Keats and Reeves (No 2)

[2010] FamCA 1165

FAMILY COURT OF AUSTRALIA

KEATS & REEVES (NO. 2) [2010] FamCA 1165

FAMILY LAW – COSTS – Indemnity costs

APPLICANT: Mr Keats

RESPONDENT: Ms Reeves

FILE NUMBER: SYC 4789 Of 2008

DATE DELIVERED: 20 December 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: The Hon. Justice Cohen

HEARING DATE: 20 December 2010

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms F. Hoad

RESPONDENT: No attendance

Orders

1. That the wife is to pay the costs of the Application in a Case of the husband filed 3 June 2009 resulting in orders of 30 November 2010 on an indemnity basis assessed in the amount fixed at $23,153.50 within 1 month from today.

Notation:

A.That at approximately 10.23am this matter was called outside the courtroom and Ms Reeves is not in attendance.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4789 of 2008

MR KEATS

Applicant

And

MS REEVES

Respondent

REASONS FOR JUDGMENT

1. In these proceedings, I made orders restraining the wife from continuing proceedings that she had taken for divorce and for property and spousal maintenance in the English High Court of Justice Divorce Division, after the husband had commenced section 79 proceedings in Australia.  The wife, among other things, refused to file documents in the Family Court of Australia in compliance with the rules, failed to appear and then, when restrained by this court from continuing the English proceedings, ignored the injunction and continued with them.  The procedural history of the matter is largely set out in paragraph 19 of my judgment delivered on 30 November 2010 and I shall not repeat it, but I refer to that history here as well as the judgment as a whole, because it is on that judgment that the husband now seeks indemnity costs.

2. Pursuant to the Act, ordinarily parties are to bear their own costs in property proceedings.  However, section 117(2) provides that where the Court forms the opinion that the circumstances justify it in doing so, the Court may, provided it considers the matters required by subsections 2(A), (4) and (5) of section 117, make an order for costs against a person in interlocutory proceedings as the Court regards just.  The only subsection which the Court must consider in this particular case in order to determine whether or not the circumstances justify the Court in making a costs order or indemnity costs order is section 117(2A).  That requires the Court to have regard to a number of matters, and I shall deal with them in the order that they appear in that subsection.

3. The first is the financial circumstances of each of the parties to the proceedings.  Although I do not know the financial circumstances of the parties in a detailed manner, I know that each has sufficient assets for it to be fair to say they could bear the costs of the other party in addition to their own. The wife appears to have one asset alone which is worth a million dollars according to her own evidence.  However, the husband appears to have assets which would allow him to cope with his own costs if I do not make a costs order against the wife in his favour.  None of the parties in this matter have legal aid.

4. The third matter to be considered is the conduct of the parties in relation to the proceedings. In my view, the conduct of the parties in this case is of importance.  The wife, as the facts make it clear; they are stated in the judgment, took a number of courses which must have significantly increased the husband’s costs without justification.  She waited on more than one occasion for the matter to be listed for hearing without giving any indication that she might appear or take any part in the proceedings, but appeared, in person, and by her appearance virtually forced an adjournment at no cost to her, but at cost to the husband who was always represented.

5. She also did something which I consider to be of critical importance because it is at the heart of the proceedings for which I am asked to make costs.  She commenced proceedings in England for tactical purposes after the husband had commenced proceedings in the Family Court.  It is those proceedings that I have now restrained.  I cannot say what might happen in relation to the husband’s costs of the English proceedings. I have no doubt they were significant. There is little doubt that he will, even if he is to succeed in a costs application in England, not be completely compensated by any costs order in the English proceedings for the costs he has incurred.  I think that it is highly likely that the English proceedings has imposed significant losses on him, irrespective of any costs application outcome in England.

6. In the course of the proceedings in England, the wife was restrained by the Family Court of Australia from continuing with them.  This did not stop her from proceeding in England in defiance of the restraining order, and despite the fact that she lives in Australia.  It is a matter of serious concern to me why she would believe that she could, in the face of an Australian restraining order continue the English proceedings while living in Australia and facing the possibility of an application to restrain her ultimately from continuing them by way of an anti‑suit injunction, challenge this Court’s authority in what she did, irrespective of the fact that, ultimately, the English Court decided to ignore the Australian restraining order.

7. It is a matter which I think puts these proceedings beyond being ordinary proceedings where a costs order might be made against a party who was unsuccessful. It transports the proceedings to proceedings which can be properly regarded as involving exceptional circumstances and therefore, the prospect of indemnity costs ought to be considered as a proper outcome. 

8. In my view, the wife’s conduct, on an overall basis, with three specific matters being of particular relevance, those three being her failure to file documents in the Australian proceedings and appearance at hearings in order to force an adjournment, her commencement of the English proceedings as a tactical move where she could achieve no more there than she can here, that commencement being after the husband had commenced the Australian proceedings, and her ignoring of the restraining order made against her warrants this court in seriously considering an indemnity costs order, if a costs order is to be made against her.

9. The next matter to be considered is whether the proceedings were necessitated by the failure of a party, which would be the wife, to comply with previous orders of the court.  They were simply necessitated by that failure.  Her continuing the English proceedings in the face of the Australian injunction necessitated the anti‑suit application here, in which the wife was wholly unsuccessful. This is the next consideration.  There has been no offer in writing by the wife to the husband. However, the husband warned the wife that if she proceeded as she has, he would be seeking indemnity costs.  That warning gave her specific notice of the risk she was taking, but she proceeded in any event, and was wholly unsuccessful.  There are no other matters which I regard as relevant.  In all the circumstance, I think this is a strong case for ordering the wife to pay indemnity costs and I shall make such an order.

10. I have examined exhibit B carefully.  In my view, there is nothing in it to indicate over‑servicing or unreasonable cost rates.  The costs seem to me to be entirely appropriate, in fact, considerably less than I expected in view of the extent of the evidence and the necessity to obtain an opinion from England.  In those circumstances, the costs that have been incurred by the husband of the application that I have dealt with of $23,153.50 are more than reasonable and I shall make an indemnity costs order in that amount. 

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen delivered 20 December 2010.  

Associate:     

Date:              22 December 2010