Douglass & Hearn
[2022] FedCFamC1F 112
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Douglass & Hearn [2022] FedCFamC1F 112
File number(s): SYC 1843 of 2021 Judgment of: CAMPTON J Date of judgment: 9 March 2022 Catchwords: FAMILY LAW – COSTS – Where the wife commenced parallel proceedings in Australia and in the B State Supreme Court for property adjustment subsequent to a marriage breakdown – Where the husband made an application for an anti-suit injunction restraining the wife from prosecuting her relief in the B State Supreme Court – Where such anti-suit injunction was initially resisted and later consented to by the wife – Where the husband now seeks indemnity costs in a fixed sum of his application for an anti-suit injunction – Where the wife had consented to the making of s 79 partial property adjustive orders in this Court while at the same time contending Australia was a wholly inappropriate forum for property adjustment – Where the wife had not complied efficiently with Orders of this Court – Obligation on litigants to conduct litigation in a reasonable and proportionate way – Where the wife’s conduct warrants a departure from the usual rule that each party – Costs ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) ss 79, 117
Federal Circuit and Family Court (Family Law) Rules 2021 (Cth) rr 1.04, 12.17
Cases cited: Atkins & Hunt [2017] FamCAFC 131
Idoport Pty Limited v National Australia Bank Limited & Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23
Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28
Division: Division 1 First Instance Number of paragraphs: 80 Date of hearing: 25 February 2022 Place: Sydney Counsel for the Applicant: Mr Gardiner Solicitor for the Applicant: Clinch Long Woodbridge Counsel for the Respondent: Mr Stapleton Solicitor for the Respondent: Meredith Lawyers ORDERS
SYC 1843 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS DOUGLASS
Applicant
AND: MR HEARN
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
9 MARCH 2022
THE COURT ORDERS THAT:
1.That within 21 days of the date of this order the wife pay to the husband the costs of and incidental to the anti-suit injunctive orders made on 27 January 2022 in the sum of $40,000.
2.That within 21 days of the date of this order the wife pay to the husband the costs of this costs application in the sum of $7,000.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Douglass & Hearn has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J
This is an application by the husband for indemnity costs payable by the wife in a fixed sum of $129,910 of his Application in a Proceedings filed on 22 November 2021, as identified in Order 4(b) made with the consent of the parties on 27 January 2022.
The wife by way of her Response to an Application in a Proceedings filed on 30 November 2021 sought orders that the husband pay her costs in opposing the relief sought by the husband in that Application in a Proceedings. The wife withdrew her relief for costs in the hearing before me on 25 February 2022.
For the reasons as set out herein, it is just in the circumstances to depart from the usual rule that each party bear their own costs of the husband’s application for an anti-suit injunction restraining the wife from progressing the proceedings she initiated in the B State Supreme Court, such that the wife pay the husband’s costs of that relief and of his application for costs heard on 25 February 2022.
BACKGROUND
The husband in this matter was born in 1949 and is 72 years of age. He commenced living with Alzheimer’s disease in December 2017. In March 2020 his diagnosis of a “mixed Alzheimer’s and Vascular Dementia” was confirmed.
The wife was born in 1951 and is 70 years of age. She is in good health.
The parties married in 2015 in City C, D State in the United States of America (“USA”). The husband contends the parties separated on 1 June 2020. The wife contends separation occurred on 1 August 2020. It is the husband’s case that the parties lived together in Sydney from early 2016 until the date of separation.
On 5 February 2021 the wife commenced divorce proceedings in the B State Supreme Court. An adjunct of the divorce proceedings in B State was a claim for property adjustment identified as a declaration of separate property and as an equitable distribution of marital property. That process was served on the husband on 17 March 2021.
The wife filed an Initiating Application in what was then the Federal Circuit Court in Sydney on 16 March 2021 seeking orders for financial adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). Broadly, her relief sought that the husband pay to the wife the equivalent of 30 per cent of the value of a jointly owned property located at E Street, Suburb F (also identified as Location G), (“the Location G property”), implicitly that the husband thereafter retained that real property, and that the wife be declared the sole beneficial owner of funds held in a joint National Australia Bank (“NAB”) account of the husband and the wife. On an interlocutory basis she sought an order that she be granted sole occupation of the Location G property and liberty to access and to withdraw funds from the joint NAB account.
Self-evidently, this Initiating Application was filed the day before the husband was served with the B State process. The Initiating Application filed on 16 March 2021 was served on the husband on 3 May 2021.
On 11 March 2021, the NSW Civil and Administrative Tribunal ordered that the husband’s daughter, Ms H, and his accountant, Mr J, be appointed his financial managers pursuant to the Guardianship Act 1987 (NSW). By orders made in this Court on 18 October 2021, they were each appointed as the husband’s Case Guardians in these proceedings.
