Laskari & Laskari and Ors
[2015] FamCA 398
•22 May 2015
FAMILY COURT OF AUSTRALIA
| LASKARI & LASKARI AND ORS | [2015] FamCA 398 |
| FAMILY LAW – COSTS – Costs application by the husband against the wife – Costs application by six respondents, being the husband’s family members and associated entities, against the wife – Where the costs applicants allege the wife’s applications in the substantive proceedings were wholly unsuccessful – Where it was found that the joinder by the wife of the six respondents who were not parties to the marriage was necessary due to their financial interconnectedness with the husband – Where it was found that the conduct of the wife in the proceedings, particularly in relation to the bringing of numerous unsuccessful interim applications, warranted an order for costs – Where the wife’s financial position was worse than the other parties – Order for specific sum of costs made against the wife, taking into account the wife’s financial circumstances. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) reg 19.18 |
| Collins (1985) FLC 91-603 | ||
| 1st APPLICANT: | Mr Laskari | |
RESPONDENT | Ms Laskari | |
| 2nd RESPONDENT: | K Pty Limited |
| 3rd RESPONDENT: | U Pty Limited |
| 4th RESPONDENT: | Mr N Laskari |
| 5th RESPONDENT | Ms S Laskari |
| 6th RESPONDENT: | Mr G Laskari |
| 7th RESPONDENT: | Ms X Laskari |
| FILE NUMBER: | SYC | 450 | of | 2010 |
| DATE DELIVERED: | 22 May 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Le Poer Trench J |
| HEARING DATE: | 9 March 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr UM |
| SOLICITOR FOR THE APPLICANT: | Diamond Conway |
COUNSEL FOR RESPONDENT: | Mr White |
| SOLICITOR FOR THE RESPONDENT | Konstan Lawyers |
COUNSEL FOR 2ND TO 7TH RESPONDENTS: | Mr Millar |
| SOLICITOR FOR THE 2ND TO 7TH RESPONDENTS: | Paltos Milevski Family Lawyers |
Orders
(1)The wife is to pay the costs of the 2nd to 7th respondents (being the 2nd to 7th applicants in these costs proceedings) in the sum of $40,000. Such payment to be made as provided for hereafter.
(2)The wife is to pay the costs of the husband in the sum of $10,000. Such payment to be made as provided for hereafter.
(3)The husband and the wife sign all documents and do all things necessary to cause the funds payable to the wife pursuant to Order (4) made on 24 December 2014 to be distributed as to $40,000 to the solicitors for the 2nd to 7th applicants for account to them and $10,000 to the husband with the balance thereafter paid to the wife.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Laskari & Laskari and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 450/2010
| Mr Laskari |
Applicant
| And Ms Laskari |
Respondent
And
K Pty Limited
Second Respondent
And
U Pty Limited
Third Respondent
And
Mr N Laskari
Fourth Respondent
And
Ms S Laskari
Fifth Respondent
And
Mr G Laskari
Sixth Respondent
And
Ms X Laskari
Seventh Respondent
REASONS FOR JUDGMENT
Introduction
On 24 December 2014 judgment was delivered in defended proceedings for property settlement between the Ms Laskari (“the wife”), who was the applicant in those proceedings, Mr Laskari (“the husband”), who was the first respondent, and six other respondents (“the 2nd to 7th Respondents”). The 2nd to 7th Respondents were joined to the substantive proceedings upon the application of the wife and were comprised of the husband’s brother, his parents, his sister in law, and U Pty Ltd (“U”) and K Pty Ltd (“K”), being companies associated with the business and property trust operated by the husband and his family.
I note that while the 2nd to 7th Respondents in the substantive proceedings are the 2nd to 7th applicants for costs in the proceedings currently before me, they will be referred to in these Reasons as the 2nd to 7th Respondents to ensure consistency with the terms used in the substantive proceedings. This is particularly because excerpts from those proceedings are reproduced in these Reasons.
The final orders made in the substantive proceedings were as follows:
(1)A declaration that the 4th, 5th 6th and 7th respondents, as co-guarantors are indebted to the husband and wife in the sum of $413, 953, and the 4th to 7th respondents are jointly and severally liable to the husband and wife in that sum.
(2)Order that the wife sign any necessary documents presented to her by or on behalf of the husband as may be necessary to transfer to the husband all her entitlement to re-imbursement by the 2nd to 7th respondents as co-guarantors of a NAB security entered into by all the parties to this proceeding.
(3)Order that the husband indemnify the wife against any claim made by any of the guarantors of the subject NAB security arising from their relationship as co-guarantors.
(4)Forthwith upon the expiration of 50 days from the date hereof the husband sign and deliver to the wife all documents presented to him as may be necessary to transfer to the wife all his interest in the balance of proceeds from the sale of the former matrimonial home presently invested in an interest bearing deposit on behalf of the husband and wife.
(5)(Note: The delay in payment to the wife of the funds referred to in order 4 is to allow any cost application to be filed and determined there being no other apparent fund available to meet a costs order, if any, which may be made)
(6)The husband transfer to the wife all his title to the jointly held 405 IAG shares. The husband is to sign any document presented to him by the wife to affect that transfer.
(7)The husband is to transfer to the wife all his title to the 552 Telstra shares held in his name. The husband is to sign any document presented to him by the wife to affect that transfer.
(8)Superannuation Splitting Order. Pursuant to s 90MT(1)(b) of the Family Law Act 1975 (Cth) (“the Act”) the husband and wife as trustees of the Laskari Family Superannuation Trust do all acts and things, sign all documents and give all consents so that whenever a splittable payment becomes payable to the husband from his interest in the Laskari Family Superannuation Trust 84.5 per cent of the splittable payment of the husband be credited to the wife and that there be a corresponding reduction of the entitlement the husband.
(9)The husband and wife be at liberty, provided same is within the power of the trustees of the Laskari Family Superannuation Trust to do so and complies with all Commonwealth legislation necessary to ensure the superannuation fund is a complying fund, transfer out of the fund the whole of the entitlement of the wife in the Laskari Family Superannuation Trust following the making of these orders. In the event of such event occurring the wife is to resign all offices held by her as a trustee of the fund.
(10)The trustees of the Laskari Family Superannuation Trust when making a split in the superannuation fund pursuant to these orders are to apply the 84.5 per cent split to each type of property or asset held by the trustee on behalf of the fund.
(11)Otherwise than as ordered herein each of the parties is declared the absolute owner, as against the other of the property both real and personal (including any superannuation entitlement) standing in their sole name or in their name with another person or entity.
(12)Each party has leave to relist the matter should it be necessary to seek further orders to enable the implementation of these orders.
(13)On or before 23 January 2015 each party file and serve any costs applicant, together with evidence and written submissions in support, they wish to pursue. Such applications to be listed for hearing before Justice Le Poer Trench on 9 February 2015 at 10.00 a.m.
(14)All outstanding applications are otherwise dismissed.
