Karbines and Karbines & Ors (No 2)

[2009] FamCAFC 247

FAMILY COURT OF AUSTRALIA

KARBINES & KARBINES AND ORS (NO. 2) [2009] FamCAFC 247

FAMILY LAW - COSTS – applications for costs by the wife and two interveners against the husband and his mother in relation to an application for enforcement – applications for costs by the wife and two interveners against the husband in relation to an application seeking  the reinstatement of an appeal deemed abandoned – application by the husband seeking an adjournment refused – where the costs applications relate to a number of different hearings – whether there are circumstances justifying costs – consideration of the circumstances surrounding each hearing – consideration of the financial circumstances of the parties – orders made for the husband and his mother to pay costs to the wife and the interveners – ordered costs to be paid within 3 months.

Family Law Act 1975 (Cth) s 117

APPLICANT: MR KARBINES

1^ST RESPONDENT: MRS KARBINES

2^ND RESPONDENT: C PTY LTD
(IN LIQUIDATION)

3^RD RESPONDENT: MR WILLA & MRS WILLA

FILE NUMBER: MLF 2479 of 2005

APPEAL NUMBER SA 111 of 2008

DATE DELIVERED: 6 November 2009

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Strickland J

HEARING DATE: 6 November 2009

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 19 December 2008

LOWER COURT MNC: [2008] FamCA 1115

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Camatta

SOLICITOR FOR APPLICANT: Patrick Cash & Associates

COUNSEL FOR 1^ST RESPONDENT: Mr Jordan

SOLICITOR FOR 1^ST RESPONDENT: Maddens Lawyers

COUNSEL FOR 2^ND RESPONDENT: Mr McGrath

SOLICITOR FOR 2^ND RESPONDENT: Norman Waterhouse

COUNSEL FOR 3^RD RESPONDENT: Mr Bersee

SOLICITOR FOR 3^RD RESPONDENT: Herman Bersee Solicitors

Orders

1. That in relation to MLF 2479 of 2005 and SA 111 of 2008 the husband pay to the trust account of the wife’s solicitors on behalf of the wife the sum of EIGHT THOUSAND FIVE HUNDRED DOLLARS [$8,500.00] by way of costs, such sum to be paid within three [3] months of the date hereof.

2. That in relation to MLF 2479 of 2005 and SA 111 of 2008 the husband pay to the trust account of the solicitors for the liquidator [C Pty Ltd] (in liquidation) the sum of ELEVEN THOUSAND DOLLARS [$11,000.00] by way of costs, such sum to be paid within three [3] months of the date hereof.

3. That the husband pay to the trust account of the solicitors for Mr and Mrs [Willa] the sum of THREE THOUSAND SIX HUNDRED AND THIRTY ONE DOLLARS AND FORTY ONE CENTS [$3,631.41] by way of costs, such sum to be paid within three [3] months of the date hereof.

4. That Mrs [J Karbines] pay to the trust account of the wife’s solicitors on behalf of the wife the sum of ONE THOUSAND DOLLARS [$1,000.00] by way of costs, such sum to be paid within three [3] months of the date hereof.

5. That Mrs [J Karbines] pay to the trust account of the solicitors for the liquidator [C] Pty Ltd (in liquidation) the sum of TWO THOUSAND DOLLARS [$2,000.00] by way of costs, such sum to be paid within three [3] months of the date hereof.

6. That the oral applications for costs before Justice Strickland be dismissed and removed from the active pending cases list.

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

IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE

APPEAL NUMBER: SA 111 OF 2008
FILE NUMBER: MLF 2479 of 2005

MR KARBINES

Applicant

And

MRS KARBINES

1^st Respondent

C PTY LTD (IN LIQUIDATION)

2^nd Respondent

MR WILLA & MRS WILLA

3^rd Respondent

EX TEMPORE REASONS

1. In this matter, I have before me today applications for costs by the wife, the intervener C Pty Ltd (in liquidation) and the interveners Mr and Mrs Willa.  The applications for costs are against both the husband and the husband's mother, Mrs Karbines.  The applications range across two separate sets of proceedings:  firstly, an application for enforcement filed by the liquidator on 20 May 2009 in file MLF 2479 of 2005 and an application for reinstatement of an appeal filed by the husband on 26 August 2009, which has a file number of SA 111 of 2008.

2. The applications are opposed by the husband, who is represented today.  The husband's mother, Mrs Karbines, has not attended today, either in person or by legal representation.  That is despite her solicitors on file being advised by the court of the date of hearing.  A letter was sent to all parties, through their solicitors, advising of the listing today.

