Holbert & Holbert (No 2)
[2025] FedCFamC1F 77
•12 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Holbert & Holbert (No 2) [2025] FedCFamC1F 77
File number(s): MLC 2024 of 2018 Judgment of: BAUMANN J Date of judgment: 12 February 2025 Catchwords: FAMILY LAW – COSTS – Where the wife sought that the husband pay costs incurred in the property proceedings on an indemnity basis – Costs Order made in a fixed sum Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Holbert & Holbert [2020] FamCA 567
Holbert & Holbert [2024] FedCFamC1F 85
Holbert & Holbert (No 2) [2024] FedCFamC1A 159
Kohan& Kohan (1993) FLC 92-340
Yunghanns & Yunghanns (2000) FLC 93-029
Division: Division 1 First Instance Number of paragraphs: 33 Date of last submission/s: 29 November 2024 Date of hearing: On the papers in chambers Place: Brisbane Solicitor for the Applicant: Mills Oakley Lawyers Solicitor for the Respondent: Litigant in person ORDERS
MLC 2024 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS HOLBERT
Applicant
AND: MR HOLBERT
Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
12 FEBRUARY 2025
THE COURT ORDERS ON A FINAL BASIS:
1.That husband shall pay to the wife a contribution to her costs of:
(a)the proceedings resulting in the Orders of McEvoy J on 24 July 2020, fixed in the sum of $30,000; and
(b)the Application in a Proceeding for costs filed 20 March 2024, fixed in the sum of $3,000,
with such costs payable within sixty (60) days.
2.That if the wife wishes to seek a further order for costs for the husband’s failure to complete full and timely disclosure prior to the commencement of the final hearing (and in the absence of any agreement being reached between the parties), the wife must, by 31 March 2025, file and serve an affidavit setting out:
(a)the applications that she pursues for further orders for discovery that resulted in such orders being made (other than for the Order made 24 July 2020); and
(b)an estimate on a party and party basis of the costs incurred for and incidental to each such applications.
3.That the husband shall respond by affidavit filed and served by no later than 30 April 2025 to any additional cost claims made by the wife pursuant to Order 2 hereof.
4.That the Court will consider both the wife’s initial claim for costs and her quantification, in chambers with a view to fixing the limit of costs, if any.
5.That if the wife fails to file her affidavit under Order 2 hereof, then the wife’s Application in a Proceeding for costs filed 20 March 2024 will otherwise be dismissed in respect of any potential claims of additional costs.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Holbert & Holbert has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
On 21 February 2024, the Court delivered Reasons and published final property orders in respect of proceedings between the Applicant wife Ms Holbert (“the Applicant”) and the Respondent husband (“the Respondent”) (see Holbert & Holbert [2024] FedCFamC1F 85 (“the trial Reasons”).
Subsequently, on 18 April 2024 the Applicant filed an Application for costs seeking orders in the following terms:
1.That the Respondent Husband pay the costs incurred by the Applicant Wife in the property proceedings on an indemnity basis, such costs to be assessed by the Court in default of agreement as to their quantum.
2.That in the alternative to Order 1 herein, the Respondent Husband pay the costs incurred by the Applicant Wife in the property proceedings on an party-party basis, such costs to be assessed by the Court in default of agreement as to their quantum.
3.That the Court provide such orders and directions with respect to this Application (including with respect to the filing of written submissions) as the Court deems fit.
4.That the costs orders to be paid by the Respondent Husband pursuant to Order 1 of the orders made by the Honourable Justice McEvoy on 24 July 2020 be fixed in the sum of $31,200, and such sum be paid by the Respondent Husband to the Applicant Wife via the Applicant Wife’s legal representatives Mills Oakley within 14 days of this order.
5.That the Respondent Husband pay the costs incurred by the Applicant Wife of and incidental to this Application in a Proceeding.
6.That such further or other orders as this Honourable Court deems appropriate.