In order to give the Orders set out above some perspective I include the concluded balance sheet which I found in the judgement published on 24 December 2014.
Final Determined Balance Sheet
I find the assets and liabilities of the parties, including the manner in which those interests are held, are as follows:
| Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The husband received a net benefit from the orders of $608,970. He also retains his superannuation after the splitting order which was valued at between $24,620 and $38,177. The wife received $353,398 in property and cash together with her split of the superannuation which had a value of between $122,455 and $182,501. Included in that property was her jewellery which was ascribed a value of $140,000. I found that to be the wife’s property against her evidence that the jewellery had been stolen from her by the husband. I mention that matter here because I take into account that the wife may no longer have possession of that asset.
On the husband’s side of the balance sheet the majority of the assets he retained from the marriage are unlikely to be readily realised or liquidated because of the nature of same. The funds owed by the “co-guarantors” of $413,953 are unlikely to be available until the business conducted by the husband and his family members is profitable enough to produce income sufficient to support all the family and then some left to pay the husband. He is unlikely to sell his interest in the R property.
It can therefore be seen that each of the husband and wife are in very poor financial circumstances as a result of the litigation caused by the breakdown of their marriage.
The 2nd to 7th Respondents (in particular Mr N, Ms S, Mr G and Ms X) have also been significantly financially impacted upon as a result of the combination of being caught up in the property proceedings between the husband and wife together with a down turn in the business which was experienced across a number of years; commencing before the husband and wife separated and continuing for an extended period thereafter.
When the case was in its early days before me I predicted in open court to the parties that this case had all the hallmarks of a pending financial disaster for all the parties and that the only way to avert that disaster was to resolve the matter in a practical and fair manner to all concerned. Unfortunately my prediction came to fruition when settlement could not be achieved. In one sense these costs applications are an endeavour to allocate blame for the failure to be able to sensibly settle the case in its early days.
In the closing stages of the primary hearing it was made clear to me by the 2nd to 7th Respondents and the husband that costs orders would probably be agitated after the final orders were made. For that reason I have had the wife not access the cash left from the sale of the former matrimonial home. An order extending the freeze on that fund was made as the 50 days from the date of order (4) approached. Time was sought by all parties to prepare argument for the costs orders sought and opposed.
In the proceedings before me, the husband seeks orders that the wife pay his costs of the substantive proceedings. It is submitted to the Court that the husband recognises that there are insufficient funds available for the wife to meet an order for the entirety of his costs. Accordingly, the husband is prepared to accept an order for his costs payable without assessment of $110,000 inclusive of GST, in line with an offer of settlement that has been previously made to the wife and rejected by her.
By way of an Application in a Case filed on 23 January 2015, the husband also seeks that the wife pay the costs and disbursements of these proceedings as assessed or agreed, that payment of his costs be charged against the joint National Australia Bank (“NAB”) term deposit account ending 5111, and that his costs be paid in priority to any other payment from this account.
The 2nd to 7th Respondents seek the following orders by way of costs against the wife:
1.That the Wife pay the Second to Seventh Respondents cost of and incidental to the proceedings on an indemnity basis:
1.1. fixed pursuant to rule 19.18(1)(a) of the Family Law Rules 2004 in the amount of $344,048.90;
1.2. Or in the event that Order 1.1 is refused, costs as agreed or assessed.
2.Certify for counsel pursuant to Rule 19.50 of the Family Law Rules 2004.
3.The Wife pay the Second to Seventh Respondents costs of an incidental to this application.
4.In the event that Order 1 is granted, order that the Husband and the Wife do all things and sign all documents necessary to cause the NAB to transfer to the solicitor for the Second to Seventh Respondents funds as determined by the Court.
The wife opposes the applications of the husband and the 2nd to 7th Respondents and seeks that both applications be dismissed.
the evidence
The husband
The husband relies upon the following affidavits:
a)Affidavit of the husband sworn 23 January 2015;
b)Affidavit of the husband sworn 6 March 2015;
c)Affidavit of the husband’s solicitor, Mr UM, sworn 28 January 2015; and
d)Affidavit of Mr UM sworn 12 March 2015.
In his affidavit, the husband deposed that Exhibit H-1 in the substantive proceedings, being a letter prepared by the husband recording the legal costs and disbursements incurred by him as $127,206 of which $45,545 have been paid, is incorrect. The husband stated that at the time of preparing Exhibit H-1 he did not have Mr UM’ file and relied upon his memory.
Annexed to his affidavit is a reconciliation statement which provides that between 23 December 2009 and 31 December 2014, the husband incurred costs of $314,855 (inclusive of GST) for the conduct of the substantive proceedings, comprised of legal costs, forensic accountant costs and the costs of Counsel. The reconciliation statement provides that the amount of $186,111 remains outstanding by the husband.
The husband also annexed a copy of an email from SW Firm, the administrators of the Laskari Family Self-Managed Superannuation Fund, which provides that the value of the Fund as at 7 January 2015 was $120,120.47. I note that would mean the wife’s 82.7 per cent had a value of about $99,339 and the husband’s remaining share was worth about $20,781.
In his affidavit sworn 6 March 2015, the husband annexed a letter dated 22 January 2015 from his solicitor to the wife’s solicitors which states:
Our client is applying for a costs order against your client.
We propose that your client pay ours a sum of $110,000 (including GST) in lieu of assessment of our client’s final total costs incurred in this matter.
We enclose a Reconciliation Statement of costs incurred by our client during the course of these proceedings. Should you require, we are happy to provide you with an itemised tax invoice for each of the tax invoices rendered to our client. In the event your client does not agree to the $110,000 we shall press on with our application for costs in that sum. Alternatively, if your client is successful on the application for costs we would be asking His Honour for those costs to be either agreed or assessed.
The husband deposed that the wife’s solicitors rejected the compromise offer.
Annexed to the the affidavit of Mr UM sworn 28 January 2015 is an extract of the judgement delivered in the substantive proceedings on 24 December 2014, namely paragraphs 51 to 53, which set out the orders sought by the husband, the wife and the 2nd to 7th Respondents.
Mr UM deposed that during the course of the substantive proceedings, there were attempts between the parties to settle the matter, however, there was no progress on these discussions due to disputes between the parties in relation to the parties in relation to the value of the D Street property, the nature of the husband’s ownership of property in R, Greece, and the value of U Pty Ltd and the husband’s interest in that company.
Mr UM outlined that his instructions were withdrawn in late October 2012 and he did not have any further involvement in the substantive proceedings.
In his affidavit sworn 12 March 2015, Mr UM responded to the allegations within the wife’s affidavit sworn 6 March 2015 of delays in the substantive proceedings caused by the conduct of the husband. The wife deposed of numerous correspondences from her solicitor which were allegedly not responded to by the solicitor for the husband. The correspondence annexed to Mr UM’ affidavit includes letters, emails and faxes in response to various correspondences referred to by the wife in her affidavit.
