Cook and Cook (No 7)

[2010] FamCA 1003

FAMILY COURT OF AUSTRALIA

COOK & COOK (NO. 7) [2010] FamCA 1003

FAMILY LAW – COSTS – Indemnity costs sought by wife – Party/party costs sought by husband – Section 117 applied – What is just – Section 117(2)(a) factors – Interlocutory hearings – Retainer costs agreement of wife – Bills of costs submitted to Court – Orders made for costs payable in favour of each of the parties – Costs off set – No stay on payment of costs – Default interest

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 Chapter 19, Rule 17.03

Yunghanns v Yunghanns (2000) FLC 93-029
Limousin v Limousin [2007] FamCA 1178
Fennessy v Gregorian (2009) FLC 93-399
Colgate-Palmolive Co v Cussons Pty Ltd 118 ALR 248 at 256
Ragata Developments Pty Limited v Westpac Banking Corporation (Federal Court of Australia, 5 March 1993, unreported)
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) FCA 202

APPLICANT: MR COOK

RESPONDENT: MS COOK

FILE NUMBER: MLF 1997 of 2003

DATE DELIVERED: 10 NOVEMBER 2010

PLACE DELIVERED: MELBOURNE

PLACE HEARD: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATE: 10 JUNE, 10 AUGUST AND 30 AUGUST 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR SPICER

SOLICITOR FOR THE APPLICANT: KENNEDY WISEWOULDS

COUNSEL FOR THE RESPONDENT: MR ST JOHN SC

SOLICITOR FOR THE RESPONDENT: MARSHALLS & DENT

Orders

IT IS ORDERED:

1. THAT within sixty (60) days the husband pay or cause to be paid to solicitors for the wife on behalf of the wife a sum of $28,500 and in default of such payment interest is then to be paid on any sum thereof outstanding from time to time at the rate prescribed in Rule 17.03 of the Family Law Rules 2004 (from time to time) and be paid on a quarterly basis adjusted in arrears.

IT IS NOTED that publication of this judgment under the pseudonym Cook & Cook is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1997 of 2003

MS COOK

And

MR COOK

REASONS FOR JUDGMENT

1. The competing costs applications now before me for determination arose from the interlocutory hearings and Orders pronounced on 10 June 2010, 10 August 2010 and 30 August 2010. In my Orders and reasons for Judgment delivered 14 September 2010, paragraph 229 thereof, I reserved the issue of costs, including reserved costs from the first two interlocutory hearings and required parties to file written submissions of no more than three pages on both the quantum of costs and the basis upon which such costs are claimed, having particular regard to s 117(2A) of the Family Law Act 1975 (Cth) (“the Act”). I directed, and the parties accepted, that the costs issues would be determined on the papers filed and without further hearing.

2. The lengthy background history of this matter is well documented in my most recent judgment where I substantially examined and made orders upon all of the continuing interlocutory issues relevant to these competing cost applications.

3. When the matter was before me on 10 June 2010 the husband was represented by his solicitor and the wife by Senior Counsel and his instructing solicitor. The outcome of that hearing, which in reality was effectively a mention, was for all extant applications to be adjourned to 10 August 2010 and with costs reserved. I certified for Senior Counsel for the wife and for the solicitor appearing as Counsel for the husband but it is important to understand that Rule 19.50 of the Family Law Rules 2004, provides that a judicial officer hearing a case may certify that it was reasonable to engage Senior Counsel as counsel to attend for a party. It is, of course, not a certification as to the reasonableness of any particular daily fee or other charge or expense of or incidental to that day or the hearing generally.

4. On 10 August 2010, I pronounced Orders requiring the husband to provide to the wife’s solicitors copies of documents within his power, possession or control in relation to the Y Group of Companies (“Y Group”) and in respect of any payments made by or at the direction of the husband to the single expert, BDO. In paragraph 3, and until further hearing, certain injunctive Orders were made against the husband’s assets or shareholdings.  I reserved all costs of and incidental to that hearing and certified for Counsel, including Senior Counsel.

5. On that same hearing day, but within a separate Order, I dealt with the issues of and related to a re-opening of the concluded s79 defended hearing for the purposes of adducing fresh evidence. The wife was granted leave to adduce further evidence pursuant to paragraph 2 thereof and otherwise ongoing case management Orders were made for both parties to make, file and serve affidavits and amended applications dealing with the substantive issue of the husband’s request for leave to re-open his case and adduce further evidence of and related to the XC project.  I delivered an ex tempore judgment on these matters.

