D’Cruz and Pierce and Ors (No 2)

[2010] FamCA 1150

FAMILY COURT OF AUSTRALIA

D’CRUZ & PIERCE AND ORS (NO. 2) [2010] FamCA 1150

FAMILY LAW – COSTS – Indemnity costs – Apportionment of costs between each of the respondent, second respondent and fifth respondent – Finding that it is “just” for a costs order to be made and apportioned between the various respondents – Judgment of Dessau J – Her Honour then disqualifying herself from all further hearings – Evaluation of her Honour’s reasons for judgment – Findings made as to an appropriate award of indemnity costs – Registrar to assess costs and disbursements unless otherwise agreed – Time for payment and applicable interest rate in default

Family Law Act 1975 (Cth) ss 4, 117
Family Law Rules 2004 Chapter 19; Rule 17.03

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

APPLICANT: Ms D’Cruz

RESPONDENT: Mr M Pierce

SECOND RESPONDENT: Mr C Pierce

FIFTH RESPONDENT: Mr T

SIXTH RESPONDENT: MT Trustees Ltd

FILE NUMBER: MLF 3135 of 2004

DATE DELIVERED: YOUNG J – 23 NOVEMBER 2010 ARISING FROM JUDGMENT OF DESSAU J – 19 SEPTEMBER 2008

PLACE DELIVERED: MELBOURNE

PLACE HEARD: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATES:

BEFORE DESSAU J –

16, 19-23 AND 26-29 MAY 2008, 19 SEPTEMBER 2008 AND 15 MAY 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Brown SC with you Mr Dickson

SOLICITOR FOR THE APPLICANT: KENNEDY WISEWOULDS

COUNSEL FOR THE RESPONDENT: Mr Lethbridge SC with you Mr O’Shannessy

SOLICITOR FOR THE RESPONDENT: GRIFFIN SWEENEY LAWYERS

COUNSEL FOR THE SECOND RESPONDENT: Mr Aldridge SC with you Ms Rees

SOLICITOR FOR THE SECOND RESPONDENT: PEARCE WEBSTER DUGDALES

COUNSEL FOR THE FIFTH RESPONDENT: Mr McNab

SOLICITOR FOR THE FIFTH RESPONDENT: WHITE CLELAND

Orders

IT IS ORDERED:

1. THAT the wife’s costs and disbursements of and incidental to the interlocutory hearings and further mentions before Dessau J on:

   (i)       16 – 29 May 2008;

   (ii)      19 September 2008;

   (iii)     15 May 2009

   be calculated and paid on an indemnity basis and that the quantum thereof be apportioned and be paid by:

   (a)the Respondent husband as to 42.5% thereof;

   (b)the Second Respondent as to 42.5% thereof;  and

   (c)the Fifth Respondent as to 15%.

2. THAT the solicitors for all parties forthwith confer and endeavour within ninety (90) days to reach agreement on the quantum of such costs and disbursements to be paid the wife.

3. THAT in the event that the wife and all other parties are unsuccessful in concluding within the ninety (90) day period an out of court agreement on costs and disbursements payable then within a further thirty (30) day period the solicitors for the wife prepare and serve upon all other parties and the Court an itemised costs account for assessment pursuant to Chapter 19 of the Family Law Rules 2004.

4. THAT a Registrar of the Family Court then fix for hearing the assessment of all such costs and disbursements on an indemnity basis.

5. THAT, subject to the assessment of costs and disbursements at any such hearing, or otherwise from the date such costs and disbursements are agreed then, after a period of a further sixty (60) days, interest in default of payment shall then apply at the rate prescribed from time to time pursuant to Family Law Rule 17.03 and with the calculation and payment of such interest to be adjusted quarterly and paid in arrears until the whole of the principal sum of costs and interest (if any) is then paid in full to or on behalf of the wife as to the respective amount(s) by each of the respondents.

6. RESERVE liberty to apply to all parties to mention this matter before Young J upon proper notice given and documents filed as to the contents of this order, or otherwise as to the appointment of a Registrar of the Family Court for the fixing of an assessment of all such costs and disbursements as are payable.

7. THAT otherwise any extant application in a case as to the issues that were before Dessau J in the interlocutory hearing or otherwise which have now been concluded by this costs judgment, be dismissed.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 3135 of 2004

MS D’CRUZ

Applicant

And

MR M PIERCE

Respondent

And

MR C PIERCE
Second Respondent

And

MR T
Fifth Respondent

And

MT TRUSTEES LTD
Sixth Respondent

REASONS FOR JUDGMENT

1. This costs judgment and the orders that I have now pronounced arise out of an interlocutory hearing before Dessau J which was held over a ten day period between 16 and 29 May 2008 and subsequent court events.  The purpose of that hearing was to determine whether significant assets, as were then identified, were properly to be classified as either the property jointly of the husband and his father (the Second Respondent in the proceedings), or otherwise the property of the husband alone.  Otherwise the hearing of the s 79 proceedings between the husband and wife and the various other parties remains outstanding and by way of background I observe that these proceedings were first instituted some six years ago and there has been substantial and ongoing litigation over that period.

2. On 19 September 2008 Dessau J delivered reasons for judgment in the interlocutory proceedings and her orders subsequently drawn and dated 29 October 2008 were identified in that judgment. In brief summary her Honour found that a purported 50 / 50 shared business agreement between the husband and his father, that had been entered into on an oral basis in March 1996 and thereafter reduced to writing in June of that year, was a sham. Her Honour found that there was no genuine agreement as claimed by each of them, [paragraph 400 of the judgment]. Further findings and orders were made by her Honour, pursuant to s 106B of the Family Law Act1975 (Cth) to set aside a number of transactions between the husband, the Second Respondent and the Fifth Respondent and various entities of and associated with each of them and in particular a Deed of Retirement dated 29 November 1997 in respect of the M Pierce Trust.

