Dimitrova & Carman
[2024] FedCFamC1A 214
•15 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Dimitrova & Carman [2024] FedCFamC1A 214
Appeal from: Carman and Dimitrova & Ors [2024] FCWA 72 Appeal number: NAA 104 of 2024 File number: PTW 2497 of 2012 Judgment of: ALDRIDGE, MCGUIRE & CHRISTIE JJ Date of judgment: 15 November 2024 Catchwords: FAMILY LAW – CROSS-APPEAL – INJUNCTIONS – Whether there was a basis for an injunction freezing funds in a named bank account – Where the primary judge found the disbursement of the funds was a matter in issue in the Supreme Court of Western Australia – Where the relevant indebtedness had been resolved despite proceedings in the Supreme Court of Western Australia continuing – Primary judge erred in making the injunction – Cross-appeal allowed – Re-exercise of discretion to disburse funds – First and second cross-respondent to pay the costs of the cross-appellants in a fixed sum.
FAMILY LAW – APPEAL AND CROSS-APPEAL – COSTS – Where the cross-appellants submit the primary judge erred in interpreting their claim for costs – Where the particulars of the cross-appellants’ statement of claim made their position clear – Costs assessment based on incorrect premise – Cross-appeal allowed – Unnecessary to consider the wife’s claim of discretionary errors – Costs to be remitted for rehearing.
Legislation: Bankruptcy Act 1966 (Cth) s 58 Cases cited: B Pty Ltd v Dimitrova [2023] WASC…
Dimitrova v Carman (No 2) [2018] WASC…
Dimitrova v Carman (No 3) [2020] WASC…
Dimitrova v Carman (No. 4) [2020] WASC…
Dimitrova v Carman (No 8) [2022] WASC…
Number of paragraphs: 73 Date of hearing: 27 August 2024 Place: Heard in Perth, delivered in Sydney Counsel for the Appellant / Second Cross-Respondent: Mr Hannan Solicitor for the Appellant / Second Cross-Respondent: F Law Firm Counsel for the First, Second and Third Respondents / First, Second and Third Cross-Appellants: Mr McGowan Solicitor for the First, Second and Third Respondents / First, Second and Third Cross-Appellants: Johnstone Crouse Lawyers Solicitor for the First Cross-Respondent: Dentons Australia The Third Cross-Respondent: Litigant in person ORDERS
NAA 104 of 2024
PTW 2497 of 2012FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS DIMITROVA
Appellant / Second Cross-Respondent
AND: MR CARMAN
First Respondent / First Cross-Appellant
MS GRABOWSKA
Second Respondent / Second Cross-Appellant
B PTY LTD (and others named in the Schedule)
Third Respondent / Third Cross-Appellant
ORDER MADE BY:
ALDRIDGE, MCGUIRE & CHRISTIE JJ
DATE OF ORDER:
15 NOVEMBER 2024
THE COURT ORDERS THAT:
1.Leave to appeal is granted.
2.The cross-appeal is allowed.
3.Orders 2, 3, 4, 5 and 9 of the orders made 12 April 2024 are set aside.
4.The parties shall forthwith take all necessary steps to cause the sum held in the CBA account #…92 to be paid to the third respondent/third cross-appellant.
5.The first, second and third cross-appellants’ claim for costs is remitted for rehearing before a judge of the Family Court of Western Australia other than the primary judge.
6.The appellant/second cross-respondent pay the costs of the cross-appellants fixed in the sum of $9,000.
7.The first cross-respondent pay the costs of the cross-appellants fixed in the sum of $2,000.
