Kelleher and Anderson (No. 2)
[2007] FamCA 685
•30 May 2007
FAMILY COURT OF AUSTRALIA
| KELLEHER & ANDERSON (NO. 2) | [2007] FamCA 685 |
| FAMILY LAW - COSTS - Between parties |
Reserved Judgment
(Costs)
| Family Law Act 1975 (Cth) |
| Applicant: | Mr Kelleher |
| Respondent: | Ms Anderson |
| File Number: | MLF | 2734 | of | 2006 |
| Date Delivered: | 30 May 2007 |
| Place Delivered: | Melbourne |
| Judgment of: | Carter J |
| Hearing date: | By way of written submissions |
Representation
| Counsel for the applicant: | Mr G Thompson |
| Solicitor for the applicant: | Rickards Legal |
| Counsel for the respondent: | Mr Levine |
| Solicitor for the respondent: | Issac Brott & Co Solicitors |
Orders
That the wife pay the husband’s costs of and incidental to pars 2 and 5 of his Form 2 Application filed 5 December 2006 together with the husband’s costs of and incidental to pars 6 and 7 of the wife’s Form 2A Response filed 2 October 2006, subject however to pars 2 and 3 thereof.
That the payment of costs to be made by the wife shall not include the husband’s costs incurred at the hearings before Young J on 19 October 2006; or Mushin J on 9 November 2006; or Carter J on 8 December 2006.
That the costs to be paid by the wife shall include two-thirds of the costs incurred by the husband of each of the hearings on 15 December 2006 and 1 March 2007.
That the wife further pay the husband’s costs of preparation of the written submissions for costs, including counsel’s fees, if relevant.
That in the event the husband and wife do not agree as to quantum on or before 15 June 2007 the wife’s costs shall be assessed in accordance with Ch 19 of the Rules.
That there be a stay of enforcement of payment of the costs until the determination of the parties’ respective substantive applications and in the event that such costs remain outstanding at that time, the husband have leave to deduct them from any payment to be made to the wife in settlement of her claim, or alternatively to secure payment to or retained by the wife.
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLF 2734 of 2006
| Mr Kelleher |
Applicant
and
| Ms Anderson |
Respondent
REASONS FOR JUDGMENT
(Costs)
Proceedings are pending in this Court for alteration of interests in property between Ms Anderson (“the wife”) and Mr Kelleher (“the husband”). I am the Judge Manager for those proceedings. On 15 December 2006 I heard a number of interlocutory applications together with an oral application by the wife that I be disqualified from further hearing the matter. I made orders in respect of all issues save as to the question of disclosure, however, I was unable, given time constraints, to explain my reasons for doing so at that stage.
On 1 March 2007 I delivered Judgment in the matter as well as my determination of the outstanding issue of disclosure.
The question of costs arose and I made orders for written submissions to be filed.
Submissions in support of an application for costs were filed on behalf of the husband. Those submissions were filed within the time prescribed in my orders. However, I was made aware by my Associate that on 14 March 2007 the husband’s solicitors had communicated with her in writing, effectively seeking an extension of time to enable an assessment of the husband’s costs to be undertaken by a costs consultant. The letter set out on its face that a copy had been provided to the solicitors for the wife and a copy of the letter from the husband’s solicitors to the wife seeking consent to the extension of time was provided.
I was not made aware as to any response made by the wife’s solicitors to this request.
As I understand it the husband’s solicitor filed an affidavit on 26 March 2007.
On 27 March 2007 the solicitors for the wife forwarded by email to my Associate written submissions dated 26 March 2007 on behalf of the wife in response to the husband’s application for costs. It is convenient to note here that the wife does not make any application for her own costs but does oppose the costs sought by the husband.
No mention was made in the wife’s submissions as to the request by the husband’s solicitors for the extension of time to which I have just referred. Accordingly, on 28 March 2007, at my request, my Associate communicated with the wife’s solicitors, in broad terms enquiring of them as to their attitude to this request. A copy was sent to the husband’s solicitors.
On 2 April 2007 the wife’s solicitors responded saying:
“Attention: […]
Associate to the Honourable Justice Heather Carter
Family Court of AustraliaDear Madam,
RE: [Anderson] / [Kelleher] / MLF 2734 / 2006
Thank you for your letter of 28 March 2007.
We note that the husband is effectively seeking a variation to the orders made by Her Honour on 1 March 2007.
The orders state that each party shall have 14 days to file written submissions and the order does not refer to any party having the entitlement to file further affidavit material which in any event is extraordinary in an application for costs.
Our client certainly objects to the intent of the husband’s solicitors.
It should be further stated that the husband has misconstrued Her Honour’s orders.
Thank you.
Yours faithfully,
ISSAC BROTT & CO
Per Issac Brott”
I have to say I do not understand why the wife objects to the Court being made aware of the quantum of costs sought by the husband.
I note, however, that there has been no application to relist the matter for further submissions, notwithstanding the liberty that was reserved in par (5) of the orders made 1 March 2007.
Accordingly I will proceed without regard to the husband’s solicitor’s affidavit and without being able to ascertain the quantum of the husband’s costs.
Background
Commencing at par 6 of my Judgment I set out the issues which were at that stage before the Court and in the following paragraphs set out some background and explained how some of those issues had been narrowed or dealt with. I concluded at par 19 by detailing the issues which remained for consideration. I noted at par 20 that an application had been made on behalf of the wife that I should disqualify myself and dealt with that issue as well during the course of my Judgment.
My Reasons for Judgment concluded:
“Final Observations
365.At the conclusion of the hearing on 15 December 2006, I made orders in respect of all issues save for the question of disclosure. This last-mentioned matter has now been determined but, as already recorded, it is not necessary in my view to make a formal order for disclosure, given the parties on-going obligation to comply with the relevant Rules.
366.It is not necessary to repeat the orders which I made on 15 December 2006 however for ease of reference I will summarise them.
366.1I granted the husband’s application and appointed [Ms B] as the single expert in this case as to children’s issues.
366.2I made orders relating to the amount of time that the children should spend with the husband at Christmas and during the long summer vacation which were different from the orders sought by both parties, but not dissimilar to the orders sought by the husband.
366.3I refused the wife’s application for the return of the piano.
366.4I granted the husband’s application that the wife remove the caveat lodged over the property at [C].
366.5I refused the wife’s application in respect of the disposition of the proceeds of sale of the property at [C] and dismissed all of her applications seeking injunctive relief.
366.6I determined the issue of the application by the wife seeking disclosure, finding it unnecessary to make any orders in this regard, save that I will need otherwise to dismiss this part of the application.
366.7I made orders in relation to the interim financial arrangements necessary to be made pending the determination of the wife’s application for spousal maintenance. Those orders were not in accordance with the application of either party.
366.8I dismissed the wife’s application that I be disqualified from further hearing this matter.
366.9With the consent of the husband given through his counsel, I continued the undertaking which the husband had given to Mushin J on 9 November 2006 in par 4(a)-(h), noting that par 4(i) was no longer relevant.
…”
Orders Sought
The husband seeks costs against the wife arising from his Form 2 Applications filed 18 September 2006 and 5 December 2006.; the wife’s Form 2A Response filed 2 October 2006 and her Contravention Application filed 30 November 2006. The Court was requested to fix the husband’s costs, or alternatively to make orders that those costs be “taxed” in default of agreement. The Court was also asked to consider making an order for indemnity costs against the wife.
The wife resists the husband’s application for costs, as I have already recorded.
Legal Principles
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) is the relevant statutory provision. It is a general rule under s 117(1) that each party shall bear his or her own costs. However, pursuant to sub-s (2) the Court may make such orders as to costs as it considers just if it is of the opinion that there are circumstances to justify doing so. In considering what order (if any) should be made the Court is required (inter alia) to have regard to the matters referred to in s 117(2A). They are:
“117(2A) [Matters relevant to costs order]
In considering what order (if any) should be made under sub-section (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.”