3. Initially, Mr Camatta, who appeared for the husband, sought an adjournment, as a result, he says, of late receipt by his instructing solicitor of the various memoranda and itemised cost accounts from the applicants.  Those documents were lodged, filed, call it what you will, pursuant to a request of mine made when this matter was last before me on 15 October 2009.  Mr Camatta says his instructing solicitor has not had the opportunity to take complete instructions from his client on those documents. 

4. I have indicated already that I am not prepared to adjourn the case for the reason proffered.  Those documents, although they are part of the information upon which I rely, are very much aide‑memoires, and in any event the detail has been elaborated on today, and I will come to that in a moment.  I also note that again the husband has chosen not to attend this hearing and he has sent along counsel, who is limited by his instructions.  This matter needs to be determined, and ample notice was given of the hearing date today.

5. The cost applications not only range over two sets of proceedings but over a number of attendances stretching back to 11 June 2009, when the application of the liquidator for enforcement first came before me.  In these reasons I need to work through the various hearings in relation to which costs are sought. Although counsel have made submissions on a general basis, unfortunately, I am not able to do the same, I need to work through those individual hearings because different considerations apply to each of them.

6. Commencing that exercise, the first hearing which is the subject of an application for costs is the hearing on 11 June 2009 and that, as I say, was the first return date, if you like, of the application for enforcement.  On that date, the husband appeared in person.  He sought an adjournment of the application.  He said that he had not physically received the application and supporting affidavit.  He did not respond, though, when it was pointed out to me and to him by Mr McGrath, who appeared for the liquidator on that occasion, that the documents had been emailed to Mr Karbines, as well as sent through the post.  Mr Kabines then, in effect, said, "Well, look, I want to file some answering documents, I want to consider my position and put a proposal to the liquidator to resolve this issue", and it was on that basis that I granted his adjournment application and indeed, as I recall, there was not strong opposition to the adjournment application on that basis by Mr McGrath.  However, Mr McGrath did seek that the question of costs be reserved, and they were.  I set a time frame for the husband to file and serve his answering documents and adjourned the matter to 2 July 2009.

7. As it has turned out, the husband has completely ignored my order.  He still has not filed any answering documents to that application in the case yet.  He has been represented by counsel at subsequent hearings.  It reached a point, though, on 25 August 2009 when his counsel sought leave to withdraw, on the basis that he had no instructions in relation to the liquidator's application for enforcement.  I find that Mr Karbines has simply strung this court along, as well as the liquidator and the other parties, attempting to delay the hearing of the application, and ultimately he has not sought to be heard any further on that application, making what happened on 11 June 2009 a complete waste of time.  Indeed, I might say that there was no evidence put before me at any stage that any proposal was put by the husband, as he was looking to do as the basis of the adjournment.

8. Pausing there, in any application for costs s 117 of the Family Law Act 1975 governs the exercise and, as Mr Camatta has rightly pointed out to me, the starting point, if you like, under s 117 is s 117(1), which provides that subject to sub‑s (2), each party to proceedings shall bear his or her own costs.

9. Then if I turn, though, to sub‑s (2), that provides that if the court is of the opinion that circumstances justify it in doing so, an order for costs can be made, subject to sub‑s (2A).  Sub‑section (2A) then sets out a series of factors which the court must have regard to in considering what order, if any, should be made. 

10. Thus, the first premise is that each party is to bear their own costs. However, that is subject to whether there are circumstances justifying an order for costs and that circumstance can be found within any one of the factors in s 117(2A). In a general sense in this case, what is relied on in terms of circumstances justifying an order for costs is the conduct of the proceedings by the husband. That is encapsulated in subparagraph (c) of s 117(2A) and also, in my view, is part of subparagraph (g), which is a catch‑all.

11. In relation to the hearing on 11 June 2009, in my view, there are undoubtedly circumstances justifying an order for costs, namely the conduct of the husband in relation to that hearing, and the liquidator should have his costs thrown away on that day.  The liquidator says that those costs are $1000, and I will come back to that when I deal with other matters.

12. The hearing of the enforcement application was adjourned from 11 June 2009 to 2 July 2009.  It came before Burr J, but I do not need to dwell on that hearing, given there is no application for costs in relation to that day.

13. His Honour adjourned the matter further to 27 July 2009, when the matter came back before me.  No application for costs is made in relation to the hearing on that day, but it is necessary for me to briefly reflect on that hearing because it has an impact upon subsequent hearings in respect of which there are applications for costs.

