CZEB & CZEB (NO 4)

[2011] FamCA 415

FAMILY COURT OF AUSTRALIA

CZEB & CZEB (NO 4) [2011] FamCA 415

FAMILY LAW – COSTS – Where the husband has been ordered to pay the wife’s costs of property settlement proceedings on an indemnity basis – Where the husband’s application to stay an order permitting the wife to rent the former matrimonial home pending determination of appeal has been unsuccessful - The wife seeks indemnity costs in relation to this application – Husband’s application wholly unmeritorious – Where the husband was opposed to renting the former matrimonial home – No evidentiary basis for husband’s submissions – Husband to pay the wife’s costs of this application on an indemnity basis – Indemnity costs fixed at $1,938.75.

Wife’s Application for Indemnity Costs in Contesting Husband’s Application in Form 2 Filed 19 April 2011

APPLICANT: Ms Czeb

RESPONDENT: Mr Czeb

FILE NUMBER: SYC 7329 of 2008

DATE DELIVERED: 8 June 2011
Published from Chambers

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Barry J

HEARING DATE: 10 May 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Hallas, Solicitor appearing by telephone for the Applicant Wife

SOLICITOR FOR THE APPLICANT: Pigott Stinson, Solicitors

SOLICITOR FOR THE RESPONDENT: The Respondent Husband appearing by telephone (not legally represented)

Orders

1. The Husband is to pay the Wife’s costs of an incidental to the costs incurred in contesting the Application in Form 2 filed 19 April 2011 on an indemnity basis fixed at $1,938.75.

IT IS NOTED that publication of this judgment under the pseudonym Czeb v Czeb (No 4) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: SYC 7329 of 2008

Ms Czeb

Applicant

And

Ms Czeb

Respondent

REASONS FOR JUDGMENT

1. On the 10 May 2011 for reasons delivered ex-tempore I dismissed an application in a case filed by the Husband (Mr Czeb) on the 19 April 2011 seeking a stay of orders made on the 6 April 2011 pending the hearing of an appeal against such orders.

2. The only relevant order which would have any practical consequence for present purposes is the order granting the Wife (Ms Czeb) the right to rent out the former matrimonial home at H which has been vacant for a number of years.

3. In my reasons I found no merit in the application describing the underlying assumption justifying the application as “preposterous”.

4. At the conclusion of the hearing on the 10 May 2011, the legal representative for the Wife sought an order that the Husband pay her costs on an indemnity basis.  Her estimate was that the indemnity costs would be about $1,500.  The Husband opposed the making of any order for costs indemnity or otherwise.  The solicitor for the Wife did not at that stage have an itemised account.

5. I directed the filing of written submissions on the issue with an attachment setting out in short form the summary of the work done to justify the costs.  The Husband was given seven days to lodge submissions in response.  The submissions have now been received.

6. I propose to accede to the application for indemnity costs.  I accept that a Court should not depart lightly from the ordinary rule relating to costs between party and party.  I accept that it is a heavy onus that a claimant bears in convincing a Court to depart from the ordinary rule and order indemnity costs.  I accept it requires the finding of exceptional circumstances to justify a departure from the normal rule.  I accept a costs order is intended to be compensatory not punitive.

7. The reality is there was no evidentiary basis put forward to support the reasons advanced by the Husband why the property should not be rented.  In summary form, his reasons were:

   ·He has heard some tenants damage houses.

   ·He may need the house for his own occupation in the event his

   application for special leave to appeal to the High Court was

   granted.In my reasons I described such a prospect as “remote in

   the extreme”.  I stand by such observation.

   ·He has personal possessions in the house.  In my reasons I simply

   noted there is no evidence he has done anything in the past three

   years to secure such possessions and the mere fact that such

   possessions exist in the house is not a satisfactory reason why it

   cannot be rented out.  To rule otherwise would be to allow the Husband to leave his possessions in the house and negate any prospect of the property being rented under any circumstances.

8. In her oral submissions when making the application for indemnity costs, the Wife’s legal representatives succinctly summarised the situation by noting the Husband’s application was “wholly unmeritorious and wholly unsuccessful”.