In Penfold (1980) FLC ¶ 90-800 the Full Court of the High Court of Australia held that the general rule expressed by s 117(1) is not paramount to s 117(2) and must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs. Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Apart from that, however, there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. The members of the High Court did not agree with the suggestion made by the Full Court of this Court in the judgment under appeal that an order could only be made under s 117(2) in “a clear case”.
In I and I (No. 2) (1995) FLC ¶ 92-625 the Full Court held that there was no rule to the effect that special circumstances must be shown to justify a costs order in children’s matters. It is clear from the legislation itself and also from cases such as I and I (No. 2) that all of the factors set out in s 117(2A) must be considered and balanced in order to determine whether the overall circumstances justify making an order for costs. That said, there is no prescription in s 117(2A) or elsewhere in s 117 that more than one factor must be present before an order for costs is made. Nor is there any indication as to the comparative weight of the factors set out in sub-s (2A). Accordingly, there is nothing to prevent any factor being the sole foundation for an order for costs. (See Fitzgerald v Fish (2005) 33 FamLR 123 at [41]).
Submissions
The submissions of both parties are in writing and will be referred to when necessary. It is necessary to note here that whilst the husband’s submissions were filed in accordance with the orders that I made on 1 March 2006, with a copy having been forwarded to my Associate by email, those acting for the wife have not filed their written submissions although they did forward a copy to my Associate by email. These submissions will form part of the Court record and the wife’s solicitors must forthwith attend to filing the relevant submissions.
The submissions of both parties identify the relevant provisions under the Act as to costs, details of which I have earlier set out in these Reasons. The submissions then go on to deal with the matters under s 117(2A) to which the Court is required to have regard. The particular matters which were said to be relevant in the husband’s submissions were s 117(2A)(a)(c)(e) and (g), although ss 117(2A)(d) and (f) were also touched on.
The wife identified s 117(2A)(a)(c) and (e) as being relevant, although mention was also made of s 117(2A)(f).
Having given consideration to all the factors, in my view the relevant matters are those set out in s 117(2A)(a)(c)(e) and (g) and I do not propose to address the other matters set out in s 117(2A).
Before I turn to address these factors I wish to address a matter raised by those on behalf of the husband in par 2(vi) of the submissions on p 5. It is in the following terms:
“(vi)There are issues of public policy to be considered arising out of the wife’s approach to these proceedings. First, litigants who do not establish a prima facie case for their applications and yet persist with arguing them in court should be penalised with orders for costs. Secondly, the time of the family court is a valuable but ‘finite resource’. Many litigants are waiting in ‘the queue’ for their cases to be heard. Litigants (and their legal practitioners) who pursue cases without merit should be seen to be doing so in ‘bad faith’. Orders for costs should be made against them when their conduct is exposed. Thirdly, this court should send a message to the community by making an order for costs against litigants who inappropriately ‘take up court time’. It is respectfully submitted that message is the policy of the Family Court is, ‘You should not proceed without having a prima facie case’. If litigants do not adhere to this legal principle, penalties should apply which include an order for costs as provided for in the rules of the court. If the community is not apprised of the seriousness with which the Family Court takes of legal principle and abuses its time, future litigants are likely to flaunt the system and so undermine respect for ‘The Rule of Law’. ”
The authorities make it clear that an order for costs is compensatory and not made for the purpose of punishment. The Full Court made this clear in, for example, Cassidy v Murray (1995) FLC ¶ 92-633. That case concerned an appeal by a solicitor who had been ordered to pay costs, and as such the circumstances in Cassidy were quite different from the present case. Nonetheless the principle is equally applicable.
In Cassidy v Murray the Full Court cited Latoudis v Casey (1990) 170 CLR 534. Again the circumstances in that case were fundamentally different from those with which the Full Court was dealing in Cassidy v Murray, however their Honours observed that the nature of the costs order was essentially the same.
In Latoudis v Casey Mason CJ said at 543:
“If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.” (citation omitted).
McHugh J said in the same case at 567:
“The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory.”
It can be seen therefore that I must disagree with much that has been submitted. That is not to say that it is appropriate for unmeritorious cases to be pursued, or for the valuable time of the Court to be wasted. However there are already means by which protection is and can be given. For example s 118(2) provides amongst other things that the Court may make such order for costs as the Court thinks fit where proceedings are vexatious or frivolous. There is also power to preclude a party from instituting proceedings without leave. In Zabaneh (1986) FLC ¶ 91-766 Evatt CJ explained that the reason for this was to prevent multifarious overlapping applications between the parties, which amount in essence to a harassment of the other party, and an abuse of the process of the Court.
The pursuit of unmeritorious proceedings, or proceedings brought in bad faith can also at times result in costs orders being made on an indemnity basis (see Colgate-Palmolive Company & Anor v Cussons Pty Ltd (1993) 26 FCR 225 per Sheppard J at 233).
The other matter to which I wish to make mention at this stage is par 16 of the written submissions provided on behalf of the wife. It was there submitted:
“16.The husband seeks that the wife pay the husband’s costs from the 11 August 2006 to 20 March 2007. The application is in reality an application for costs of the entire proceeding and it extends to hearings before the Honourable Justice Young on 19 October 2006 and the Honourable Justice Mushin on 9 November 2006. It is plain that the costs of the proceedings and in particular any costs incurred in these hearings should only be the subject of orders for costs at the said hearings or at the trial of the proceedings. It is respectfully submitted that the Honourable Justice Carter does not have jurisdiction to make any orders for costs pertaining to those hearings or if there is such jurisdiction should not exercise any discretion to make a costs order in respect of these hearings.”
The first observation I should make is that I do not understand why it is contended that the husband seeks costs from “11 August 2006 to 20 March 2007”. Firstly, proceedings in this Court only commenced on 18 September 2006 and it has been made clear on behalf of the husband in the written submissions which Applications are sought to be the subject of costs orders.
Nor do I agree that the Application is “in reality an Application for costs of the entire proceeding…”.
I do agree that the Application may extend to hearings before Young J on 19 October 2006 and Mushin J on 9 November 2006, given that the proceedings came before them on those days. I do not accept that I do not have jurisdiction to make orders for costs pertaining to those hearings or alternatively that if there is jurisdiction, it should not be exercised in respect of a costs order in respect of those hearings. I note no authority is cited in support of this.
To my mind the costs sought flow from the interlocutory applications and the wife’s contravention application, and some of the costs include reserved costs. They are properly before me, given that I was the Judge ultimately concerned with the Applications.
I also note that the Full Court has expressed a preference for Judges who hear interlocutory matters to avoid reserving costs to the Trial Judge who ultimately hears the substantive Application.
I do acknowledge however that there can be difficulties in determining whether or not costs should be made in respect of earlier hearings, particularly if there is no transcript available.
Section 117(2A) Matters
The financial circumstances of the parties:
Reference is made in the husband’s written submissions to his Amended Form 13 Financial Statement filed 4 December 2006 as well as the Affidavits of Mr C and the husband’s mother, both filed 4 December 2006.
On the basis of the evidence I am satisfied that the husband’s income is $1,784.00 per week and that he has personal expenditure of $1,230.00 per week. He also has the benefit of payments which are made on his behalf through a loan account which he does not control. His capacity to draw on that loan account is dependant on the consent and authority of his mother.
I note the wife’s submissions include an assertion that the husband is in control of all the assets of the marriage. If that submission is meant to include control over corporate entities, it cannot be accepted. As I found in my Reasons for Judgment delivered on 1 March 2007, on the basis of the evidence before me, the husband was not in control. The submission overlooks the fact that the wife resides in the former matrimonial home and it also overlooks the undertaking given by the husband when the matter was before Mushin J on 9 November 2006, which undertaking was continued, save in one respect which was no longer relevant.
The husband has pointed in his written submissions to the wife’s Financial Statement filed 2 October 2006 in which she disposes to having “nil” average weekly income and “nil” expenses. In response it is said on behalf of the wife that the submission that the wife has “nil” expenditure is “quite embarrassing” and fails to take into account that the wife has disclosed the extent of her expenditure in Part N of her Financial Statement. Both submissions are correct. The wife does say that she has “nil” income in her Financial Statement and also does not disclose personal expenditure in Part G. She has however in Part N set out average weekly expenses.
