Jess and Jess and Ors

[2009] FamCA 556

FAMILY COURT OF AUSTRALIA

JESS & JESS AND ORS [2009] FamCA 556

FAMILY LAW – COSTS – applications by persons wife sought to join – application by husband

Family Law Act 1975 (Cth) ss 117(1), 117(2)(2A)
Family Law Rules 2004
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic)

HUSBAND: Mr Jess

WIFE: Ms Jess

SECOND RESPONDENT Y Pty Ltd

THIRD RESPONDENT Y Corporation Pty Ltd

FOURTH RESPONDENT:  Mr Jess (Jnr)

FILE NUMBER: MLF 3444 of 2006

DATE DELIVERED: 29 June, 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Brown J

SUBMISSIONS: As set out in judgment

REPRESENTATION

SOLICITOR FOR THE HUSBAND: Carew Counsel

SOLICITOR FOR THE WIFE: Kenna Teasdale Lawyers

SOLICITOR FOR THE 2^ND & 3^RD

RESPONDENTS:

Kahns Lawyers

SOLICITOR FOR THE 4^TH RESPONDENT: DLA Phillips Fox

Orders

1. That the wife pay the costs of the second, third and fourth respondents of and incidental to the following applications, including costs of senior counsel :

   (a)amended application for interim orders filed by the wife on 27 July, 2007;

   (b)amended application for final orders filed by the wife on 14 September, 2007;  and

   (c)further amended application for interim orders filed by the wife on 14 September, 2007. 

2. That the quantum of costs be agreed and, failing agreement, be assessed pursuant to the Family Law Rules 2004.

3. That payment of the costs agreed or assessed, as the case may be, be stayed until the first of the following events :

   (a)determination of the competing applications for final property orders filed by the husband and wife;  or

   (b)one year from the date of agreement or final assessment, as the case may be. 

4. That the husband’s application for costs be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym  Jess & Jess and Orsis approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLF 3444 of 2006

MR JESS

Husband

And

MS JESS

Wife

And

Y PTY TLD
Second Respondent

And

Y CORPORATION PTY LTD
Third Respondent

And

MR JESS (JNR)
(Fourth Respondent)

REASONS FOR JUDGMENT

1. On 19 October 2007 the court heard argument on a number of applications in this matter. The wife sought joinder of three respondents, being Mr Jess Jnr, Y Corporation Pty Ltd and Y Pty Ltd. She sought a mandatory injunction directed to Mr Jess Jnr to achieve the transfer to this court of Supreme Court proceedings in which he was the plaintiff, an anti-suit injunction restraining him from prosecuting those proceedings and injunctions restraining him from dealing with assets of Y Corporation and the Y group. The second, third and fourth respondents opposed the making of those orders.  Also before the court were applications between the husband and wife relating, among other things, to expert evidence, jewellery, reliance on documents produced in the Supreme Court proceedings, a judicial settlement conference and costs.

2. On 30 January 2008 judgment was delivered on the various applications. The wife was unsuccessful in obtaining any order sought against Mr Jess Jnr, Y Corporation or Y Pty Ltd.  The relevant history and context of the applications determined on 30 January, 2008 are set out in the judgment delivered that day. 

3. In their respective responses to the wife’s application for orders against Mr Jess Jnr and the companies, the husband and each of the second, third and fourth respondents sought costs. On 30 January 2008 the court ordered that if a party, or a person or company which the wife sought to have joined as a party, sought to make further submissions in relation to the costs of the applications determined that date, written submissions were to be filed. The orders provided for submissions to be filed by 15 February 2008, responses by 7 March 2008 and submissions in reply by 21 March 2008. Subsequently the parties and the proposed second, third and fourth respondents consented to extensions of time.

4. Before the court are the following submissions.

   ·Submission filed by the husband on 15 February 2008, in which he sought costs against the wife.

   ·Submission filed by the second, third and fourth respondents on 20 February 2008, in which they sought costs against the wife.

   ·Submission filed by the wife on 13 March 2008 in which she responded to the applications for costs brought by the husband and the second, third and fourth respondents.

   ·Submission filed by the husband on 25 March 2008, in reply to the wife’s responsive submissions filed 13 March 2008.

5. The normal rule in proceedings under the Family Law Act 1975 (Cth) is that each party bears his or her own costs; s 117(1). If the court is of the opinion that there are circumstances which justify it in doing so, it may make orders as to costs; s 117(2). In considering what order (if any) should be made, the court must have regard to the factors set out in s 117(2A), being :

   (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.

6. The court can assume the second, third and fourth respondents did not seek costs on an indemnity basis as there is no mention in their submission of a costs agreement or its terms:  see Family Law Rules 2004, Rule 19.08(3). The order sought by the husband in paragraph (23) of the submission filed 15 September, 2008 specifically sought costs on a party/party basis.

