Curtain & Curtain (No 5)
[2025] FedCFamC1F 124
•12 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Curtain & Curtain (No 5) [2025] FedCFamC1F 124
File number(s): ADC 4409 of 2013 Judgment of: MEAD J Date of judgment: 12 March 2025 Catchwords: FAMILY LAW – COSTS – Application for costs – Both parties seeking indemnity costs – Whether costs should be awarded on an indemnity basis – Where there are circumstances that justify orders for costs being made Legislation: Family Law Act 1975 (Cth), ss 79, 79A, s 79A(1)(a), 117, 117(2), 117(2A), 117(2A)(c), 117(2A)(e), 117(2A)(f), 117(4), 117(4A), 117(5), 117(6)
Federal Circuit and Family Court of Australia (Family Law) Rules r 12.13,
Cases cited: Curtain & Curtain [2018] FamCA 796
Curtain & Curtain [2019] FamCA 919
Curtain & Curtain [2022] FedCFamC1F 186
Curtain & Curtain [2022] FedCFamC1A 134
Curtain & Curtain (No 4) [2024] FedCFamC1F 348
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225
Fitzgerald (as child representative for A) (Legal Aid commissioner of Tasmania) v Fish [2005] FamCA 158
Lindon v Commonwealth of Australia (No 2) (1996) 136 ALR 251
Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664
Sfakianakis & Sfakianakis [2019] FamCAFC 54
Division: Division 1 First Instance Number of paragraphs: 83 Date of hearing: 20 January 2025 Place: Adelaide Counsel for the Applicant: Mr UU Solicitor for the Applicant: AT Lawyers Counsel for the Respondent: Mr McQuade Solicitor for the Respondent: CM Tucker & Associates ORDERS
ADC 4409 of 2013 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR CURTAIN
Applicant
AND: MS CURTAIN
Respondent
ORDER MADE BY:
MEAD J
DATE OF ORDER:
12 MARCH 2025
THE COURT ORDERS THAT:
1.The husband do pay the wife’s costs of and incidental to the husband’s application for summary dismissal filed herein on 18 January 2021 fixed in the sum of $27,500 (TWENTY SEVEN THOUSAND FIVE HUNDRED DOLLARS).
2.The wife do pay the husband’s costs of and incidental to the wife’s Initiating Application filed herein on 29 November 2017 (as amended on 8 May 2020) fixed in the sum of $300,000 (THREE HUNDRED THOUSAND DOLLARS).
3.To give effect to the orders specified in paragraphs 1 and 2 hereof, the wife do pay to the trust account of the husband’s solicitors, CM Tucker & Associates on account of the husband, fixed in the sum of $272,500 (TWO HUNDRED AND SEVENTY-TWO THOUSAND FIVE HUNDRED DOLLARS) on or before the 11 July 2025.
4.All extant applications be otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MEAD J:
INTRODUCTION
On 25 March 2022 I made an order dismissing an Application in a Case filed by the husband on 18 January 2021, wherein the husband sought summary dismissal of an Initiating Application filed by the wife on 29 November 2017. I further ordered that the question of costs be reserved.
The wife sought costs against the husband on an indemnity basis in relation to that interlocutory application.
On 4 June 2024 I ordered that both the Initiating Application filed by the wife on 29 November 2017 and the Response thereto filed by the husband on 13 February 2018 be dismissed and that all extant applications be otherwise dismissed save as to costs.
These reasons relate firstly to the wife’s application for indemnity costs against the husband arising from his unsuccessful interlocutory application to summarily dismiss the wife’s Initiating Application and secondly, to the husband’s application for indemnity costs against the wife arising from the order dismissing her Initiating Application.
Reasons with respect to both costs applications are being delivered in the same judgment in circumstances where shortly after the hearing of the original costs application issues concerning my absence from the court for a lengthy period and the husband’s ongoing involvement in proceedings in the Federal Court directly relevant to these proceedings resulted in a lengthy delay to the proceedings generally.
WIFE’S APPLICATION FOR COSTS FILED 4 MAY 2022
On 29 November 2017 the wife Ms Curtain filed an Initiating Application seeking to set aside final orders for settlement of property made by Berman J on 15 July 2016 (as amended on 26 July 2016). The wife relied on the provisions of s 79A(1)(a) of the Family Law Act 1975 (Cth) (“the Act”). She further sought an order for indemnity costs against the husband.
On 13 February 2018 the husband filed a Response opposing the wife’s Initiating Application and seeking his costs against the wife on an indemnity basis.
In the course of these proceedings the court was required to determine an issue relating to legal professional privilege in 2018[1] and then in 2019, an application by the wife to bifurcate her s 79A application and s 79 application.[2]
[1] Curtain & Curtain [2018] FamCA 796.
[2] Curtain & Curtain [2019] FamCA 919.
Then on 18 January 2021 the husband filed an Application in a Case seeking that the wife’s Initiating Application be summarily dismissed and that the wife pay his costs in relation to that application on an indemnity basis.
On 19 April 2021 the wife filed a Response seeking that the husband’s Application in a Case be dismissed.[3]
[3] Curtain & Curtain [2022] FedCFamC1F 186.
For reasons delivered on 25 March 2022 the husband’s interlocutory application was dismissed.
On 20 April 2022 the husband filed a Notice of Appeal seeking leave to appeal that interlocutory order.