It is the case that the wife lives in the former matrimonial home as was pointed out in the husband’s submissions. It is also the case that expenses for the wife and the children were being met pursuant to the orders of Mushin J made 9 November 2006. It is also correct as was submitted on behalf of the husband, that the wife did not disclose any outstanding legal expenses in her Financial Statement and that she also swore that she had no liabilities. I do note however that this may no longer be the case, given that the Financial Statement was filed at the commencement of the proceedings.
On the current state of the evidence I accept that the wife has no independent source of income and that she is reliant upon payments made by or on behalf of the husband for her support and for the support of the children.
It is submitted on behalf of the wife that she does not have capacity to meet any order for costs whereas the husband has the capacity to pay for his own costs.
I accept that the husband is in a stronger financial position than the wife.
Conduct
This sub-section relates to conduct of the parties “in relation to the proceedings” however conduct which is thought to be relevant, but which is not within this sub-section may be able to be taken into account under sub-s 2A(g).
Both parties raise the issue of conduct as being relevant in the circumstances of this case and this is a proposition with which I agree.
For the wife’s part it was submitted that the husband had not conducted the proceedings in a proper or expeditious manner. Reference is made to the fact that he did not file a Financial Statement and to the orders made by Young J on 19 October 2006 in this regard. Reference is then made to the fact that the husband’s Financial Statement, subsequently filed, was inaccurate and further to the fact that the wife incurred the expense of swearing and filing an affidavit “dated” 6 November 2006 which deposed as to the inaccuracies of the husband’s Financial Statement. Reference is made to pars 10 to 19 of that affidavit. Finally it is noted that on 9 November 2006 Mushin J granted the husband a further opportunity, by ordering him to file and serve an amended Financial Statement (inter alia).
The first observation that should be made is that the failure of the husband to file a Form 13 Financial Statement was indeed referred to by Young J in his Reasons for Judgment of 19 October 2006. In par 7 of His Honour’s Reasons he noted that counsel for the wife sought to place great emphasis on this omission. He went on to say however that in the context of the case and given the ex tempore Reasons which his Honour was making, and the orders that he made as a consequence, it was “not a matter of importance” to him. He went on to observe that it would be a matter of very real importance at the adjourned hearing and made a specific order for the husband to file this document within seven days. In so doing he noted his expectation that the Form 13 Financial Statement would be “complete and comprehensive”. He noted that it was to cover all of the corporate entities, financial accountant statements and give a totally fair, complete and fully informed financial position of the husband and all related entities.
On 26 October 2006 the husband filed an Affidavit setting out details of directorships, shareholdings and interest in trusts (inter alia). He annexed a significant number of documents to that affidavit and the index described the nature of the various exhibits. On the same day he also filed a Form 13 Financial Statement.
On 6 November 2006, as was correctly submitted, the wife filed a third affidavit in response to affidavits of the husband filed 26 October 2006, an earlier affidavit filed 20 October 2006 and his Form 13 Financial Statement. She alleged that the husband had failed to comply with his obligations pursuant to the orders made by Young J on 19 October 2006.
The proceedings came before Mushin J on 9 November 2006 and orders were made. The Court file does not include a transcript of the proceedings before his Honour or Reasons for Judgment for the making of those orders. It is the case that his Honour made orders requiring the husband to file and serve within 14 days an amended Form 13 Financial Statement and any affidavits including any amended affidavit.
Given the absence of Reasons for Judgment and a transcript, I cannot of course know what happened in the proceedings before Mushin J. I do note that all questions of costs were reserved, not just for example those of the wife which would have been likely to be the case in circumstances suggested on behalf of the wife in the written submissions. This however is speculation.
There is an explanation given by Mr C, the accountant, in his affidavit filed 4 December 2006 which (inter alia) responded to the wife’s affidavit filed 6 November 2006. In his affidavit he explained, for example, the circumstances in which the husband had annexed to his earlier affidavit an incorrect, or perhaps more accurately out of date, schedule or chart which showed the entities in which the husband was a director.
However it has not been submitted on behalf of the wife, nor does it emerge from the evidence that the husband’s initial failure to file a Financial Statement or the fact that the subsequent documents he filed were inaccurate, prolonged the proceedings or caused delay.
It is clear from Young J’s Reasons for Judgment that the matter commenced before him at 2.15pm and that the parties were allowed a total of one hour (collectively) to make submissions through their counsel. His Honour also pointed out in par 34 of his Reasons that there were “numerous other orders” sought by the wife in her Form 2A Application which, to the extent that he had not been able to deal with them, needed otherwise to be adjourned to 9 November 2007. His Honour went on to say:
“There must be some level of understanding of the parties of what they can have done in an Interim Duty List. It just so occurred this afternoon that I was able to spend the better part of 1¾ hours on this matter but that rarely occurs in this list.”
It should be noted that Young J made no orders as to costs, not even reserving costs.
As I have already recorded there was no transcript of proceedings before Mushin J on 9 November 2006, nor did his Honour deliver Reasons for Judgment. There is however on the Court file a document headed “Draft Minutes of Proposed Orders Submitted by the Husband” which appears to have formed the basis for some at least of his Honour’s orders.
Accordingly, and whilst it is the case that the husband had not filed a Form 13 Financial Statement when proceedings came before Young J, and further, whilst the material which he filed for the purpose of the proceedings before Mushin J was in part inaccurate, it is impossible to discern what effect, if any, all of this had on the proceedings, save to note that the wife did incur the expense of preparation of her affidavit filed 6 November 2006.
The wife then went on in her submissions to note that the husband’s documents were not filed within the time allowed for by the orders made by Mushin J. She then issued a contravention application on 30 November 2006. The wife’s submissions go on to say:
“The wife was entirely entitled to issue a contravention application, especially given the previous defaults of the husband and she decided to withdraw the application and file a Notice of Discontinuance filed on 19 December 2006 and to allow the husband to rely upon the said affidavits to enable the matter to be heard before the Honourable Justice Carter on 15 December 2006. She therefore provided an indulgence to the husband and it is incredulous (sic) that the husband would regard his failure to comply with the court as justifying an order for costs in his favour.”
To my mind that submission does not adequately describe what happened.
In support of his application for costs the husband relies on the affidavit of his solicitor Mr Rickards filed 12 December 2006. In that affidavit Mr Rickards noted the amount of work required to comply with the orders made by Mushin J, setting it out in some detail. He went on to say that when it became apparent that compliance with the timetable was not possible, correspondence was sent to the wife’s solicitors on 22 November 2006, seeking consent to an extension of time until Friday, 1 December 2006. A copy of that letter is annexed to his affidavit.
In the letter and in the affidavit it was pointed out that the wife would not suffer any prejudice in granting this extension, since I would not be able to sit to provide directions in the case until after 1 December 2006. That was the case. I had been appointed Judge Manager by Mushin J on 9 November 2006 and at my request my Associate advised solicitors for both parties that I was due to commence a two week circuit on Monday, 20 November 2006 and would not be back in the Registry until the week commencing Monday, 4 December 2006. As it transpired the matter was listed for mention before me on 8 December 2006. This was in circumstances where I had been made aware that the husband’s solicitors had sought to file certain material on 1 December 2006. The documents could not be filed until a Directions Hearing date had been appointed. Some of the documents which the husband had sought to file were unable to be filed on 4 December 2006 but some could not be processed and were not filed until 5 December 2006.
I now go back to the wife’s contravention application.
That application was given a return date of 21 December 2006. It was supported by an affidavit sworn or affirmed by the wife’s solicitor on 29 November 2006 and filed on 30 November 2006.
In that affidavit Mr Brott set out the history leading up to the orders made on 9 November 2006 and went on to say that:
“On or about 22 November 2006, the solicitors for the husband sent me a letter that stated that the husband would not be able to comply with the terms of the orders of the Honourable Justice Mushin and that the amended Form 13 and any amended affidavit would be filed and served on 24 November 2006.”