3. The primary findings of her Honour were that “there was never a genuine agreement … to share the business” and her Honour was further satisfied that “the husband intended to defeat the anticipated orders of this court” [427]. Her Honour’s further finding at paragraph [428] was that:

   “At the time of each disposition it was more probable than not that the dispositions would defeat an anticipated order in the proceedings.  In each instance they effected transactions that moved assets or interests owned or controlled by the husband, or entities associated with him, away from that ownership or control”.

4. I have carefully read the reasons for judgment and the orders pronounced by her Honour.  I conclude that it was unnecessary for the purposes of this costs judgment to more particularly detail the various other findings of her Honour.  Her orders do speak for themselves and they were subject to Full Court appeals instituted by the husband and the Second Respondent.  The Full Court of this Court heard and determined those appeals, sitting for three days in July 2009, and subsequently delivered reasons for judgment on 9 June 2010 wherein all appeals were dismissed.  Further reasons for judgment and orders as to the costs of the appeals were handed down on 2 September 2010.

5. At the time of delivery of judgment in the interlocutory hearing before Dessau J it had been agreed that the making of orders would be stayed until “argument as to their precise nature” could be heard. The matter was therefore adjourned to 29 October 2008 on which day her Honour pronounced the orders. Those orders included a declaration pursuant to s 78 and other orders under s 106B of the Act which I have read and considered for the purposes of this costs judgment.

6. The wife’s costs application of and incidental to the whole of those proceedings is now before me for determination and it is supported by written submissions filed by her lawyers on 30 January 2009 and supplemented by further written submissions filed 22 April 2009.

7. The wife has sought costs as against the husband, the Second Respondent and the Fifth Respondent, a solicitor, Mr T, who had then been the Appointor of the M Pierce Trust, the sole director, shareholder and secretary of the corporate trustee and previously a solicitor for the husband and wife.

8. The husband filed written submissions both in reply and opposition on 27 February 2009.  The Second Respondent filed his written submissions on costs issues on 16 March 2009.  The Fifth Respondent filed his written submissions as to costs on 27 February 2009 and further supplementary submission on 11 June 2009.  I have carefully read and evaluated all of those submissions. 

9. On 15 May 2009, at the instigation of the Court, a mention of all outstanding proceedings were listed.  That was largely necessitated by the filing of an affidavit by the Fifth Respondent on 3 April 2009, which I have read, and further supplementary written submissions as to costs filed on behalf of the wife on 22 April 2009, and specifically in response to matters raised in that further affidavit then filed.  That affidavit of the Fifth Respondent was an unrelated document not directly connected to any extant application then before the Court.  It touched upon matters which go to the purported independence of the Fifth Respondent from both the husband and the Second Respondent and issues of whether there was any conflict of interest in his acting in certain transactions.  Those matters were important issues before Dessau J in the interlocutory proceedings and in respect of which her Honour’s earlier substantial judgment had been delivered.

10. In her reasons for judgment, delivered on an extempore basis on 15 May 2009, her Honour said in paragraph 2 thereof that:

    “The parties subsequently made written submissions as to costs.  This mention today was initiated by me.  The first reason was to discuss my preliminary view that in fact the wife’s costs at this stage should be reserved.  There is now a consensus about that”.

11. In her Honour’s orders dated 15 May 2009, as to the costs orders and leaving aside the other orders made that day, it was ordered:

    1.That all questions of the wife’s costs in relation to the hearing between 16 and 29 May 2008 shall be reserved.

    2.That any party seeking to reply to the wife’s supplementary submissions as to costs filed 22 April 2009 shall file such reply by 15 June 2009, and any such submissions to be kept on the Court file pending later argument.

12. Her Honour did not order that all questions of costs be reserved to the trial Judge.  Likewise she did not place any limitation upon the further reply submissions of the husband, the Second Respondent or the Fifth Respondent (who were all then represented before her in Court on that day) save that their further documents were required to be filed by 15 June 2009.  No such further written submissions were filed by the husband or Second Respondent notwithstanding the very clear opportunity so to do.  No court time was sought to orally argue any costs matter.

13. Accordingly I have proceeded on the basis that the lawyers advising each of the various respondents were confident that all of their legal arguments and submissions were before the Court and that they were in agreement to the wife’s application for her costs being determined on the papers then filed.

14. This matter was then transferred to me and first listed on 29 September 2010 and I pronounced various orders on that day, primarily of a case management type, and delivered extempore reasons for judgment.  In the course of that hearing it became evident that Senior Counsel for the wife, on behalf of his client, was awaiting the Court handing down the reserved costs judgment and accompanying orders from that earlier interlocutory hearing.  I was then unaware that such a costs judgment was outstanding.  After discussion with all Counsel then appearing in the proceedings I adjourned the matter to a further mention date before me and endorsed the Court orders with the following notation:

    C.At the conclusion of this hearing Counsel for all parties raised or endorsed the request for the costs judgment to be delivered pursuant to the costs reserved by Dessau J in paragraphs 11, 12 and 13 of her orders pronounced 29 October 2008.  The Court was advised that all written submissions including supplementary submissions for costs were filed in this matter on or prior to her Honour’s removal of herself from the hearing on 10 September 2010”

15. At that September hearing before me no issue was then raised by Counsel for any of the parties as to any objection to a costs judgment being delivered by her Honour or to any other material or oral argument being supplemented before the delivery of such reasons for judgment as to costs and the order itself.

16. Circumstances have now changed and her Honour has now disqualified herself from the proceedings and has also concluded that it would therefore not be proper for her to deliver her reasons for judgment on the outstanding costs application of the wife arising out of the now concluded interlocutory proceedings. 

17. It is apparent from all that I have read within the Court file, and from what Counsel have addressed me upon, that fundamentally the costs issues, and their determination, were held over pending the hearing and delivery of judgment by the Full Court on all issues under appeal.  It was only finally as at September of this year, some two months ago, that orders were wholly pronounced as to both the appeal and the consequential costs issues arising therefrom.  On the basis of her Honour’s judgment and orders and all of the subsequent documents filed with the Court the costs application arising out of that interlocutory judgment must be determined and it is for that purpose I have undertaken the very considerable task of carefully reading and evaluating her judgment and orders, the court documents and written submissions to which I have been directed and my orders and reasons for judgment are delivered upon that basis.

