HUGHES & OLIVER

[2020] FamCA 318

FAMILY COURT OF AUSTRALIA

HUGHES & OLIVER [2020] FamCA 318

FAMILY LAW – COSTS – Application for costs by the husband – Where the wife was wholly unsuccessful – Where the wife chose not to provide financial disclosure – Where the husband made two genuine offers in attempt to resolve the matter – Where there is no evidence of a response to either offer – Where there are exceptional circumstances – Costs application granted from the date of the first offer and in respect of certain court events on an indemnity basis as agreed, or assessed.

Family Law Act 1975 (Cth) s 117

Sfakianakis & Sfakianakis [2019] FamCAFC 54
Colgate-Palmolive Co & Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801

APPLICANT: Mr Hughes

RESPONDENT: Ms Oliver

FILE NUMBER: PAC 5262 of 2015

DATE DELIVERED: 4 May 2020

PLACE DELIVERED: In Chambers

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: Heard by way of written submissions of the Applicant

REPRESENTATION

COUNSEL FOR THE APPLICANT: Not Applicable

SOLICITOR FOR THE APPLICANT: Brydens Lawyers

COUNSEL FOR THE RESPONDENT: Not Applicable

SOLICITOR FOR THE RESPONDENT: Not Applicable

Orders

1. That the wife shall pay the husband’s costs of and incidental to:

   (a)The trial concluded on 24 July 2018 calculated from 28 July 2017 on an indemnity basis as agreed or assessed; and

   (b)The application conducted on 16 November 2018 and 17 December 2018 to include preparation of Application and Affidavit in Support of Natalie Dadisho solicitor, on an indemnity basis as agreed or assessed.

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 Oliver & Hughes 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 NEWCASTLE

FILE NUMBER: PAC 5262 of 2015

Mr Hughes

Applicant

And

Ms Oliver

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application for costs by the applicant husband arising from a trial with respect to adjustment of interests in matrimonial property. The trial was conducted in the Parramatta registry of this Court over two days in July 2018.

2. Orders and reasons were delivered on 14 September 2018.

3. On 12 October 2018 the Application in a Case (Costs) was filed by the husband supported by an Affidavit of his solicitor. 

4. The Application was listed for 16 November 2018 at 10.00 am in the Newcastle Registry, with the parties to attend by telephone.

5. On that day the solicitor for the husband appeared. There was no appearance by or on behalf of the wife. At 9.26 am on that day an application by the wife by email arrived at the Court asking for an adjournment on the basis of “chronic pain disability and cannot get to the doctors to get a certificate”.

6. As a result the application was adjourned to 17 December 2018.

7. On the adjourned date the solicitor for the father again attended by telephone and again there was no appearance by or on behalf of the wife.

8. R Lawyers had apparently taken instructions from the wife for the first time, after the trial, early in October 2018. It was unclear whether that firm was representing the wife.

9. The Solicitor for the husband was asked, and kindly agreed, to advise the solicitors to file a Notice of Ceasing to Act if they were no longer acting for the wife.

10. On 19 December 2018 the solicitors for the wife filed a Notice of Ceasing to Act.

11. In January 2019 the wife made contact with the Court.

12. The wife was granted leave to apply to have the matter re-listed within 28 days (by 14 February 2019) if she wished to do so. She was told by email that if she did not make that application the matter would be determined based on the submissions and evidence of the husband.

13. There was no application to re-list by the wife. No documents have been filed by the wife or on her behalf.

14. Regrettably by mid-February 2019 the momentum was lost for bringing this aspect to conclusion, and it has been over-looked.

The Orders Sought

1. The orders sought are as follows:

   1.That the wife shall pay all of the husband’s costs of and incidental to these proceedings commenced on 30 October 2015 on an indemnity basis;

   2.That the wife shall pay all of the husband’s costs of and incidental to the Application in a Case filed on 23 October 2017 on an indemnity basis;

   3.That the wife shall pay all of the husband’s costs of and incidental to this Application in a Case [12 October 2018] on an indemnity basis.

2. Proposed Order 2 relates to an Application in a Case filed by the wife on 23 October 2017. That application was dismissed by His Honour Justice Foster on 13 November 2017.[1] The opportunity to raise the matter of costs of that application has passed and I do not propose to deal with the matter any further.

   [1] Orders dated 13/11/2017, Order 19.

3. Proposed Orders 1 and 3 relate to the trial and this application.

4. The husband has applied for an indemnity costs order to cover the period from commencement of the proceedings by him on 30 October 2015 to the date of conclusion of trial on 24 July 2018 and in respect of this application.

The Law

1. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) states:

   (1) Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.

   (2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the Court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

   (2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   (a)The financial circumstances of each of the parties to the proceedings;

   (b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;

   (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g)such other matters as the court considers relevant.