On 4 May 2022 the wife filed an Application in a Proceeding seeking, inter alia, that the husband “pay the costs of an (sic) incidental to his application for summary dismissal filed on 18 January 2021 on an indemnity basis in the sum of $41,260.52 or otherwise as the court shall determine.”
That application was ultimately listed for hearing on 12 October 2022. By the time of that hearing the Full Court of the Federal Circuit and Family Court of Australia had, by order of 31 August 2022, refused leave to appeal the interlocutory order as sought by the husband and further had made an order for costs against the husband in relation to that application fixed in the sum of $18,370.39.[4]
[4] Curtain & Curtain [2022] FedCFamC1A 134.
During submissions by Mr Tredrea of Counsel for the wife and Mr McQuade of Counsel for the husband on 12 October 2022, Mr McQuade conceded that an order for costs was appropriate but only on a party-party basis.
Section 117 of the Act provides that each party to proceedings under the Act bear their own costs subject to the provisions of subsections 2, 45A(b) and 70NFB(1) and sections 117AA and 117AC. For the purpose of this judgment subsection 117(2) is relevant.
Section 117(2) of the Act enables the court, in proceedings under the Act, to make an order for costs either on an interlocutory basis or otherwise as it considers just if it is of the opinion that there are circumstances that justify it so doing, subject to various subsections.[5]
[5] ss (2), 102QAB(6) and s 117AA, 117AC of the Act.
In the event that a court determines there are circumstances that justify it exercising its discretion to make an order for costs it may do so having regard to the matters set out in s 117(2A) of the Act.
Section 117(2A) of the Act provides that the court shall have regard to the factors specified therein in considering what if any order should be made for costs. Those factors are:
(a) the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(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 answer 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.
It is well settled law that no one factor in s 117(2A) of the Act is determinative, and the Court may give such weight as it considers relevant to any factor.[6]
[6] Fitzgerald (as child representative for A) (Legal Aid commissioner of Tasmania) v Fish [2005] FamCA 158.
In circumstances where the husband’s application for summary dismissal of the wife’s Initiating Application had been wholly unsuccessful, it was submitted by counsel for the wife that in those circumstances an “innocent party” should not have to bear costs incurred by them.
Counsel for the husband conceded the question of costs but submitted the husband’s conduct in making the application could not be described as vexatious or frivolous and that any order for costs should be made on a party-party basis.
The wife sought the sum of $41,260.52 on an indemnity basis of and incidental to the husband’s application for summary dismissal.[7]
[7] Wife’s Application in a Proceeding filed 4 May 2022.
The wife’s solicitor Mr UU filed an affidavit on 27 April 2022 in support of the wife’s costs application, to which was attached a document described as a “SCHEDULE OF RESPONDENTS COSTS RE: APPLICATION FOR SUMMARY DISMISSAL (calculated at scale)”. The document set out costs calculations in two columns, the first headed “Scale Amount” and the second “Indemnity Amount”. The amounts in the column headed “Scale Amount” totalled $27,561.12 and those in the column headed "Indemnity Amount" totalled $41,260.52.
It was submitted by Mr Tredrea that an order for costs should be made fixing a lump sum, to avoid the time and expense associated with an order for taxation of costs, particularly in circumstances where the orders sought related to an interlocutory application. Mr McQuade did not speak against that submission for the reasons of saving of costs and time of taxation but made no concession as to the issue of indemnity costs.
Mr McQuade drew the courts attention to Rule 12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) which provides inter alia that:
…
(4)A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement or costs agreements in relation to those costs and, if so, the terms of the costs agreement or costs agreements.
He submitted that the Affidavit of the wife’s solicitor setting out the two costs schedules did not attach a copy of any costs agreement between the wife and her legal representatives. He said that the wife’s solicitor had conceded in that affidavit that although the wife had been billed for work at the rate of $450 per hour plus GST she had not signed a retainer agreement by oversight but had paid fees calculated at that rate.[8]
[8] Affidavit of Mr UU filed 27 April 2022, paragraph 4.
At the time the application for costs was argued before the court each of the parties had filed a Financial Statement. In that filed by the wife on 11 October 2022 she deposed to total average weekly income of $1,650, total weekly personal expenditure of $1,621 and to a total value of property owned by her of $1,237,100. She deposed to total liabilities of $473,262 and gross superannuation in the sum of $196,872.[9]
[9] Wife’s Financial Statement filed 11 October 2022.
In the husband’s statement filed on 10 October 2022 he deposed to total average weekly income of $4,470, total weekly personal expenditure of $1,186, and total value of property owned by him of $2,553,848. He deposed to total liabilities of $1,486,222 and gross superannuation in the sum of $942,029.[10] I am satisfied at that time that the husband’s net average weekly income significantly exceeded that of the wife as did the value of his superannuation entitlements and the value of property owned by him.
[10] Husband’s Financial Statement filed 10 October 2022.
Neither party were in receipt of Legal Aid and the proceedings were not necessitated by the failure of a party to the proceedings to comply with previous orders of the court. Neither counsel made submissions with respect to any offers in existence.
Counsel for the wife submitted that the conduct of the husband was remiss in that he had failed to make proper disclosures at the original trial heard by His Honour Justice Berman in 2016.
It was submitted however by Mr McQuade for the husband that the costs application before the Court related to the specific application for summary dismissal and it was therefore not appropriate to refer to the husband’s conduct in any other proceedings between the parties.