6. The substantive interlocutory hearing of the husband’s application was before me for a hearing by written submissions and supplemented by oral argument on 30 August this year.  My Orders and reasons for judgment were delivered 14 September 2010 and I now conclude the outstanding costs issues by orders explained in this judgement.

WRITTEN SUBMISSIONS AS TO COSTS – ORDERS SOUGHT

Husband

1. The husband submitted that the wife should be ordered to pay his costs on a party/party basis of and incidental to his successful application for leave to reopen his case and adduce further evidence.  Such costs were assessed by his solicitors to total $10,544.43, with their payment to be stayed until the wife received her substantive property settlement.

2. In paragraph 10 of his written submissions the husband identified, on an item by item basis, those fees and disbursements sought to be recovered on a party/party cost basis.  There is no allowance claimed for GST or any administrative charge or professional loading by his solicitors.

3. I read paragraph 10 of those written submissions on the basis that the costs and disbursements therein detailed have been actually calculated on a party/party basis. That is that those costs have not been submitted on the basis of what has or will be charged to the husband but rather what can be properly recovered on the basis requested. Presumably their calculation is pursuant to Schedule 3 of the Family Law Rules 2004 and cross referenced to Rule 19.18 thereof. I have not sought to individually assess each of the individual items as charged but do so collectively and within the reasonable ambit of my exercise of judicial discretion on these costs issues generally.

Wife

1. The wife sought an Order that the husband pay her costs and disbursements inclusive of GST and administrative service charges, in accordance with her retainer costs agreement totalling approximately $110,750.00.  Of that sum her solicitor’s professional costs and administration charges were assessed at $49,220.00 and the balance, primarily fees payable to Senior Counsel, totalled $51,490.00, plus GST.  The wife’s costs and disbursements, as itemised, are on the basis of what will or has been charged to her.  They have not been prepared on a party/party basis but pursuant to the executed Retainer Costs Agreement and as charged by Senior Counsel.

2. The written submissions of the wife highlighted that there were three aspects of both applications of the husband and wife before me and they were:

   a.       the husband’s application for leave to adduce further evidence;

   b.      the wife’s application for leave to adduce further evidence; and,

   c.      the wife’s application for interlocutory injunctions.

3. The wife sought that the husband pay her costs as assessed on an indemnity basis for each of the three issues identified above.  A detailed bill of costs and a true copy of the Retainer Costs Agreement executed between the wife and her solicitors and dated 6 March 2003 were annexed to her written submissions.

4. If I were not to be satisfied that payment of indemnity costs were appropriate, then the wife sought (in paragraph 7 of her written submissions) that her costs be paid in accordance with Schedule 2, save as to the fees of Senior Counsel which were said to be wholly justified “by the unusual complexity of the matter and the importance of the applications pursued before the Court.” The itemised scale of costs are now included within Schedule 3 to the Family Law Rules as and from 1 July 2006 and significantly all of those items are inclusive of GST and this is specifically provided for in Note 2 of such schedule.  I contrast this alternative basis of application on behalf of the wife for an assessment of costs pursuant to the applicable Schedule with paragraph 3 of her Retainer Costs Agreement where she has agreed that all GST liability will be additionally passed on to her.

5. On an indemnity basis, the wife therefore sought the repayment of the whole of her lawyer costs, disbursements charged or incurred and GST.  All such costs and disbursements, if calculated upon a party/party basis, would result in a much lesser quantum of costs to be paid.  She would then remain, subject to her Retainer Costs Agreement and without other matters arising, responsible for the balance of professional fees, charges and disbursements incurred by her in the proceedings.  Her solicitors have not submitted any alternate assessment of the quantum of costs, save the general submission which I have recorded in the preceding paragraph of this judgment.

6. Again as with the husband, I have concluded that it is just that I determine a proper quantum of costs to be paid and the basis of such payment in the exercise of my discretion and on all of the material and submissions now before me and without thereafter referring the proceedings to any formal costs assessment issues.

FAMILY LAW ACT 1975 (CTH) (“THE ACT”)

1. Pursuant to s117 of the Act, each party to proceedings shall bear his or her own costs. That principle is, however, subject to the discretion afforded to the trial Judge in subparagraph (2) thereof, where it is provided (in summary) that:

   “If the Court is of the opinion that there are circumstances that justify it in so doing then it may, subject to the further subsections thereof and the applicable Rules of Court, make such Order as to costs … as the Court considers just.”

