Maley and [R] Pty Ltd
[2009] FMCAfam 588
•26 June 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MALEY & [R] PTY LTD | [2009] FMCAfam 588 |
| FAMILY LAW – Property proceedings – injunction sought against third party – costs – what is proper – nature of third party proceedings. |
| Family Law Act 1975, ss.90AF, 90AJ, 114, 117, 117AA, 118 |
| Browne v Green 29 Fam LR 428 In the Marriage of I and I (No.2) 22 Fam LR 557 Penfold v Penfold (1980) 5 Fam LR 517 |
| Applicant: | MS MALEY |
| Respondent: | [R] PTY LTD |
| File Number: | ADC 625 of 2007 |
| Judgment of: | Brown FM |
| Hearing date: | 25 March 2009 |
| Date of Last Submission: | 25 March 2009 |
| Delivered at: | Adelaide |
| Delivered on: | 26 June 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Tinning |
| Solicitors for the Applicant: | Von Doussas |
| Counsel for the Respondent: | Ms Lewis |
| Solicitors for the Respondent: | Ouwens Lawyers |
ORDERS
The wife pay the third party’s costs fixed in the sum of $2,500.00.
All outstanding applications are otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Maley & [R] Pty Ltd is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 625 of 2007
| MS MALEY |
Applicant
And
| [R] PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons for judgment concern acrimonious proceedings for the settlement of matrimonial property between Ms Maley “the wife” and Mr Maley “the husband” into which a third party [R] Pty Ltd has become unwillingly involved.
The husband became bankrupt in the latter part of 2008. He remains an undischarged bankrupt. His trustee in bankruptcy is Ms O. She filed a notice of address for service in these proceedings on 18 December 2008.
On 19 June 2008, the wife filed an application naming the husband and [R] Pty Ltd “the third party” as respondents. She sought an order restraining the third party from enforcing any judgment, to which it might be entitled, against a property situated at Property [S].
This property and another one at Property [L] previously represented the husband and the wife’s most significant items of matrimonial property, in terms of value. Both were previously registered in the husband’s sole name and each was subject to a mortgage in favour of Bank SA.
Mr and Ms Maley married in 1996 and separated in August 2006. They are the parents of two children aged twelve and eleven respectively, who live predominantly with the wife.
During the latter stages of their marriage, the husband operated a [omitted] business – [A]. The business operated through an overdraft facility, which was also secured against the [S] and [L] properties.
The wife commenced these matrimonial property proceedings against the husband on 22 May 2007. She sought the payment to her of $188,000.00 and the transfer outright of the [S] property. It was her position that the business was a profitable one and, as such, was worth a sum in excess of $500,000.00.
The husband did not agree the business was anywhere near as valuable as the wife contended. He disputed that it provided him with a comfortable income. To the contrary, it was his position that the business carried a high level of debt and he himself held a modest level of equity in the two real properties concerned. As such, ostensibly at least, he considered the orders sought by the wife to be outlandish.
On 31 October 2007, the wife filed an application for interim spousal maintenance and an order that would permit her to have the right to the sole occupation of the [S] property pending finalisation of the parties’ competing property applications. At that stage, it was her position that the husband was intent on organising his business affairs so as to defeat her proper entitlements.
The [S] property was the parties’ holiday home. It was the husband’s position that, around about the time of the wife’s application for sole occupancy of the property, the business was teetering on the brink of insolvency, particularly because of taxation and superannuation liabilities, which amounted to around $80,000.00.
The husband asserted that the wife, who had been responsible for the business’ bookkeeping prior to the parties’ separation, had compounded the business’ financial difficulties, either through her accounting incompetence or malice for him. In these circumstances, he asserted that the parties could not afford to retain the [S] property, which needed to be immediately sold to reduce indebtedness.
Mr Maley continued to live in the [L] property, which had been the parties’ former matrimonial home. This added to the level of recrimination, which infused the sole occupancy proceedings. The wife was aggrieved at the prospect of having nowhere to live with the parties’ two children.
Ultimately, on 7 December 2007, I determined that the wife should be entitled to occupy the [S] property, pending trial, provided she paid all the necessary outgoings in respect of the property, including the recurrent mortgage repayments and rates. I was informed that mortgage repayments were in the vicinity of $250.00 per week.
Later, on 7 February 2008, the parties agreed that further orders should be made restraining the husband from selling or further mortgaging either the [S] or [L] properties, until the property proceedings between the parties were concluded. The wife was to pay the husband a sum of money calculated by reference to the mortgage payments on the [S] property.