The husband’s application for summary dismissal failed because I was unable to find that the wife had no reasonable likelihood of successfully prosecuting the proceedings she had instituted pursuant to s 79A(1)(a) of the Act, wherein she sought to set aside the order of Berman J of 15 July 2016 (as amended on 26 July 2016).[11]
[11] Curtain & Curtain [2022] FedCFamC1F 186, 83 and r 10.09(1)(d) of the Rules.
The concept of no reasonable likelihood was discussed in Lindon v Commonwealth of Australia(No 2) (1996) 136 ALR 251 where the court said at 256:
“that it is clear, on the face of the opponents documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious. An opinion of the court that a case appears weak such that it is unlikely to succeed is not, alone, sufficient to warrant summary determination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment”.
Notwithstanding submissions made by Mr Tredrea as to various “findings” I had made in my reasoning for the dismissal of the husband’s application for summary dismissal (commented on by the Full Court in paragraph 33 of the reasons relating to the husband’s application to appeal the interlocutory judgment of 25 March 2022)[12] the issue that had to be determined was whether the husband should succeed in his application for summary dismissal taking into account the relevant principles on which such a determination should be made.
[12] Curtain & Curtain [2022] FedCFamC1A 134.
The husband was wholly unsuccessful in that application and I find that an order for costs is justified. I am not satisfied however that there was any material before the court that would support a finding that the appropriate order for costs should be one based on indemnity, noting also the non-compliance with the provisions of Rule 12.13 of the Rules.
I am unable to find that some “particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party and party basis”.[13]
[13] Per Sheppherd J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233.
The application for costs arose from an interlocutory application argued and determined on the papers. The evidence had not been tested and I was not satisfied on the material filed by the husband that it was appropriate to deprive the wife of an opportunity to pursue her pending claim.
I accept the submission of counsel for the husband that an order for costs is appropriate on a party-party basis but not on an indemnity basis.
I accept the submission of Mr Tredrea for the wife that by the time of the hearing in October 2022 the husband had been in possession of the detailed costs schedule, annexed to the affidavit of Mr UU to which I have referred, for some five months, and no objection had been raised with the quantum of the costs either as calculated on the scale or as indemnity costs.
I find that is appropriate to make an order for costs to be paid as a lump sum to avoid additional time and cost associated with taxation and that the costs should be fixed in the sum of $27,500. I will refer to the issue of payment of that amount at the conclusion of these reasons.
HUSBAND’S APPLICATION FOR INDEMNITY COSTS AGAINST THE WIFE IN RELATION TO THE WIFE’S INITIATING APPLICATION FILED 29 NOVEMBER 2017 (AS AMENDED ON 8 MAY 2020)
On 13 February 2018 the husband filed a Response to the wife’s Initiating Application filed 29 November 2017. In that response he sought that her application to set aside the final order for settlement of property made by Berman J on 15 July 2016 (as amended on 26 July 2016) be dismissed and that she pay his costs on an indemnity basis.
By order of 4 June 2024 the wife’s Initiating Application filed on 29 November 2017 (as amended on 8 May 2020) was dismissed.[14] The husband’s Response thereto was also dismissed and all extant applications were otherwise dismissed save as to costs.
[14] Cant & Cant (No 4) [2024] FedCFamC1F 348.
On 3 July 2024 the husband filed an Application in a Proceeding seeking that the wife pay his reasonable costs of defending her application pursuant to s 79A of the Act on an indemnity basis, as well as orders seeking discharge of interlocutory orders made by Kari J on 20 July 2023 and 18 October 2023.
An affidavit in support of the application was filed by the husband on 1 July 2024 and a Financial Statement was filed on 3 July 2024. On 6 December 2024 the husband’s solicitor filed an affidavit annexing a bill of costs prepared by Mr AR of AS Lawyers. The Bill of Costs covered the period 16 August 2018 to 3 October 2024. The total of the costs as set out on page 6 of the costs account was $320,834.54.
On 15 January 2025 the wife filed a Response to the application in a proceeding seeking that the husband’s application filed 1 July 2024 be dismissed. On the same date an Affidavit in support of her response was filed together with a Financial Statement.
On 16 January 2025 the husband filed an updating Affidavit and Financial Statement. On the same day counsel for the husband filed an outline of case, with Mr UU, the solicitor for the wife filing submissions on behalf of the wife on 20 January 2025. Both Counsel spoke to their written submissions on 20 January 2025.
In the outline of case filed on behalf of the husband on 16 January 2025 Mr McQuade referred to the relevant sections of the Act pertaining to costs in the circumstances of this case, namely s 117(2) and s 117(2A) of the Act, and submitted that it was a case where circumstances would justify the making of a costs order, particularly the wife’s conduct in relation to the proceedings[15], the wife’s complete lack of success in her application[16] and the wife’s failure to accept offers in writing made by the husband.[17]
[15] s 117(2A)(c) of the Act.
[16] s 117(2A)(e) of the Act.
[17] s 117(2A)(f ) of the Act.
He further submitted that although ordinarily orders for costs would be made on a party-party basis, orders may be made for the payment of costs on an indemnity basis. He referred to the provisions of paragraph 4 of Rule 12.13 of the Rules which references indemnity costs and provides that:
(4)A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement or costs agreements in relation to those costs and, if so, the terms of the costs agreement or costs agreements.
