Kay and Kay and Anor - [2017] FCCA 515

FEDERAL CIRCUIT COURT OF AUSTRALIA

KAY & KAY & ANOR

[2017] FCCA 515

Catchwords:
FAMILY LAW – Costs application consequent on property orders – where Respondent Husband does not participate in present application – where a third party involved.

Legislation:

Family Law Act 1975, s.117

Applicant:

MS KAY

First Respondent:

MR KAY

Second Respondent:

MR V KAY

File Number:

WOC 923 of 2013

Judgment of:

Judge Altobelli

Hearing date:

Written submissions

Date of Last Submission:

3 February 2017

Delivered at:

Hobart

Delivered on:

8 March 2017

REPRESENTATION

Counsel for the Applicant:

Mr Campton

Solicitors for the Applicant:

Kells The Lawyers

There was no appearance by or on behalf of the First Respondent.

Counsel for the Second Respondent:

Ms Humphreys

Solicitors for the Second Respondent:

Hansons Lawyers

ORDERS

The Respondent Husband pay the costs of the Applicant Wife on an indemnity basis and fixed at a sum of $130,675, with such sum to be paid within one month of the date of these Orders.
The Second Respondent’s application for costs filed 22 December 2016 is dismissed.
The First Respondent’s Application for costs against the Second Respondent is dismissed.
Each party pay and bear their own costs of this application.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT WOLLONGONG

