Holland & Holland (No 2)
[2024] FedCFamC2F 1537
•6 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Holland & Holland (No 2) [2024] FedCFamC2F 1537
File number: SYC 3983 of 2024 Judgment of: JUDGE BLAKE Date of judgment: 6 November 2024 Catchwords: FAMILY LAW – Application to review decision of Senior Judicial Registrar (‘SJR’) – application dismissed – application for costs made and dismissed. Legislation: Family Law Act 1975 (Cth) ss 72, 117, 117(1), 117(2), 117(2A).
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) Sch 1.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Pt 14.3.
Cases cited: Prantage & Prantage (Costs) [2014] FamCA 850 Division: Division 2 Family Law Number of paragraphs: 18 Date of last submissions: 23 October 2024 Date of hearing: On the papers Place: Melbourne Solicitor for the Applicant: Cheryl Orr Family Law Solicitor for the Respondent: Nolan Lawyers ORDERS
SYC 3983 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR HOLLAND
Applicant
AND: MS HOLLAND
Respondent
ORDER MADE BY:
JUDGE BLAKE
DATE OF ORDER:
6 NOVEMBER 2024
THE COURT ORDERS THAT:
1.The husband’s application for costs arising from the wife’s Application for Review dated 24 September 2024 be 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).
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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BLAKE:
On 18 October 2024, I made orders dismissing an application by the wife to review orders made by a Senior Judicial Registrar (‘SJR’) of this Court. The husband now seeks a costs order against the wife for costs incurred in respect of the hearing before the SJR (‘Registrar Hearing’), and also his costs incurred from the application to review the orders of the SJR before me (‘Review Hearing’). He seeks those costs according to the scale of costs as set out in schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth). The application is opposed by the wife.
RELEVANT LAW
Applications for review of orders of Registrars fall to be determined in accordance with Part 14.3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). The Court is required to hear an application for review as an original hearing.
Costs applications are determined having regard to section 117 of the Family Law Act 1975 (Cth) (‘Act’). The principal position under subsection 117(1) of the Act is that each party is to bear their own costs. That rule, however, is subject to subsection 117(2) of the Act. In essence, subsection 117(2) permits the Court to make an order for costs if there are circumstances that justify it doing so, having regard to the subsections that follow, including subsection 117(2A) of the Act. Subsection 117(2A) of the Act sets out matters the Court shall have regard to in considering whether a costs order should be made under subsection (2). It is well settled that no one factor has priority under subsection 117(2A), nor must more than one factor be satisfied and that any one factor may be sufficient: Prantage & Prantage (Costs) [2014] FamCA 850 at [12]. Where cost orders are made, such costs are paid on a party/party basis, or more accurately in the case of this Court, according to the scale of costs.
CONTEXT
Before turning to the individual factors that I am required to consider under subsection 117(2A), it is necessary to set out some of the background:
(a)at the Registrar Hearing, the SJR was required to deal with a number of issues. One was the wife’s application for spousal maintenance of $850 per week. Clearly, the wife advanced that application at that time on the basis that she was in need of funds, and unable to support herself adequately. The SJR dismissed that application. The SJR was not satisfied the wife had met the threshold for maintenance set out in section 72 of the Act, and further, was not satisfied that the husband had capacity to meet the maintenance payment;
(b)the other matter before the SJR was an application by the husband that the property known as ‘Property B’ be sold and that the husband and the wife each receive $200,000 by way of partial property settlement. The SJR made orders in terms largely sought by the husband;
(c)in her application before the SJR, the wife had sought an order for ‘costs’ in her Application in a Proceeding dated 22 July 2024. The husband had not sought costs in his Response to the Application in a Proceeding dated 19 August 2024. The SJR did not make any order for costs on 13 September 2024. Indeed, it is not apparent from the reasons of the SJR that the issue of costs was even argued before her. Unsurprisingly then, in all of the circumstances, the wife’s application to review the orders of the SJR did not seek any review of any costs order. The husband in his Response to the Application for Review dated 11 October 2024 did, however, seek an order that the wife pay his costs of and incidental to the Review Hearing; and
(d)in her application to review the orders of the SJR, the wife sought to review, inter alia, the orders to sell Property B, but did not seek to review the order dismissing her application for spousal maintenance. In advancing her case before me, the wife effectively contended that (contrary to the case she ran before the SJR) she could meet her outgoings, largely because of a commercial contract she was negotiating, and also with the assistance of her parents. I ultimately was not satisfied that the wife had capacity to meet her outgoings, even accounting for the additional evidence that she led.
THE APPLICATION FOR COSTS OF REGISTRAR HEARING
I decline to entertain any application for costs of the Registrar Hearing. The husband’s Response to the wife’s Application in a Proceeding did not seek costs of the hearing before the SJR. It is not apparent from the face of the reasons of the SJR that any oral application was made by the husband for costs at that time. Further, his Response to the wife’s Application to Review the reasons of the SJR only sought costs of and incidental to the Application for Review. In the circumstances, the issue of whether the husband should receive his costs was never an issue before the SJR and was never an issue before me. The issue has only become a live one with the filing of the husband’s submission on costs before me. In my view, in the circumstances of this case, the appropriate time and forum to hear any application for costs of the Registrar Hearing was and is before the SJR.
THE APPLICATION FOR COSTS OF REVIEW HEARING
The parties filed written submissions on costs. Each submission sought to engage with the factors set out in section 117(2A) of the Act that are relevant to the present matter. I deal with the relevant matters below.