In paragraph 13 of his outline he referred to the power to order costs on an indemnity basis pursuant to s 117(2A) of the Act being well settled. In submitting that not only was this a case in which the court could find that there are circumstances that justify a costs order being made against the wife but further, in exercising the discretion to award costs it would be appropriate to order those costs on an indemnity basis Mr McQuade submitted:
·The wife made allegations of fraud knowing them to be false;
·The wife was guilty of misconduct in the conduct of the case;
·Her cause of action was founded on a lie and on her deceit;
·The wife knew her case was without merit and continued to press her case over seven years knowing such to be the case;
·The wife pursued her case wilfully disregarding facts known by her to be true and with a wilful disregard of clearly established law pointing to the commencement of the action for an ulterior motive;
·The wife made allegations that should never have been made and prolonged the case by the making of groundless contentions;
·The wife wasted the courts time;
·At trial the wife acknowledged the husband had approached her to elicit her support in his proceedings in the Federal Court and had offered to pay her from monies he received from that litigation.[18]
[18] Husband’s Outline of Case filed 16 January 2025, paragraphs 17–19.
Mr McQuade submitted that the total coasts sought by the husband on the basis of indemnity costs were $436,459.07.[19]
[19] Ibid, paragraphs 21-23.
In speaking to the written submissions at the hearing on 20 January 2025 Mr McQuade stressed that at the time the wife instituted proceedings in 2017 she was aware that the major premise upon which those proceedings were based, namely that at the time of the 2016 trial before Berman J she had been unaware of the husband having an interest in an entity known as Q Trust, was patently untrue.
He submitted that:
·Had the wife properly informed her solicitors in 2017 of the facts known to her she would likely have been advised against instituting the proceedings, and that the only inference that the court could draw from that course of action was that either she did not tell her solicitors of the true situation or she ignored advice against instituting proceedings;
·In any event the wife embarked upon her action knowing the premise of the action to be completely false, an action in respect of which proceedings were still ongoing in 2025, and that the wife had conceded that the premise was false by lunch time on the second day of the trial in 2024;
·Notwithstanding that concession at trial the proceedings had continued, and the court could infer from the fact that the wife instituted the proceedings and that the trial continued after that concession, that the proceedings were either commenced or continued for an ulterior motive;
·The wife’s actions in commencing the proceedings were entirely without merit;
·The court did not need to establish the exact motive but it could be noted in those circumstances that the matter was neither commenced nor proceeded with because of any belief on part of the wife of such a course being “right”;
·The wife’s actions were evidence of misconduct on her part causing loss of time to the court and to other parties;
·In failing to disclose what she knew regarding the husband’s interest in Q Trust and her knowledge of communication from W Pty Ltd to the husband contained in correspondence to him from that entity dated 18 February 2013 the wife misrepresented to the court that she knew nothing of the husband’s interest in the entity or the contents of the letter until after Justice Berman had delivered judgement in 2016;
·The wife knew that her case was without merit and it was for that reason that she failed to disclose the letter or her knowledge of the husband’s interest in Q Trust in the material she placed before the court when instituting the proceedings in 2017, being concerned that if she did disclose that information any proceeding to summarily dismiss her application would probably be successful and that would be the end of the matter;
·The wife continued with her deceit until the second day of trial, being the first day on which evidence was taken, in wilful disregard of the facts that she knew at the time;
·The wife made allegations of fraud knowing them to be false;
·She failed to disclose to the court that she in fact possessed the letter from W Pty Ltd to the husband dated February 2013, and thereby had knowledge of his interest in Q Trust and continued with that falsity until a concession was made in cross examination on the second day of trial;
·The wife’s conduct resulted in undue prolongation of the case in that she persisted with the prosecution of groundless contentions;
·The wife did not deny receiving offers from the husband to resolve the matter but rather said in evidence she was unaware of such offers;
·Ultimately she had been wholly unsuccessful such that she would not receive one dollar or even one cent from the action commenced by her in 2017, and that any offer of settlement above those amounts should have been accepted by the wife;
·In circumstances where the wife knew that her case was entirely without merit it was “unbelievable” that the wife would fail to accept any offer made by the husband;
·The reason that the wife failed to accept any offers made by the husband to resolve the issue was further evidence that she had commenced the case and continued the proceedings for an ulterior purpose, namely to make the husband suffer or incur unnecessary cost at a time he was incurring significant costs in the Federal Court;
·It was her position to make life for the husband as hard as possible, and that she conceded in evidence that her conversations with police regarding allegations made by her against the husband with respect to fraud occurred at a time before Justice Berman heard the matter in 2016;
·There was no other reason for the wife to raise those matters in these proceedings other than to “get back” at the husband;
·The wife had made no offer in relation to the question of the husband’s costs;
·The wife’s Financial Statement filed 15 January 2025 illustrated that the wife was not impecunious and that in any event the law was settled in respect of the principle that impecuniosity is not a bar to an order for costs;
·The wife persisted with the case knowing the amount of the legal fees she was incurring and, through costs notices relating to the husband’s costs, the legal fees he was facing;
·At any time the wife could have discontinued the proceedings or withdrawn her application but she chose to “fight on” with the extent of her knowledge about the Q Trust issue becoming clear on the first morning of evidence; and
·In circumstances where the wife put the husband to substantial expense knowing that her entire case was without merit an order not only for costs but for indemnity costs was demanded.
