Gilliam & Barre (No 3)
[2022] FedCFamC1F 1001
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Gilliam & Barre (No 3) [2022] FedCFamC1F 1001
File number(s): SYC 342 of 2019 Judgment of: HARPER J Date of judgment: 16 December 2022 Catchwords: FAMILY LAW – PROPERTY – De facto relationship of less than two years – Where wife would suffer injustice if property adjustment not made – Where husband is bankrupt and trustee in bankruptcy is a party – Where wife loaned monies to the husband during the relationship which partially remain unpaid – Adjustment of 20 percent in the wife’s favour – Where wife seeks orders for indemnity costs against the trustee and the husband – Costs for self-represented litigants – No basis to order costs. Legislation: Bankruptcy Act1966 (Cth) ss 58(3), 59A, 60(2), 60(3)
Family Law Act 1975 (Cth) ss 90SF(3), 90SM(3), 90SM(4), 90SM(15), 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.01(2)
Cases cited: Atkins & Hunt (Costs) [2017] FamCAFC 131
Barnell & Barnell (2020) FLC 93-961; [2020] FamCAFC 102
Barre & Barre (Superannuation) [2021] FamCA 463
Barre & Barre [2021] FamCA 101
Barre & Barre [2021] FedCFamC1F 61
Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303
Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Burke and Burke (1981) FLC 91-055; [1981] FamCA 44
Casley & Casley(Costs) (2010) FLC 93-449; [2010] FamCAFC 189
Cresvale Far East Ltd (in liq) v Cresvale Securities Ltd and Others (No 2) (2001) 39 ACSR 622; [2001] NSWSC 791
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Ex parte Angerstein (1874) LR 9 Ch App 479
Frigger v Trenfiled (No 10) (2021) 397 ALR 24; [2021] FCA 1500
G and G (2000) FLC 93-043; [2000] FamCA 1075
Gilliam & Barre (No 2) [2022] FedCFamC1F 677
Gilliam & Barre [2022] FedCFamC1F 465
Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Horrigan & Horrigan [2020] FamCAFC 25
Hypec Electronics Pty Ltd (in liq) v MEAD and Others (2004) 61 NSWLR 169; [2004] NSWSC 731
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
JEL and DDF (2001) FLC 93-075; [2000] FamCA 1353
Kowalski and Kowalski (1993) FLC 92-342; [1992] FamCA 54
Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21
Manolis & Manolis (No 2) [2011] FamCAFC 105
Morris Finance Ltd v Free (trustee of the property of Brown) (No 2) [2017] NSWSC 1514
Norman & Norman [2010] FamCAFC 66
Oscar & Traynor [2008] FamCAFC 158
Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Trustee of the Property of Sandor v Ramirez [1999] NSWCA 261
Division: Division 1 First Instance Number of paragraphs: 108 Date of last submission/s: 22 November 2022 Date of hearing: On the papers Place: Sydney The Applicant: Litigant in person The First Respondent: Litigant in person Solicitor for the Second Respondent: Jeff Horsey Solicitor ORDERS
SYC 342 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GILLIAM
Applicant
AND: MR BARRE
First Respondent
MR UU AS TRUSTEE IN BANKRUPTCY FOR MR BARRE
Second Respondent
order made by:
HARPER J
DATE OF ORDER:
16 December 2022
THE COURT ORDERS THAT:
1.Within 21 days, the Second Respondent cause to be paid to the Applicant Wife (“the wife”) the amount of $154,527 from the bankrupt estate of the First Respondent Husband (“the husband”) pursuant to s 90SM of the Family Law Act 1975 (Cth).
2.All outstanding liabilities existing at the date of judgment between the wife and the husband be discharged.
3.Order 1 made on 24 November 2022 be discharged.
4.The wife’s Application for Final Orders filed on 22 January 2019 be otherwise dismissed.
5.The wife’s Application in a Proceeding filed on 10 November 2022 seeking costs be dismissed with no order as to costs.
6.All outstanding applications be otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
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 Gilliam & Barre has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
INTRODUCTION
These proceedings concern an application for a declaration of the existence of a de facto relationship and consequential property adjustment between the Applicant Wife, Ms Gilliam (“the wife”) and the Respondent Husband, Mr Barre (“the husband”). The husband is bankrupt, and therefore, his Trustee in Bankruptcy (“the trustee”) has been joined to these proceedings.
I note here that the husband and wife were also parties to related proceedings between the husband and his ex-wife, Ms Haynes (“the 2016 proceedings”). The wife was joined as a party to those proceedings as a creditor of the husband. The trustee also became a party to those proceedings. Several relevant judgments were delivered in those proceedings, the main judgment concerning a binding financial agreement (Barre & Barre [2021] FamCA 101 (“Barre”) and a supplementary judgment concerning superannuation (Barre & Barre (Superannuation) [2021] FamCA 463 (“Barre (Superannuation)”). These judgments should be read together with these reasons and I will refer to them as necessary in the course of these reasons.
I note that Order 10 in Barre restrained the trustee from declaring any dividend or making any distribution from the bankruptcy estate of the husband, other than for the payment of the trustee’s reasonable remuneration.
I have already delivered several judgments in these proceedings, the first concerning the existence of a de facto relationship between the husband and wife. I set out a brief summary of the proceedings in Gilliam & Barre [2022] FedCFamC1F 465 (“Gilliam”):
2. The wife commenced these proceedings in January 2019. She seeks a declaration pursuant to s 90RD, Part VIIIAB of the Family Law Act 1975 (Cth) (“the Act”) that a de facto relationship between the couple existed between June 2016 and December 2018, and orders for property adjustment under s 90SM of the Act. The husband denies that a de facto relationship existed, for any period, and resists any orders for property adjustment.
3. The same parties are also involved in proceedings SYC 6149 of 2016 (“the 2016 proceedings”), which concern enforcement of a binding financial agreement and parenting disputes between the husband and his former wife, Ms Barre, who now goes by the surname “Haynes”. The two proceedings overlap, because the parties in both proceedings make claims in respect of at least some of the same property. Most of the substantive issues in the 2016 proceedings have been determined by my judgments in Barre & Barre [2021] FamCA 101 and Barre & Barre (Superannuation) [2021] FamCA 463.
