I Limited & Chester and Ors (Costs)
[2011] FamCAFC 51
•15 March 2011
Family Court Of Australia
| I LIMITED & CHESTER AND ORS (COSTS) | [2011] FamCAFC 51 |
| FAMILY LAW - APPLICATION FOR COSTS – costs sought in the appeal and in the first instance hearing - where appellant has been wholly successful – where respondent/cross-appellant was wholly unsuccessful – costs sought on an indemnity basis or on a party and party basis - submissions made in relation to s 117(2A)(a), (e) and (f) of the Family Law Act 1975 (Cth) – where offers of compromise were rejected – justifying circumstance established – respondent/cross-appellant to pay costs of appellant on a party and party basis for appeal hearing only. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 Federal Proceedings (Costs) Act 1981 (Cth) |
| B & J (2006) FLC 93-259 C & M(Costs) (2006) FamCA 213 Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 Deputy Child Support Registrar v Gill (1992) 15 Fam LR 493 Edelman v Ziu (No. 2) [2010] FamCAFC 236 Fennessy and Gregorian (2009) FLC 93-399 Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 Gaudry and Gaudry (No 2) (2004) FLC 93-203 In the Marriage of Fisher (1990) 13 Fam LR 806 In the Marriage of Vaughan (1990) 13 Fam LR 842 Kohan and Kohan (1993) FLC 92-340 Latoudis v Casey (1990) 170 CLR 534 Limousin v Limousin (Costs) (2008) 38 Fam LR 478 McAlpin and McAlpin (1993) FLC 92-411 Munday v Bowman (1997) FLC 92-784 NMFM Property Pty Ltd and Others v Citibank Ltd (No 2) (Court’s “NMFM” Judgment No 11) (2001) 109 FCR 77 Penfold v Penfold (1980) 144 CLR 311 Re JJT and Others; Ex parte Victoria Legal Aid (1998) 195 CLR 184 Ruddock and Ors v Vadarlis and Ors (2001) 188 ALR 143 Whitehouse & Whitehouse (Costs) [2010] FamCAFC 93 Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029 |
| APPELLANT: | I Limited |
| FIRST RESPONDENT: | Mr Chester |
| SECOND RESPONDENT: | Ms Chester |
| INTERVENOR: | G Pty Ltd |
| FILE NUMBER: | BRC | 2696 | of | 2007 |
| APPEAL NUMBER: | NA | 16 | of | 2010 |
| DATE DELIVERED: | 15 March 2011 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Written submissions |
| JUDGMENT OF: | May, O’Ryan & Le Poer Trench JJ |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 29 January 2010 |
| LOWER COURT MNC: | [2010] FMCAfam 68 |
Representation
| COUNSEL FOR THE APPELLANT: | Mr Hastie |
| SOLICITOR FOR THE APPELLANT: | Tucker & Cowen Solicitors |
| COUNSEL FOR THE FIRST RESPONDENT: | H A Scott-Mackenzie |
SOLICITOR FOR THE FIRST RESPONDENT: | Browns Lawyers |
| THE SECOND RESPONDENT: | Self-Represented |
| COUNSEL FOR THE INTERVENOR: | Mr Sheehy |
| SOLICITOR FOR THE INTERVENOR: | Peter Sheehy Solicitor |
Orders
The Respondent Husband pay the costs of the Appellant I Limited of and incidental to the Appeal by I Limited (NA 16 of 2010)
The Respondent Husband pay the costs of the Appellant I Limited of and incidental to the Cross-Appeal by the Respondent Husband (NA 16 of 2010).
The costs be assessed on a party and party basis.
IT IS NOTED that publication of this judgment under the pseudonym I Limited & Chester and Ors (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 16 of 2010
File Number: BRC 2696 of 2007
| I Limited |
Appellant/Cross-Respondent
And
| Mr Chester |
First Respondent/First Cross-Appellant
And
| Ms Chester |
Second Respondent/Second Cross-Appellant
And
| G Pty Ltd |
Intervenor
REASONS FOR JUDGMENT
Introduction
Before us is an application by I Limited seeking that Mr Chester (“the Husband”) pay costs, assessed on an indemnity basis, of proceedings before Federal Magistrate Baumann and an appeal by I Limited and a cross appeal by the Husband against the judgment of his Honour. More specifically, I Limited seeks the following: “The [Husband] pay the Appellant's costs of and incidental to the Appeal, the Cross Appeal, and the applications to the Federal Magistrates Court filed 9 July 2009 and 3 August 2009 to be assessed on an indemnity basis”.
In accordance with directions we made, I Limited filed written submissions on 5 January 2011 in support of the application. An affidavit in support was sworn by Mr N on 24 December 2010.
The Husband filed submissions on 5 January 2011. The Husband opposes any order for costs of the appeal and cross appeal and seeks an order that a costs certificate be granted to him under the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth). The Husband submitted that no order for costs was made by the Federal Magistrate and therefore we have no power to make any order for the costs of the trial before his Honour.
On 25 January 2011 I Limited filed submissions in reply. On 1 February 2011 the Husband also filed submissions in reply.
I Limited appealed against orders made by the Federal Magistrate on 29 January 2010 in relation to the disbursement of funds held on trust, being the balance of the proceeds of sale of property H that was jointly owned by the Husband and Ms Chester (“the Wife”) as tenants in common in equal shares.
In the second appeal, the Husband was the appellant and I Limited was the first respondent and the Wife was the second respondent. The Husband was appealing against the refusal of the Federal Magistrate on 29 January 2010 to make an order that the Husband be paid an amount of $55,544.99 from the funds that were held on trust.
The Wife did not participate in the hearing of the appeals and no order for costs is sought against her.
BACKGROUND
Notwithstanding the detailed history provided in our reasons for judgment of 15 December 2011 we will include a short background here.
The Husband and the Wife were involved in parenting and property settlement proceedings which commenced in about May 2006. Both the Husband and the Wife acquired funding from I Limited to pay their costs of the litigation. This funding involved granting I Limited a charge on the title of property H.
