Kent and Kent (No. 4)

[2017] FamCA 1053

FAMILY COURT OF AUSTRALIA

KENT & KENT (NO. 4) [2017] FamCA 1053

FAMILY LAW – COSTS – circumstances justify the making of an order for costs – Court persuaded that it is just for the order made to specify the amount of the costs payable – costs to be paid within 30 days of the making of final orders or the final resolution of the proceedings

Family Law Act 1975 (Cth)

Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119
D & D (Costs) (No 2) (2010) FLC 93-435
Harrison v Schipp (2002) 54 NSWLR 738
Idaport Pty Ltd v National Australia Bank Limited & Ors [2007] NSWSC 23

APPLICANT: Ms Kent

RESPONDENT: Mr Kent

FILE NUMBER: BRC 11392 of 2016

DATE DELIVERED: 19 December 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: Determined in Chambers following the receipt of written submissions

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Hopgood Ganim Lawyers (by way of written submissions filed on 13 October 2017 and by written submissions filed in reply on 3 November 2017 )

SOLICITOR FOR THE RESPONDENT: Hirst & Co (by way of written submissions in reply filed on 27 October 2017)

Orders

IT IS ORDERED THAT

1. Mr Kent pay Ms Kent’s costs of and incidental to the  Application in a Case filed 18 July 2017 and the Response to the Application in a Case filed 4 September 2017, with such costs:

   (a)to be in the amount of $7,591.49;  and

   (b)       to be paid within 30 days of either:

   (i)the making of a final order in the property settlement proceedings between the parties;  or

   (ii)the final resolution, by other means, of the property settlement proceedings between the parties.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kent & Kent (No. 4) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 11392 of 2016

Ms Kent

Applicant

And

Mr Kent

Respondent

REASONS FOR JUDGMENT

1. On 29 September 2017, I made an order restraining Mr Kent from making any further withdrawal from the E Trust, otherwise dismissed the Application in a Case filed by Ms Kent on 18 July 2017[1] and dismissed paragraphs 2 to 5 inclusive of the Response to Application in a Case filed by Mr Kent on 4 September 2017.

   [1]           Sealed on 20 July 2017.

2. I also made orders to facilitate the consideration and determination in Chambers of any application for costs subsequently advanced on behalf of either or both of the parties.

3. It is clear that neither party is in receipt of Legal Aid. There is no suggestion that the proceedings disposed of by Order made on 29 September 2017 were necessitated by the failure of either party to comply with previous orders of the Court.

4. There is dispute between the parties about whether either made any real attempt to settle the competing applications for interim relief before the hearing of the same.

Ms Kent’s application for costs and the substance of the submissions made in support of the same

1. In seeking an order that Mr Kent pay her costs, fixed in the sum of $7,591.49,[2] Ms Kent relies on the Order made 29 September 2017, the Reasons for Judgment delivered 29 September 2017 and an affidavit of Ms L, filed 13 October 2017. She also relies on submissions filed on 13 October 2017 and 3 November 2017.

   [2]          Or, alternatively, as assessed on a scale basis.

2. It is submitted on Ms Kent’s behalf that the Court would be persuaded that the circumstances justify the making of an order for costs because:

   a)each party’s financial circumstances are reasonable, despite them having a shortfall of income compared to expenses or outgoings – said to arise largely as a result of the impost on each of them of the legal fees associated with the proceedings; and

   b)there is nothing in Mr Kent’s financial situation to mitigate against an order for costs being made; and

   c)any contention by Mr Kent that he does not have available to him the cash resources from which to meet an order for costs should not persuade against the making of an order for costs, particularly given clear authority that impecuniosity of itself is no bar to the making of an order for costs if the Court is otherwise persuaded that such order should be made; and

   d)it was ‘improper’ for Mr Kent to oppose Ms Kent’s application to preserve the remaining balance of the E Trust account and to seek orders that she pay half of the funds held in her term deposit to him in circumstances which included that:

   i)Ms Kent did not know that he had accessed his entitlement in the E Trust until she received his Amended Financial Statement; and

   ii)he did not provide disclosure about his use of the $515,968.00 withdrawn by him from that source when she asked for the same; and

   iii)the term deposit is the only significant source of funds available to her in the proceedings; and

   iv)there was nothing to suggest she had acted to alienate or destroy the property of the parties; and

   v)his own evidence was that it is difficult to transfer funds from Papua New Guinea to Australia; and

   vi)he had previously used the amount of $104,785.00 to purchase a luxury vehicle in Australia despite already having a vehicle available to him; and