Mr Brott’s affidavit concluded by saying that the husband had failed to file and serve an amended Form 13 Financial Statement and/or an affidavit, as at the date of the affidavits.
When the matter came before me on 8 December 2006 I enquired whether it was convenient or desired that time be abridged to enable that contravention application to be heard on the day. That was not a course of action which was acceptable.
I had become aware that one of the orders sought in the husband’s Form 2 Application in a Case was that the Court grant him an extension of time.
However I was told that the wife still wished to proceed with her Form 18 Contravention Application. When I asked what was desired to be achieved by this, counsel for the wife informed me that the default had been wilful and pointed briefly to some of the history of the matter. Mr Levine also told me that his client would resist the application to extend time. That became particularly significant given that I had hoped to make directions to enable the most important at least of the outstanding interlocutory matters to be determined. In due course however Mr Levine, having obtained instructions, told me that no opposition was taken to the husband being granted permission to rely on the documents which had been filed, notwithstanding that they were filed beyond the date upon which they should have been filed.
During discussion I also drew Mr Levine’s attention to the affidavit of his instructing solicitor where he had set out, as I have already recorded, that he had received a letter on or about 22 November 2006, which stated that the husband would not be able to comply with the terms of the orders, and that any amended affidavit would be filed and served on 24 November 2006. The letter in question had not been annexed to Mr Brott’s affidavit.
The letter dated 22 November 2006 from the husband’s solicitors to the wife’s solicitors was as I have said, annexed to his solicitor’s affidavit. It was also however annexed to the husband’s affidavit and I drew that letter to Mr Levine’s attention. Mr Levine confirmed that the letter referred to by Mr Brott did in fact seek an extension to 1 December 2006, not 24 November 2006 as Mr Brott had deposed.
Mr Rickards had deposed in his affidavit to not having received a response to his letter and this was not gainsaid in any way. It emerged therefore that, in the full knowledge that an extension of time had been requested to 1 December 2006, and in circumstances where, as I am satisfied, the wife would not have been prejudiced in any way by such an extension, not only did Mr Brott not respond to the letter dated 22 November 2006, but he proceeded to depose an affidavit in support of an application for contravention, the same having been filed one day prior to the date of the requested extension.
I also note from Mr Rickards’ affidavit that when the husband’s material was completed in the late afternoon of Friday, 1 December 2006, sworn copies were faxed to the wife’s solicitors.
It was in those circumstances that the wife’s contravention application was filed and sought to be prosecuted, at least as at 8 December 2006. It was also the case at that time that the wife had determined not to oppose the husband being granted leave to rely on the documents which had been filed outside the time limits imposed by Mushin J, whilst at the same time resisting the husband’s application to extend time.
The contravention application remained listed for 21 December 2006, however when the matter came before me on 15 December 2006, Mr Levine informed me that the wife had decided not to proceed with that application. In those circumstances the husband’s application for extension of time no longer needed to be considered.
It should also be noted that as at 8 December 2006 the wife’s Contravention Application had not been served personally upon the husband, although I was told on that day by Mr Levine that the documents had been forwarded to the husband’s solicitor.
It is in those circumstances that the husband has submitted that the wife had inappropriately sought to challenge the extension of time sought by the husband and the fact that she had issued a contravention application, then informing the Court on 15 December 2006 that she had decided not to proceed with her application. It was also pointed out in the submissions that no prior notice had been given to the husband’s solicitors of this proposed discontinuance, as a result of which the husband unnecessarily incurred costs. It was also submitted that the notice of discontinuance had not been served, as at the date of the husband’s submissions being filed which I note as 14 March 2007. I do note that the Notice of Discontinuance was however filed on 19 December 2006.
Whilst the Contravention Application was not due to be heard until 21 December 2006, the question of the husband’s application for an extension of time was before the Court on 15 December 2006 and was the subject of written submissions filed on behalf of the husband (see par 4 of the husband’s submissions filed 12 December 2006).
The whole thrust of Mr Brott’s affidavit is that he waited until after the date which he had (erroneously) stated was the date of the extension of time sought by the husband. By that time, the husband had not filed the documents as had been foreshadowed in the correspondence. Accordingly, the Form 18 Contravention Application was filed, one day prior to the date of the requested extension.
If, as may well be the case, Mr Brott had simply mistaken the date to which the extension was sought, the real situation was made clear at the mention on 8 December 2006, but it was still sought to proceed with the Contravention Application. The purpose for this could only have been to punish the husband.
Further and notwithstanding that Mr Levine, having obtained instructions, told me that there was no opposition to the husband being permitted to rely on the documents which had been filed, the application to extend time continued to be resisted. I am at a loss to understand why.
In my view the submissions criticising the wife in this regard have considerable merit in the circumstances I have described.
The other matter raised on behalf of the wife in her written submissions concern the manner in which the wife’s application for spousal maintenance was determined. It was pointed out that the matter had been before the Court on three occasions during which the husband had not at any time suggested that it was necessary for the wife to be cross-examined. He did do so in his written submissions dated 12 December 2006.
This, it was said, caused the wife to incur unnecessary costs in providing written submissions in support of that application.
The husband addressed the question of the wife’s application for spousal maintenance in par 8 of those submissions, and in sub-par (d) sought leave to cross-examine the wife.
Interlocutory proceedings such as these are normally dealt with on the papers. All that the husband had done in his submissions was to foreshadow, as it were, that leave to cross-examine would be sought. Neither the husband nor the wife could have been certain whether leave would be granted or otherwise. Accordingly it was necessary for them both to address this issue in their written submissions, indeed as they both did.
I place no weight on the submissions made on behalf of the wife in this regard.
The husband raises other matters upon which it is contended the Court should find that the wife’s conduct gives rise to an order for costs against her.
On an overall basis it was submitted that the wife’s claims were not supported by evidence and reference was made to pars 63, 64, 65 and 66 of my Reasons for Judgment in support of this submission. Those paragraphs were by way of an overview and were included in a section where I dealt with the manner in which applications “on the papers” are dealt with.
The submissions filed on behalf of the husband then go on to deal with various applications and issues which I determined.
I agree with the submission that the wife’s counsel sought to argue the wife’s case through assertions from the Bar table in connection with her opposition to the husband’s application for the appointment of Ms B as the single expert witness to prepare a Family Report. The husband’s submissions have correctly identified a number of paragraphs of my Reasons for Judgment, although I note that when dealing with par 93 of those Reasons, the submission has been incorrectly incorporated in the extract from that particular paragraph.
I accept that submission however, and agree that the husband did provide cogent and relevant evidence about the appointment of Ms B which enabled the Court to make an informed decision. Not only was I not assisted by the very limited evidence put forward by the wife, I note that the proceedings were interrupted from time to time when the wife’s solicitor made enquiries about other possible counsellors and gave instructions to Mr Levine about the results of his enquiries.
Reference was made in the husband’s written submissions to an issue of a piano. I dealt with that in my Reasons for Judgment in pars 114 to 120. The wife had sought the return of a piano, which was described as being one of a number of items of property that she wished to have returned to her. In his responding affidavit the husband deposed that this was owned by his mother. The wife did not deny that evidence in a subsequent affidavit. Mr Levine submitted that the husband had not deposed that he did not own the piano, and he was plainly wrong in this. He went on to submit however that the husband had in fact paid for the piano and the wife was in a position to know that this was so. However it was the case, as I recorded in par 119 of my Reasons, that the wife put forward no evidence about this whatsoever.
The husband’s submission in this regard has merit to my mind.