During 2007 I Limited advanced $190,000.00 to the Wife.
On 15 February 2008 the Federal Magistrate delivered reasons for judgment in the parenting and property settlement proceedings but did not make orders.
On 27 March 2008 I Limited lodged a caveat over the Wife’s interest in property H. On 4 April 2008 I Limited filed a notice of intervention.
On 29 April 2008 the Federal Magistrate made the following orders by consent:
…
4. That from the Wife’s share of the proceeds of sale of [property H] an amount of $238,641.00 together with further accumulated interest from the 1st April, 2008 be paid to the trust account of Peter Sheehy, Solicitor, pending resolution of any dispute between the Wife and [I Limited] in respect of monies owing to [I Limited] and the Wife.
5. That pending agreement being reached if the funds are paid to the trust account of Peter Sheehy they remain there until such time as agreement is reached or further Order is made and the interest accumulated on those funds, which are to be invested, shall be paid as agreed between the parties.
6. That from the Husband’s share of the proceeds of sale an amount of $116,636.21 together with interest accumulated from the 29th April, 2008 until settlement be paid to [I Limited], the Intervener.
7. That [I Limited], the Intervener, sign all necessary documents and do all necessary things to release caveats lodged against the title to the said property to enable settlement to proceed on or before the date of settlement.
NOTATION:
That the notice of intervention filed by [I Limited] on 4 April 2008 is construed as an application to be joined as a party to these proceedings.
The issue in the appeal by I Limited related to the effect of orders 4, 5 and 7 above. The Husband contended that on 29 April 2008 I Limited compromised the quantum of its claim against the Wife and also its security.
On 30 April 2008 the Federal Magistrate made the following order pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”):
1. That [property H] (“the house property”) be placed on the market for sale forthwith by private treaty with such agent or agents as may be agreed between the husband and wife or failing agreement may be determined by the Court at a price to be agreed between the husband and the wife, or failing agreement, as may be fixed by the Court.
2. That upon completion of the sale, the proceeds of sale be applied by the husband and wife as follows:
(a)Firstly to pay all costs, commissions and expenses of the sale including legal costs and disbursements in respect of the sale of the home;
(b)In satisfaction of the mortgage to the ANZ Banking Group Limited (“the said mortgage”);
(c)Payment of $214,000 to the Trustee of the [A Group Pension Scheme];
(d)Payment of $40,000 to the Barclays Select Loan Account;
(e)As to the balance, (“called the net proceeds of sale”) to be dealt with as set out in this Order.
3. Consistent with paragraph 96 of the reasons for judgment delivered in this case the nett proceeds of sale shall be added to the other items referred to, and more particularly set out in Annexure “A” to these Orders, to constitute the nett divisible pool.
4. The nett divisible pool shall be divided in the proportions of 65% to the husband and 35% to the wife but on the basis that:
(a)The wife shall be entitled to retain all [S] Equipment ($32,960);
(b)The husband shall retain, free of any claim by the wife, his interest as a beneficiary in the [A Group Pension Fund] (inclusive of the repayment to that fund of the debt of $214,000) having a deemed value of $331,977;
(c)The husband shall retain, free of any claim by the wife, his interest as a beneficiary in the National Farmers Union Pension Fund having a deemed value of $92,982;
(d)The parties shall be deemed to have had the benefit of legal expenses paid of $5,000 (for the wife) and $21,224 (for the husband);
(e)The husband shall be entitled to the full recovery of loans made to [Mr C] deemed to be $40,776
(f)The husband shall be deemed to have had the benefit of $58,000 for the nett proceeds of the [G] Shares.
5. The parties, by consent, shall adjust the nett proceeds of sale distributable to them under this order by the wife paying to the husband contemporaneously with the payment from the nett proceeds of sale, the following sums:-
(a)$4,084.16 being agreed mortgage arrears;
(b)$4,693.96 being an agreed adjustment.
6. After the wife vacates the said house property and pending settlement of any sale of the said house property, the parties shall contribute to mortgage payments, Body Corporate levies, local authority rates and charges and insurance in the proportions of 65% (by the husband) and 35% (by the wife).
7. The husband shall be solely responsible, and shall indemnify the wife in respect of any liability on the Bendigo Bank Visa Card Account.
8. In respect of [A Trust], the parties shall sign all such documents and do all such things (whether as officers of the Trustee [A Pty Ltd] or otherwise), so as to perfect the following transactions in accordance with the terms of the parties’ agreement and the reasons for judgment, namely:-
(a)Transfer all right and title relating to the operation of the business [S] to [S Pty Ltd] or such other entity as nominated by the wife;
(b)To Cause the [retail premises] lease to be assigned to [S Pty Ltd] or such other entity as nominated by the wife;
(c)To cause [S Pty Ltd] or such other entity as nominated by the wife to assume the liabilities of the business [S] (as identified in the books of [A Trust]) including estimated taxation liabilities (including GST);
9. Pending the perfecting of the transactions set out in Order 9 [sic], the wife shall be responsible for and shall indemnify the husband against any claims, actions or demands against the business entity known as [S].
10. As soon as practicable after the transactions in Order 9 are completed, the wife will resign any directorship of [A Pty Ltd] and otherwise transfer all her interest as a shareholder in the said company; beneficiary (if at all in the [A Trust]) or a beneficiary of any remaining loan account or beneficiary account to the husband with the interest that the husband shall thereafter control and have complete ownership of the [A Trust] and the said corporate Trustee.
11. The wife, at her sole costs, shall cause financial statements to be prepared for the [A Trust] for the period commencing 1 July 2006 until the transactions described in Order 9 are completed.
12. That unless otherwise specified in these Orders:
(a)Each party is to be solely entitled to the exclusion of the other party (including choses in action) in the possession of such party as to the date of these Orders;
(b)Each party shall be solely entitled to the credit of any monies in any bank account in their name;
(c)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders;
(d)Each party will be responsible for the costs of transfer of any asset into their name including registration and transfer fees and for any tax arising as a result of that transfer;
13. That in the event that either party refuses or neglects to sign a document necessary to give effect to these orders within seven (7) days of a written request to do so, a Registrar of the Federal Magistrates Court of Australia at Brisbane be permitted to sign documents on the behalf of the defaulting party.
