Field & Kingston (No 2)
[2022] FedCFamC1F 210
•6 April 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Field & Kingston (No 2) [2022] FedCFamC1F 210
File number(s): PAC 2095 of 2014 Judgment of: RIETHMULLER J Date of judgment: 6 April 2022 Catchwords: FAMILY LAW – Costs – Lump sum order made on party and party basis – No matters of principle. Legislation: Family Law Act 1975 (Cth) ss 79A, 117(1), 117(2), 117(2A)(d) Cases cited: Field & Kingston [2021] FedCFamC1F 353
Field & Kingston [2021] FedCFamC1A 66
Idoport Pty Limited v National Australia Bank Limited & Ors [2007] NSWSC 23
Division: Division 1 First Instance Number of paragraphs: 28 Date of last submission/s: 9 February 2022 Place: Parramatta Solicitor for the Applicant: Matthews Folbigg Lawyers Solicitor for the Respondent: Cathers Beavers & Kamiya Lawyers ORDERS
PAC 2095 of 2014 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS FIELD
Applicant
AND: MR KINGSTON
Respondent
ORDER MADE BY:
RIETHMULLER J
DATE OF ORDER:
6 APRIL 2022
THE COURT ORDERS THAT:
1.Within 14 days of the date of these orders, the respondent husband pay the applicant wife’s costs fixed in the sum of $22,604.38.
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 Field & Kingston has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
RIETHMULLER J:
INTRODUCTION
The wife was entirely successful in resisting an application by the husband pursuant to s 79A of the Family Law Act 1975 (Cth) (the Act) to set aside the property orders made in this matter and further to correct orders made by a registrar with respect to the amounts of interest owing on the outstanding monies due pursuant to property settlement orders.
The facts and circumstances relevant to this proceeding are set out in Field & Kingston [2021] FedCFamC1F 353, and the numerous judgments referred to therein.
BACKGROUND
On 21 November 2019 final property orders were made following a contested hearing. Those orders provided the husband with the option of paying the wife a sum of money to retain the parties’ property, and that if he did not pay the wife within a certain timeframe then the property be sold and the proceeds divided in shares set out in the orders. The husband was unable or unwilling to make the payment in the timeframe provided for in the orders.
Proceedings were brought before each Altobelli and Wilson JJ (on different points), and ultimately the property was sold pursuant to consent orders that were made in February 2021. The sale of the property settled in May 2021. Thereafter there was a dispute as to the correct sum to be paid to the wife, which was settled by the Full Court in Field & Kingston [2021] FedCFamC1A 66 in the wife's favour. Unsurprisingly, the wife also sought interest on the money she was entitled to receive pursuant to the orders.
Thereafter, the husband, in September 2021, brought an application pursuant to s 79A of the Act seeking to set aside the property settlement orders, which had been affirmed previously by the Full Court in Field & Kingston [2021] FedCFamC1A 66, and with respect to which the High Court had refused to grant special leave to appeal.
The wife sought the summary dismissal of the husband's s 79A application and the husband sought to stay the payment of the monies to the wife pending the determination of his s 79A application.
In order to attempt to minimise the number of court events involved in the matter, I heard the summary dismissal application at the same time as the stay application. As I determined that the matter ought to be summarily dismissed it was not appropriate to grant a stay. On 17 December 2021 I gave judgment entirely in the wife's favour.
There is no doubt that the issues determined in the most recent applications come at the end of particularly long, expensive and protracted litigation between the parties. It is also the case that these proceedings concerned the property of the parties and did not involve any parenting issues.
COSTS
In family law proceedings parties ordinarily bear their own costs, as is set out in s 117(1) of the Act. However, the court may make a costs order having regard to the circumstances set out in s 117(2) of the act which provides as follows:
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
The factors relevant to this application are set out in s 117(2A) which provides:
(2A)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.
In the trial judgment, the trial judge made a small adjustment in favour of the wife as a result of the difference in her financial position compared to the husband. From the date of the trial judgment in 2019 until late last year in 2021, the wife was held out of a large part of the funds that she was entitled to pursuant to the orders made by the trial judge.
The husband earned considerable taxable income in 2018 (around $100,000), together with rental income of $400 per week. The husband says that the effect of COVID-19 and these proceedings have caused him and his business to suffer significant losses. It is difficult to accept that COVID-19 impacted his business significantly given the high level of activity with respect to sales in the relevant industry throughout the COVID-19 pandemic. The wife does not have a significant income.
Neither party in this matter is in receipt of legal aid.
Both parties seek to make submissions with respect to the manner in which the litigation was conducted from the outset up to the time that these applications were filed. Whilst this provides a background to the litigation, it does not appear to me that it bears significantly upon the current application. Importantly, in the current proceedings, the husband did not clearly particularise his case pursuant to s 79A of the Act which resulted in orders of the Court for particulars. The particulars provided by the husband were long and rambling making it difficult to understand his case and to engage with it. Indeed, his own counsel had to group the large number of matters into a smaller number of issues in order to make submissions, just as occurred in the reasons for judgment as set out in Field & Kingston [2021] FedCFamC1F 353.
