Keach and Keach & Ors (Costs)
[2012] FamCA 14
•23 January 2012
FAMILY COURT OF AUSTRALIA
| KEACH & KEACH AND ORS (COSTS) | [2012] FamCA 14 |
| FAMILY LAW - COSTS – THE FIRST APPLICATION – Trustee Company seeks costs against wife as a result of application by wife for orders against Trustee Company being dismissed – additional or alternative claim for order for costs against the wife’s father – no circumstances justifying an order for costs against the wife – no basis for an order for costs against the wife’s father – application dismissed. FAMILY LAW - COSTS – THE SECOND APPLICATION – where the wife was ordered to pay costs of $600 in relation to the production of documents pursuant to a subpoena – where the question of ultimate responsibility for payment of costs was adjourned to the final hearing – where a further order for costs was sought by the Trustee Company – where no submissions were made in support of the application – where not appropriate for a further order for costs to be made – application dismissed. | |
| Family Law Act 1975 (Cth) – s 106B, s 117 (1), (2), (2A), s 117AB | |
Family Law Rules 2004 (Cth) – Rule 13.02
| Knight v FP Special Assets Ltd (1992) 174 CLR 178, at 192-193 |
| APPLICANT: | J Pty Ltd (as Trustee of the Junior Trust) |
| RESPONDENT: | Ms J Keach |
| FILE NUMBER: | SYF | 2181 | of | 2006 |
| DATE DELIVERED: | 23 January 2012 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | By way of written submissions |
| JUDGMENT OF: | Strickland J |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Emmett |
| SOLICITOR FOR THE APPLICANT: | Esplins Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr Kearney |
| SOLICITOR FOR THE RESPONDENT: | Barkus Doolan Kelly |
Orders
The applications in a case filed by J Pty Ltd on 27 April 2011 and the response thereto filed by the wife on 30 May 2011 be dismissed.
There be no further order as to the order made on 18 November 2008.
The said applications and response be removed from the active pending cases list.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Keach & Keach and Ors (Costs) has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Act.
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
File Number: SYF 2181 of 2006
| J Pty Ltd (as Trustee of the Junior Trust) |
Applicant
And
| Ms J Keach |
Respondent
REASONS FOR JUDGMENT
Introduction
On 9 March 2011 I delivered my reasons for judgment in relation to competing applications by the husband and the wife for property settlement, applications by the wife for spousal maintenance with respect to child support, and for orders pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”) against K Law Firm. The wife also sought orders against J Pty Ltd (as Trustee for the Junior Trust), and in turn J Pty Ltd sought the dismissal of that application.
On 25 March 2011 I delivered addendum reasons for judgment and made final orders. In summary I made an order for property settlement, namely, that the husband pay to the wife the sum of $362,129, and that otherwise the husband and the wife retain the assets that they then each had. I dismissed the wife’s applications for spousal maintenance, with respect to child support, and pursuant to s 106B of the Act, and I dismissed all other applications. As to costs I made the following orders:
10.That within twenty-eight [28] days of the date hereof any party seeking an order for costs shall file and serve an Application in a Case setting out the orders sought, an Affidavit in Support, and written submissions in relation to the orders sought.
11.That any Response to any application for costs be filed and served within twenty-eight [28] days of the receipt of the said application, such response to comprise an Affidavit (if necessary) and written submissions.
12.Any Reply to any Response be filed and served within seven [7] days of the receipt of the said Response.
In purported compliance with those orders the following has occurred:
(a)J Pty Ltd filed two applications on 27 April 2011. In the first application the following orders were sought:
1.That the [Wife] pay [J Pty Ltd’s] costs on an indemnity basis;
2.In the alternative, that the [Wife] pay [J Pty Ltd’s] costs on a party-party basis up to and including 21 September 2009 and on an indemnity basis after that date;
3.In addition or in the alternative, that [Mr D] [the Wife’s father] pay [J Pty Ltd’s] costs on a party-party basis;
4.Such further orders as the Court thinks fit.
