LACY & CLOET (No.2)

[2020] FCCA 2864

FEDERAL CIRCUIT COURT OF AUSTRALIA

LACY & CLOET (No.2) [2020] FCCA 2864

Catchwords:
FAMILY LAW – Costs – application dismissed.

Legislation:

Family Law Act 1975 (Cth), s.117
Federal Circuit Court Rules 2001

Cases cited:

Lacy& Cloet [2020] FCCA 791
Medlon and Medlon (No.6) (Indemnity Costs) (2015) FLC 93-664

Applicant: MS LACY

Respondent: MR CLOET

File Number: SYC 2137 of 2019

Judgment of: Judge Boyle

Hearing date: 9 April 2020

Date of Last Submission: 24 April 2020

Delivered at: Sydney

Delivered on: 21 October 2020

REPRESENTATION

Counsel for the Applicant: Ms Treherne

Solicitors for the Applicant: Maksisi Lawyers

Counsel for the Respondent: Mr Carroll

Solicitors for the Respondent: Guardian Legal

ORDERS

1. The respondent’s application for costs is dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Lacy & Cloet (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 2137 of 2019

MS LACY

Applicant

And

MR CLOET

Respondent

REASONS FOR JUDGMENT

Introduction

1. The matter concerns a costs application in relation to proceedings finalised by judgment delivered on 9 April 2020.[1] The applicant in that matter sought leave to commence proceedings out of time in relation to section 44(6) of the Act. That application was dismissed and the respondent seeks their costs of those proceedings.

   [1] Lacy & Cloet [2020] FCCA 791.

Background

1. The applicant filed their application in the substantive proceedings on 4 April 2019 seeking leave to commence property proceedings out of time pursuant to section 44(6).  The parties had been in a de facto relationship for approximately five years and had separated in September 2014.

2. The matter was listed for a final hearing on the leave issue on 5 March 2020 for a half day and proceeded on submissions only.  I delivered my reasons for judgment in that matter on 9 April 2020, dismissing the application for leave.

3. At the conclusion of that hearing the respondent made an oral application to file written submissions in relation to a cost application, and directions were made.

Documents relied on

1. The respondent filed their written submissions on 20 April 2020 and the applicant filed submissions on 24 April 2020. No further documents were filed by either party.

The Law

1. Pursuant to section 117 of the Family Law Act:

   (1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.

   (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.

(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 the proceedings and the terms of any such offer; and

(g)such other matters as the court considers relevant.

1. The Court has a broad discretion in considering costs and when considering the subsections in 117(2A) it is a matter of weight to be accorded to each factor and no one factor prevails over another.[2]

   [2] Medlon and Medlon (No.6) (Indemnity Costs) (2015) FLC 93-664.

(a) Financial circumstances of each of the parties to the proceedings

1. I have had regard to each parties’ financial statement filed in the substantive proceedings.

2. The respondent submits that there is no significant disparity in the parties’ net asset positions. The respondent concedes that he earns a higher wage. He points to the income of the applicant’s partner, and that his wife is presently on leave following the birth of their son.

3. The applicant submits that she has meagre financial means, inferior to that of the respondent. She argues that the evidence does not support the respondent’s submission of similar financial positions between them.  

4. The applicant submits that she was employed, but has been stood down as a result of the COVID-19 pandemic. The applicant foreshadowed in her affidavit in the substantive proceedings that the employer in which she worked was about to close down.[3] I have evidence she has been employed as a customer service officer, and I can take judicial notice of the effect of the pandemic on those employed in such occupations.

   [3] Affidavit of Ms Lacy filed 3 February 2020, paragraph 59.

5. The applicant’s financial statement filed before the pandemic disclosed an average weekly income of $779.50.  This comprised $346 per week in wages, $380 per week received as rent and $53 per week in Centrelink benefits. She had weekly personal expenditure of $931 per week.

6. The applicant owns a unit in Suburb G valued at $500,000 a Motor Vehicle H valued at $15,000 and household contents and personal property valued at $1,500. She has $40,000 in superannuation.  She has liabilities consisting of the mortgage over the Suburb G property at $385,000, a car loan at $6,000, and credit card debts of $5,850.

7. The respondent deposes to weekly income of $1,428 and weekly personal expenditure of $1,398.  He owns a unit in Suburb F worth approximately $500,000, has approximately $20,000 in cash in the bank, a Motor Vehicle J worth $30,000, a Motor Vehicle C worth $3,500, and household contents worth $3,000. He has $96,000 in superannuation.

8. The respondent lists his liabilities as a mortgage of $376,000, a car loan of $32,000 and a personal loan to fund the legal costs of $55,000.

9. I find that while neither party is in a particularly strong financial position the respondent’s financial position is superior to that of the applicant. 

(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid

1. Not relevant.

(c) The conduct of the parties to the proceedings

1. There was no adequate explanation advanced by the applicant in respect of the substantial delay in filing the substantive proceedings. The parties separated in September 2014, yet no application was filed until 4 April 2019, some 2 1/2 years outside the limitation period.

2. The respondent submits that the applicant is pursuing parallel proceedings in the Supreme Court and incurring further costs for the parties. There is an application in the Supreme Court relates to a lapsing notice on a caveat. I do not regard this as relevant to determination of this costs application.

3. The conduct of both parties is relevant under this subsection. The respondent failed to appear at court on the first return date of the matter on 19 June 2019, and the matter was adjourned to 3 September 2019.

4. Orders were made for the respondent to file his evidence by 30 October 2019. The respondent failed to do so. The applicant submits that the respondent did not respond to numerous requests to file their material.

5. The respondent filed an affidavit on 10 December 2019, and a response and financial statement on 4 March 2020. The matter was re-listed on 28 January 2020 due to the lack of response from the respondent. The respondent’s counsel appeared as a courtesy to the court, but held no instructions. The respondent failed to appear.   The respondent arrived late to the hearing date on 5 March 2020.

6. I accept the applicant’s submission that the respondent’s failure to properly engage with the proceedings made the litigation more expensive for her in letters to chase documents, and an unnecessary appearance.  Additionally by filing material late, and appearing at court late, the respondent frustrated any possible settlement discussions.

(d)  whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court.

1. Not relevant.

(e)  whether any party to the proceedings has been wholly unsuccessful in the proceedings;

1. The applicant sought leave to commence proceedings out of time. She was wholly unsuccessful.

2. The applicant submits that she had a prima facie case which is relevant to a consideration of this section. I do not accept that this is relevant to the consideration under this subsection, as it is directed to her success or otherwise in the litigation.  The application was dismissed.

(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

1. Not relevant.

Costs

1. The respondent seeks an order for costs of the proceedings on a party/party basis as agreed or assessed. There is no provision in the Federal Circuit Court Rules for taxation of costs.

2. The application was entirely unsuccessful. That is not the only relevant consideration.  The respondent did not comply with filing documents in accordance with court directions, which required an unnecessary listing of the matter. The hearing was brief being a summary hearing of half a day, which proceeded on submissions only.  The expense of an additional court appearance, and correspondence seeking response material, is not insignificant in a matter of as limited in scope as this. 

3. Given the circumstances I do not propose making an order in favour of the respondent and I dismiss his application for costs.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Boyle

Associate:

Date: 21 October 2020