WRITTEN SUBMISSIONS AS TO COSTS

WIFE

1. The solicitors for the wife filed written submissions on her behalf on 30 January 2009 and they were supplemented by her further written submissions filed 22 April 2009.  No costs orders were sought against the Sixth Respondent.

2. The orders sought by the wife is that:

   “The husband, the Second Respondent and the Fifth Respondent pay her costs of and incidental to her amended application for final orders filed 16 August 2005 (as amended on 16 April 2008) in such proportions as this Honourable Court deems appropriate, such costs to be calculated on an indemnity basis”.

3. In the alternative the wife sought such orders on a lawyer and client basis, rather than on an indemnity basis.

4. The wife has not provided any assessment of her costs, expenses or disbursements incurred on either of the indemnity or lawyer and client basis.  There is no costs agreement accompanying the written submissions, as would be required to be disclosed if it had been executed between her and her solicitors and that document would otherwise give insight to the quantum of legal expenses and disbursements charged to the wife.  The foundation of the wife’s costs application is based upon s 117(2) and (2A) and in particular (a), (c) and (e) thereof.  It is said that the husband and each of the Second and Fifth Respondents were wholly unsuccessful in the interlocutory proceedings before Dessau J and that the wife therefore was wholly successful.  Her submissions highlight that the evidence of the other parties were found to be “unimpressive”, “unreliable” and “opportunistic” and these findings were highlighted together with the substantial finding of the “sham” and the involvement of each of the three respondents in transactions designed to relocate assets from the Court’s jurisdiction and from the wife’s reach.  Her submission is that a proper assessment of the s 117(2A) factors would warrant that an order for costs was just and that they should be calculated and paid on an indemnity basis.

5. I have hereafter made a determination of what is “just” having regard to the factors identified within s 117(2A) of the Act.  I do not intend and nor am I asked to calculate the actual quantum of costs and disbursements payable and specifically no itemised bill of costs has been prepared and none of the written submissions filed addressed the dollar value of any costs that it might be just to award the wife.

6. The wife, in her written submissions highlighted Family Law Rule 19.19(2) in determining the method of calculation of costs and the matters that the Court may then consider and which included:

   1.        the importance, complexity or difficulty of the issue; and

   2.        the reasonableness of each party’s behaviour in the case.

   All of these issues will be left to the Registrar of the Court in assessing costs.

HUSBAND

1. The husband sought that the wife’s application for costs be reserved pending a final determination of the division of property proceedings pursuant to s 79 of the Act.  He submitted that the application of the wife for costs is premature and was now sought “at a time when the s 79 exercise is incomplete”.  It was further submitted on his behalf that it would be a departure from the “longstanding practice and settled law of the Court” to determine such an application prior to the conclusion of the property division proceedings.  I do not agree.

2. Significantly the further reason given, in paragraph 3 of those written submissions, was that the costs application should not be considered at that time because of the relatively close proximity of an appeal hearing bearing upon the correctness of her Honour’s decision.  That reason no longer applies as the Full Court has delivered their judgments, both on the appeal and on costs of and incidental to such appeal.

3. The husband raised, in paragraphs 4, 5 and 6 of his written submissions that an offer in writing to settle the proceedings was submitted in mid 2006 to the previous solicitors for the wife and that the terms of such a costs offer should not be disclosed to the trial Judge before the conclusion of the s 79 proceedings.  That position is of course correct but those proceedings remain unheard and the costs issues now before the Court for determination relate solely to the substantial interlocutory proceedings dealt with by Dessau J.  The final settlement offer is of no relevance to this interlocutory hearing.

4. I reject the submission in paragraph 7 of the husband’s written submissions and again state that my approach is to hear and determine the wife’s application for costs arising out of the wholly concluded interlocutory proceedings.  I find no reason why such an issue cannot now be determined and why it would be required to await the conclusion “of the section 79 exercise”.

5. The husband submitted that in the event that his primary application was not accepted (that is there be no costs order made against him or that it be otherwise adjourned pending the conclusion of the division of property proceedings), any costs order should not be made on an indemnity basis but on a party / party basis and any payment of costs be stayed until the conclusion of the property division proceedings. They are submissions that I have determined and made orders hereafter that are just and which are explained herein.

1. Section 117 of the Act empowers a Court, on a discretionary basis, to hear and determine and where found to be just to make costs orders.  Sub-section (1) and (2) thereof identify the jurisdiction of the Court which exists where “proceedings are instituted under this Act” and “proceedings”  is in itself defined as a term in s 4 of the Act as meaning:

   “A proceeding in a court, whether between the parties or not, and includes cross proceedings or an incidental proceeding in the course of or in connection with a proceeding”.

2. Clearly it is envisaged that a Court has a discretionary power to make orders that are just and appropriate in interlocutory proceedings and I proceed upon that basis.

THE SECOND RESPONDENT

1. By his written submissions filed 16 March 2009 the Second Respondent sought an order in the following terms:

   “The wife’s application for costs be reserved pending the conclusion of the section 79 property proceedings between the husband and wife”.

2. As with the husband he submitted that the wife’s present application for costs was premature as the property division proceedings have not been completed and those submissions are amplified in paragraphs 2 – 12 (inclusive) thereof which I have carefully read and evaluated.  It is well understood that the final net asset pool is yet to be determined and that any taxation consequences are yet to be ascertained and finalised and it well may be that a sum of tax and interest, costs and penalties thereon may be payable from assets that otherwise would have been included within the net asset pool available for distribution between the parties.

3. From submissions made in Court proceedings on continuing issues I have a clear understanding that the potential intervening solicitors, who act for the parties in their taxation proceedings and negotiations as to any quantum of tax now payable, and the parties themselves are in consultation and negotiation with the Australian Taxation Office.  That is known and does not detract from the fact that the interlocutory proceedings before her Honour are wholly concluded and the wife’s costs application arising therefrom does need to be heard and determined.

4. I reject paragraph 13 of the written submissions for the reasons previously expressed when dealing with that objection made on behalf of the husband.