That application was supported by an affidavit of Mr Esplin, solicitor, and written submissions prepared by counsel.
I observe that Mr D, the wife’s father, was not named as a respondent to this application and there was in fact no application that he be joined or that he be made a party.
In the second application the following order was sought:
That the [Wife] pay [Keach Nominees Pty Ltd’s] costs in the amount of $1,631.30 in complying with the subpoena filed 27 March 2006.
Keach Nominees Pty Ltd was a Trustee of the Junior Trust prior to J Pty Ltd.
That application was supported by a further affidavit by Mr Esplin but no written submissions were filed.
(b)On 30 May 2011 the wife filed a response to both applications seeking that they be dismissed with costs. That response was supported by an affidavit of the wife and written submissions from her counsel. I observe that those submissions were not filed on behalf of Mr D and did not address the application that he pay costs.
(c)On 4 July 2011 written submissions in reply together with a further affidavit of Mr Esplin were filed on behalf of J Pty Ltd.
(d)On 6 July 2011 email correspondence was sent to my associate by the solicitors for J Pty Ltd attaching two letters passing between them and the solicitors for the wife as to orders made on 2 May 2006. This related to the second application filed by J Pty Ltd and I will say more about this later in these reasons.
(e)On 12 July 2011 the wife filed a written outline of further submissions. In those submissions it was put that the wife opposes J Pty Ltd being able to rely on the affidavit of Mr Esplin filed on 4 July 2011 together with the written submissions in reply on the ground that the evidence had closed and no application had been made for leave to rely on further evidence.
On 14 July 2011 a letter was sent to my associate by the solicitors for J Pty Ltd which in part read:
1.The affidavit of Hamish Esplin sworn 4 July 2011 is entirely responsive to the matters raised by the Wife in her affidavit and submissions of 30 May 2011. The 2nd Respondent did not know the basis on which the Wife resisted costs until that material was served. The further brief affidavit of Mr Esplin adduces evidence in support of submissions made by the 2nd Respondent by way of reply to matters raised in the wife’s submissions filed 30 May 2011.
Although the wife is strictly correct that the evidence had “closed”, and the filing of the affidavit was not permitted by the orders of 25 March 2011, and there should have been an application for leave to adduce this evidence, I propose to receive the affidavit for the reasons set out by the solicitors for J Pty Ltd. I also observe that in the written outline filed by the wife on 12 July 2011 a further submission was put which was also not permitted by the order of 25 March 2011, and it is somewhat disingenuous for the wife to then complain about the filing of the affidavit. I propose to receive that further submission as well, which in turn was responded to in the letter of 14 July 2011.
(f)On 10 August 2011 Mr D, having received on 4 July 2011 the documents filed by J Pty Ltd on 27 April 2011, filed a document described as “Submissions on Costs”, in which he opposed any order for costs being made against him.
(g)On 23 August 2011 J Pty Ltd filed a reply to the submissions of Mr D.
I observe that no party has sought to cross-examine the deponent of any affidavit filed and thus I will proceed on the basis that except where a fact is put in issue by a responding or replying affidavit, the contents of each affidavit are unchallenged. Of course, where there is a conflict in the evidence I am limited in what I can do with that given the absence of a hearing with cross-examination.
The relevant statute law
Any application for costs is governed by s 117 of the Act, the relevant provisions of which are as follows:
(1)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.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(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.
J Pty Ltd also seeks to rely on s 117AB of the Act, which provides as follows:
(1)This section applies if:
(a) proceedings under this Act are brought before a court; and
(b) the court is satisfied that a party to the proceedings knowingly made a false allegation or statement in the proceedings.
(2)The court must order that party to pay some or all of the costs of another party, or other parties, to the proceedings.
