IMBARDELLI & IMBARDELLI

[2019] FamCA 399

FAMILY COURT OF AUSTRALIA

IMBARDELLI & IMBARDELLI [2019] FamCA 399

FAMILY LAW – COSTS – Between parties – Section 117(2A) factors – where the wife seeks costs on an indemnity basis – where husband seeks the wife’s application be dismissed – where the husband was wholly unsuccessful – no exceptional circumstances justifying costs on an indemnity basis – orders made that the husband pay the wife’s costs on a party/party basis.

Family Law Act 1975 (Cth)

Kohan & Kohan (1993) FLC 92-340

APPLICANT: Ms Imbardelli

RESPONDENT: Mr Imbardelli

FILE NUMBER: MLC 8876 of 2009

DATE DELIVERED: 24 May 2019

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATE: Written Submissions considered in chambers

REPRESENTATION

SOLICITOR FOR THE APPLICANT: AMT Legal

SOLICITOR FOR THE RESPONDENT: Macpherson Kelly

Orders

1. The husband pay the wife’s cost of and incidental to her application for interim spousal maintenance and her application to set aside final property orders pursuant to s 79A of the Family Law Act 1975 (Cth) on a party-party basis.

2. Paragraph 1 of the wife’s Application in a Case be adjourned for mention before Justice Macmillan at 10.00 am on 27 May 2019.

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 Imbardelli & Imbardelli 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 MELBOURNE

FILE NUMBER: MLC 8876 of 2009

Ms Imbardelli

Applicant

And

Mr Imbardelli

Respondent

REASONS FOR JUDGMENT

1. The wife in her Amended Application filed 1 September 2017 sought inter alia that the final property orders made by consent in the Federal Circuit Court of Australia on 30 June 2010 be set aside pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”). The wife also sought an order for interim spousal maintenance of $5,000 per month.

2. The wife’s application for interim spousal maintenance was initially listed for hearing before Senior Registrar Field on 19 January 2018, however the matter was adjourned for hearing before me, together with the wife’s s 79A application on the application of the husband who sought to cross examine the wife in relation to her application for spousal maintenance.

3. On 22 May 2018, following an eight day hearing, I ordered until further order that the husband pay the wife spousal maintenance of $1,000 per week. That order was not the subject of an appeal.

4. On 24 October 2018 I set aside the final property orders made 30 June 2010 and published my reasons. On 20 November 2018 the husband filed a Notice of Appeal, however that appeal was deemed to have been abandoned when the husband failed to comply with the orders made 22 February 2019 for the filing and service of the Appeal Books.

5. On 13 November 2018, prior to the husband filing his Notice of Appeal, the wife filed an application seeking inter alia that the husband pay her costs of both the application for spousal maintenance and the s79A application on an indemnity basis or, alternatively, as agreed or assessed. On 27 November 2018 I made orders in chambers requiring the parties to file and serve written submissions in support of any applications for costs arising out of or incidental to the wife’s application pursuant to s 79A of the Act. Although the orders did not refer to the application for spousal maintenance the wife’s application sought orders with respect to both applications. The husband opposes the wife’s application for costs. Although the husband did not comply with the timeline set out in those orders, the parties have now filed their respective submissions and those submissions addressed both applications. Although the wife did not make her application for costs in relation to the spousal maintenance application until some months after that judgment was delivered I am satisfied that in circumstances where both applications were dealt with as part of the same hearing it was appropriate for the wife to wait until judgment was delivered in relation to the s 79A application to seek the costs of both applications.

6. The orders the wife seeks are based upon her having incurred legal costs of $97,419.03 between 23 August 2017, when she filed her application and 24 October 2018, when the final property orders were set aside. The wife has reduced the amount she seeks by 10 per centum which she attributes to the parenting matters. The wife has not been in a position to meet her costs and owed her solicitors $60,048 as at 7 November 2018.

7. Section 117 of the Act establishes the general rule that parties to proceedings in this Court each bear their own costs unless there are circumstances that justify the Court departing from that rule (s 117(2) of the Act). In considering what (if any) order to make, the Court must consider the matters set out in s 117(2A) of the Act.

