Eastgate and Cardiff & Anor (No 2) - [2020] FamCA 681

FAMILY COURT OF AUSTRALIA

EASTGATE & CARDIFF AND ANOR (NO. 2)

[2020] FamCA 681

FAMILY LAW – COSTS – Where applications for a stay of proceedings pursuant to the Trans-Tasman Proceedings Act 2010 (Cth) were dismissed – Where orders were made for any party seeking costs to file an application and detailed schedule of costs – Where the husband filed an application seeking indemnity costs totalling around $200,000 referable to not only the stay application but proceedings in other courts – Where the husband only amended his application orally on the morning of the hearing – Where the wife was forced to defend the husband’s application for indemnity costs – Where the wife sought her costs of defending the husband’s costs application – Where it is appropriate to award the husband costs fixed in the amount of $10,000 – Where that amount is reduced by $2,000 to countenance an amount of the wife’s costs appropriate to visit upon the husband.

Family Law Act 1975 (Cth) s 117
Trans-Tasman Proceedings Act 2010 (Cth)
Family Law Rules 2004 (Cth) r 19.18

Anison & Anison (2019) 59 Fam LR 581; [2019] FamCAFC 108
Eastgate & Cardiff and Anor [2020] FamCA 387
Stopford Malloy & Malloy and Anor (Costs) (2018) FamCAFC 6

APPLICANT:

Mr Eastgate

FIRST RESPONDENT:

Ms Cardiff

SECOND RESPONDENT:

Ms Cardiff & Mr Nash as Trustees for the N Trust

FILE NUMBER:

BRC

14812

2018

DATE DELIVERED:

17 August 2020

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Kent J

HEARING DATE:

17 August 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Alexander

SOLICITOR FOR THE APPLICANT:

MBA Lawyers

SOLICITOR FOR THE FIRST

RESPONDENT:

Franklin Family Law

SOLICITOR FOR THE SECOND RESPONDENT:

Leishman Legal

Orders

Leave be given to the First Respondent’s solicitor, Ms Franklin, to appear by telephone at today’s hearing.
The First Respondent to pay the Applicant’s costs of and incidental to the applications for the stay of proceedings the subject of the orders made on 21 May 2020 in the fixed amount of $8,000.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Eastgate & Cardiff and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 14812 of 2018