Counsel for J Pty Ltd submits that there is some doubt about the applicability of s 117 to third parties. He relies on obiter dicta by Moss J in The Marriage of Wilson and Figtree Gardens Caravan Park Pty Ltd (No. 2) (1994) 123 FLR 159 at 173 where his Honour suggested that because several provisions of s 117 are ill-suited to third parties it should be read down in respect of third parties.
Mr Emmett suggests that because of “the anomalies identified by Moss J” and because the statutory policy of s 117 in attempting to ensure that parties should not be deterred from seeking costs is “weaker or non-existent in respect of third parties” s 117 does not apply and costs should follow the event.
I reject this submission and the obiter dicta expressed by Moss J. Apart from anything else it is inconsistent with the approach of the Full Court in McAlpin & McAlpin (1993) FLC 92-411. Section 117 clearly applies to all parties to the proceedings including third parties and there is no warrant for confining it to parties to the marriage. Nor is there any basis for “reading the word ‘proceedings’ in s 117 differently from the manner in which it is defined in s 4 of the Act” as was suggested by Mr Emmett.
Discussion
THE FIRST APPLICATION FOR COSTS FILED BY J PTY LTD
The order for costs sought against the wife pursuant to s 117 of the Act
The scheme of s 117 is that each party shall bear his or her own costs
(s 117(1)). However, if the Court is of the opinion that circumstances justify it such order for costs can be made as is considered just (s 117(2)). Then, in considering what order (if any) should be made the Court shall have regard to the factors in s 117(2A).Turning to those factors, it is the case that (b) and (d) do not apply. As to the other factors:
(a)The wife has set out her financial circumstances in her affidavit filed on 30 May 2011. She is employed part-time in a professional capacity and her income from all sources including child support from the husband is $970 per week. Her claimed expenses are $2,085 although it is plain that some of those expenses are exorbitant. Her assets total $404,933, her superannuation entitlements total $249,547 and her liabilities total $777,132. Of those liabilities there is a personal loan of $607,558 from her father, Mr D, which she used to meet her legal fees.
I observe that in my reasons for judgment delivered on 9 March 2011 I found that it was extremely unlikely that the wife’s father, or her brother to whom she also owed money, would require the wife to pay out the loans from them. Nothing has been put to suggest that that has changed.
As to the wife’s financial resources she continues to be a beneficiary of the O1 Trust, and she can expect to receive benefits from that Trust into the future.
Thus it can be seen that the wife has assets and resources that will enable her to meet a costs order if one is made against her. Of course, as is emphasised by the wife’s counsel, J Pty Ltd has not specified the amount of costs that it seeks, but that is not required, and this circumstance cannot be used per se to prevent a costs order being made.
As to the financial circumstances of J Pty Ltd, it is apparent from the evidence given at the substantive hearing that it is in a sound position, owning as it does the property at M in Sydney and other assets as well. In any event, I consider that the financial circumstances of J Pty Ltd do not affect one way or the other whether a costs order should be made.
(c)This is a factor relied on heavily by both J Pty Ltd and the wife. J Pty Ltd submits that “the wife presented a false case to the court”, pointing out the findings that were made by the court as to her evidence. For example, the court rejected her evidence of the Junior Trust purchasing and becoming the owner of the property at M in Sydney for investment purposes. It is further said that this “false” evidence was the basis of the wife’s “grave allegation” that “the Junior Trust was a sham and that the trust structure was ‘mere camouflage’”.
A second aspect of the wife’s conduct relied on by J Pty Ltd is the wife’s refusal “to provide pleadings or particulars of her allegations against the Junior Trust (J Pty Ltd)”. It is claimed that if such detail was provided then that issue could have been dealt with far more simply and relatively quickly.
Finally, J Pty Ltd looks to rely on the circumstance that in final addresses the wife conceded that the husband’s father controlled the Junior Trust whereas this was not her position in her outline of case document.