2. The matters relevant to determining what Order, if any, should be made for costs are indentified in sub-paragraph (2A) thereof and, relevant to the proceedings now before me, I have had particular and careful regard (in summary) to:

   a.the financial circumstances of each of the parties to the proceedings;

   b.…

   c.the conduct of the parties to the proceedings including, without admitting the generality thereof, their conduct in relation to pleadings, particulars, discovery, inspection and production of documents and all similar matters;

   d.whether the proceedings were necessitated by failure of a party to comply with previous Orders of the Court.

   e.whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   f.…

   g.such other matters as the Court considers relevant.

3. I have hereafter carefully evaluated each of these relevant matters upon the facts and written submissions of this case.  I do so with the very substantial knowledge and background of my previous involvement in the s79 hearing and the many other interlocutory proceedings.

INDEMNITY COSTS

1. The Court has jurisdiction, in its discretion, to pronounce an Order for costs on an indemnity basis.  The purpose of such an award of indemnity costs is to more fully, or even wholly, repay to a party all, or at least the majority of, their legal costs and disbursements, charges and taxes incurred in the proceedings.

2. The category of cases in which an award of indemnity costs may be appropriate are not closed and in Yunghanns v Yunghanns (2000) FLC 93-029, the Full Court (Lindenmayer, Holden and Mullane JJ) said (at [31]):

   “It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought”.

3. More recently the Full Court has further considered indemnity costs in Limousin v Limousin [2007] FamCA 1178, and in particular paragraphs 41-49 (inclusive) thereof and subsequently in Fennessy v Gregorian (2009) FLC 93-399 at paragraphs 53 – 73 (inclusive) thereof. I have read and considered each of these decisions of the Full Court and the other cases identified in the wife’s written submissions.

4. The principle underlining an award of indemnity costs is that there exists exceptional or other very clear and significant circumstances so as to persuade the Court to depart from the usual award of costs on a party and party basis.  Those principles underpinning indemnity costs were classically summarised by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd 118 ALR 248 at 256 where it was said (in summary) that:

   a.“The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party / party basis;

   b.This has been the settled practice for centuries in England.  It is a practice which is entrenched in Australia.  Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate court of appeal or of the High Court would be required to alter it.

   c.In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party / party basis.  The circumstances of the case must be such as to warrant the court in departing from the usual course.”

5. Sheppard J continued, at page 257, and observed some of the circumstances which may warrant the exercise of the discretion to award indemnity costs and they included false and irrelevant allegations of fraud, misconduct that causes a loss of time to the court and other parties, where proceedings were commenced or continued for an ulterior motive, the undue prolongation of a case or wilful disregard of known facts and clearly established law.

6. In Ragata Developments Pty Limited v. Westpac Banking Corporation (Federal Court of Australia, 5 March 1993, unreported) Davis J stated (at para [7] – [8]) that:

   “An award of costs on an indemnity basis may be made only in a special case, where the circumstances justify departure from the ordinary principle. The circumstances must be such as to justify an award indemnifying the successful party in respect of all of the costs incurred, save only as to those costs which are unreasonable in amount.

   The very nature of the award of costs on an indemnity basis gives a guide to the type of case in which such an award is appropriate. Thus, indemnity costs may be awarded where unsuccessful proceedings have been brought and prosecuted, not for the bona fide purpose of protecting and enforcing a legal right, but to achieve an ulterior or extraneous purpose."

7. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) FCA 202, Woodward J stated (at para [21]):

   “I believe that it is appropriate to consider awarding 'solicitor and client' or 'indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law.”

8. The Family Law Rules 2004 provide in Chapter 19 that costs to be paid by parties to their lawyers should be within the range set out in the Schedules to the Rules unless the parties have entered into a Retainer Costs Agreement and knowingly contracted out of the operation of such Rules. That is the case in this matter with a true copy of such Agreement annexed to the written submissions and with provision of a copy of the fees, charges and disbursements incurred by the client pursuant to such Agreement and accordingly the requirements of the Court to be so informed of such matters has been satisfied.

9. I have therefore carefully evaluated in these reasons for judgment all of the relevant facts and circumstances of the case to determine whether the guidelines and justice for an award of indemnity costs are satisfied and further that the costs and disbursements charged are reasonable in their quantum.