8.The Notice of Appeal filed 2 May 2024 as amended 20 May 2024 is 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 the pseudonym Dimitrova & Carman has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE, MCGUIRE & CHRISTIE JJ:
These are appeals against orders made by a judge of the Family Court of Western Australia on 12 April 2024. Relevantly, Order 2 was an injunction freezing funds in a named bank account, other than to give effect to any orders made in the Supreme Court of Western Australia (“the Supreme Court”) as to the disposition of those funds. Orders 3, 4 and 5 required the appellant, Ms Dimitrova (“the wife”), to pay the costs of the third respondent, B Pty Ltd, fixed in the sum of $33,334, the costs of the second respondent, Ms Grabowska, fixed in the sum of $33,333 and the costs of the first respondent, Mr Carman, fixed in the sum of $33,333.
The wife appealed against the making of the costs orders. Mr Carman, Ms Grabowska and B Pty Ltd (together, “the cross-appellants”) cross-appealed against the making of the freezing order as well as the costs orders.
These reasons explain why the cross-appeal will be allowed and why there will then be no need to consider the appeal, which will be dismissed.
It must be said, however, that this matter is particularly complicated, a circumstance which has been exacerbated by the parties’ approach to these proceedings. To say that the primary judge was given little assistance is a complete understatement. The submissions provided to his Honour were confusing indeed. However, it is our obligation to conduct a full review of the evidence, a task which, even with the assistance of competent counsel who appeared on the appeal, was not easy.
BACKGROUND
In order to understand the appeal, it is necessary to identify the parties and their relationships to each other and then to identify the relevant factual matrix, as simply as can be done.
Mr E Carman (“the husband”) commenced parenting proceedings against the wife in May 2012. By way of an Amended Response filed in August 2012, the wife sought property settlement orders against the husband. The husband became a bankrupt in June 2018 and Mr D in his capacity as trustee of the husband’s bankrupt estate became a party to the proceedings (“the trustee”).
On 13 August 2012, a number of third parties were added to the proceedings. Those that remain are Mr Carman (the husband’s brother), Mr Carman’s wife (Ms Grabowska) and B Pty Ltd, a company owned and controlled by Mr Carman and Ms Grabowska. B Pty Ltd operates in the construction industry.
The husband, wife, Mr Carman and Ms Grabowska together carried out a number of projects in partnership. It has been found by the Supreme Court that each project was undertaken through a new partnership of these parties. B Pty Ltd carried out the necessary work for each partnership.
One of the projects concerned a property at G Street, Suburb H, Western Australia (“[G Street]”) which was acquired by Ms Grabowska, Mr Carman and Mr J Carman (Mr Carman’s uncle) in 2010. The ownership was as tenants in common as to 50 per cent, 25 per cent and 25 per cent respectively.
The property was subdivided into two lots, Lot A which was registered in Ms Grabowska’s name and Lot B which was registered in the husband and Mr J Carman’s names as tenants in common in equal shares.
Lot B of G Street was sold in late 2011 for $1,250,000. Half of the proceeds were paid to Mr J Carman and the other half paid into an account in the name of the wife and the husband.
On 13 December 2011, the sum of $610,492 was transferred to the public trustee’s escrow account in circumstances where the public trustee was, at that time, administering the husband’s affairs.
On 14 August 2012, ex parte orders were made. Order 2 effectively froze what remained of the $610,492, namely $541,411 which was deposited into a Commonwealth Bank of Australia (“CBA”) account in the names of the husband and wife. These funds have been referred to as the “escrow funds” and we will use that shorthand here.
On 5 December 2012, the parties entered into consent orders dealing with the escrow funds. At that time, the balance of the funds was $550,000. The orders provided for $50,000 to be retained for the costs of the expert witness, one third of the balance to be paid to Mr Carman, Ms Grabowska and B Pty Ltd jointly, followed by payment to discharge a CBA loan held by the husband and wife. In compliance with those orders, approximately $189,000 was paid to the CBA to discharge the personal loan and, as at November 2020, approximately $31,000 had been paid to the expert witness. Mr Carman, Ms Grabowska and B Pty Ltd did not receive their portion of the funds (which remained in the account).