Pausing here, it can only be the issue of the wife’s evidence that can carry any weight under sub-paragraph (c). The issue of the need for pleadings or particulars was dealt with three times, firstly by Watts J on 18 November 2008, then by Watts J again on 12 June 2009, and then by me on 21 September 2009. On each occasion the application for particulars by J Pty Ltd was dismissed. Thus, it is not open to J Pty Ltd to suggest that this is conduct of the wife that can sound in costs.
Similarly, it is clutching at straws to seek to rely on a change of position between the commencement of the case and the conclusion of the case given that at the latter time all of the evidence was then before the court.
Turning then to the findings in relation to the wife’s evidence, it would be a mistake to view that in isolation. It is necessary to also look at the findings in relation to the evidence of the husband, his father and his sister, and the conduct of the husband, his father and the Junior Trust (J Pty Ltd) in the running of the case. Indeed, it is the latter which is relied on by the wife in submitting that there should be no order as to costs.
As to the husband’s evidence I found as follows in my reasons for judgment delivered on 9 March 2011:
157.Although the husband was not represented, he had a reasonable understanding of the process and the issues involved. Generally he gave his evidence well, but when it came to anything to do with the Junior Trust and/or the house property at [M in Sydney], he was defensive to the point of being evasive. He was always at pains to distance himself from the Junior Trust and its assets, and in particular the [M in Sydney] property, and in the process his evidence often became inconsistent and at times hard to follow. This was an inevitable consequence of the historical circumstance that there had not always been a strict division of roles in relation to the Junior Trust, and at times the public face of the husband in relation to the Junior Trust, and the property at [M in Sydney], were prima facie at odds with the strict legal position. For example, he referred to the house as “mine” or “ours”, meaning he and his wife’s, he described he and his wife as the landlords in lease documents, and he represented that he was the sole beneficiary of the Trust. Thus, it was when these issues and others of a like nature were put to him in cross-examination that he became defensive and sometimes evasive in his response. He lapsed into saying that he did not recall or that he did not know, when he would have been expected to have been able to answer the particular question.
In addition I made specific findings such as that the husband’s evidence as to how he had spent the draw-downs from his loan account with the Trust was “less than satisfactory”, and that there were “significant uncertainties” in relation to the origin and repayment of the debt post-separation to the husband’s father.
With the oral evidence given on behalf of the Junior Trust (J Pty Ltd), there was the husband’s father and the husband’s sister. Both were defensive and difficult about aspects of the operation of the Trust and the husband’s involvement in the same.
Counsel for J Pty Ltd in his submission in reply says that the conduct of the husband and any adverse finding in relation to his evidence is irrelevant to the application for costs by J Pty Ltd. However, I reject that submission. The principal issue in the proceedings was whether the asset pool should comprise the assets of the Junior Trust (J Pty Ltd) on the basis that the Trust was a sham and the husband was in reality entitled to its assets. Thus, the husband’s position and that of his father vis a vis the Trust was highly relevant not only to that issue but also to other related issues such as whether if there was not a sham did the Trust and its assets represent a financial resource of the husband. However, because of the conduct of the husband and the Junior Trust (J Pty Ltd) in resisting and failing to make proper disclosure coupled with the evidence of the husband and the father there was what the wife’s counsel describes as “a lack of clarity as to the interrelationship between the affairs of the Trust, the husband and the husband’s father”.
As is apparent from the affidavit material that the wife has put before me that lack of clarity resulted in many requests and applications to the court looking to obtain the necessary information from the husband and/or the Junior Trust (J Pty Ltd) and that persisted both in the immediate lead-up to the trial and during the trial itself. For example, in a letter from the solicitors for J Pty Ltd dated 24 July 2009 it was put that the financial circumstances of the Trust were “irrelevant to the dispute”, and thus the duty of disclosure in Rule 13.02 of the Family Law Rules (Cth) 2004 did not apply. I had to deal with this issue during at least one of the many interlocutory applications that arose during the hearing related to the failure by the Junior Trust (and the husband) to provide full and frank disclosure. In my view it was beyond doubt that the duty of disclosure applies to the Junior Trust (J Pty Ltd) and I made findings accordingly in my ex tempore reasons for judgment delivered on 24 September 2009 (for example see paragraphs 16, 17 and 18).