Mr McQuade submitted that in the husband’s affidavit filed in support of his costs application on 1 July 2024 he deposed to putting to the wife a proposal that if she assisted him in meeting his legal costs arising from his litigation in the Federal Court he would ensure she received a percentage of any successful outcome. He said that as at 20 January 2025, some six and a half months after the matter was deposed to by the husband, there had been no denial of that matter by the wife and accordingly that goes to the issue of the wife’s conduct in the continuation of these proceedings.
In the written submissions filed on behalf of the wife on 20 January 2025 Mr UU said that:
·Costs should not follow the event as a matter of course in the Family Law jurisdiction, that it was an essential preliminary to the making of a cost order that the court make a finding of justifying circumstances and that the ordinary rules relating to costs between party and party should not be departed from lightly;
·A court should be cautious in exercising its discretion to award indemnity costs and that the court is not obliged to exercise that discretion to make an order for indemnity costs even if there are facts and circumstances capable of warranting such an order;
·With reference to the parties financial circumstances contained in their recently filed Financial Statements, the husband was in a very superior financial position to that of the wife;
·Neither party was in receipt of Legal Aid;
·There was nothing adverse in the judgment delivered on 25 March 2022 as to the wife’s conduct of the proceedings and that the judgment delivered on 4 June 2024 made no findings as to the conduct of the proceedings by either party such that the court’s consideration of s 117(2A) of the Act would be materially effected save as to the contents of paragraph 114 of that judgment;
·Notwithstanding the wife’s s 79A application having been wholly unsuccessful she was successful in relation to issues of inspection of the husband’s commercial solicitors files early in the proceedings, in defending the husband’s application for summary dismissal and in defence of his application for leave to appeal and in obtaining injunctive orders before the Honourable Justice Kari;
·A written offer from the husband’s solicitors to the wife’s solicitor was put four years and two months after the commencement of the proceedings and some six week prior to the commencement of trial and was not framed in such a manner as to enable the wife to consider the reasonableness of the offer in any meaningful way;
·The husband did not disclose the terms of any written costs agreement as between he and his solicitors;
·The judgment the court delivered dismissing the husband’s application for summary dismissal of the wife’s substantive application recorded that the court could not be satisfied that the wife had no reasonable prospect of success or that the application was hopeless and that any argument that the wife filed the application with an ulterior motive or in wilful disregard of known facts is not applicable to the facts of this matter nor was she delinquent in bringing the application;
·Reference in the judgment of 25 March 2022 to the husband failing to disclose material he was obliged to disclose with respect to the 2016 proceedings did not mean he can benefit from those issues on the question of costs notwithstanding the subsequent findings of the court regarding the wife’s prior knowledge of relevant material as detailed in the judgment dated 4 June 2024;
·The most significant factor for the court to consider mitigating a costs order against the wife was the significant disparity in the parties financial circumstances;
·It would be unjust to make a costs order on that ground alone, and any significant costs order would result in the wife losing her home at the age of 61 years whereas in the event of the dismissal of the husband’s costs application there would be no comparative impact on him, taking into account his disclosed nett assets, including superannuation, of $4,679,365 as compared to the wife’s disclosed nett assets of $1,296,000;
·No other relevant s 117(2A) of the Act matters should overcome the parties disparate financial circumstances;
·In the event the court considered a costs order to be appropriate it should be on a party-party basis; and
·Any liability of the wife for costs should be set off against her entitlement to costs arising from the husband’s application for summary dismissal.
In speaking to the written submissions on 20 January 2025, Mr UU’s submission was that the disparity in the parties’ financial circumstances was the primary consideration and was enough to cast a shadow on the husband’s claim. He further submitted that:
·The issue of costs comes down to a balancing act regarding the s 117(2A) factors;
·Whilst the wife’s substantive application pursuant to s 79(A) of the Act had been unsuccessful it did not change the fact that the husband had misled the court in 2016 in that he had failed to disclose a number of important documents at trial before Justice Berman including the letter to him from W Pty Ltd dated February 2013 and subsequent correspondence regarding his interest in the Q Trust from Mr NN;
·There was no doubt that the husband did not come to the court as a “clean skin” in that he did not make appropriate disclosure;
·The court found that neither party made adequate disclosure and that such a finding should be taken into account by the court when considering costs;
·The delay such that the matter ultimately did not conclude until mid-2024 could not be attributed to the conduct of the wife but rather was caused as a result of the husband being involved in proceedings in the Federal Court as between he and W Pty Ltd and the Q Trust;
·The offer the husband had made to resolve the matter referred to earlier herein was not an offer at all in that it consisted of the transferring of units in a trust to the wife absent of any background to the offer or how that would impact on the parties pool of assets;
·The wife’s evidence was that she did not recall verbal offers made by the husband to resolve the matter and if the husband was relying on any further offers allegedly made to the wife to resolve issues they should be better particularised;
·The findings made in the judgment of 25 March 2022 arising from the husband’s application for summary dismissal were relevant to the question of costs in this matter in circumstances where whatever the wife’s knowledge of the letters was the husband had misled the court in 2016 in any event; and
·There should be no order made against the wife for costs but in the event that the court considers a costs order is warranted it can be an arbitrary figure having regard to the parties financial circumstances or alternatively the court can order that costs be taxed.