4. The wife intervened in the 2016 proceedings as a creditor of the husband. Her status as a creditor was conceded by the husband. She was joined as a party by consent. During the course of the 2016 proceedings, I made a number of orders distributing amounts totalling $125,000 to the wife, characterised as part repayment of monies owing to her, as set out in Barre & Barre [2021] FamCA 101 at [18]–[19] and [409], leaving a balance owing of $108,000. See also Barre & Barre; Gilliam & Barre [2019] FamCA 315, and Barre & Barre and Ors [2020] FamCA 455 at [8].
5. However, the husband is presently bankrupt, and his Trustee in Bankruptcy (“the trustee”), who is a party to the 2016 proceedings and these proceedings, is currently restrained, by orders made in those proceedings, from distributing any dividend pending the compliance with certain orders in the 2016 proceedings and determination of these proceedings.
In Gilliam, I made findings that a de facto relationship existed between the wife and husband for less than two years, having commenced no earlier than early 2017 and ending by 21 November 2018. However, I also found that the wife made substantial contributions of the type mentioned in ss 90SM(4)(a)–(c) of the Family Law Act 1975 (Cth) (“the Act”).
Subsequently, in Gilliam & Barre (No 2) [2022] FedCFamC1F 677 (“Gilliam (No 2)”), I found that a failure to make an order under s 90SM of the Act for property adjustment would result in serious injustice to the wife:
6. … [The wife] put “everything into the relationship” and has lost it all. The wife made financial contributions in the form of loans which enabled the husband’s businesses to continue, she worked in an unpaid capacity for a time, helped look after the husband’s father, and cared for the husband after the collapse of his mental and physical health. The wife claimed that she became totally financially dependent on the husband by the end of the relationship. I accept these submissions.
…
10. … In the circumstances of this matter, I am satisfied that if an order is not made pursuant to s 90SM in favour of the wife, she will suffer an injustice which falls into the category of “serious” within s 90SB(1)(c)(ii).
Following the delivery of Gilliam (No 2), I stood the proceedings over to 28 September 2022 to receive submissions about the best way to finalise the proceedings. There remained for determination the question of whether any property adjustment order should be made in favour of the wife. There did not appear to be any claim for property adjustment pressed by the husband, but in any event, since his bankruptcy it seems any claim, at least in respect of vested bankruptcy property, was stayed by s 60(2), and then abandoned pursuant to s 60(3) of the Bankruptcy Act1966 (Cth).
On 28 September 2022, the wife sought orders permitting her to file, and for the Court to hear, an application for the costs of “the threshold issue”, by which she meant the costs of the proceedings to determine the existence or otherwise of a de facto relationship, which was the subject of the judgment in Gilliam. She appeared to seek costs against the trustee and the husband on an indemnity basis, arguing that the trustee had sought dismissal of her proceedings alleging the existence of a de facto relationship.
It was pointed out to the wife that she had been self-represented at all times after the trustee was appointed, and any costs she incurred through legal representatives were incurred prior to that time. Nevertheless, she sought orders setting out a timetable for the filing of an application. I granted her fourteen days on which to do so.
When the matter was next before the Court on 28 October 2022, the wife had failed to file any costs application in accordance with the Court’s directions. She complained that the night prior to the filing deadline, the trustee had sent her an extensive document that she had insufficient time to digest, and she did not wish to file material which was incomplete. I granted an extension of time for the wife to file her application, and the proceedings were listed on 24 November 2022.
The wife filed an Application in a Proceeding on 10 November 2022 seeking orders as follows:
1. That the hearing of this Application be listed before the Honourable Justice Harper on 24 November 2022
1.2 That pending the determination of proceedings SYC 349/2019 an injunction in the amount of $386,000 of the bankrupt estate of [Mr Barre]
1.3 In the alternate to 1.2 herein that pending the determination of this Application an injunction in the amount of $230,000 of the bankrupt estate of [Mr Barre]
1.4 That simultaneous to 1.2 herein the order preventing the payment of a dividend in SYC/6149 be dismissed
1.5 That simultaneous to 1.3 herein the Trustee in Bankruptcy be restrained from declaring a dividend & the payment of any disbursement or fees of administration until further order or the determination of proceedings SYC349/2019 which ever occurs first
2.That within 14 days from the date of these Orders, [Mr Barre] is to pay to the Applicant the costs of and incidental to the proceedings to date as follows.
2.1 On an indemnity basis, and fixed pursuant to Rule 12 . 17( I) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) in the sum of $230,000
2.2 In the event that Order 2.1 is refused, costs on an indemnity basis as agreed or assessed
2.3 That to give effect to order 2.1 - 2.2 herein the court direct the trustee in bankruptcy to pay the applicant from the bankrupt estate of [Mr Barre]
3.That within 14 days from the date of these Orders, [the trustee] is to pay to the Applicant the costs of and incidental to this Application as follows:
3.1On an indemnity basis, and fixed pursuant to Rule 12.17(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) in the sum of $230,000
3.2In the event that Order 3.1 is refused, costs on an indemnity basis as agreed or assessed
3.3In the event that Order 3.2 is refused, costs on a party/party basis as agreed or assessed
3.4 That the scale of costs does not apply
3.4 That the amount ordered pursuant to 3.1, 3.2, 3.3 herein shall on a dollar for dollar basis proportionally reduce the amount ordered pursuant to orders 2.1 & 2 2 herein
Her written submissions were filed over one week late. However, as will become apparent, on the view I take, this has no implications and I have taken them into account.
The trustee sought orders dismissing the wife’s application, and for costs. The husband did not file any submissions, but did file a brief affidavit which appeared to contain a number of submissions opposing her application for costs.
When the matter returned to Court on 24 November 2022, the wife moved to have her costs application determined “on the papers”. The trustee consented to this course. The Court acceded to this course. The husband failed to appear.
It was also pointed out to the wife that determining her costs application would not finalise the proceedings, because, in light of the Court’s conclusions in earlier judgments, there remained outstanding her application for property adjustment pursuant to s 90SM. She consented for this application to be determined on the basis of material which she has already filed in the proceedings, and in particular on the basis of the findings already made and conclusions reached in earlier judgments, without any further hearing or submissions. The trustee did not wish to be heard or make submissions concerning final property adjustment.
Section 90SM(15) of the Act provides as follows:
If a bankruptcy trustee is a party to property settlement proceedings in relation to the parties to a de facto relationship, then, except with the leave of the court, the bankrupt party to the de facto relationship is not entitled to make a submission to the court in connection with any vested bankruptcy property in relation to the bankrupt party.