5. Otherwise I have carefully balanced the objections of the Second Respondent to pay costs and for such costs to be calculated on an indemnity basis.  I have separately considered the legal authorities identifying the particular circumstances where an order for indemnity costs are appropriate and I have evaluated all of the evidence contained within this written submission in determining orders that are just and the basis for assessment of all reasonable costs.

THE FIFTH RESPONDENT

1. The submissions of the Fifth Respondent were filed 27 February 2009 and supplementary written submissions were filed on his behalf on 11 June 2009.  I have carefully read and evaluated each of those submissions.

2. The wife’s application for costs are opposed insofar as any contribution is sought from this respondent of whom it is said has no personal involvement in the adjustment of property interests between the other parties.  It was further submitted that the Fifth Respondent was not a voluntary participant in the proceedings and that he had been joined by the actions of the wife in his capacity as Trustee of the M Pierce Trust.  It is submitted that this Trust was separate from the financial interests and trust established by the Second Respondent.  It is asserted on his behalf that he did not devise or orchestrate the schemes effected between the husband and the Second Respondent.  It was argued that Mr T had only a limited involvement in the proceedings and that his conduct as a party did not materially increase the wife’s costs and disbursements.  He was a witness and his evidence did not add to the complexity of an already complex case and he gave evidence for only 5.75 hours in a trial that lasted 11 full days.

3. I have carefully read the judgment and findings of her Honour and the subsequent affidavit and disclosures of the Fifth Respondent which led to the further written submissions of the wife and in turn those further submissions of the Fifth Respondent filed 11 June 2009.  All of those documents and the reasons for judgment and the orders of her Honour give a very clear understanding of the role, attitude and influence of Mr T in the proceedings and it is all of these matters which I have reflected upon in determining orders that are just within the requirement of s 117 of the Act.

FAMILY LAW ACT 1975 (CTH) (“THE ACT”)

GENERAL PRINCIPLES

1. The power for this Court to make an order for costs is contained within s 117 of the Act.  Sub-paragraph (1) thereof provides that each party to proceedings shall bear his or her own costs. 

2. That principle is, however, subject to the discretion afforded to the trial Judge by sub-paragraph (2) thereof where it is stated that (in summary):

   “If, in proceedings under this Act, the Court is of the opinion that there are circumstances that justify it in so doing, the Court may, subject to the further sub-sections herein and be applicable Rules of Court, make such order as to costs … whether by way of interlocutory order or otherwise, as the Court considers just”.

3. It is appropriate to emphasise the very particular identification in sub-section (2) thereof that interlocutory costs orders can be made, subject to considerations of it being a just order.

4. The matters relevant to determining what order, if any, should be made for costs are identified in sub-paragraph (2A) thereof and the Court shall have regard to:

   (a)the financial circumstances of each of the parties to the proceedings;

   (b)whether any party to the proceedings is in receipt of legal aid assistance;

   (c)the conduct of the parties to the proceedings in relation to such proceedings and including, without limiting the generality thereof, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of fact, 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.

5. Accordingly I have hereafter carefully considered and evaluated each of the above factors relevant to the facts and written submissions of the case.  I do so with a very particular reading of the substantial interlocutory judgment of Dessau J and her subsequent orders.

S 117(2A) (a) - FINANCIAL CIRCUMSTANCES OF THE PARTIES

1. I have read the financial statement filed by the wife as a basis to understand her present financial circumstances.  She was the applicant in complex and strongly contested legal proceedings before this Court and engaged Senior Counsel with junior Counsel and an established firm of solicitors to act on her behalf.  She has continuing legal costs and disbursements.  On the basis of the findings made in the interlocutory judgment the wife submitted in her written submissions that the husband does have the financial capacity and is able therefore to meet any costs orders made against him from his share of the pool of assets when divided by Court order. 

2. In paragraph 7 and 8 of her written submissions she highlighted the findings of Dessau J as to the sham partnership agreement and the fact that the husband was declared to be the beneficial owner of shares of a substantial value.

3. The wife further submitted that as a result of the findings and order of Dessau J there would be a very substantial pool of assets, perhaps in excess of $20m which, as yet, cannot be properly identified and is subject to debts and liabilities owing to the Australian Taxation Office and other potential liabilities, outgoings and costs.  Nevertheless the primary submission of the wife is that the husband would “clearly be able to meet any costs order made in favour of the wife from his share of any property settlement” and on the evidence now before me that submission has substantial merit and foundation.

4. The submissions of the husband on this issue are dealt with in paragraphs 10 – 13 (inclusive) of his written submissions and rely upon his assertion that, until final property orders are pronounced, neither the husband nor wife has the financial capacity to meet any costs orders.  I do not agree.

5. I have read carefully the judgment of Dessau J and her findings upon the assets to which the husband has had a previous benefit.  Ultimately the net pool of assets available for division will be a substantial issue in the defended trial but I currently do not accept the submission of the husband that he has no capacity to pay any costs order.  The final negotiated payment to the Australian Taxation Office is presently unknown and that will be a priority payment as against the interests of the parties to this litigation but nevertheless I am comfortable that the present financial circumstances of the husband, upon the findings of her Honour and all of the evidence in the proceedings, is such as to facilitate a costs order that is just in all of the circumstances.

6. As to the Second Respondent, the wife relied upon his financial statement filed 6 March 2008 and the property and assets identified by him therein and these are summarised by the wife in paragraph 9 of her written submissions.  I can only accept that the document was accurate when filed though, with the passing of time it may now need to be updated both as to ownership and valuation of assets.  Nevertheless it was the financial position before her Honour and for the purposes of this costs judgment arising out of her Honour’s decision it is proper that it be accepted and relied upon.

7. The Second Respondent is the sole director and shareholder of PK Pty Ltd, which entity is the sole shareholder in LO Pty Ltd which then owned a bayside property, the value of which would appear to be unknown but which is said to be of a substantial value and I have no contrary submissions.

8. In her judgment, at paragraph 116, Dessau J noted that:

   “When it was put to the Second Respondent that the sum of $1,378,000 was paid out of the [PK] account to C & L [Pierce] on 24 December 2007 he replied that “he did not know”.

