Kite and Kite (Costs)

[2011] FamCA 251

FAMILY COURT OF AUSTRALIA

KITE & KITE (COSTS) [2011] FamCA 251

FAMILY LAW - COSTS – Not established that the wife’s conduct in the property proceedings, by way of her asserted failure to fully and frankly disclose relevant financial matters, warrants an order for costs being made against her – Where the wife’s conduct in the proceedings has already been taken into account to her detriment in the substantive judgment – Where the outcome of the substantive proceedings was such that each party achieved a measure of success and failure, an order for costs is not justified in all the circumstances.

The Family Law Act 1975 (Cth) s 117(2)

Penfold v Penfold (1980) 144 CLR 311

APPLICANT: Mr Kite

RESPONDENT: Ms Kite

FILE NUMBER: BRF 3200 of 2004

DATE DELIVERED: 8 April 2011

PLACE DELIVERED: Parramatta

PLACE HEARD: By written submissions

JUDGMENT OF: Coleman J

HEARING DATE: 6 August 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kirk SC

SOLICITOR FOR THE APPLICANT: Hartley Healy

COUNSEL FOR THE RESPONDENT: Mr Cooper

SOLICITOR FOR THE RESPONDENT: Barry & Nilsson Lawyers

Orders

1. That there be no order for costs.

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

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: BRF 3200 of 2004

Mr Kite

Applicant

And

Ms Kite

Respondent

REASONS FOR JUDGMENT

costs

1. On 6 August 2010 the Court made orders implementing the settlement of property of the parties in accordance with its substantive judgment delivered almost four years earlier. At that time, the costs of the proceedings were reserved. Subsequently, very extensive submissions with respect to costs have been filed on behalf of both parties.

2. As is apparent from the minutes of order prepared by the Counsel representing the parties, and as envisaged by the Court’s November 2006 Reasons for Judgment, implementation of the substantive division of the property of the parties envisaged by the Court’s November 2006 judgment was, or by August 2010 had become, comparatively complex.

3. To the extent that the Court’s Reasons for Judgment with respect to costs do not refer in any detail to the carefully drawn written submissions of Counsel for the parties, no discourtesy is thereby intended. The Court is of the view however that, the more closely one reads and has regard to the submissions on behalf of the parties, the more the basis of the Court’s ultimate conclusion finds support.

4. Broadly speaking, as the Court’s Reasons for Judgment in 2006 confirm, albeit the issues were within a narrow compass at that time, each party achieved a measure of success and failure. As at the date of the Court’s 2006 judgment, the Court would not be of the opinion that an order for costs was justified in all the circumstances.

5. In so concluding, the Court is mindful of the broad discretion the Court exercises with respect to costs, albeit that discretion must be informed by reference to the provisions of Section 117(2) of the Family Law Act 1975 (Cth) (“the Act”). The Court is also mindful of Penfold v Penfold (1980) 144 CLR 311 at 315 the High Court, in which the High Court said:

   Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this 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. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s 117 (2) in "a clear case".

6. As is not in doubt and perhaps, it could be suggested, even anticipated by the November 2006 Orders, whilst determining the issues which the Court was asked to determine in 2006 was a relatively straightforward task, the legal structures through which the parties possessed the most significant and controversial properties in their portfolio, and the nature of those properties rendered implementation of the November 2006 judgment of the Court less than simple or straightforward.

7. As is not in doubt, for reasons which the Court then provided, the November 2006 judgment did not seek to do other than essentially determine the broad issues raised during the course of the trial which preceded that judgment. Those issues were essentially, first, the percentage division of the property of the parties and, second, which party should receive which income generating property. With the benefit of hindsight, determining those two questions can be seen as deceptively simple. Indeed, it could be said that determining the issues addressed in the Court’s August 2010 judgment was more difficult than determining the substantive proceedings in November 2006.

8. Without referring in detail to all or any of the matters raised by the competing submissions with respect to costs, the Court’s August 2010 judgment can, in broad terms, be seen as providing vindication for the position of each party with respect to certain issues and rejection of the position of each party in relation to others. The Court does not believe that either party could assert a totality of success on its part or a complete absence of success on the part of the other party. To even suggest a preponderance of success or failure on one side or the other would not, in the court’s view be an accurate summary of the Court’s August 2010 series of decisions or the reasons for them.

9. To the extent that it is suggested that the husband’s entitlement to costs should be enhanced by reason of the preparation of Mr S’s report, whilst the evidence suggests that the wife was at times less than as co-operative as she might have been, the Court is not ultimately persuaded that the evidence establishes conduct of a kind which should enhance the husband’s entitlement to a costs order pursuant to Section 117(2A)(c). On balance, the Court is not persuaded that any other aspect of the wife’s “conduct” subsequent to the November 2006 judgment would provide support for forming the requisite “opinion”.

10. To the extent that the wife may have been less than as co-operative with Mr S as she might have been, and/or provided less than adequate or sufficiently reliable disclosures of relevant financial matters subsequent to November 2006, it is to be remembered that those matters have been taken into account to the wife’s detriment in the Court’s August 2010 judgment. That does not preclude them from assuming significance in the context of a costs dispute, but the Court is concerned to avoid “penalising” the wife in such circumstances.

11. For the foregoing admittedly brief reasons, the Court is not of the opinion that it should make any order for costs. Objectively, in the Court’s 2010 judgment, the Court found that “many of the matters that have been controversial, probably since 2006, are in no small measure the result of the party’s mutual mistrust”. (Reasons for Judgment, para 8).

12. That finding is relevant to the Court’s conclusion with respect to costs. As is also apparent from the Court’s August 2010 Reasons for Judgment, the wife’s evidence was challenged in ways which, if successful, could and would be material to the question of costs. For reasons which the Court provided in its August 2010 judgment, notwithstanding the finding of some exaggeration, the Court did not accept the major thrust of the husband’s case in terms of the asserted failure of the wife to fully and frankly disclose relevant financial matters (paragraph 10).

13. Without restating them, the Court’s Reasons for Judgment with respect to the various issues requiring determination in August 2010 reveal that the wife was more successful than the husband with respect to some issues, whilst the husband was more successful than the wife with respect to others. As the Court also made clear, whilst not being critical of Mr S, and despite the parties’ hopes in that regard, Mr S’s report did not remove the scope for dispute with respect to a number of financial matters.

14. To the extent that a more exhaustive analysis of the competing submissions with respect to costs than these reasons reveal may have been possible, and resulted in a more nuanced and detailed judgment, nothing there raised changes the broad basis of the Court’s conclusion as articulated above.

I certify that the preceding fourteen (14) paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Coleman delivered on 8 April 2011.

Associate: 

Date:  8 April 2011