In reply, Mr McQuade submitted that most contentions made by Mr UU ignored the findings of the court in paragraphs 186 – 214 of the judgment of 4 June 2024.
CONCLUSION
I am satisfied that there are circumstances in this matter that justify an order for costs against the wife. I say at the outset however that I am not satisfied that this is a matter where it is appropriate to make an order for indemnity costs. That may have not been the case however had:
·There been any evidence before the court to satisfy the requirements of Rule 12.13 of the Rules regarding the existence of a costs agreement having been entered into between the husband and his solicitors and/or the fact of such agreement having been made known to the wife’s solicitors; and
·There not been such a significant disparity between the parties’ financial circumstances as evidenced in their Financial Statements to which I have referred.
It is important to note that the question of costs arises in relation to the wife’s s 79A application filed on 29 November 2017 (as amended on 8 May 2020), and not earlier proceedings. The wife was wholly unsuccessful in respect of that application.
The application was predicated on her allegation that before or at the time the Honourable Justice Berman was called upon to determine the distribution of assets acquired by she and the husband during their marriage the husband had failed to disclose relevant financial information such that she had been misled (as had the court at that time) as to the circumstances of the husband’s interest in Q Trust resulting in a miscarriage of justice.
In paragraph 91 of the wife’s Trial Affidavit filed on 28 February 2024 she deposed to the husband having never disclosed correspondence to him from W Pty Ltd dated February 2013 offering employment and a 20% interest in Q Trust and further that she had not obtained a copy of that correspondence until receiving the same from Mr LL on or about August 2017.
It was the wife’s position at the trial in April 2024 that there had been a duty upon the husband to bring before the court, at the time of the original trial in 2016, matters relating to his interest in Q Trust, the provision of funds to Ms YY and the existence of unpaid invoices due by W Pty Ltd to the husband/E Pty Ltd and Ms YY which he held back pending the completion of the proceedings in 2016. She argued there would have been a substantially different result leading to a conclusion that a miscarriage of justice had occurred.
Having heard the evidence of the parties and submissions from their counsel I delivered judgment on 4 June 2024, inter alia making the following findings:
·That the wife was an unreliable witness who throughout lengthy cross-examination, gave answers to questions in a manner intended to obfuscate the issues to which she was being directed;[20]
[20] Curtain & Curtain (No 4) [2024] FedCFamC1F 348 at [159].
·The frequent suggestion during cross examination that she had had “suspicions” about the husband’s interest in Q Trust was designed to mislead the court;[21]
[21] Ibid at [160].
·The husband had told her in 2013, during collaborative mediation, that he had commenced employment with W Pty Ltd;[22]
[22] Ibid at [189].
·During cross examination she freely conceded that she had obtained a copy of the letter of offer from the agricultural property herself…;[23]
[23] Ibid at [161].
·Had intentionally removed the document and at no time prior to the 2016 trial disclosed to the husband that she had removed the document nor attempted to return to him, at the very least, a copy of the document;[24]
[24] Ibid at [162].
·To the contrary, she had instructed her solicitor on 2 December 2014, likely some 18 months or so after she had obtained the copy of the correspondence, to write to the husband to seek discovery of the very same document;[25]
[25] Ibid at [163].
·The wife adduced no evidence for the purposes of the 2016 trial that she had the letter in her possession from the early part of 2013 nor was that raised in her affidavit filed for the purposes of this trial;[26]
[26] Ibid at [164].
·When pressed on that matter in cross examination she told the court that she knew as at 2 December 2014 when she gave her solicitor instructions to seek discovery of the letter that she had a copy of the letter and gave it to her solicitor…When asked what prevented her from telling the court that she had obtained a copy of the letter at the very latest by 1 December 2014 she said she could only apologise if that detail was missing as she was not denying she had seen a copy of the letter.[27]
[27] Ibid at [165].
·Neither party discovered the document as being a document in their possession or control either prior to the 2016 trial or during that trial;[28]
[28] Ibid at [166].
·She adduced no evidence to explain why she had not taken advice, particularly from her counsel…with respect to the issuing of subpoenas to Q Trust and W Pty Ltd. Notwithstanding her evidence that she was anxious at all times up to the date of the trial in 2016 to ascertain the extent of the husband’s interest in Q Trust and the value of same, I am unable to find any evidence to support that assertion on the part of the wife;[29]
[29] Ibid at [168].
·…she conceded she told Ms AN that the husband had been given a job offer by Q Trust and offered a share in the business in late 2011. None of this material was brought to the attention of the court in 2016. Nor, in circumstances where she had the opportunity to cross examine the husband whilst under oath during the 2016 trial were any of those issues put to the husband;[30]
[30] Ibid at [170].
·The facts of this case are that neither party discovered the document prior to trial and neither party adduced any evidence before His Honour Justice Berman as to any interest the husband may have in the trust;[31]
[31] Ibid at [185].
·I find the wife was further aware that at the time of trial in 2016 the husband was still employed by W Pty Ltd as that was disclosed on his financial statement. I find that in addition to neither party discovering the letter of February 2013 to the other of them or the court prior to or during trial, neither party disclosed in their respective cases as presented to Berman J in April 2016 their knowledge of the husband’s potential interest in Q Trust;[32]
[32] Ibid at [190].