The failure by the Junior Trust (and the husband and his father) to provide relevant documentation and the impact of that on the proceedings and the trial is no better illustrated by the fact that it was only during the hearing that the general ledgers for 2007 and 2008 for the Junior Trust and the general ledgers for the Senior Trust for a number of years going back to 1995 were produced by the accountant for the Trusts. Then, as detailed in paragraph 117 of my reasons for judgment, on 25 September 2009 (the last day for taking evidence) senior counsel for J Pty Ltd sought to tender general ledgers of the loan accounts for the Junior Trust. These documents had been requested by the wife from at least March 2006. However, I dismissed the application primarily because of the late production of the ledgers.
In the reply submissions filed on behalf of J Pty Ltd it is submitted that these matters provide no basis for refusing a costs order against the wife. It is said the complaint of lack of clarity is too vague to place any weight on it, and in effect the wife’s claim did not fail by reason of the late production of documents.
I reject entirely the submission as to the lack of clarity, and in my view the reply generally overlooks the crucial issue that if the Junior Trust, and the husband and his father, had provided full and frank disclosure in a timely fashion, the case may very well have taken on a different turn and the proceedings and the hearing may well have been truncated or determined far earlier than they were. Thus I consider the conduct of the Junior Trust (J Pty Ltd) and the related conduct of the husband and the father as highly relevant to the application for costs, just as my findings as to the evidence of not only the wife but also the husband, his father and his sister.
(e)As is conceded by the wife, she was “wholly unsuccessful as against the Trust in establishing that it was a sham”, but I agree with the submission of the wife that this must “be viewed in the context of the wife being successful in establishing that the Trust represented a resource of some substance to the husband, a conclusion which was resisted.” Despite the position taken by the husband, the husband’s father and the Junior Trust (J Pty Ltd) that the husband had no expectation of benefitting from the Trust, I found that the Trust and its assets were a significant and substantial resource of the husband.
(f)J Pty Ltd relies on an offer of settlement made on 1 September 2009 to the effect that both parties walk away with each party paying their own costs. That offer was rejected and the matter proceeded to trial on 21 September 2009.
However, it is submitted on behalf of the wife that she was in effect justified in rejecting the offer given the prevailing circumstances, namely:
5.30.1The conduct of the Trust and the husband up to the date of the offer and during trial;
5.30.2Similarly, the absence of complete compliance with the obligation of full and frank disclosure by the Trust and the husband; and,
5.30.3The findings ultimately made by the court as to the inter-relationship of the husband and the Trust during the marriage and following separation (and the lack of clarity regarding the same) and the Trust being a financial resource of the husband.
In support of this proposition the wife’s counsel referred the court to what was said by the Full Court in Pennisi & Pennisi (1997) FLC
92-774, at 84,547:Offers must be seen in the context of the case and the extent of the offeree’s knowledge of the parties’ financial circumstances while the offer is live. In the family law jurisdiction, it is not uncommon to find relationships where one party, often the wife, has significantly less grasp of the parties’ financial arrangements, or the financial circumstances are so complex that it would be premature to accept an offer. There are also cases where the contents of the offer are in themselves, the subject of disputed value and legitimate subject matter for determination. These and other features of the context of offers must be taken into account when considering whether it was reasonable or not to accept and offer, no matter how close to the ultimate result the offer may be.
This submission resonates with me, and although the offer and its non-acceptance is a matter to be considered in the exercise of discretion, so is the context of that offer.
