Cotter and Cotter (No 2)
[2016] FamCA 878
•14 October 2016
FAMILY COURT OF AUSTRALIA
| COTTER & COTTER (NO 2) | [2016] FamCA 878 | |
| FAMILY LAW – COSTS – Application for indemnity costs against wife in respect of the wife’s dismissed application to set aside consent orders as to property under s79A and husbands enforcement application arising out of the consent property orders – Where discussion of general principles – Whether there are justifying circumstances for a costs order to be made – Whether there are grounds for awarding indemnity costs – Where husband fails to comply with Rule 19.08(3) – Where costs order made on party/party basis. | ||
Colgate-Palmolive Company and Colgate-Palmolive Pty Limited v Cussons Pty Limited [1993] FCA 536
|
| APPLICANT: | Mr Cotter |
| RESPONDENT: | Ms Cotter |
| FILE NUMBER: | PAC | 4313 | of | 2013 |
| DATE DELIVERED: | 14 October 2016 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 12 August 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Judge |
| SOLICITOR FOR THE APPLICANT: | Jonathan Abbott & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr McDonell |
| SOLICITOR FOR THE RESPONDENT: | McDonell Milne Toltz Family Lawyers |
Orders
That the wife pay the husband’s cost of and incidental to her s79A application and his application for enforcement on a party/party basis as agreed within one month of this order or as otherwise assessed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cotter & Cotter (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 4313 of 2013
| Mr Cotter |
Applicant
And
| Ms Cotter |
Respondent
REASONS FOR JUDGMENT
On 24 February 2015 final orders as to property settlement as between the husband and wife were made by consent.
Regrettably that was not the end of the litigation between the parties and by reason of subsequent events further proceedings were commenced and the husband now seeks an order for costs against the wife in relation to those further proceedings.
On 14 July 2015 less than five months after final property orders the wife filed an application seeking to set those orders aside pursuant to s79A of the Family Law Act asserting nondisclosure by the husband.
The wife’s application was first listed before the Court on 18 September 2015 on which date the wife was unrepresented. The matter was adjourned to 30 October 2015 it appears to facilitate the wife obtaining legal advice in relation to her application.
On 9 September 2015 the husband filed an enforcement application in respect to asserted non-compliance by the wife of several of the final orders for property settlement made on 24 February 2015. The husband’s enforcement application was also listed before the Court on 18 September 2015.
Both applications were listed before a registrar on 30 October 2015 on which date there was no appearance by or behalf of the wife. Proceedings were adjourned for judicial case management to 14 December 2015.
Prior to the adjourned date the husband filed an amended application in a case setting out with more particularity the orders sought by him against the wife by way of enforcement.
On 14 December 2015 orders and notations were made in the following terms:
1.The matter is adjourned to Tuesday 15 March 2016 at 10:00am for a further Case Management hearing.
2.The Husband’s application in a case filed on 9 September 2015 as subsequently amended is adjourned to Tuesday 15 March 2016 at 10:00am for hearing.
3.The Husband file and serve any amended application in a case together with such further affidavit material he wishes to rely upon by no later than Friday 11 March 2016.
4.The Wife file and serve a response to the application in a case and any affidavit material upon which she seeks to rely by no later than Friday 11 March 2016.
5.The Respondent Husband in respect to the Wife’s s 79A application has leave to administer a request for further and better particulars to the Wife as to the precise grounds relied upon under s 79A of the Act to set aside or vary the subject orders and for the particular facts relied upon in support of each of the grounds with that request to be administered by Friday 29 January 2016 with the Wife’s response to that request for particulars to be provided by no later than Friday 26 February 2016.
6.The costs of the Respondent Husband for today are reserved.
IT IS NOTED THAT:
A.If the parties during the period of the adjournment are able to resolve the matter including a resolution by way of amending the subject property orders by consent they are at liberty to file terms with chambers for the purposes of consent orders being made in chambers and in that circumstance the adjourned date will be vacated.
On 15 March 2015 orders were made in the following terms:
1.The matter is adjourned to Friday 6 May 2016 at 2:15pm for hearing of the Respondent Husband’s application for summary dismissal of the Applicant Wife’s s79A application and secondly for hearing of the Husband’s application for enforcement of property orders.