14. On that day what was before me was the application for enforcement and also two applications filed by the husband in an appeal, respectively on 5 June 2009 and 15 June 2009.  Those applications were seeking extension of time to file notices of appeal.  Ultimately I dismissed those applications and made cost orders at the time in the sum of $1800 for the liquidator and $1800 for the wife.  I note, though, and this is relevant to the financial circumstances of the parties, that those cost orders have not been paid by the husband.

15. In relation to the application for enforcement, there was discussion about the progress of that application.  The husband, at that point, still had not filed any responding documents, yet Mr Berman appeared for him.  The matter was adjourned to 13 August 2009, and that was at the request of the husband.  I cannot quite recall the specific reason, but my general memory of it was he needed more time to address the issues.  He had instructed solicitors and Mr Berman was counsel, and at that stage adjournments were more readily granted than later in the piece.  In any event, an adjournment was granted until 13 August 2009, to give the husband more time to deal with the application for enforcement.

16. In relation to 13 August 2009 there is an application for costs by the liquidator.  On that day I again had before me the application for enforcement and the two applications in an appeal that I have referred to and it was on this day that I dismissed those applications and made orders for costs.  In relation to the enforcement application, though, what happened was Mr Richards of counsel appeared for the mother, Mrs J Karbines, who had been served with the enforcement application.  Initially Mr Richards put to me his instructions were that the mother, Mrs Karbines, had not been served and had not received the documents, but when I pointed out to Mr Richards that there was an affidavit of service on file, annexing an acknowledgment of service by Mrs Karbines, he took a step back and said he needed to take instructions and would raise it on the next occasion. 

17. In any event, as far as I was concerned, there was no doubt that Mrs Karbines had been served with the application, but what Mr Richards sought was an adjournment. The husband also sought an adjournment of the applications in an appeal, but I dismissed that oral application and dismissed the applications in an appeal.  In relation to the application for enforcement, the husband did not seek an adjournment, but I granted his mother’s application for an adjournment.  Mr McGrath, for the liquidator, sought an order for costs against both Mrs Karbines and the husband in relation to the adjournment of the application for enforcement.  In my view, though, given that there was no application to adjourn sought by the husband of that application, the only order for costs of the adjournment could be against Mrs Karbines. I said that at the time and on that basis, Mr McGrath does in fact only seek the costs of that day against the mother, Mrs Karbines. In that regard, the amount of $1000 is sought against the mother by the liquidator, and I will come back to that. 

18. There was no argument on the day as to the appropriateness or otherwise or the circumstances justifying an order for costs, but it is quite clear, having refreshed my memory from my reasons for judgment, that there were circumstances justifying an order for costs.  The matter was listed to be heard, counsel attended and sought an adjournment, initially it was suggested that Mrs Karbines had not received the documents, but that was not correct, and then it was simply a matter of, "Well, we need some time to deal with this," and in the interests of justice I determined an adjournment was appropriate, but it had to be subject to an order for costs.  Thus in my view, there are circumstances clearly justifying an order for costs against the mother, Mrs Karbines, on that day.

19. The adjournment was to 25 August 2009.  On that day the application for enforcement was again before me.  The mother, Mrs Karbines, had filed a response and supporting material on 21 August 2009.  That is also the day that I mentioned earlier when Mr Berman, who was counsel for the husband, sought leave to withdraw, and that leave was granted.  In relation to the costs sought on that day, Mr Jordan has identified that the costs his client seeks are against the mother, and Mr McGrath now says the same on behalf of the liquidator.

20. On 25 August 2009, as I say, there was a response before me filed by the mother, Mrs Karbines. The liquidator sought to pursue his application for enforcement and the wife was there in support of that application. In Mrs Karbine's response, she firstly sought that the application of the intervener be dismissed and, in the alternative, that it be adjourned. Her counsel on that day indicated to me that he was not pursuing that day the application for dismissal but he was pursuing the application for an adjournment. I have set this all out in my reasons for judgment delivered on that day and I do not need to repeat all of it, but the adjournment application was put on two bases: firstly, that it be adjourned pending final determination of an appeal by the husband. The appeal referred to was in relation to the husband's then proposed application to seek reinstatement of the appeal which had been deemed abandoned, and the mother's position was that if that appeal was reinstated and was successful and the matter was sent for retrial, she would join in that retrial and pursue a claim she says she had in relation to the property in Queensland. Secondly, if the husband's application to reinstate was unsuccessful, the mother was wanting time to file a s 79A application to set aside the orders of Dawe J, presumably. The problem with all that was there was no application for reinstatement of the appeal yet filed by the husband, so it only left one basis for an adjournment, namely, to enable the respondent to proceed pursuant to s 79A, and on that basis, an adjournment was sought for three months.