Second, third and fourth respondents

1. On 27 July 2007 the wife filed an amended application for interim orders seeking, among other orders, that Mr Jess Jnr and the companies be joined as respondents to the proceedings. She sought that two separate Supreme Court actions (or part of actions) “be removed from the Supreme Court and transferred to this Honourable Court for determination” and that Mr Jess Jnr be restrained from taking any further steps in one of them. In a further amended application filed 14 September 2007, the wife deleted paragraphs four, five and six of the amended application of 27 July 2007 (relating to the transfer of the proceedings and the injunction) and sought a detailed asset preservation injunction against Mr Jess Jnr and that he be restrained from continuing Supreme Court matter No. …1of 2007. Not until 14 September 2007 did the wife file an amended application for final orders in which she sought orders against the husband and the companies, as follows:

   8.That the second named respondent [Y] Pty. Ltd. and/or the third named respondent [Y Corporation] Pty. Ltd. pay such sum and/or do all acts and things and sign all documents as may be required by way of adjustment of property between the husband and the wife as this Honourable Court deems appropriate. 

   9.That the Deed of Trust made by [the husband] and dated the 28^th February, 2002 be set aside. 

   10.In the alternative the fourth named respondent [Mr Jess Jnr] do all such acts and things and sign all documents as may be required to pay to the wife such sum as the Court deems appropriate by way of adjustment of property between the husband and the wife. 

   11.That the wife be excused from particularising further orders sought by her as against the second, third and fourth named respondents until such time as there has been full and frank disclosure by the said respondents. 

   12.Such further or other consequential Orders as this Honourable Court deems appropriate in the circumstances.

2. The wife was wholly unsuccessful in her application with respect to the second, third and fourth respondents. The court found that the wife, as a party to Supreme Court proceedings initiated by the husband, could have sought orders under the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic), but had not done so. It found no basis for any asset preservation injunction against Mr Jess Jnr and that senior counsel for the wife, when invited to set out a basis upon which the 2002 Deed of Trust was challenged, was unable to articulate a lawful basis for the challenge, save to talk of suspicions. Only when pressed and in response to a direct question was senior counsel prepared to say that the wife’s primary position was that the 2002 Deed of Trust was a sham.

3. There is force in the submission of the second, third and fourth respondents that the application by the wife against them was made without legal foundation and merit.

4. Having dismissed the application for an asset preservation injunction directed to Mr Jess Jnr, the court determined it was inappropriate for him to remain a party to the proceedings in the absence of any particularised claim against him. Similarly, the court found no basis for the continuing joinder of the two companies.

5. The court has some evidence of the wife’s financial position and little of the second, third and fourth respondents. Litigation in the Supreme Court will determine whether a group of companies, said in the proceedings to have a value of up to $100 million, are beneficially owned by the husband or by Mr Jess Jnr.  I make no finding that $100 million is an accurate estimation of the worth of the group, regardless of ownership.

6. Even were the court to find that the wife’s financial position was significantly weaker than that of the second, third and fourth respondents, the evidence would support the costs orders sought by them. They were reluctant parties, forced to contest an application the court found to be without merit.

7. Orders will provide for the wife to pay the costs of the second, third and fourth respondents of and incidental to the amended application for interim orders filed by the wife on 27 July 2007, the further amended application filed by the wife on 14 September 2007 and the amended application for final orders filed by the wife on 14 September 2007.

8. The wife sought that any cost order against her be stayed until the property proceedings in this court are determined. None of the second, third or fourth respondents is presently a party to those proceedings.  I am satisfied that a stay should be granted until the determination of the competing applications for final property orders in this court or for twelve months, whichever is the lesser period.

Husband

1. The husband sought that the wife pay his costs “of and incidental to this application” on a party-party basis within 30 days of assessment or such other date as the parties agreed in writing.

2. The application initially listed for hearing on 19 October 2007 was the amended form 2 filed by the wife on 27 July 2007. Orders made herein on 7 August 2007 provided for the husband to file a response to that application, and for the filing of material by Mr Jess Jnr and the companies which the wife sought to join. The husband filed a response, pursuant to those orders, on 24 August 2007.

3. On 14 September 2007 the wife filed a further amended application for interim orders and an amended application for final orders. The husband’s submission that the wife could not file an amended application for final orders at that stage without leave was unsuccessful.

4. On 15 October 2007, the wife filed a further amended application for interim orders.

Orders made by consent on 30 January, 2008

1. The husband submitted that his application for single experts had been the subject of extensive correspondence prior to the filing of a response on 24 August 2007 in which he sought orders for the appointment of a number of single expert valuers. It was his submission that the orders finally made by consent on 30 January, 2008 were essentially identical to those originally proposed by him, while conceding that (contrary to his proposal) the consent orders provided for him to pay the whole of the valuations, one half being characterised as a part property payment to the wife.

