Caruso & Colombo (No. 2)

[2007] FamCA 674

FAMILY COURT OF AUSTRALIA

CARUSO & COLOMBO (NO. 2) [2007] FamCA 674

FAMILY LAW - COSTS - Circumstances justifying order

Family Law Act 1975 (Cth)

Steel and Steel (1992) FLC 92-306;
Pennisi v Pennisi (1997) FLC 92-774;
Browne v Green (2002) FLC 93-115

APPLICANT: Mr Colombo

RESPONDENT: Ms Caruso

FILE NUMBER: SYF 6324 of 1987

DATE DELIVERED: 10 July 2007

PLACE DELIVERED: Sydney

JUDGMENT OF: Moore J

WRITTEN SUBMISSIONS RECEIVED: 24 April & 5 June 2007

REPRESENTATION

SOLICITOR FOR THE APPLICANT: H.C. Stathis & Co.

SOLICITOR FOR THE RESPONDENT: Armstrong Legal

Orders

1. On or before one (1) month from the date of these orders the wife pay to the husband costs in the sum of $5,000. 

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Moore delivered this day will for all publication and reporting purposes be referred to as Caruso and Colombo

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  SYF6324 of 1987

MR COLOMBO

Applicant

And

MS CARUSO

Respondent

REASONS FOR JUDGMENT

1. The husband applies for an order for costs following delivery of judgment and orders made about property settlement on 20 March 2007.  The wife opposes any costs order being made. 

2. Section S.117 of the Family Law Act 1975, which governs the making of costs orders, imposes a general rule pursuant to ss 117(1) that each party is to bear his/her own costs. However, ss 117(2) allows the court to make such order as to costs as it considers just if it is of the opinion that there are circumstances to justify doing so. In considering what order [if any] should be made the Court is required to have regard to the matters referred to in S.117(2A).

3. The written submissions were directed to those matters considered relevant and what was said of the parties’ respective positions will be summarised shortly.  Before doing so, however, it will be necessary to give a short account of the course proceedings took before final orders were made. 

4. In May 2006 the husband instituted proceedings seeking a declaration pursuant to s 78 of the Act with respect to his interest in a home at P owned by him and his former wife as joint tenants.  The wife responded to this by seeking its dismissal, leave to institute proceedings for property settlement pursuant to s 79 and, if granted, certain orders in her favour. 

5. These applications came before Judicial Registrar Loughnan on 26 October 2006.  The Judicial Registrar made orders on 6 November 2006 giving the wife the leave sought and making orders for the wife to pay $255,000 to the husband within 90 days whereupon he was to transfer his interest in the home to her.  Failure to pay in the time specified was to result in a sale of the home and the net proceedings of sale would then be distributed equally between them save that the wife would be paid $45,000 over and above her 50% entitlement.  They would otherwise retain personalty they owned at the time. 

6. On 1 December 2006 the wife filed a review which put again the position agitated on her behalf before the Judicial Registrar.  The husband, on the other hand, sought to maintain the orders made by the Judicial Registrar. 

7. The review application was heard on 16 March 2007 and I made orders on 20 March 2007 dismissing it.  Thus, their positions after final hearing remain the same as determined by the Judicial Registrar, subject to an extension of time for the wife to exercise the option of acquiring the husband’s interest in the home. 

Applicant’s position

1. The fundamental proposition put for the husband is that the wife’s review application meant there were two contested hearings about their respective entitlements to modest property in circumstances where there was no ‘irregularity’ in the proceedings before the Judicial Registrar and the husband should not have to bear the costs of the exercise but should have his costs on an indemnity basis from 6 November 2006, being the date of the Judicial Registrar's orders. 

2. Annexed to the written submissions made on his behalf is a schedule of costs and disbursements he incurred, totalling $14,290. Acknowledging the court’s discretion in relation to making a costs order, it is submitted that if he is not awarded his full costs then an assessment ought to be made of his costs having regard to the schedule provided. His claim is supported by reference to several factors in ss 117(2A).

(a) financial circumstances

1. The point is made for the husband that the parties will be in almost identical financial positions as a result of the orders.  In other words, he is in no better position than her to absorb the costs of her unilateral decision to review the Judicial Registrar’s decision. 

(c) conduct of the parties

1. The husband’s position at the review hearing was that rather than re-litigate he would accept the decision made by the Judicial Registrar, though it was not according to his application at the initial hearing. 

(d) whether the proceedings were necessitated by a failure of a party to comply with previous orders

1. The submissions for the husband do not contend the proceedings were ‘necessitated’ by a failure to comply with previous orders, but it is submitted that the court would have regard to the fact that he has been kept out of his property entitlement by virtue of the delay brought about by the re-hearing at the wife’s behest. 

(e) whether a party has been wholly successful

1. The wife was wholly unsuccessful in the review application.  She did not succeed in obtaining any different order to that made by the Judicial Registrar and yet the husband was put to the further expense in having to meet it.  It is further submitted that the review was ‘always a risky enterprise on her part’ and as there was already a decision following the expense of a contested hearing the husband should have his costs on an indemnity basis.