The husband filed a Response to an Initiating Application on 9 June 2021 seeking orders that the wife transfer to him all of her interest in the Location G property and her interest in a jointly held motor vehicle. He also sought a cash adjustment payment from the wife to be particularised upon exchange of disclosure. It was the husband’s contention that the wife had sourced from the husband’s bank accounts and retained or not accounted for approximately $2.5 million withdrawn from financial institutions in Sydney to a bank account in her name in B State.
The proceedings were transferred to the Family Court Sydney (as it was then) by way of orders made on 16 June 2021. A series of directions were made by judicial registrars over a number of months in these proceedings as to the disclosure of documents in compliance with the Federal Circuit and Family Court (Family Law) Rules 2021 (Cth) (“the Rules”).
The husband in the B State proceedings contended that the wife had not met threshold residential requirements to file and progress her divorce and property claims in that forum.
On 19 August 2021, the husband filed an Application in a Proceedings seeking permission to use the wife’s Initiating Application, affidavit and Financial Statement filed in this forum on 16 March 2021 in the B State Supreme Court litigation for the purposes of defending and seeking dismissal and/or strikeout of the proceedings in that forum. Consent orders were made facilitating same by a judicial registrar on 2 November 2021.
The husband filed an Application for Divorce in Division 2 of this Court in Sydney on 8 November 2021 (“the Divorce Application”).
The proceedings came before me for case management on 16 November 2021. Mr Jones appeared as solicitor for the wife and Mr Stapleton of counsel appeared for the husband by way of his Case Guardians. During the course of the listing before me on that day, the husband contended that the wife bringing proceedings in B State and in this forum for substantially the same relief was an abuse of process, and that her conduct in the parallel proceedings constituted at least a “wilful disregard of known facts and clearly established law”. On that day the following orders were made:
1.By consent the interim relief sought by the Wife in her Initiating Application filed 16 March 2021 is withdrawn and dismissed.
2.By consent the interim relief of the Husband in his Response to Initiating Application filed 9 June 2021 is withdrawn and dismissed.
3.The Husband file and serve any amended Application in a case identifying with precision any interlocutory orders he will seek including as to an injunction restraining the Wife from prosecuting or continuing her Application filed in the Supreme Court in the [B State, L County] by summons dated 5 February 2021 proceedings No […] by way of judgment for divorce and ancillary relief as to declaration of separate property, equitable distribution of marital property and costs together with any Affidavit in support on or before close of business on 22 November 2021.
4.The Wife file and serve any Response to that Application in a case together with any Affidavit evidence in support thereof on or before close of business on 29 November 2021.
5.I direct that the parties do all things as are necessary to confer and agree as to the identity of a Court expert to opine as to relevant matters pertaining to the [B State] action and to provide to that expert on or before close of business on 29 November 2021 a letter of instruction for the purposes of provision of an opinion.
6.The Court anticipates on the 30 November 2021 when the matter is next listed that the parties will be in a position as to advise:
a.Agreement as to the terms of the letter of instruction to the Court Expert; and
b.The anticipated time frame that the Court expert will furnish an opinion; and
c.The nature of the orders or directions to be made in the [B State] proceedings when next listed on 4 January 2022 including whether any substantive relief will be prosecuted by either party on that occasion.
7.In the event the parties are unable to agree as to the identity of the single court expert the Husband is to provide the Wife’s solicitors with the names of three such experts together with a statement as to their qualifications and experience and estimate costs of providing an expert opinion on or before close of business on 19 November 2021 together with a draft letter of instruction, and the Wife shall select one such expert and make any proposed amendments to the draft letter of instruction on or before 25 November 2021.
8.In the event of any dispute as to the terms of the letter of instruction to the expert that dispute will be determined by me on 30 November 2021.
9.I vacate the listing by a Judicial Registrar on 15 December 2021.
By way of her Amended Initiating Application filed on 30 November 2021, the sole relief sought by the wife in this forum was that this Court give effect to any orders as to property adjustment made in the Supreme Court of B State.
The matter again was listed before me on 30 November 2020 and the following orders were made:
1.By consent Orders are made in accordance with paragraphs 2, 3, 6, 7 and 8 of the Husband’s Amended Application in a proceedings filed on 22 November 2021 and attached hereto.