Consequently, on 24 November 2022, I also made an order for the husband, despite his non-appearance, to file and serve submissions concerning whether he should be granted leave pursuant to s 90SM(15), with an order for his trustee to notify him of the orders made that day.
I also discharged the restraint upon the trustee in the 2016 proceedings (above at [3]) and made the following order in these proceedings with the consent of the wife:
1.The Trustee be restrained from declaring a dividend and payment of any disbursements or fees of administration pending further determination of the Court, up to an amount of $350,000.
The purpose of this order was to permit the trustee to make a distribution to creditors, but preserve a fund sufficient to meet any property adjustment order in favour of the wife.
The husband later contacted my chambers, claiming he had failed to appear because he had not been informed of the listing time. He said he objected to the orders made, demonstrating that he was aware of the terms of the orders. The matter was therefore relisted on 1 December 2022 for mention. On that date, after some discussion, the husband made clear that he actually did not wish to take the opportunity to provide submissions in relation to s 90SM(15). He said he was exhausted from the process of litigation and wanted finality. Consequently, he was content for the Court to determine the question of any property adjustment orders in the wife’s favour on the basis of material already filed, and the findings already made and conclusions reached in earlier judgments. The husband made no submissions concerning the order referred to above at [18].
The wife also sought a further seven days to put on submissions in reply to the trustee’s submissions concerning costs. She failed to make any submissions.
As a result, what remains to be determined is the wife’s application for property adjustment pursuant to s 90SM, and her application for costs as against the husband and trustee.
PROPERTY ADJUSTMENT
As noted at [12] of Gilliam (No 2), the wife indicated in submissions “a desire for a property adjustment of about $400,000”.
THE LAW
The jurisdictional facts to enliven the discretion to make a property adjustment order pursuant to s 90SM, and as required by s 4AA and s 90SB of the Act, have been established: see [5]–[6] above.
Judicial statements and the approach they articulate in relation to s 79 of the Act apply mutatis mutandis to an application for determination under Pt VIIIAB of the Act, particularly s 90SM and s 90SF.
Section 90SM(3) of the Act further provides that:
The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 90SM(4) of the Act set outs the factors to be taken into account in considering what order, if any, should be made. These will be discussed in detail below.
Section 90SS grants specific powers to make a range of different orders to adjust property interests.
Section 90ST reflects a policy of making orders which finally determine the financial relationship between the parties and avoid further proceedings, as far as (is) practicable.
APPROACH TO BE TAKEN
I adopt the “four step process” set forth in Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 for determination of the wife’s application under s 90SM.
In Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) the High Court made clear at [37] it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. The Full Court in Bevan & Bevan (2013) FLC 93-545 (“Bevan”) at [72]–[73] has held that the decision in Stanford has not overruled the four step approach.
The husband is bankrupt, whilst, as will be seen, the wife’s assets are minimal. The trustee gave evidence that the bankrupt estate currently holds $772,633.36 in assets, but has claims under consideration of $1,192,318 as at 22 July 2022, excluding the sum of $108,000 which has been declared to be owing to the wife.
As at the date when Barre was delivered (8 March 2021), the husband had superannuation of $21,296, together with a half interest in a self-managed superannuation fund with his ex-wife, which was comprised of a property with a net value of about $969,100: Barre at [313]–[328]. By reason of the orders made in Barre (Superannuation) (Order 2) the husband’s interest in the self-managed superannuation fund should have been rolled into a compliant fund of his choice, and I will assume this has happened. There was no clear evidence about the precise current value of the husband’s superannuation interests for the purposes of this judgment. On the basis of the findings in Barre, I will assume those interests are no less than $400,000.
I note here that in the 2016 proceedings, the wife made claims in relation to the self-managed superannuation fund. I found that her claims had no merit, she made no contribution to the fund, apart possibly from a de minimis amount, and she had no tenable claims in respect of it: Barre (Superannuation) at [29]–[35].
Stanford also made clear that the requirement pursuant to s 79(2) (or s 90SM(2)) that it would be just and equitable to make orders altering property should not be conflated with the requirements of s 79(4) (or s 90SM(4)). The High Court further stated at [39] that the question of whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights or interests in marital property are or should be different from those that then exist”, ie, at the time when the discretion may be exercised.
The Full Court in Bevan at [73] also summarised three “fundamental propositions” laid down by the High Court in Stanford to provide “useful guidance to trial judges in approaching the task under s 79 [or s 90SM]” as follows:
1.Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2.The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties' interests in the property are or should be different from those determined by common law and equity;
3.A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4) and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
The wife argued that it would be just and equitable to make some form of adjustment. The husband, by reason of s 90SM(15), was prohibited from making submissions. As explained, I am satisfied it would be just and equitable to make a property adjustment order. The Court must also be satisfied that its proposed final orders are themselves just and equitable. I will return to this question later in these reasons.
I will approach the determination of this matter by first identifying the assets and liabilities of the parties, then by dealing with the s 90SM(4) factors, including s 90SF(3).
ASSETS, LIABILITIES AND FINANCIAL RESOURCES
The available property pool is modest. In Gilliam (No 2), I set out the main elements of the current available pool at [4]:
The husband is bankrupt. The evidence of the husband’s trustee in bankruptcy is that he holds $772,633.36 in the husband’s bankrupt estate, as vested bankruptcy property. He anticipates a further $35,000 will be incurred in fees and other outlays. He presently has $1,192,318 in claims on the estate under consideration. As found in an earlier judgment in associated proceedings, the wife’s outstanding debt is $108,000. There will be a return to unsecured creditors of $0.566 per dollar, which will see the wife receive $61,128 on a debt of $108,000 as her dividend in the bankruptcy.
According to the wife’s most recent financial statement filed on 21 December 2021, she has no assets of note, save for minimal savings, superannuation, and a motor vehicle. Her total assets are $4,108. I note that she sought to include a debt owed by the husband, in the sum of $228,000, as an asset. I will exclude this as I have found that she is owed the sum of $108,000 by the husband. There is no dispute as to the existence of this liability. This is a form of personal property owned by the wife and a corresponding liability of the husband.
The wife also alleges liabilities with a total of $165,107 comprised largely of fees owing to her former lawyers.
