LABELLA & LABELLA (No.2)
[2020] FCCA 3267
•2 December 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LABELLA & LABELLA (No.2) | [2020] FCCA 3267 |
| Catchwords: FAMILY LAW – Costs – undefended property proceedings – where Respondent Husband dropped out of the proceedings – where matter heard on a final basis undefended – where section 117(2A) applied. |
| Legislation: Family Law Act 1975 (Cth), ss.117, 117B. Family Law Rules 2004 (Cth) sch 3. Federal Circuit Court Rules 2001 (Cth) rr 21.02, 21.10, 21.11; sch 1.. |
| Cases cited: Penfold v Penfold (1980) 144 CLR 311 |
| Applicant: | MS LABELLA |
| Respondent: | MR LABELLA |
| File Number: | WOC 1080 of 2018 |
| Judgment of: | Judge Morley |
| Hearing date: | 12 June 2020 |
| Date of Last Submission: | 10 July 2020 |
| Delivered at: | Sydney |
| Delivered on: | 2 December 2020 |
REPRESENTATION
| Solicitors for the Applicant: | Mr McEwan of Heard McEwan Legal |
| The Respondent did not appear |
ORDERS
That the Respondent Husband Mr Labella pay the Applicant Wife Ms Labella’s costs of these proceedings in the fixed sum of $50,000, such sum to be paid by the Respondent Husband into the trust account of the Applicant Wife’s solicitors Heard McEwan Legal within 21 days of the making of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Labella & Labella (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
WOC 1080 of 2018
| MS LABELLA |
Applicant
And
| MR LABELLA |
Respondent
REASONS FOR JUDGMENT
Introduction
These are Reasons for Judgment in relation to the costs application by the Applicant Wife Ms Labella (‘the Applicant’) consequent upon judgment being delivered on 12 June 2020 after the final undefended hearing of these property proceedings that occurred on 24 October 2019.
The Respondent Respondent is Mr Labella (‘the Respondent’).
At the final undefended hearing in October 2019, Ms Eldershaw of Counsel appeared for the Applicant. There was no appearance by or for the Respondent.
It is the Applicant’s application that the Respondent pay her costs of these proceedings in the amount of $50,000.00.
The substantive proceedings
The substantive proceedings related to property settlement pursuant to section 79 of the Family Law Act 1975 (Cth) (‘the Act’). They were commenced by the Applicant filing an Initiating Application accompanied by affidavit and Financial Statement on 19 October 2018, all of which were served on the Respondent together with the Court brochure on 14 November 2018 by a licensed process server.
The Respondent did not appear before the Court on the first mention of the matter on 3 December 2018, and the matter was adjourned to 13 December 2018 for possible undefended hearing.
On 14 December 2018, the Respondent appeared before the Court with legal representation. The parties entered into consent orders in relation to preliminary issues relating to the relevant real properties, and orders were made that within 28 days, the Respondent was to provide the Applicant with full and frank disclosure of all documents and information relating to his financial affairs. Orders were also made requiring the parties to take a certain actions in relation to the liquidation and winding up of trusts in a private corporation and for the Respondent to file and serve a Response, Financial Statement, and affidavit by no later than 18 January 2019.
The Respondent filed his Response, Financial Statement, and affidavit on 21 January 2019. In his Response, he did not move the Court for final orders, it being stated in that document that he sought an order granting him leave to amend the orders he would seek on a final basis following receipt of the Applicant’s documents of full and frank financial disclosure.
Access Law Group filed a Notice of Address for Service for the Respondent on 13 December 2018. That firm filed a Notice of Withdrawal as Lawyer on 8 April 2019.
Other than the appearance by the Respondent with legal representation before the Court on 14 December 2018, and the filing of the Respondent’s Response, Financial Statement, and affidavit on 21 January 2019, three days after the time specified in the orders of 14 December 2018, the Respondent has taken no part further part in these proceedings.
The matter went to final undefended hearing before me on 24 October 2019. I delivered Reasons for Judgment and made orders consequent upon that final undefended hearing on 1 June 2020.