(These orders provided for a capacity to use all the documents filed in these proceedings and all orders made in these proceedings in the [B State] Supreme Court matter, the listing of the [Location G] property for sale and adjusting $1,196,298 for the husband’s non-refundable deposit for accommodation and care and [P Nursing Home] and placing the balance of proceeds of sale in the husband’s solicitors trust account “pending final resolution of these proceedings”)
3.By consent and by way of partial property settlement, the wife do all things as are necessary within 7 days of the date of these orders to transfer to the husband all her right, entitlement and interest in the [Motor Vehicle 1], registration number …, and all of her right, entitlement and interest in the NAB account in the joint names of the parties, account number […46], with the balance of that account presently standing in the sum of approximately $204,000.
4.Pursuant to Order 7 of the Orders dated 16 November 2021, [Mr M] be appointed on the nomination of the wife as the Single Expert to opine as to relevant matters pertaining to the [B State] litigation commenced by the wife in that forum.
5.The solicitors for the husband forward to solicitors for the wife on or before 4.00 pm today, 30 November 2021, a copy of the draft letter of instruction to be forwarded to [Mr M] the Single Expert, such letter being omitted from the husband’s solicitor letter of 19 November 2021, and that the solicitors for the wife on or before 4.00 pm on 1 December 2021, provide by way of return letter to the solicitors for the husband any proposed amendments to that letter of instruction.
6.In the event of any further dispute as to the contents of the draft letter of instruction to be provided to [Mr M] as the Single Expert, I list these proceedings for the purposes of settling the terms of the letter of instructions to that expert on 2 December 2021 at 2:00 pm by Microsoft Teams.
7.In the event that agreement is reached as to the content of the draft letter of instruction to be provided to the Single Expert, I grant leave to vacate the listing on 2 December 2021 by way of joint email forwarded to my chambers.
8.The balance of relief as prosecuted by the Husband in Application in a proceedings not determined by way of orders made today be listed for hearing before me on 27 January 2022 by Microsoft Teams.
9.By consent, without prejudice and without admissions, until close of court business on 27 January 2022, the wife is restrained from doing any act of thing to prosecute the proceedings commenced in the Supreme Court in the [B State] by summons, proceedings number […] save and except to obtain procedural orders in respect of those proceedings, including and not limited to, by way of amendment of proceeding by way of particular, by way of compliance of existing orders of that court.
10.That a sealed copy of the orders made today and a transcript of the proceedings today be made available to the attorneys of each of the parties in the [B State] proceedings and the judge in those proceedings
11.That for the purposes of the hearing listed on 27 January 2022, the husband have leave to rely upon the Affidavit of [Ms H] filed 22 November 2021 and exhibits thereto, affidavit of [Mr J] and exhibits thereto, and such further affidavit as considered appropriate by or on behalf of the husband, such further affidavit to be filed no later than 11 January 2022.
12.That the wife have leave to rely upon, if she considers it appropriate, for the purposes of the hearing listed on 27 January 2022, each of her affidavits filed 30 November 2021, and such further affidavit by way of update and reply, or in the alternative, a single consolidated affidavit, such update and reply or consolidated affidavit to be filed no later than 11 January 2022.
13.That on or before close of court business on 25 January 2022 each party is to file and serve a case outline document setting out:
a.A list of material relied upon for the purpose on 27 January 2022;
b.Brief chronology listing significant events relevant to the issues to be determined on that date;
c.Outline of submissions in support of relief sought by that party.
14.Both parties have leave to apply on 24 hours’ notice to the other party and to my Associate.
During the course of the hearing on 30 November 2020, a concession was made by the wife that:
(a)Irrespective of whether the separation between the parties occurred on the 1 June 2020 or 1 August 2020, the ground of irretrievable breakdown of marriage in the Divorce Application was established, and that save as to service or other technical matters, it was likely that an order for divorce would be made on the listing of that Divorce Application for hearing by Division 2 of this Court on 17 February 2022; and that
(b)Upon an order for divorce being made in Sydney, the B State Supreme Court would not further progress or determine the proceedings commenced by the wife in that forum on 5 February 2021; and that
(c)The solicitor for the wife could not identify any foundation to be agitated by the wife in opposing the husband’s Divorce Application.
On 17 December 2021, the wife filed a Show Cause Notice in B State proceedings seeking a determination that she met the residency requirements for standing to bring proceedings in that forum, an anti-suit injunction restraining the husband from proceeding with his relief in these proceedings and an injunction restraining the husband from prosecuting the Divorce Application in this Court.
The wife’s Show Cause Notice was not heard on the day it was first listed, being 3 January 2022. I will return to the transcript of the B State proceedings from that date later in these reasons.
It is the husband’s contention that the wife was in contravention of the injunctive Order 9 made in this Court on 30 November 2021, by way of the relief she sought to prosecute in B State on 3 January 2022.
On 27 January 2022 the following orders were made in this Court:
1.Leave is granted to the wife to make an oral application today seeking an adjournment of the hearing of the husband’s Application in a proceedings filed 22 November 2021.