9. As to the monies received by the Second Respondent from the sale of the intellectual property in X Trading Pty Ltd, at paragraph 113 of her judgment her Honour held that:

   “…. he had to admit that … he received and retained the full sum of $487,000.  He said he was advised … that in order to avoid paying half the monies in tax he could invest them in insurance bonds.  That is what he did.  He had to concede that he had received just under $2m from the insurance bonds when he sold them in about 2002”.

10. Her Honour observed at paragraph 117 of her judgment that Mr Pierce “could not give coherent evidence as to the whereabouts of that money”.

11. I record the submission of the Second Respondent that a significant costs order against him “is likely to result in his bankruptcy which would not be appropriate when there are more than significant funds held in the pool of assets to meet the wife’s claim”.  There is no evidence before the Court to support this submission and it would be unjust to deny the wife her costs on that untested basis.

12. The wife submitted and her Honour accepted that the evidence of the Second Respondent was evasive as to his financial position and that such a circumstance should not preclude an order for costs being made against him if it be found to be a just outcome.  I agree with that submission.

13. At paragraph 114 of her judgment Dessau J found that the Second Respondent was “vague” as to where certain monies had been applied.  Her Honour said that he gave answers to highlight his lack of financial understanding and that he could not remember where sizeable sums of money had gone.  He said it was “monopoly money” and I have given significant weight to her Honour’s findings on the financial knowledge and acumen of the Second Respondent.

14. Significantly, in paragraph 396 of her judgment, her Honour found that almost three quarters of the wealth and assets had been retained by the Second Respondent, or entities associated with him and that the majority of those monies went offshore.  That is a substantial finding that underpins his financial capacity to meet any just order for costs.

15. I am wholly satisfied that the Second Respondent would and should have the financial capacity to meet any costs order pronounced against him.  I do emphasise that any such costs order is compensatory in nature.  I will not make any punitive costs order but the purpose of costs under the Act are to effect a just financial repayment to a successful party and I have applied strictly the requirements and intention of s 117 of the Act in my deliberations.

16. With the umbrella of the financial circumstances of each of the respondents I have evaluated all of the reasons for judgment and written submissions and evidence before the Court.  I do not accept the supposed practical reality identified in paragraph 13 of the husband’s written submissions in response, filed 27 February 2009 where he asserts that “the practical reality is that neither the husband nor the wife has the assets available to meet a costs order”.  As I have concluded it is just for the wife to be the recipient of a costs order and that she does not have to pay the costs of any of the respondents of or incidental to these interlocutory proceedings it is unnecessary for me otherwise to consider her financial circumstances within the context of her ability to pay.  That is not an outcome which I have or would entertain on the documents now before me.

17. As to the Fifth Respondent his financial circumstances are not known.  He is a director and partner of a legal firm.  No submissions were made as to his financial circumstances though he had a clear opportunity so to do.  On the material before the Court and for all of the matters identified by her Honour in the judgment I have no basis to make any finding that the Fifth Respondent would be unable to meet any costs order that was pronounced against him.  I find that he does have a financial capacity sufficient to satisfy sub-section (a) thereof and I am also aware of the substantial monies that he personally and on behalf of his family and his firm have received from the parties.

S 117(2A)(c) THE CONDUCT OF THE PARTIES

1. The wife submitted that the conduct of the husband, the Second Respondent and the Fifth Respondent resulted in her incurring “exceptional” costs and that such conduct justified the making of an indemnity costs order in her favour.  Her submission was that the conduct of the husband and the Second Respondent “has increased the costs she has been forced to bear” and that in particular each of the three respondents have refused to concede at all times throughout the hearing that the husband was the “proper owner of [K Company]”, as was ultimately found by Dessau J.  The foundation of the wife’s case is that all other respondents had been on notice of her primary factual submission since her original application for final orders was filed on 16 August 2005.

2. Dessau J found that the husband and the Second Respondent had acted to remove assets from the husband’s control via a myriad of corporate entities which at relevant times were involved in a “flurry” of complex transactions.  She found that they had acted on the basis of numerous advices obtained from Counsel.  On the evidence of the Second Respondent a sum of no less than $16m had been divested or diverted from the husband.  Her Honour considered the “context, timing and content of such advices” and rejected the claim that they were necessitated by and legally justified following upon an argument between the Second Respondent and the wife.  Her Honour was satisfied in concluding that “the prospect of receiving a large sum of money was the primary motivation (of the Second Respondent) in seeking such advice” [334]. In commenting upon one of the opinions received from Mr R of Counsel her Honour held that it [341]:

   “related to [M Pierce] and the major risk dealt with was the risk arising from the Family Court proceedings between [M Pierce] and his spouse”.

3. The intention of such advices sought was apparent and her Honour discussed the covering letter sent by Counsel with that 2 March 1998 advice wherein he confirmed that:

   “A discretionary trust drafted in the form of my overseas trust cannot form part of the assets of [the husband] for the purpose of the Family Law Act 1975”.

4. Her Honour further held at paragraph [344]:

   “The instructions to Counsel unambiguously raised what should occur if divorce proceedings were commenced against [the husband].  [Mr T] had apparently expressed a preliminary view.  The clarity of what Counsel was being asked to address was stark”.

5. Later at paragraph [337] her Honour found that:

   “The relevance of instructions to Counsel is of course that [Counsel] addressed particular questions.  It is reasonable to expect that he addressed questions he was asked to address.  It is also reasonable to expect that had he detoured from such questions he would have said so in his written advice.  I am satisfied that in the absence of a plausible explanation as to why instructions to Counsel have not been produced, the reasonable inference is that it is because they would have shown instructions to [Counsel] directed to removing assets from the husband’s control and from the Court’s jurisdiction so that they would not be available to satisfy anticipated orders in property proceedings”.

6. Her Honour found the evidence of the Second Respondent to be “equally unimpressive” [231]. His evidence was “confused” and “at times incomprehensible” when trying to recall details about monies he had allegedly advanced towards repayment of the mortgage of the husband and wife [232]. In summary her Honour held that “much of his evidence was doltish” and that she was “not satisfied that he was being fully forthright or frank … and his evidence suffered from a combination of incompetence and lack of candour” [390].