21. That application was opposed by the intervener and by the wife.  Both counsel, in extensive submissions, took me to the history of this matter and the involvement of the mother, such that at the end of the day, I found that for the mother to suggest that she really did not know what she needed to do and she has only now realised she needs to obtain that, in my view, was a load of nonsense. Also I agreed with Mr Jordan's summary, that it is a bit rich for the third respondent to simply describe herself as a 70 year old pensioner who has now suddenly realised she needs to do something about this.  I did not accept that for one moment.  Thus I found that there was no justification for an adjournment of the application and I dismissed the relevant paragraphs of the response. Given that, the intervener then pursued his application for enforcement and that left, of course, the response insofar as it sought a dismissal of that application.

22. I then made orders on that day on the application for enforcement designed to give effect to paragraph 5 of the order made by Dawe J on 19 December 2008.  In effect, what I ordered was that the husband and the wife provide vacant possession of the property in Queensland and I adjourned the matter for further consideration to 17 September 2009.

23. The basis of the application for costs by the intervener and the wife was in relation to the adjournment application by the third respondent, Mrs Karbines, which I dismissed.  Thus, looking at whether there are circumstances justifying an order for costs, in my view, there clearly are.  Her application to adjourn was wholly unsuccessful, and there should be an order for costs in favour of the intervener and the wife against Mrs Karbines for costs thrown away that day. 

24. Moving then to 17 September 2009, obviously, the application for enforcement was still before me. There was also an application in the case filed on 17 September 2009 by the intervener pursuant to s 79A of the Family Law Act1975, and there was still, of course, the response filed by the third respondent on 21 August 2009.  On that day, which was relatively short in fact, I adjourned the enforcement application to Dawe J because she was better able to deal with it.

25. The application for costs for the hearing on 17 September 2009 relates to the application in an appeal filed by the husband on 26 August 2009 seeking reinstatement of his notice of appeal.  That came on for hearing before me on that day, and in the end result I adjourned the application to 9 October 2009. 

26. In summary, time was spent in considering the application, but the need for the adjournment was to enable the respondents to better respond to the application.  Of course, the context of that is that ultimately the application in an appeal filed by the husband was dismissed and costs are sought in relation to each and every hearing and all the work undertaken by the intervener and the wife and Mr and Mrs Willa in dealing with that application and that encompasses, of course, the hearing on 17 September 2009. 

27. To repeat the application was adjourned to 9 October 2009.  On that day, each of the respondents had taken up the leave that I had given to file a response and further affidavit material, but all but one of those responses had been filed only the day before and the husband had not had the opportunity to provide full instructions to his legal representatives on those documents and file an affidavit in response, and Mr Berman sought an adjournment to file a responding affidavit.  That application was opposed but I granted the application.

1. In my view, there is no basis for making an order for costs in relation to the hearing on that day against the husband and I refer generally to my reasons for judgment delivered on that day and the reasons for the adjournment to 15 October 2009. 

2. The matter was then set for 15 October 2009, when I heard the husband's application and the responses.  At the end of the day I delivered an ex tempore judgment dismissing the husband's application for reinstatement.  All respondents, in terms of the orders for costs they seek in relation to that day, rely on as the circumstances justifying the order for costs, firstly, the fact that the husband was totally unsuccessful and, secondly, my findings in relation to the husband's conduct and in particular his lack of credit, in that I did not accept that the husband had told this court the truth in relation to not receiving documents, and that really formed very much the basis of his application for reinstatement. 

3. In my view, there are ample circumstances justifying an order for costs in relation to the application for reinstatement and those costs would encompass the hearing on 15 October 2009 and the earlier hearing that I have referred to already on 17 September 2009, but not, as I say, 9 October 2009. 

4. That then leads me to what order I should make in relation to costs.  As I say, I have received memoranda from each of the respondents detailing their costs.  At the commencement of the hearing today, I took each counsel through those memoranda and as a result, they have been substantially amended.  None of the respondents seek an order for indemnity costs, the orders sought are on a party/party basis, and without any order from me, that would be on the basis of the scale in the schedule to the Family Law Rules.  In that regard what has now been put to me is amended figures, calculated on a rough and ready basis, as to what the costs would be on the scale, save and except in relation to Mr Bersee, who appears for Mr and Mrs Willa.  He has provided me with an itemised costs account prepared on the scale.  I have challenged him about some of the items and he has conceded those. 