The effect of the transactions was that the amount which remained held pursuant to the original injunction as at the time of the November 2020 hearing was approximately $328,000. Some interest will have accrued.
On 29 January 2021, the freezing order was varied so as to become:
10.Until further order, the Husband, the Wife and the Second Applicant, [MR D] in his capacity as Trustee of the Bankrupt Estate of the Husband are restrained by injunction from dealing with the funds presently held in the CBA account number … established pursuant to the order contained in paragraph 1 of the orders made on 14 August 2012, other than to give effect to any orders made in proceedings … in the Supreme Court of Western Australia consequential upon the taking of account ordered in those proceedings.
(As per original)
It is not necessary to refer to the myriad of proceedings in the Family Court leading up to that order, but it is necessary to refer to some of the proceedings in the Supreme Court.
In 2015, proceedings were commenced in the Supreme Court for the taking of account between the wife, Mr Carman and Ms Grabowska. The husband, Mr J Carman and Mr K Carman (brother of the husband and Mr Carman) were subsequently joined to the proceedings. Neither the trustee nor B Pty Ltd were parties.
After a seven-day trial, Chaney J delivered reasons as to why he was satisfied that there had been a series of single venture partnerships between the parties that covered eight separate projects (Dimitrova v Carman (No 2) [2018] WASC…). Each partnership was found to have been dissolved. Accounts were ordered to be taken on the basis that the costs and expenses of each venture should be deducted before any repayment of the parties’ funds used in the project. His Honour included (at [134(4)]):
For the purpose of the account, costs of [the project] are to be brought to account on the basis of the lump sum … contract prices for the [project] applicable in each case. Any balance due in relation to a [project] contract which remains unpaid is to be taken as an expense of the partnership and be taken as payable from the net proceeds of sale of the properties concerned.
Some of the key findings made by his Honour were:
·For all the projects (bar one), including G Street, the parties entered into a lump sum contract with B Pty Ltd(at [127]);
·The existence of formal contracts was consistent with the parties’ commercial approach to project costs with a view to ultimately sharing the profits (at [129]); and
·The project costs should be assessed by reference to the relevant contracts (at [130]).
The hearing of the taking of accounts took place over nine days in 2019. Findings were delivered by Registrar Whitbread in early 2020 (Dimitrova v Carman (No 3) [2020] WASC…).
As to Lot A and Lot B of G Street, the Registrar found in relation to the costs:
Item 245 – [Company L] … Contract Cost
339No objection to determine. Agreed Item and Agreed Fact 18.4 and 18.9
During the appeal hearing a document titled “Schedule B” was handed up as the schedule of claims and objections dealt with by Registrar Whitbread and marked as Exhibit 1. The exhibit also contained “Schedule C” being a “Further Amended Statement of Agreed Facts”.
Item 18.9 in Schedule C showed the cost of the contract with B Pty Ltd (trading as Company L) for the project at Lot B of G Street agreed in the sum of $550,000 (Exhibit 1, Schedule C, p.724).
As to costs of the project, the finding was:
Item 248 – Cost of [Project]
342No objection to determine. Item is a purely mathematical calculation dependant on value of other Items. Objections to constituent Items already determined.
As to the “Balance of … Contract Still Unpaid”, the Registrar found:
Item 264 – Balance of … Contract Still Unpaid
353Objection not upheld. Item 264 is the value of the … contract, $950,000 (Agreed Fact 18.4 and 18.9), less [Mr J Carman’s] share, of $275,000 (already determined to be correct at Item 249 above), being a total of $675,000. The sum of $246,000 (being Agreed Fact 18.13), is then deducted; which agreed sum being agreed to be the payments from loan account … to [B Pty Ltd] for the … contract. Accordingly, no objection can be sustained to this Item.