7. A matter of importance is that the Second Respondent resettled the assets of the DM Trust which was then valued at approximately $10m upon the MT Trust.  This occurred at a time when the Trustee of the DM Trust had already been joined by the wife as a respondent to the proceedings.  That commercial transaction was said by the wife to have made her investigations “more difficult and expensive”.  That must have been the case and its importance is that at all times from August 2005 the husband and the Second Respondent were aware of the primary claim of the wife, that is that the capital and assets of K Company were alone the property of the husband and not the joint property of the husband and the Second Respondent.

8. Her Honour found that the Fifth Respondent had finally conceded that the question Counsel had been asked to address was in respect of removing the trust assets from the jurisdiction of the Family Court [371].

9. Although each of the respondents had endeavoured to distance the husband from the advices and the ensuing transactions, Dessau J was “satisfied as to his active role in relation to each of the dispositions” [410]. Her Honour further found that each of the husband and the Second Respondent were parties to “the implementation of the advices that saw the control of the [M Pierce] Trust apparently shift from [the husband]” [343].

10. It is submitted on behalf of the Fifth Respondent that he did not devise or orchestrate such schemes effective as between the husband and the Second Respondent.  In his written submissions, at paragraph 14 thereof, he stated:

    “The evidence that the hearing did not establish that [the Fifth Respondent] was the architect of the arrangements implemented by [the husband] and/or [C Pierce] and that there was no finding to that effect ….  It was never suggested or put that but for [Mr T] the scheme of transactions and arrangements undertaken by the husband and [C Pierce] would not have taken place.  It was not put to [Mr T] that he had conspired with the husband and [C Pierce] to defeat the claims of the wife”.

1. The written submissions of the Fifth Respondent continued at paragraph 15 where he submitted that:

   “The findings of the Court in relation to the reality of the arrangements between the husband and [C Pierce] do not, as a necessary consequence, entail that [Mr T] was aware of the realities of those arrangements.  He states that he was not”.

2. In the supplementary submission filed by the Fifth Respondent he argued at paragraph 5(vi) that his involvement in the proceedings was “peripheral” to the central issues between the wife, the husband and the Second Respondent.  He further submitted in sub-paragraph (vii) thereof that he:

   “… acted as the lawyer for the parties in some of their commercial dealings but did not play a significant part in such dealings between the husband and [C Pierce] which lie at the heart of the Court’s findings … Mr [T] was not the architect of the legal structures relied upon by the husband or [C Pierce].”

3. I do not accept this endeavour by the Fifth Respondent to distance himself from the conduct of the husband and the Second Respondent.  It is not consistent with the findings of Dessau J who concluded that “his role was important in relation to these advices” [359]. The fact, apparent from the judgment, was that as a result of the advices Mr T became the Appointor of the M Pierce Trust and the sole director, shareholder and secretary of its corporate trustee.

4. In her judgment, at paragraph 362, her Honour held that:

   “There were references in Counsel’s advices as to the instructing solicitors and even, for example … two preliminary views expressed by the solicitor.  But there was also ample other evidence of Mr [T’s] involvement”.

5. Her Honour’s judgment identified various documents from the file of the Fifth Respondent’s law firm which showed his “integral involvement” [363]. Her Honour said that:

   “It was apparent that he sent instructions to and was speaking with and briefing [Counsel].  He was receiving the advices (which he admitted he read) and was passing them on to the clients … he was receiving and arranging payment of Counsel’s invoices.  He attended a conference in Sydney with [C Pierce] and [Counsel] on 26 August 1997 and with a telephone link to [the husband] … he met with and took instructions from [the husband] and [C Pierce] in relation to such advices”.

6. Her Honour made findings that, as early at 10 September 1997, the Fifth Respondent had written to the husband about implementing changes to the corporate entities, as advised by Counsel who had sought documents prepared and produced to him by the Fifth Respondent as to the effect of the advised changes.

7. A more fundamental fact contained within the judgment and relevant to conduct and ongoing management issues was that control of the M Pierce Trust had effectively shifted to the Fifth Respondent in his various roles and in the context of all of the findings within the judgment as to his conduct, and notwithstanding his various written submissions, there is a stark reality of the intent, purpose and focus of all of his conduct within the proceedings.

8. What is abundantly clear from the reasons for judgment of her Honour is that whilst the husband and the Second Respondent were the parties to the sham, all three respondents were fundamentally involved in obtaining advice and effecting transactions “designed specifically to protect assets from the wife” [394].

9. The evidence identified in the judgment is likewise of real significance in assessing the conduct of these parties and the matters relevant within sub-paragraph (c) of s 117(2A).  As an illustration upon the husband’s evidence Dessau J found that he “prevaricated and was evasive” [73] when cross examined about the unhappy marriage and that his evidence was “vague to the point of absurdity” [239] when questioned about the dissipation of monies from the sale of the intellectual property owned by X Trading Pty Ltd.

10. Her Honour made stringent findings about the Fifth Respondent and his conduct and evidence, such as at paragraph [310] where she found that:

    “Overall I am sceptical as to his objectivity, given his role with the two men, and the evasive and unconvincing nature of much of his evidence”.

11. At paragraph [208] her Honour found that, so far as the evidence of Mr T was concerned that she was “unimpressed … and was left with little confidence in his role as a truly independent advisor”.

12. At paragraph [377] of the judgment her Honour concluded that the Fifth Respondent’s:

    “Vagueness and evasiveness, the sliding nature of his evidence, his selective memory, his attempt to distance himself from transactions in which he was clearly involved, and an unexplained lack of instructions, memoranda and backsheets to Counsel who were instructed by him, in combination, means that I have no confidence that his evidence was forthright or accurate”.