5. I am not sitting as a taxation officer and I do not propose to go through each and every item and determine whether it was reasonable or necessary or whether the appropriate figure is attached to it.  I accept what Mr Bersee says about that because there has been no challenge to it.  The issue for me, in relation to particularly then the costs sought by the liquidator and the wife, is whether I am in a position to fix costs or whether I need to send that off to taxation, and if I did that, I would also add Mr and Mrs Willa's costs to that because, as I say, I am not setting myself up as a taxation officer today. 

6. Mr Camatta has submitted, on behalf of the husband, that I should not fix costs, and that I should send it all off to taxation.  The respondents whose applications are before me today have submitted otherwise.  I consider that I have sufficient information before me in relation to the costs sought to fix the costs.  As I always say, my practice is, where possible, to fix costs, rather than put parties to the delay and usually further costs involved in a taxation process.  But I only do that ‑ in other words, fix costs ‑ where I consider I have sufficient information.  In this case, I find that I have, in looking at the basic memoranda provided to me and then with the further submissions from counsel as to how that can be translated into costs on the scale.

7. Using the scale, the wife seeks costs in the sum of $8500 against the husband and $1000 against Mrs Karbines, the liquidator seeks costs of $11,000 against the husband and $2000 against Mrs Karbines, and Mr and Mrs Willa seek against the husband the sum of $3631.41.

8. I have already found that there are circumstances justifying orders for costs, but I am obliged, under s 117(2A)(a), to take into account the financial circumstances of the parties. I have a relatively current financial statement filed by the mother, Mrs Karbines, pursuant to an order of mine. I have no current detailed information from the husband, although in a recent affidavit he deposed to continuing to work, to operating a business involving overseas interests, and to earning upwards of $40,000 or $50,000. In that affidavit filed on 14 October 2009, the husband, in paragraph 6, said this:

   I have the means to pay cost orders that may be made against me.  As at present, I am earning approximately $46,000 per annum.  I live alone and extremely frugally.  My personal living expenses are absolutely minimal.  Nevertheless, I remain able to pursue business opportunities and so my income does not remain static but is increasing.  Furthermore, should I re-occupy the [M] factory and complete a factory order that is presently dormant, I believe that I will receive the further sum of $80,000.

9. What I take from that is the husband is positive about his future, his income, his work, and his ability to meet any cost orders.  Mr Jordan has made the point that historically there has been some difficulty in pinning the husband down as to his financial circumstances and I accept that from my understanding of it, but for the purposes of today I do not need to go behind paragraph 6 of the husband's own affidavit.

10. I received submissions from Mr Jordan as to the wife's position and also from Mr McGrath as to the liquidator's position.

11. It is also relevant, and I mentioned this earlier, that there are a number of outstanding cost orders that the husband simply has not paid and that has put the respective respondents into difficulties from a financial point of view.  That said, that assessment of the financial circumstances of the parties does not change my position in relation to the circumstances justifying an order for costs or the amounts of those costs.

12. The next issue to address, and the final issue, is the time to pay the costs.  Of course, with Mrs Karbines, she is not here today, and she is not represented.  That is her difficulty, but I do have her financial statement before me.  That financial statement indicates, on its face, a poor financial position but the history of this matter and what I have read about it and what has been put before me for the purposes of each hearing indicates that I am not getting the complete picture from Mrs Karbines, the same as I have not been getting the complete picture from the husband.  Thus, although prima facie it would seem that Mrs Karbines is in difficult financial circumstances, I do not necessarily accept that.  She has been able to instruct both solicitors and counsel to appear on her behalf on previous hearings and that indicates some access to funds which, frankly, would not be readily apparent on her financial statement.

13. In terms of time to pay for the husband, Mr Camatta is without instructions.  He makes the sensible and logical submission that a reasonable time to pay should be allowed.  Counsel for the three sets of respondents each put to me that 28 days is a reasonable time, given the history of this matter.  In my view though, the husband should have more than that, and so should the mother.  I appreciate that the history of this matter is highly relevant and I appreciate that I am relying very much also on paragraph 6 of the husband's affidavit, where he indicates there is really no difficulty in meeting any order for costs, but there are ongoing matters still in this court ‑ not as many as there have been ‑ and hopefully they are rapidly coming to a conclusion, and there is still a way to go before this matter is finalised.  Thus I propose to give each of the husband and Mrs Karbines three months to pay the amount of costs that I have ordered. 

I certify that the preceding 40 paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 6 November 2009.

Associate