Holbert and Holbert
[2020] FamCA 567
•24 July 2020
FAMILY COURT OF AUSTRALIA
| HOLBERT & HOLBERT | [2020] FamCA 567 |
| FAMILY LAW – COSTS – Circumstances justifying order – Where the wife sought costs against the husband as a result of her successful Application in a Case – where the wife sought costs on an indemnity basis – Where the husband opposed the application for costs – Where it is appropriate that the husband be awarded costs on a party party basis in an amount agreed or as assessed – Where indemnity costs not ordered |
| Family Law Act 1975 (Cth) s 117(1), 117(2), 117(2A) |
| Baum & Lokare (No 2) [2019] FamCA 292 Colgate-Palmolive and Anor v Cussons Proprietary Limited (1993) 46 FCR 225; [1993] FCA 801 Danks & McCabe (2017) FLC 93-767; [2017] FamCAFC 41 Wrenstead v Eades (2016) FLC 93-697; [2016] FamCAFC 46 Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4 Yunghanns v Yunghaans (2000) FLC 93-029; [2000] FamCA 681 |
| APPLICANT: | Ms Holbert |
| RESPONDENT: | Mr Holbert |
| FILE NUMBER: | MLC | 2024 | Of | 2018 |
| DATE DELIVERED: | 24 July 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | McEvoy J |
| HEARING DATE: | 28 May 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Dixon SC |
| SOLICITOR FOR THE APPLICANT: | Scanlan Carroll Pty Ltd |
| COUNSEL FOR THE RESPONDENT: | Mr Mawson QC |
| SOLICITOR FOR THE RESPONDENT: | Coote Family Lawyers |
Orders
The applicant wife’s costs of and incidental to the application filed 24 April 2019 be paid on a party party basis by the respondent husband in an amount to be agreed and, in default of agreement, to be assessed.
The applicant wife’s Application in a Case filed 24 April 2019 and Amended Application in a Case filed 17 May 2019 be otherwise dismissed.
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 Holbert & Holbert 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 2024 of 2018
| Ms Holbert |
Applicant
And
| Mr Holbert |
Respondent
REASONS FOR JUDGMENT
The applicant wife has sought the costs of her Application in a Case filed 24 April 2019 and her Amended Application in a Case filed 17 May 2019 to be paid by the husband on an indemnity basis. The husband opposes the making of any costs order, but says that if costs are ordered they should be ordered on a party party basis in accordance with Schedule 3 of the Family Law Rules 2004 (Cth).
The wife’s application was for the production of further documents which had been sought but not provided, the sale of two vehicles, and the sale of certain properties owned by the parties in the UK. Her application was heard by the Court on 28 May 2019. After fruitful discussions between the parties orders were made that day by consent that the husband produce several categories of documents, and that the motor vehicles be sold. However agreement was not reached on the question of whether certain UK properties owned by the parties should be sold for the purposes of interim property settlement, or whether, as the husband contended, the former matrimonial home in Suburb K should be sold instead. The wife resisted the sale of the former matrimonial home, submitting that it was not yet clear that it would need to be sold, and that she and the two children of the marriage were presently living in it.
Orders were subsequently made on 22 August 2019 for the sale of two of the parties’ properties in the UK: see Holbert & Holbert [2019] FamCA 566. The proceeding has now been listed for trial commencing on 26 October 2020, and a case conference is to be conducted on 29 July 2020.
For the reasons which follow the wife should have an order that the husband pay her costs on a party party basis in an amount to be agreed and, in default of agreement, to be assessed.
The wife seeks the payment of the costs of her interim applications on an indemnity basis in accordance with s 117(2) of the Family Law Act 1975 (“the Act”). Section 117(2) of the Act provides that if, in proceedings under the Act, the court is of the 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.
In submissions filed 28 August 2019 the wife says that she was compelled to bring her Application in a Case filed 24 April 2019, and her Amended Application in a Case filed 17 May 2019, because the husband had not complied with his disclosure obligations and his continuing failure to respond substantively to requests for further disclosure. She points, in this respect, to requests made in correspondence on 15 August 2018, 13 September 2018, 2 November 2018, 19 December 2018 and 1 April 2019. The wife also says that she was compelled to bring her applications for the sale of the vehicles and the UK properties in circumstances where the husband had failed to comply with orders for the payment by him of the mortgage instalments due on the former matrimonial home, and related costs. The wife was wholly successful in relation to her application for the sale of the vehicles and two of the UK properties.
The wife relies, in particular, on ss 117(2A)(a), (c), (d), and (e) of the Act. As well as the matters mentioned above, she points to the fact that the husband controlled the parties’ finances throughout their relationship and that his business interests are complex, requiring significant disclosure; that the husband repeatedly resisted requests for further disclosure on the unfounded basis that the documents were irrelevant; and that there was, at least at the relevant time, a significant disparity in the assets and financial resources of the parties (in the husband’s favour).