354Further, the Plaintiff (taking both the Plaintiff's Schedule and the Plaintiff's Submissions regarding this Item into consideration) has failed to coherently particularise her assertions in a format which explains how the Plaintiff's amount contended for would (a) differ; or (b) be calculated; or (c) be applied; to the First and Second Defendants' account. Nor has the Plaintiff coherently cross referenced, and support, any assertions by reference to admitted evidence in such a way that she establishes either a surcharge or a falsification. As a consequence, the Plaintiff fails to establish any surcharge or falsification.
In mid-2020, Tottle J adopted the report of the Registrar (save for one matter not relevant to this appeal) and made orders for an independent accountant to complete the process of taking the accounts using the findings of the Registrar (Dimitrova v Carman (No. 4) [2020] WASC…).
The expert, Ms M, filed a report on 2 February 2021 which was amended on 3 December 2021 pursuant to further orders. Justice Tottle subsequently ordered that the report be adopted.
These steps did not resolve the issues between the parties and each continued to seek completely different orders to bring the dispute to an end. In early 2022, Tottle J found that the relief sought by the parties was not available in proceedings for taking account and what was needed was a winding up of the various partnerships (Dimitrova v Carman (No 8) [2022] WASC…). That step was not available in the proceedings as constituted (Dimitrova v Carman (No 8) [2022] WASC…).
Finally, in proceedings between B Pty Ltd, the wife and the Registrar of Titles, Whitby J extended a caveat lodged by B Pty Ltd over Property C on G Street (B Pty Ltd v Dimitrova [2023] WASC…). Her Honour found that Clause 8 of the contract with B Pty Ltd charged the land on which the project was undertaken with payment of the sums due under the contract.
This is relevant as there was no issue that B Pty Ltd had a standard form contract with the partnerships and accordingly, would have had the same standard form contract in respect of G Street.
The winding up proceedings, if any, (surprisingly the position was not clear at the hearing of the appeal) are yet to be concluded.
This led the primary judge to make the following findings:
21The winding up proceedings are, for obvious reasons, not yet completed. It is common ground that the funds in the holding account are sourced from the proceeds of sale of [Lot B of G Street]. Thus, the disbursement of those funds is a matter in issue in the winding up proceedings.
…
56As already noted, the injunction made on 29 January 2021, for the reasons set out in the relevant judgment, was clearly directed to the preservation of the escrow funds until their appropriate disposition was determined by the partnership proceedings in the Supreme Court. That disposition simply could not be determined in this Court, let alone on the papers, while the Supreme Court proceedings remained unresolved.
57All that has relevantly changed is that the Supreme Court proceedings then on foot have been completed – but that only goes so far. The completion of those proceedings did not, as earlier noted, in fact resolve the partnership disputes as anticipated by the parties; the winding up proceedings commenced in 2023 are intended to do that.
58For present purposes, therefore, the fundamental position has not changed – the partnership dispute in the Supreme Court remains unresolved, the determination of the interests of the primary parties in partnership property must await that resolution, and the substantive proceedings in this Court for alteration of those, and any other, property interests cannot proceed.
59The propositions advanced by [B Pty Ltd], [Mr Carman] and [Ms Grabowska] as to the immediate disbursement of the escrow funds may be dealt with briefly. There is no proper basis upon which the funds could simply be immediately paid to [B Pty Ltd]. The secondary proposition that the funds should be divided equally between [B Pty Ltd], [Mr Carman] and [Ms Grabowska] is not supported by the evidence, in circumstances where the partnership dispute remains unresolved.
60While there is some attraction in the proposition advanced on behalf of the Trustee, that only goes so far. As was tacitly conceded, even if the escrow funds are paid now into the husband's bankrupt estate, claims against those funds by the other parties to the partnership dispute would remain open to be pursued. The distribution of the husband's bankrupt estate, including any payments to other creditors not identified in the evidence before me, would necessarily be delayed pending the resolution of those claims. In a real sense, the immediate disbursement of the escrow funds would achieve no practical outcome.