On the first date that the matter was before the Court, the husband sought further time to recast his particulars, which was granted, causing further expense to be incurred. It is remarkable that after such a lengthy and difficult litigation, and so many appeals, the husband was unable to precisely articulate his application pursuant to s 79A of the Act when it would have been apparent to him and his advisers, from the very outset, that such an application would be not only be opposed, but difficult to sustain in light of the extensive litigation and many appeals the case has involved. In my view, the manner in which this application was pursued caused unnecessary expense in the litigation.
The wife's claim for interest arises only because the husband failed to make payment in accordance with the final property orders. It was ultimately not controversial that she was entitled to the interest that she sought and which was subsequently ordered.
In response to the costs submission, the solicitor for the husband alleges that the wife failed to comply with an order by Wilson J in February 2021 with respect to the sale of the property. Issues concerning the sale of the property were not the subject of litigation before me, nor properly the subject of the applications that came before the Court on this occasion. I do not accept that those submissions are relevant matters for the purpose of s 117(2A)(d).
It is clear that the husband was wholly unsuccessful in the applications that were dealt with on this occasion. The only answer that his solicitors give to this point is the statement that they have lodged an appeal from the decision that has been handed down. The fact that an appeal has been lodged is not relevant to the question of costs: if the appeal is upheld the Full Court may alter the costs orders.
Offers to settle are particularly important in financial cases; the practical focus of the litigation is the most efficient manner in which the wealth of the parties may be appropriately divided. The wife offered to settle the s 79A application on the basis that the husband withdraws the s79A applicant and she make no further claims for costs or interest. This offer was made on 24 November 2021. The offer was not accepted by the husband and the wife made another offer on 16 December 2021 by email, offering not to pursue interest or costs if the husband agreed to bring litigation to an end. Again the husband did not accept the offer. The solicitor for the husband relies upon an offer made by the husband on 22 April 2020 one month prior to the applications which were the subject of the applications that were dealt with before me, to resolve the proceedings on the basis of each party paying their own costs. The wife has obtained judgments more favourable than what was offered and in those circumstances the offer does little to assist the husband.
The solicitor for the husband also asks that the application for costs be stayed pending the outcome of the appeal proceedings. I see no utility in such a course. The costs issue will need to be determined if the appeal is unsuccessful. If the appeal is successful and the matter remitted for rehearing, it will be open to the Full Court to set aside the costs order, or make such other order with respect to costs as may be appropriate having regard to the outcome of the appeal.
In the circumstances of this proceeding, having regard to the relevant statutory provisions, I am persuaded that the wife should have her costs on a party and party basis.
The solicitors for the wife, unsurprisingly given the length and complexity of the litigation, seek orders fixing the amount of costs so as to avoid further expense, delay and aggravation. I have regard to the principles identified in the judgment of Einstein J in Idoport Pty Limited v National Australia Bank Limited & Ors [2007] NSWSC 23 (albeit in the context of the NSW Supreme Court Rules) to the extent that they are relevant to orders made pursuant to s 117. I am persuaded that this is an appropriate case to fix the amount of costs having regard to the history of the litigation and the schedules and material placed before me by the solicitors for the wife, enabling me to make an assessment of an appropriate amount for the costs order. I note that the solicitors for the husband have had an opportunity to make submissions as to the quantum of costs.
The wife seeks an amount of $22,604.38 for costs. As her solicitor points out in submissions, the husband has recently received a considerable sum following the payment of money from the sale of the property and, therefore, is in a position to meet a costs order.
The wife prepared a schedule of costs using the court scale which are at pages 13 to 19 of the wife’s written submissions. There are no submissions by the solicitor for the husband to the effect that any of the items in that schedule are inappropriate or outside of the ambit of party and party costs. As I am of the view that the wife should have her costs on a party and party basis, as she has sought, it is appropriate that she also have the costs of the costs’ application.
When fixing a lump sum amount for costs it is not appropriate to review each line item in the schedule in the manner that would occur if the costs were assessed by a registrar. Rather it is appropriate to review the amount sought more generally, having regard to the nature of the matter and any submissions as particular items or classes of items. The husband’s solicitors did not identify any particular items or classes of items that were challenged. This may reflect the obvious differences in approach that both parties took to legal costs, as can be seen with respect to the wife’s costs for the hearing: the wife was represented by her solicitor, whereas the husband had senior counsel appear to argue his application.
As a s 79A application, particularly in the form in which the husband presented it in these proceedings, necessarily requires a review and consideration of the previous proceedings, it was inevitable that the reasonable costs would be greater than may be expected in a simple interlocutory application. Given the complexity of litigation and the number of appeals, it was reasonable and necessary that the solicitors for the wife obtained advice and guidance from counsel. That they did not brief counsel to appear in the argument before me demonstrates their focus upon minimising the costs that the wife may have incurred in these applications.
I am persuaded that the costs sought by the solicitors for the wife are reasonable when considered on a party and party basis, and that the husband ought to be ordered to pay those costs.
I, therefore, make orders that the husband pay the wife's costs fixed in the sum of $22,604.38 and that such payment be made within 14 days.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Riethmuller. Associate:
Dated: 6 April 2022
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