In submissions provided on 26 September 2019, the husband resists the wife’s application on the basis that the starting position is that the parties should bear their own costs unless there are circumstances which justify the court departing from that position (s 117(1) of the Act). He submits that neither of the parties have the financial resources to pursue wasteful litigation, and he details, in this respect, the state of his own finances. The husband says that he is in no position to meet a costs order. It may be accepted that the husband’s financial position has become more parlous since September 2019.
The husband also submits, in effect, that by her continuing requests for disclosure the wife has conducted the proceeding in an oppressive manner, and that his conduct of the proceeding has been appropriate in all the circumstances. He denies that he has failed to comply with court orders, and disputes that the wife has been wholly successful in her application. Accordingly, he submits, the usual position should obtain and the parties should each bear their own costs.
A party seeking that the Court make a costs order must establish that the justice of the case requires an order for costs by reference to the non-exhaustive list of statutory considerations set out in s 117(2A) before such an order is made: Baum & Lokare (No 2) [2019] FamCA 292 (“Baum”) at [10]. Any one, or any combination, of these matters can be matters on the basis of which the court could make a costs order. Whilst the considerations must be taken into account, there is nothing to prevent any factor being the sole foundation for an order for costs being made: Baum at [11]; Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania) v Fish and Another (2005) 33 Fam LR 123 at [41].
An applicant for costs must establish the circumstances in which a costs order would be justified, however as McClelland DCJ observed in Baum, (citing Penfold v Penfold (1980) 144 CLR 311, 315), “it is not the case that a costs order can only be made in what has been described as a ‘clear case.’” In Wrenstead v Eades (2016) FLC 93-697 at [15] the Full Court reiterated this position, noting that as long as there is an essential preliminary finding that there are justifying circumstances to make a costs order, there is no additional or special onus which the applicant needs to be establish in order to obtain an order for costs.
In relation to an award of indemnity costs, while the court does have the power to order costs on an indemnity basis, the general approach is that it will not depart lightly from the ordinary rules relating to costs between party and party. Any circumstances justifying an award of indemnity costs should be of an exceptional kind: Yunghanns v Yunghanns (2000) FLC 93-029 at [30].
Insofar as an award of indemnity costs is concerned, it is well established that there are certain circumstances which might properly attract such an order. Some of these circumstances are essayed by Sheppard J in Colgate-Palmolive and Anor v Cussons Proprietary Limited (1993) 46 FCR 225 at 233 (“Colgate-Palmolive”). They include the commencement or continuation of proceedings in wilful disregard of known facts, the making of allegations that ought never to have been made, the undue prolongation of a case, and evidence of particular misconduct which causes loss of time to the court and other parties. The approach adopted by his Honour in Colgate-Palmolive has been accepted and applied in many cases in this Court: Danks & McCabe (2017) FLC 93-767 at [8].
In the circumstances of this case, and having regard to the considerations in s 117(2A) of the Act, it is appropriate for the wife to have an award of costs in her favour. The wife’s Amended Application in a Case that was heard on 28 May 2019 was substantially successful. Although it was ultimately by agreement, the application did force the husband to agree to provide a wide range of documents which had been the subject of previous requests, and to agree to sell the two vehicles. The wife also prevailed in relation to the sale of two of the UK properties. Also relevant is that fact that the husband had for many months resisted the production of documents requested by the wife. His attitude to his disclosure obligations was a significant reason for the bringing of the wife’s application. Insofar as the need to sell some of the UK properties is concerned, this ultimately came about because of the father’s failure to continue paying the mortgage and other costs associated with the former matrimonial home, as there were extant court orders requiring him to do. In these respects it may be accepted that ss 117(2A)(c), (d), and (e) of the Act are engaged. These matters provide an appropriate basis for an order pursuant to s 117(2) that the husband pay the wife’s costs of and incidental to her Application in a Case filed 24 April 2019.
This is not the occasion, however, for an award of indemnity costs. Although problematic, and the cause of the wife’s application, I do not consider that the husband’s attitude and his approach to the litigation rises to the level of something special or unusual which would justify the Court in departing from the ordinary rules relating to costs between party and party and making an indemnity costs order against him.
There will be orders that the husband pay the wife’s costs of and incidental to her application filed 24 April 2019 in an amount to be agreed and, in default of agreement, to be assessed; and for the wife’s Application in a Case filed 24 April 2019 and Amended Application in a Case filed 17 May 2019 to be otherwise dismissed.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McEvoy delivered on 24 July 2020.
Associate:
Date: 24 July 2020
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