2.That the oral application of the wife made today with leave to adjourn the hearing of the husband’s Application in a proceedings filed 22 November 2021 listed for hearing today is refused.
3.That the hearing of that Application shall commence at 2.15 pm today by way of Microsoft Teams format.
4.By consent and pending further order, orders are made in accordance with the consent orders relevantly being:
1. That until further Order, the Applicant Wife be immediately restrained from taking any steps in matrimonial proceedings […] filed by her in the Supreme Court of [B State], USA ([B State Proceedings]) on or about 5 February 2021.
2. Pending further order, that the Applicant Wife immediately take all steps available to her to discontinue the [B State Proceedings] and cause her legal representatives in the [B State Proceedings] to send a copy of these Orders to the [B State] Supreme Court and the Husband’s US legal representatives.
3. That upon the Wife’s compliance with Order 2 above and the discontinuance of the [B State Proceedings], the Wife cause her legal representatives to provide documents in writing verifying the discontinuance to the Husband’s US and Australian legal representatives.
4. The Court notes the agreement of the parties in these proceedings that the injunctions in paragraphs 1 and 2 above are agreed on the basis in relation to their costs of the parties, as follows:
a. Each party will bear their own costs of the [B State Proceedings] upon the discontinuance of those proceedings.
b. The Husband’s seeks his costs of his Application in a proceedings filed 22 November 2021 to be paid by the Wife but that order is opposed.
5.Order that the parties attend a private mediation on or before 31 March 2022, with the Wife being permitted to attend that mediation by video conference.
10.The Husband’s application for the determination of his costs of his Application in a proceedings filed 22 November 2021 be listed for hearing at 2.15pm on 25 February 2022.
11.The balance of the Husband’s Application in a proceedings filed 22 November 2021, other than those parts already resolved and the question of costs, be adjourned until a date after the date of the mediation in Order 5 above.
14.The proceedings are listed before his Honour Justice Campton at 9.30 am on 1 April 2022 for consideration of an order pursuant to section 79 (9) of the Family Law Act 1975 (Cth) and for further management including the possible allocation of trial dates and trial directions.
The husband filed an Amended Application for Divorce on 17 January 2022. An order for divorce was made in Division 2 of this Court at Sydney on 17 February 2022. The divorce order is yet to become absolute.
THE CLAIMS FOR COSTS
Arising from Order 4(b) made on 27 January 2022 the husband makes claim for an order for indemnity costs in his favour fixed in an amount between $85,000 and $95,000 of and incidental to pursuing the anti-suit injunction as prosecuted in his Application in a Case filed on 22 November 2021. He contends that his “total costs of pursuing the anti-suit injunction” were $129,910. The husband relies on the following documents:
(a)An affidavit of Ms H filed on 4 February 2022;
(b)Financial statement of the husband filed on 9 June 2021;
(c)A Costs Notice filed on 25 February 2022 and marked as Exhibit “H1”;
(d)Transcript of Australian proceedings on 27 January 2022 and marked as Exhibit “H2”;
(e)Show Cause Notice of the wife in the B State Supreme Court filed on 3 January 2022 and marked as Exhibit “H3”;
(f)Written submissions as to costs filed on 22 February 2022; and
(g)The husband’s statement as to costs filed 28 February 2022 pursuant to directions made 25 February 2022.
The wife resists the cost claim of the husband. Her primary position is that the husband’s application for costs be dismissed. In the alternative she contends that the husband’s costs ought to be reserved until the final determination of the s 79 proceedings. In the third alternative, should an order for costs be determined to be just, she contends that costs should be ordered on a party and party basis as agreed or as assessed, contending that the exceptional circumstances as identified in by long standing authority as to the order of indemnity costs are not applicable to this case.
The wife relied on the following documents:
(a)Affidavit of the wife filed on 18 February 2022;
(b)Financial statement of the Wife filed on 16 March 2021;
(c)Costs notice filed on 25 February 2022 and marked “W1”;
(d)Transcript of the B State Proceedings on 3 January 2022 and marked “W2”;
(e)Written submissions filed on 24 February 2022;
(f)The wife’s statement as to costs filed on 28 February 2022 pursuant to directions made
25 February 2022.THE LAW AND PRINCIPLES
The relevant principles with respect to costs are well settled, and are set out in detail in the
Full Court decision of Atkins & Hunt [2017] FamCAFC 131.
While the general position established by s 117(1) of the Act is that each party should bear their own costs, s 117(2) allows a court to make such costs order as it considers just if there are circumstances which justify doing so.
In considering what order for costs should be made (if any) and in what form, a court is required to have regard to the considerations set out in s 117(2A) of the Act. The relevance of the particular matters will depend on the circumstances of each case.