14. That the parties be granted liberty to apply to Federal Magistrate Baumann for any incidental machinery orders.
ANNEXURE A
[Property H] Nett proceeds of sale
[S] Equipment $32,960
[A Group Pension Fund]
(after deduction of $116,375) $331,977National Farmers Union Pension Fund $92,982
Add Backs
Ladbroke Loss/Loan to [Mr C] $40,776
Proceeds of [G] Shares $58,000
Legal Expenses
- husband $21,224
- wife $5000
Liabilities
Mortgage $757,000
Loan to Pension Scheme Payable $214,000
Barclay Select Loan $40,000
$1,011,000
The Federal Magistrate found that the division of assets between the Husband and the Wife should be 65 per cent to the Husband and 35 per cent to the Wife. Paragraphs 8 and 9 of the property settlement order were relevant to the Husband’s appeal.
Subsequent to the property settlement order, property H was sold and on completion of the sale in July 2009 there remained $877,234.07 of the proceeds of sale. I Limited contended that it should have received half of that amount in accordance with the funding agreements between I Limited and the Wife.
On 9 July 2009 an application was filed by I Limited in which it sought the following orders:
1. That paragraph 4 of the orders made by His Honour Federal Magistrate Baumann on 29 April 2008 be varied by deleting the words “an amount of $238,641.00 together with further accumulated interest from the 1st April 2008” and substituting in lieu thereof the words “an amount of $367,055.55 together with further accumulated interest from 13 July 2009 to the date of payment of $67,706.70 and the sum of $60,000 as security for costs of the action taken by [I Limited] against the Applicant Wife in Supreme Court of Queensland [ … ];
2. Alternatively, such further or other Orders as this Honourable Court deems fit.
3. An order that the Applicant Wife pay [I Limited] costs of and incidental to the Application to be agreed between the parties, or in default of agreement to be assessed.
On 3 August 2009 an application was filed by I Limited seeking the following:
1. A declaration that item 12 of the financial table, and clause 2 of the special conditions of each of the Loan Agreements between [I Limited] and the Wife dated 7 March 2007, 21 June 2007, 6 August 2007 and 12 September 2007 are a charge on the Wife’s interest in [property H] (“the property”).
2. A declaration that the Wife’s interest in the property as tenant in common with the Husband at the time of each of the Loan Agreements comprised one half undivided share of the property.
3. A declaration that upon the sale of the property the charge in favour of [I Limited] pursuant to each of the Loan Agreements extended to one half of the net sale proceeds of the property.
4. A declaration that the charge in favour of [I Limited] pursuant to each of the Loan Agreements has priority over the Wife’s half share of the net sale proceeds of the property to:
(a)any interest or amount due to the Husband pursuant to the Orders made by FM Baumann on 30 April 2008 between the Husband and Wife, and
(b)the debt owing to [G Pty Ltd] Accountants.
5. An injunction restraining the sum of $438,617.03 of the net sale proceeds of the property in the trust account of Woods Hatcher being the Wife’s half share of the net sale proceeds of the property to abide the determination of Supreme Court proceedings … between [I Limited] and the Wife or earlier order.
6. Such further or other Orders as this Honourable Court deems fit.
There was a dispute between I Limited and the Wife in relation to the amounts owed by the Wife to I Limited and in December 2009, in proceedings in the Supreme Court of Queensland between I Limited as plaintiff and the Wife as defendant (“the Supreme Court proceedings”), Daubney J made the following orders:
1. The defendant pay to the plaintiff the sum of $332,337.22 for claim and interest.
2. The defendant pay the plaintiff’s costs of and incidental to this proceeding to be assessed on an indemnity basis.
3. It is declared that the amounts in paragraphs 1 and 2 are secured pursuant to Loan Agreements executed by the defendant in favour of the plaintiff over the defendant’s one half interest in the net proceeds of sale of [property H] (“the property”) in the sum of $438,617.03 presently held in the Woods Hatcher Solicitors Trust Account.
4. Liberty to apply.
The Husband contended that there was no inconsistency between the judgment of Daubney J of December 2009 and the consent orders of 29 April 2008.
On 29 January 2010 the Federal Magistrate made the following orders:
THE COURT ORDERS ON A FINAL BASIS
1. That the funds held by Woods Hatcher Solicitors be distributed as follows:-
a.The sum of $165,690.37 to the husband.
b.The sum of $332,337.22 to [I Limited].
2. A declaration that the balance of $12,155.26 is the entitlement of the wife, subject to the determination of the competing claims of unsecured creditors.
THE COURT DIRECTS:
3. That any application for costs by a party to these proceedings be filed and served within 21 days.
4. That any reply to such submissions be filed within 14 days thereafter.
In our reasons of 15 December 2010 we observed:
19. In summary, in December 2009 in the Supreme Court proceedings, an order was made that the Wife pay to [I Limited] the amount of $332,337.22 together with interest. The costs were to be assessed on an indemnity basis. Those amounts were to be secured over the Wife’s one half interest in the net proceeds of sale of [property H]. The Wife’s share of the sale proceeds was $438,617.03. On 29 January 2010 the Federal Magistrate made an order that the sum of $332,337.22 be paid to [I Limited] from the funds held on trust. In other words, pursuant to the order of the Federal Magistrate, [I Limited] was not entitled to recover from the funds held on trust the balance of the Wife’s share of the proceeds of sale of [property H] or any further interest that may accrue subsequent to […] December 2009 on the amount of the Wife’s debt nor their costs as ordered.
Essentially, the proceedings before the Federal Magistrate and the controversy before us, was a dispute between I Limited and the Husband as to who had priority over the net proceeds of sale of property H.
