Ettridge and Somers
[2018] FamCA 38
•1 February 2018
FAMILY COURT OF AUSTRALIA
| ETTRIDGE & SOMERS | [2018] FamCA 38 |
| FAMILY LAW – COSTS – where a declaration was previously made that the parties were in a de facto relationship – where the applicant seeks costs on an indemnity basis or in the alternative on a party/party basis – where the respondent opposes an order for costs – no order as to costs. |
| Family Law Act 1975 (Cth) s 117 | |||
| Addison & Leahy [2008] FamCA 248 Luadaka & Luadaka (1998) FLC 92-830 Penfold v Penfold (1980) 144 CLR 311 Sholl & Bartlett [2014] FCCA 283 | |||
| APPLICANT: | Ms Ettridge | ||
| RESPONDENT: | Mr Somers |
| FILE NUMBER: | MLC | 11262 | of | 2015 |
| DATE DELIVERED: | 1 February 2018 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Thornton J |
| HEARING DATE: | Written Submissions in Chambers filed 27 September, 30 October and 3 November 2017 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Carew Counsel |
| THE RESPONDENT: | In person |
Orders
Each party to the pre-trial hearings and the trial conducted on 29 to 31 May and 1 and 2 June 2017 bear their own costs.
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 Ettridge & Somers 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 MELBOURNE |
FILE NUMBER: MLC 11262 of 2015
| Ms Ettridge |
Applicant
And
| Mr Somers |
Respondent
REASONS FOR JUDGMENT
On 15 September 2017 I made a declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”) that a de facto relationship existed between the applicant and respondent for the period from January 2007 until 2 January 2015 with the exception of one month between January and February 2008.
The trial in those proceedings proceeded over five days in May and June 2017. The respondent was self-represented during the trial. The respondent was also self-represented throughout most of the pre-trial proceedings, with his previous lawyers filing a Notice of Ceasing to Act on 11 July 2016.
The applicant seeks an order that the respondent pay her costs of “the interim proceedings prior to the trial” and her costs of the trial on an indemnity basis or in the alternative on a party/party basis.
This is opposed by the respondent. In the alternative he proposed that if any costs order were made that it should be made on a party/party basis.
The respondent’s submission appeared to suggest that he also sought an order for costs notwithstanding that he was wholly unsuccessful in the trial.
Procedural Background
I made an order on 15 September 2017 that the applicant’s application for costs be listed for hearing before me on 28 September 2017.
On 27 September 2017 the applicant filed written submissions and an affidavit of her solicitor in support of her costs application.
On 28 September 2017, the respondent who was self-represented successfully sought further time to respond to the written submissions of the applicant and seek advice.
On 28 September 2017 I made orders that the respondent file and serve any affidavit and written submission as to costs by 30 October 2017 and that the applicant file and serve any reply by 8 November 2017.
The respondent filed and served his written submission on 30 October 2017 and filed and served an affidavit (sworn by him) on 3 November 2017. The affidavit was filed late but the applicant deemed it unnecessary to reply.[1]
[1] Email from the applicant’s solicitors dated 8 November 2017.
Relevant law
In Renald & Renald (Costs) [2018] FamCAFC 4 at paragraph 12 Thackray J pointed out that in Greedy & Greedy (1982) FLC 91-250 and Luadaka & Luadaka (1998) FLC 92-830, the Full Court “made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters”.
Under s 117(1) of the Act and subject to other provisions, each party to proceedings under the Act shall bear his or her own costs. However under s 117(2) of the Act the Court is empowered to make an order for costs if it is of the opinion that there are circumstances which justify such an order.
It is entirely a matter for the discretion of the Court as to whether any order for costs should be made and the nature of the costs to be ordered.
In this case the applicant relies upon Penfold v Penfold (1980) 144 CLR 311 at 315-16 to argue about the interrelationship between subsections 117(1) and 117(2), that s 117(2) of the Act:
…requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs.