2.The Applicant Wife’s compliance with Order 4 made on 14 December 2015 as to filing and serving a response to the application in a case as to enforcement and any affidavit on which she intends to rely be extended to no later than Friday 29 April 2016.
3.The Applicant Wife file and serve any further affidavit material to be relied upon by her in support of her s 79A application by no later than Friday 29 April 2016.
4.The Applicant Wife file and serve an amended initiating application setting out with particularity the provisions of s 79A on which she relies.
5.The Applicant pay the Respondent Husband’s costs thrown away by reason of the further adjournment today assessed in the sum of $750 within two months of today’s date.
On 6 May 2016 further orders were made in the following terms:
BY CONSENT IT IS ORDERED THAT:
1.Upon noting that the parties have agreed as to the appointment of a real estate agent for the purpose of the sale of the commercial property at [D Street] Sydney that agent being [H Agents], … Sydney it is ordered that the Husband do all necessary things and sign all necessary documents on behalf of the Husband and Wife to list that property for sale with [H Agents] in the manner provided for in orders made on 24 February 2015.
2.Upon noting that the parties have agreed upon the appointment of a conveyancer for the purposes of conducting the sale of the said commercial property that conveyancer being [I Conveyancing] the Husband do all necessary things and sign all necessary documents on behalf of the Husband and Wife so as to appropriately instruct [I Conveyancing] to have carriage of the sale of the commercial property as provided for in orders made on 24 February 2015.
IT IS FURTHER ORDERED THAT:
3.The matter is adjourned to Thursday 19 May 2016 at 10:00am for hearing.
4.The Wife be in attendance in person on the adjourned date and that she produce to the Court on that date the Certificate of Title in relation to the property at [B Street, Suburb C] being Folio Identifier … and the duly executed discharge of the mortgage secured over the said property and it is noted that on the adjourned date it is proposed that those documents be provided to the Husband or his solicitor and that the Wife sign a memorandum of transfer of that property to the Husband as provided for in orders made on 24 February 2015.
5.The Wife’s compliance with Order 2 made on 15 March 2015 be extended to the close of business on 18 May 2016.
6.The time for the Wife’s compliance with Orders 3 and 4 made on 15 March 2016 be extended to the close of business on 18 May 2016.
7.Proceedings as to enforcement and the Husband’s application for summary dismissal of the Wife’s s 79A application are adjourned for hearing to Thursday 19 May 2016 at 10:00am for hearing.
8.In the event that the Wife fails to comply with the previous order for her to file and serve her further material in relation to her s 79A order then her initiating application filed on 14 July 2015 shall stand dismissed.
9.The Husband’s costs of today are reserved noting that he has today made an application for indemnity costs in the sum of $4357.85.
On 19 May 2016 the wife appeared at 10.00am with her s79A application being dismissed pursuant to Order 8 made on the 6 May 2016. The wife was excused to obtain certain documents relevant to the enforcement application and ordered to be in attendance before the Court at 2.15pm. She failed to return.
Orders were that day made in the following terms:
IT IS ORDERED THAT:
1.The Wife’s application filed on 14 July 2015 is dismissed.
2.The proceedings are stood down until 2:15pm today.
3.The Respondent Wife be in attendance in person before the Court at 2:15pm.
UPON NOTING THAT THE WIFE DID NOT RETURN TO COURT AT 2:15PM TODAY IT IS FURTHER ORDERED THAT:
4.The Applicant [Mr Cotter] be authorised on behalf of he and the Respondent [Ms Cotter] to do all things necessary and sign all necessary documents so as to make application to the Director of the Land Titles Office NSW for a replacement Certificate of Title in relation to the property at [B Street, Suburb C] being the land comprised in Folio Identifier ...
5.The Applicant [Mr Cotter] be authorised to do all things necessary and sign all necessary documents on behalf of himself and the Respondent [Ms Cotter] so as to obtain a replacement discharge of mortgage from Perpetual Trustees Limited in relation to the mortgage that previously encumbered the property at [B Street, Suburb C] being the land comprised in Folio Identifier ...