(As per the original)
The application was supported by the Applicant’s affidavit sworn 20 March 2024.
The final Orders were the subject of an appeal by the husband which was dismissed by the Full Court (Tree, Williams and Altobelli JJ) on 17 September 2024 (see Holbert & Holbert (No 2) [2024] FedCFamC1A 159).
As a result of the wife’s costs application remaining in abeyance pending the determination of the appeal, on 27 September 2024 directions were made in chambers for the filing of costs submissions. The wife filed written submissions on 18 October 2024 in accordance with those directions. The husband, who may now be unrepresented, and the Court understands resides permanently in Country C, filed his written submissions in response on 15 November 2024 and the wife filed her reply submissions on 29 November 2024.
Those submissions have been considered as the Reasons which follow reflect – without feeling compelled in dealing with every particular contention and submission raised.
PRINCIPLES
The general rule (s 117(1) of the Family Law Act 1975 (Cth) (“the Act”) is that each party bears their own costs in respect of family law proceedings, however if the Court finds that circumstances justify an order for costs to be made, in the exercise of a wide discretion, the Court may make such orders as to costs as it deems just. In making such a decision, the Court is to consider the factors prescribed by s 117(2A) of the Act.
HUSBAND’S ATTEMPTS TO ATTACK FINDINGS IN FINAL JUDGMENT
Whilst the Court is mindful that, although an intelligent and articulate businessman, the husband is not legally qualified and as a result may not understand the context for determining a costs application, this does not justify the Court embarking on a re-examination of findings made and published in its Reasons for Judgment.
Either party had an absolute right to appeal the Orders made – and the husband did so. I do not regard it as necessary or helpful to consider the grounds for appeal articulated or otherwise pursued. In circumstances where no application to the High Court of Australia was made, the effect of the Order by the Full Court to dismiss the husband’s appeal means effectively that the Court is entitled to accept that the Reasons for Judgment delivered on 21 February 2024 were not infected by error.
Accordingly, I give no weight at all to a number of irrelevant claims or assertions made by the husband in parts of his submissions, in particular:
(a)as referred to in his affidavit filed 15 November 2024:
(i)at paragraph 4, he deposes to selling 1 N Street, and on sale in January 2024 he received no funds – causing £245,810.28 to be paid to P Limited under a purported charge. This transaction occurred after the trial but before Judgment from the final hearing was delivered, and the husband made no application to re-open. The trial Reasons refer to inconsistencies around alleged liabilities (see paragraph 59(k));
(ii)at paragraph 6, the husband deposes to a demand for £616,320.80 against O2 Limited – before the hearing completed on 9 May 2023. Even if a bank did force the sale of RR Street, City G (with a reduction in share value), such event was not raised during the trial as far as I can recall;
(iii)similarly, the alleged events referred to at paragraph 7 could have been raised before the trial ended – where it is said to have occurred on 11 December 2023;
(iv)I do not comment on the husband’s attack on a finding referred to at paragraph 8;
(v)at paragraph 13, the husband says that he has a capital gains tax liability in the United Kingdom of £134,835.04 as a result of the sale of the Suburb K property. The wife (in her reply submissions at paragraph 3.1) questions both the authenticity and accuracy of document “[MSH]16”. If the husband has a capital gains tax liability now, its only relevance is in relation to the assessment of the parties’ comparable financial circumstances, for this costs judgment.