At the final undefended hearing, the Applicant made an application for the Respondent to pay her costs of the hearing in the fixed sum of $50,000.
The costs application
In relation to her application, the Applicant relies upon:
a)The written submissions contained in the Case Outline prepared by Ms Eldershaw of Counsel for the undefended hearing on 24 October 2019;
b)The affidavit of her solicitor, Nathan John McEwan, sworn and filed on 1 October 2019;
c)Further written submissions prepared by her solicitor and filed on 12 June 2020; and
d)The affidavit of her solicitor, Nathan John McEwan, sworn and filed on 9 July 2020.
In the further written submissions, the Applicant refers to and relies upon my Reasons for Judgment in the substantive proceedings delivered on 1 June 2020, and in particular to paragraphs 4 to 34 therein.
In that regard, I incorporate those paragraphs into these Reasons for Judgment.
As to quantum of costs, the Applicant has sought costs on a fixed sum of $50,000. I have read and take into account the whole of the evidence contained in the affidavit of Nathan John McEwan sworn on 1 October 2019 and exhibit NGM-1 to that affidavit, which was entered as exhibit A in the final undefended hearing of the matter.
That evidence makes plain that the solicitor and client costs incurred by the Applicant are considerably in excess of the sum of $50,000.
The law
Costs under the Family Law Act 1975 (Cth)
Costs in relation to matters under the Act are governed by section 117, which provides in subsection 117(1) that the normal position in relation to costs in family law matters is that “each party to proceedings under this Act shall bear his or her own costs.”[1]
[1] Family Law Act 1975 (Cth) s 117(1).
Subsection 117(2) provides for a departure from the usual rule in subsection 117 (1) as follows:
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.[2]
[2] Family Law Act 1975 (Cth) s 117(2).
Subsection 117 (2A) provides as follows:
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle proceedings in the terms of any such offer; and
(g) such other matters as the court considers relevant.[3]
[3] Family Law Act 1975 (Cth) s 117(2A).
Pursuant to section 117(2), a finding by the Court of circumstances that justify the making of a costs order is the necessary preliminary to the making of an order, and beyond that there is no additional or special onus on an Applicant for a costs order.
If, having considered the matters referred to in subsection 117(2A) the Court is of the opinion that the circumstances justify a departure from the usual rule that each party bear his and her own costs then the Court must determine the quantum of the costs to be awarded.
In Penfold v Penfold,[4] the High Court discussed section 117 of the Act and said:
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former 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. Beyond this there is nothing in the subject matter or in the interrelationship of the 2 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 judgement under appeal that an order can only be made under s. 117 (2) in “a clear case”.[5]
[4] Penfold v Penfold (1980) 144 CLR 311.
[5] Penfold v Penfold (1980) 144 CLR 311, 315.
The Court’s discretion in relation to costs is broad and the considerations listed in subsection 117(2A) are not restrictive.[6] There is nothing to prevent any one factor in this subsection being the sole determinant for an order for costs.[7] It is a matter of the weight to be accorded to each factor by the Court, as no one factor listed in s 117(2A) prevails over another.[8]
[6] Penfold v Penfold (1980) 144 CLR 311.
[7] PBF & TRF & Anor [2005] FamCA 158, [41].
[8] Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157.
Costs are compensatory and not punitive, 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.[9]
[9] Latoudis v Casey (1990) 170 CLR 534.
The Full Court of the Family Court of Australia recently summarised the basic law on costs orders under the Act in Sfakianakis & Sfakianakis:[10]
[9] The ordinary position in proceedings under the Family Law Act 1975 (Cth) (the Act) is that each party is to bear his or her own costs (s 117(1)). Where the Court is of the opinion that circumstances justify it in doing so, the Court may make such order as to costs as it considers just (s 117(2)). Thus, an order may be made for the payment of costs on an indemnity basis, although such orders are exceptional (In the Marriage of L and C L Kohan (1992) 16 Fam LR 245 at 259; (1993) FLC 92-340 at 79,614; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCa 1178; D and D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64).