Mr UM gave oral evidence on 9 March 2015. His evidence was of a conversation which took place between himself as legal representative of the husband and Ms LN as legal representative of the wife. The oral evidence was given following leave being granted by me for such oral evidence upon the striking out of part of paragraph 13 of the affidavit of Mr UM sworn 28 January 2015. Mr UM gave evidence of a conversation which took place in October 2011 at this Court on a day when there was an interlocutory application filed by the wife before the court. His oral evidence was:
[Ms LN] said to me ‘Why don’t you give us some money to walk away?’ My response was ‘What is it you want to go away we would love you to go away.’ [Ms LN] said ‘We want the house’. I said ‘That is impossible’ Then I said later in the discussion ‘We can give you $500,000 to walk away’. [Ms LN] said ‘That is just not enough’.
Notwithstanding the discussion above set out, no written offer to settle was made following same by the husband. It was not until 10 October 2012 that the first written offer of settlement was made by or on behalf of the husband.
On 9 October 2012 the wife made an offer in writing to the husband through his solicitor Mr UM. In its essence the offer was for the wife to receive 70 per cent of the net matrimonial property. Each party was to retain their superannuation. The response to that offer consisted of Mr UM asking questions of the wife’s solicitor about the offer. Nowhere is there a responding offer to the wife to resolve the litigation.
In the affidavit of the husband sworn 23 January 2015 the husband annexed a written offer to settle made by him at a time he represented himself. The written offer was made by email from the husband to the wife’s solicitor Mr SK on 14 February 2013. The final hearing commenced on 18 February 2013. The offer consisted of a simple proposal:
The husband pay the wife the sum of $200,000 within 30 days of the settlement of the sale of the former matrimonial home at [J Street, Suburb B]; The wife’s application otherwise be dismissed; Each party pay their own costs.
Although not specifically stated in the offer above set out, it was at least an implied provision that each party would retain the property which stood in their sole names. No indemnities were offered by the husband to the wife for liability she might otherwise have had associated with the Laskari enterprises including U or K.
That simple offer made by a self-represented party was met with, in part, a somewhat caustic or sarcastic response; however, it acknowledged that an offer had been made. The response made 15 February 2013 included the following:
As to your offer of settlement you are absolutely correct. It is a “vain” attempt in both senses of that word by which we say it is neither realistic nor capable of acceptance.
In my view the offer made on 14 February 2013 by the husband as above set out warranted a proper response by the wife and by that I mean the wife should have explored questions of indemnity, superannuation and the retention of assets already in her possession. To reject the offer out of hand was, as it has transpired, inappropriate and ill advised. The hearing thereafter proceeded over nine days during which the wife incurred very substantial fees for both her solicitor and her counsel. The end result saw her with cash from the sale of the house of $206,426, a small number of shares with little value, and her 82.7 per cent split of superannuation which now has a value of about $100,000.
Exhibit W1 in the final hearing was a costs disclosure document tendered by the wife. That showed that the trial expenses she had been quoted amounted to $45,000 for eight days. Since that time there has been the requirement for written submissions in relation to the trial and the costs incurred in relation to this application. Exhibit W1 tendered in the trial on 20 February 2013 showed the wife owed her solicitor Mr SK $50,000 in fees. She now owes him $195,000 as set out in her affidavit sworn 6 March 2015.
The 2nd to 7th Respondents
Mr G Laskari (“Mr G”) swore an affidavit in these proceedings on 23 January 2015. He is the sixth respondent in the substantive proceedings and is also the director of K and U.
Mr G asserts that the 2nd to 7th Respondents have incurred significant costs as a consequence of the wife’s application to join them to the proceedings.
He calculates the total fees incurred for the conduct of the proceedings, made up of his solicitor’s fees, counsel’s fees, professional costs and disbursements at $344,048.90.
Annexed to Mr G’s affidavit are various correspondences to the wife’s solicitors including Costs Notifications, a letter of offer, letters requesting the wife to provide adequate particulars and evidence in relation to her applications, letters regarding her refusal to execute documents from the NAB after the sale of the property at P Street, and various correspondence raising issues with the wife’s late service of applications and non-compliance with orders and directions. Also annexed was a response from the wife’s solicitors in response to the request for particulars, and subsequent correspondence from the husband’s solicitors regarding issues with same.
Mr G also annexed a letter from his solicitors to the wife’s solicitors in February 2014 enclosing the 2013 financial accounts for U and the Laskari Property Trust, and the subsequent correspondence between the parties regarding the wife’s objection to the tender of these documents.
The offer of settlement relied upon by the 2nd to 7th Respondents is contained in a letter dated 25 February 2013. I note the trial had proceeded for four days prior to that date and the 25 February 2013 was the fifth day of the trial. The offer was simple in its terms and therefore must be seen as easy for the wife to understand. The offer was “That the wife’s application (as amended) against Respondents 2 to 7 inclusive be dismissed. No order as to costs.”
The orders sought by the wife against the 2nd to 7th Respondents as at 25 February 2013 are those set out in paragraph 51 of the judgment. The wife sought, in exchange for release of her liability to the NAB arising from her interest in the Laskari Family Property Trust, to transfer to the husband her interest in the Trust. She sought the sale of the Trust property at D Street, Sydney. From the sale proceeds she sought payment to her of a sum equivalent to the sum paid from the sale of the former matrimonial home to meet liabilities of the respondents to the NAB. She also sought that U sell the Laskari business. She sought a payment from that sale should she still not have received all the sale proceeds of the sale of the former matrimonial home. She sought indemnities from all the respondents.
The orders sought by the wife against the 2nd to 7th Respondents were very significant orders and clearly required their attention to the proceeding and their intervention. However, what is also clear is that the husband and wife’s financial interests were significantly comprised in assets and interests in which the 2nd to 7th Respondents similarly held significant interests. As a consequence, in the absence of a family led settlement with the wife, it should have been plain to all concerned that the husband and wife’s property proceedings in this Court could not have been resolved without having to resolve the connected interests which the husband and wife held with the 2nd to 7th Respondents. This was further complicated by the sale and purchase of property by the husband’s parents and Mr G and his wife. It was compounded by the NAB taking from the sale proceeds of the former matrimonial home funds to meet liabilities of the corporate respondents.
Ultimately, based significantly upon the evidence of Mr G, I made a determination that the husband and wife were owed $413,953 by Mr G, Ms X, Mr N and Ms S Laskari.
The wife
The wife relied upon an affidavit sworn by her on 6 March 2015.
In that affidavit, the wife denied the assertion by the husband and the 2nd to 7th Respondents that her conduct caused delays in the substantive proceedings.
She alleged that the proceedings were delayed by the conduct of the husband. She annexed correspondence which she alleged was not responded. She stated that the husband and the 2nd to 7th Respondents failed to comply with directions for the preparation of the final hearing.