   vii)he failed to adduce sufficient evidence to support his contentions about the poor performance of Kent Limited; and

   viii)his actions were absent bona fides and more about putting pressure on Ms Kent not to advance the proceedings,

   e)Mr Kent’s conduct has included a failure to make full and frank disclosure, acting so as to abuse the process of litigation, using litigation as a tool to damage or bully Ms Kent and having wilful disregard for the costs incurred by Ms Kent in the litigation; and

   f)Ms Kent was wholly successful in her application because, whilst she originally sought a variety of orders, the relief ultimately sought was the relief she was successful in obtaining; and

   g)Ms Kent was wholly successful in her response to the relief sought by Mr Kent, who was wholly unsuccessful in his attempt to obtain such relief.

Mr Kent’s opposition to the making of any order that he pay Ms Kent’s costs and the substance of the submissions made in support of such opposition

1. Mr Kent opposes the making of any order that he pay Ms Kent’s costs. Instead, he seeks an order that each party pay their own costs. He contends that Ms Kent’s financial position is superior to his and rejects any suggestion that the expenditure she has incurred by way of legal expenses is as a result of his conduct.

2. In advancing the latter proposition, it is submitted on his behalf that the costs both parties incurred were directly as a result of Ms Kent’s application to the Court, particularly in circumstances where she failed to notify him in accordance with Rule 5.03(1) of the Family Law Rules 2004 and that such failure deprived him of the opportunity to attempt to resolve the dispute without the need for further litigation; and, further, that he attempted to resolve the dispute on the basis that the Applicant withdraw her application and each party bear their own costs – an offer to which Ms Kent failed to respond – and that he had notified her of his intention to commence proceedings in the absence of a response.

3. In addition, as I interpret the submissions, it is also contended that, irrespective of any comparison between the two, each party has adequate financial means to meet their respective legal costs.

4. The submissions prepared on behalf of Mr Kent also refute any assertion that he acted improperly in seeking to access the balance of his funds in the E Trust or in prosecuting an order for the payment to him of half of the parties’ joint funds. Mr Kent further denies any suggestion that he did not provide disclosure in relation to his drawings on the funds held in the E Trust and emphasises that he detailed his actions in withdrawing the same at Item 57 of the Financial Statements filed on 5 July 2017 and 8 August 2017.

5. In essence, Mr Kent submits that Ms Kent’s Application in a Case was unnecessary and caused him to incur legal expenses in responding to the same.

6. Further, Mr Kent rejects the contentions or aspects of the submissions filed on behalf of Ms Kent, as particularised at paragraph 20 of the submissions filed on behalf of Mr Kent on 27 October 2017, and submits that the same are without evidentiary support. It is submitted on his behalf that his position in seeking an order for the payment to him of half of the funds withdrawn by Ms Kent from the relevant ANZ bank account was justified in circumstances where she had not notified him of her intention to act and, further, that his opposite to the orders sought by Ms Kent was not unjustified.

7. The submissions filed on behalf of Mr Kent also emphasise that the balance of Ms Kent’s application, other than save as for the injunctive relief sought, was dismissed and, as such, it cannot not be said that she was wholly successful or he was wholly unsuccessful in the respective positions each adopted.

8. It is further submitted that, for the reasons summarised briefly above (together with those outlined in the written submission filed on Mr Kent’s behalf), the Court would not be persuaded that the circumstances justify the making of an order for costs; instead, the general starting point outlined in s 117(1) of the Family Law Act 1975 (Cth) should apply and each party should be left to pay their own costs.

Do the circumstances justify the making of an order as to costs?

1. Section 117(1) of the Act provides that each party to proceedings under the Act shall bear his or her own costs. However, if the Court is satisfied there are circumstances which justify it, the Court may make such order as to costs as it considers just.[3] In considering what order, if any, as to costs should be made, the Court must have regard to the matters set out in s 117(2A) of the Act.

   [3] Section 117(2) Family Law Act 1975 (Cth).

2. It is clear that impecuniosity on the part of a party opposing the making of an order for costs is no bar to an order for costs being made where it is otherwise warranted.[4]

   [4]           See, for example, D & D (Costs) (No 2) (2010) FLC 93-435.

3. At present, there is allegation and counter-allegation about the asserted conduct of the parties. In such a circumstance, I consider that I am not now in a position to conclude whether in fact there is anything in the conduct of the parties to the proceedings in relation to the proceedings to persuade that this consideration favours the conclusion that the circumstances justify the making of an order departing from the starting point established by s 117(1) of the Act.

