Hunt and Atkins - [2015] FamCA 1152

FAMILY COURT OF AUSTRALIA

HUNT & ATKINS

[2015] FamCA 1152

FAMILY LAW – COSTS – Where the Court dismissed the wife’s application to vary a final spousal maintenance order pursuant to section 83 of the Act – Where the Court further dismissed the wife’s oral application for leave to amend the application so that the order was sought pursuant to section 74 of the Act – Where those orders have now been appealed to the Full Court – Orders made for the wife to pay the costs of the husband – Orders in respect to costs stayed pending determination of the appeal.

Family Law Act 1975 (Cth) s 117

Family Law Rules 2004 (Cth) r 1.04

APPLICANT:

Mr Hunt

RESPONDENT:

Ms Atkins

FILE NUMBER:

SYC

425

2012

DATE DELIVERED:

20 November 2015

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

McClelland J

HEARING DATE:

20 November 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Lethbridge SC

SOLICITOR FOR THE APPLICANT:

Sexton Family Law

COUNSEL FOR THE RESPONDENT:

Mr Othen

SOLICITOR FOR THE RESPONDENT:

Paltos Milevski Family Lawyers

Orders

The wife is to pay the costs incurred by the husband in respect to the wife’s Application in a Case filed on 14 July 2015, the wife’s oral application made on 21 August 2015 together with the proceedings heard on 21 August 2015 and the costs arising from those proceedings on a party / party basis to be agreed or assessed.

Order 1 be stayed pending such time as the Appeal filed by the wife on 17 September 2015 in respect to the orders made on 21 August 2015 is heard and determined.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hunt & Atkins has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 425 of 2012