The husband sought that the wife remove a caveat which her solicitor had lodged over the C property. I dealt with this in pars 121 to 131 of my Reasons for Judgment. I agree with the submission that my conclusion that the wife did not have a caveatable interest was the only one which could have been reached given the evidence before the Court. Whilst the wife had in an affidavit filed 12 December 2006 deposed that she had no objection to removing her caveat on certain conditions, those conditions effectively impinged upon the rights of a third party. In those circumstances I found it convenient to deal with them in the context of injunctive relief which the wife had sought. The claim she made in the caveat was that the husband held the property pursuant to a constructive trust or trusts for her. That was not the basis of the wife’s claim in this Court, further, she did not plead or provide any evidence to support such a claim. The substantive application brought by the wife in this Court was for an alteration of the party’s interest in property pursuant to s 79 of the Family Law Act 1975. I agree that there is merit in the husband’s submission that the wife should not have continued to resist the husband’s application to remove the caveat.
It is convenient to note here that the conditions upon which the wife would have agreed to remove the caveat effectively involved freezing the proceeds of sale of the C property. That application was refused. It was submitted on behalf of the husband, and I agree, that the wife sought to advance her case without a proper factual basis to support her claim. References were made in the written submissions to pars 152, 153, 154 and 155 of the Reasons for Judgment. I agree that those paragraphs support this submission and I would particularly highlight the last sentence of par 155 in which I wrote:
“To all intents and purposes there is an evidentiary vacuum in the wife’s case about these matters.”
The next matter about which submissions were made concerned the injunctive relief sought by the wife.
I dealt with this injunctive relief commencing at par 156 of my Reasons for Judgment. The wife sought injunctive relief against the husband in connection with some 18 corporate entities and at no stage in her first affidavit or thereafter did the wife depose that the husband controlled any of those entities.
The wife persisted in her application notwithstanding the evidence given by the husband’s mother, the accountant, the husband’s former wife and the husband himself. All of this material concerned the control of the business entities. Having set out that evidence I wrote:
“186.The only evidence as to control of the business entities is that which I have already outlined. That evidence is credible and the wife has not provided any evidence to contradict it.
187.In short, at the present stage of the proceedings there is no evidentiary foundation for Mr Levine’s assertion that the husband holds control of the family group of companies. Any evidence which would establish this, as claimed by Mr Levine, was not put before the court. Accordingly, and for present purposes I accept that the husband does not hold control of the business entities.”
Whilst repetitious it is important to note that the wife had never in any of her material alleged that the husband controlled these business entities. The matter was argued by Mr Levine from the Bar table. There was no evidentiary foundation for the position taken by the wife. Nonetheless the wife persisted with this application.
I set out the relevant legal principles in respect of injunctive relief commencing at par 188 of my Reasons for Judgment.
After discussion of the evidence I wrote:
“On the current state of the evidence I am far from satisfied that any such injunction is warranted … ”
I also noted at par 231 that the approach that the wife had taken in seeking the injunction set out in par 7 of her Form 2A Response was wide ranging and sweeping, and that little, if any, attention had been given to the necessity for the injunctions actually sought. It was also the case as I found that the injunctions were not only sought in respect of all the entities, they were sought without regard to the question of control.
As I noted in par 236 of my Reasons for Judgment there had been correspondence in respect to caveats lodged by the wife’s solicitor on behalf of the wife over a number of items of real estate. The correspondence was between a firm of solicitors who acted for a number of companies who owned real estate affected by those caveats. These companies were amongst those referred to in the wife’s application and these companies would have been affected if the injunctive relief had been granted. This information was contained in correspondence dated 20 and 27 October 2006 and this correspondence had been annexed to the wife’s affidavit filed 6 November 2006. The information set out in the correspondence corroborated the husband’s evidence. However and notwithstanding this information, which had been provided by a different firm of solicitors from those acting for the husband in these proceedings, the wife maintained her claim.
There was no attempt made to frame any of the injunctive relief sought in a more narrow way, nor was there any attempt to take a more minimalist approach, for example, that notice should be given before any action was taken.
I noted at par 238 of my Reasons for Judgment that a broad brush approach had been adopted, which of itself could well mean that the injunctions that had been sought were too wide, and also raised the question of whether the injunctions were necessary and if so, went no further than was necessary.
The husband correctly submits that the wife’s application for injunctive relief impinged upon the rights of third parties who had not been given notice. It was further submitted that the application was “always doomed to fail”.
The wife however, in a separate section of the submissions in reply, submits that she was “partially successful in pursuing injunctive relief”. She points to the undertaking given by the husband originally in the proceedings before Mushin J on 9 November 2006, and to the undertaking which was proffered on behalf of the husband in the proceedings before me on 15 December 2006. It was submitted that this undertaking would not have been proffered had the wife not pursued her application for injunctive relief, and that it provided similar protection to injunctive relief. Paragraph 224 of my Reasons for Judgment is cited in support of this.
Importantly it must be noted that Mr Thompson told me that the husband would agree to have the undertaking given to Mushin J (in so far as it was still relevant) continue and that this was the case prior to Mr Levine commencing his submissions on behalf of the wife. This was not however sufficient for the wife who continued to press for the injunctive relief.
If, as was contended, the undertaking provided “similar protection” the wife did not need to proceed.
It is submitted on behalf of the husband that the wife has paid scant respect to the Pre-Action Procedures in the Family Law Rules 2004 and rr 1.05 and 1.06 are cited as examples. In response, it is submitted on behalf of the wife that there is no evidence before the Court of any attempts by the husband or his legal representatives to comply with these Rules.
I raised this matter myself in pars 270 and 271 of my Reasons for Judgment. The text of the Pre-Action Procedures is set out in Schedule 1 to the Rules. There is no evidence as to whether either party took any steps to comply with these procedures before filing their applications and it is not a matter I can take any further.
Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The Full Court discussed this sub-section in its unreported decision of B & B and Anor [1999] FamCA 744. In par 61, their Honours wrote:
“… It seems to us that the paragraph must be applied in what might be termed a relative type of way. That is, it is a matter of judgment whether what a party finally receives is so different from what he or she originally sought that he or she can be described as ‘wholly unsuccessful’ ... .”
Subsequently, in the unreported decision of T & T [2004] FamCA 250, the Full Court wrote:
“11.… the phrase ‘wholly unsuccessful’ needs to be read in light of the entire circumstances of the litigation before the Judge and not just in terms of the net outcome of the proceedings. It was open at any stage of the proceedings for concessions to be made in respect of matters claimed which would have, of course, removed the necessity for those matters to be litigated at some length. … .”
Whereas, “conduct” and the possibility of costs flowing from it arises in the context of the manner in which the case is presented which results in additional expense, being caused, the question of “a party being wholly unsuccessful” arises from the concept that an unmeritorious claim which is defeated by the other party should not result in that party being penalised by having to pay his or her own costs.
Thus in Re Collins and the Victorian Legal Aid Commission (1984) FLC ¶ 91-508, an order for costs was made against the wife and the Victorian Legal Aid Commission. Fogarty J held that the proceedings instituted by the wife was completely without merit and should not have been instituted. Further, the Victorian Legal Aid Commission permitted the litigation to proceed where that litigation was unreasonable, and where the Commission seemingly took no steps to consider its reasonableness. Further, the husband was not in receipt of legal aid and he had, in defending the action, incurred substantial expenses, which he should never have had to incur.
I note the overlap in various of the s 117(2A) factors.
In the present case, I have earlier set out a summary of the orders I made in respect of the individual applications which I was called upon to determine. That summary, as noted, was recorded at pars 365 and 366 of my Reasons for Judgment.
It follows from that summary that the husband obtained substantial parts of the relief which he sought, and successfully opposed substantial parts of the relief sought by the wife.
I now turn to deal with some of the individual matters where relief was sought or opposed.
Caveat, Injunctive Relief
To my mind the most pressing issues which fell for determination, concerned the injunctive relief sought by the wife, and the husband’s application for the removal of a caveat.
For reasons earlier given the wife’s opposition to the removal of the caveat was doomed to failure. She simply did not have a caveatable interest.
Included in the wife’s application for injunctive relief, was an application effectively to “freeze” the proceeds of sale of the C property. The wife also sought to restrain the husband in his dealings with another property at B and two other properties which were identified only by reference to Lot and Plan numbers. I said in respect of those last mentioned properties that they were not sufficiently identified to be the subject of any injunctions.