6.The Applicant [Mr Cotter] be authorised to do all things necessary and sign all necessary documents on behalf of himself and the Respondent [Ms Cotter] to obtain a replacement Certificate of Title in relation to the property situate at [D Street] Sydney being the land comprised in Folio Identifier ...
7.The Registrar, Family Court of Australia Parramatta registry forthwith be authorised to execute in the name of the Wife the memorandum of transfer in respect of the property at [B Street, Suburb C] being the land comprised in Folio Identifier …, that transfer effecting a transfer of the Wife’s right title and interest in that property to the Husband.
8.Proceedings as to the balance of the Husband’s enforcement application seeking a sale of the property at [E Street, Suburb F] and as to costs be adjourned for hearing to Wednesday 20 July 2016 at 10:00am.
9.The Applicant Husband file and serve any further affidavit material to be relied upon by him in relation to the outstanding matters for determination by no later than Friday 8 July 2016.
10.The solicitor for the Husband send by ordinary pre-paid post addressed to the Wife at [E Street, Suburb F] a sealed copy of the orders made today together with a letter informing the Wife that in the absence of her during the period of the adjournment complying with Order 1(c) made on 24 February 2015 there may well be an order for the sale of the Normanhurst property on that day and that further the Husband’s application for costs will be heard and determined on that date.
11.The Wife file any affidavit material to be relied upon by her by no later than 8 July 2016.
12.The Husband’s costs of today are reserved.
13.Leave is granted to the Husband to relist proceedings as to implementation of these orders on short notice.
As a consequence of orders made on 19 May 2016 the only outstanding issue relating to the husband’s application for enforcement was the wife’s compliance with obligations under the orders of 24 February 2015 to procure a refinance of the mortgages secured over properties at Suburb C that was to be done concurrently with the transfer to her of those properties.
The matter was again before the Court on 12 August 2016 and orders and notations were made as follows:
IT IS ORDERED THAT:
1.The Wife file and serve any written submissions in response to the Husband’s application for costs of the proceedings by no later than Friday 16 September 2016.
2.In the event of any submissions in reply by the Husband those submissions are to be filed and served by no later than Friday 23 September 2016.
3.Judgment as to costs will be reserved to chambers as and from 23 September 2016.
4.The amended application as to enforcement filed by the Husband on 1 December 2015 is dismissed.
IT IS NOTED THAT:
A.There is one discreet issue outstanding in relation to enforcement relating to the Wife’s obligation to refinance the [Suburb F] property and in the event of any further issues the Husband would propose to file a further application
The husband’s written submissions as to costs provided on 12 August 2016 are Exhibit “A”.
The wife’s written submissions have now been received.
Costs
Relevantly as to this application s 117 of the Act provides that each party to the proceedings shall bear his or her own costs.
That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.
Although s 117(2) of the Act requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: see Penfold v Penfold (1980) 144 CLR 311.
The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section as follows:
a)The financial circumstances of each of the parties to the proceedings;
b)Whether any party has legal aid and the terms of any grant of aid;
c)The conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answers, questions, admissions of facts, production of documents and similar matters;
d)Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;
e)Whether any party to the proceedings has been wholly unsuccessful in the proceedings;
f)Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
g)Such other matters as the Court considers relevant.
The Full Court in Hawkins & Roe [2012] FamCAFC 77 said:
18. The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:
… A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
As to the relevant considerations:
a)Neither party is impecunious and both parties have assets of some substance. The capacity of the wife to meet an order for costs is not in issue.
b)Neither party is in receipt of a grant of legal aid.
c)As to the conduct of the parties to the proceedings in relation to the proceedings the wife failed to comply with various orders as to the filing and service of documents and on 19 May 2016 the matter having been adjourned until the afternoon failed to reappear notwithstanding an order that she do so. As a consequence the husband’s application for enforcement orders proceeded to hearing in her absence. The wife’s non-compliance necessitated additional court events to which the husband was put to expense.
d)The enforcement application commenced by the husband was necessitated by the wife’s failure to comply with obligations imposed upon her in the final consent orders made on 24 February 2015.
e)The wife has been wholly unsuccessful in these proceedings in that ultimately her s 79A application was dismissed and the husband despite her non-cooperation in the proceedings was able to obtain orders facilitating implementation and enforcement of the final orders of February 2015.
f)There are no relevant offers of settlement.
g)Otherwise by letter dated 1 December 2015 the wife was put on notice that in the event that she failed to comply with directions for the filing of an amended initiating application, her affidavit in support and her financial statement within seven days and that in the event that she did not by 4.00 p.m. on 11 December provide to the husband’s solicitors certificates of title and other documents necessary to complete her compliance with obligations under the orders of February 2015 then costs would be sought against her as and from 14 December 2015 on an indemnity basis. As a consequence of the wife’s conduct in breach of her obligations pursuant to orders of February 2015 it was necessary for the husband to commence proceedings appropriately.