The financial circumstances of each of the parties
The extent and value of the parties property, liabilities and other resources are all matters of dispute at this time. Indeed, during the conduct of the Review Hearing, I was presented with two competing balance sheets. The husband’s estimate of total net assets in the document he presented to me was approximately $2.3 million. The wife’s estimate of net assets was just over $1 million. That is a significant discrepancy. The true overall financial position of these parties is not clear.
The husband nevertheless contends that the wife is in a position to meet any costs order imposed by the Court. In making that submission, he points to the fact that the wife has the support of her parents. He also asserts that the wife has funds available to meet the costs order in her C Bank account of approximately $31,000.
The wife does not have $31,000 in her C Bank account. She has tendered evidence that shows the amount in that account is now approximately $15,000.
There is a further, obvious difficulty with the husband’s submission. I dismissed the Application for Review because I was satisfied that the wife did not have the capacity to meet her outgoings, whether that be from her parents, the commercial contracts she was negotiating, or otherwise. Put another way, I did not accept the wife’s submissions and evidence that she could meet her outgoings, and I accepted the husband’s submissions and evidence that the wife could not meet her outgoings. Indeed, I referred to the extent of the weekly shortfall the wife faced in the reasons I gave at the time as being $4,320 per week. The husband now puts before me, and asks me to accept, a fundamentally different view of the evidence to that which I took at the Review Hearing. I decline to do so.
On any view of the evidence, the wife is struggling to make ends meet. The submissions of the husband not only ignore the obvious conclusions I reached about the wife’s financial position, but also ignore the significant ongoing costs associated with Property B that the wife will need to bear pending the sale of Property B (see orders 2(e), 2(f) and 3(b) of the Orders of 13 September 2024). While the husband too, appears to be struggling financially, his submission that his needs are somehow greater than the wife’s, and that she has the financial strength and capacity to pay him, cannot be accepted.
It is relevant to note that each of the parties filed Costs Notices prior to the Review Hearing. Up to and including the Review Hearing, the husband has apparently incurred costs of approximately $106,000. These fees are said to have been met from his income and from loans from family and his new partner. Up to and including the Review Hearing, the wife has apparently incurred costs of approximately $99,000. These fees are said to have been met from her bank account and funds loaned from her parents. It is apparent that neither of these parties have the capacity to meet their legal expenses from their respective incomes.
When all of these matters are considered, neither party finds themselves in a stronger or better financial position than the other party. I reject any submission that one party’s financial position is greater or stronger than the other. The financial circumstances of the wife do not, in my view, warrant or support the making of a costs order in favour of the husband.
The conduct of the parties
The husband submits that what the wife has done is have a ‘dry run’ of her case at the Registrar Hearing, and then substantially amended her case in the Review Hearing before me. He is also critical of the change in the wife’s position from one where she asserted she was in need of money to meet her expenses (in the Registrar Hearing) to one where she contended she was able to meet her expenses (in the Review Hearing). These submissions carry some weight. I certainly expressed the view that the wife appeared to have had a practice run before the SJR. Moreover, the apparent turnaround in the wife’s financial position from the hearing before the SJR to the hearing before me is, to say the least, extraordinary.
The manner in which the husband has conducted the litigation, however, is also not free from criticism. He came before me seeking orders that Property B be sold. Yet, only a day before the Review Hearing, he had filed a Further Amended Initiating Application. In that document, he sought final orders that included he receive a payment from the wife and that only in the event she failed to make the payment, would Property B be sold. In other words, in his Further Amended Initiating Application, he appeared content to pursue a course of conduct that gave the wife the opportunity to retain Property B. His change in position (which occurred over one day) from the filing of the Further Amended Initiating Application to the Review Hearing before me was never adequately explained. Given the position the husband took in his Further Amended Initiating Application, the wife was well within her rights to seek to review the orders of the SJR and seek orders that she retain Property B.
In my view, both of these parties have not conducted themselves with the requisite degree of frankness. They have not sought to clarify the real issues in dispute. They have not sought to conduct the litigation efficiently. Each has, on the face of it, misled the other as to their respective positions. If one could order a costs payment from both of the parties to a charity, I would not hesitate to do so. In the absence of that avenue being available, I am of the view that the conduct of both parties is such that it does not warrant a costs order being made one way or the other. In terms of the husband’s application for costs, the wife’s conduct (in all the circumstances of this case) does not warrant or support a costs order being made against her in favour of the husband, given the husband’s own conduct.
Whether a party has been wholly unsuccessful in the proceedings
The wife was wholly unsuccessful in the Review Hearing before me, notwithstanding that the husband consented to a change in order 2(m)(i) of the orders made by the SJR. That lack of success, however, needs to be weighed against the fact that the day before the Review Hearing, the husband filed his Further Amended Initiating Application which, on its face, appeared to afford the wife the opportunity to retain Property B.
Disposition
I decline to make any costs order in favour of the husband. This is a case where each party should bear their own costs. The wife may have been wholly unsuccessful in the proceedings before me, but I do not regard that factor of itself, in all the circumstances I have mentioned, as justifying a costs order at this stage. The financial circumstances of both of these parties, and their conduct in the lead up to the Review Hearing before me mean that each has contributed to the situation which has arisen. As a result, each party should bear their own costs.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Blake. Associate:
Dated: 6 November 2024
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