On 9 February 2010 I Limited filed a notice of appeal against orders 1(a) and 2 made on 29 January 2010 and also sought leave to appeal. On 10 February 2010 the Husband filed a notice of cross appeal.
On 10 February 2010 the Federal Magistrate made the following orders:
1. That pending further hearing and determination of the appeal, filed by [I Limited] on 9 February 2010, the further execution of the Order made 29 January 2010, as amended by Amended Order made 9 February 2010, be stayed on the following conditions:
a)That the sum of $5,000.00 being retained in trust by Messrs Woods Hatcher, be released to the Husband upon production of an invoice for legal expenses associated with the appeal lodged by [I Limited] from a Solicitor or Counsel retained by the Husband in respect of that appeal;
b)The sum of $12,155.26 pursuant to the declaration of Order 2 of 29 January 2010 remain in trust pending appeal; and
c)That the balance of funds, $89,124.55, being the claimed entitlement of [Mr Chester] be held pending determination of the appeal; and
On 25 February 2010 the Federal Magistrate amended the orders made on 10 February 2010 pursuant to r 16.05(2)(e) of the Federal Magistrates Court Rules to add sub paragraph 1(d) namely: “That the balance of funds be released to [I Limited]”.
In our reasons of 15 December 2010 we observed:
157. The Husband submitted that at [54] the Federal Magistrate rejected the application by [I Limited] when he said that, in his view, the order of 29 April 2008 quantified and otherwise defined the agreed monetary limits, as between the Wife and [I Limited] that was to be taken into account by his Honour and that the Husband was on notice about that claim. Further, that at [58] his Honour observed that, in his view, the order of 29 April 2008 where [I Limited] agreed to accept, subject to the dispute between the Wife and [I Limited] as to quantum and cross claims, from the Wife’s share of the proceeds of sale an amount of $238,641.00 together with further accumulated interest from 1 April 2008, set the limit of the amount that was a secured debt. His Honour was of the view that the order amounted to a variation of the security.
…
161. [I Limited] submitted that the order of 29 April 2008, whether made by consent or otherwise, did not reflect any variation of the security held by it over the interests of the Wife and that the Federal Magistrate erred in so finding. [I Limited] contended that it was entitled to 50 per cent of the net proceeds of sale being $438,617.03 because the loan facility made available to the Wife was secured by equitable mortgage over [property H], ranking behind the registered mortgage to the Australian and New Zealand Banking Group Ltd (“the ANZ Bank”), but in priority to other creditors to be paid in accordance with the property settlement order of his Honour of 30 April 2008 being $214,000.00 to the [A Group Pension Scheme] and $40,000.00 to Barclays Select Loan Account and the adjustment of $30,922.97. [I Limited] contended that while it withdrew its caveat over the interest of the Wife in [property H], it retained an equitable mortgage over that interest and upon a sale of the property the equitable mortgage became a charge over half of the net proceeds of sale and the amount to be paid by the Wife in accordance with the order of the Supreme Court proceedings in December 2009 was $332,337.22 together with interest and costs on an indemnity basis.
By letter dated 31 March 2010 I Limited made the following offer:
1. The quantum of the costs payable by [the Wife] to our client under the costs order made by Justice Daubney on [ … ] December 2009 are fixed in the sum of Seventy Thousand Dollars ($70,000);
2. The parties consent to the following orders in the appeal and the cross appeal:-
(a)the appeal be allowed;
(b)the cross appeal be dismissed;
(c)the amount in order 1(a) of the orders made by His Honour Federal Magistrate Baumann on 29 January 2010 be reduced to One Hundred and Seven Thousand Eight Hundred and Forty Five Dollars Sixty Three Cents ($107,845.63), plus any interest thereon;
(d)The amount in order 1(b) of the orders made by His Honour Federal Magistrate Baumann on 29 January 2010 be increased to Four Hundred and Two Thousand Three Hundred and Thirty Seven Dollars Twenty Two Cents ($402,337.22), plus any interest thereon;
(e)order 2 of the orders made by His Honour Federal Magistrate Baumann on 29 January 2010 be set aside; and
(f)each party pays their own costs of and incidental to the appeal, cross appeal and the applications made by [I Limited] to the Federal Magistrates Court.
(g)[The Husband] and [the Wife] are solely responsible for any legal fees of Woods Hatcher Solicitors in relation to the matter;
(h)this offer is subject to, and conditional upon, all of the other parties ([the Husband], [the Wife], and [G Pty Ltd]) accepting this offer of settlement. If this offer of settlement is not accepted by all other parties, there is no binding agreement.
It was noted at the end of the letter:
If this offer is not accepted, our client will vigorously prosecute the appeal. If our client is successful in the appeal, our client will be seeking an order that [the Husband] and [the Wife] pay our client’s costs of and incidental to the appeal, and our client’s costs of and incidental to the applications made by our client to the Federal Magistrates Court. We estimate that those costs would be in the vicinity of $60,000 (on a standard basis) or $100,000 (on an indemnity basis).
We also observe that at the commencement of the letter the solicitors stated: “In our view, our client will succeed in its appeal against the judgment of His Honour Federal Magistrate Baumann”.
On 6 April 2010 the Husband rejected the offer of settlement dated 31 March 2010. On 7 April 2010, the solicitors for I Limited sent an email to the other parties to the proceedings advising them of the Husband’s rejection of the offer.