The imposition of an injunction in respect of the C property would have affected a person who is not a party to the proceedings, namely the husband’s mother. On behalf of the wife it was conceded that this lady had no notice of the wife’s application in this regard, nor was it the case that the wife had sought an order directed to her or that a loan agreement alleged by both the husband and his mother, should be set aside. I concluded that, on the state of the evidence as it was before me, it could not be said that the rights, powers or privileges of the husband’s mother were not a sham having been brought into existence in appearance rather than reality, as a device to assist the husband to evade his obligations under the Act.
I noted that detriment would be caused to the husband’s mother should the husband not be permitted to comply with his obligations under the loan agreement and his mother’s rights under that loan agreement would be prejudiced. I also noted, given the circumstances of the case, that I did not have the power to order the husband’s mother to remove her caveat which was noted on the title of the property. The sale of the property in question would be in jeopardy and apart from the obvious potential consequences of that, I noted that the interest payments for the mortgage affecting that property were just over $8,000 per month. It was for those reasons that I declined to make any order in relation to the balance of the proceeds of sale of the C property.
I had earlier noted evidence given by the husband as to, for example, the purchase, planned subdivision and sale of the property as well as the loan obtained from the husband’s mother. I had noted that there was no evidence by the wife to contradict that evidence. Whilst the wife had said that she did not accept the bona fides of the loan and/or that she believed that this was a “poorly disguised attempt” to reduce the net equity in the property, the wife had not provided any evidentiary foundation for that.
In support of her application in respect of the B property the wife relied on the same matters asserted in relation to the orders sought regarding the disposition of the balance of proceeds of sale of the C property.
Those matters were discussed in considerable detail in connection with her application and in conclusion I noted that “on the state of the evidence as it was before me I was far from satisfied that any injunction was warranted”. The protection of an undertaking that had been proffered by the husband was an additional matter and one which could have been presumed to have been of some comfort to the wife. It did not detract in any way from my lack of satisfaction as to the necessity for the imposition of an injunction.
Other injunctions that were sought by the wife were in connection with business entities and trusts, and again rested on the same foundation as had been asserted in relation to the injunctions sought against the husband in his personal capacity as owner of the B property and the C property. I noted that my findings in this regard applied with equal force in connection with the business entities and trusts and went on to note that there were additional factors which reinforced the husband’s case (see pars 231 – 238 Reasons for Judgment).
At par 239 I referred again to the undertaking that had been proffered on behalf of the husband that he would give the wife’s solicitors seven (7) days notice in writing of any intention to do any of the acts set out in par 7(a)-(g) of her application. I noted further that this undertaking would protect the wife’s interests “in so far as they need protection, given the lack of evidence by the wife contradicting the evidence as to control”.
I considered the impact on the husband’s business activities and found that the provision of seven days written notice would not significantly impact on the husband’s business activities, whereas the injunctions sought in par 7(h) of the wife’s application would, if granted, restrain the husband from ordinary business details without written permission of the wife.
The wife was unsuccessful in her claims for injunctive relief.
The Watches
The wife points out that the husband was “wholly unsuccessful in obtaining the return of any personal property” in the proceedings before me “save for the return of two of the watches (which was conceded by the wife)”.
That submission is accurate but overlooks the fact that it was part of the wife’s initial application that she have leave to sell the Rolex and Raymond Weil watches. That was specifically rejected by Young J (see par 10 of Young J’s Reasons for Judgment). It also overlooks the very sensible suggestion made by his Honour in par 32 of his Reasons for Judgment. His Honour suggested that the watches should be independently valued, with the husband to put forward names of valuers and the wife to select the valuer. He proposed that the husband should pay the cost of valuation. The watches should then be photographed and with value established and agreed, the watches would be part of the substantive applications for alteration of interests in property. With all that in hand, his Honour went on to say that he could see no reason why the watches should not be returned to the husband. He proposed to allow the wife the opportunity to enter into that process and return them without order saying however that he “would have no hesitation in making the order if the matter came before (him) again and if facts remained the same”. The wife did not do this and it was in those circumstances that this part of the husband’s application was pursued. It should also be noted that his Honour had made an order that the wife forthwith return to the husband his personal clothing such as was then in her possession or control.
In any event when the matter came before me, I reminded the parties of the order that his Honour had made in respect of the husband’s personal clothing as well as the suggestion that he had made in respect of the process to deal with the watches. I foreshadowed that subject to submissions, I proposed to make an order for the wife to file an affidavit particularising her knowledge as to the whereabouts of the husband’s clothing and other personal items not returned to him as well as a third watch which was said to be not in her possession. I also foreshadowed, again subject to submissions, making an order in terms of the process suggested by Young J.
Subsequently I asked Mr Levine whether he wished to make any submissions as to why the watches should not be returned to the husband or as to why his client should not be required to join in the procedure recommended by Young J. Mr Levine did not desire to make any submissions and eventually orders were made by consent in that regard.
I place no weight on the wife’s submissions given these circumstances.
Children’s Issues
It was the wife’s submission that the husband’s application for equal shared time to be spent with the children was “wholly misconceived, was not pursued at all and was probably only a tactical attempt to place pressure on the wife”. Save to say that the last part of that submission is to be deplored, I make no further reference to it.
The wife’s submission went on to note that the husband applied for a different regime to spend time with the children during the hearing before me, which was disclosed to the wife for the first time in the issues in dispute dated 1 December 2006 and confirmed in the husband’s submissions filed 12 December 2006 and about which it is said that it was never the subject of a formal application.
This overlooks a number of factors. Firstly in the proceedings before Young J it was made clear that the limited orders that his Honour made on an interim basis for the arrangements for the children to spend time with their father were to operate only until the adjourned hearing date. As such only a few weekends were involved. Secondly, his Honour made it clear that issues of holidays or Christmas would not be considered at the time that the proceedings were before him.
The orders however were still in operation when the matter came before me. By that time the husband had also filed a new application in a case seeking to spend additional time with the children. He sought that they spend time with him each Wednesday night from 4:00pm, to be returned to the wife at 9:00am or during school term at the commencement of school. Apart from that the orders sought by the husband dealt with arrangements to be made over the fast approaching festive season.
The wife in her answering material put forward an alternative suggestion as to the time the children should spend with their father during the following few weeks and the Christmas holidays, however in her affidavit raised a new matter, namely that she wished to reduce the time the children spent with their father at weekends.
During the discussion before me, I foreshadowed that I would not be dealing at that time with the husband’s application to spend time with the children on Wednesdays, or with the wife’s application to reduce the period of time at weekends. I said I would not do that until there was evidence from a professionally qualified person as to the relationship between the father and the children, about which the parties were vehemently at odds.
The parties were given an opportunity to discuss the arrangements for Christmas as well as other matters and when the matter resumed I was told that I would be asked to determine the time that the children should spend with their father during the holidays and in particular on Christmas day.
In those circumstances I do not place any weight on the matters raised in this regard in the wife’s submissions.
As I noted in my summary of the orders which I made, the orders relating to the amount of time that the children should spend with the husband at Christmas and during the long summer vacation were different from the orders sought by both parties, but were not dissimilar from the orders sought by the husband.
Other Matters
The wife’s submissions also note that the husband made a number of oral applications to the Court. It was said and correctly so that his application for the appointment of an Independent Children’s Lawyer was unsuccessful before Young J. It was also submitted that the husband’s application for the removal of the caveat over the C property was never challenged by the wife. A reference is made to par 13 of the Reasons for Judgment of Young J and par 8 of my orders.
If indeed the husband made an oral application for the removal of the caveat in the proceedings before Young J, I was not made aware of this. I note that par 13 of his Reasons does not deal with the question of the removal of any caveat. It notes the wife’s preparedness for the sale of the property to proceed provided that it was at arms length and on a fair and proper sale process with the nett available proceeds of sale held in an interest bearing account upon settlement.
It would seem from par 14 of his Honour’s Reasons that this matter was raised in the context of the wife’s application for injunctions.
