Darue and Darue

[2008] FamCA 541

FAMILY COURT OF AUSTRALIA

DARUE & DARUE [2008] FamCA 541

FAMILY LAW – COSTS – Costs between parties – costs thrown away – indemnity costs

Family Law Act 1975 (Cth)

Kohan and Kohan (1993) FLC 92-340

APPLICANT: Ms Darue

RESPONDENT: Mr Darue

FILE NUMBER: SYF 4321 of 2006

DATE DELIVERED: 14 July 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Fowler

HEARING DATE: 3 July 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Richardson, Senior Counsel with Mr Livingstone, Counsel

COUNSEL FOR THE RESPONDENT: Ms Rees, Counsel

Orders

1. The husband pay the wife’s costs and disbursements (as agreed or assessed in accordance with the Rules of Court on a party and party basis) thrown away by reason of the matter not proceeding to a final hearing on the day fixed for its commencement.

2. Pursuant to r 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel including Senior Counsel.

3. The costs be paid within 28 days of the final hearing of the proceedings for alteration of property interests of the parties.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 4321  of 2006

MS DARUE

Applicant

And

MR DARUE

Respondent

REASONS FOR JUDGMENT

Introduction

1. In this matter which was listed for hearing before me today the wife’s Counsel Mr Richardson applied for an adjournment of the hearing of the matter in order for a single expert to be appointed to value certain property in dispute between the parties, which was asserted to have been the subject of a former agreed value, and from which agreement (if it existed) the husband sought to resile.

2. The opportunity was afforded to the husband and wife to reach agreement on the value of those properties but that was not possible and the husband accepted the adjournment.

3. In those circumstances, I made an order for the appointment of a single expert and adjourned the matter by consent to a date to be fixed.

4. I am asked to make an order for costs in terms of an oral application made to the Court on the day in the following terms:

   “The husband pay the wife’s costs and disbursements thrown away by the adjournment of this hearing on an indemnity basis in such sum as may be agreed or in the absence of agreement as assessed.”

Section 117 considerations

1. The Court has a broad discretion as to the orders that it makes for costs and that discretion is set out in section 117(2) of the Act.  In the consideration of the exercise of that discretion I am obliged to consider the matters set out in section 117 (2A) of the Act.  Those matters are set out in the following sub lettered sub sections of that section namely:

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

1. The financial circumstances of the parties as at present were not the subject of significant dispute.  The husband has means greater than those of the wife, including considerable cash savings in the order of $200,000.00.  The wife was obliged to seek and obtain a maintenance order before me since she is presently unemployed.  It is true that some monies were held by the solicitors for the wife as a result of an order previously made and those monies are for the purpose of the wife’s costs in the proceedings.  As her Counsel pointed out they were not calculated on the basis that the costs of this day were in part to be thrown away by adjournment.

(b)      whether any party is in receipt of any assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party

1. There is no evidence that either party is in receipt of legal aid.

(c)      the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters

1. This matter has been before this court since 22 November 2006.  The matter has been subject to directions on a number of occasions.  A number of balance sheets have been prepared.  Affidavits have been filed.

2. The matter was listed before me on 31 March 2008 for mention and I was informed that the matter only required the filing, by Counsel for the husband, of a submission on the issue of how the husband’s judicial pension should be dealt with, and an updated financial statement from the husband together with offers of settlement in accordance with the Rules.

3. I have heard the audio transcript of the mention before me in March and I note that I sought assurance from those at the bar table at that time that this matter was ready for hearing.  There was no response or demur indicating outstanding matters requiring attention other than the matters referred to.

4. This matter was set down for hearing, and in order to accommodate the requirements of the parties as to counsel’s availability, for two days in one week and two further dates some seven days later.

5. Hearing dates in this Court are difficult to obtain and the Court allocates them only on the assurances that the matter is in all respects ready to proceed.  Because of the experience of those involved in this matter I permitted it to be set down on representations that the matter was, subject to only the matters mentioned, ready and otherwise on assertions from the bar table.

6. It is a matter of singular regret that in the event, the Court was not able to rely on those assertions on this occasion.  Court dates are hard to find and there is plenty of competition for them.

7. It is said on behalf of the wife, that there was a clear agreement as to the value of two properties in dispute, one of which by common accord she was to keep and one of which by common accord the husband was to keep.

8. A document filed before the Registrar of this Court, comprising the most recently dated balance sheet (and there were earlier and different ones) said that the values had been agreed.  The husband asserts that there were no such agreements and points to the fact that the document so asserting is a document of the wife’s solicitor’s preparation.  A bundle of correspondence and documents were tendered before me on this application.