HUSBAND’S SUBMISSIONS

1. The written submissions of the husband concentrated upon sub-paragraph (a) and (e) of s117(2A) of the Act and otherwise his legal practitioners did not address the remaining sub-paragraphs thereof.

2. The husband’s submission “is that he has no immediate access to funds and his financial future is clouded by the outcome of the [XC] project and subsequent litigation.”  Pursuant to Court Orders he has continued to pay periodic spousal maintenance (effectively) to the wife in the sum of $675.00 per week, together with all outgoings on the former matrimonial home and her motor vehicle.  I have the benefit of having heard all of the financial evidence in the now part-heard defended property proceedings and I was also able to observe each of the parties in Court and in the witness box in the giving of their evidence.  There are other substantial assets, leaving aside the XC property, and other sources of income available to the husband and the orders I have pronounced on these costs matters have regard to a balanced understanding of the financial circumstances of both parties as at 29 July 2009.

3. The reasoning of the husband for a costs order to be made in his favour is founded upon the fact that he was wholly successful (and therefore the wife was said to be wholly unsuccessful) in his application for leave to re-open his case and adduce further evidence.  He argues that “It ought to have been apparent to the wife that leave would be granted to reopen his case and adduce further evidence.”  He included in paragraph 6 of his submissions a summary of the relevant dates and events of and related to the appointment of the liquidator and receiver manager to entities within the XC Group.  He identified the evidence that he had given in the defended hearing and of his efforts to refinance the development project.  I gave significant but balanced weight to sub-paragraph (e) and the successful outcome to the husband with him being permitted to reopen the defended proceedings and adduce further evidence in the face of determined and continued opposition from the wife and her legal advisors.

4. I adopt the approach of Woodward J in Fountain Selected Meats (Supra) where it observed that an applicant, properly advised should know where they had a limited chance of success and ultimately, for the substantial reasons given in my primary judgment, the Court could not know and determine the pool of assets of the parties net of all liabilities until the XC development project and all related corporate, legal and financial issues have been resolved.  The wife could and should properly have been advised of the likely outcome of the reopening application given all of the financial and commercial changes that have or reasonably could have been understood to have occurred post 29 July 2009 and the unknown and ongoing financial issues which impacted upon the determination of the net asset pool.  I regarded some of these matters as both obvious and substantial and my primary judgment delivered 14 September 2010 makes apparent many of these issues.

1. That said the husband has not sought orders for indemnity costs and I have therefore made no award of any costs to him on that basis.  I have concluded an overall costs order that I regard to be just.

2. The husband relied upon the failure of the wife to seek an adjournment of the defended hearing prior to its conclusion and pending the outcome of the refinancing and other issues of and associated with XC.  His submission is that the wife should have known and should have accepted that his application to reopen the case and adduce fresh evidence was a likely outcome, and without the need for a Court hearing and substantial expenditure by the parties in contesting those interlocutory applications.  I find that there was real merit in that submission which I have balanced in concluding cost orders that are just.

3. The husband highlighted and I have accepted, what he said were his sensible concessions made in favour of the wife and permitting her to reopen her case on issues of the Y Group shareholding and the single expert fees and contrasted that measured and practical approach with the wife’s failure, upon legal advice, to make any “sensible concession which necessitated a hearing over two days.”

WIFE’S SUBMISSIONS

1. Aside from the basis of any award of costs, be it on an indemnity basis or otherwise, the written submissions filed on behalf of the wife relied upon the general strength and superiority of the husband’s financial position when compared with that of the wife. This is said to be a significant factor (subparagraph (a) of s117(2A)). It was argued that “The husband is in a financial position of strength and the wife has outstanding legal costs of hundreds of thousands of dollars…contrasted with the husband, by his nondisclosure of the [Y Group] sales,… contrived to ensure that the overwhelming proportion of his outstanding legal costs were paid.”

2. Having concluded the s79 defended hearing on 29 July 2009, and subsequently having heard and concluded an interim property distribution to the wife and made other orders and given further ex tempore reasons for judgment, I have a significant understanding of what is alleged to be the income and financial circumstances of both parties, their assets and liabilities, and related commercial entities.  It is within the umbrella of that evidence that I have assessed the significant issues of and related to respective financial position of each of the husband and wife and I record that the financial circumstances of both parties are a matter of substantial importance to which I have given due and proper weight.  