61It may also fairly be noted that at the hearing of interlocutory matters on 24 November 2020, counsel then appearing for the Trustee resisted the proposition that the funds the subject of the injunction should be distributed to any party on an interlocutory basis, pending the determination of the Supreme Court partnership proceedings then on foot. The position presently advanced by the Trustee is inconsistent with that earlier expressed position. No explanation for that was advanced.
62The appropriate course is for the current injunction to be varied to secure the funds pending the determination of the winding up proceedings. I do not propose to make orders disbursing the escrow funds to any party on an interlocutory basis.
(Footnotes omitted, emphasis in the original)
This led him to make the following order, which is the subject of the cross-appeal
2.Until further order, the [husband], the [wife], and the [Trustee] are restrained by injunction from dealing with the funds presently held in the CBA account number [#…92] established pursuant to the order contained in paragraph 1 of the orders made on 14 August 2012, other than to give effect to any orders made in the Supreme Court of Western Australia as to the disposition of those funds.
His Honour took the view that the proceedings against the third parties in the Family Court were over because there remained no dispute for the Court to determine and made the costs orders recited earlier.
THE CROSS-APPEAL
It is useful first to deal with the cross-appeal. Essentially the complaint was that the issue of the payment to B Pty Ltd had been determined in the Supreme Court already and would not be determined in any winding up proceedings between the partners. Thus, it was submitted his Honour erred in finding there was “no proper basis upon which the funds could simply be immediately paid to [B Pty Ltd]” (at [59]).
There was no dispute that any winding up proceedings will determine the respective entitlements of the parties. Those entitlements will be established after allowance is made for the payment of creditors.
The cross-appellant submits, however, that the above findings and report of Ms M (to which we will return shortly) establish that B Pty Ltd was a creditor of the partnership relating to Lot B of G Street, secured over the property in the sum of $469,000 and that this finding will not be reviewed in any winding up proceedings.
At this stage it is appropriate to note that all counsel accepted that B Pty Ltd has a standard agreement, so that the clause noted by Whitby J (at [30] above), appeared in the same form for the project at Lot B of G Street.
No point was taken that B Pty Ltd was not a party to the taking of accounts. Its principals were parties and the respondents to the cross-appeal could not now assert the contrary to the findings made in those proceedings.
It must be recalled also that neither the wife nor the husband raised any challenge to the costs of B Pty Ltd in relation to G Street before Registrar Whitbread.
The task of Ms M was to take the Registrar’s findings and to use them to update the accounts.
In relation to G Steet, Ms M noted (Report of Ms M dated 2 February 2021, Schedule B):
·The overall B Pty Ltd costs (for Lot A and Lot B) were $950,000 which was now an agreed figure (Item 245);
·The costs payable by the partnership was $675,000, Mr J Carman having paid his share of $275,000 (Item 256);
·The balance of the cost unpaid at 11 August 2011 was $429,000 (a payment of $246,000 having been made). Again, this was noted as now being agreed (Item 264);
·The balance of the cost unpaid was $469,000, correcting a transposing error (Item 271).
As we have said, these conclusions were adopted by Tottle J.
What, then, is the basis for suggesting that B Pty Ltd was not owed $469,000 in relation to G Street and does not have a charge over the funds held under the freezing order arising from its charge over the source of the funds, the property itself?
Counsel for the wife submitted that the question of whether B Pty Ltd had already received the monies due to it under the contract may prevent the making of the orders B Pty Ltd sought. He very properly accepted that it did not appear that the wife had raised this impediment previously. There was no evidence to support the wife’s contention (and in fact, all available evidence demonstrated the contrary position).
The submission is based solely on the report of Ms M. At Item 263, Ms M calculates a net profit of $118,252. The wife asserts that if a net profit has been achieved then, in order to derive that profit, B Pty Ltd must have been paid.