By letter dated 29 July 2010 the solicitors of I Limited sent a second offer of settlement to the parties to the proceedings. The solicitors observed in the letter that the parties had received and had the opportunity to consider the outlines of argument of I Limited and the Husband and that the Husband had the opportunity to obtain legal advice. I Limited offered the following:
1. The parties consent to the following orders in the appeal and the cross appeal:-
(a)the appeal be allowed;
(b)the cross appeal be dismissed;
(c)the amount in order 1(a) of the Orders made by His Honour Federal Magistrate Baumann on 29 January 2010 be reduced to $107,845.63 plus one-half of the interest earned on the funds paid into Woods Hatcher Solicitors trust account;
(d)order 1(b) is affirmed;
(e)there be inserted a new order 1(c) as follows, “That the amount of $70,000 plus one-half of the interest earned on the funds paid into Woods Hatcher Solicitors Trust Account remain in trust pending quantification of the costs of [I Limited] Limited pursuant to the order of Justice Daubney made [ … ] December 2009, and/or any other judgment or order for costs that has been or may be made against the wife in favour of [I Limited] (either in the Supreme Court or Family Court), and disbursed following such quantification to [I Limited] in payment of its costs up to the amount of $70,000 plus one-half of the interest earned on the funds paid into Woods Hatcher Solicitors Trust Account, and if the costs of [I Limited] are quantified in a lower amount, the balance to be paid to the husband”;
(f)order 2 be set aside;
(g)There be no order as to the costs of the appeal, but on the basis that [I Limited] is at liberty to pursue any rights that it may have to recover the balance of its enforcement expenses from [the Wife]; and
(h)[The Husband] and [the Wife] are solely responsible for any legal fees of Woods Hatcher Solicitors in relation to the matter.
The second offer of compromise was not accepted by the Husband.
The hearing before us was on 3 August 2010. Judgment was pronounced and reasons delivered on 15 December 2010. We made the following orders:
(1) [I Limited] be granted leave to appeal against orders 1(a) and 2 made by Federal Magistrate Baumann on 29 January 2010.
(2) The appeal be allowed.
(3) The amount of “$165,690.37” in order 1(a) made by Federal Magistrate Baumann on 29 January 2010 be altered by the deletion of that amount and the insertion in lieu thereof of the amount of “$71,565.82”.
(4) The amount of $106,279.81 remain in trust pending quantification of the costs of [I Limited] pursuant to the order of Justice [ … ] made on [ … ] December 2009 in proceedings in the Supreme Court of Queensland between [I Limited] and the Wife or any other order for costs in favour of [I Limited].
(5) The amount of $106,279.81, referred to in order (4) hereof, be disbursed following such assessment to [I Limited] in payment of its costs so assessed up to the amount of $106,279.81.
(6) If the costs of [I Limited] are assessed in a lower amount then the balance of $106,279.81, referred to in order (4) hereof, be disbursed to the Husband.
(7) Order 2 made by Federal Magistrate Baumann on 29 January 2010 be set aside.
(8) The cross-appeal by the Husband be dismissed.
(9) Each party be at liberty to make an application by way of written submissions in respect of costs incurred in relation to the appeal by [I Limited] and the cross-appeal by the Husband by filing such submissions at the Northern Region Appeal Registry of the Family Court of Australia and serving them on the other parties within 21 days of the date hereof.
(10) Each party have a further seven days in which to make written submissions in answer thereto by filing such submissions at the Northern Region Appeal Registry of the Family Court of Australia and serving them on the other parties.
(11) Each party be at liberty to reply to an answer by way of written submissions by filing such reply at the Northern Region Appeal Registry of the Family Court of Australia and serving it on the other parties within a further seven days.
(12) Each party endorse on the cover sheet of any submissions filed pursuant to orders (9), (10) and (11), the date upon which a copy of that submission was served on the other parties.
In relation to the appeal by I Limited we concluded:
231. We are persuaded that, in the circumstances of this case, the orders of 29 April 2008 merely expressed the consent of the parties and did not embody and give effect to an underlying contract between [I Limited] and the Wife and thus the Federal Magistrate did not have the power to, in effect, vary the orders made by the Supreme Court of Queensland. We are satisfied that his Honour was in error.
232. We therefore propose to grant leave to appeal and to allow the appeal. No direct submissions were made in relation to the application by [I Limited] for leave to appeal. However, insofar as leave may be required, we are satisfied that there was an important error of principle and also that a substantial injustice would be suffered by [I Limited] if leave was not granted.
233. As we have observed, if the appeal is successful, [I Limited] seeks that the amount in order 1(a) of 29 January 2010 be altered to $71,565.82 and that there be a new order 1(c) which provides that the amount of $106,279.81 remain in trust pending quantification of the costs of [I Limited] pursuant to the order of Daubney J pronounced on [ … ] December 2009 in the Supreme Court proceedings or “any other order for costs in favour of [I Limited] and disbursed following such assessment to [I Limited] in payment of its costs so assessed up to the amount of $106,279.81 and if the costs of [I Limited] are assessed in a lower amount the balance to the husband”. [I Limited] also seeks that order 2 be set aside.
234. No submissions were made on behalf of either [I Limited] or the Husband in relation to the orders sought if the appeal was successful. However, we understand that the orders are sought for the following reasons.
235. [I Limited] was seeking that the amount of $438,617.03, being one half of the net proceeds of sale of [property H], be available to satisfy its claims against the Wife. However, the Federal Magistrate made an order that [I Limited] could only receive $332,337.22. [I Limited] was therefore seeking a further $106,279.81 ($332,337.22 plus $106,279.81 = $438,617.03).
236. We assume that as at 29 January 2010 there was available an amount of $510,182.85, being the amount of $165,690.37 to be paid to the Husband in accordance with order 1(a), the amount of $332,337.22 to be paid to [I Limited] in accordance with order 1(b) and $12,155.26 being the amount that in accordance with order 2 was declared to be the entitlement of the Wife.
237. After payment of $332,337.22 to [I Limited] from the amount of $510,182.85 this then leaves $177,845.63 ($165,690.37 plus $12,155.26). If from the amount of $177,845.63 an amount of $106,279.81 is paid to [I Limited] then there is a balance of $71,565.82 ($177,845.63 minus $106,279.81). [I Limited] seeks that the amount in order 1(a) should be $71,565.82 in lieu of $165,690.37 and the amount of $106,279.81 remain in trust pending quantification of its costs. In the event that the balance held on trust is greater than $71,565.82 then it would be dealt with in accordance with the property settlement order.