With regard to the wife’s proposed interim application to wind up U, which resulted in interim orders restraining the wife from bringing winding up action to wind up, the wife deposed that the reason she had sought to bring proceedings against U was due to the husband’s non-compliance with orders requiring him to make mortgage payments on the former matrimonial home. She said that she was initially advised by her previous lawyers that it would be possible to seek the wind up of U for the non-payment of mortgage, but was then subsequently advised that there was no precedent for a wind-up based upon a Garnishee Order. The wife was then advised to instead seek orders that the husband transfer his interest in any loan accounts with U to be transferred to her.
In respect of the allegations made by the 2nd to 7th Respondents with regard to the wife’s interim application for the sale of the D Street property, the wife outlined her concerns that the sale was not being properly attended to; that there were defaults by K in payment of financial obligations. The wife said that in this context, she did not believe that application for the sale of the D Street property was misplaced. She deposed that the reason she withdrew the application was because she was advised by her legal representatives when she attended court on 14 June 2012 that there may be an opportunity on that day to seek a final hearing date early the following year. She was advised that if she proceeded with her application for the sale of the D Street property, there would be a ‘mini trial’ which could cause a delay in the Court allocating a final hearing date. The wife asserted that she did not want to delay the trial and therefore elected to withdraw the application.
The wife also alleged that the 2nd to 7th Respondents failed to comply with her Notice to Produce and her subsequent requests for financial disclosure.
The wife said that it was only on the first day of the final hearing that the lawyers for the 2nd to 7th Respondents handed to her solicitors a luggage bag containing financial material. In relation to that part of the wife’s case it was conceded by the 2nd to 7th Respondents that on the first day of the final hearing a luggage bag of documents said to answer the wife’s Notice to Produce was provided to the wife’s lawyer.
With respect to the conduct of the wife in objecting to the tender of documents in relation to the financial position of U and K as at February 2014, which the 2nd to 7th Respondents alleged to be the cause of increasing costs, the wife deposed that the reason for this objection was because the documents were unverified and needed to be tested for cross examination. Ultimately she said she could not afford to re-open the trial for further cross examination.
The wife denied the allegations by the 2nd to 7th Respondents that she failed to adequately particularise her case in the substantive proceedings and said that despite various amendments to her applications, the substance of the orders she sought remained consistent.
The wife also denied the allegations by the husband and the 2nd to 7th Respondents that the length of the hearing was prolonged by her conduct. In respect of her unsuccessful application to join the NAB to proceedings, she deposed that she was advised by her Counsel that the orders she sought could not be made without the joinder, and, that in any event, the hearing took up no more than a half day. The wife asserted further that any resolution she reached with the NAB in during “without prejudice discussions” with the bank was rejected by the 2nd to 7th Respondents.
At the conclusion of her affidavit, the wife set out the following evidence in relation to her current financial circumstances. She does not have any assets in her name or possession other than the funds in the NAB account, being the balance of the sale proceeds from the former matrimonial home, which are frozen pending the determination of these costs applications.
She denied the allegation by the husband that she has re-partnered. She deposed that she lived with her parents in a three bedroom townhouse in Maroubra and that her parents assist her with the purchase of most groceries and household expenses. Her eldest daughter, S, lived with her, as did her youngest daughter, N until 7 January 2015. N now resides principally with the husband.
The wife said she is employed as part-time and works three days a week. She stated that she found it extremely difficult to obtain employment due to her age and lack of qualifications. She earns $672 gross per week and her expenses are $490 per week. She also claims various liabilities, set out at paragraph 25 of her affidavit as follows:
my parents (for legal fees) $250,000
loan from PA Ltd $100,000
credit card debts $10,000
legal fees
-VRA Lawyers $86,930
-Konstan Lawyers $195,000
tax liability in respect to the NAB Term Deposit $1983.58
The wife alleged that the husband is in arrears of child support of $4,273.49 and that she does not receive any child support.
Submissions of the husband
Counsel for the husband submits that the wife’s application in the substantive proceedings was “wholly unsuccessful” and that the outcome of the substantive proceedings constituted a “success” for the husband.
It is asserted on the husband’s behalf that the wife conducted proceedings which pursued an unmeritorious claim based upon an “unfounded belief in the existence of a fanciful pot of gold” despite the existence of single joint expert valuations which contradicted her position.
It is further submitted that the wife made a number of conspiratorial allegations against the husband and his family during the course of the proceedings, including that he removed jewellery from the former matrimonial home, that he and his parents sold jewellery in Greece which they failed to declare upon their return to Australia and that the husband took amounts of $10,000 in cash with him on trips to Greece. Counsel for the husband asserts that these allegations were unsubstantiated and prolonged the proceedings, increasing the liabilities of all the respondents and diminishing the asset pool.
With regard to the financial circumstances of each party (see ss 117(2A)(a) of the Family Law Act 1975 (Cth) (“the Act”)) counsel for the husband acknowledges the findings made in the substantive proceedings that the wife did not have the same ability as the husband to build a substantial income. Counsel asserts, however, that the wife has re-partnered and there is no evidence before the Court of his financial circumstances or whether the wife is in receipt of financial support from him.
Counsel for the husband further submits that pursuant to the Orders made in the property settlement proceedings (subject to the costs applications currently before the Court) the wife will receive the monies standing in the NAB term deposit. Counsel acknowledged that it is questionable whether these monies will be sufficient to meet successful costs applications.
In relation to the conduct of the parties (see 117(2A)(c) of the Act) it is submitted that the husband is entitled to be critical and aggrieved by the wife’s “unrelenting vigour” in conducting the proceedings despite the evidence as to value of the properties and her inability to substantiate her allegations as to the conduct of her husband and his family.
It is asserted on behalf of the husband that wife’s interlocutory applications were, in the majority, unsuccessful.
Counsel for the husband submits that the wife’s recalcitrance in consenting to the sale of the former matrimonial home, despite it being apparent from October 2010 that the husband was having difficulties in meeting the mortgage payments, resulted in the diminishing the value of the home and increasing the parties’ liabilities to the NAB. This conduct, it is submitted, also resulted in a number of court appearances which increased the litigation expenses incurred by all parties.
With respect to offers of settlement (see 117(2A)(f) of the Act), counsel for the husband outlined that there were two written offers of settlement made between the parties; one on the husband’s behalf and one on the wife’s. It was submitted, however, that in circumstances where there was no agreement between the parties as to the balance sheet, the respective liabilities of the parties and the net assets available for division, it was not possible for either party to have made a realistic offer of settlement.
It is submitted that the Court can make the orders proposed by the husband, namely for a specific costs order in the sum of $110,000, pursuant to Rule 19.18(a) of the Family Law Rules 2004 (Cth) (“the Rules”) which provides:
(1) The court may order that a party is entitled to costs:
(a) of a specific amount…
Counsel for the husband referred the Court to the decision of Stoian & Fiening (Costs) [2014] FamCA 944 where his Honour Kent J outlined at paragraph 91 of the judgement:
Commencing at [8] of his judgment Einstein J discussed the applicable principles in these terms:
8.As may be expected in what is likely the largest claim ever made in this country for a gross sum costs order, both parties took the court to the authorities which inform the principled exercise of the relevant discretion. Notwithstanding that some areas of difference arose concerning disparate parameters/appropriate emphases, in terms of the application of the appropriate principles, there were in the main no areas of serious disagreement.