The husband holds some superannuation which is not vested bankruptcy property: Gilliam (No 2) at [9]. I refer to this in more detail later.
Consequently, if there was no property adjustment, the trustee would hold all of the available non-superannuation asset pool, the husband would hold his superannuation as non-vested bankruptcy property, with the wife in substantial debt towards her former solicitors, while holding no superannuation or other assets.
I turn now to consider the application of Pt VIIIAB of the Act and the factors set forth in s 90SM and s 90SF(3).
CONTRIBUTIONS
I will deal first with s 90SM of the Act. Section 90SM(4) sets out the considerations to be taken into account by the Court in determining what order (if any) should be made under s 90SM in property settlement proceedings.
Generally, a global approach should be taken to the assessment of contributions: Norbis v Norbis (1986) 161 CLR 513. However, in my view, two pools should be used in this matter, one being the fund held by the trustee, and the other comprised of the husband’s superannuation, in respect of which, as noted, I have already dismissed claims made by the wife.
In accordance with s 90SM(4), the Court must consider all the contributions, both financial and non-financial to the acquisition, conservation and improvement of the parties’ assets, as well as to the welfare of the family during cohabitation and after separation. The Court must consider the parties’ respective contributions in an overall sense: Norman & Norman [2010] FamCAFC 66; Kowalski and Kowalski (1993) FLC 92-342; G and G (2000) FLC 93-043. A broad approach is preferred, rather than reference to precise mathematical calculations: Burke and Burke (1981) FLC 91-055; JEL and DDF (2001) FLC 93-075. Assumptions about equality of contributions should not be made, and there is no assumption that equal division is the starting point for any exercise of the Court’s discretion: Mallet v Mallet (1984) 156 CLR 605 at 610, 613, 625, 635–6, and 646–7. Contributions are assessed in a holistic manner: Dickons v Dickons (2012) 50 Fam LR 244 at [17]–[21]; Jabour & Jabour (2019) FLC 93-898 at [31]–[87]; Horrigan & Horrigan [2020] FamCAFC 25 at [35]–[49]; Barnell & Barnell (2020) FLC 93-961 at [30]–[43]; Benson & Drury (2020) FLC 93-998 at [35].
Below is a discussion of the evidence and my findings in relation to the relevant contributions under s 90SM(4) of the Act.
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage
There was no dispute that at the commencement of the relationship, the husband owned businesses and real property with his ex-wife, which were the subject of the binding financial agreement, enforced by the decision in Barre. It was primarily as a consequence of the sale of property pursuant to the orders made in the latter judgment that the existing fund held by the trustee came into existence. The husband also had his interest in the self-managed superannuation fund with his ex-wife. His share of these assets was determined by the decision in Barre, and they were relatively substantial. However, I infer the husband also had some liabilities at the start of the relationship, although the evidence did not show their nature and extent.
The husband before and during the relationship owned and ran a number of businesses. I found in Gilliam at [72] that the wife engaged in some form of employment in the husband’s business:
The fact of separation leads me to infer that the parties did not work together jointly in a business to any meaningful extent before February 2017. After that, the evidence was not clear concerning the extent to which the wife may have worked in the husband’s businesses, although I accept that she did to some extent. DD Pty Ltd was then registered in November 2017. I accept the wife was employed in this business.
As explained in Gilliam at [66], the type of the work the wife described was that the husband:
… sort of wanted me to oversee what was happening with his businesses – like, business [EE Company], and, you know, started, sort of, asking me to go into the office or do various things about setting up websites, you know, to register other businesses, sorting out infringement notices and things like that …
(Transcript 25 March 2022, p.265 lines 11–15)
In Gilliam, I discussed extensively the wife’s financial contributions towards the relationship, which I repeat here:
104.It was common ground that the parties did not have any joint bank accounts or credit cards, nor did they purchase any property together.
105. The wife argued she made significant financial contributions during the relationship upon which the husband depended. The wife had an interest in a property located at BH Street at the commencement of the relationship. The wife argued that she had $37,000 in cash as at May 2016. She then received $470,000 from the sale of BH Street from which she paid her former husband $70,000. She gave evidence, therefore, that during the relationship she disbursed all but about $10,000 of $437,000 in loans to the husband, money injected into his businesses, and the parties’ joint living expenses.
106. In 2016, the wife was working for WW Company, however in August of that year, she states she reduced her hours to 12 hours a week in order to spend more time assisting the husband with domestic duties and his businesses. The wife gave evidence that after the husband gave her the ring, which will be discussed later in this judgment, she worked for the husband’s businesses. On 16 November 2016, she left WW Company and worked for the husband until December 2018. However, she worked unpaid until January 2018, when DD Pty Ltd began to trade.
107. The wife gave evidence that the husband would request money frequently for purposes unrelated to his businesses, either saying exactly how much was needed or what he needed to pay. At his direction, the wife would deposit money into his bank account, make direct payments of some invoices, or give the husband cash. The money borrowed by the husband was applied for a range of expenses. For example:
(a) In or about February 2017, the husband requested money to bet on a horse which was racing at BK Racecourse. The wife loaned $20,000, in addition to funds for gambling expenses on numerous other occasions;
(b) In late 2017, the wife loaned money for the husband’s dental expenses; and
(c) In August 2018, the wife lent the husband money for hair follicle testing as part of the 2016 proceedings. These tests were a pre-requisite to the husband spending any time with the children. The wife states her loans were also applied to legal expenses for the 2016 proceedings and child support arrears.
108. The wife also asserts that she made a number of additional financial contributions to the husband in the region of $200,000, which was applied to joint living expenses and the husband’s businesses, including EE Company, F Pty Ltd, DD Pty Ltd, AV Company, and Barre Pty Ltd. Whilst admitting that the wife did provide funds of some form to the businesses, the husband asserts that this all formed part of the loans provided by the wife. These loans were said by the wife to have been made between October 2017 to November 2018, when the parties were working together to build their business, and was used to pay employee wages, contractors, business suppliers, and tax liabilities.
109. As regards joint living expenses, the wife said these included purchasing groceries and household items for the husband and his children, as well as meeting rental payments, utilities, and household expenses for AZ Street, which the parties allegedly resided in together. The husband, for his part, states that he did not attempt to provide financial support to the wife’s children, save for paying her rent for AZ Street as a means of repaying his debt. I discuss this below under (h) – the care and support of children.