238. We are of view that the orders of 29 January 2010 should not have been made as they affect [I Limited] and we propose to make the orders sought in the notice of appeal.
In relation to the cross-appeal by the Husband we concluded:
243. A number of authorities were referred to in the written submissions of the Husband as to how, in proceedings pursuant to s 79 of the Act, a court deals with contingent liabilities. In our view, they are irrelevant to the issue.
244. During the hearing before us the Presiding Judge inquired of counsel for the Husband as to the relevant applications that were made before the Federal Magistrate in relation to adjustments which were not dealt with in the reasons of 15 February 2008. Counsel said that there “remained issues concerning adjustments” but could not identify the relevant applications. Counsel also said that it was not an enforcement application and this then lead to a discussion as to whether on 30 April 2008 his Honour made what, for discussion, was described as a “partial property settlement order”. Without repeating all of what was discussed, counsel then informed us that he was unable to point to anything further which would indicate how the matter came back before the Federal Magistrate in August 2009 to deal with adjustments.
245. The Husband was seeking that the amount of $55,544.59 be paid from the proceeds of sale of [property H]. The Federal Magistrate observed at [38] that in his view this obligation, if enforceable by the lessor against the Husband under the guarantee he signed, arising as it did for adjustment pursuant to the indemnity in order 9 of the final property order, was in a different category to the other adjustments already determined by his Honour. His Honour observed that any debt which the Husband was ultimately ordered to pay to the lessor was claimable by him against the Wife. In other words, it was not an adjustment that the order of 30 April 2008 provided could be satisfied from the proceeds of sale of [property H] and the debt can be recovered by the Husband from the Wife by enforcement of order 9.
246. We propose to dismiss the cross-appeal. In our view, the Husband failed to establish any error on the part of the Federal Magistrate.
Relevant Principles
General
Section 117(1) of the Act provides: “Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.”
Section 117(2) of the Act provides that if, in proceedings under the Act, the court is of opinion that there are circumstances that justify it in doing so, it may, subject to sub-ss (2A), (4) and (5), and the applicable rules, make such order as to costs, whether by way of interlocutory order or otherwise, as it considers just.
Section 117(2A) of the Act provides that in considering what order (if any) should be made under s 117(2), the court shall have regard to the matters set out in paragraphs (a) to (g). In Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 the Full Court (Kay, Warnick and Boland JJ), referring to s 117(2A), said at 130:
A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
As to the relationship between s 117(1) and s 117(2) of the Act in Penfold v Penfold (1980) 144 CLR 311, in joint reasons, Stephen, Mason, Aickin and Wilson JJ said at 315:
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in “a clear case”. (emphasis added)
As to the nature of the hearing of an application pursuant to s 117 of the Act in Penfold their Honours said at 315-16:
Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent [(1970) 92 W.N. (NSW) 503, at p. 505]). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
We also observe that in Re JJT and Others; Ex parte Victoria Legal Aid (1998) 195 CLR 184 the majority of the High Court (Gaudron, Gummow, Hayne and Callinan JJ, Kirby J dissenting) held that s 117(2) of the Act referred to costs in the conventional sense and thus to the payment by one party to litigation of money by way of a partial indemnity for professional legal fees and expenses actually incurred by another party in the course of the litigation: see Hayne J at 219. An order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature. Costs are not a penalty or damages: Latoudis v Casey (1990) 170 CLR 534 per Mason CJ at 543 and McHugh J at 567; Ruddock and Ors v Vadarlis and Ors (2001) 188 ALR 143 per Full Court of the Federal Court at [12] and B & J (2006) FLC 93-259 per Full Court (Holden, Warnick and Boland JJ) at 80,403-404.
Offers of settlement
Section 117(2A)(f) provides that one matter to be taken into account is 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. Section 117C(2) provides that if a party to proceedings to which the section applies makes an offer to the other party to the proceedings to settle the proceedings; and the offer is made in accordance with any applicable Rules of Court the fact that the offer has been made, or the terms of the offer, must not be disclosed to the court in which the proceedings are being heard, except for the purposes of the consideration by the court of whether it should make an order as to costs under s 117(2) and the terms of any such order. Section 117C(3) provides that a judge of the court is not disqualified from sitting in the proceedings only because the fact that an offer has been made is, contrary to s 117C(2), disclosed to the court.
Indemnity Costs
There are various machinery provisions within Part 19 of the Family Law Rules 2004 (Cth) (“the Rules”). Part 19 regulates the costs between parties for applications in family law cases. Part 19.5 of the Rules deals with the calculation of costs. Rule 19.18 provides:
(1) The court may order that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
Example
For paragraph (1) (c), the stated method may be in accordance with Schedule 3 but with an additional percentage for complexity.
(2) If costs are payable under the Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party/party basis.
(3) In making an order under subrule (1), the court may consider:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the case;
(c)the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with pre-action procedures; and
(f)expenses properly paid or payable.
(emphasis added)
The Family Court has jurisdiction to make orders for indemnity costs: McAlpin and McAlpin (1993) FLC 92-411 per Full Court (Nicholson CJ and Maxwell J, Baker J dissenting); Kohan and Kohan (1993) FLC 92-340 per Full Court (Strauss, Lindenmayer and Bulley JJ); Munday v Bowman (1997) FLC 92-784 per Holden J; Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029 per Full Court (Lindenmayer and Holden JJ, Mullane J dissenting) and Limousin v Limousin (Costs) (2008) 38 Fam LR 478 per Full Court (Kay, Coleman and Boland JJ).
An order for costs may be made on an indemnity basis, subject to a judicial determination capable of being made that there ought to be a departure from the usual basis that costs be payable on the party and party basis. For a discussion of the jurisdiction to order indemnity costs and its exercise see Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J at 256-257 and NMFM Property Pty Ltd and Others v Citibank Ltd (No 2) (Court’s “NMFM” Judgment No 11) (2001) 109 FCR 77 per Lindgren J at [53] to [90].
Costs of the trial
In this case I Limited is seeking the costs of and incidental to the proceedings before the Federal Magistrate.