4. I am not persuaded by the argument advanced on behalf of Mr Kent to the effect that he was not afforded an opportunity to resolve the dispute with Ms Kent because of any asserted non-compliance with the Rules before the application seeking interim orders was filed. Such argument may have been more persuasive if the injunctive relief sought by Ms Kent – and in respect of which she was ultimately successful – had not been opposed at the hearing before me.

5. Ms Kent was wholly successful in her attempt to obtain relief restraining Mr Kent from further drawing on the E Trust.  She achieved more in that respect than she would have done had she accepted Mr Kent’s offer that she withdraw her application for interim relief on the basis that each party bear their own costs. Further, she was also wholly successful in her resistance to the relief sought by Mr Kent as particularised in the Response filed on 4 September 2017.

6. On balance, in the circumstances of this case and in the broad exercise of discretion accorded to the Court in determining applications for costs, I am persuaded that these matters persuade of circumstances which justify the making of an order that Mr Kent pay Ms Kent’s costs of and incidental to the Application in a Case filed 20 July 2017 and the Response to an Application in a Case filed 4 September 2017.

What are the just terms of the order for costs?

1. It was submitted on behalf of Ms Kent that, having determined that the circumstances justify the making of an order for costs, the Court would be persuaded, by virtue of the matters relevantly summarised above, that it is appropriate for such costs to be ordered on a scale basis. No particular issue was taken about this contention in the submissions filed on behalf of Mr Kent.

2. It was further submitted on behalf of Ms Kent that, given that the parties have already been involved in contested hearings at every opportunity since proceedings commenced, the Court would not be confident that they will be able to reach agreement about the quantification of her costs: consequently, the quantum of costs payable by Mr Kent should be fixed or specified so as to avoid the prospect of further litigation (and its associated costs) about the issue.

3. I accept such submission insofar as it addresses the desirability of making orders which are more likely to result in less cost to the parties.

4. I am persuaded that it is just to make an order quantifying and specifying the amount which is to be paid by Mr Kent to Ms Kent by way of the costs of and incidental to her application for interim relief and his response to the same.

5. Ms Kent sought that the appropriate amount to fix as the quantum of the costs payable by Mr Kent is $7,591.49. This figure includes the costs associated with the attendance of Counsel on the day of the hearing of the competing applications for interim relief.

6. I accept that, if the Court is to fix a sum payable by a party by way of costs:

   a)such sum should be fixed broadly, having regard to the information before the Court;[5] and

   b)the process to be undertaken in specifying or fixing such sum does not envisage that a process similar to that involved in a taxation or assessment of costs should occur;[6] and

   c)there is no requirement to approach the task in any scientific or formulaic manner.[7]

   [5]          Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at [24].

   [6]Idaport Pty Ltd v National Australia Bank Limited & Ors [2007] NSWSC 23; Harrison v Schipp (2002) 54 NSWLR 738.

   [7]          Idaport at [10] per Einstein J.

7. The only submission advanced on behalf of Mr Kent about the sum sought by way of costs is that Ms Kent’s alleged failure to comply with the Rules in relation to notice before filing her Application in a Case mitigates against an order for costs in her favour. No criticism is made of the evidence of Ms L, whose affidavit annexes a schedule containing the quantification of the costs incurred by Ms Kent in prosecuting her application for interim relief and responding to the interim relief sought by Mr Kent (via his Response to the Application in a Case) as calculated according to Schedule 3 of the Family Law Rules 2004.

8. There being no particular challenge to the amount arrived at by application of the Items particularised within Schedule 3 of the Rules and adopting the approach referred to in paragraph [26], I am persuaded that it is just to order that Mr Kent pay Ms Kent’s costs of and incidental to her application for interim relief and his response to the same, with such costs to be fixed in the sum of $7,591.49. The order shall specify the payment of the same in that amount.

9. Ms Kent sought that Mr Kent be required to pay this amount forthwith.  Whilst not specifically addressed in the written submission prepared on Mr Kent’s behalf, I have proceeded on the basis that Mr Kent opposes such an order on the basis that his current weekly expenditure exceeds his current weekly income.

10. Whilst others may disagree, having taken that matter into account, I consider that the just order in the circumstances is one which requires Mr Kent to pay the sum of $7,591.49 within 30 days of either the making of a final order in the property settlement proceedings between the parties or the final resolution, by other means, of the property settlement proceedings between the parties.

11. For these short reasons, then, I make orders in the terms outlined at the commencement of these Reasons.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 19 December 2017.

Associate:     

Date:    19 December 2017