WOC 923 of 2013

MS KAY

Applicant

And

MR KAY

First Respondent

MR V KAY

Second Respondent

REASONS FOR JUDGMENT

Introduction

On 22 July 2016, shortly before his retirement, His Honour Judge Scarlett delivered reasons for judgment in a property dispute between the Applicant Wife, the First Respondent Husband and the Second Respondent, who is the son of the parties. His Honour heard the matter on 2 April 2015 and 1 September 2015. The date of the last submissions was 15 September 2015 and his reasons for judgment were published as [2016] FCCA 1841.
I had previously been involved in the matter and, indeed, adjudicated on an earlier interlocutory application. My reasons for judgment were delivered on 5 December 2014 and published as [2014] FCCA 2797. The reasons for judgment that I now provide relate to the costs application consequent on His Honour’s judgment from last year. The matter proceeded by way of written submissions. The Applicant’s submissions as to costs were, in fact, drafted by her Senior Counsel. This document refers to the documents that are relied on in support of the costs application and the lengthy, indeed, comprehensive submissions in relation to costs.
No submissions have been made by the First Respondent Husband and, indeed, he has not participated in the costs proceedings. The Second Respondent son provided his written submissions as to costs. Those submissions looked like they were drafted by his Counsel, Ms Humphreys. Again, this document refers to the documents relied on in support of the costs application, as well as detailed submissions. It follows that insofar as the costs application relates to the First Respondent Husband, the matter proceeds on an undefended basis.
I am satisfied that the applicable law is identified in the submissions, other than acknowledging that, as s.117 of the Family Law Act 1975 (‘the Act’) applies, I will simply rely on the various references to the law, including case law that is contained in the submissions. I record that both sets of submissions reflect some thought and consideration and were very helpful to the Court.
I want to make some preliminary observations. I am not sure whether it was an advantage or a disadvantage seeking to adjudicate on the costs issue in respect of the hearing that I did not actually hear. On the one hand, there is the obvious disadvantage caused by the fact that all that I can rely on is the judgment itself, whereas if I heard the case I probably would have had a much deeper understanding of the evidence and be able to make observations that go beyond something that can be achieved just by reading the various documents that the parties asked me to look at in the course of this consideration. Nonetheless, one advantage is that I do not have those nuances and therefore come to this matter with a degree of freshness and impartiality. Even my involvement in this case back in 2014 is sufficiently in the past as to create distance and therefore even greater objectivity.
I must confess that at times it has been difficult to discern the actual effect of His Honour’s orders as the reasons are somewhat scant at times in this regard. This is important because one of the things I must consider relates to the relative financial circumstances of the parties and thus their ability to sustain an order for costs. In any event, doing the best the Court can, it seems as if the following is the case.
Firstly, that His Honour accepted that the pool of assets was as contended for by the Applicant Wife. Secondly, that His Honour treated the various items of property identified at paragraph 35 of the reasons for judgment, totalling $598,395.71, as being, in effect, in the possession or the control of the First Respondent Husband. This meant, therefore, that the total pool consisted of the following. Firstly, $518,027.00, being items 1 to 9 of the balance sheet as contended for by the Wife and as accepted by the Husband. Secondly, $598,395.71, being the funds identified at paragraph 35 of the reasons for judgment and notionally treated as property of the Husband.
The status of the loan referred to at item 20 of the balance sheet is unclear and all I can do in the circumstances is to ignore it. It would seem, therefore – and, again, emphasising that, just doing the best I can – that the total pool was $1,116,422.00. Thus, what the Applicant Wife received from His Honour’s orders included the former matrimonial home at Property J, with a value of $475,000.00, the (omitted) Bank account worth $882.00, the burial plot worth $3,612.00, and an add back for legal fees paid of $84,411.00.
In other words, the Wife was deemed to have or received as a result of the orders property to the value of $563,905.00. It must follow that His Honour found that the Respondent Husband retained control of at least $598,395.00. As I foreshadowed, this process is necessary in order to establish what the financial circumstances of the parties to this case are for costs purposes. Of course, the Husband’s post-judgment actions (in burning the house down on 4 August 2016) have reduced the value of what the Applicant Wife, in fact, received, indeed quite significantly. The consequences that flow from that, legally, are not limited to the present costs application.
Turning now to the Applicant Wife’s cost application as regards the First Respondent Husband. This is relatively straightforward and, as I have indicated, proceeds on an undefended basis. The Court accepts the matters submitted on behalf of the Applicant Wife in her submissions as to costs insofar as they relate to the First Respondent Husband. The only comments that the Court makes are as follows.
Whilst s.117(2A), paragraph (g), does entitle the Court to consider matters that took place after judgment and especially the First Respondent Husband’s conduct, it should not be thought that everything an unsuccessful litigant says or does after judgment is necessarily relevant in a costs application. But in this case the Husband’s extremely high-handed unilateral actions are entirely consistent, it would seem, with His Honour’s findings about him. Indeed, arguably and with the benefit of hindsight the Husband’s post-judgment actions merely reflect his prejudgment attitudes and actions as found by His Honour.
Secondly, this is a comparatively rare case where indemnity costs should, in fact, be ordered, given the First Respondent Husband’s conduct, viewed in its entirety, both before and after judgment.
Thirdly, the Court does accept that it has power to fix costs - a matter that is plainly evident from the Federal Circuit Court Rules. Having regard to these matters – and, again, just accepting the submissions made in the Wife’s submissions so far as they relate to the Husband – the Court finds and orders the First Respondent Husband to pay the costs of the Applicant Wife on an indemnity basis and fixed at a sum of $130,675, such sum to be paid within one month. The Court is then satisfied that the First Respondent Husband does have access to these funds.
Turning now to the Applicant Wife’s costs application as against the Second Respondent, Mr V Kay. This matter is far from straightforward. What is plainly evident from paragraphs 30 and 31 of His Honour’s reasons is that the Applicant Wife’s claim against him was unsuccessful. Any conduct of the Second Respondent during the proceedings must be understood in that context. The Applicant Wife brought a claim against the third party and lost. The Second Respondent’s conduct assumes a significance in another context but there is no basis for a costs order against a Second Respondent in the present circumstances. It is, in effect, a bridge too far.
Finally, the Court now turns to consider the Second Respondent’s claim for costs against the Applicant Wife. Whilst he was successful in the proceedings, the focus here quite appropriately turns to his conduct, a matter that was clearly contemplated by s.117(2A)(c). The Applicant Wife’s submissions as to costs quite properly focus on His Honour’s adverse findings about the Second Respondent’s conduct and, specifically, the Second Respondent’s role in the proceedings.
To award costs in favour of the Second Respondent could easily be perceived as condoning conduct which His Honour thought was quite unacceptable. Whilst the Court acknowledges that there are factors in s.117(2A) that do point towards a costs order in favour of the Second Respondent against the Applicant Wife, the conduct factor strongly contraindicates against such an order.
The Second Respondent’s application for costs filed 22 December 2016 is dismissed. The First Respondent’s application for costs against the Second Respondent is dismissed.
The last issue is the costs of the present cost application. Having regard to the orders made, the Court believes that each party should pay and bear their own costs.
My mind goes back to comments that I made back in 2014 about this matter. I described it then in the following terms; ‘Let there be no misunderstanding, the present application is merely one battle forming part of the war that is going on between the family’.
Would that it were the case that the war that is happening between this family is necessarily finalised by the making of these orders. If history is any indication, that is far from the case.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Date: 22 March 2017