It is well settled that no one factor has priority under s 117(2A), nor must more than one factor be satisfied; any one factor maybe sufficient. The discretion conferred by s 117 of the Act is a broad one, and the factors under s 117(2A) are not to be read in a restrictive way. I have considered each such relevant consideration as is relevant and engaged by each party in the circumstances of this costs application.
DISCUSSION
By way of broad agreement between the parties the pool of property available for adjustment in this matter is in the range of $10 million. Some property has been adjusted between the parties in favour of the husband by way of the orders made on 30 November 2021 being a portion of the proceeds of sale of the Location G property of $1,196,298 and all of the funds in a joint NAB account with a balance of $204,000.
The husband is not employed. He is in full time care. He receives an income by way of a pension and by way of dividends in the range of $3,134 per week. In addition to receiving the monies in the NAB account and some of the proceeds of sale of the Location G property, he has investments valued in excess of two million dollars. His superannuation entitlement is valued slightly in excess of $2,450,000. He has an unpaid taxation liability of $254,154 and some credit card debts. It is uncontroversial that the husband is residing in P Nursing Home, a high-cost age care facility. The costs of this facility is to be sourced from his interim adjusted share of the Location G property.
The Financial Statement of the wife filed on 9 September 2021 records that she is unemployed. She receives social security in the United States of $1,342 per week. She is the owner of an apartment in City N, B State valued a 1.4 million USD, has approximately 45,000 USD in bank accounts and a fidelity investment valued at 355,000 USD. She has other investments recorded at a value of 1,676,848 USD and a B State deferred compensation item of property valued at 539,849 USD. Her City N apartment is subject to a mortgage of 140,435 USD.
The husband’s financial circumstances may be superior to that of the wife dependant on the findings of fact made as to his claim of the wife retaining the sum of $2.5 million withdrawn from his Australian bank accounts. It was not submitted on behalf of the wife that she has any incapacity to pay costs if ordered as sought.
The husband submitted that a finding ought to be made in this costs hearing implicit from the wife’s conduct that she was attempting to delay the hearing of anti-suit injunctive relief he sought in this forum restraining her from proceeding in B State until she could obtain an anti-suit injunction in B State restraining the husband from progressing his s 79 relief in this court.
He identified by way of grounding the finding that:
(a)The wife failed to engage in the retention and instruction of the single expert as ordered on 16 November 2021 and 30 November 2021, and
(b)The wife failed to file her affidavit to be relied on for the purposes of the anti-suit hearing listed for 27 January 2022 as directed on 30 November 2021, and
(c)The wife applied for an adjournment of that hearing on 27 January 2022.
The evidence establishes that the wife unnecessarily attempted to complicate the instructions to the expert and proposed additional requests of the expert to opine on matters not apparently relevant to the determination of the anti-suit injunction application. The wife failed to comply with the direction made 30 November 2021 as to filing her affidavit opposing the husband’s anti-suit injunctive relief in this forum by 11 January 2022. No affidavit was filed at any subsequent time by the wife after the orders made on 30 November 2021 on that subject matter. She did file an affidavit of her solicitor on 25 January 2022 in support of the unsuccessful adjournment application determined on 27 January 2022.
Each of these matters support an exercise as to discretion as to costs in favour of the husband.
The transcript of the B State proceedings on 3 January 2022 records the judge commenting that the wife “filed her papers… on what was a State Court holiday before a long weekend” and that the judge had not read the documents prior to the appearance. It further records an aspect of surprise from the judge as to the filing in circumstances where the matter had been adjourned from 17 September 2021. The legal representative on behalf of the wife contended
…this whole litany of facts about what may or may not be happening in Australia, whether it is accurate or not, I don’t agree in the way that it has been portrayed.
The legal representative of the wife contended to the B State judge as to the anti-suit prayer of the husband in this forum that:
I don’t see how [the husband] can do that when [B State], no one said [B State] doesn’t have jurisdiction.
The legal representative of the wife further contended
I would say that my application is procedural. I asked to amend the verified complaint. I asked the Court to make a proactive determination, and [the wife] has met the residency requirement to be divorced in [B State]. And I ask this Court restrain the Australian Court from proceeding further with regard to – they don’t have any authority over the [B State] property here and [B State] has jurisdiction over this divorce case. That is all I am trying to do and move forward with [the wife’s] case.