[10] It is, however, a mistake to think that if a costs order is made, that order can only be on a party and party basis or on an indemnity basis. The words “such order as to costs … as the court considers just” permit the Court to fashion an order that is apt to the circumstances. One such well-known example is assessment on a trustee basis, which is more generous than party and party costs, but falls short of an indemnity. Orders for a partial indemnity or for a particular period are obvious possibilities. The Court may also fix costs in a particular sum, taking account of all relevant circumstances; that type of order too is neither one for party and party costs nor an indemnity costs order. For convenience, in these reasons we shall refer to such orders as a “special costs order”.
[11] Decisions as to the appropriate basis for any costs order are, of course, guided by principle. In applications under s 117 of the Act for costs of whatever kind, the Court must have regard to the considerations set out in s 117(2A). Paragraph (g) requires the Court to take into account any relevant matter.
[12] As the decision in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233–4; 118 ALR 248 at 256–7; 28 IPR 561 at 569–70 (‘Colgate-Palmolive’) and the extensive authorities referred to in it make clear, the categories for the making of special costs orders are not closed and may be made whenever the particular facts and circumstances warrant it. That position is reflected in s 117(2) of the Act.
[13] It is necessary to consider first whether there should be an order for costs before turning to whether the quantum of the costs should be left to the application of the scale contained within Sch 3 of the Rules or assessed or fixed on some other basis. …
[40] … the Court is not bound only to make an order on a party and party basis or on an indemnity basis. It may take an intermediate course if that is the order that is just in all of the circumstances. A special costs order may be assessed by reference to a particular period of time or set of events. Alternatively, the Court may fix a sum for costs that exceeds party and party costs but falls short of an indemnity.[11]
[10] Sfakianakis & Sfakianakis [2019] FamCAFC 54.
[11] Sfakianakis & Sfakianakis [2019] FamCAFC 54, [9]-[13], [40].
Offers of settlement are an important section 117(2A) consideration in determining the question of costs. Section 117(2A)(f) requires the Court to consider any offer in writing to settle the proceedings and the terms of any such offer.[12]
[12] Trevi & Trevi (No. 3) [2019] FamCAFC 58.
In Browne & Green,[13] the Full Court said:
We think that whilst s 117 (2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made. The insertion of s 117C into the legislation is a clear indication of the desire of Parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it proper consideration, is something to which very significant weight indeed normally to be given … [14]
[13] Browne & Green [2002] FamCA 791.
[14] Browne & Green [2002] FamCA 791, [57].
Rule 21.02 in part 21 – costs, division 21.2 – orders for costs, of the FCC Rules provides:
(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceedings is concluded.[15]
[15] Federal Circuit Court Rules 2001 (Cth) r 21.02.
Rule 21.10 of the FCC Rules provides:
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to;
(a) costs in accordance with Parts 1 and 2 of Schedule 1; and
(b) disbursements properly incurred.[16]
[16] Federal Circuit Court Rules 2001 (Cth) r 21.10.
I note here schedule 1 to which reference is made in rule 21.10(a) is schedule 1 of the FCC Rules.
Rule 21.11(2) provides that if costs in the court are taxed, the taxing officer[17] must apply the scale of costs set out in schedule 3 to the Family Law Rules for family law or child support proceedings,[18] and not schedule 1 of the FCC Rules to which reference is made in rule 21.10.
[17] “‘Taxing officer’ means a Registrar”, Federal Circuit Court Rules 2001 (Cth) r 21.11.
[18] Federal Circuit Court Rules 2001 (Cth) r 21.11(2)(a).
Schedule 1 of the FCC Rules is composed of ‘composite amounts’ for stages in the proceedings.[19] Schedule 3 in the Family Law Rules is composed of charges that can be made per item of work or per hour of work.[20]
[19] See, eg, “Initiating or opposing an application up to the completion of the first court date – Both: (a) $2,241; and (b) the daily hearing fee mentioned in item 13 that applies to the hearing”, Federal Circuit Court Rules 2001 (Cth) sch 1 item 1.