110. The husband argued that these loans do not amount to a financial contribution by the wife to the relationship nor any form of financial support. I disagree. Although the payments made by the wife were loans, which have been repaid in part, they were also financial contributions and were timely and supportive in the sense that they enabled the husband to continue his business activities, including the payment of creditors, and to pursue lifestyle activities, such as gambling.
111. I am satisfied that the wife gave the husband substantial financial support during the period of the relationship, which included injecting some of her money into the operation of his businesses. I am also satisfied that the husband supported the wife financially in material respects. I find that the parties were generally financially interdependent to a material degree and dependent upon each other between September 2016 and November 2018.
112.It is undisputed that the parties did not own any real property together, nor did they acquire any joint property during the period of their relationship…
113. The wife’s interest in BH Street at the commencement of the relationship has been mentioned above. I am satisfied that she used a substantial proportion of the proceeds of sale of this property for the parties’ joint benefit during the relationship.
114. The acquisition or use of DD Pty Ltd seems to have been for the benefit of both parties. It was a business which generated income, and was used to pay the wife’s rent from January 2018 until she moved to Suburb BG. There appeared to be no dispute that the operation of the business relied upon the husband’s business skills. However, the wife agreed she put none of her own money into DD Pty Ltd, and she was neither a director or shareholder. Consequently, the shareholding was held by the husband. I find the business of DD Pty Ltd was his property which was used for the benefit of both parties.
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage
I have nothing to add here.
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent
I refer here to my findings in Gilliam, where I found that the parties were routinely involved in the care and support of each other’s children throughout the period of their relationship. I set these out in full for ease of reference:
133. It is the wife’s case that not only did she and the husband maintain two common residences, but that their children would, at times, reside with the parties together. As outlined above, she argues that she would undertake grocery shopping, cooking, and cleaning.
134.In particular, she provided assistance to Ms H, including with her employment, university assignments, and when she moved houses on two occasions. In her evidence, the wife provided copies of a number of text messages between herself and Ms H. In one, dated 31 December 2017, she states that “I love you like my own mom”, and on 6 February 2018, she describes the wife as the “best soon to be step mom evaaaa.”
135.In addition to Ms H, the wife asserts she provided assistance to the husband in caring for his two other children, Y and X. This involved attending contact visits, cooking, playing with them, accompanying them to their sports games, and caring for them when they were sick. She further states that she acted on the husband’s behalf at times, contacting the children’s school on his behalf to arrange meeting to discuss their welfare, and attending parent teacher nights with the husband.
136.In August 2016, the husband’s then-solicitor liaised with the wife to obtain her agreement to supervise contact visits between the husband and X and Y. Although Ms Barre refused her consent for this to occur, the husband’s agreement to such an approach is indicative of a great level of trust between the parties and a willingness on the husband’s part to allow the wife to play some part in the care of X and Y.
137.The husband denies most of these assertions, save for conceding that the wife was present for a few supervised visits with Y and X, albeit far less than the fifteen times she asserts. I do not accept this. Having regard to Exhibit X, which were the bundles of supervised contact reports, the wife was recorded as being present for at least fourteen of these occasions. These were regular weekly visits in December 2016, February 2017, and from mid-April to mid-May of 2017. These made up the vast majority of the contact reports provided.
138.During those visits, X and Y were recorded numerous times as seeming “comfortable when engaging with [the wife]”, whilst the wife herself was “affectionate and warm towards the boys.” Without setting out the detail of each report in full, I am satisfied that the wife was involved in caring for the husband’s children during these visits. For example, there is evidence that she prepared meals for them, played with them, and was generally present to supervise them. Whilst the wife was not present for the full duration of each visit, the reports indicate that she was involved in the care and support of the husband’s children.
139.The husband also acknowledges that the wife attended X’s parent teacher evening on at least one occasion, because he required her as a witness in the event Ms Barre made false allegations of assault against him, or that she attempted to assault him herself.
140.The wife also contends that the husband had a close relationship with ZZ, one of her children from a previous relationship. The husband denies ever attempting to parent the wife’s children. Without needing to set out each and every text message, there was evidence from screenshots tendered by the wife that the husband and ZZ were in regular contact. One notable text message from the husband asked “Are u in school today answer the question,” to which ZZ responded that she was at home working on her assignments. In response, the husband states “Ok send me a picture of what work you have done so far in your self homeschool?? I bet u still in bed and bullshitting away ?” This, and the other text messages, are indicative of the father taking a supervisory and disciplinary role in relation to ZZ, which is consistent with acting as a parent.
141.Although the husband denied providing financial support to the wife’s children, the wife provided some evidence of text messages between the husband and ZZ which suggests that the husband did provide financial support of some kind. In one text message on 16 July 2017, ZZ asks “So ahh the 50$ under the mat yea?” to which the husband responds, “Don’t ever second guess Mr Barre. Ok there’s $40.” Several days later, on 22 July 2017, there is evidence of a text message from the husband with a cash PIN, enabling ZZ to make a card-less withdrawal of $100 from the husband’s bank account. A similar transaction of $50 occurred on 19 August 2017. I am satisfied that the husband provided some form of financial support to ZZ.
142.Having regard to the evidence as a whole, I am satisfied that the parties were, routinely for several periods during their relationship, engaged in the care and support of each other’s children. Most of the clear evidence comes from 2017 and 2018. The evidence does not support a conclusion that the mutual parenting took place for the entire period for which the wife contends. It appears to have arisen initially by December 2016, but as already noted, the parties separated for a period between late December 2016 and February 2017. However, during 2017 and the first half of 2018, there was evidence, which I accept, that the parties gave care and support for each other’s children from time to time.
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
I find that the orders sought will have no effect on either party’s earning capacity.
(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and
This is discussed further below.
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
There are no children of the marriage. The husband is presently involved in parenting proceedings with his ex-wife. These proceedings remain ongoing.
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
As stated above, there are no children of the relationship.
ASSESSMENT OF CONTRIBUTIONS
Taking account of the very short relationship, the significantly more substantial assets the husband had at the commencement of the relationship, the findings and conclusions above at [49]–[58], I assess contributions as 20 percent in favour of the wife and 80 percent to the husband.
SECTION 90SF(3) ADJUSTMENT
The Act requires me to take into account the matters referred to in s 90SF(3) of the Act, so far as they are relevant, when considering what orders should be made in these proceedings. The following matters are relevant.