8. Counsel for the wife’s primary submission is that the husband has been wholly unsuccessful in relation to both the wife’s application for spousal maintenance and her application to set aside the property orders.

9. In her application, the wife sought spousal maintenance in the sum of $5,000 per month. In closing submissions this was reduced to $4,454 per month. The Court ultimately ordered that the husband pay $4,333 per month. The husband denied the necessity for the order as well as his capacity to pay. This is in circumstances where the wife’s only source of income was a disability support pension and rental assistance. The husband opposed any order for spousal maintenance until his counsel’s closing address when he proposed an amount of $1,733 per month.

10. The husband also opposed both of the grounds upon which the wife relied in support of her application to set aside the final property orders. Significantly I found that the wife should succeed on both of these grounds.

11. Before making any order however, the court must consider all of the matters in s 117(2A) of the Act.

12. Counsel for the wife submits that, the Court having found that “the wife is unable to adequately support herself” and is now wholly dependent upon the husband for support, he is in a superior financial position. Although it was submitted by counsel for the husband that his income of $1,500 is modest, I found that the husband had access to additional funds and capital. Whilst I accept counsel for the husband’s submission that the husband, in addition to supporting himself and the children of the marriage, also has as an obligation to pay the wife $1,000 per week. I also note that it is the husband’s case that he has paid a total of $360,000 in legal fees excluding the costs of his now abandoned appeal. Although the wife’s costs are significantly less than the husband’s costs, she, unlike the husband, has not had the capacity to pay all of her costs and still owes $60,048. There is in my view some force in counsel for the wife’s submission that the husband is in a superior financial position and I do not accept that his financial position is such that it would preclude an order for costs in the wife’s favour.

13. Counsel for the wife also relied upon the way in which the husband conducted the proceedings in support of the wife’s application for costs. The husband’s evidence in this case was found to be both “evasive and disingenuous” and that there was a “significant degree of artifice in the way in which the husband and his brother gave evidence about the Imbardelli Family Trust, the management of that Trust and relationship between their personal finances and the Trust”. As submitted by counsel for the wife, I also found that the husband’s Financial Statement did not “give an accurate picture of the husband’s income or expenses”. I was also critical of the husband’s failure to produce documents such as financial statements in relation to the Trust. I am satisfied that these are matters to which I can have regard in reaching my decision with respect to the wife’s application for costs.

14. The husband’s unsuccessful opposition to the wife’s applications and the way in which he conducted the proceedings necessitated these protracted and costly proceedings and as a consequence the wife has incurred significant legal costs prosecuting both her application for interim spousal maintenance and her application pursuant to s 79A of the Act. The husband has been wholly unsuccessful on all grounds in relation to these two distinct applications and I am satisfied that in this case there are circumstances which justify an order for costs.

15. Neither party in this case was in receipt of legal aid nor relied upon any offer of settlement.

16. Although I am satisfied that there are circumstances in this case which justify the Court departing from the general rule that parties should bear their own costs and that I should make an order for costs, I am not satisfied that the circumstances of this case are of the “exceptional kind” referred to by the Full Court in Kohan & Kohan (1993) FLC 92-340 that would warrant that order for costs being made on an indemnity basis, as the wife seeks. In these circumstances I propose to order that the husband pay the wife’s costs on a party-party basis.

17. The wife sought orders in the alternative that costs be as determined by the Court, or as agreed or as assessed. The husband proposed that, if costs are ordered, in absence of an agreement, those costs be assessed. Although counsel for the husband submitted that in circumstances where some of the costs, as acknowledged by the counsel for the wife relate to the parenting proceedings that the costs should be taxed. I do not agree. My preference would be to fix the costs and avoid the further expense and delay of an assessment. However, although it is open to the Court to fix the costs, it is difficult in circumstances where the wife’s costs have been calculated in accordance with a Costs Agreement, and the order I propose to make is on a party-party basis. 

18. In all of the circumstances I propose to list the matter for mention with a view to fixing the costs on a party-party basis if the parties are unable to agree upon a figure. In circumstances where the matter is already listed for hearing in the Judicial Duty List on 27 May 2019 I propose to list the matter for mention on that date.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 29 May 2019.

Associate: 

Date:  24 May 2019