9.For present purposes it seems convenient to commence with the recitation of the principles which inform the exercise of the discretion;
i.the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: Beach Petroleum NL v Johnson (1995) 57 FCR 119, Von Doussa J page 265: [following Purchase J in Leary v Leary [1987] 1 All ER 261 who described the purpose of the rule allowing the fixing of a gross sum as “the avoidance of expense, delay and aggravation involved in protracted litigation arising out of taxation” (All ER page 265)];
ii.the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum at [16];
iii.the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available: Harrison v Schipp (2002) 54 NSWLR 738, per Giles JA at [22]; [following (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA) and adopted in Sony Entertainment v Smith (2005) 215 ALR 788];
iv.a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place: Harrison v Schipp at [22];
v.the gross sum “can only be fixed broadly having regard to the information before the Court”: Beach Petroleum at 124;
[in Hadid v Lenfest Communications Inc [2000] FCA 628 at [35] it was said that the evidence enables fixing a gross sum “only if I apply a much broader brush than would be applied on taxation, but that…is what the rule contemplates”.]
vi.nevertheless the power to award a gross sum must be exercised judicially, and after giving the parties an adequate opportunity to make submissions on the matter: Leary v Leary [1987] 1 WLR 72 at 76, and Beach Petroleum NL v Johnson (No. 2) (1995) 57 FCR 119 at 120;
vii.in terms of the necessity for the approach taken to be logical, fair and reasonable, Von Doussa J in Beach Petroleum NL & Anor v Johnson & Ors (No. 2) (1995) 57 FCR 119, put the matter as follows, at [16]:
“On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary “fail safe” discount on the cost estimates submitted to the Court: Leary v Leary at 265…”
At paragraph 94, his Honour Kent J referred again to the judgement of Einstein J in Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23 (unreported delivered 7 February 2007) and cited paragraph 11:
In the result it is not an arbitrary exercise of power for the Court to weigh up competing factors and make a determination, even if, as is often the case, the task cannot be undertaken in a mathematical or precise manner.
Submissions of the 2nd to 7th respondents
Counsel for the 2nd to 7th Respondents submit that an order for costs in their favour against the wife is justified having regard to the nature, history and number of applications filed by her in relation to the following:
a)Winding up of U;
b)Sale of the D Street property;
c)Valuations of the D Street property and the emerald; and
d)The application to join the NAB to the proceedings.
The wife ultimately did not proceed with her application to wind up U and, it is submitted, was also entirely unsuccessful in her attempts to remove the injunction restraining her from same. Further, the wife was unsuccessful in her application to have U’s loan account transferred to her name.
The wife also withdrew her applications to sell the D Street property and the joinder of NAB, and did not proceed with undertaking a valuation of the emerald which she asserted was undervalued.
The 2nd to 7th Respondents submit that, in light of the above, the wife was wholly unsuccessful in her final application against them and therefore they should not have been joined as parties to the proceedings.
In response to the wife’s submissions as to the necessity of the joinder, counsel asserts that the Court would have been able to identify the matrimonial asset pool without joining the 2nd to 7th Respondents. The Court could have determined the assets of the husband and the wife, including their rights of contribution from co-borrowers and co-guarantors, and their liabilities to same, by reference to the relevant security documents and without the participation of the 2nd to 7th Respondents. It is submitted that the rights and liabilities of the 2nd to 7th Respondents and of the husband and the wife arose from the relevant security documents, and the 2nd to 7th Respondents never sought to alter those rights and liabilities.
It is submitted that the relevant declarations relating to their rights and liabilities were only sought by the 2nd to 7th Respondents after the conclusion of the hearing because the liabilities between co-guarantors and co-borrowers had then crystallised following the sale of various security properties. Since there were already proceedings on foot due to the joinder of the respondents by the wife, the 2nd to 7th Respondents sought declaratory orders in those proceedings to avoid being met with a plea of Anshun estoppel in the event that they sought to commence proceedings for contribution against the husband and the wife as co-borrowers or co-guarantors in another forum.
Counsel for the 2nd to 7th Respondents refers the Court to the authority of Collins (1985) FLC 91-603, where the Full Court outlined the broad discretion of the Court in determining whether to make an order for costs. Their Honours Evatt C.J., Pawley and Barblett S.JJ outlined at 79,877:
There is no doubt that sec. 117 of the Family Law Act confers a broad discretion on the Court in regard to costs. The discretion is to be exercised having regard to the primary rule that each party bears his or her own costs. This rule negates any principle that costs should follow the event or that the husband should bear the costs of the wife in matrimonial proceedings. Under the Act, costs will, in general, lie where they fall. Nevertheless, in deciding whether the circumstances justify an order for costs, there is a broad discretion to be exercised, having regard to the factors set out in subsec. (2A) so far as relevant. Those factors which were inserted into the Act in 1983 are not to be read in a restrictive way, however, the discretion remaining a broad one: Penfold v. Penfold (1980) FLC ¶90-800 at pp. 75,053-75,054; quoted in Mallet v. Mallet (1984) FLC ¶91-507 at pp. 79,123-79,124 (by Wilson J.).
Counsel also refers to the authorities of Penfold v Penfold (1980) 144 CLR 311 and Jensen (1982) FLC 91-263 in support of his submission that neither special circumstances nor an exceptional case is required to justify an order for costs.
Turning to the financial circumstances of the parties, it is submitted by counsel for the 2nd to 7th Respondents that as a result of the property settlement orders made in the substantive proceedings, the wife has the capacity to pay their costs, having retained property to the value of $307,958 after the conclusion of the proceedings.
It is also asserted that given their current financial circumstances, the 2nd to 7th Respondents cannot afford the substantial costs incurred in defending the various “unmeritorious” claims brought by the wife. Reference is made to the necessity of the sale of the P Street property and the D Street premises in order to repay the debts to the NAB.