Mr Hunt

Applicant

And

Ms Atkins

Respondent

EX TEMPORE REASONS FOR JUDGMENT

This application concerns an application for costs arising from orders that I made on 21 August 2015 dismissing the wife’s Initiating Application filed 14 July 2015 to vary an order for spousal maintenance and the wife’s oral application for leave to amend the Initiating Application to an application for orders pursuant to section 74 of the Family Law Act 1975 (Cth) (“the Act”).
The wife’s Initiating Application filed 14 July 2015 sought orders pursuant to section 83 of the Act to vary Order 6 made by Aldridge J on 4 December 2014. That order related to spousal maintenance and relevantly provided that “upon completion of the sale of [the relevant property]… all existing orders in relation to that property, and for spousal maintenance, are discharged”.
It was acknowledged that the date of completion of the sale referred to in the order by Aldridge J was 17 July 2015. It was common ground that section 83(1) empowers the Court to vary an order concerning spousal maintenance:
If there is in force an order… with respect to the maintenance of a party to the marriage…
My ex tempore reasons for judgment delivered on 21 August 2015[1] set out the basis upon which I dismissed the wife’s application. By way of summary, as the spousal maintenance order made by Aldridge J had been discharged as a result of the completion of the sale of the relevant property on 17 July 2015, there was therefore, at the time of the hearing on 21 August 2015, no order in force with respect to the maintenance of a party to the marriage. Hence, as at that date, the Court was without jurisdiction to make the orders sought by the wife pursuant to section 83 of the Act.
[1] Atkins & Hunt (No. 2) [2015] FamCA 707.
The further order that was made on 21 August 2015 was to dismiss the wife’s oral application to amend the Initiating Application filed 14 July 2015 to include a claim for spousal maintenance pursuant to section 74 of the Act. Again, by way of summary, that application was dismissed on the basis that granting the application to amend would effectively circumvent section 44(3) of the Act. Section 44(3) requires an application for spousal maintenance to be brought within 12 months of the divorce order taking effect, unless the leave of the Court is granted.
It was common ground that the divorce order took effect at a point earlier than 12 months prior to 21 August 2015. In dismissing the oral application to amend the Initiating Application, I noted that the wife’s appeal against the orders of Aldridge J made on 4 December 2014 included an application for Order 6 relating to spousal maintenance:
To be remitted for hearing by a single judge of the Family Court of Australia other than Aldridge J.
I also noted that senior counsel for the husband objected to the Court considering the oral application to amend the Initiating Application, on the basis that the wife had not particularised the basis upon which leave should be granted pursuant to section 44(3) of the Act to permit an application for spousal maintenance to be made out of time.
In light of the orders dismissing the wife’s application pursuant to section 83 of the Act and also her oral application to amend the Initiating Application to include a claim pursuant to section 74 of the Act, the husband sought an order for costs.
Counsel for the wife requested the opportunity to respond to that application by way of written submissions, and a timetable was set for that to occur. By Application in a Case filed 4 September 2015, the husband sought orders to the following effect:
1. That the wife pay the husband’s costs of and incidental to the Application filed 14 July 2015, such in the sum of $16,000, or otherwise as agreed or taxed.
2. That the wife pay the husband’s costs of and relating to this Application for Costs, such costs as agreed or taxed.
By way of written submissions in reply filed 18 September 2015, the wife opposed the Court making an order for costs against her. Also, on 18 September 2015, the wife filed a Response to an Application in a Case that included three alternative orders:
1. That the husband’s Application in a Case filed 4 September be dismissed;
2. That costs be reserved pending the determination of the appeal filed by the wife on 17 September 2015 in respect of the orders made on 21 August 2015; or
3. That the payment of any order for costs be stayed pending determination of the appeal filed by the wife on 17 September 2015.
In support of his application for costs, on 4 September 2015, the husband filed:
·Firstly, an affidavit of Mr VV, registered valuer, providing an updated valuation of the property located of the Town C property; and
·Secondly, an affidavit of Ms WW, solicitor/director of Sexton Family Law.
Ms WW’s affidavit provided details of documentation produced under subpoena by Westpac Banking Corporation as well as a schedule of costs incurred by the husband in respect to the wife’s application filed 14 July 2015 and this current application for costs.
In respect to the arguments presented by the parties, in seeking an order for costs the husband submitted:
·First, there need not be special circumstances to justify an order for costs, and reference was made to Penfold[2] in that respect;
·Second, the Court need only find that there are circumstances justifying an order for costs having regard to the provisions of section 117(2A) of the Act; and
·Third, in terms of section 117(2A), the husband submitted that, while the husband has substantially greater assets, income and resources than the wife, nonetheless the wife has sufficient capacity to meet a costs order.
[2] Penfold & Penfold (1980) FLC 90-800.
In terms of the third point, the husband sought to rely on an updated valuation undertaken by Mr VV, in respect to the Town C property. The husband also sought to rely on documentation produced under subpoena by Westpac with a view to arguing that, as a result of the wife providing a guarantee in respect to debts totalling $140 000, which guarantee was secured against a property sold pursuant to the orders of Aldridge J, the wife had effectively received $140 000 more than was intended by the trial judge.
It was further argued that the documentation produced by Westpac established that the wife had the capacity to discharge her credit card shortly after the orders of Aldridge J were made. In summary, it was argued that the disparity between the parties’ financial resources should not be an impediment to the Court ordering costs in this matter.
In terms of section 117(2A)(c), which requires the Court to consider the conduct of the parties, the husband repeated the submissions made in respect to the wife providing the guarantee referred to. However, in oral submissions today, senior counsel did not rely heavily on that point.
In terms of section 117(2A)(e), the husband argued that the wife was wholly unsuccessful in respect to both the application to vary Order 6 of the orders of Aldridge J pursuant to section 83 of the Act, and the oral application to amend the Initiating Application filed 14 July 2015 to seek orders pursuant to section 74 of the Act.
In terms of section 117(2A)(f), the husband argued that, by letter dated 28 July 2015, the solicitors for the husband invited the wife to withdraw her application with no order as to costs.