The judge recorded that “leave to amend is freely given” and whatever the dispute between the parties, the Court would determine it. The judge made it clear that on that listing there would not be a determination on the “merits”. The judge recorded that parties could amend their pleadings at the early stage of the litigation and observed that the husband could file an amended answer squarely putting the issues and that the pleadings are to be determined by way of a motion process. The judge also recorded, albeit that she had not read the papers, that it “kind of doesn’t make sense to do it in both jurisdictions”. The judge identified that there are “comity issues” that the Court in B State would probably feel compelled to be bound by or at least to have it addressed as to why that was not going to be honoured.
It is certainly implicit from the terms of the relief sought by the wife in the Show Cause Notice listed in B State on 3 January 2022 of the wife’s intention to prosecute it prior to the listing of the husband’s Divorce Application in Division 2 of this Court on 17 February 2022. It would defy common sense that she would seek relief in those terms in the event she did not have an intention to prosecute the Show Cause Notice prior to that listing date for the divorce hearing in Australia.
That said, it would be unsafe in the truncated nature of this costs hearing, absent cross-examination, to make a finding that the wife was engaging in conduct attempting to delay the hearing of the anti-suit relief in this forum so as to obtain an advantage in achieving the B State relief for an injunctive order in that forum of an anti-suit character on 3 January 2022 or in early February 2022.
The husband urged that a finding be made that the wife was in contravention of Order 9 made on 30 November 2021 as recorded in paragraph 22 of these reasons. It was his case that the wife, by way of her Show Cause Notice filed in the B State Supreme Court on 3 January 2022, sought to progress an order restraining the husband’s rights to prosecute his s 79 relief in this forum. The wife squarely put that contention into issue, submitting consistent with the language used by the relevant judge in the B State proceeding, that she had only undertaken procedural steps in the B State litigation by way of the Show Cause Notice filed in that forum on 3 January 2022. For the purposes of this costs application it is not necessary to make any finding as to whether the wife contravened the orders made by this Court by way of her conduct in the United States proceedings subsequent to 30 November 2021.
The husband contends that he was wholly successful in the anti-suit injunctive proceedings. He submits that the wife availed herself of each opportunity to delay or to obfuscate in these proceedings to obtain a perceived forensic advantage in aid of the B State cause including failing to engage pursuant to orders made for the appointment of an expert. The husband specifically identifies paragraph 26 of the wife’s affidavit filed on 18 February 2022 which records:
Upon my separation from [the husband], I was advised by my previous solicitor that it would be necessary for there to be simultaneous proceedings in Australia and [B State] as the Australian Court would not be in a position to make any order with clear jurisdictional reach to award a proportion of my [B State] pension to [the husband] and a local order would have to be obtained referable to that.
The wife submits with some force that the interim relief of the husband contained in his Response filed on 9 June 2021 was withdrawn and dismissed on 16 November 2021, the orders made that day requiring the husband to amend by “identifying with precision” the injunctive relief sought.
To my mind it is significant that the wife, with the benefit of her legal representatives, consented to this court exercising s 79 jurisdiction on the 30 November 2021. The wife in this costs application did not adequately engage with the self-evident juxtaposition in her conduct. That is, a consent to this court exercising a partial property adjustment power on 30 November 2021 and she at the same time agitating for a not dissimilar property adjustment power being exercised in the B State forum with Australia being implicitly a wholly inappropriate forum as to property adjustment.
It is submitted on behalf of the husband that the wife “would have been wholly unsuccessful” in her opposition to the husband’s anti-suit injunctive relief listed for hearing at 2.00 pm on 27 January 2022 before me in the event that prayer was heard on a contested basis. While not making a finding on that subject matter, the wife consented to the anti-suit injunctive relief sought by the husband. She agreed to orders discontinuing the B State litigation.
The wife was critical of the husband not putting her on notice as to the costs of the anti-suit injunction mounting and requesting by letter from his solicitors for she to agree to an order restraining her progressing the B State Supreme Court proceedings subsequent to 22 November 2021. I reject that submission.
The wife by way of her Amended Initiating Application filed 30 November 2021 clearly “set the board” as to the forum dispute for the litigation. She “pinned her colours to the B State Supreme Court mast” in that she requested this Court give effect to any B State orders for property adjustment after they had been made.
It was conceded that the wife had not sent any correspondence to the husband’s solicitors proposing a resolution of there being two parallel sets of property adjustment proceedings. It was uncontroversial that the husband put the wife on notice as to seeking indemnity costs by way of the relief identified in his Application in a Proceedings filed on 22 November 2021. With some chutzpah, the wife, by way of her Response to an Application in a Proceedings filed on 30 November 2021, sought orders that the husband pay her costs in opposing the husband’s anti-suit injunctive relief.
In my view the wife’s attempts to lay fault arising from her conduct as a litigant on her prior solicitors provides no solace to the husband. To permit such reliance to avoid a costs consequence by laying blame for her conduct would be unjust. I accept the husband’s submission that in the event the wife is aggrieved by advice provided that matter can be addressed by way of a different process in another forum.