We do not accept that to be so. Ms M was determining a net profit assuming payment. That profit was calculated on the basis that $610,492 of the net proceeds of sale “have been retained by the [wife and the husband] of which approximately 50% of the funds have been used and remainder held in escrow account” (Report of Ms M dated 2 February 2021, Schedule B, Item 260). This was noted as agreed. That is incompatible with a suggestion of payment of the unpaid costs.
The trustee opposed the cross-appeal, submitting that none of the asserted errors had been established. In oral submissions he did repeat those submissions made to the primary judge that the funds be paid to him, as he was the proper person to deal with all the issues regarding the funds.
There are two difficulties with that submission. The first is that the trustee did not appeal and no other party sought an order in the appeal that the funds be paid to the trustee. In that sense, the submissions had no point.
Secondly, a trustee is only entitled to those assets of the bankrupt that vest in him or her pursuant to s 58 of the Bankruptcy Act 1966 (Cth), save for relevantly secured payments (s 58(3)). B Pty Ltd held a charge over G Street to secure costs which extends to the proceeds of its sale. There was no basis for payment to the trustee.
The order made is interlocutory and leave to appeal is required. A material injustice would arise if leave were not granted because B Pty Ltd will continue to be held out of funds to which it is entitled. No one was able to identify any order that could be made by the Supreme Court in the partnership proceedings to alter that entitlement.
Although not articulated as clearly as would be desirable, the cross-appellants’ position before the primary judge and on appeal was that B Pty Ltd stood in a different position from the husband, wife, Mr Carman and Ms Grabowska in their personal capacities since B Pty Ltd’s entitlement to the funds in the escrow account arose from the unpaid amount on the contract and not from the resolution of the partnership dispute. Absent a dispute about the validity of the contract (which dispute had not been raised at the time of the hearing before the primary judge), B Pty Ltd was a creditor of the husband and wife whose indebtedness under the contract had been the subject of adjudication arising from the conclusion of Ms M’s report.
The primary judge’s reluctance to make the orders sought by B Pty Ltd arose from a concern that all matters were not yet finalised in the Supreme Court. While it is true that not all matters have been finalised, we accept that the indebtedness of the husband and the wife to B Pty Ltd in respect of the contract from the project at G Street has been resolved in a manner which permits an order requiring payment of this debt.
It was accepted that if we allowed the appeal, we were in the same position as the primary judge to determine the matter and re-exercise. Having regard to the matters discussed above, we accept that the escrow funds should be paid to B Pty Ltd in circumstances where they are less than will be required to discharge the outstanding amount under the contract.
There will be a grant of leave and the appeal allowed and the order made by the primary judge set aside. For the above reasons there will be an order that the parties shall forthwith take all steps to cause the sum held in the CBA account to be paid to B Pty Ltd.
THE COSTS APPEAL AND CROSS-APPEAL
The wife appealed against the costs orders sought by Ms Grabowska, Mr Carman and B Pty Ltd, saying that the orders were erroneously made. They, in turn, cross-appealed asserting that the primary judge misunderstood their case and the amounts sought by them which, in turn, affected the sums awarded.
As to the amount sought, the primary judge said:
30[B Pty Ltd], [Mr Carman] and [Ms Grabowska] were represented by [N Lawyers] from August 2012 to February 2020. They have been self-represented since. In particulars filed on 27 October 2023, they defined their costs claim to seek:
(a)costs against the wife in the sum of $261,400.88, comprised of fees apparently paid to [N Lawyers] in the period from August 2012 to February 2020 in the sum of $231,700.88, and fees paid to [P Accountants] towards the preparation of a report ordered earlier in the proceedings, in the sum of $29,700; and
(b)"as an alternative, in the event the wife is unable to pay", costs against the firm or [Mr Q] personally in the sum of $119,444.60, being the fees apparently paid to [N Lawyers] from 1 October 2013 to 24 February 2020, the firm having represented the wife since 26 September 2013.