2. Similarly, the husband submitted that the wife consented to his application for specific discovery on the day of the hearing and also agreed on orders providing for the disclosure of material obtained on subpoena in this court, or from the wife pursuant to orders of this court, for the purposes of proceedings No. …1 of 2006 in the Supreme Court.

3. The husband’s submission was that the wife’s conduct in rejecting or not responding to proposals and her last minute agreement to orders which essentially mirrored those advanced earlier by him justified an order for costs.

4. In response, the wife submitted that there was early agreement between the parties as to the appointment of single expert valuers and what was, and remained, in issue was the question of valuation of Y Corporation. It was put that the husband did not need to incur costs seeking orders for the single expert valuations, as correspondence confirmed the wife’s agreement on 17 August 2007, prior to the filing of his response.

5. In relation to the specific discovery aspect, the wife submitted that the husband sought these orders in a response filed only one week after the letter in which he requested the provision of specific documents and the specific discovery sought by him in the response was not identical to that requested in his letter of 14 August 2007.

6. Apropos the application for an order relating to the disclosure of the material obtained on subpoena in this court, or pursuant to orders of this court, for the purpose of proceedings No. …1 of 2006 in the Supreme Court, the wife submitted that the husband had sought leave to disclose material for the purposes of two sets of proceedings in the Supreme Court, in respect of one of which he had not entered a defence at the time of the hearing before me, and that orders made by consent earlier by Young J limited the disclosure of material obtained on subpoena or from the wife to proceedings No. …1 of 2006.

7. In his submissions in reply the husband responded to the wife’s assertions and reiterated aspects of his earlier submissions.

Opposed applications

1. The court determined applications relating to jewellery which the wife sought to be returned to her. In response, the husband sought orders relating to the provision of jewellery to a valuer and it subsequently being secured with a private company. Neither party was successful in obtaining the orders sought in respect of the jewellery. The court noted the absence of evidence which would support the making of either set of orders, and in lieu, made orders for the disclosure and valuation of any jewellery not already disclosed or valued.

2. I note the husband’s submission that he was “wholly successful” in his application in respect of the jewellery, save for what he called the practical variation of the order he sought. That sits uncomfortably with the finding, contained in paragraph 104 of the judgment of 30 January 2008, that “nothing persuades me that I should make an order as sought by the husband.”

3. The parties were unable to reach agreement on the question of evidence from adversarial expert valuers and the court was required to determine this aspect of their applications. Before me, the wife submitted that a single expert witness should be appointed to value the racing and tyre interests and that applications for the appointment of adversarial experts could be made at a later time, if necessary. I did not accept that submission, and granted each of the parties permission to tender a report and adduce evidence from an expert witness in relation to the valuation of those interests. The husband was successful in obtaining the order he sought in that respect.

Opposed application involving third parties

1. The husband conceded that although he opposed any step which might delay genuine attempts to resolve the proceedings between the husband and wife or increase the costs, he was prepared to abide the order of the court on the question of the joinder of the second, third and fourth respondents and the various orders and injunctions which the wife sought against them.  In his submissions in reply the husband referred to the necessity for his attendance and the wife’s failure to “make out her application”.  As is clear from the judgment of 30 January, 2008, numerous other applications were before the court that day, involving the husband and wife. 

Financial circumstances

1. In the course of the litigation much evidence has been adduced about the parties’ respective financial circumstances. Both assert they are in dire financial need; both assert that the other is extravagant; both assert that the other has failed to make full financial disclosure. At this point in the litigation the court could not make findings about their respective financial positions.

Conduct

1. I have considered the arguments advanced referrable to the conduct of the wife in the proceedings and find little substance in them. This litigation has been hard fought, as evidenced by the material to which the parties referred in their submissions, and in the hearing.

Success

1. The wife was wholly unsuccessful in resisting the order for the appointment of adversarial experts. As previously found, I do not find that the husband was wholly successful in his application in relation to jewellery.  The wife was wholly unsuccessful in obtaining orders against the second, third and fourth respondents.

Offers

1. I do not find that weight should be placed on various affidavits and letters which, the husband submitted, amounted to offers or which could justify the making of orders in his favour when, eventually, orders were made by consent in terms similar to those originally sought. The history of the litigation and the nature and timing of the filing or sending of the various documents militate against that.

Conclusion

1. Balancing all factors, I am not satisfied that the wife should pay all or any of the husband’s costs of this round of interim proceedings between them or costs said to have been incurred as a result of the application brought by her against the second, third and fourth respondents. The husband’s application for costs will be dismissed.

I certify that the preceding
34 paragraphs
are a true copy of the reasons for
judgment herein of the
Honourable Justice Brown AM.

Dated the           day of            2009.

…………………………………………
Associate.