9. I have perused the Wife’s submissions dated 19 May 2011 and do not propose to elaborate on those submissions.

10. I had previously received the costs agreement signed by the Wife when making an award of indemnity costs on the 6 April 2011.  I accept now as I did then that the terms of the costs agreement were reasonable and consistent with rates charged by lawyers practicing in this jurisdiction in the Sydney area.

11. A leading case on the issue of indemnity costs is Yunghanns v Yunghanns [2000] FLC 93 029. In that decision the majority of the Full Court (Lindenmayer and Holden JJ) held:

    “The categories of circumstances which enliven the discretion to award indemnity costs are not closed and 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 the order is sought: Colgate-Palmolive Company v Cussons Pty Ltd [1993] 46 FCR 225 cited.”

12. Fraudulent behaviour by a litigant may justify an award of indemnity costs.  Similarly, bringing an application which has no merit whatsoever either on a legal or factual basis may justify an award of indemnity costs.  This was an application which had no prospect of success and was so unmeritorious it justifies an award of indemnity costs.

13. I have perused written submissions which were faxed to the Registry on the 1 June 2011.  At paragraph 19 of those submissions the Husband says he made submissions:

    “to the following effect:

    a.I strongly object renting the property.  I fear damage to the household and building.  The furniture is antique and fragile.  I also have my Supreme Court documents in the house.  I have business documents.  I have my valuables.  I have my family ring, data and clothes.

    b.The stay of order for renting is for three to six months until the appeal is heard and adjudicated.  If [the Wife] for any reason cannot pay the mortgage I will make arrangement with the bank for these three to six months the payments to be deferred or otherwise.”

14. I do not have the benefit of a transcript but I am extremely sceptical that the above accurately reflects the submissions made by the Husband.  There is no evidence of the Husband making an approach to the bank for the mortgage payments to be deferred for three to six months pending the finalisation of the appeal.  The Husband in his submissions refers to the fact that he has no income and the Wife has a substantial income. 

15. The Husband once again makes reference to the existence of what he says was the agreement entered into with the Wife on 4 June 2007.  He has had it explained to him on numerous occasions that that agreement has no legal effect unless or until it has been approved by a Court with appropriate jurisdiction.  Given the circumstances surrounding the preparation and presentation of the agreement, it would be inconceivable that any Court would approve such a one sided document.

16. At paragraph 20(g) of his submissions he asserts:

    “The husband was adamant in his decision not to rent the property.”

17. He certainly made that much readily apparent when the matter was previously before me on 6 April and 19 April 2011 this year.  He can be as adamant as he likes about not renting the property, the reality is there was a mortgage to be paid, the property was deteriorating, and the Court for reasons given determined that although the property was not to be sold, it could be rented to save the parties some money.  The fact that the Husband wishes to endlessly challenge the decision to permit the property to be rented is a matter for which he must accept responsibility in the event the Court once again rejects his application to stay the order permitting rental.

18. Hopefully sooner, rather than later, the Husband will realise if he wishes to continue to litigate it is a matter for him.  But, if he is unsuccessful in the litigation he runs the risk of having an award for costs made against him on each occasion, whether indemnity costs or party and party costs.  This will lead to a significant diminution in the amount he will ultimately receive when the matter is finalised.  I preface these remarks on the assumption that even if he is successful to some extent on the substantive appeal against the property settlement determination, he may not be successful in relation to subsequent costs orders.

Quantum of Costs

1. Having regard to the history of this litigation where the Wife has been met with a totally unreasonable stance in the property settlement proceedings, and has been met with a plethora of ancillary applications, both prior to and subsequent to the trial, I do not see why she should be put to the further expense and inconvenience of having to obtain an assessment of her costs.  This would raise the prospect that the Husband will make her proceed to a detailed justification of the costs even though awarded on an indemnity basis.

2. I have perused the short form summary of the costs claim.  I find the costs claim more than reasonable.  I accept that one reason why the costs are less than one would usually find in contesting an interim application such as this, is that the hearing was held via telephone link so that there were no travel costs or waiting time involved.

3. For the reasons given an order will issue that the Husband is to pay the Wife’s costs of and incidental to the costs incurred in contesting the application in a case filed 19 April 2011 on an indemnity basis fixed at $1,938.75.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry delivered on 8 June 2011.

Associate: 

Date:  8 June 2011