[20] See, eg, “Drafting a document (other than a letter) - $24.43 per 100 words”, Family Law Rules 2004 (Cth) sch 3 item 101.
It was established by the decision of Raphael FM (as His Honour then was) in Colan Products Pty Ltd & Luxon Pty Ltd[21] that, when applying the scale provided by the FCC Rules, Counsel’s fees are not claimable as a disbursement, and what is to be claimed is the advocacy loading on the daily hearing fee.[22] That is applicable in this matter, as what is sought by way of costs on behalf of the Applicant is the cost of attendance before the court by Counsel to conduct the final hearing.[23]
[21] Colan Products Pty Ltd v Luxon Pty Ltd (No 2) [2002] FMCA 90.
[22] Colan Products Pty Ltd v Luxon Pty Ltd (No 2) [2002] FMCA 90, [13].
[23] Colan Products Pty Ltd v Luxon Pty Ltd (No 2) [2002] FMCA 90.
Indemnity costs
In Colgate-Palmolive Company v Cussons Pty Limited,[24] Sheppard J provided some examples of circumstances that might warrant the exercise of discretion to award indemnity costs, and in In the Marriage of Munday & Bowman,[25] Holden CJ drew from his Honour’s decision with the following:
(a) Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] 81 ALR 397;
(b) Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra);
(c) Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)). 2015] FamCAFC 157 Reasons Page 7
(d) The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v Westpac Banking Corporation (unreported Federal Court, 5 March 1993)).
(e) An imprudent refusal of an offer to compromise.[26]
[24] Colgate-Palmolive Company v Cussons Pty Limited (1993) 118 ALR 248.
[25] In the Marriage of Munday & Bowman (1997) 22 Fam LR 321.
[26] In the Marriage of Munday & Bowman (1997) 22 Fam LR 321.
In relation to indemnity costs, in Phillips & Hansford[27] the Full Court said:
[35] Indemnity cost orders are made only in exceptional cases (Kohan and Kohan (1993) FLC 92-340; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; D & D (Costs) (No. 2) (2010) FLC 93-435).
[36] Whilst the categories of cases in which indemnity cost orders may be awarded are not closed, it is accepted that such costs may be ordered where a case was pursued with “wilful disregard of known facts or clearly established law” and where there has been “an imprudent refusal of an offer to compromise” (Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233).
[37] In relation to the first category, it has been said that indemnity costs may be awarded where “the Applicant, properly advised, should have known that he had no chance of success” (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401) and where “a party persists in what should on proper consideration be seen to be a hopeless case” (J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers – Western Australian Branch & Anor [1993] FCA 70 per French J at 5).[28]
[27] Phillips & Hansford [2020] FamCAFC 28.
[28] Phillips & Hansford [2020] FamCAFC 28, [35]-[37].
Specifically in relation to offers of settlement, in Trevi & Trevi,[29] the Full Court said at [15]:
… failure to accept an offer which in retrospect should have been accepted does not necessarily justify an order for costs on an indemnity basis.[30]
[29] Trevi & Trevi (No. 3) [2019] FamCAFC 58, [15].
[30] Trevi & Trevi (No. 3) [2019] FamCAFC 58, [15].
I refer here also to the learned judgment of the Full Court of the Family Court in the case of JEL & DDF.[31]
[31] JEL & DDF [2001] FamCA 907.
Consideration of section 117 of the Act
In proceedings under the Act, and pursuant to section 117 of the Act,[32] I must first consider if there are circumstances that justify the Court in making an order as to costs – that is, on the Applicant’s application, should an order be made that the Respondent pay her costs. In deciding whether an order for costs is justified in the circumstances, I must have regard to the considerations set out in section 117(2A).[33]
[32] Family Law Act 1975 (Cth) s 117.
[33] Family Law Act 1975 (Cth) s 117(2A).
If I find that there are circumstances justifying the making of a costs order, I must then go on to consider the nature of such a costs order – party/party costs, indemnity costs, ‘special costs order’ – and, depending on the nature of such costs order, the quantum of costs.