9. In December 2007, the husband’s solicitor filed a balance sheet noting that the property which he was to keep by common accord required expert valuing, and an agreement was implied to exist on the value of the property said to be agreed to be kept by the wife.  It is in respect of this property that the husband sought to file a late valuation.

10. On 17 January 2008, the wife’s solicitors wrote to the husband’s solicitors indicating that they will not agree to the valuations proposed in a letter sent by the husband’s solicitors so far as they relate to the property other than the one which she was to retain.

11. A further letter is sent to the wife’s solicitors on the 28 May 2008 in which the wife’s agreement, inter alia, to an estimate of the value by the husband of the property the husband is to keep, is sought.

12. By letter dated the same date the husband’s solicitors are referred to an earlier letter dated 4 December 2007, wherein the husband’s assertion as to value is rejected.

13. It is not until the 24 June 2008, some four clear working days before the commencement of the hearing, that the matter is referred by the husband’s solicitors to a valuer for valuation.  A letter tendered shows instructions being forwarded to a Mr B, a valuer in relation to procuring a valuation of the property to be used in evidence at the hearing.  It is of course pointed out that the valuer is not a joint expert appointed in accordance with the usual practice of this Court.

14. In the wife’s affidavit of the 12 September 2007 the wife makes assertions as to the values of the two properties.  These assertions were also made in her affidavit of the 10 July 2007.  The husband by his affidavit of the 24 June 2008 says he accepts the value of the property at T Street is $1.6 million and the W Street property $1.4 million.  Interestingly, the wife in her affidavit under reply asserts that that latter property is worth only $1.3 million but that figure is changed to $1.4 million in her later affidavit and the other property in that same later affidavit is said to be valued at $1.75 million.

15. In the balance sheet most lately filed the properties are described as having values of $1.4 million and $1.75 million.

16. Ms Rees asserts that there was a mutual mistake as to the state of agreement of the parties.  If that was the case (which Mr Richardson does not concede) he says that the husband has not brought the issue back to Court as required by the Rules for directions for the appointment of an independent expert in a timely fashion.  Had there been a dispute, it should have been mentioned before me.  I agree with this latter assertion.

17. Mr Richardson argues that by reason of the conduct of the husband, the wife will suffer costs thrown away and she is by comparison of limited available means.

(d)      whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. I refer to the directions made and the assurances given and the failure of the husband to seek the appointment of an independent expert in accordance with the requirements of practice of this court.

(e)      whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. The husband has conceded the wife’s application for adjournment.

(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

1. There is no evidence of any such offer before me.

(g)      such other matters as the Court considers relevant

1. The application herein by the wife is for an order for indemnity costs. I note that I have received in evidence copies of the costs agreements entered into by the wife and her solicitors and counsel.

The Law

1. Kohan and Kohan (1993) FLC 92-340 establishes:

   a)the Court clearly has a discretion to make an order for costs under section 117.

   b)the Court has a clear discretion to make an order for indemnity costs where they depart from party and party costs and which are quantified under costs agreement or costs agreements.

   c)such an order is a very great departure from the normal standard.

   d)the Judge should know the terms of the agreement.  In this case the relevant costs agreements of the wife with her solicitors and counsel have been tendered.

   e)the Court should know the extent of the departure from scale and the impact it will have on the financial position of the parties.  The degree of departure may be a reason for not ordering indemnity costs.

   f)circumstances requiring a departure from the scale should be circumstances of an extraordinary kind.

   It is noted that in cases where there has been a dishonest concealment of assets there still has been only an award of costs on a scale basis. Whilst the category of circumstances in which indemnity costs might be ordered is not closed the thrust of the decisions is that it is a departure from what is normal to make such an order, and there must exist extraordinary circumstances to warrant the making of such an order.

2. What happened in this case is a matter of regret.  I have considered, so far as they are relevant, the matters referred to in section 117.  The wife says that if the result be found to be the result of a mistake on the part of the husband, in any event the costs should not fall at her feet because of the untimely nature of the pursuit of the issue by him.  The husband has conceded the adjournment.  Given what has occurred I take the view that an order for costs is appropriate.  I do not intend to make an order for costs on an indemnity basis since I do not consider, in the light of the authorities, that the matters referred to by the wife’s solicitors, on any basis, whilst regrettable, are sufficiently egregious to be considered “extraordinary”.  However, I believe the wife should have some of her costs met and accordingly I make the order set out above.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.

Associate: 

Date:  14 July 2008