2. The husband relies on three subsections, namely (c) conduct, (e) the wife being wholly unsuccessful and (f) the making of an offer by him.

(c) Conduct

1. Prior to the commencement of trial in 2018 I raised with the parties the significance of the disputed date of separation in relation to the issue of the receipt by the wife of Commonwealth benefits from 2005 onwards on the basis of being a single parent. The remarks were incorporated into the judgment.[2]

   [2]Oliver & Hughes [2018] FamCA 731, paras 24-27.

2. Ultimately I found that the parties’ marriage did not break down until 2015 and that the wife and the parties’ child had been financially supported by the husband throughout the marriage.

3. The Court referred the matter for consideration of investigation being undertaken which could lead to prosecution.

4. The wife chose to proceed and adhered to her position throughout.

5. A finding was made by this Court that the wife had been secretive and unforthcoming about her true financial position.[3]

   [3]Oliver & Hughes [2018] FamCA 731, para 136.

6. There was from the outset failure by the wife to meet her obligation to make full and frank financial disclosure to the husband. There is documentary evidence[4] of courteous professional letters sent between 6 November 2015 to 18 July 2018 to the solicitors for the wife seeking general, and on occasions, specific disclosure. The letters themselves refer to the lack of response. A Conciliation Conference failed during that time as a result of the conduct of the wife.

   [4] Affidavit of Natalie Dadisho filed 12 October 2018, Annexure M.

7. It is reasonable to conclude that the wife chose to “tough it out”, to not disclose documents or acknowledge the truth of her double source of support, private and public.

(e) Wholly unsuccessful

1. The wife was unsuccessful with her application because it was unrealistically favourable to her from the outcome.

2. The wife adhered to her assertion that the parties had lived together for five years only, until June 2004.

3. The husband asserted, and the Court accepted, that the parties separated in January 2015 having lived together for 17 years.

4. The dispute between the parties over the appropriate adjustment of interests in matrimonial property required determination but it had to be done in the context of concealment and resistance to reason by the wife.

(f) Offers

1. The wife made only one “offer”, on 12 October 2015.[5] The relevant letter from the wife’s then solicitors presented the terms of an agreement which the parties were purported to have made. The terms would have delivered all but a nominal amount (less than 5 per cent of the asset pool) to the wife. If such an agreement was discussed it certainly did not proceed.

   [5] Affidavit of Natalie Dadisho filed 12 October 2018, Annexure H.

2. Two weeks later the wife filed her Initiating Application in much the same terms.

3. On 28 July 2017 the husband made an offer[6] which was reasonable in its terms and less advantageous to him than the orders ultimately made by this Court on 14 September 2018.

   [6] Affidavit of Natalie Dadisho filed 12 October 2018, Annexure I.

4. There was no response by the wife to this offer. Given her stance maintained at trial, that she was entitled to most, if not quite all, of the matrimonial assets, the wife probably disregarded the offer without much analysis of the possibility that she might not be successful with her own application. Costs could potentially have been saved. Both parties would have benefited from acceptance of the offer.

5. On 23 July 2018, the first day of trial the husband made a handwritten offer via solicitors which is not entirely clear but appears to be a modest variation on the first offer in 2017; still less than what was ultimately ordered. There is no evidence of a response.

6. The making of a genuine offer in a genuine attempt to resolve the matters in dispute should be taken into account and I do so here.

Conclusion

1. The law is clear that for a Court to order indemnity costs there must be exceptional circumstances for that to happen.[7]

   [7]Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801

2. I consider that in this matter there have been exceptional circumstances. The wife sought to retain almost all the assets and did not respond to two reasonable offers. She was found to have lied about the date of separation probably in order to retain the benefits of misrepresenting her status to Centrelink.

3. The wife did not make full disclosure and was dismissive of efforts to cause her to do so.

4. The conduct of the wife in this litigation was reckless and led to the necessity for a trial when the dispute, if approached openly, could have been readily resolved.

5. The solicitor for the husband disclosed the Fee Agreement[8] she was obliged to do.

   [8] Affidavit of Natalie Dadisho filed 12 October 2018, Annexure A.

6. For the reasons set above an order is made for the wife to pay costs on an indemnity basis for the trial, commencing from the date of the July 2017 offer.

The Application in a Case

1. There is a possibility that the wife has been prosecuted such that her financial position has now changed adversely.

2. The Court can only determine disputes based on the evidence put before it.

3. In respect of this Application in a Case the wife was twice given further time to participate and file documents. She chose not to.

4. On that basis an order is made for the wife to pay costs on an indemnity basis for the costs application.

5. Orders are made accordingly.

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 4 May 2020.

Associate: 

Date:  4 May 2020