I do not think it accurately reflects the reality of the situation to say that the removal of the caveat was “never challenged” by the wife, even noting the rider to that as set out in the written submissions, which related to the conditions upon which the wife would agree to remove the caveat.
That was the position adopted by the wife at the hearing before me and it is clearly reflected in par 14 of the affidavit she filed on 12 December 2006.
The wife’s refusal, otherwise than on her own terms, to agree to the application for the removal of the caveat was to my mind doomed to failure. Some of the relevant authorities were cited in par 129 of my Reasons for Judgment. They are not recent. In short, the wife did not have a caveatable interest. To my mind, the caveat should never have been lodged. I said as much during the course of Mr Thompson’s submissions, explaining that, subject to anything raised by Mr Levine as to the removal of the caveat itself, as distinct from what might happen to the proceeds of sale, I did not need to hear any submission from Mr Thompson.
When Mr Levine addressed the question of the caveat he did say that there was no objection to the caveat being removed and made no submissions in that regard, however continued to maintain that the removal should be on various conditions.
In the wife’s written submissions it was noted that she was “wholly successful” in obtaining orders for the payment of various specified expenses “by way of spousal maintenance” including payment of one of the children’s dental bills. That is the case in the sense that Young J granted orders on an interim basis which were in the main, designed to ensure that the costs of the ongoing residence and occupation of the former matrimonial home in which the wife and the two children resided were to be met. Additionally, his Honour made an order for the payment of a lump sum to the wife. It is important to note that his Honour specifically did not apportion that as maintenance, saying he was not calculating any weekly maintenance sum. The orders that Young J had made were continued by Mushin J with some additions.
I think it is a better expression to say that the wife was substantially successful in the orders that she sought in respect of these matters, and I take this into account. I also take into account that the husband was prepared to continue payment either personally or from monies advanced from his mother, the accounts referred to in Young J’s orders and additional payments referred to in Mushin J’s orders. What was in dispute between these parties was the quantum of the additional periodic maintenance sought by the wife for herself.
The wife’s submissions also refer to her “success” in the orders made by Young J for the husband to provide a Form 13 Financial Statement, the orders made by Mushin J for the husband to file an amended Financial Statement and any further affidavits upon which reliance was to be placed.
I have already dealt with the Financial Statement which was the subject of one of Young J’s orders. I have also noted the observations that Young J made about this matter. Given that there was no transcript, I am unaware of what submissions were made in respect of an amended Financial Statement and further affidavits. That said however, I note the draft minutes of proposed orders which were submitted by the husband, and which pursuant to Mushin J’s order remained on the Court file. Amongst the orders sought by the husband was the provision by him of an amended Financial Statement and further affidavits. I cannot in the circumstances determine further whether either party was successful or unsuccessful in this regard and have to say I do not place a great deal of weight upon this matter in any event, at least so far as this sub-section is concerned.
The wife points out in the written submissions filed on her behalf that she did not pursue the application for sole use and occupation of the former matrimonial home given that the parties had agreed to consent to an extension of the intervention order. It was submitted accordingly that this could not be regarded as being successful or unsuccessful or having been a matter improper for the wife to have pursued. I do not disagree with that, indeed I do not understand that the husband submitted to the contrary. I do however record that I raised this matter with counsel in the course of discussions at the commencement of the case. Having ascertained that the application for the intervention order was to come back to Court in June of the following year, given that the husband was currently restrained from attending the matrimonial home, I did not regard that part of the wife’s application as pressing. It was in those circumstances that this part of the wife’s application was dismissed, with a right of reinstatement after the proceedings for an intervention order had been determined.
I do not agree with the wife’s submission that she was “partially successful” in the injunctive relief sought and I refer to my earlier discussion in this regard.
Paragraph 13 of the wife’s written submissions, inter alia provides:
“13.The husband’s submission is that the wife should not have made the applications without there being a stronger factual basis for them. The submission of the husband is misguided and fails to understand the difference between an interlocutory decision and a final decision. The evidence of the husband, [his mother] and the other witnesses was not tested by cross-examination and it cannot be assumed that, at the trial, the said evidence will be accepted by the trial judge (see paragraph of (sic) 53, 57-62 of the Reasons for Judgment of the Honourable Justice Carter delivered on 1 March 2007). It should also be noted that the wife did not have the benefit of full and proper discovery or a proper opportunity to subpoena all the relevant material. It is thus more appropriate to reserve the costs to the trial judge who will make a proper determination on these issues.”
I disagree.
It is correct that the husband’s submissions included a submission that the wife’s submissions were on an insecure factual basis. The submission went on to contend that this made her claims unsustainable and contrary to legal principle. I do not agree that this submission was misguided. Further, it is in accordance with my findings and conclusions, in particular in respect of the injunctive relief sought by the wife.
The references to my judgment as noted above were selective and for completeness reference should be made to the other paragraphs in the section in which I dealt with the manner in which applications “on the papers” should be dealt with. In particular, reference should be made to pars 60, 61, 66, 63, 64, 65, and 66.
The reference in the submission to the alleged lack of full and proper discovery, alternatively proper opportunity to subpoena all the relevant material, does not take into account my discussion and ruling in respect of the wife’s application for disclosure which commences at par 247 of my Reasons for Judgment and concludes at par 290 of those Reasons. Further I note that it was never submitted to me that the wife had not had an adequate or proper opportunity to subpoena material. When the matter was before me on 8 December 2006 there was no application for any subpoena. There is no record on the file covers or on the Bench Sheets of any subpoena having been filed or documents produced pursuant to subpoena until 6 March 2007, well after the hearing before me had been concluded.
The question of “full and proper discovery” or lack thereof was also dealt with in my Reasons for Judgment.
The situation is that there are pending proceedings for financial orders. I am not determining, nor can I, the ultimate outcome of the substantive proceedings. In the course of the proceedings interlocutory matters arose which were the subject of attendances at Court on a number of days. Applications and Responses were prepared and filed, as were affidavits. Those various applications have been earlier identified, as were the parts of the applications which I determined. Those applications fell to be determined on the basis of the evidence which both parties chose to put before the Court. If there was further evidence, as was contended by Mr Levine in the earlier proceedings before me, the wife chose not to put it before the Court. I refer to without repeating what I said in pars 61 to 66 in my Reasons for Judgment. Otherwise I note, as earlier recorded, the preference of the Full Court that Judges who hear interlocutory matters should avoid reserving costs of such applications to the Trial Judge who ultimately hears and determines the substantive applications.
On behalf of the husband it was submitted that the Court largely adopted the husband’s proposals for interim financial arrangements and payments pending the hearing of the wife’s application for spousal maintenance which was to be adjourned. I do not agree and accept the submissions of the wife in this regard, in so far as it was contended that I made a pragmatic decision to provide her with a fixed sum of money. I said as much in par 300 of my Reasons for Judgment. As I noted in the summary of the orders which I have set out, the orders which I made were not in accordance with the application of either party, and neither party could be regarded as either successful or unsuccessful.
Such other matters as the Court deems relevant
The first of the matters raised in this regard in the husband’s written submissions really has its foundation in the issue of conduct or alternatively success and to deal with it further at this stage, to my mind, would be “double-counting”.
The second matter raised on behalf of the husband is the application made during the course of the proceedings on behalf of the wife that I should disqualify myself on the grounds of apprehended bias. It was highlighted that the application took a considerable amount of the Court’s hearing time; that it was unfounded; and that it was dismissed. It was submitted that the proceedings were unnecessarily prolonged by reason of that application.
It is the case that the application was dismissed. It did occupy a considerable part of the hearing, however the matter was able to be concluded within the day which had been allotted, save that I was not able to give Reasons for Judgment as I had previously hoped would be the case. Even though there have been no submissions on behalf of the wife in respect of this matter. I do not propose to give it any weight in those circumstances.
The husband’s written submissions conclude so far as this sub-section is concerned with a reference back to part C, which dealt with what were described as “Preliminary Considerations”. The submissions and considerations are to be found primarily in par 2. The matters set out in this paragraph, to which I give weight, have already been considered earlier in these reasons.