In relation to the conduct of the wife, counsel for the 2nd to 7th Respondents refers to the following.
a)The failure by the wife to file an Amended Initiating Application by 28 April 2011 to include the relief sought by her, as directed by Registrar Sanderson on 21 April 2011.
b)The wife’s application, and subsequent withdrawal of same, to wind-up U necessitating an application by the husband to restrain the wife from taking action to wind up U which was unsuccessfully opposed by her. On 27 October 2011, Coleman J restrained the wife from taking any proceedings for the appointment of a liquidator, administrator or receiver of U. Costs were reserved and the Court certified for the appearance of Counsel.
c)The wife’s unsuccessful application that the husband’s interest in U’s loan accounts be transferred to her.
d)The wife’s application for the sale of the D Street property filed on 11 April 2012 and accompanied by some 190 pages of affidavit material. It is submitted that this application was made in circumstances where the wife had previously sought and not proceeded with orders for the sale of D Street on three occasions, and where the wife was aware of the listing of the property by K for sale from at least 2 March 2012. It was also submitted that there was no evidence adduced by the wife that the Respondents could apply the net sale proceeds of the property other than as directed by the NAB, or that she would not have been properly informed as to the course of the proposed sale. This application was ultimately withdrawn by the wife and Counsel for the Respondents sought an order for the costs of the 2nd to 7th Respondents.
e)The wife’s application to join the NAB as a party to proceedings, which was abandoned by her on the first day of the final hearing leading to a cost order against her in favour of the NAB. Counsel refers to the authorities of D’Cruz & Peirce and Ors (No. 2) [2010] FamCA 1150 [24]; Police & Tannard [2009] FamCA 583 and Farrel & Farrell [2011] FamCA 168 in support of the position that it is a consideration of public policy to ensure that the resources of the Court are engaged appropriately by parties to proceedings, rather than in pursuit of serial applications which are ultimately abandoned.
f)The failure of the wife to adequately particularise her case against the respondents, despite numerous requests for the same from the respondents. Counsel for the 2nd to 7th Respondents outlines that the wife amended the orders she sought against the 2nd to 7th Respondents on five occasions following her application for their joinder. It is submitted that on each occasion the 2nd to 7th Respondents incurred further costs attendant to these amendments, a number of which were not marked up in accordance with the Rules.
g)The wife’s failure to make the former matrimonial home available for presentation to potential purchasers and the cancellation of the auction campaign, resulting in the parties incurring further expense to appear before Court on 8 February 2013 when the matter was listed to deal with the husband’s application regarding this conduct.
h)The wife’s refusal to file NAB documents provided to her lawyers following the sale of the P Street property.
i)The wife’s objection to the tender of financial documents in relation to the financial position of U and K as at February 2014. The objection was heard on 11 April 2014 and the Court accepted the financial documents into evidence subject to them being verified by affidavit.
It is submitted on behalf of the 2nd to 7th Respondents that the wife was wholly unsuccessful in the following applications:
a)Application of 25 October 2011 where the wife was unsuccessful in seeking that the husband’s interests in any loan accounts with U be transferred to her and the removal of the injunction against her bringing winding up action against U;
b)Her application of 11 April 2012 for the sale of the D Street property, that application ultimately being withdrawn and dismissed on the wife’s application of 14 June 2012;
c)Her application seeking to join the NAB as a party to the proceedings, which was ultimately withdrawn and dismissed on the wife’s application; and
d)Her application for final orders against the 2nd to 7th Respondents.
Counsel for the 2nd to 7th Respondents asserts that the maintenance of claims for relief by the wife which were so clearly lacking in any prospects of success is a circumstance which strongly justifies an order for costs in their favour.
Counsel also submits that the wife’s pursuit of various applications against the 2nd to 7th Respondents resulted in them incurring significant, and ultimately unnecessary, expense in relation to their preparation for and participation in multiple listings, including the costs of briefing Counsel to appear.
In relation to their offer in writing, Counsel refers to an offer in writing provided to the wife on 25 February 2013 which provided that the wife withdraw her application against the 2nd to 7th Respondents and each party pay their own costs. It is submitted that this was a genuine offer which the wife should have accepted as she could have avoided the substantial order for costs now sought, and her rights of contribution and liability to her co-borrowers and co-guarantors would have remained in place and crystallised upon the sale of the security properties.
Counsel for the 2nd to 7th Respondents outlines that the wife was on notice from 5 September 2011 that they would seek their costs to be paid on an indemnity basis. The wife was also provided on three occasions with Costs Notifications.
It is submitted, in support of the order sought by the 2nd to 7th Respondents for certification for Counsel, that it was appropriate for Counsel to be retained given the legal and factual issues raised in the proceedings and the retention of Counsel by the husband and the wife. His Honour Coleman J made orders for certification for counsel on 27 October 2011 in regard to the wife’s interim application.
Turning to address the basis of the costs order sought, counsel for the 2nd to 7th Respondents submitted that the Court has the power to make an order for costs which it may fix in accordance with Rule 19.18 of the Rules (outlined above). Rule 19.18(3) of the Rules provides that in making an order for a specific amount pursuant to sub-rule (1) the Court may consider various matters, including the reasonableness of each party’s behaviour in the proceedings.
With respect to the orders sought for the payment of indemnity costs by the wife, Counsel refers to the authorities of In the Marriage of Munday and Bowman(1997) FLC 92–784, Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 and Prantage & Prantage (2013) FLC 93-544 (“Prantage”) in support of the proposition that it is appropriate to order indemnity basis having regard to the following:
a)The persistence of claims by the wife which never had prospects of success;
b)The wife was on notice from 11 September 2011 that the 2nd to 7th Respondents would be seeking costs on an indemnity basis;
c)The wife’s refusal to accept the offer from the 2nd to 7th Respondents on 25 February 2013 to withdraw her application and have each party pay their own costs;
d)The wife being warned by the Court on a number of occasions of a possibility of a costs order against her in favour of the 2nd to 7th Respondents should she fail to establish her case against them;
e)The application by the wife to join the NAB to the proceedings which was abandoned by her on the first day of hearing, wasting half a day of the Court’s time and that of the parties and their legal representatives;
f)The wife amended a series of questions put to the 2nd to 7th Respondents during the final hearing, after substantial work had already been completed by the Respondents to respond to the wife’s initial questions, causing additional costs and also wasted costs in responding to questions which were then abandoned by the wife; and
g)The prolonging of the case through the wife’s numerous “groundless contentions and conspiracy theories” including the diversion of funds away from the U and Laskari Property Trust, that the emerald owned by U was undervalued, that U did not properly account for jewellery taken overseas and sold, and that the 2nd to 7th Respondents owed the husband and the wife $1,610,283.
It is submitted that the costs of the 2nd to 7th Respondents are substantial and have been exacerbated by the wife’s conduct throughout the proceedings and that accordingly, it is just and equitable to make the orders sought.
Submissions of the wife
In response to the husband’s application for costs
It is submitted on behalf of the wife that her financial circumstances are “very restricted”. The wife does not own a home and it is asserted on her behalf that she is unlikely to be able to purchase one in the near future. She has no assets, and currently lives with her parents and one of her daughters at her parents’ home. She pays rent of $800 per month.
Counsel further asserts that due to her age and the duration of the marriage where she had the primary role of carer and home-maker, her employment prospects are limited. She is currently employed and earns $672 per week gross.
It is the wife’s belief that her daughter N feels resentment toward her because she had to move to live with her father, due to the wife’s inability to financially support two children.
In relation to the wife’s debts, counsel submits that these are significant, including tax liabilities, credit card debts, a third party loan and outstanding legal fees.