(a) the age and state of health of each of the parties
The wife is presently aged 49. The husband is aged 50. The husband previously struggled with alcohol and drug addiction, spending three weeks at a rehabilitation clinic in late 2017. The wife deposes to some ongoing anxiety and depression. Neither pointed to any other health issues to be taken into account.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
The wife is presently unemployed and receiving Centrelink payments.
The presentation of the husband suggested that he has suffered some form of mental health problems during the proceedings. These, together with his bankruptcy, lead me to infer his capacity for gainful employment is compromised.
(d) commitments of each of the parties that are necessary to enable the party to support
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person; and
There was some evidence to suggest that the wife has ongoing commitments to financially support YY, one of her children from her first marriage, who suffers from depression and another mental illness. YY has reached his majority. The wife also reports that this affects her ability to obtain full-time employment as she needs to be available to care for YY in the event of an emergency. She noted in her affidavit of 10 November 2022 that she has a total of two dependents who reside with her, although did not provide any further information.
Both parties will have to accommodate themselves.
The husband is still engaged in parenting proceedings with Ms Haynes over their two children. However, he has not spent any formal time with them since January 2020. There was no indication that he was providing any financial support to these children.
Conclusion
I am not satisfied there should be any additional adjustment for s 90SF(3) factors.
WHETHER THE PROPOSED ORDERS ARE JUST AND EQUITABLE
As pointed out, the wife claimed property adjustment in her favour of about $400,000, while the husband declined to seek leave pursuant to s 90SM(15) to make any submissions about property adjustment.
As explained in Gilliam (No 2) at [4], it has been declared that the wife has the sum of $108,000 owing to her. Prima facie, this debt would have been provable in the husband’s bankruptcy. The trustee did not contend otherwise. But, by reason of s 58(3) of the Bankruptcy Act, the wife was prohibited from enforcing any remedy in respect of this debt, or taking any step in proceedings in respect of it. In Gilliam (No 2), I held that:
4. The husband is bankrupt. The evidence of the husband’s trustee in bankruptcy is that he holds $772,633.36 in the husband’s bankrupt estate, as vested bankruptcy property. He anticipates a further $35,000 will be incurred in fees and other outlays. He presently has $1,192,318 in claims on the estate under consideration. As found in an earlier judgment in associated proceedings, the wife’s outstanding debt is $108,000. There will be a return to unsecured creditors of $0.566 per dollar, which will see the wife receive $61,128 on a debt of $108,000 as her dividend in the bankruptcy.
…
7. If an order is not made for property adjustment pursuant to s 90SM, the wife will get significantly less than if an order was made which had, for example, the broad effect of the wife receiving an amount equivalent to the outstanding loan amount plus some interest.
…
9. It is clear that neither party has any assets of any significance, although the husband enjoys some superannuation which is not vested bankruptcy property.
10. The seriousness of an injustice in this context is assessed by reference to the circumstances of the case. Where there is available only a relatively modest asset pool, a failure to make a relatively modest property adjustment order may result in serious injustice, where it would not in other circumstances. In the circumstances of this matter, I am satisfied that if an order is not made pursuant to s 90SM in favour of the wife, she will suffer an injustice which falls into the category of “serious” within s 90SB(1)(c)(ii).
Taking account of these matters, and my conclusions concerning contributions, I propose to order that there be paid to the wife by way of property adjustment pursuant to s 90SM from the bankrupt estate of the husband, the amount of $154,527, being 20 percent of that estate. Although this amount will be ordered by way of property adjustment and by reason of s 59A of the Bankruptcy Act will therefore take priority, together with all the other matters discussed above concerning contributions, it also takes account of balance of the loan owed by the husband. For this reason, there should be an order discharging this remaining loan balance.
Section 90SM(3) requires the Court to be satisfied the proposed order itself is just and equitable and to “stand back” from its preliminary determination, and consider the impact of the proposed order: Manolis & Manolis (No 2) [2011] FamCAFC 105 at [65]–[66].
The High Court in Stanford commented at [36] on the meaning of “just and equitable” as follows:
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
(Footnotes omitted)
I am satisfied the proposed order is just and equitable in the unusual circumstances of this case.
COSTS APPLICATION
The wife seeks an order for indemnity costs against the husband and the trustee, in the sum of $230,000. Her application seeks a separate costs order against each of the husband and the trustee.
The relevant principles with respect to costs are well settled, and have been discussed by the Full Court in Parke & The Estate of the Late A Parke (2016) FLC 93-748, followed in Atkins & Hunt (Costs) [2017] FamCAFC 131. The Court has a wide discretion, which is to be exercised judicially.
In proceedings to which the Act applies, the starting point is that each party shall bear his or her own costs: s 117(1). If, however, the Court is of the opinion that there are justifying circumstances, the Court may make such order as to costs and security for costs as the Court considers just: s 117(2).
When considering what, if any, order for costs should be made, the Court must have regard to the factors set out in s 117(2A).
The trustee put his position simply in his submissions:
1. The wife seeks costs against the bankruptcy trustee which were incurred by the wife at a time when the bankruptcy trustee was not a party to the proceedings.
2. At no time since the bankruptcy trustee was made a party to the proceedings has the wife been legally represented.
I accept that the general rule is that a trustee in bankruptcy, like any trustee, is in the same position as any other litigant, places him or herself in the bankrupt’s place, and is liable personally for costs awarded against him or her in unsuccessfully defending litigation and may receive an indemnity from the bankrupt estate or the creditors: Ex parte Angerstein (1874) LR 9 Ch App 479; Trustee of the Property of Sandor v Ramirez [1999] NSWCA 261 at [33]–[34]; Cresvale Far East Ltd (in liq) v Cresvale Securities Ltd and Others (No 2) (2001) 39 ACSR 622 at [41]; Hypec Electronics Pty Ltd (in liq) v MEAD and Others (2004) 61 NSWLR 169; Morris Finance Ltd v Free (trustee of the property of Brown) (No 2) [2017] NSWSC 1514 at [18]; Frigger v Trenfiled (No 10) (2021) 397 ALR 24 at [44].
The wife commenced proceedings on 22 January 2019. At that point, she was represented. She ceased to have legal representation from 7 January 2020, and has been self-represented since. The trustee did not file a notice of address for service until 18 August 2020.