13. The wife’s submission is that the involvement of the Fifth Respondent in the proceedings unnecessarily prolonged the hearing.  She submitted that he was joined to the proceedings and orders were sought against him only in his capacity as Appointor of the M Pierce Trust.  She argued that, at the commencement of the trial the husband had conceded that the assets of this Trust were indeed assets of the marriage and it was open to the Fifth Respondent to simply abide by orders of the Court in that regard. 

14. What indeed is submitted on behalf of the wife was that the Fifth Respondent actually volunteered to participate as a party in the proceedings so as to “actively defend and retain his position as Appointor”.  That involvement in the proceedings was found to be of self interest.  Subsequently and in her supplementary submissions the wife dealt with the financial issues of and related to the Education Trust and the payment of the school fees of the children of Mr T for the years 2000 and through 2007.  On that basis it was submitted that the Fifth Respondent “had a vested interest in the Court determining the fund did properly belong to [C Pierce] rather than to the husband and wife”.  That submission is made in the context of the refusal of the Fifth Respondent to declare a conflict of interest during cross examination. 

15. At paragraph [384] Dessau J found that the Fifth Respondent:

    “Was given repeated opportunities to acknowledge a conflict of interest in acting for the wife at that point.  He said there was none whatsoever.  Later he said that as he now understood that the wife was saying [C Pierce] never had an interest in the business, and therefore no legitimate interest in re-structuring the Trust, he was far less comfortable and could see a clear conflict”.

16. That admission by the Fifth Respondent and the various findings made by her Honour all substantiate the conflicted role and involvement the Fifth Respondent instructed his lawyers to adopt during the hearing.

17. As to the submission advanced by the wife that the Fifth Respondent was an officer of the Court and should be held to an even higher standard of conduct and responsibility than either of the husband or the Second Respondent I do not have a need to make any finding on that submission and it is unnecessary to the conclusions that I have appropriately reached.  Likewise I find there is no further need for me to further investigate any past fiduciary duty owed by the Fifth Respondent to the wife as a former solicitor during the marriage and at times relevant to commercial undertakings and shams being orchestrated.

18. There is other sufficient evidence as was found by her Honour to highlight the unnecessary involvement of the Fifth Respondent and the prolonged hearing and complexity of issues as a result of his evidence and the instructions given to his lawyers in the conduct of the case.

19. Subsequently her Honour made orders reporting Mr T to his professional body and I mention that fact for completeness but it has played no role in my assessment of a costs order that is, in all of the circumstances, just.

20. Finally, and in dealing with each of the written submissions of the Fifth Respondent, he submitted that his being a party to proceedings did not in any significant manner increase the complexity of the hearing or the length of trial or additional costs to the wife.  His argument is that he was a witness for only 5.75 hours in a trial of 11 full days.  That submission is wholly unhelpful as the fact is that he was a party to proceedings and was a participant within those proceedings.  His Counsel cross examined other witnesses and was involved in all aspects of the hearing.  It is clear from the judgment that the Fifth Respondent participated equally as a party and in that way materially contributed to the legal costs and disbursements of the wife.  I conclude that it is just that he bear a portion of the financial burden of the wife’s costs and disbursements which I have carefully considered within these reasons for judgment and the orders which I have hereafter pronounced.

21. I have evaluated the wife’s conduct of and incidental to the whole of these interlocutory proceedings. In the written submissions of the Second Respondent it was identified that indemnity costs are not appropriate in all of the circumstances and the one factor that was said to be required to be taken into account was the conduct of the wife.  It was stated in paragraph 17 of those submissions that it was not “until the second day of the hearing of the case before she was fully able to articulate the case sought against the Second Respondent”.

22. I have reflected upon all aspects of conduct relevant to the wife as identified in the reasons for judgment and I am not satisfied that any aspect of her conduct is such to void a costs order made on an indemnity basis or otherwise to facilitate a stay of any costs orders pending the conclusion of the s 79 proceedings.

S 117(2A) (d) - WHETHER THE PROCEEDINGS WERE NECESSITATED BY THE FAILURE OF A PARTY TO COMPLY WITH PREVIOUS ORDERS

1. The wife has submitted that she was effectively forced to bring before the Court several interim applications dealing with ancillary matters and was obliged to issue in excess of twenty subpoenae for production of documents.  This submission predominantly is a complaint by her about the lack of financial and commercial disclosure on the part of the husband and each of the Second and Fifth Respondents. That submission was not otherwise answered appropriately.  In my reading of her Honour’s judgment and with an assessment of the evidence and Court documents before her Honour it is clear that there is merit in this submission on behalf of the wife. 

2. I conclude that the wife’s costs were inflated as a result of the failure of others to comply fully and properly with previous orders of the Court and they are matters relevant both to costs and the basis of my award of costs.

S 117(2A) (e) - WHETHER ANY PARTY HAS BEEN WHOLLY UNSUCCESSFUL

1. It is clear from the reading of the judgment and the orders made by her Honour that the husband and the Second Respondent have been wholly unsuccessful.  It follows therefore that the wife has been wholly successful.  This factor is of fundamental importance in determining the just basis upon which an award of costs should be made in favour of the wife and supports the indemnity basis of such costs.

S 117(SA) (f) - WHETHER EITHER PARTY HAS MADE AN OFFER IN WRITING TO SETTLE THE PROCEEDINGS

1. The wife’s submissions are that no formal or proper offer in writing was made to her and disclosed to the Court.  That fact is disputed by the husband who has submitted that the wife is in error in this regard.  What is however conceded is that any offer was not disclosed to the Court and the contents and particulars thereof have not been disclosed.  I intend to make no finding upon this factor but it does not in any way impact upon my findings as to costs.

INDEMNITY COSTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

8. The Family Law Rules 2004 provide in Chapter 19 that costs to be paid by parties to their lawyers should be within the range set out in the Schedules to the Rules subject to any Retainer Costs Agreement which the parties have entered into and where they have knowingly contracted out of the operation of such rules. I am unable to conclude that this may be the case on the documents now filed with the Court.

AWARD OF INDEMNITY COSTS

1. On all of the findings of her Honour and upon a careful reading of the reasons for judgment and orders I conclude that it is just that there be an award of costs made to the wife on an indemnity basis.