·I find that the contents of paragraph 91 of her affidavit filed in these proceedings on 28 February 2024 were patently untrue;[33]
[33] Ibid at [192].
·…Nevertheless, in circumstances where:
·The wife was the applicant;
·She was well aware of the history of discussions between the husband and W Pty Ltd regarding his employment with that company and the likely benefits that may flow therefrom;
·She had knowledge of the lengthy and detailed letter of offer to the husband of 28 December 2012; and
·She had knowledge of the contents of the correspondence to the husband from W Pty Ltd dated February 2013
and knowledge in 2013 that he was working for W Pty Ltd, the wife chose not to pursue that issue at any level in preparation for trial notwithstanding being represented for almost all of the time between September 2013 and March 2016 by experienced family law solicitors and on occasion counsel, receiving advice concerning issuing subpoena to W Pty Ltd and Q Trust, and her solicitor informing the husband’s solicitors as early as May 2014 during negotiations that for that time only the wife was willing to include stated valuations in the pool of assets. That of course did not include any value for the husband’s interest in Q Trust;[34]
·I am not satisfied that the husband suppressed evidence by way of failure to disclose relevant information such as to provide the basis for the necessity for the court to consider whether a miscarriage of justice has occurred;[35]
·I find that the wife removed the copy of the correspondence from the manilla folder in which the husband had placed it at the agricultural property and that she did not disclose that fact to him prior to or during the trial. I accept the husband’s evidence that despite searching for the letter not only on or about December 2014 but on other occasions he was unable to find the letter until some considerable later time after obtaining assistance from a data company;[36]
·I accept the husband’s evidence that the wife had no interest in the project, did not believe that it was likely to be a successful project that would lead to any financial benefit to the husband in the future, was focused on the issue of retention of the family enterprise at trial and elected not to seek orders that the husband retain any interest in Q Trust. I find that had the wife chosen to discover the correspondence of February 2013 prior to trial and adduce evidence as to the existence of that correspondence and her knowledge of the history behind the contents of that correspondence, those matters would have been before the court at least by the time of trial in 2016 and probably much sooner;[37]
·I am unable on the evidence to find that the wife was misled as to the husband’s interest or potential interest in Q Trust at the time of trial and accordingly was not mislead as to the value of any such interest;[38]
·I find that information about any interest the husband may have had in 2016 in Q Trust was not peculiarly in his knowledge but rather the wife chose to conceal her knowledge of the matters to which I have referred, chose not to adduce any evidence regarding the matter at trial and indeed specifically sought an order that the husband retain any interest he may have in Q Trust. I am not satisfied that she took that position as a result of any misleading or adequate information on the part of the husband, notwithstanding he did not discover the letter;[39]
[34] Ibid at [192].
[35] Ibid at [193].
[36] Ibid at [194].
[37] Ibid at [195].
[38] Ibid at [196].
[39] Ibid at [202].
With respect to the wife’s claim that the husband had failed to provide particulars to the court in 2016 of his financial relationship with Ms YY and in particular the provision of funds to her, I made the following finding:
·In circumstances where I have referred to finding that for the most part I preferred the evidence of the husband over that of the wife in these proceedings, I am not satisfied, on the basis of the evidence of the wife contained in paragraphs 70 and 133 of her trial affidavit filed on 28 February 2024 or from cross examination of the husband that he either intentionally supressed or failed to disclose relevant information about that issue. Nor am I satisfied on the wife’s evidence that the matter was of such relevance that it was worthy of pursuit in terms of the likely additional expenditure in legal fees.[40]
[40] Ibid at [205].
As to the issue of unpaid invoices I found as follows:
·There was no evidence adduced by the wife as to the period of work covered by those invoices but I am satisfied they were not in existence nor had the work been done by the time of trial in 2016 and in those circumstances would not have constituted evidence that was either supressed or in respect of which the husband failed to disclose.[41]
[41] Ibid at [207].
I have set those matters out in some detail to illustrate the level of concern I had regarding the veracity of the wife at least until the time of various concessions made by her during cross‑examination at the time of trial in April 2024.
I accept the submission of Mr McQuade that the wife’s course of action was predicated on evidence contained in paragraph 91 of her trial affidavit filed on 28 February 2024 that was patently untrue[42], the wife knew the evidence to be untrue and continued to press her case for seven years knowing that evidence to be untrue. I accept his submission that it is hard to point to the wife commencing the proceedings other than for an ulterior motive.
[42] Ibid at [192].
Notwithstanding the wife’s complaints about being misled because of the failure of the husband to discover a letter that was in her hands for possibly up to three years prior to the trial before Justice Berman in 2016, I found that I was unable to find any evidence to support the wife’s assertion that she was anxious at all times up to the date of the trial in 2016 to ascertain the extent of the husband’s interest in Q Trust.[43]
[43] Ibid at [168].
She conceded in cross-examination that she had told her solicitor Ms AN on 11 September 2013 that she thought the husband had a share in Q Trust because of what the husband had told her about the project when they were still living on the family property and also what she had told him during collaborative mediation.[44] She also agreed in cross-examination that if Ms AN had written in notes of an appointment with her in November 2013 that she had told Ms AN the husband had been given a job offer by Q Trust and offered a share in the business in late 2011, she would have given Ms AN that information.[45]
[44] Ibid at [124].
[45] Ibid at [126].