I accept the husband’s submissions that the wife by way of her present solicitors had ample time to consider whether the conduct of parallel proceedings in each forum was an abuse of process and that her concession at the hearing on 27 January 2022 was achieved only after her application for an adjournment had been refused. I attach some weight to the fact of the wife consenting to and negotiating agreed orders for the purposes of listing before me during the course of the afternoon on 27 January 2022. The belated concession in those circumstances had little if any material impact on the costs incurred by the husband in prosecuting the relief he obtained. The compromise by the wife emerged only in the long shadow of the hearing when she had not filed her affidavit evidence as directed.
I am mindful of the provisions of r 1.04 of the Rules in that litigants are obliged to conduct litigation in a reasonable and proportionate way. I find that the wife was cavalier in complying with these obligations electing to proceed without meaningful regard to the legal expenses she would risk in the event she was unsuccessful on the anti-suit prayer.
Should costs be reserved?
The anti-suit injunctive prayer listed before me on 27 January 2022 was a discrete hearing event. The wife put squarely into issue the anti-suit injunctive relief prosecuted by the husband subsequent to the orders made on 16 November 2021. The consent orders made on 27 January 2022 was a direct concession and determination on that issue as against the wife.
The final property adjustment event between the parties will be determined in the future. Findings will be made as to the wife’s use and application of the funds withdrawn from the husband’s bank account. There will be future changes to the financial circumstances of the parties. To my mind this is not a reason to “kick costs down the road” to be determined by another judge. Each of the parties has a raft of processes at their disposal, including by way of offers of settlement or compromise, to garner some insurance as to the costs of and incidental to the substantive s 79 dispute.
The husband has been put to significant legal expense by the wife in resisting the fact and terms of the anti-suit injunctive relief prosecuted by him subsequent to 22 November 2021 including the obtaining of single expert opinion evidence from a B State Attorney. I find that the wife’s absence of success in resisting the anti-suit injunction, the fact of her consent to partial property orders being made on 30 November 2021 while at the same time contending that Australia was a wholly inappropriate forum for property adjustment and the conduct of the wife failing and/or neglecting to promptly and efficiently comply with the orders made as to the appointment of the single expert Mr M pursuant to the orders made on 16 November 2021 are justifying circumstances to warrant an order for costs being made against the wife.
What order should be made
The husband’s contention is that costs should be ordered on an indemnity basis. In relation to an award of indemnity costs, the recent Full Court decision of Phillips & Hansford [2020] FamCAFC 28, helpfully summarises the position as follows:
35.Indemnity cost orders are made only in exceptional cases.
36.Whilst the categories of cases in which indemnity cost orders may be awarded are not closed, it is accepted that such costs may be ordered where a case was pursued with “wilful disregard of known facts or clearly established law” and where there has been “an imprudent refusal of an offer to compromise”.
37.In relation to the first category, it has been said that indemnity costs may be awarded where “the applicant, properly advised, should have known that he had no chance of success” and where “a party persists in what should on proper consideration be seen to be a hopeless case”.
The husband submitted that the justifying circumstance for an award of indemnity costs is grounded from the wife knowing, or that the wife ought to have known, that commencing parallel proceedings here and B State seeking not dissimilar relief in each different forums constituted “the wilful disregard of known facts and clearly established law, and from the moment the wife commenced each of the proceedings the “abuse of process” was alive and became an issue that the husband had no option but to oppose. He further identifies that the wife took “every chance available to her, despite the orders she was bound by” to cause the husband to incur more time and costs to assist this court in protecting its own processes.
I accept that the wife persisted in maintaining the parallel proceedings when, on proper consideration, she ought not to have done so. That said, I am not satisfied that the nature of this case is exceptional so as to warrant an order for indemnity costs.
Fixing of Costs
The husband sought that costs, if ordered, be fixed.
The wife opposed any fixing of costs. She sought that, if ordered, costs be as agreed or assessed.
Pursuant to the directions made February 2022 each party filed on 28 February 2022 the value of costs incurred between 22 November 2021 and 27 January 2022 on an indemnity, party and party and scale basis. The husband’s further cost document records:
(a)Indemnity costs $96,679.32
(b)Party and party costs $72,509
(c)Scale costs $63,263
The husband provided itemised spreadsheets “breaking down” each contended quantum. His calculation of party and party costs was said to be “75 per cent of indemnity costs”.