This was the background to the involvement of the third party in these proceedings as a result of the wife’s application of 19 June 2008. At this stage, she continued to maintain that the husband was intent on defeating her proper entitlements, particularly so far as the [S] property was concerned and her aspiration to retain it following the overall conclusion of these proceedings.
To this end, she asserted that the husband had been both duplicitous and tardy in respect of the provision to her of financial information and documentation concerning the business and its turnover. What discovery had been provided to her, the wife claimed had been given in a haphazard fashion and without necessary elaboration.
In June 2008 the wife deposed that she had discovered some invoices presented by the third party to the husband. Subsequently, she had discovered that the third party had instigated proceedings against the husband in the District Court at Adelaide, seeking a sum in excess of $40,000.00 as a result of the lack of payment of these invoices, which related to the hire of equipment to [A].
The wife’s position, as disclosed in her affidavit in support of her application filed 19 June 2008, was that Mr W, the principle proprietor of [R] was a close friend and business associate of the husband. As such, she doubted the bonafides of the various invoices in question.
In these circumstances, she was fearful that the invoices and the resulting District Court proceedings were a subterfuge designed to secure her eviction from the [S] property and so defeat her principal application. Her fears were heightened by what she alleged was the husband’s failure to be frank with her and the court about his financial affairs and his alleged intention, as expressed to her, to ensure that she would never receive anything of worth from these proceedings.
The wife’s application for an injunction to restrain the third party from enforcing any judgment against the [S] property was made returnable on 9 July 2008. The husband has never formally responded to this application and has subsequently not taken an active part in the substantive proceedings, which had been allocated a trial date in February of 2009. However, it remained his position that the business was in a parlous financial position, particularly so far as pressure being applied to it by its various creditors.
The third party was not in a position to file and serve answering material by 9 July 2008. On this basis, after the wife had provided an undertaking as to damages, I made an order restraining the third party from executing any judgment it may obtain against the [S] property. The third parties’ solicitors were present at this hearing and were given a period of 21 days to file any answering material to the wife’s application.
At this stage and subsequently it was the wife’s position that it remained open to the third party to execute any judgment debt in its favour against the [L] property, which continued to be occupied by the husband. As such, she contended that there was little prejudice to the third party, which was not being deprived of all potential avenues to recoup its entitlements.
To this end, the wife contended that it was suspicious that the third party was ostensibly disinterested in pursuing its remedies against the [L] property up to this stage. In these circumstances, she argued that there was some level of corroboration for her position that the husband and the third party were not at arm’s length.
The third party filed a response and an affidavit in support on 31 July 2008. The affidavit in support was deposed by Mr W, who is a director of the third party. He deposed that the third party had instigated proceedings against the husband, in the District Court of South Australia, on 14 May 2008. Mr W further deposed that on 19 June 2008, the third party had obtained judgment in default of a defence from Mr Maley in the sum of $53,093.00 plus costs in the sum of $1,085.10.
Mr W acknowledged that he had been a close friend of the husband for around eight years. He disputed any suggestion that the various invoices rendered by the third party were anything other than genuine and that, as a consequence, [R] Pty Ltd was anything other than entitled to payment in the sum of the judgment debt. It was Mr W’s position that he was going to make an application, on behalf of the third party, that both the [S] and [L] properties be charged in the third party’s favour.
The wife’s application returned to court on 5 August 2008. The husband elected not to appear on this occasion. I determined that the injunction should continue until the final hearing of the matter. In reaching this decision, I was influenced by the fact that the final hearing had been scheduled for 19 & 20 February 2009, at which stage I hoped to be able to determine the truth or otherwise of the wife’s claims regarding the bonafides of the judgment debts in question.
On 5 August 2008, counsel for the third party indicated clearly that the third party strenuously objected to the injunction in question and was an unwilling participant in the proceedings between the husband and wife.
As such, the third party put the wife on notice that it would be pursuing a claim for costs against the wife arising from its appearances before the court on both 9 July 2008 and 5 August 2008, as well as the costs incurred in preparation of the necessary answering documentation. Accordingly, on 5 August 2008, I reserved the costs of the third party to the final hearing date.
On 28 November 2008, the third party filed its own application seeking the immediate discharge of the injunction made on 5 August 2008. In support of this application, Ms Amabili, the solicitor for the third party deposed an affidavit.
In her affidavit, Ms Amabili deposed that the third party had charged the [L] property with the judgment debt against the husband, which it had obtained in the District Court. She further deposed that Bank SA, the mortgagee of both the [L] and [S] property had informed her that it intended to exercise its rights under the mortgages concerned as both were in default.