(g)It is submitted on behalf of J Pty Ltd that it is necessary to take into account that “the wife’s claim was against a third party controlled not by the husband but by a stranger to the marriage.” It is said to be necessary because the policy behind the general rule in s 117(1) “is not present, or is much weaker in respect of claims against third parties.” However, I do not accept this submission and I refer to what I have said in rejecting the claim of J Pty Ltd that s 117 should be read down where third parties are involved.
Taking all these matters into consideration, in the exercise of my discretion I do not consider that an order for costs is justified pursuant to s 117(2) of the Act.
The order for costs sought against the wife pursuant to s 117AB of the Act
It is said that the adverse findings in relation to aspects of the wife’s evidence brings the case within s 117AB, and thus the court must make an order for costs against her.
For s 117AB to apply I must find that the wife “knowingly made a false allegation or a statement in the proceedings”. That is a standard that is simply not reached in these proceedings, and I agree with the submission of the wife that:
That the court did not accept the evidence of the wife in a number of respects (which is conceded) does not establish that the wife knowingly made a false allegation or statement in the proceedings nor was such contention put to the wife at any time during the trial.
Thus, there should be no order for costs against the wife pursuant to s 117AB.
The order for costs sought against Mr D
I again observe that at no stage has Mr D been named or joined as a party to the application for costs against him. Indeed, although the solicitors for J Pty Ltd stated in their email forwarding the initial application, affidavit and written submissions to the court that Mr D would be sent copies of those documents, that did not in fact happen until 4 July 2011!
In these circumstances Mr D was quite entitled to ignore the application, and it was not to the point that he had notice of it.
I am tempted to simply dismiss the application out of hand, but given that
Mr D has now filed submissions opposing the application, I will deal with it on its merits.At the outset though I indicate that I propose to dismiss the application, and for that reason I do not propose to delay the finalisation of this matter by setting up a hearing to give Mr D the opportunity that he would normally be entitled to to make further submissions.
I observe that despite their failure to properly involve Mr D in their application, a submission in reply to Mr D’s submissions was filed on behalf of J Pty Ltd in which J Pty Ltd disingenuously raises no opposition to Mr D making submissions or making an application to adduce evidence, and generously offers to appear at any hearing fixed for that purpose.
It is beyond doubt that the court has the power to make a costs order against Mr D, even though he was not a party to the substantive proceedings (Knight v FP Special Assets Ltd (1992) 174 CLR 178, at 192-193; Re: JJT and Ors; Ex-Parte Victoria Legal Aid (1998) FLC 92-812; Re: P (a child); Separate Representative (1993) FLC 92-376; McAlpin & McAlpin (1993) FLC 92-411).
It is also apparent from the authorities that although the court has a wide discretion and the power should be exercised sparingly, relevant considerations include:
(a)whether the relevant party to the proceedings is insolvent or a person of straw;
(b)whether the non-party has played an active part in the conduct of the litigation; and
(c) whether the non-party has an interest in the subject of the litigation.
Mr D filed two affidavits on behalf of his daughter in the substantive proceedings, namely on 2 April 2009 and 3 September 2009. In those affidavits the following emerges. Firstly, Mr D lent the wife money to meet her legal costs and to pay her rent on the basis that the same was repaid out of any settlement that she may receive in the proceedings. However, if she was not able to do that then adjustments would be made to what the wife might receive from Mr D’s estate. In addition, Mr D provided the wife with money to meet household and other expenses on an ongoing basis.
Turning to the relevant considerations above. First, it is beyond doubt that the wife is not insolvent and nor is she a person of straw. Counsel for J Pty Ltd, although conceding that, submits that that is “outweighed” by other considerations including that there may be some doubt about the wife’s ability to meet a costs order, and she seeks to avoid a costs order on the ground of hardship to her and the children. For my part there is no doubt about the ability of the wife to meet a costs order, and I reject entirely the submission that a proper basis for ordering Mr D to either pay the costs or be jointly liable for the same is because the wife’s financial position may militate against a costs order being made against her.
