COOMBS & COOMBS (No.2)
[2019] FCCA 852
•30 April 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COOMBS & COOMBS (No.2) | [2019] FCCA 852 |
| Catchwords: FAMILY LAW – Costs – application for costs dismissed. |
| Legislation: Family Law Act 1975 (Cth), s.117 Federal Circuit Court of Australia Act 1999, s.54 |
| Cases cited: Brisbane South Regional Health Authority v Taylor (1996) 186 CLR Coombs & Coombs [2018] FCCA 2671 Idoport Pty Ltd v National Australia Bank Ltd [2006] NSWSC 895 |
| Applicant: | MS COOMBS |
| Respondent: | MR COOMBS |
| File Number: | PAC 5002 of 2015 |
| Judgment of: | Judge Obradovic |
| Hearing date: | On the Papers |
| Date of Last Submission: | 18 March 2019 |
| Delivered at: | Parramatta |
| Delivered on: | 30 April 2019 |
REPRESENTATION
| Submissions for the Applicant: | Ms Lee |
| Solicitors for the Applicant: | Stephanie Lee Family Lawyers |
| Submissions for the Respondent: | Mr Oliveri |
| Solicitors for the Respondent: | Oliveri Attorneys |
ORDERS
The application for costs is dismissed.
Remove all issues from the list of cases awaiting finalisation.
IT IS NOTED that publication of this judgment under the pseudonym Coombs & Coombs (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 5002 of 2015
| MS COOMBS |
Applicant
And
| MR COOMBS |
Respondent
REASONS FOR JUDGMENT
On 20 September 2018, the Court made orders and delivered its Reasons for Judgment in respect of property adjustment orders between the parties.
On 31 October 2018, the husband filed an Application in a Case, seeking an order that the wife pay all of his costs of and incidental to the proceedings, including the cost of the Application in a Case. The husband also sought leave to make the costs application out of time pursuant to Rule 21.02 Federal Circuit Court Rules2001.
Together with the application for costs, the husband filed an Affidavit which he affirmed on 29 October 2018, and written submissions as to costs. The submissions filed on behalf of the husband seek an order that the wife pay two thirds of the husband’s costs of $117,469.76 plus interest within 42 days of the date of order.
The costs application is resisted. The wife has filed a Response to the Application in a Case, together with an Affidavit and written submissions.
The costs application has proceeded to be heard on the papers and is determined in chambers with the parties’ consent.[1]
[1] See s54 Federal Circuit Court of Australia Act 1999 (Cth) and Rule 15.03 Federal Circuit Court Rules 2001 (Cth)
Relevantly, an application for an order for costs may be made within 28 days after a final order is made or within any further time allowed by the Court.[2] The husband does not, in his Affidavit in support of the costs application, nor in his written submissions, provide any evidence or otherwise explain why leave ought to be granted for the application to be made outside the 28 day prescribed period.
[2] Rule 21.02 Federal Circuit Court Rules 2001 (Cth)
The principles in respect of costs orders in family law proceedings are well known. The starting position with respect to costs, as set out in s117 of the Family Law Act 1975 (Cth) is that, subject to subsection 117(2), each party to proceedings under the Act shall bear his or her own costs.
The High Court held in Penfold & Penfold[3] that it is necessary for the Court to make a finding of justifying circumstances as an essential preliminary to the making of an order for costs. The Court is not required to specify the circumstances which justify the making of such an order.
[3] (1980) 144 CLR 311
In determining what order, if any, should be made under s117(2) the Court must have regard to the prescriptive but non-exhaustive list of considerations in sub-section (2A).
Financial Circumstances of Each of the Parties
The financial circumstances of each of the parties at the time of final hearing are the subject of relevant findings.[4] Neither party has filed an updated Financial Statement in respect of their current financial circumstances. The parties’ Affidavits presently relied upon are almost entirely silent as to their current financial circumstances, albeit the husband deposes that since the final hearing he has retired and works casually two days per week as needed. He otherwise relies on his superannuation funds to meet his living expenses and legal costs. It does not appear that either party is impecunious and indeed both parties have significant assets following the making of the property adjustment orders by this Court in September 2018.
[4] See Coombs & Coombs [2018] FCCA 2671
Conduct of the Parties
There was nothing particularly extraordinary in the conduct of either party to these proceedings, in relation to the proceedings. The submissions made on behalf of the husband that the wife’s conduct in failing to comply with pre-action procedures and as a result of the actions taken by her during the proceedings are not made out on the evidence. The onus rests on the husband.
Rule 1.05 Family Law Rules sets out the pre-action procedures applicable in the Family Court of Australia. Compliance with pre-action procedures in that Court is not necessary in certain circumstances, such as where an application is urgent. It appears from the Court file that the Initiating Application filed on 13 October 2015 sought an order that it be listed at short notice, an order which was not made by the Registrar who determined that application.
There does not appear to be any evidence in the husband’s case on the application for costs which outlines what it is that the wife was obliged to do pursuant to the pre-action procedures and how it is asserted that she failed to comply with those procedures.[5] There was some evidence at final hearing as to how and when the husband was served with the Initiating Application, but no cross-examination of the wife about her alleged failure to comply with pre-action procedures.
[5] The husband says at paragraph 9 of his affidavit filed in support of the application for costs “I further rely upon my Affidavit sworn and filed on 29 March 2017 in these proceedings.” This was the husband’s trial affidavit. The husband refers to paragraphs 146 to 178 of that trial affidavit in his written submissions.