Mr Eastgate

Applicant

And

Ms Cardiff

First Respondent

And

Ms Cardiff & Mr Nash as Trustees for the N Trust

Second Respondent

EX TEMPORE REASONS FOR JUDGMENT

On 21 May 2020, I made orders dismissing the applications of Ms Cardiff (“the wife”) and Ms Cardiff & Mr Nash as Trustees for the N Trust (“the Trustees” and “the Trust” respectively) to stay the property settlement proceedings instituted by Mr Eastgate (“the husband”), pursuant to the Trans-Tasman Proceedings Act 2010 (Cth).
My reasons for judgment delivered on 21 May 2020[1] for those orders (“the 21 May 2020 reasons”) are relevant to the current costs application made consequent upon dismissal of that application and I incorporate the 21 May 2020 reasons here, without unnecessary repetition of them, in full as part of these reasons.
[1]Eastgate & Cardiff and Anor [2020] FamCA 387.
Included in the orders made on 21 May 2020 were orders providing for, inter alia, any party seeking costs to file an application and to otherwise provide a timetable for the filing of responses, affidavits and written submissions concerning costs.
Read with the 21 May 2020 reasons, particularly at [86] in the context that each party had raised costs issues in the stay proceedings, it ought to have been tolerably clear that “the question of costs” referred to in [86] of the 21 May 2020 reasons was a reference to costs relating only to the stay proceedings and the discrete stay application. However, the solicitors for the husband, remarkably as it seems to me, took the terms of the orders made apparently as an invitation to advance an application for costs for matters well beyond the discrete stay proceedings.
On 12 June 2020 the husband filed an application seeking:
1.That the First Respondent pay the Applicant’s costs of and incidental to these proceedings on an indemnity basis as agreed between the parties or as assessed by an independent costs assessor.
2.That in the event that First Respondent is unable to pay the Applicant’s costs within thirty (30) days from the date of these Orders or an assessment (if applicable), then this amount be deducted from the First Respondent’s final property settlement.
3.Such further or other order as this Honourable Court deems appropriate.
(As per the original)
That application was supported by an affidavit of the husband’s solicitor in which she outlines that the “total costs incurred to date, together with costs to be incurred, throughout these proceedings and up to and including the hearing of this application is $202,454.53”.
Clearly then, the husband was pressing for an order that the wife pay his costs of the entire proceedings so far on an indemnity basis and not just those costs relevant to the application which was dismissed on 21 May 2020. Moreover, as is made clear from paragraphs 28 to 32 of the husband’s solicitor’s affidavit that total amount of costs includes costs incurred in Magistrates Court proceedings referable to domestic violence proceedings, costs associated with divorce proceedings, and costs associated with proceedings that have been conducted in New Zealand.
Notably, the husband did not resile from that position in his Submissions as to Costs filed for the purpose of this application. Indeed at the outset of the hearing of this application the husband’s material including the 12 June 2020 application and relevant submissions, all filed on 12 June 2020, was read. It was only upon testing of the proposition that the applications advanced for all of these costs, and including costs of the whole range of proceedings outside the discrete application, that counsel for the husband acknowledged that some concessions were needed to be made. The first concession was an abandonment of any claim for costs on an indemnity basis and secondly an abandonment of an amount of costs approaching anything like $200,000.
An adjournment was allowed to the husband to prepare a claim for costs coming somewhere close to approximating what was envisaged by the orders I made on the 21 May 2020.
As would be clear, the orders made on 21 May 2020 with respect to the applications for costs, were designed to facilitate the position that costs might be fixed by the Court in a specific amount rather than subjecting the parties, and indeed the resources of the Court, to the assessment process. The Family Law Rules 2004 (Cth) relevantly provide for ordered costs to be fixed in a specific amount[2] and that should usually be the aim given the need to avoid for the parties any unnecessary stress, inconvenience and yet further costs of an assessment process, not to mention the imposition upon the limited resources of the Court.[3]
[2] Rule 19.18(i)(a).
[3] Stopford Malloy & Malloy and Anor (Costs) (2018) FamCAFC 6 (“Stopford Malloy & Malloy and Anor (Costs)”).
In the result, the adjournment produced a substantially amended claim for costs in the total sum of $10,173.14 on the part of the husband.
The wife’s response to the written application and material filed in support was to dispute any entitlement of the husband to indemnity costs, and to dispute that it was appropriate for there to be any consideration of costs with respect to anything other than the discrete application and hearing of the stay proceedings.
The wife filed an affidavit on 2 July 2020 simply nominating an amount of $5,000 as being the sum the wife would seek in successfully defending the application for costs which was mounted against her.[4]
[4] A claim repeated in the wife’s Submissions as to Costs filed on 2 July 2020.
Exhibit 1 in the proceedings is a schedule prepared by the wife’s current solicitors as to the amount of an invoice for costs that was rendered to her on the 6 July 2020 in the total sum of $6,911.30. The amount of $5,000 claimed was said to be some discounting of that total amount referable to the additional work done by the current solicitor to bring herself up to date. That is, the $5,000 is not strictly referable to a party and party claim. What is submitted in response to it is that there should be an allowance of no more than about three hours under the relevant scale item (108 in the schedule 3 costs schedule) amounting to a total of $754.50 in terms of a quantification of the claim, albeit that an order for costs in this respect was resisted.
In considering the relevant provisions of s 117 of the Family Law Act 1975 (Cth) (“the Act”) so far as the substantive stay proceedings are concerned, I am satisfied that this was a financial proceeding in which the wife was wholly unsuccessful on that application.
As referred to in Anison & Anison[5] subsection (e) of s 117(2A) comes into play where an application is brought which is wholly unsuccessful, as was the case here. Moreover, the financial circumstances of each of the parties to the proceedings would not stand in the way, in any event, of an order for costs where it was justified.
[5] (2019) 59 Fam LR 581.
Whilst at issue in the proceedings is the extent of control, and therefore to what extent the assets of the relevant Trust come into play, it is clear that the wife derives at least as a financial resource, income by way of distributions from the Trust.
I am therefore satisfied that there are justifying circumstances within the meaning of s 117(2A) for there to be an order for costs with respect to the stay proceedings, in favour of the husband, who was entirely successful in those proceedings.
However, the husband did not comply with the orders made on 21 May 2020 in relation to the framing of the current application. As has been pointed out in the course of argument, the whole purpose of orders being made in those terms on 21 May 2020 for an application to be heard today (17 August 2020) is that the Court would be in a position to make a sensible assessment and approximation of the order for costs that should be made. Because of the approach taken on the husband’s side, the wife was forced to defend an application for indemnity costs amounting to almost $200,000 and in relation to costs of an array of proceedings, quite apart from the substantive application.
As it seems to me, an order for costs in favour of the husband must be tempered by the costs to which he unreasonably put the wife in resisting the application for costs as initially framed by him. As against that, the wife did not volunteer or consent to an order for the payment of a reasonable sum of party and party costs referrable to the discrete application. She opposed there being any order for costs at all, let alone including party and party costs of the application in respect of which she was wholly unsuccessful.
Whilst it is submitted by her solicitor that it was reasonable for the wife to pursue the relief that she did in the stay proceedings, that is not in my view a matter, even if it was made out, which takes the place of the specific matter referred to in subsection (e) of s 117(2A) as to a party being wholly unsuccessful in the proceedings, taking into account also the nature of the proceedings being financial proceedings.
Adopting a rounded off figure of $10,000 as the proper claim for the husband’s costs of the stay proceedings, and adopting a figure of about $2,000 rounded off as that part of the reasonably assessed costs[6] referable to defending the indemnity costs application the wife was forced to defend, I balance those two things in making an order for costs of and incidental to the applications of the stay proceedings in favour of the husband in the total amount of $8,000.
[6] Consistent with the principles in Stopford Malloy & Malloy and Anor (Costs).
For these reasons I make the orders set out at the commencement.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the ex tempore reasons for judgment of the Honourable Justice Kent delivered on 17 August 2020, edited to correct grammatical errors and some infelicity of expression.

Associate:

Date: 18 August 2020