3. As to the Orders made in relation to the husband’s sale or his other dealings with the Y Group shares, the wife, in paragraphs 8 – 12 (inclusive) of her written submissions, had summarised from my judgment the financial impact upon her of the husband’s dealings which were then unknown to both the Court and the wife.  The wife identified what she described as the husband’s “previous deception” and his “secrecy”.

4. I accept that there were issues raised and time spent by the court on these Y Group matters, primarily on 10 August 2010 and not withstanding the consent on behalf of the husband to orders on this issue.  The wife did incur costs and outgoings and her legal expenses and disbursements are the more substantial because of this and I have properly weighed these issues in considering a just costs Order and the quantum of costs in my order gives very proper weight to that day’s hearing.

5. Whilst the wife was successful on this aspect of her application I do record that there was no opposition by the husband and his legal advisors to the proposed Court Orders and the requirement for the production of documents, which the wife has alleged in paragraph 11 of the written submissions, have, as yet, not been provided by the husband.

6. I have carefully read and evaluated the bill of costs, as submitted on behalf of the wife, for the purpose of an understanding of the time spent and actions taken and disbursements incurred of and related to Y Group.  I have made an appropriate and just allowance in my assessment of the quantum of costs that properly should be paid in that regard.  I do not see the need to more particularly give further reasons to explain that approach or outcome.

7. The wife’s leave to re-open and adduce further evidence application was again primarily founded upon the sale of the Y Group shares and that is particularly explained in paragraph 15 of her written submissions which I have carefully considered. I found that the husband did withhold relevant documents and information and that he made incomplete disclosure. Certainly more candid and timely disclosure by him of the documents and facts relating to his dealings with these shares would have better informed the wife and her legal practitioners and made her level of inquiry less onerous and expensive. I accept that the wife’s costs were magnified by the lack of action and disclosure by the husband. This is primarily a matter falling within the compass of sub-paragraph (c) of 117(2A) of the Act. It is a matter which I regard to be of particular significance and weight, and it has had a marked influence upon the ultimate costs orders and the quantum thereof made in my discretion and on the basis of what is just as between these parties.

8. I find that the husband did substantially put in place or allow to remain a strategy which he pursued with full appreciation of, but with complete indifference to, the wife and the legal expenses and disbursements which she continued to incur in searching for and ascertaining the facts of and related to the Y Group.

9. As to the BDO single expert’s fees, they are a matter of much lesser significance and inquiry made by the wife.  They contributed only marginally to the wife’s costs. On balance there could and should have been a more timely acceptance by the husband of these issues and that would further have limited the financial expenditure of the wife.  That is a matter which I have appropriately balanced in the determination of a just order for costs and the quantum thereof.

10. I have also assessed the failure of the husband to comply with previous Court orders and, in the context of his knowledge of, but failure to provide timely disclosure of matters and facts to the wife and those issues are made relevant by subparagraph (e) of s117(2A) of the Act and I have had proper regard to the consequences thereof.

11. The husband’s application for leave to reopen his case and adduce fresh evidence was at the very heart of the hearing on 30 August 2010.  It was the primary contested application.  It is, however, important to carefully reconsider the multiplicity of hearings in and after December of last year, which could and should have been avoided by a more diligent and proper acceptance of Court orders and filing dates.  I accept the strength of paragraph 18 of the wife’s written submissions in that regard and I have given due weight thereto in my assessment of the final quantum of costs as ordered.

12. Likewise, paragraph 19 of the wife’s written submissions had been prepared upon a close analysis of my reasons for judgment and I accept that there are matters identified therein where the husband was tardy and uncooperative in his disclosure obligations.  I have balanced all of these issues in my order and quantum of costs awarded.

13. I have regarded the onus upon the husband and his legal practitioners to be at a very high and continuing level given his evidence as to the refinancing sought for the XC project, the conclusion of the defended hearing and the fact that judgment remained outstanding.  Whilst I was privy from the Court hearing to the breakdown in communication between the husband and wife, there does unfortunately seem to be a competitive professional relationship between legal practitioners in the disclosure of continuing financial information and other relevant matters and facts and that has exacerbated the legal fees and disbursements.  I do not direct that criticism at any one legal practitioner and I have heard no evidence and my comments are made upon my observations within the Court room and from what was said across the bar table between Counsel and all matters and allegations raised through counsel in submissions.  I am of the opinion that there is and must be a primary onus upon solicitors and counsel to efficiently and expeditiously litigate these continuing applications and disputes but with every effort to minimise the enormous and escalating legal costs, fees and disbursements which these parties, and particularly the wife, now carry, with interest continuing to accrue thereon.