Secondly, there is no evidence that Mr D took an active part in the proceedings. All he has done is lend money to the wife to meet her legal costs.
Thirdly, it can be seen that Mr D did have an “interest” in the subject of the proceedings given that the arrangement he had with the wife was that if possible she would repay him out of any settlement that she received, but if that category of “interest” is to be a basis for making an order for costs against a non-party it will be a sorry day for litigation. As Baker J said in McAlpin & McAlpin at 80,209:
Many litigants (particularly in the family law area) receive assistance, both financial and emotional, from third parties without there being any suggestion of maintenance of champerty being involved and without there being present the slightest suggestion that they may be at risk as to costs.
This is the case here. Thus, taking all these considerations into account there is no basis for making an order for costs against Mr D.
Having determined that there should be no order for costs made against the wife or Mr D, and that each party should bear their own costs, it is unnecessary for the court to address the issue of the basis of any costs order.
The second application for costs
The background to the application is that in late March 2006 a subpoena to produce documents was issued on behalf of the wife to Keach Nominees Pty Ltd (the former Trustee of the Junior Trust) returnable on
4 April 2006. On 4 April 2006 a consent order was made limiting the documents to be produced, and the issue of the costs of production was adjourned to 18 April 2006, and on that day further adjourned to 2 May 2006.Although annexure “C” to the affidavit of Mr Esplin filed on 27 April 2011 is a letter from the accountants for the Trust to the solicitors for the Trust indicating that the costs of production were $1,631.30 (i.e., the amount now claimed), on 2 May 2006 the amount of $4,406.70 was sought. On that day Registrar Cameron made an order that the wife pay the costs of Keach Nominees Pty Ltd fixed in the sum of $600. It is not apparent from the court file whether that represented the costs of production or some other costs, but I propose to proceed on the basis that it was the former. In any event, the matter then came before Loughnan JR (as he then was) on 16 May 2006, and, inter alia, his Honour ordered as followed:
That the question of the ultimate responsibility for the costs of [Keach] Nominees Pty Ltd in relation to a subpoena that issued to that entity be adjourned to the final hearing.
It was this order that I raised with the parties when I delivered my reasons for judgment on 9 March 2011. Then, on 17 March 2011 the parties indicated that they would address this order in any costs application that they determined to file.
I observe again that despite J Pty Ltd filing an application seeking payment of the sum of $1,631.30, no written submissions were presented in support of that application. There was an affidavit filed but that was of no assistance whatsoever, and certainly provided no basis for making the order sought.
In her submissions in response, the wife adverted to the background set out above, and submits that “the application has already been heard and determined”. Then, in the submissions of J Pty Ltd in reply it is said that on the basis that an order for the payment of $600 was made in May 2006, the order that J Pty Ltd now seeks is that the wife pay $600 within 14 days.
In these circumstances I do not propose to make any further order, and I will dismiss the application by J Pty Ltd. The initial order for the payment of $600 still remains, and the wife does not suggest that any other party should pay it.
I observe that I also raised with the parties the order made on 18 November 2008 and to which I referred in paragraph 105 of my reasons for judgment, namely that the question of “how ultimately the costs (of an updated expert report) are borne as between the parties” be reserved to the trial judge. The order made on that day was that the parties were to equally pay the costs of the report. Neither party has sought to deal with this issue, and thus I will make no further order in relation to this matter.
The final issue is that in the response filed by the wife she not only sought that the applications be dismissed, but that they be dismissed with costs. However, no supporting material including any submissions were filed by the wife. In any event, in all the circumstances I do not consider it appropriate for an order for costs to be made. Given the outcome of the substantive proceedings it was reasonable for J Pty Ltd to seek an order for costs. Further, given the confusion surrounding the order of 16 May 2006 it was also reasonable for the second application to be made by J Pty Ltd as well.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on
23 January 2012.
Associate:
Date: 23 January 2012
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Jurisdiction
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Procedural Fairness
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