The Applicant’s application for costs is, as noted above, an application that the ‘general rule’ be departed from as a matter of exercise of the Court’s discretion, on the basis that there are circumstances that justify the Court making an order as to costs.
She asserts that such a costs order should be made pursuant to Rule 21.02(2)(a) of the Federal Circuit Court Rules 2001 (Cth) (‘the Rules’) setting the amount of the costs at $50,000.
The submissions by Mr McEwan in the written submissions dated 12 June 2020 repeat the tenor of the submissions on costs contained in paragraphs 69 to 76 of the written submissions of Ms Eldershaw dated 24 October 2019.
In Beach Petroleum NL v Johnson (No 2),[34] at 120 the Court determined that the purpose of a rule of Court enabling an order for costs in a specific amount, without proceeding to a formal assessment or taxation is to “avoid the expense, delay and aggravation involving protracted litigation arising out of taxation”.[35]
[34] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119.
[35] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 120.
In Idoport Pty Ltd v National Australia Bank Ltd[36] at [10], the New South Wales Court of Appeal said that a Court must act judicially in determining a fixed sum of costs, but that does not mean that it must exercise the power to award a lump sum in any “scientific or formulaic manner”.[37]
[36] Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWCA 23.
[37] Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWCA 23, [10].
In Parke v Estate of Parke,[38] Murphy J in a separate judgment as a member of the Full Court said “I consider that an order for costs which is ‘just’ within the meaning of s 117(2) of the Act is one which ‘specifies the amount’ of those costs”.[39]
[38] Parke v Estate of Parke (2016) 314 FLR 322.
[39] Parke v Estate of Parke (2016) 314 FLR 322, [128].
The terms of rule 21.02(2) of the Federal Circuit Court Rules 2001 are analogous to, for example, section 101(4) of the Civil Procedure Act 2005 (NSW). That section was the subject of the decision in Idoport Pty ltd v National Australia Bank Ltd. There, Einstein J referred to principles applicable to a Court fixing costs. I consider that those same principles apply analogously to rule 21.02(2).
At [130] of Parke v Estate of Parke, the Murphy J said that if a Court is to fix a sum, it should be “fixed broadly, having regard to the information before the Court”.[40]
[40] Parke v Estate of Parke (2016) 314 FLR 322, [130], quoting Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, [24]; cited in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWCA 23.
The process does not “by its free nature… envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place” [reference omitted].
Then, at [131]:
Obviously enough, the Court must act judicially in fixing or specifying a sum of costs, but:
the requirement that the power to award a gross sum should be exercised judicially does not mean that it must be exercised in any scientific or formulaic manner; At the heart of the judicial function is the responsibility to weigh up competing factors and considerations, many of which might conflict, to reach a determination. Acting judicially carries with it an obligation to apply the rules of natural justice, to act impartially and to apply the law to the facts. …[41]
[41] Parke v Estate of Parke (2016) 314 FLR 322, [131].
Turning to the matters set out in section 117(2A), I find that the evidence relating to the financial circumstances of each of the parties is as contained in the Respondent’s Financial Statement filed 21 January 2019 – the only financial statement filed in the proceedings – which indicates the Respondent’s weekly wage income of $2,800, and the Applicant’s Financial Statement filed 27 September 2019, which indicates the Applicant’s weekly wage income of $1,122.[42]
[42] Family Law Act 1975 (Cth) s 117(2A)(a).
Once again, as concisely stated in the written submissions, the Respondent is to receive 37% of the net matrimonial asset pool pursuant to the orders I made on 1 June 2020, being equivalent in my findings in the matter to $480,459 in assets.
The Applicant has ongoing care of the parties’ children aged 17 and 14.
The Respondent has a capacity to pay a costs order up the amount sought by the wife as a fixed sum.
Neither party was in receipt of a grant of Legal Aid in the proceedings.[43]
[43] Family Law Act 1975 (Cth) s 117(2A)(b).