By contrast, it is submitted, the husband is a talented designer and salesman and his employment prospects are superior. Counsel for the wife puts to the Court that he will continue to be employed in the Laskari business, and U has a better prospect, now that proceedings have concluded, of returning to being a thriving company.
Counsel for the wife asserts that as at 20 February 2015, the husband is in arrears of $4,273.49 in relation to child support.
In the written submissions of the wife, it is outlined that following the outcome of the substantive proceedings, the husband retains $346,452 more than the wife and that both his capital position and his income earning potential are superior to hers.
Counsel submits that having regard to the wife’s financial circumstances, the only way for her to meet a costs order would be from the property pool, and even then, she would only be able to meet one costs order. Counsel asserts that if either of the costs orders sought by the applicants is made against the wife, she will retain nothing from the property settlement.
With respect to whether she has been “wholly unsuccessful” in the proceedings, Counsel for the wife outlines that while the husband, at hearing, had maintained the wife should receive approximately $295,000, she was ultimately awarded just over $400,000 by the Court, representing some 42 per cent of the parties’ assets. Therefore, despite the findings of the Court regarding the diminished asset pool of the parties, the wife cannot be said to have been wholly unsuccessful.
In relation to offers of settlement, Counsel for the wife outlined that the husband’s written offer to the wife on or about 14 February 2013 of $200,000 (and asserting a negative pool) was not accepted by the wife and that the Court subsequently found the pool to be in excess of $950,000, with the wife receiving just over $400,000.
The wife denies being appraised of any oral offer allegedly made by the husband’s solicitor in Court on or about October 2011.
It is asserted on the wife’s behalf that she sought, from an early stage in the proceedings, and prior to their commencement, to settle the proceedings, but those discussions could not progress after the husband withdrew his instructions to his solicitors, Diamond Conway.
2nd to 7th Respondents’ application for costs
It is submitted for the wife that it was necessary for the 2nd to 7th Respondents to be joined to the proceedings because, in order to identify the matrimonial pool, the Court had to determine what assets might exist in relation to the right to contribution from the co-borrowers and/or co-surety providers relative to the obligations of K and U.
The wife maintains that the joinder was necessary having regard to the close association between the husband, his brother and parents and the operation of the family business. The wife also refers to the joint liabilities of the husband and wife and the husband’s brother and his wife to the NAB in relation to the assets of the joint venture.
Counsel for the wife submits that in finding that the husband and the wife were owed approximately $413,000 by the 2nd to 7th Respondents as co-guarantors, the Court plainly had jurisdiction to make orders binding on the 2nd to 7th Respondents as well as the husband and the wife.
It was put by the wife that they were afforded the opportunity, during the substantive proceedings, to bring an application for summary dismissal of the proceedings against them but no such application was brought.
The wife denies the allegations of misconduct during the proceedings levelled against her by the 2nd to 7th Respondents, including that her conduct caused them to sell assets at a loss. Counsel for the wife submits that the evidence tendered in the substantive proceedings, namely an affidavit sworn by Mr G in February 2003, shows that the husband’s parents wanted to sell their home at P Street in 2009, prior to the commencement of proceedings, in order to reduce U’s debt to the NAB. The property was subsequently sold in late 2012 and approximately $1,490,000 of the sale proceeds were applied toward the NAB facilities of U/K, and approximately $1,120,000 is held in a term deposit for Mr G and Ms X. I note that in submissions in reply, the 2nd to 7th Respondents outline that it is not asserted by them that any action of the wife caused the sale of this property.
It is the wife’s case that the sale of the D Street property and subsequent reduction of U’s liabilities was necessitated by the downturn in the business.
In relation to the conduct of the parties during the proceedings, the wife says that throughout the proceedings the 2nd to 7th Respondents sought, and were unsuccessful in obtaining, declarations which showed a liability from the husband and the wife to the 2nd to 7th Respondents. Counsel asserts that, instead of the declaration, the Court found that the husband and the wife were owed approximately $413,000 by their co-guarantors, the 2nd to 7th Respondents.
Counsel for the wife submits that, in light of the above, and the fact that the Court permitted the wife to join the 2nd to 7th Respondents to the proceedings, the wife was not “wholly unsuccessful”.
With regard to the offer made by the 2nd to 7th Respondents, the wife says that this was not an offer of compromise and simply sought the dismissal of the wife’s application.
In response to the 2nd to 7th Respondents position that costs should be awarded on an indemnity basis, it is submitted for the wife that there are no exceptional circumstances which would warrant an award of costs on an indemnity basis. Counsel for the wife refers the Court to the authority of Prantage, where his Honour Murphy J stated:
152. Section 117(1) is important in that respect. Indemnity costs are confined to “an exceedingly rare situation” (Callinan J quoted by Thackray and Ryan JJ at [42]) in jurisdictions where “the usual rule” is that a successful party receives an order for costs (ie “costs follow the event”). They might, then, be seen to be more so in this jurisdiction where the “usual rule” is that “each party … shall bear his or her own costs” (s 117(1)). The comments by this Court in Kohan that indemnity costs are “a very great departure” from the “normal standard” should be seen in that context. That, it should be observed, is not a fetter on this Court’s discretion to award costs or indemnity costs if justice so requires it (see Oshlack v Richmond River Council (1998) 193 CLR 72, at 134 (particularly subpar [3]), per Kirby J). Rather it recognises that an order for indemnity costs, has a particular context in this jurisdiction.
153. In this Court, one of the two “seemingly irreconcilable objectives” of awards of costs referred to by Cooper and Merkel JJ in Re Wilcox quoted by Thackray and Ryan JJ can be expressed as “… protecting access to justice in family law matters by not exposing an unsuccessful litigant in the usual course to an order for costs”. A litigant in this Court must establish that the justice of the case requires an order for costs by reference to (non-exhaustive) statutory considerations before any order for costs is made.
CONCLUSION
The Court is required to consider costs applications as prescribed by s 117 of the Act and the Rules. The relevant provisions of s 117(2A) have been identified by the parties in their submissions.
I turn first to determine the cost application sought by the 2nd to 7th Respondents.
Although the named respondents were clearly not parties to the marriage which grounded the jurisdiction of the Court to make orders under s 79, they were significantly connected to ascertaining the assets of the parties available for distribution between the parties. I therefore conclude the wife appropriately joined those parties to the proceeding. As was determined, those respondents owed the husband and wife collectively a significant amount of money when considered in the light of the parties other assets. This indebtedness arose as a result of the interconnection of the financial ties between the 2nd to 7th Respondents with the parties to the marriage.
Having said that, the 2nd to 7th Respondents rely significantly upon the conduct of the wife in the proceeding which gave rise to the incurring of legal costs. The detail of the complaint is set out in detail earlier in these reasons.