14. Paragraphs 20 and 21 of the wife’s written submissions draw heavily upon my reasons for judgment and highlight her personal and financial prejudice which she has asserted she would suffer on any reopening of the hearing.  I have carefully assessed the arguments of her Senior Counsel in each of those paragraphs but ultimately she was wholly unsuccessful, and it follows that the husband was wholly successful, in the re-opening of his case on all issues related to the XC development.

15. I generally have considered all of the matters and facts of and related to my judgment and some of these do fall within the umbrella of subparagraph (g) of s117(2A) of the Act and as such I have carefully considered and evaluated them relevant to the costs application and ultimately the quantum of costs.

COSTS SOUGHT

Husband

1. The husband sought costs assessed on a party/party basis in respect of his total fees charged of $10,544.43. I do not purport to make an assessment on an item by item basis of those costs but, as an overview, they are relatively modest and are calculated on a party/party basis which would seem very appropriate for the work and effort involved by legal practitioners in preparing for and in conducting each of the hearings before me on 10 August 2010 and 30 August 2010.  I record that there are no costs, fees or disbursements charged for the 10 June 2010 hearing, on which occasion the husband was represented by his solicitor.  The calculation of the husband’s costs (as submitted) is seemingly from 7 July 2010 and in preparation for the hearing on 10 August 2010. I observed that Counsels’ fees (for a very experienced Junior) are submitted on the basis of four days, including preparation and conferences, and total approximately $6,500.00.

Wife

1. The costs, fees and disbursements incurred by the wife, inclusive of GST and administration charges pursuant to her costs agreement are very substantially greater than the quantum of fees and disbursements charged to the husband by his legal practitioners.  They are also charged on a very different basis, at least as disclosed to the Court.

2. The wife, or her solicitors on her behalf, briefed Senior Counsel who has appeared for her on all defended hearings and most case management mentions before me. He now appears without a Junior.  His fees charged should, understandingly, be greater than those of the husband’s experienced Junior Counsel.  Nevertheless the certification provided to him on earlier occasions is as to the reasonableness of his engagement and not any endorsement of the fees charged.  I certainly do not find that this is a matter of “unusual complexity” as was claimed in the written submissions filed on behalf of the wife.  In particular the 10 June hearing was primarily a mention well within the compass of solicitors, though I generously certified for the attendance of Senior Counsel on the basis of his past and ongoing involvement in the hearing and presumably on the basis that he appeared at the request or insistence of the client who has or should at all times have been fully kept informed of the enormous and escalating costs which she has incurred.

3. I have read the retainer costs agreement, marked as exhibit “B” to the written submissions, but, I have not and I do not regard it as my responsibility for the purposes of this costs judgment and orders to examine and confirm the individual validity or accuracy of each item within the bill of costs.  That said, the total fees and disbursements charged of $100,000 excluding GST are enormous and related only to the continuing discovery and interlocutory proceedings.  Fees for Senior Counsel are approximately $51,000.00, excluding GST. Some $18,000.00 or thereabouts related to the appearances before me (including the mention on June 10) and legal argument on each of the other two hearing days which I identified at the commencement of these reasons for judgment. Otherwise the balance of fees charged by Senior Counsel relate to chamber work in conferences, drawing applications and affidavits, drawing written submissions, emails and telephone attendances and perusal of documents, including $17,700.00 (approximately) for drawing the application and affidavit (and redrafting same) upon which these interlocutory proceedings are founded.  I observe that these ongoing further attendances, conferences and hours spent are all additional to the previous many hours of conferences and defended hearings and all of that separate legal work and investigation for which the wife has been charged a very substantial sum.  I have carefully re-read the application and affidavit in support which necessitated three days of the care, attention and involvement of Senior Counsel, and also his solicitor, and I could never find that it would be just, and a proper exercise of judicial discretion, to allow those fees as charged for those documents.  That is not in any way to criticise the quality of the work or documents produced but the time allocated and charged for can only be seen as excessive and the charges way in excess of what could be ever considered just and proper.

4. I highlight those costs, fees and disbursements as the wife’s enormous legal bill, from all defended and interlocutory proceedings, has been partly paid with the assistance of litigation funding and other interim property orders.  I have yet to conclude the s79 property and financial hearing, which has now been re-opened, and ultimately the net available pool of assets remains unknown.  I have, on many prior occasions, and in various ex tempore judgments, highlighted the financial balance and common sense that was needed to be brought by both parties and all legal practitioners and the partners of their firm to these proceedings and the costs associated therewith.