In reply, the wife objected to the Court reading the affidavit of Mr VV on the basis that he had been a single expert appointed by the parties in the proceedings before Aldridge J and he had not been appointed as a single expert in respect to the application filed 14 July 2015, or in respect to the costs application. Counsel for the wife argued that, in the absence of leave being granted to the husband to engage Mr VV as his own expert, the report of Mr VV should not be relied upon.
In addressing section 117(2A) (a), the wife referred to the significant disparity between the parties’ financial resources.
It was also submitted that issues of conduct raised in the affidavit of Ms WW filed 4 September 2015 have been raised in error. By way of summary, the wife submitted that the personal guarantee referred to in the affidavit of Ms WW was secured against the relevant properties prior to separation and the new documentation produced by Westpac simply reflected a change in business name.
In respect to the assertion that the wife had the capacity to pay a credit card debt immediately after the trial, it was submitted that the documentation simply revealed that Westpac had sold the client’s indebtedness to Lion Finance, and the wife remained liable for paying the amount due.
Further, it was argued that, even if the misconduct alleged by the husband was substantiated, it could have no relevance to the consideration of this costs application because it arose in respect to the earlier proceedings and not the present proceedings.
More generally, the wife argued that an order for costs should not be made at this time, because an appeal is pending and the appeal raises a seriously arguable question of law regarding statutory interpretation. That issue is whether an application filed pursuant to section 83 to vary an order for spousal maintenance, which was in force at the time of filing, has the effect of preserving jurisdiction and/or the Court’s power to make an order pursuant to section 83; even though, subsequent to filing and prior to hearing, the spousal maintenance order had been discharged.
In respect to the dismissal of the wife’s oral application to amend her Initiating Application counsel for the wife argued that, as an alternative to dismissing the application as a result of the husband raising natural justice concerns, the Court should have instead adjourned the application.
In considering the respective arguments for costs, I note that the wife was, in my view, wholly unsuccessful in the proceedings on 21 August 2015.
I am of the view that, as a result of the construction of section 83 that I have taken, both the application under section 83 and the oral application to amend the application, were misconceived for the following reasons:
·First, in circumstances where the wife knew that the spousal maintenance order made by Aldridge J on 4 December 2014 would be discharged on 17 July 2015, it was apparent that subsequent to that time, the Court would have no power to make an order pursuant to section 83; and
·Second, in respect to the oral application to amend the application made on 21 August 2015, section 44(3) sets out an orderly and proper process for a party to seek leave to apply for spousal maintenance after the expiration of a 12 month period from the date of divorce, and that process was not followed.
As a result of the process for an application for leave not being followed by the wife, in respect to the oral application made on 21 August 2015, the respondent husband in my view raised a legitimate natural justice objection to the Court dealing with the matter on that day and, further, made an entirely proper request for the wife to regularise the application in a formal application pursuant to section 44(3) of the Act if she wished to proceed with an application for spousal maintenance under section 74 of the Act.
In arriving at the conclusion to award costs in favour of the husband, I have also had regard to rule 1.04, which provides that the main purpose of the Family Law Rules 2004 (Cth) is to ensure that each case is resolved in a just and timely manner and at a cost to the parties and to the Court that is reasonable in the circumstances of the case.
In that context, the oral submission made by senior counsel for the husband, opposing an adjournment of the costs application, has merit. That argument was that an adjournment would be likely to raise additional costs subsequent to the appeal with, perhaps, an application to present additional evidence to the Court and to invite further submissions.
I have also had regard to rule 1.04 in the context of noting what senior counsel for the husband today described as a “parallel process”, which is reflected in the fact that the appeal against the orders made by Aldridge J on 4 December 2014 includes Order 6 in respect to spousal maintenance and specifically includes an application for the issue of spousal maintenance to be remitted for rehearing by a judge of the Court.
I further note that the wife had the opportunity to appeal the orders of Aldridge J dismissing the wife’s stay application in respect to the orders he made on 4 December 2014, including Order 6, and she declined to do so.
I note also and acknowledge the financial disparity between the parties, and I note the wife’s objection to the Court reading the report of Mr David VV attached to his affidavit sworn 18 August 2015. I do not read the report for the purpose of accepting the accuracy of the valuation. I read it for the purpose of noting a disagreement between the parties as to the value of the Town C property whereby, on the other hand, Mr VV places a current value of $425 000 upon the property, and during the course of the proceedings the balance sheet provided by the wife placed a value of $350 000 on the property.
I have also had regard to the fact that, despite the disparity, the wife has been able to raise funds to commence court proceedings, including what have been described as “parallel proceedings”, by seeking redress against Aldridge J’s orders by way of appeal and, similarly, seeking other avenues to obtain spousal maintenance despite not appealing Aldridge J’s dismissal of the application for a stay.
Whilst there is an issue between the parties regarding the value of the wife’s property, there is at least a property in the name of the wife, albeit with the extent of the wife’s equity in the property being uncertain. There is also evidence of the wife having the financial means to support her own litigation.
I do not consider that the conduct of the parties that was engaged in during the course of the proceedings before Aldridge J to be relevant to my consideration in this question of costs, and in that respect, I do not read the affidavit of Ms WW.
Having decided to order the wife to pay the costs of the husband in respect of the application heard on 21 August 2015, I consider that similar considerations apply in respect to the costs incurred in this costs application. In respect to both, I will order costs on a party-party basis to be agreed and/or assessed.
I have noted the objection raised by senior counsel for the husband to the issue of costs being adjourned, and I have referred to rule 1.04. However, counsel for the wife raises a significant issue in respect to the appeal which has been filed in respect to the orders I made on 21 August 2015 and has submitted that a legitimate question of statutory interpretation is involved. If the wife’s appeal is successful in that respect, it would clearly have an impact on any costs that I award in this application. Accordingly, I will stay this order for costs pending the determination of that appeal.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 20 November 2015.

Associate

Date: 21 December 2015