I conclude that those parts of the primary hearing or earlier proceeding identified by the 2nd to 7th Respondents in the following matters warrants an award of costs in their favour, either because the wife was wholly unsuccessful or, alternatively, the conduct in bringing an application necessarily required the involvement of the 2nd to 7th Respondents. That determination is subject to the other considerations required to be considered under s117(2A):
·Application of 25 October 2011 where the wife was unsuccessful in seeking that the husband’s interests in any loan accounts with U be transferred to her and the removal of the injunction against her bringing winding up action against U;
·Her application of 11 April 2012 for the sale of the D Street property, that application ultimately being withdrawn and dismissed on the wife’s application of 14 June 2012;
·Her application seeking to join the NAB as a party to the proceedings, which was ultimately withdrawn and dismissed on the wife’s application;
·The wife’s application, and subsequent withdrawal of same, to wind-up U, necessitating an application by the husband to restrain the wife from taking action to wind up U which was unsuccessfully opposed by her. The 2nd to 7th Respondents were required to be represented in relation to that action. On 27 October 2011, Coleman J restrained the wife from taking any proceedings for the appointment of a liquidator, administrator or receiver of U. Costs were reserved and the Court certified for the appearance of Counsel.
·The wife’s unsuccessful application that the husband’s interest in U’s loan accounts be transferred to her. This application required the 2nd to 7th Respondents to be represented.
·The wife’s application for the sale of the D Street property filed on 11 April 2012 and accompanied by some 190 pages of affidavit material. This application was ultimately withdrawn by the wife and Counsel for the Respondents sought an order for the costs of the 2nd to 7th Respondents.
·The wife’s application to join the NAB as a party to proceedings, which was abandoned by her on the first day of the final hearing leading to a cost order against her in favour of the NAB.
·The wife’s failure to make the former matrimonial home available for presentation to potential purchasers and the cancellation of the auction campaign, resulting in the parties incurring further expense to appear before Court on 8 February 2013 when the matter was listed to deal with the husband’s application regarding this conduct.
The financial circumstances of the parties need to be considered. The wife’s financial circumstance is, I accept, such that her available assets are exceeded by the sums she owes. Her ability to earn income is limited and her current support is significantly provided by her parents which whom she lives. The husband’s position is marginally better; however, ultimately his circumstance is dependent upon the Laskari business being able to flourish. The evidence in the hearing was that the business had struggled for a number of years because, intervener alia, of the burden of debt covering the family connected business and enterprise.
The financial circumstances of the husband’s parents, his brother Mr G and sister-in-law Ms X has not been particularised other than in the affidavit filed by Mr G in this costs hearing. In particular he has highlighted the legal costs burden which the 2nd to 7th Respondents have incurred arising from the proceeding. There was evidence of the financial position of U and K before the Court in the primary hearing. Each of those corporations I accept would have an impact upon the individual circumstances of the other respondents. Mr G also provided evidence which was relied upon in the primary hearing and some of that touched on the financial position of all the respondents. The calculations provided by Mr G to support the declaration of liability between the 2nd to 7th Respondents and the husband and wife.
Overall I consider the disparity in financial circumstance between all of the parties falls in favour of the wife in that I consider it probable that her financial position is significantly less than either the husband or any of the 2nd to 7th Respondents.
None of the parties in the proceedings were funded by legal aid.
The wife has been wholly unsuccessful in a number of interlocutory applications as specified in these reasons and already considered above.
The 2nd to 7th Respondents relied upon an offer in writing to the wife made as detailed earlier in these reasons. That offer, in effect, required the wife to withdraw all applications against the 2nd to 7th Respondents and upon her doing so no order for costs would be sought against her. The wife declined that offer.
The 2nd to 7th Respondents say that it was unnecessary to proceed against them in this Court and if necessary the wife could have proceeded against them in another jurisdiction at the conclusion of the Family Court proceeding, had that been necessary. I do not accept that submission. It was necessary for the Court to know exactly what the indebtedness was between the 2nd to 7th Respondents and the husband and wife. Ultimately the 2nd to 7th Respondents sought a declaration in the proceeding.
The 2nd to 7th Respondents submit that the case took longer to hear than was necessary. In particular they submit this fact arose because of the conduct of the wife. Further the wife failed in seeking to establish some of her case. In relation to that submission I agree there was additional time taken in the hearing of the case as a result of the wife’s conduct. In this regard, the case she conducted in relation to the value of the husband’s interest in the R property. Also, she sought to establish the husband had taken her jewellery from the home. Ultimately I found against her on that issue.
The Rules permit the Court to make an order for the payment of a specific sum for costs. I propose to do that in this case because the parties have been locked in litigation in this Court for a very long period of time and have spent very large sums of money in the proceeding. The amount I propose to award for costs to be paid by the wife to the 2nd to 7th Respondents is, in my view, well below the amount I consider is probable they would be awarded on an assessment.
The 2nd to 7th Respondents seek an indemnity costs order. I do not accept the conduct of the wife or any particular circumstance of the case would warrant the Court applying a general order across all of the proceeding for indemnity costs. I accept the 2nd to 7th Respondents may have made a case for a particular interlocutory proceeding to have a costs order categorised as “indemnity costs”.
The 2nd to 7th Respondents have incurred costs totalling $344,048.90 as particularised in the affidavit of Mr G. It is probable that an assessment of the costs charged on a party and party basis would see a lesser sum calculated. To the extent there is any issue as to the engaging of counsel to represent the 2nd to 7th Respondents I certify that counsel was warranted.
Having regard to all the above I conclude that the wife should make a payment of $40,000 as costs of the 2nd to 7th Respondents. In so ordering I have drawn a balance between entitlement to a costs order and the financial circumstances in which the wife now finds herself.
I conclude the husband is entitled to a payment of part of his costs incurred in responding to the actions of the wife as specified above in relation to the 2nd to 7th Respondents. The husband has had to participate in the proceedings as the 2nd to 7th Respondents have in which the wife has either been wholly unsuccessful or failed to ultimately prosecute, rather withdrawing same.
The financial circumstances of the husband and wife do mediate against an order for cost of considerable proportion being made. I propose to order the wife pay the husband’s costs assessed in the sum of $10,000. In so ordering I accept that on the evidence available this represents almost a token payment. I would not be prepared to make an order for indemnity costs for the same reasons specified in relation to the 2nd to 7th Respondents’ application.
The written offer relied upon by the husband is not in sufficient detail to ground a costs order being made. Likewise the oral offer made by Mr UM would not ground a cost order under s 117(2A)(f) as it is not in writing. Nonetheless, the Court can have regard to those matters under 117(2A)(g). In relation to the offer made by the husband on the eve of the commencement of the final hearing, his offer, as made by an unrepresented litigant, warranted response from the wife through her solicitor to explore exactly what the other terms of the offer may have been. As it was, the cash offer of $200,000 therein made was very close to the final result. This is particularly so where the jewellery value for the wife remained on her side of the balance sheet and not the husband’s as she had contended for.
I certify that the preceding one hundred and twenty-six (126) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 22 May 2015.
Associate:
Date: 22 May 2015
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