The most potent consideration in relation to this costs application is the conduct of the parties in the proceedings.[44] In that regard, I refer to again to the matters set out in paragraphs 1 to 34 of my Reasons for Judgment of 1 June 2020, incorporated into these Reasons for Judgment earlier.
[44] Family Law Act 1975 (Cth) s 117(2A)(c).
I find that in consequence of:
a)The conduct of the Respondent in failing to engage with the proceedings past the filing of his Response, Financial Statement, and affidavit on 21 January 2019;
b)The Respondent filing his Response material three days after the date specified in the order for filing and well in excess of the time required under the Rules for filing; and
c)In particular, his failure, once having engaged with the proceedings, to provide full and frank disclosure in compliance with his obligation under the Act and the Rules;
the Respondent’s conduct caused the Applicant to be put to considerable expense over and above that to which she would have been put had the Respondent continued to engage the proceedings through to a finality (by way of consent orders or by way of final hearing and delivery of judgment) and made full and frank financial disclosure.
In particular, in consequence of the Respondent’s conduct in failing to continue to engage with the proceedings, and in failing to comply with his obligation to give full and frank financial disclosure, the Applicant was put to considerable additional expense by having to assemble the necessary evidence to present the matter before the Court at the final undefended hearing, but still so as to enable the Court to make a proper finding as to whether it would just and equitable for the Court to proceed with the property settlement process under section 79 of the Act, and having so found, to enable the Court to proceed to consider matters required under section 79 to make proper orders within the Court’s discretion for a property settlement.
A further burden of work and cost was placed upon the Applicant and her legal advisers in consequence of the Respondent’s failure to continue to attend at proceedings before the Court, by reason of the extra methods of service that were required to be undertaken and that were undertaken, so as to ensure that the Court had the material necessary to make a proper discretionary decision as to whether or not the matter should proceed to a final undefended hearing.
On the part of the Applicant, her conduct in the proceedings has been, on the evidence, without blemish.
The proceedings were not necessitated by a failure of a party to comply with the previous order of the Court.[45]
[45] Family Law Act 1975 (Cth) s 117(2A)(d).
The Applicant was wholly successful in the proceedings.[46] I consider that the Court can validly say that the Respondent was wholly unsuccessful in the proceedings, in that the only order that he sought in his Response was that he have leave to amend his Response once he had obtained full and frank financial disclosure from the Applicant. He immediately dropped out of the proceedings and never sought to file an Amended Response seeking more particularised orders. The only final order he sought, he did not obtain.
[46] Family Law Act 1975 (Cth) s 117(2A)(e).
The ultimate decision reached was very close to the orders proposed by the Applicant on final undefended hearing.
I do not have any specific evidence of offers in writing made by the Applicant to the Respondent in relation to settlement.[47]
[47] Family Law Act 1975 (Cth) s 117(2A)(f).
There is another matter that I consider relevant. Costs orders are not punitive by nature, but are compensatory. The Applicant has been put to considerable expense in these proceedings where the Respondent, by his inaction after at first engaging the proceedings, has turned his back on the matter in full knowledge of the existence of the proceedings. In effect, the Respondent says to this Court and to the Applicant ‘let the final result be what it will be, but you will have to do all the work’.
The Applicant should be compensated for doing all that work.
Accordingly, I find that it is proper to make an order as sought by Applicant, that the Respondent pay her costs fixed in the sum of $50,000.
The Respondent, in not engaging with the proceedings whilst being aware that the Applicant sought costs in the matter, has chosen to make no submission in relation to time to pay any costs order.
I will make an order that the Respondent has 21 days to pay the Applicant the costs ordered, and I note that pursuant to section 117B of the Act, if the Respondent fails to make payment of the $50,000 within 21 days by way of compliance with this costs order, then interest will begin to run on the sum of $50,000.00 at the rate applicable pursuant to Rule 22.01 of the Rules, in consequence of Rule 21.08(a) of those Rules.
Accordingly, I make the orders as set out at the start of these Reasons for Judgment.
I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of Judge Morley
Associate:
Date: 2 December 2020
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