In all of the circumstances the Court is satisfied that it is appropriate to make an order that the wife pay the husband’s costs of and incidental to the above proceedings.
It is usual for such an order to be made on a party/party basis. The husband seeks an order that the wife pay his costs on an indemnity basis.
Indemnity Costs
The application before the Court is an application for the wife to pay the husband’s costs on an indemnity basis, or such other order as the Court thinks fit.
It is usual for the Court to make an order for costs on a party/party basis.
Provisions of the Family Law Rules 2004 (Cth) (“the Rules”), particularly rule 19.18, provides for the method of calculations of costs. That rule provides as follows:
(1)The court may order that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
(b)to be calculated in accordance with the method stated in the order; or
(c)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
Rule 19.18 further provides that:
(3) In making an order under subrule (1), the court may consider:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness of each party’s behaviour in the case;
(c) the rates ordinarily payable to lawyers in comparable cases;
(d) whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with pre-action procedures; and
(f) expenses properly paid or payable.
The Court has jurisdiction in its discretion to make an order for costs on an indemnity basis and the purpose of such an award is to more fully or even wholly repay to a party all, or at least the majority, of their legal costs and disbursements and charges incurred in the proceedings.
The category of cases in which an award of an indemnity costs order may be appropriate are not closed and the Full Court of the Family Court observed in Yunghanns & Ors & Yunghanns & Ors & Yunghanns [2000] FamCA 681 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 order is sought. …
More recently, the Full Court has considered indemnity costs in Joyce & Fante [2013] FamCAFC 141, Limousin & Limousin [2007] FamCAFC 1178, Fennessy & Gregorian [2009] FamCAFC 44 and D & D(Costs) (No. 2) [2010] FamCAFC 64.
Otherwise, the principles underlying an award for indemnity costs have been classically summarised by Sheppard J in Colgate-Palmolive Company and Colgate-Palmolive Pty Limited v Cussons Pty Limited [1993] FCA 536 where his Honour, in summary, said at [24]:
…
2. 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 a party and party basis. …
3. 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. …
4. In consequence of the settled practice which exists, the Court ought not usually make an order for payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. …
Sheppard J detailed some of the circumstances which may warrant the exercise of the discretion to award indemnity costs and they included:
a)false and irrelevant allegations of fraud;
b)misconduct that causes a loss of time to the Court and other parties;
c)where the proceedings were commenced or continued for an ulterior motive;
d)the undue prolongation of a case on groundless contentions; and
e)wilful disregard of known facts and clearly established law,
f)the imprudent refusal of an offer of settlement.
Having regard to the consideration of the background circumstances of this matter as discussed above the applicant wife has commenced proceedings, engaged the husband in a response thereto necessitating the expenditure by him of significant legal costs only to then to consent to her application being dismissed in circumstances where it is admitted in submissions as to costs that her application was ill-conceived.
Otherwise the husband has been put to significant expense in procuring compliance by the wife with her obligations under the February 2015 orders.
The husband has provided a copy of his costs agreement as between himself and his solicitors in compliance with rule 19.08(3). Failure to do so would have been fatal to his application for indemnity costs. However, in the circumstances of this matter it is appropriate that the ordinary rule as to costs on a party/party basis be applied, there being no circumstances that would clearly enliven an award of indemnity costs.
Otherwise it is just, for the reasons discussed above, that there be an order that the wife pay the husband’s costs of and incidental to these proceedings on a party/party basis as agreed or assessed.
Orders will be made accordingly.
I certify that the preceding thirty eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 14 October 2016.
Associate:
Date: 26 October 2016
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Remedies
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