In the written submissions filed on 5 January 2011 I Limited submitted that in relation to the costs of the hearing below, the Federal Magistrate ordered that any application for costs be filed and served within 21 days after judgment and that as I Limited was unsuccessful below, it did not avail itself of that direction.
In the written submissions filed on behalf of the Husband on 5 January 2011 it was submitted that no application was made by the I Limited to the Federal Magistrate in respect of the costs of the trial and there is therefore no order made by the Federal Magistrate which was the subject of any appeal. It was submitted that, in the circumstances, this Court has no power to make any orders for the costs of the trial before the Federal Magistrate.
In the written submissions in reply filed on 25 January 2011 I Limited simply submitted that it was in the interests of the parties that we deal with the question of costs below so as to avoid the parties costs in a further application to the Federal Magistrates Court consequent upon the orders of the Full Court. No further submissions were made by the Husband.
We observe that in C & M (Costs) [2006] FamCA 213 Warnick J observed:
2. I do not consider that I have jurisdiction to make an order in respect of the trial in the Federal Magistrates Court. The jurisdiction which I exercised in making the orders of 20 January 2006 was the appellate jurisdiction of this court. Not only was there no appeal in respect of a costs order relating to the trial, but it is common ground that no order in respect of such costs has been made. Indeed for the husband it is said that the wife did not seek costs at trial. The issue of the costs of the trial is one for determination at first instance.
In Whitehouse & Whitehouse (Costs) [2010] FamCAFC 93 the husband submitted that the Full Court should determine the question of costs at first instance “to the extent that this is permitted” pursuant to ss 28 and 94 of the Act, r 1.09 of the Family Law Rules 2004 and the “implied incidental power of the Full Court”. The Full Court (May, O’Ryan & Stevenson JJ) said:
9. In our view, it is inappropriate for the Full Court to determine the question of first instance costs on this occasion. In addition to the matters correctly raised in the appellant’s submissions, we observe that any appeal from such a decision would have to be pursued in the High Court. Although there are some unusual features of this litigation, applications of this type should not generally be entertained. There is nothing about this case which would attract a departure from the usual course.
Given the paucity of the submissions in relation to the power to consider any application for costs of the proceedings below, we do not propose to express any concluded view in relation to such a power. However, there is considerable merit in the view expressed by Warnick J in C and M (Costs). We are also of the view that even if we had the power, in the circumstances of this case, we would decline to exercise it given that different considerations may apply and the submissions made no attempt to distinguish between the matters that would be relevant in relation to the costs of the proceedings at first instance and the costs of the appeal. For example, the offers of compromise are only relevant to the costs of the appeals.
RELEVANT MATTERS
Introduction
We observe that in the submissions of I Limited no attempt was made to address seriatim the relevant matters in s 117(2A) of the Act. However consideration of the submissions of I Limited and the Husband reveals that submissions were made in relation to the matters in s 117(2A)(a), (e) and (f).
Financial Circumstances
Section 117(2A)(a) of the Act provides that we are required to consider the financial circumstances of each of the parties to the proceedings.
I Limited, which is a public company, provided no evidence of its financial circumstances.
The Husband submitted that his modest financial circumstances should be taken into account pursuant to s 117(2A)(a) of the Act in the determination as to whether there are circumstances that justify the Court in departing from the provisions of s 117(1) of the Act that each party to the proceedings bear its own costs of the appeal. The Husband submitted that there was “a modest property pool” of which the majority of the moneys received by the Husband have been paid by him towards his legal costs and/or the payment of debts and/or the reimbursement of moneys to his litigation funder namely I Limited.
I Limited submitted that the Husband provided no evidence of his current financial circumstances. Further, that while the “property pool” at trial may have been described in the reasons of the Federal Magistrate as “modest” in comparison to the costs spent by the Husband and the Wife and when dealing with the application by I Limited, “the pool itself was not itself insignificant (nearly $1.9M)”. It was submitted that the costs sought ought to be able to be paid out of the Husband's share of the property pool alone. It was further submitted that, in any event, even if the parties’ assets were modest, that is not determinative of the issue of costs: Edelman v Ziu (No. 2) [2010] FamCAFC 236 at [80].
Outcome of the proceedings
Section 117(2A)(e) of the Act provides that we are required to consider whether any party to the proceedings has been wholly unsuccessful in the proceedings. This was a significant matter.
I Limited submitted, and it was not controversial, that it was wholly successful on both appeals and successful in respect of each of its grounds of appeal.
The Husband submitted that the appeal by I Limited succeeded by the Court’s determination that the Federal Magistrates Court made the following errors of law:
(a) The Federal Magistrate was in error making a finding that the Consent Orders of 29 April, 2008 embodied a binding agreement by which the Appellant accepted that it may receive less than it was entitled to receive pursuant to the loan agreements and that the value of its security was reduced…;
(b) The Federal Magistrate failed to give adequate reasons for his decision…;
(c) The Federal Magistrate was in error in inferring that the reason why the Appellant did not wish to be further heard on the final Orders was because of a commercial compromise of the value and extent of its interest…;
(d) There was no evidence that would enable the Federal Magistrate to make any finding as to whether or not the Orders of … April 2008 heard before Daubney J in the Supreme Court proceedings…;
(e) The Federal Magistrate was in error in relation to his application of the equitable maxim of clean hands…;
(f) The Federal Magistrate did not have the power to, in effect, vary the Orders made by the Supreme Court of Queensland and in that respect the Federal Magistrate was in error….
In relation to the Husband’s appeal the Husband submitted that it occupied a small part of the hearing and the costs of the appeal. I Limited submitted that the Husband’s appeal raised issues discrete to those raised in the appeal by I Limited.
I Limited submitted that where a party is wholly unsuccessful in the proceedings, and no difficult question of law arose from the subject matter, then the court is justified in making an order for costs against the unsuccessful party: In the Marriage of Vaughan (1990) 13 Fam LR 842; In the Marriage of Fisher (1990) 13 Fam LR 806; Deputy Child Support Registrar v Gill (1992) 15 Fam LR 493.