Furthermore, the husband simply asserts that throughout the proceedings, the wife has raised disclosure issues which has caused delay and caused the husband to incur costs. The wife has issued 14 subpoenas. The Court noted in its Reasons for Judgment published on 20 September 2018 that it “appears that the wife has spent, since the proceedings commenced, significant effort in trying to chase every rabbit down its warren”. This of itself is not a finding of the Court that the wife has acted in a manner which has caused delay or unnecessary costs to be incurred by the husband.
Nothing is said by the husband as to how the wife’s actions have impacted upon him, for example, the husband does not put before the Court evidence of his compliance with requests for full and frank disclosure, the costs involved with that, and why such disclosure was either unnecessary or somehow improperly sought. What the husband does is to assert through his trial affidavit that the wife had access to documents because they were kept in an unlocked filling cabinet in the former matrimonial home (which the parties shared whilst separated) and to which the wife had full access at the time and that the wife had access to shelves in the garage of that home where old paperwork and files were stored. [6]
[6] If access was available to both of them, no explanation is offered by the husband as to why documents which were presumably sought by the wife were not then produced by him – if the husband asserts that he has complied with his obligation for full and frank disclosure and that the wife wasted costs unnecessarily.
It is further submitted that the “wife would not enter into sensible negotiations at two mediations because of her view that the husband was not making full disclosure”. There is no evidence as to what occurred at mediation, for example, what offers were made and what was said. Such evidence is admissible on the question of costs[7]. A submission is not evidence.
[7] See generally ss 55, 131(2)(h) Evidence Act 1995 (Cth)
Failure to Comply with Orders
There is no evidence that the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court.
Whether a Party has Been Wholly Unsuccessful
Neither party was wholly unsuccessful. Orders adjusting their property interests were made which were not in accordance with either of the parties’ applications.[8]
[8] At final hearing the husband ran 55/45 case in his favour, while at final hearing the wife ran a 52.5/47.5 case in her favour. Neither party was either wholly successful or wholly unsuccessful.
Offers in Writing
Both parties made offers in writing to settle the proceedings. Neither party ultimately did better as a result of the final order made than the offer(s) that they each made.
Other Matters
In its Reasons for Judgment[9], the Court found that the wife had had expended over $100,000 between October 2016 and November 2017 from savings which she had accumulated as at October 2015, and that it appeared to the Court that a great deal of this money was spent on legal expenses.[10]
[9] Paragraph 38
[10] The husband did not seek a notional add back of these funds, nor was any submission made on behalf of the husband at final hearing in respect of such legal costs paid by the wife (if indeed they had been paid).
The husband paid legal costs of similar proportions in the period leading up to final hearing. His legal costs to the date of the application for costs from October 2015 are $117,500.[11]
[11] Rounded to the nearest $100
Costs Reserved Previously
The proceedings were initially commenced by the wife in the Family Court of Australia, and subsequently transferred to this Court. The parties had the benefit of two financial conferences in the Family Court. On 6 September 2016, the husband’s costs of the conciliation conference were reserved.
On 1 March 2017, both parties’ costs of the final hearing which was vacated, were reserved. On the day both parties submitted to the Court, for different reasons, that the matter was not ready to proceed to final hearing on the day listed. Part of the reason why the matter was not ready to proceed on the day was because of late disclosure by the husband (which was not made until shortly prior to the hearing date).
On 1 June 2017, the Court made an order to “reserve today’s costs”. The matter was before the Court for a directions hearing. During the course of the directions hearing, an oral application for leave to issue more than 5 subpoena was made by the wife and leave was refused.
The Federal Circuit Court Rules provide that if the costs of a motion, application or other proceeding are reserved, the costs reserved follow the event unless the Court otherwise orders.[12] It is a rule which replicates the now repealed O 62 R 15 of the Federal Court Rules (Cth), now replaced by a slightly differently worded Rule 40.03 of the Federal Court Rules and which is in similar terms as Rule 42.7 of the Uniform Civil Procedure Rules(NSW) 2005.
[12] Rule 21.04
In essence, the effect of reserving the costs of interlocutory proceedings is to make them recoverable as the costs of the successful party in the proceedings, unless some contrary order is made by the Court.[13]
[13] Idoport Pty Ltd v National Australia Bank Ltd[2006] NSWSC 895; BC200607058 at [6] referring to O’Keefe Nominees Pty Ltd v BP Australia Limited (No 2) (1995) 55 FCR 591 at 598: “ it is not necessarily just that the costs of an interlocutory application should follow the result of that interlocutory application but rather should be determined by the result of the principal litigation of which the interlocutory application forms but a part.”
The difficulty with this rule for present purposes is that in proceedings under the Family Law Act costs do not follow the event but rather each party pays its own costs unless there are circumstances justifying making a costs order. However, if a costs order is made then there is no reason why the effect of an order reserving a party’s costs would not be to follow the event, in line with the rules of the Court.
The order reserving the husband’s costs were costs made by the Family Court, before the matter was transferred to this Court. Rule 21.05 of the Federal Circuit Court Rules2001 relevantly provides that if the Family Court has not made an order for costs, then upon transfer, this Court may make an order for costs including costs before the transfer.
Court’s Determination
Despite having an opportunity and indeed an obligation to do so, the husband has not put before the Court any evidence or submissions as to why the Court ought to exercise its discretion and allow the costs application to be made outside of the 28 day limitation period provided for in the Rules.
Limitation periods exist for a reason. As stated by Justice McHugh:
A limitation period should not be seen … as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature's judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. … A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case.[14]
[14] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 553
Furthermore, the Court does not find that there are circumstances justifying a departure from the usual rule (s117) that each party to proceedings under the Act shall bear his or her own costs.
The application for costs is not made out.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Date: 30 April 2019
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