31In submissions filed on 5 January 2024 that position was amended. They now sought indemnity costs against the firm in the sum of $119,440.60 and "the balance of any indemnity cost" from the wife. Thus, as finally presented, the claim for costs against the firm was not conditional on the wife's inability to pay, but stood alone. Relief against [Mr Q] personally was no longer sought.
The cross-appellants submit this was wrong because the claim was for $261,400.88 whether or not the claim against the lawyers succeeded (it did not).
The cross-appellants were required to particularise the claim for costs. The claim against the wife is identified as $261,400.88 (Mr Carman, Ms Grabowska and B Pty Ltd’s statement of claim lodged 27 October 2023, paragraph 1(a)). The claim then goes on to assert:
2.The advisers of the [the wife], [F Law Firm] or [Mr Q], as an alternative, in the event the wife is unable to pay, is:
a.For the amount of $119,444.60, being the sum of the bills outlined in [N Lawyers’] Debtor Statement from 1 October 2013 (Invoice…) to 24 February 2020 (Invoice…).
b.It has been deposed by the [wife] that her adviser, [F Law Firm] represented her since 26 September 2013.
(As per original)
That claim is clearly in the alternative and not intended to replace part of the claim against the wife. The order sought against the lawyers is conditional on the wife not paying any order made against her.
In the written submissions given to the primary judge, the cross-appellants said:
110.[Mr Carman, Ms Grabowska and B Pty Ltd] submit the appalling conduct of [the wife] and her legal advisers supports that the Court should exercise its discretion in awarding indemnity cost against [F Law Firm] in the sum of $119,444.60 and the balance of any indemnity cost is sought from the [wife].
This does put the claim slightly differently, but we do not read it as replacing the claim against the wife – the indemnity claim against the wife remains at the higher figure unless an award is made against the lawyers. Their aim was to receive, if possible, the higher sum.
It follows that the assessment of costs was based on an incorrect premise which is an error which must be addressed.
The wife also appealed against the costs order asserting that the primary judge made a number of discretionary errors. Where she differed from the cross-appellants was that she sought an order on appeal dismissing the costs application.
The effect of the above finding is that the claim for costs has not been properly considered and must be redetermined. Thus, there is no point in considering the asserted errors raised by the wife as the discretion will be exercised again.
We do not consider that we are in a position to undertake that task and the matter will have to be remitted for rehearing.
As part of the orders made by the primary judge, the cross-appellants were removed as parties. That was understandable because on his Honour’s findings, all matters involving them had been resolved. However, as costs are once again a live issue, that order must also be set aside.
COSTS
The cross-appellants have succeeded in the cross-appeal as to the injunction and as to the costs order – they apportioned the costs incurred by them equally between both issues.
The cross-appeal as to the injunction was opposed by the wife and trustee, who should each bear a portion of the costs. We take the view that the trustee played a lesser role than the wife.
Although the wife was dissatisfied with the outcome of the costs application, she did not concede the cross-appeal and sought to pursue her own appeal. Costs are awarded as compensation for legal fees incurred. The wife’s approach required the cross-appellants’ appeal against costs to proceed on a fully contested basis. It is therefore just, in all of the circumstances, that the wife pay the costs of that aspect of the appeal.
The claimed costs included a total of $6,631.92 for “reading authorities” and $1,105.32 for the solicitor preparing for the hearing of the appeal where counsel ran the appeal. It is hard to justify these costs.
Doing the best we can, the wife will pay the costs of the cross-appellants fixed in the sum of $9,000 and the trustee will pay $2,000.
I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, McGuire & Christie. Associate:
Dated: 15 November 2024
SCHEDULE OF PARTIES
NAA 104 of 2024
PTW 2497 of 2012Respondents
First Cross-Respondent:
MR D IN HIS CAPACITY AS TRUSTEE OF BANKRUPT ESTATE OF MR E CARMAN
Third Cross-Respondent:
MR E CARMAN
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