Subsection 117(2A) of the Act mandates the factors to which the court must have regard in considering whether to make an order for costs. Subsection 117(2A) of the Act provides:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
Any of the factors in s 117(2A) of the Act may be the sole foundation for an order for costs, but the relevant matters must all be taken into account and balanced in order to determine whether the overall circumstances justify the making of an order for costs.[2]
[2] Renald & Renald (Costs) [2018] FamCAFC 4, [11], citing I and I (No 2) (1995) FLC 92-625.
Rule 19.08(3) and cl 6.08(3) of Schedule 6 of the Family Law Rules 2004 (Cth) (“the Rules”) provide that a party applying for an order for costs on an indemnity basis must inform the Court if the party is bound by a costs agreement in relation to those costs and, if so, the terms of the costs agreement. The terms of the cost agreement must be produced to the Court.[3] In this case the affidavit of the applicant’s solicitor filed 27 September 2017 annexed a copy of the Costs Agreement between the applicant and her solicitor.
[3] Addison & Leahy [2008] FamCA 248, [95].
The meaning of the expression “indemnity basis” was discussed by Thackray, Ryan and Murphy JJ in Prantage & Prantage [2013] FamCAFC 105 (“Prantage”). Their Honours accepted the definition of indemnity basis provided for in the explanatory guide to the Rules. At paragraph 17 they reiterated that definition as:
…an entitlement to costs, including costs under a costs agreement, for all costs incurred, other than costs that are unreasonable in amount or that have been incurred unreasonably.
In Prantage, the Full Court referred to the settled law relating to indemnity costs and referred to the Full Court decision of Kohan & Kohan (1993) FLC 92-340. The Court emphasised the well accepted proposition that indemnity costs orders are “a very great departure from the normal standard”.[4]
[4] Prantage & Prantage [2013] FamCAFC 105, [79].
Thackray, Ryan and Murphy Ryan JJ concluded, after some research, that the “usual rule” that costs are payable on a party/party basis applied in the Federal Court, the Family Court and the Supreme Courts of New South Wales, Victoria, Queensland, South Australia, Tasmania and Western Australia.
At paragraph 94 of Prantage, Thackray, Ryan and Murphy JJ stated:
We recognise that the Rules now expressly refer to orders for costs on an indemnity basis. We recognise also that the rules in this court are not precisely the same as those in other courts; however, there is nothing in the Rules which indicates that the fundamental principle applied in other jurisdictions should not also be applied in this jurisdiction. Indeed r 19.18 makes clear that the “default” position is that costs are awarded on a party/party basis.
The applicant here conceded that “the issue of indemnity costs was recently revisited” in the decision of Prantage. However, the applicant in this case submitted that the Courts have nevertheless continued to order indemnity costs where the circumstances warrant it and cited as examples Dinci & Smith [2014] FamCA 76 and Sholl & Bartlett [2014] FCCA 283.
Rule 19.18(1) of the Rules provides that the Court may make an order for costs on a number of different bases which include:
(a)a specific amount;
(b)as assessed on a particular basis (e.g. lawyer and client, party/party or indemnity);
(c)to be calculated in accordance with the method stated in the order;
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
Rule 19.18(3) of the Rules provides that in making an order under this rule, the Court may consider:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each parties behaviour in the case;
(c)the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with
pre-action procedures; and(f)expenses properly paid or payable.
Schedule 3 of the Rules lists the costs that can be charged for specified work.
The Rules also provide for a procedure for the costs payable by a party to another party to be assessed by a Registrar who may determine whether costs are reasonably incurred, are of a reasonable amount and whether they are proportionate to the matters in issue.[5]
[5] Family Law Rules 2004 (Cth) r 19.33, 19.34.
The written submissions
The applicant argued that at all relevant times throughout the conduct of these proceedings the respondent maintained his position that the parties did not reside in a de facto relationship despite the overwhelming documentary evidence and in the face of having been warned by counsel for the applicant in the opening of the applicant’s case on the first day of the trial that costs were likely “to follow the cause” and would in all probability be ordered against him in the event that he was unsuccessful.
The applicant also submitted that the respondent incurred no legal costs during the trial whilst the applicant was not in receipt of legal aid and met her own legal costs.