(b)as referred to in his written submissions:
(i)the dispute about the existence or otherwise of various alleged Directors loans is dealt with in the trial Reasons for Judgment. The husband did assert various liabilities should be taken into account – the wife claims (at paragraph 6.16 of her submissions) amounting to “a grand total of $2,485,676”. The husband did not satisfy his onus of proof – and I accept that was not assisted by his inability to call his expert Mr BB as well as his mother, Ms U. I do not agree that this issue occupied “substantial Court time”. It is difficult to delineate how much time and effort was exerted on this factual issue – however, the failure of the husband to satisfy the Court of the alleged loans benefited the wife, as the pool of interests was not further reduced;
(ii)similarly, the husband was unable to satisfy the Court about the alleged loan to his mother. The husband was bound by the manner in which he conducted his case – but again, in a sense, the wife benefited from the husband’s inability to establish a debt he claimed he owed;
(iii)at paragraph 6.15 of his submissions, the husband says his lawyer “failed to lodge the mortgage statement that the husband provided to her with the Court”. I repeat the earlier observations of the husband being bound by the way he ran his case – but accept if a debt had been established, the likely effect was a reduction in the value of the pool; and
(iv)the Court found a pool of interests to be nett $7,441,088 (including superannuation) and it is correct to observe that the pool so identified was more than the husband asserted, but also significantly less than the pool the wife asserted in final submissions of $11,649,976. Frankly, the perspectives of the parties about the “pool of interests”, as the trial Reasons demonstrate, required a most comprehensive analysis by me. Neither the husband nor the wife could assert they were close to the Court’s ultimate finding of the value of the pool of interests. The difference however reveals why these parties ultimately required the Court’s determination and could not resolve the proceedings.
SECTION 117(2A) CONSIDERATIONS
Financial circumstances of the parties
The terms of the final Orders provided for a division of the pool of interests as to:
(a)45% to the wife – $3,348,489; and
(b)55% to the husband – $4,092,599.
Although, as explained at [73] of the trial Reasons, a small potential adjustment payable by the wife to the husband of $52,509 was not ordered, I do not accept as a result, that the wife’s financial circumstances are “significantly better than those of the husband”, as the husband submits. I accept that his submission is shaped by what he says are debts he has had to pay, increased post-trial credit card liabilities paid by him for a medical event in Country QQ, but they do not persuade me that the husband is bordering on impecuniosity as he would seek that I accept.
Legal Aid
Neither party was in receipt of legal aid.
Conduct of the parties
The husband concedes that the Judgment delivered by Justice McEvoy on 25 July 2020 (see Holbert & Holbert [2020] FamCA 567) and the order for costs made against him, establishes a liability, although the husband challenges the quantum claimed by the wife of $31,200.
I have dealt with the wife’s submissions that the conduct of the trial before me should justify an order for costs in itself. The initial hearing was conducted over four days, with the wife represented by senior Counsel Mr Geddes KC and the husband represented by Ms Colla of Counsel – both ably instructed by experienced solicitors.
Frankly, whilst some expert evidence was late being published, which of itself required some agility from the lawyers (noting a meeting of experts on 4 August 2022 and an “updated” report from Dr Z dated 15 September 2022 – during the hearing), I did not form the view that any conduct during the trial would justify an order for costs. The trial was efficiently conducted with both trial Counsel doing their best for their clients and no doubt conscious of the costs being incurred. It is not unusual for “calls” to be made for documents, most of which were answered anyway by the husband.
The submissions of the wife from paragraph 5.1 to 5.3 are the basis for the wife’s general submissions that “throughout the proceedings the [h]usband consistently and flagrantly failed to comply with his obligation to make a full and frank disclosure as required by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) … made throughout the proceedings compelling the [h]usband to make specific and general disclosure”.
In that regard, apart from the order made by McEvoy J earlier referred to in the written submissions, the wife points to:
(a)an Order by Johns J on 13 November 2018 for specific disclosure by the husband;
(b)an Order by McEvoy J on 28 May 2019 in similar terms to the Order made on 13 November 2018;
(c)an Order by McEvoy J on 22 November 2019 for further, similar, specific disclosure.
(d)the Order of 24 July 2020 by McEvoy J where in the Reasons for Judgment for the costs Order made his Honour, inter alia, observed at [14]:
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.
This clearly refers to the husband’s conduct and the earlier Orders made.