5. The very real risk in all of the continuing litigation before the Court, and subject to all further evidence and hearings and without expressing any findings whatsoever, is that one day there may perhaps be insufficient available property (net of all liabilities, costs, fees and charges) to satisfy the financial requirements of the parties and complete any meaningful division of property.  I again carefully do not make any such comment or finding but those matters are, and should be, of concern to the Court and fundamentally of direct and primary concern to the legal practitioners and the clients.

OUTCOME

Husband

1. I conclude that it is just for there to be a costs order in the husband’s favour. I do so upon my careful consideration of all of the relevant matters and facts identified in these reasons for judgment, and in particular the factors highlighted in s117(2A) of the Act.

2. I conclude that it is a just and proper outcome that I discount partly the costs and disbursements sought by the husband on a party/party basis because of orders made to the benefit of the wife and on all of the facts and circumstances that were considered and evaluated by me in this hearing.

3. I conclude that the wife should be ordered to pay the husband’s costs, fixed in the sum of $7,000.00.  I have, however, offset the payment of those costs as against the quantum of costs that I have determined that it is just for the husband to pay to the wife in finalisation of her competing costs claim.

Wife

1. From the s79 defended hearing and the evidence given therein by the husband and wife and subsequently by the further submissions of Senior Counsel for the wife, I am acutely aware that she is confronted by a very substantial and escalating legal bill. Her overall costs and disbursements will exceed $1,000,000.00 and she has litigation funding and interest from that source of funds is continuing to accrue at a rate of approximately 17% on monies outstanding. It is not necessary for the purposes of this judgment that I have any more detailed knowledge of her parlous financial circumstances. I have given very considerable weight and understanding to sub-paragraph (a) of s 117(2A).

2. I have not awarded the wife costs on an indemnity basis.  That would not be a just outcome.  I have carefully considered and evaluated the circumstances and guidelines provided in reported cases of the Court(s) where it has been held that an award of indemnity costs would be appropriate.  Such special or unusual circumstances and other factors are not reflected in the facts of this matter now before me.  There is no reason to depart from the usual basis of costs orders.  In particular I highlight that the husband was successful in the primary disputed issue of his re-opening of his case and being permitted to adduce fresh evidence at a further hearing and this factor further negates the wife’s submission for indemnity costs.

3. I have also concluded that the conduct of the proceedings by or on behalf of the husband, the loss of time and convenience to the Court and to the wife, and the withholding of facts and information of and related to Y Group do not justify an award of costs on an indemnity basis. They are factors upon which I have based an ordinary costs order.

4. I have concluded that it is just that there be an award of costs to the wife for the reasons which I have highlighted in this judgment and primarily matters related to her difficult financial circumstances and, in part, the conduct of the proceedings by and on behalf of the husband and other outcomes as I have found.

5. I will not order that costs be assessed by a Registrar in a further Court process.  That would be a further expensive and prolonged matter. It is more equitable for the parties that I, in the exercise of discretion, determine a quantum that should be paid by the husband to the wife for costs.  I conclude that a just sum of costs inclusive of all fees and charges of Senior Counsel and solicitor, but excluding all GST charges which are inclusive within the Schedules in the Rules, would be $35,500.00.  I specifically have not individually itemised a breakdown of that sum which I have carefully considered and found to be a just sum.

6. I will not delay the payment of those costs to the conclusion of the defended property hearing and the time at which “the wife then receives her substantive property settlement”, as was sought by the husband in paragraph 1 of his written submissions.  From my detailed knowledge of this case I conclude that it would be unjust to stay the order which I have pronounced hereunder and the husband must therefore find the required sum of costs within sixty days.

7. I offset the sum of $7,000.00 as costs ordered to be paid by the wife to the husband and the balance remaining is therefore $28,500.00 and the husband is to pay this sum of costs to the wife within 60 days and in default interest will then accrue at the rate prescribed from time to time by the Family Law Rules on a quarterly basis, adjusted in arrears.

I certify that the preceding sixty five
(65) paragraphs are a true copy of the reasons
for judgment of the Honourable Justice Young
delivered 10 November 2010

Associate: ……………………………………………………………

Date:  …………………………………………………………………