She further agreed in cross-examination that in 2011 or 2012 it was possibly the case that the husband was not backward in telling her that he expected a share in the project.[46] The wife further conceded in cross-examination that an interim case outline prepared on her behalf by her new solicitor Mr UU on 5 August 2015 included in the list of assets the Q Trust, was drafted in accordance with her instructions and with a value recorded as “not known”. When asked what steps she took to find out the value of the interest she replied that it was in the lawyer’s hands and said that she didn’t know if she had instructed her new lawyers to perform a valuation but was probably relying on discovery and that she had never instructed a valuer.[47]
[46] Ibid at [134].
[47] Ibid at [135].
When it was put to the wife in cross-examination that the letter to the husband of February 2013 indicated him holding a 20% interest in the Q Trust entity and whether it was the case she had never asked any of her legal advisors what that meant, she replied that she had not and that “we” didn’t know the value of the project or where it was at and that “they” relied on Mr Curtain to tell them. She said that she did not know whether at the time of the draft affidavit being prepared the project had no value.[48]
[48] Ibid at [139].
When questioned about notes pertaining to an office attendance with Mr UU on 25 February 2016 she said she relied on the notes being accurate, was unable to independently recall whether she had been advised that her chances of retaining the agricultural properties was NIL and agreed that she persisted with that argument at trial and did not succeed in keeping the agricultural enterprise and properties.[49] The wife also agreed in cross-examination that, as noted on the same review note of Mr UU, she had described the case to him as a multi-million dollar agricultural case and that when the file note was created her interest was predominantly in being able to retain the agricultural property.
[49] Ibid at [153].
I refer to that evidence in particular in circumstances where at the conclusion of the trial in April 2024, the order sought by the wife was a transfer of property comprising the family property retained by the husband following upon the orders of Berman J of 2016, as well as an order providing for her retention of the property at F Street, Suburb G and an order that she have all of the agricultural plant and equipment employed in the conduct of the agricultural enterprise of the parties free from any claim by the husband. She sought a cash adjustment in addition to those orders and a clause providing for the properties to be sold in default of payment of the cash settlement sum.
The lack of any apparent intention on the part of the wife to adduce evidence about her knowledge of the husband’s interest in Q Trust, inform the court in 2016 of her knowledge of those matters and to instruct a solicitor shortly prior to the 2016 trial on the basis that the matter concerned a “multi-million dollar [agricultural enterprise] case” suggests that retention of the family agricultural properties, an outcome in which she was unsuccessful before Berman J in 2016, was a matter of utmost importance to her.
I am satisfied that the wife was at the very least reckless as to the impact on the court with respect to wasting the courts time, and as to the financial cost to the husband if not to herself in instituting the proceedings in September 2017. As I said in reasons delivered on 4 June 2024 in paragraph 14:
·It was of significant concern that by the time the trial commenced before me on 2 April 2024 the parties combined legal costs totalled just under $800,000.[50]
[50] Curtain & Curtain (No 4) [2024] FedCFamC1F 348.
Notwithstanding those comments, I accept the submission of Mr UU that the discrepancy in the financial circumstances of the parties as disclosed in their Financial Statements filed on 15 January 2025 (wife) and 16 January 2025 (husband) are of significance. Nevertheless, as submitted by Mr McQuade, impecuniosity is no bar to a costs order.[51]
[51] Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 at [23].
It is clear that the husband is in a far superior position to the wife. Nevertheless, I find that these proceedings were initiated by the wife recklessly, that they were conducted in a manner such as to obfuscate the issues before the court and her role in the conduct of the proceedings before Berman J in 2016, and that there was likely an ulterior motive behind her taking the action she did in seeking to set aside the order of Berman J. It is not appropriate that the husband, in circumstances where the wife’s application was wholly unsuccessful and unfounded, should be placed in a position where he is required to meet all of his legal costs.
I have already found in favour of the wife with respect to her costs application arising from the husband’s unsuccessful application for summary dismissal. I find that in this matter it is appropriate to make an order for lump sum costs rather than to put the parties to further cost in referring the matter to taxation. No objection was raised on behalf of the wife to the method by which the husband’s costs were calculated by AS Lawyers (Mr AR).
The amount claimed by the husband is $436,459.07. That figure was calculated by reference to the Bill of Costs referred to in paragraph 45 hereof and the additional material contained in paragraphs 2 – 4 inclusive of the affidavit filed by the husband on 16 January 2025.
Taking into account the conduct of the wife to which I have referred balanced against the significantly superior financial position of the husband I find that the wife should pay the husband’s costs on a lump sum basis fixed in the sum of $300,000 arising from her unsuccessful application pursuant to s 79A of the Act filed on 29 September 2017.[52]
[52] Sfakianakis & Sfakianakis [2019] FamCAFC 54 at [10].
I consider it is appropriate, taking into account the matters contained in these reasons in relation to the wife’s costs arising from the husbands wholly unsuccessful application for summary dismissal, that the sum of $300,000 payable by the wife to the husband should be reduced by $27,500, resulting in a payment due to the husband by the wife on account of costs in the sum of $272,500.
Neither party made submissions as to time to pay and in the circumstances of this matter I am satisfied that it is appropriate to order that payment be made within four (4) calendar months.
I therefore make the orders as set out at the commencement of these Reasons.
I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Mead. Associate:
Dated: 12 March 2024
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