The wife’s further document set out for the same period:
(a)Indemnity costs $43,308.75
(b)Party and party costs $32,185.65
(c)Scale costs $16,835.50
Rule 12.17(a) permits the Court to adopt a course to fix costs, although it is accepted that it is entirely a matter of discretion. Some guidance as to the appropriate matters to be considered can be found in the judgment of Einstein J in Idoport Pty Limited v National Australia Bank Limited & Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23 (“Idoport”) at [9] where his Honour considered that:
9.For present purposes it seems convenient to commence with the recitation of the principles which inform the exercise of the discretion:
i.the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: Beach Petroleum NL v Johnson (1995) 57 FCR 119, Von Doussa J page 265: [following Purchase J in Leary v Leary [1987] 1 All ER 261 who described the purpose of the rule allowing the fixing of a gross sum as “the avoidance of expense, delay and aggravation involved in protracted litigation arising out of taxation” (All ER page 265)];
ii.the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum at [16];
iii.the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available: Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738, per Giles JA at [22]; [following (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA) and adopted in Sony Entertainment v Smith [2005] FCA 228; (2005) 215 ALR 788];
iv.a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place: Harrison v Schipp at [22];
v.the gross sum “can only be fixed broadly having regard to the information before the Court,”: Beach Petroleum at 124;
[in Hadid v Lenfest Communications Inc [2000] FCA 628 at [35] it was said that the evidence enables fixing a gross sum “only if I apply a much broader brush than would be applied on taxation, but that….is what the rule contemplates.”]
vi. nevertheless, the power to award a gross sum must be exercised judicially, and after giving the parties an adequate opportunity to make submissions on the matter: Leary v Leary [1987] 1 WLR 72 at 76, and Beach Petroleum NL v Johnson (No.2) (1995) 57 FCR 119 at 120;
vii. in terms of the necessity for the approach taken to be logical, fair and reasonable, Von Doussa J in Beach Petroleum NL & Anor v Johnson & Ors (No. 2) (1995) 57 FCR 119, put the matter as follows, at [16]:
“On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary “fail safe” discount on the cost estimates submitted to the Court: Leary v Leary at 265….”
During the course of submissions each party was directed to the costs incurred by the other identified in the costs disclosure statements filed pursuant to the rules, each being an exhibit, then cast by way of comparison as against the court scale of costs for the same work completed.
Consideration is given to the terms of the fee agreements entered by the husband contrasted with the court scale as to costs.
The parties have been in litigation since mid-2021, but in that short time have quickly blown out the scope of their proceedings and associated costs, having been involved in various procedural and a number of interim hearings. I am mindful that the parties are continuing to engage in the s 79 litigation pathway. It is inevitable that the process of assessment of costs will in itself involve considerable further costs and delay. The wife’s current solicitors did not “inherit the entire file” of her prior solicitors. The absence of that file would further complicate and may delay a process of assessment of costs.
The absence of reasonableness to the forensic positions and elections taken by the wife ought to be reflected in the quantum of costs ordered.
The wife identifies, and I accept, that some of the items of costs referred to in the husband’s schedule and “breakdowns” relate to matters relevant to the final hearing and other subject matters unrelated to the anti-suit injunction relief such as to the progression of the sale of the Location G property and the construction of balance sheets. Such matters require a reduction in the value of costs claimed by the husband.
The litigation has been hard fought to date. I do not expect that the tenor or tone of that litigation will militate in the foreseeable future. Each party has, consistent with their capacities, taken forensic position and points. Parties ought to be aware that in the event they elect to conduct litigation in this way orders for costs will loom large on the horizon. Litigants in this Court have an obligation to engage in litigation responsibly.
I have considered the amounts claimed by way of the husband’s costs on a party and party basis and the basis for their calculations and compared them to those of the wife for the same period from 22 November 2021 to 27 January 2022. The husband was required to undertake a greater quantity of work and necessarily incurred greater fees for the anti-suit hearing. I am satisfied taking into account the factors identified in Idoport that it is appropriate to fix costs as there is sufficient evidence to do so grounded from the basis of their calculation so as to make an assessment and order.
I am satisfied that this is a case in which it is appropriate to fix an amount of costs on a party and party basis of the husband as to his anti-suit injunctive relief for the period from 22 November 2022 until 27 January 2022 in the amount of $40,000 payable by the wife within 21 days.
It is appropriate for the wife to contribute to the husband’s cost of his cost application. As recorded in these reasons she has financial capacity to pay such a costs order. The wife has been unsuccessful in resisting a costs order. No evidence was adduced as to any offer made by the wife to compromise the cost application.
At the hearing before me each party agreed that their costs of the cost application should be fixed in the sum of $7,000 on a party and party basis.
The wife shall be ordered to pay the husband’s costs of the cost application in the sum of $7,000 payable by the wife within 21 days.
I make the orders as set out in these reasons.
I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 9 March 2022
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