(f) offers of settlement

1. No relevant offers were made – apparently by either – but the submissions for the husband assert that the parties here had more than the ‘educated guess’ of an offer because they had the benefit of a judicial decision following contested proceedings. 

(g) other matters

1. The point is made that the review was conducted in circumstances where there had been contested proceedings with no apparent irregularity and with an outcome that was ‘within the range’.

Respondent’s position

1. The submissions for the wife emphasise the primary position as to costs as expressed in ss 117(1). The discretionary nature of costs orders is noted, as is the requirement for the court to be of the opinion there are circumstance to justify the departure from the primary position.

2. The submissions for the wife otherwise focus on paragraph 117(2A)(c).  It is said that the conduct of the husband in relation to the proceedings, particularly while in the witness box under cross-examination, was such that the Court should not be persuaded to exercise its discretion in his favour.  In the course of giving evidence he engaged in conduct described as follows:

   ‘(a)     Directing comments at the wife;

   (b)      Calling the wife names;

   (c)       Yelling at the wife;

   (d)Standing to his feet on several occasions while directing comments to the wife;

   (e)       Directing questions to the wife;

   (f)Refusing to answer questions at many points including answering on more than one occasion in cross-examination with words to the effect, "It's none of her business ";

   (g)When pressed on certain issues of fact where his credit was being challenged asking that the proceedings be stopped; and

   (h)Making a threat to the legal advisors of the wife.  (Which to the best of the writer's recollection and notes, translated to words to the effect, "Your Honour could we please stop now. If we don't I'm going to have to get them." – them referring to [Mr L] and the writer.  The court adjourned at that point where the writer was advised by the court appointed translator for the wife that the translation of the last piece of evidence of the husband should have been more accurately translated to words of the effect, "Your Honour could we please stop now.  If you don’t I'm going to have to kill these idiots.")

3. It is submitted that it would be inappropriate to exercise the discretion in the husband’s favour in the face of this kind of conduct in open court. In short, it is submitted there are no circumstances to justify departure from the primary position set out in ss 117(1) and therefore each party should be left to bear his/her own costs.

Conclusion

1. Consideration of these various matters demonstrates that there are a number of factors pointing towards an order giving the husband the costs he incurred in defending the review proceedings.  In short, both parties’ financial circumstances are quite modest and he is in no better position than the wife to shoulder the cost of her decision.  Her decision put him in the position where he had to incur the additional costs associated with conducting another contested hearing when that further hearing did not result in any different outcome for the wife.  She was wholly unsuccessful and that was in the face of the husband compromising his initial position somewhat on the rehearing by agreeing to be bound by the Judicial Registrar’s determination.  Quite apart from the not insignificant costs he incurred in meeting the review application, another consequence was to delay his receipt of his property entitlement. 

2. Of course a party is entitled to have the determination of a Judicial Registrar reviewed and the law requires that to be heard de novo. That is not in question. But, by doing so, lack of success enlivens the wholly unsuccessful factor in ss 117(2A) which, when combined with favourable consideration of other relevant factors, can assume considerable weight. The rationale for attaching weight to timely and clear offers of settlement, as discussed in cases at appellate level - [eg. Steel and Steel (1992) FLC 92-306 (Nicholson CJ, Strauss and Nygh JJ) at 79.309 – 79,310; Pennisi v Pennisi (1997) FLC 92-774 (Nicholson CJ, Barblett DCJ and Faulks J) at 84,547; and Browne v Green (2002) FLC 93-115 (Kay, Coleman and Warnick JJ)] - is apposite to the review of contested property proceedings where no different result is achieved.

3. Without more, the matters mentioned as weighing in the husband’s favour could be seen as constituting circumstances to justify an order for costs in his favour and, if they were the only circumstances to consider, could result in an order for costs so as to restore him to the position he would have been in had the review not been sought and argued through to its unsuccessful conclusion. 

4. But there must also be considered and weighed in the balance the argument put for the wife about the husband’s conduct in the course of the review hearing while under cross-examination.  It would be wrong to place any weight on the hearsay based submission about what the interpreter told the wife’s advisers during an adjournment.  On more certain and solid ground are the other general descriptors of aspects of the husband’s conduct during cross-examination when his outbursts were frequent.  Apart from its disruptive and unsettling nature, his behaviour had the effect of prolonging the legitimate exercise of cross-examination.  This is a relevant factor for consideration which falls either within paragraph 117(2A)(c) or (g) and constitutes a counterweight of some measure against his otherwise meritorious argument for costs. 

5. All things considered and weighed, I find the balance tips in favour of a costs order in his favour because there are justifying circumstances.  But there are also circumstances to justify the reduction of the quantum he would otherwise have been entitled to receive, by reason of his failure to conduct himself during the rehearing process in a way that saw it concluded as expeditiously as all involved are entitled to expect. 

6. Turning to the annexure setting out his costs, there is no submission from the wife about the items or the overall figure.  In my judgment it would be an appropriate balance of the matters just mentioned for the husband to receive $5,000 towards his costs.  Absent submissions about the time for payment and absent any indication of the current stage in the settling up process, the order will provide for payment on or before a month from this date. 

7. For those reasons the order is as set out earlier. 

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Moore

Associate: 

Date:   10 July 2007