The wife made an earlier costs application in the 2016 proceedings which was dismissed, substantially on the grounds that she was self-represented: Barre & Barre [2021] FedCFamC1F 61 (“Barre Costs”)
In Barre Costs, I set out some relevant provisions of the rules of court and principles in relation to self-represented litigants:
28.The Rules of Court should also be considered. The Family Law Rules 2004 (Cth) (“2004 Rules”) have been repealed as of 1 September 2021 (Family Law Repeal Rules 2021 (Cth), Schedule 1). The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) commenced on 1 September 2021 (“the new Rules”). These apply to proceedings not finally determined before the repeal of the 2004 Rules (FCFCOA Practice Direction – TRANSITIONAL ARRANGEMENTS, Clause 2.1).
29.Rule 1.05 of the new Rules defines “costs” as “an amount paid or to be paid for work done by a lawyer, and includes expenses”. This definition is materially identical to the definition in the 2004 Rules.
30.However, it should be noted that the r 1.16 of the 2004 Rules also contained a definition of “expense” – “an amount paid to a third party, other than a lawyer, for work done in a case or services provided for a party”. This definition led authorities decided under the 2004 Rules to hold that a self-represented litigant may sometimes recover actual disbursements paid to third parties in the course of the proceedings, pursuant to the Court’s power to award costs: Casley & Casley [2010] FamCAFC 189. There is no definition of “expense” in the new Rules, and accordingly, given the apparently intentional omission, the definition of costs in the new Rules may not extend to expenses paid by a self-represented litigant to third parties. Regardless, on the view I take, it is not necessary to further consider this question.
31.Chapter 12 of the new Rules now deals with costs. Rule 12.01(3) provides that Chapter 12 does not apply where a Family Court is exercising its jurisdiction under s 35, 35A or 35B of the Bankruptcy Act. As I explained at [5], this judgment is not concerned with any bankruptcy issues.
32.Accordingly, rule 12.13 relevantly provides that:
(1) The court may make an order for costs on its own initiative.
(2) A party may apply for an order that another person pay costs.
(3) An application for costs may be made:
(a) at any stage during a proceeding; or
(b) by filing an Application in a Proceeding within 28 days after the final order is made.
33.It is a basic principle that an order for costs is compensatory and is not to be used to punish parties: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; Cachia v Hanes (1994) 179 CLR 403 (“Cachia”); Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [1]. Costs are awarded by way of indemnity; not as compensation for lost earnings, much less as a reward for a litigant's success: Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29; (2019) 372 ALR 555 at [33]. In Re JJT; Ex parte Victoria Legal Aid [1998] HCA 44; (1998) 195 CLR 184 at [91] and [92], the majority of the High Court (Gaudron, Gummow, Hayne and Callinan JJ, Kirby J dissenting) held that s 117(2) referred only to costs in the conventional sense, and could not, for instance, permit the Court to order a non-party to incur expenditure for litigation over which they had no control. “Costs” in s 117(2) is limited to the definition as provided in the Act. This interpretation was then followed in the Full Court: B v J [2006] FamCA 256; (2006) FLC 93-259.
34.It is also well established that self-represented litigants cannot obtain a costs order. The “costs” provided for in the new Rules do not include time spent by a litigant who was not a lawyer in preparing and conducting his case; such costs are confined to money paid, or liabilities incurred for professional legal services: Cachia at [6]. The definition of “costs” in r 1.05 of the new Rules makes this clear.
The terms of r 12.01(2) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the new Rules”) are also relevant:
12.01 Application of Chapter 12
…
(2) A party may only recover costs from another party in accordance with these Rules or an order.
Note: A self-represented party is not entitled to recover costs for work done for a proceeding (other than work done by a lawyer) but, if so ordered, may be entitled to recover some payments.
The note to r 12.01(2) suggests that a self-represented litigant cannot recover costs, but may recover “payments.” It is not clear what this means. A note to a rule does not form part of the rule. There is no definition of “payments” contained in the dictionary. As pointed out, there is now also no definition of “expense” in the new Rules.
In Oscar & Traynor [2008] FamCAFC 158 (“Oscar”), which was decided under the 2004 Rules, the Full Court observed that:
85.There has been considerable case law since Cachia v Hanes, much of which is unreported, dealing with claims for recovery of “expenses” as “costs”. Those expenses which have been found to be properly recoverable include:
a)court fees (see, for example, the discussion of the Full Court in B and P [2000] FamCA 392 at [50]; and also the Family Law Regulations 1984, reg 11(6)(b));
b)transcript costs, on the basis that they cannot also be claimed as costs in connection with the trial (see, for example, the discussion of the Full Court in W (deceased) and W and Ors [2004] FamCA 319 at [41]);
c)expenses for serving documents (see, for example, Winter v Fleeton [2002] WASCA 73 at [23]);
d)freedom of information fees (see, for example, Pittwater Council v Bolitho [2007] NSWLEC 355 at [159]);
e)fees for searching registers, such as an ASIC search fee (see, for example, Re Sullivan and Department of Industry, Science and Technology (1998) 51 ALD 767 at [45]);
f)appeal book binding (see, for example, Winter v Fleeton [2002] WASCA 73 at [23]);
g)disbursements incurred by a litigation guardian (see, for example, Step v Northern Territory (2007) 20 NTLR 141); and
h)incidental expenses in relation to photocopying, postage and telephone and facsimile transmissions (see, for example, Shephard v Blueberry Farms of Australia (Corindi) Ltd (2001) 162 FLR 339 at [66]; Cary v Owners of Strata Plan No. 7241 [2002] FMCA 18).
86.There are, of course, also many cases in which a litigant has been awarded costs relating to the legal advice obtained in preparation for a hearing, although they did not have legal representation at the hearing itself.
87.Expenses which have been held not to be recoverable include:
a)travelling costs (see, for example, the discussion of the Full Court in W (deceased) and W and Ors (supra at [49]); and also Farquar and Farquar (No 2) [2008] FamCA 682; Cachia v Hanes (supra) at p 417);
b)parking costs (see, for example, H & H [2006] FamCA 257 at [9]); and
c)meals (see, for example, Maronis Holdings Ltd v Nippon Credit Australia Ltd [2002] NSWSC 838 at [14]).