Referring to the financial circumstances of the parties, the applicant submitted that the respondent is the registered proprietor of real property at B Street, Suburb C (“the Suburb C property”) which is the property the subject of the current application, where the parties formerly resided. The mortgage secured on that title was reduced by financial contributions made by the applicant and lump sum compensation payments received by the applicant during the relevant period of the de facto relationship were also applied to the benefit of the business conducted by the respondent. Referring to the respondent’s business, however it was conceded by the applicant that the respondent “earns, at best, a modest income from that source”. The applicant emphasised that she has no real property and her lump sum compensation payments throughout the relevant de facto relationship were applied to the benefit of the business conducted by the respondent, or in reduction of the mortgage that was secured on the Suburb C property.
The applicant relied upon the following conduct of the respondent during the proceedings:
·the respondent’s failure to provide all taxation returns and relevant financial documents “called for” during the course of the trial;
·the respondent’s failure to admit facts which might have readily been admitted in the face of documentary proof including the contents of documents which prima facie established certain facts;
·the respondent’s failure to admit the fact and purpose of the financial contributions made by the applicant from the sale of her real property, the compensation monies and the inheritance she received;
·the respondent’s denial of the de facto relationship persisting despite him having signed tax returns recording the applicant as his de facto partner and 100 per cent beneficiary in the event of his death. Further the respondent maintained those denials despite the trust deed to his superannuation fund recording the applicant as his de facto partner and him referring to the applicant as his de facto partner in police statements made by him. (I note that the evidence in the police statement was that the respondent referred to the applicant as his “partner” and not his “de facto partner”. The respondent’s case was that the applicant was his business partner);
·the respondent’s failure to admit facts in the face of overwhelming evidence extended the hearing and put the applicant to greater expense in proving a case that ought to be obvious on the face of the respondent’s own discoverable documents;
·the respondent persisted in the face of overwhelming documentary evidence which meant that it was clear from the beginning that his case would be wholly unsuccessful; and
·the respondent was put on notice and warned about the risks of a costs order being made against him if he proceeded with his application to dispute the existence of a de facto relationship on the first day of trial and by the solicitors for the applicant on 26 May 2017 prior to the trial and again by counsel for the applicant prior to the commencement of the trial on 29 May 2017.
The respondent’s costs submissions were very confusing. The respondent’s costs submission contained many irrelevant extraneous matters some examples of which are as follows:
·The Respondent submits that fraud on the part of the Applicant and the Applicant’s Representatives is clear in these proceedings and that the Applicant’s Representatives are informed of this fact. The court may review privileged correspondence and any other privileged material as fraud is a fact in issue under section 125 of the Evidence Act 1995 (Cth).[6]
·The Respondent Submits [sic] that the court refer the Applicant’s Representative [Ms D] and Carew Council [sic] Solicitors Pty Ltd to the Victorian Legal Services Board and Commissioner (VLSBC) and is advised by the board that he should raise this with the court.[7]
·The Respondent submits that the court refer the Applicant’s Barrister Mr Sweeney to the Victorian Legal Services Board and Commissioner (VLSBC) and is advised by the board that he should raise this with the court.[8]
·The Respondent submits that both the Applicant’s Solicitors and Barrister are fully aware that fraud is an issue in this case and that that [sic] they knowingly submitted false and fabricated evidence during the hearing. Specifically, The Respondents [sic] submits that the Applicant’s Barrister stated and or inferred that the resumes submitted as evidence have been manipulated by the Applicant. The court may not have noticed this.[9]
[6] Respondent’s Written Costs Submissions filed 30 October 2017, par 14.
[7] Respondent’s Written Costs Submissions filed 30 October 2017, par 15.
[8] Respondent’s Written Costs Submissions filed 30 October 2017, par 16.
[9] Respondent’s Written Costs Submissions filed 30 October 2017, par 17.
The respondent, without any evidence in support of his assertion, maintained in his submissions that he had made consistent attempts to settle the matter since 2015 both verbally and in writing and that the applicant had refused mediation.