I Limited further submitted that the Husband led the Federal Magistrate into making each of the above errors in that it was the Husband who submitted below, and again on appeal, that the consent orders of 29 April 2008 had the effect of compromising the rights of I Limited pursuant to the loan agreements. It was submitted that the errors below were readily apparent and but for the Husband being opportunistic, as submitted in the appeal outline, it ought to have been recognised by him and those that advised him.
Offers of compromise
As we have observed, s 117(2A)(f) of the Act provides that we are required to consider 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.
As we have observed I Limited made two offers of compromise. It was submitted by I Limited that each of the offers to settle was a genuine compromise. It was also submitted that it is apparent from a perusal of their terms that I Limited achieved a more favourable outcome in our judgment and, in the circumstances the Husband's refusal to accept either was unreasonable.
The Husband submitted that the offers to settle contained a term that the offers were subject to and conditional upon all of the other parties accepting the offers and there is no evidence that the Wife and Third Respondent accepted the offers. Further, the offers contained a term that the Husband and the Wife be solely responsible for any legal fees of Woods Hatcher Solicitors in relation to the matter and such matters had not been the subject of any determination by this Court. Further, the offers contained a term as to the costs of the Federal Magistrates Court proceedings and such costs have not been the subject of any determination by this Court.
The Husband submitted that his acceptance of the offers would not have determined the appeal in the circumstances and/or saved any costs of the parties. The Husband also submitted that his rejection/failure to accept the offers is, in the circumstances, not a factor by itself which would entitle I Limited to a costs order in respect of the appeal pursuant to s 117(2) of the Act and in particular s 117(2A)(f).
I Limited submitted that the submission of the Husband in relation to the offers being subject to and conditional upon all the other parties accepting the offers, while factually true, is misguided because the Husband was the beneficiary of the order the subject of the appeal by I Limited and opposed the appeal and no other respondent to the appeal took any active role in the proceedings as none had an interest in the outcome like the Husband. The Husband rejected the first of the two offers to settle thereby making it incapable of acceptance by the other parties, and did not respond to the second offer.
I Limited submitted that the submission of the Husband that the offers contained a term that the Husband and the Wife be solely responsible for any legal fees of Woods Hatcher Solicitors, while factually true, is similarly misguided because there was no order for legal costs in favour of Woods Hatcher in the matter. Woods Hatcher were the trustees of the balance of the proceeds of sale of property H pending final court orders. It was submitted that the offer was merely expressed in cautious terms, namely that “[Mr & Mrs Chester] are solely responsible for any legal costs of Woods Hatcher in relation to the matter” (emphasis in original).
I Limited submitted that the submission of the Husband that the offers contained a term as to the costs of the proceedings in the Federal Magistrate’s Court is factually true but was irrelevant in the circumstances and ignored the fact that the amounts of each of the offers, being $60,000.00 and $70,000.00 respectively, were a significant compromise. It was submitted that the costs of I Limited in the Supreme Court, the Federal Magistrates Court and the Family Court were expressed in the offers to be in the sums of $165,321.78 and $180,000.00 respectively. It was submitted that the costs of I Limited in the Supreme Court alone have been assessed in the sum of $86,638.97. It was submitted that accordingly, each offer was in an amount less than the Supreme Court costs orders alone. It was submitted that it therefore made no practical difference other than in a way advantageous to the Husband that the offers by I Limited included the costs I Limited had incurred in both the Federal Magistrates Court and the Family Court.
I Limited submitted that, contrary to the submissions made by the Husband, had the Husband accepted either offer, it would have both determined the appeal and cross-appeal and saved the costs of the appearances before the Family Court and subsequent costs and his conduct is a relevant consideration under s 117(2A)(f) of the Act.
CONCLUSION
In relation to the costs of the appeal by I Limited and the appeal by the Husband we are satisfied that I Limited has established a justifying circumstance, namely, that the Husband was wholly unsuccessful in both appeals. We also take into account the offers to settle the proceedings made by I Limited. Overall we accept the submissions of I Limited in relation to the effect of the two offers of settlement.
In all the circumstances, we are of the view that the Husband should pay the costs of I Limited of and incidental to the appeal by I Limited and the cross-appeal by the Husband.
QUANTUM OF COSTS
In relation to the contention of I Limited that the costs should be assessed on an indemnity basis, without repeating all of the submissions, we observe that I Limited appears to rely on two matters. First, it was submitted that the matters raised on both appeals were not complex and that there was an undue prolongation of the proceedings by groundless contentions. Second, there was an imprudent refusal of an offer of compromise. It was submitted that either of these two matters warrants the exercise of the discretion to award indemnity costs.
The Husband simply submitted that his failure to accept the offers to settle did not place this case in the exceptional category of cases where indemnity costs may be ordered and referred to Gaudry and Gaudry (No 2) (2004) FLC 93-203 and Fennessy and Gregorian (2009) FLC 93-399.
As we outlined in our reasons for judgment of 15 December 2010, there was protracted litigation before the Federal Magistrate. As we also pointed out, the manner in which the property settlement proceedings was conducted by his Honour was unfortunate. In our earlier reasons we said that it was an example of the difficulties that can arise when judgement is not pronounced when reasons for judgment are delivered and in the reasons there is no indication of the orders the trial judge proposes to make and even after judgment there remain unresolved issues particularly involving the interests of third parties. In other words the controversies may not have arisen if the proceedings had been conducted in a manner where at all times the interests of the relevant third parties were addressed. As well, we were persuaded that his Honour made a number of errors of law.
In the circumstances, we are not persuaded that the conduct of the proceedings by the Husband, including his attitude to the offers of compromise, was so special or exceptional such as to justify the costs being assessed on an indemnity basis. The costs will therefore be assessed on a party and party basis.
I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, O’Ryan and Le Poer Trench JJ) delivered on 15 March 2011.
Associate:
Date: 15 March 2011
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