Conclusion
In my view, the husband has established that there are circumstances which justify an award of costs against the wife.
Section 117(2A)(a) favours her. Indeed, in an appropriate case a disparity in the financial circumstances of the parties may justify an order for costs. However, this would not necessarily be so if, for example, the financially weaker party has conducted the case in an unjustifiable manner. (See Fisher (1990) FLC ¶ 92-127 at 77,848.)
In my view there are a number of instances which I have already described which demonstrate that the wife did indeed conduct this case in an unjustifiable manner. I refer to the circumstances surrounding the filing of the Form 18 Contravention Application and the insistence to prosecute the same until 15 December 2006 when, without prior notice being given, the Court was told that the wife would discontinue this application. I further refer to the refusal to consent to the husband’s request as conveyed through his solicitors for an extension of time, noting that the wife would not have been prejudiced by agreeing to this. I refer also to the insistence on objecting to that application, even though, on 8 December 2006, counsel for the wife told the Court that there was no objection to the husband relying on the material which had been filed, notwithstanding that it was filed beyond the time provided for in Mushin J’s order. Again that opposition continued until 15 December 2006 when, and again without prior notification, the wife withdrew her opposition.
Other instances of the wife’s conduct which favour the husband’s application for costs arise from the lack of an evidentiary foundation for the assertions made by the wife’s counsel as to the husband’s alleged control of the corporate entities. This was but one example of the manner in which the wife’s case was argued through assertions from the Bar table rather than by the provision of evidence sufficient to meet the wife’s forensic onus of establishing her case or refuting that of the husband. Other instances have also been referred to above.
The approach taken by the wife in seeking various injunctions was wide-ranging and sweeping. A broad-brush approach was adopted, which raised questions as to the width of the injunctions and also raised the question of whether the injunctions were necessary and, if so, went no further than was necessary. There was no attempt made to frame any of the injunctive relief in a more narrow way, nor was there any attempt to take a more minimalist approach, for example, that notice should be given before any action was taken. Further, the wife’s application for injunctive relief impinged upon the rights of third parties who had not been given notice. On the one hand, it is submitted on behalf of the wife that the undertaking provided “similar protection” to injunctive relief which was sought. On the other hand, it must be noted that the undertaking was proffered prior to Mr Levine commencing his submissions on behalf of the wife. Notwithstanding this, the wife continued to press for the injunctive relief.
Whilst the wife had in an affidavit filed 12 December 2006 deposed that she had no objection to removing her caveat on certain conditions, those conditions effectively impinged upon the rights of a third party. Again, this was a situation where the wife sought to advance her case without a proper factual basis to support her claim and she persisted in her opposition to the husband’s application that the caveat be removed, save on conditions which she sought to impose. In my view, she maintained a position which was clearly untenable.
The other factor which significantly supports the husband’s application for costs is the question of success or lack thereof.
It should be noted that one party does not have to be wholly successful in achieving the orders which were sought for the other party to be wholly unsuccessful. Nor is it necessary to establish that a party has been “one hundred per cent unsuccessful”. For example, the Court is entitled to have regard to the fact that a party has been wholly unsuccessful in pursuing certain issues and in opposing certain issues.
As has been already stated I was called on to decide a number of separate applications. In the circumstances in which the matter came before me the most important of those matters were the wife’s claims for injunctive relief; the husband’s application for removal of the caveat and the wife’s opposition to this together with her application to “freeze” the proceeds of sale of the C property; the husband’s application for the appointment of Ms B for the purposes of preparation of the Family Report and the wife’s opposition thereto.
As can be seen from the orders which I made on 15 December 2006 and my Reasons for Judgment I dismissed the wife’s applications for injunctive relief, including the freezing of the proceeds of sale of the C property. I also granted the husband’s application for the removal of the caveat and his application for the appointment of Ms B.
To that extent the wife was unsuccessful in her application and in pursuing her opposition to the husband’s application.
On an overall basis, as can be seen by the summary of the orders I made in respect of the individual applications, the husband obtained substantial parts of the relief which he sought and successfully opposed substantial parts of the relief sought by the wife.
On an overall basis therefore the wife was generally unsuccessful, and as seen, completely unsuccessful in some very significant areas.
On balance, I have determined that the wife’s weaker financial position does not counter balance, let alone outweigh, the circumstances which justify an order for costs being made in the husband’s favour.
Indemnity Costs?
In the written submissions filed on behalf of the husband the Court is “asked to consider making an order for indemnity costs against the wife”.
There is no doubt that the Court has the power to award indemnity costs, however, it must be borne in mind that an award on this basis is an exception in this Court as well as other jurisdictions. (See Kohan (1993) FLC ¶ 92-340 and Colgate-Palmolive Co and Anor v Cussons Pty Ltd (1993) 46 FCR 22.)
When a party applies for an order for costs on an indemnity basis, the Court must be informed if the party is bound by a Costs Agreement in relation to those costs, and if so, the terms of the Costs Agreement (see r 19.08(3)).
In the present case I have not been informed whether the husband is, or is not, bound by a Costs Agreement.
In any event, I am not satisfied, and nor has it been explained, that there are circumstances of “an exceptional kind” which justify a departure from the ordinary rules relating to costs between party and party.
I therefore decline to make an order for indemnity costs.
Orders
As I have already recorded the husband seeks costs against the wife arising from his Form 2 Applications filed 18 September 2006 and 5 December 2006; the wife’s Form 2A Response filed 2 October 2006 and her Contravention Application filed 30 November 2006.
The Court was requested to fix the husband’s costs, or alternatively, to make orders that those costs be ‘taxed” in default of agreement. As a further alternative it was submitted that the wife should pay a substantial percentage of the husband’s Scale costs, “say 90 per cent”.
In my view the circumstances of this case do not warrant orders being made in accordance with those sought by the husband, although, as seen, I am satisfied that there are circumstances justifying an order for costs being made in his favour. There were significant aspects of the case which were not dealt with. I would refer in particular to the wife’s application for spousal maintenance and other issues involving parenting matters. Those issues were reflected for example, in parts of the affidavits, the Form 13 Financial Statements, and some of the interlocutory proceedings.
In those circumstances there must be some assessment of the proportion of costs.
In the circumstances of the case it is not appropriate, in my view, for the wife to be called upon to contribute towards the husband’s costs of the appearances before Young J on 19 October 2006; Mushin J on 9 November 2006; and myself on 8 December 2006.
On the other hand, it is appropriate in my view, for the wife to contribute towards the husband’s costs of the proceedings before me on 15 December 2006 and 1 March 2007. I do not think it appropriate that the wife pay the totality of the husband’s costs of those dates but consider it appropriate that a proportion should be paid, which in my view, should be two-thirds of such costs.
It is also appropriate in my view for the wife to pay the husband’s costs of and incidental to pars 2 and 5 of his Form 2 Application filed 5 December 2006, together with his costs of and incidental to pars 6 and7 of the wife’s Form 2A Response filed 2 October 2006.
To my mind these orders will achieve an appropriate and fair outcome.
It is desirable to avoid the costs and delays associated with an assessment of costs if at all possible. Regrettably I am not in a position to be able to fix the amount of the husband’s costs. Hopefully the parties will be able to agree as to quantum, although I have to say that the history of this matter does not give me any great optimism in this regard.
It is also appropriate for the wife to pay the husband’s costs of the preparation of the written submissions for costs.
I will stay enforcement of the costs until the substantive applications have been determined, given the wife’s current financial situation.
Accordingly, I make orders as identified at the beginning of this judgment. The orders will be -
I certify that the preceding two hundred and four (204) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carter.
Associate:
Date: 31 May 2007 (amended as at 19 June 2007)
IT IS NOTED that this judgment for all publication and reporting purposes be referred to as Kelleher & Anderson
Key Legal Topics
Areas of Law
-
Civil Procedure
-
Family Law
-
Equity & Trusts
Legal Concepts
-
Costs
-
Jurisdiction
-
Remedies
-
Injunction
-
Constructive Trust
-
Procedural Fairness
0
6
1