2. The ordinary rule that the costs of litigation be paid on a party / party basis is wholly inappropriate on all of the findings and facts of this case, in particular the very profound finding of a sham.  It is just that there be a departure from the usual course and the circumstances of this case wholly merit an award of costs and disbursements of and incidental to the hearing and the related proceedings on 19 September 2008 and 15 May 2009 to indemnify the wife as to all of her costs incurred, save only as to such costs and disbursements which were not unreasonably incurred in their amount.  That is a matter to be wholly determined by the Registrar to be hereafter appointed to assess costs should the parties fail to reach agreement within a specified time for which I have provided in my orders.

3. These proceedings should not have been defended as they were by the husband and the Second Respondent and thereafter the involvement of the Fifth Respondent and in the manner in which they were prepared and argued before her Honour.  That is abundantly clear from her Honour’s reasons for judgment.

4. All of the respondents were wholly unsuccessful.  Their evidence was not accepted and there was a substantial loss of time both to the Court and to the wife and thereby greatly increased costs to the wife.

AWARD OF COSTS – DETERMINATION

1. It is just that there be a departure from the primary principle of s 117(1) of the Act and that costs be awarded to the wife to cover her legal expenses, outgoings and disbursements of and incidental to all of the interlocutory proceedings before Dessau J for where such costs were reserved.

2. Costs were additionally reserved by her Honour for the proceedings subsequently before her on 19 September 2008 and 15 May 2009 and likewise I conclude that it is just for costs of those occasions of the wife to be so included within this order.

3. I have separately concluded that it would be unjust to the wife to make any costs order on a party / party basis.  Such an order would result in a substantial shortfall of costs to the wife and I conclude she is entitled to a strong exercise of judicial discretion based upon the findings and conclusions of her Honour in her substantial interlocutory judgment.

4. Family Law Rule 19.08(3) requires that a party applying for costs on an indemnity basis inform the Court if that party is bound by a Retainer Costs Agreement in respect of the costs sought, as well as the terms of any such agreement.  The wife has not, to my knowledge, disclosed any such agreement.  Certainly it was not annexed to either of the two submissions filed on her behalf.  It could have been reasonable to expect, given the level of legal representation and the length and complexity of the hearing, that such an agreement could have been required between the wife and her lawyers.  That however is not the case on the facts before me and whilst it would have been clearly required for any such Retainer Costs Agreement (if it existed) to have been before the Court I have nevertheless evaluated and reflected on the judgment and findings and all other issues before me and it would not be “just” to disallow the wife’s reliance upon any such agreement in the obtaining of her indemnity costs on account of her failure to disclose any such agreement.  Family Law Rule 19.34(2) gives the Registrar the basis of assessing costs on the Schedule 3 scale any Retainer Costs Agreement and costs normally payable by a person to their lawyer provided all such costs are reasonably incurred and of a reasonable amount.  This is what I intend.  My reasons for judgment and orders deal with the principle of and related to the award of costs and the basis of such costs order and overwhelmingly in determining orders that are just in all of the circumstances of this case.

APPORTIONMENT OF COSTS BETWEEN RESPONDENTS

1. In her written submissions the wife has not particularised in what portions she sought that the husband, the Second Respondent and the Fifth Respondent be so liable for her costs and disbursements.  I have concluded that it is just that each of the husband and Second Respondent should pay and contribute 42.5% each of the award and payment required, that is between them a total of 85% thereof.  It is just that the Fifth Respondent pay 15% of all such costs and disbursements as assessed.

SUMMARY OF ORDERS

1. Accordingly I find that it is just that the costs and disbursements of the wife of and incidental to the hearing before Dessau J conducted between 16 and 29 May 2008 and the subsequent hearings before Dessau J on 19 September 2008 and 15 May 2009 and all legal fees and outgoings of and incidental thereto be paid on an indemnity basis as follows:

   §by the husband as to 42.5% thereof;

   §by the Second Respondent as to 42.5% thereof;  and

   §by the Fifth Respondent as to 15%

2. I will permit the parties a period of ninety (90) days in which to negotiate and resolve the quantum and payment of all of the wife’s costs and disbursements. If unsuccessful in their out of court negotiations the wife’s costs and disbursements on an indemnity basis will be prepared in an itemised costs account by her solicitors and then they will then be assessed by a Registrar of the Family Court in accordance with Chapter 19 of the Family Law Rules 2004. When assessed they are to be paid within sixty (60) days of the date of such assessment and in default of payment interest thereafter will be applied at the rate prescribed from time to time pursuant to Rule 17.03 of the Family Law Rules, adjusted quarterly and with payment in arrears until the whole of the principal sum and interest is paid in full by each of the respondents. For clarity I intend that the default interest will be applicable and calculated upon each of the quantum of costs awarded as against the respondent husband, the Second Respondent and the Fifth Respondent separately and each of those individuals will be responsible for their share of such cost repayment and interest applicable thereon, if any.

3. I otherwise do not further stay the payment of such costs and disbursements as are so ordered.  I acknowledge that a stay of any payment of costs pending the hearing and conclusion of the s 79 property proceedings was sought by one or other of the various respondents.  I find that any such stay is both inappropriate and unjust to the wife.  Her costs and disbursements have been incurred and do require to be paid.  There is no date certain for the listing and hearing of the division of property proceedings and currently all mattes are held in abeyance pending negotiation by the parties and their commercial lawyers with the Australian Taxation Office.  It is only when the outcome of those discussions, or any subsequent court action or enforcement proceedings which may then arise are concluded that it will be possible to identify the net pool of assets for this Court for division.

4. I conclude that there is no injustice to any one or all of the respondents in requiring payment to be made and the timetable that I have struck will ensure that they have sufficient time now to organise the sum that may be required from each of them to discharge their financial obligations under these orders.

5. I otherwise do not further stay the payment of such costs and disbursements as so ordered.

I certify that the preceding One Hundred and Eighteen
(118) paragraphs are a true copy of the reasons
for judgment of the Honourable Justice Young
delivered on 23 November 2010.

Associate: ……………………………………………………………

Date:  …………………………………………………………………