At paragraph 24 of his submissions the respondent complained about the following conduct of the applicant and her solicitors, and submitted that the applicant has:
i. Offered to settle the matter for 120% of the asset pool in her favour at Case Assessment on 1st march [sic] 2015 before Registrar Lethbridge.
ii. Refused to disclose fees at Conciliation Conference on 18 July 2016.
iii. Provided a grossly incorrect balance sheet at Conciliation Conference on 18 July 2016 with financial statements that were very old.
iv. Withheld and/or claimed she does not have documents and information the Respondent required for hearing on 29 May 2017.
v. [Ms D] Solicitor for Carew Council [sic] Pty Ltd response to queries from the respondent in relation to the information presented in her conciliation document which she handed to the Respondent was an outburst where [Ms D] exclaimed “ she wants to destroy you and get your house”.
vi. The documentary evidence provided by the applicant is largely contrived and not representative of the facts.
vii. The applicant has still not complied with orders of Registrar Lethbridge made at Case Assessment on 1 March 2015.
vii. [sic] The Applicant has consistently [sic] that the Respondent discover experts reports that have not been ordered by the court and were not required by the court at this stage of the proceedings.
viii. The Applicant has persisted over a period of more than 2 years in making overtly vexatious discovery requests.
viii. [sic] Inspection of Document’s [sic] by way of “Notice to Admit” was requested by the Applicant and then denied by [Ms E] of Carew Council [sic] Solicitors despite all efforts being made by the Respondent to attend the office of Carew Council [sic] as set out in the Applicant’s notice to Admit. There has been an abuse of legal process by Carew Council [sic] Solicitors.
Conclusion
The question of costs is always a discretionary matter under section 117 of the Act. The question here is whether there are circumstances which justify a departure from the general rule that each party to proceedings under the Act shall bear his or her own costs. I have had regard to the factors set out in s 117(2A) of the Act.
There is no evidence to support the complaints of the respondent about the conduct of the applicant outlined in paragraph 24 of his submissions outlined above, and repeated in his affidavit. I reject those arguments.
The respondent was wholly unsuccessful in the trial. In terms of the respondent’s conduct the applicant complains that the respondent failed to admit at an early stage the existence of a de facto relationship. This however was the threshold issue for determination in the trial. I accept that the respondent failed to admit some facts which might readily have been admitted in the face of documentary proof, but there were a number of matters in dispute and the onus of proof was borne by the applicant.
The respondent did not rely solely upon his own evidence. There was evidence of other witnesses relied upon by the respondent.
It was conceded by the applicant that at best the respondent earns a modest income. However I accept that he is the registered proprietor of the Suburb C property whilst the applicant owns no real property. The applicant made financial contributions to both the business of the respondent and the mortgage on the Suburb C property.
Neither party are in receipt of legal aid.
The proceedings were not necessitated by the failure of a party to comply with previous orders.
There is no evidence of any offer in writing by the respondent to the applicant to the proceedings to settle the proceedings as he asserts. It would be difficult to make such an offer because the proceeding involved the threshold issue of whether a de facto relationship existed between the applicant and respondent.
I note that the respondent annexed to his affidavit, a written proposal by the applicant’s solicitors to resolve property matters. Discussions or offers about a property settlement are a separate matter.
Having observed the conduct of the respondent he did his best within his limitations as a self-represented litigant during pre-trial hearings and at trial. Although his arguments and cross-examination were misconceived at times he remained polite. I am not persuaded, despite his failure to admit certain matters, that there are circumstances which justify a departure from the general rule that each party bear their own costs.
The respondent’s submissions provided at paragraph 4 that “Costs are sought by the respondent, Mr Somers, on a party/party basis in accordance with Section 117(1) of the Family Law Act 1975 (Cth)…” This would appear to be an error, as there was no application by the respondent in proper form for costs, but in the event that the respondent seeks an order for costs it is refused on the basis that he was wholly unsuccessful in the proceedings, there is no proper basis for an order in his favour and there is no reason to depart from the general rule.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 1 February 2018
Associate:
Date: 1 February 2018
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