In Casley & Casley(Costs) (2010) FLC 93-449 (“Casley”), the Court concluded at [35] that
…it is well established that a litigant in person may seek an order for costs pursuant to s 117(2) of the Act. Such a litigant will not recover an amount for time spent in preparing and conducting his or her case. However, such a litigant may recover disbursements being out of pocket expenses which would have been recoverable had he or she been legally represented.
However, in Oscar, the Court further noted that
88.When considering the case law, it is important to keep in mind that each jurisdiction has different legislative provisions and rules dealing with costs. As Toohey and Gaudron JJ said in Cachia v Hanes (supra) at p 419:
In truth any relevant statute or subordinate legislation must be the starting point for a consideration of the appellant’s entitlement to costs. That is not to say that the interpretation of any statutory provision or rule of court should be divorced from the historical context in which it was introduced or from the understanding of the time. But the ultimate question is one of interpretation.
89.The starting point must therefore be the proper interpretation of the words “costs” and “expenses” as they appear in the Rules….
Although I am dubious, I will assume in the wife’s favour that the types of costs identified in Oscar could still be claimed by a self-represented litigant under the new Rules. The question is whether she has established circumstances justifying an exercise of discretion for such an order, first against the trustee, and then against the husband, taking account of the matters in s 117(2) of the Act.
The wife made reference to provisions concerning remuneration for trustees in bankruptcy. She did not explain how those provisions related to her costs before or after the trustee was joined. I fail to see how the trustee could possibly be liable for any costs before he was joined. The only question is whether the trustee should be liable for costs after joinder and while the wife was self-represented.
The wife’s claim for costs fails for the following reasons.
Whilst Oscar makes explicit reference to circumstances where the litigant has previously obtained legal advice, as is the wife’s case, she failed to produce evidence of her costs or expenses, whether that be in respect of legal advice, or “payments” such as court fees and transcript costs incurred when self-represented. At paragraph 99 of her affidavit of 10 November 2022, the wife sets out a table of additional expenses incurred, including stationery, subpoena conduct money, fees for searches, transcripts, and software. However, that same table explains that those fees cover the period between January 2019 and July 2022. The wife was represented up to January 2020, and it is not clear which of those expenses were incurred after that date whilst she was self-represented.
Furthermore, she has never filed a costs notice in these proceedings. She merely submitted that:
19. My costs are proportionate to the importance & complexity of the matters in dispute. Each respondent was at all given times on notice that I anticipated I would require extensive legal advice & representation. The court can find an order for costs in my favour is justified.
The wife also argued that:
(a)The husband and trustee failed to make her any offers, such that she has been worn out by “simple attrition,” having regard to the husband’s superior financial position;
(b)The trustee was wholly unsuccessful, and failed to represent the wife’s interests as a creditor, choosing instead to become her adversary; and
(c)The trustee abandoned the proceedings as some point, having regard to provisions concerning the service of documents in the Bankruptcy Act.
It is unclear what the wife meant by [93(a)]. If she means the trustee and husband engaged in some form of conduct in bad faith, there is no evidence to support such an inference. The fact that the husband is bankrupt demonstrates the inaccuracy of asserting he has a superior financial position to the wife.
It is trite law that a bankruptcy trustee’s duty is to treat all creditors equally and get in the estate of the bankrupt. It is true that the trustee on the husband’s behalf appeared to resist the wife’s claim on the hearing days in October 2020, which dealt with the threshold question whether a de facto relationship existed. This could be seen as him protecting the value of the bankrupt estate for all creditors, including the wife. It would have been inappropriate for him to take a partisan position in favour of the wife. However, this is not any reason justifying a costs order in the wife’s favour for those hearing days. She was self-represented, and had to prove her case for the existence of a de facto relationship. In any event, those hearing days were partially lost because of the wife’s own health problems. Thereafter, the trustee took little active part in the proceedings.
I am not persuaded that the wife has established any circumstances justifying a costs order, as a self-represented litigant, even for the limited category of expenses listed in Oscar, against the trustee.
In respect of the husband, the wife alleged deliberate noncompliance with orders and rules, and that he, together with the trustee, “refused until the last moments to nail their colours to the mast”.
She made a number of allegations concerning the husband’s conduct which are said to have caused her to incur additional costs during the period when she was represented.
The husband did not advise, until the first day of trial on 6 May 2019, that he had become self-represented, resulting in that hearing date and the costs associated being thrown away.
She also complained about numerous correspondence that her solicitors were forced to send in relation to costs, about the husband’s conduct, his disclosure, and that he unreasonably ignored offers to settle the proceedings between May and November 2019. Furthermore, in December 2019, the husband was said to have sent a total of 33 emails in the space of a week to the wife’s solicitors, with the intention of running up legal costs. The ultimate result of the husband’s conduct, argues the wife, was that her solicitors became unable to continue acting for her, although she also concedes being unable to afford the fees herself.
Although the wife made references to the husband’s failure to prepare for final hearing in early 2020, this happened during a time where she was self-represented.
I accept the conduct of the husband contributed to delay. But, so did the conduct of the wife. Her disorganised filing of applications, seeking a range of extravagant orders, in my view prolonged the proceedings. In Gilliam at [10], I said:
These proceedings have taken an inordinate time to reach finality, caused by the manner in which the parties, who have been self-represented for most of the proceedings, presented their cases, their health problems, a range of misconceived and convoluted interlocutory applications, and the disruptions brought about by the Covid-19 pandemic. The somewhat tortured path the proceedings have taken will, as will become clear, influence the orders made on the basis of these reasons, and likely lead to the need for some further consideration.
Then at [167], I referred to “the fragmented and disorganised manner in which the proceedings progressed to hearing, as well as the manner in which the parties conducted the hearing”.
The wife is impecunious, and possibly insolvent. But, the husband is bankrupt.
The wife, contrary to her submissions, was not wholly successful, because her primary case was for the existence of a de facto relationship existing for a period in excess of two years. The husband therefore cannot be said to have been wholly unsuccessful.
The Court itself, in light of the modest pool of assets, urged the parties on numerous occasions to resolve their dispute. However, they did not.
In view of the above, I am not satisfied that justifying circumstances have been demonstrated such that any costs orders should be made in favour of the wife. I will dismiss her application.
CONCLUSION
For the reasons above, I am satisfied that the orders set out at the commencement of these orders should be made.
I certify that the preceding one hundred and eight (108) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 16 December 2022
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