(e)on 11 March 2022, at a subpoena objection hearing before Judicial Registrar McGee, further orders were made by consent requiring production of documents by 15 March 2022. The discovery ordered was extensive on the face of the Order; and
(f)by 9 September 2022, the wife was still agitating for more discovery as her Response filed indicated. These cross applications (by the husband and the wife) were consumed by the trial commencing as it did before me, on 12 September 2022.
I am satisfied this history establishes, as I found at [67(h)] of the trial Reasons, that the husband had failed to make disclosure “in a full and timely manner”, but rejected the wife’s submissions for an adjustment of as much as 10% (or $700,000) in her favour for non-disclosure. I did allude to the possibility that his failure to disclose in a timely manner might be better considered in a costs application.
As a matter to which I will soon return, the difficulty in assessing costs arises from all the different judicial and other events (collectively described at [1(f)] of the trial Reasons).
The wife, for example, does not submit that costs should flow from many of the 17 judicial Court events; the two adjourned trials or the unsuccessful judicial mediation that all took place in these proceedings.
WHETHER PROCEEDINGS WERE NECESSITATED BY THE FAILURE OF A PARTY TO COMPLY
Certainly, the Reasons for Judgment of McEvoy J arose from a failure by the husband – as he concedes. It seems however that the wife’s consistent demands for discovery often resulted in “consent orders” and rarely did she get an order for costs.
It might be observed, of course, that such orders are not unusual and often – with a solution focus – parties do not ask a judicial officer to order costs against a party for an application which the party may only have filed because of a failure to disclose. It is not possible, or efficient, for me to try and unravel every event that has taken place by comparing the order made (for example) with the material upon which the judicial officer was asked to consider the relief sought in those applications.
WHETHER A PARTY TO THE PROCEEDINGS HAS BEEN WHOLLY UNSUCCESSFUL
Neither party could sustain an argument that the other party was wholly unsuccessful in the proceedings, as a whole, but as I have already identified, it may be that for certain judicial events (not including those before McEvoy J), that a party may assert the other party was wholly unsuccessful. Consent orders, to a degree, camouflage the merits of the application.
OFFERS OF SETTLEMENT
Although the husband asserts he made a reasonable offer on 25 October 2019, at paragraph 9 of the wife’s reply submissions, it is contended the offer does not trigger consideration, and I agree for the reasons given at paragraph 9.
CONSIDERATION
Based on the findings made above, I have reached a conclusion that some of the husband’s behaviour in failing to make disclosure and comply with specific Orders, does justify an order for costs in addition to the costs order made by McEvoy J.
I, however, would only consider costs for the applications made for discovery that result in orders then being made. I accept this as but a small part of the overall costs incurred by the wife. I do not find circumstances justified an order for costs for, preparing for the final hearing before me; the trial conducted before me and the events thereafter.
QUANTIFICATION
I am not satisfied that, applying the well known principles arising from Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 adopted in this jurisdiction by decisions such as Kohan& Kohan (1993) FLC 92-340; Yunghanns & Yunghanns (2000) FLC 93-029, that costs should be awarded on an indemnity basis.
WHAT HAPPENS NEXT?
In my view, the last thing these parties would want to endure, is to incur further costs of having taxation or other assessment occur.
The obvious preference would be to have costs paid on a fixed sum as agreed or as set by the Court, as the Rules permit.
The difficulty I have in fixing costs for the earlier discovery applications before McEvoy J and the earlier discovery applications, referred to in the submissions, is that I have no basis on which to assess the costs.
Doing the best I can, the orders at the commencement of these Reasons are made to seek to bring the costs application to finality.
I will order the husband pay a contribution to the costs of the wife fixed in the sum of $30,000 for the proceedings before McEvoy J, based on the solicitors own client estimate of $46,806.42 (detailed in the annexure to the wife’s submissions). I would also fix costs payable to the wife by the husband of this costs application at a figure of $3,000.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 12 February 2025
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