On this basis, the third party was fearful that its rights would be adversely affected if the injunction was maintained. It was also
Ms Amabili’s understanding that the wife had failed to make her contributions towards the mortgage on the [S] property as required by the earlier orders of the court.
The wife’s response to this application was to seek an immediate transfer of the [S] property to her. She also sought orders that would require the husband to make all the necessary payments to bring the business overdraft out of arrears.
In the alternative, the wife proposed the immediate sale of the [L] property to alleviate the financial pressures on the parties. Clearly, the wife’s principle intent was to preserve the [S] property for herself from the husband’s various creditors.
The wife opposed the third party’s application for a discharge of the injunction concerned. She was critical of [R] for not taking further steps to execute directly against the [L] property.
The wife was also critical of the husband for not keeping her informed of developments regarding Bank SA’s intention to exercise its rights pursuant to the mortgages registered on both the [S] and [L] properties. She complained that she had not been provided with the necessary documents and statements by the husband to enable her to attend to the mortgage payments arising in respect of the [S] property.
It was the wife’s position that Mr W and the husband remained in cahoots to force her out of the [S] property. As a result of which, the husband was intent on either running the business down or concealing its true worth from her and his various creditors.
In support of her position, the wife relied on financial statements prepared for the husband in respect of [A] for the financial year ending 30 June 2007. These documents indicated that the business had a total income of $385,722.00 and expenses of $338,065.00, leaving a net profit of $47,657.00. One of the components of the business’ expenses was an amount of slightly in excess of $147,000.00 for salaries.
On the basis of these documents, the wife asserted that the husband had a reasonable income from the business. It was also her position that, given the husband had continued to hire plant and equipment from the third party, this of itself was indicative that the business was trading more successfully than the husband would otherwise have it.
Once again, the husband did not respond to either the assertions of Ms Amabali or to those of the wife. The reason for this seems to have been that both the wife’s application and that of the third party were overtaken by events.
The various applications were listed before the court on 17 December 2008. On this occasion the husband’s trustee in bankruptcy appeared and announced that Mr Maley had become bankrupt, presumably on his own petition. On this occasion, solicitors for Bank SA also sought to intervene.
As a result of these occurrences, the proceedings were adjourned until 20 January 2009 so that the wife could consider her position. In the circumstances, I was not prepared to make an order transferring the [S] property to the wife by way of an interim or partial property settlement. During the period of the adjournment, Bank SA undertook not to execute against the [S] property.
On 19 January 2009, Mr F, a commercial manager with Bank SA filed an affidavit in the proceedings. He deposed that the husband owed the bank a total of $228,450.00 in respect of the two mortgages which it held and the overdraft facility. Mr F anticipated that the bank would occur around $40,000.00 in costs if the two properties in question were sold as a result of any action taken on its part.
Mr F estimated the total value of the two properties to be in the vicinity of $640,000.00. It also transpired that there was a further mortgage secured against the [L] property. This was a first mortgage in favour of Perpetual Trustees Victoria Limited in the sum of $308,000.00.
Annexed to Mr F’s affidavit was a consent dated 16 February 2006 from Perpetual Trustees Victoria indicating its consent to a second mortgage being granted over the [L] property in favour of Bank SA in a sum of $178,000.00. This consent provided details of the first mortgage which secured a principle sum up to $308,000.00.
On the basis of his analysis of the sums in question, Mr F had reached the view that the sale of the [L] property alone would not be sufficient to discharge the husband’s current level of indebtedness. This was a position with which the husband’s trustee in bankruptcy concurred. As a result of the husband’s bankruptcy, the third party did not enjoy any priority over the husband’s secured creditors.
Another interested party appeared before the court on 20 January 2009. This was the wife’s former trustee in bankruptcy. It being the position that the wife had become bankrupt, on her own petition, on 22 January 2004. She had been discharged from her bankruptcy on 23 January 2007.
The wife had alluded to this bankruptcy in her initial affidavit material. It was her position that she had been the sole director and shareholder of a company which the husband had essentially operated as an earlier [omitted] business. This business had collapsed as a result of insolvency resulting in her own personal bankruptcy but not that of the husband.
The wife’s former trustee in bankruptcy sought to be joined as a party to these proceedings. The trustee was concerned that there may have been irregularities in respect of the wife’s bankruptcy and the transfer to the husband of the various assets, which were at the heart of the matrimonial property dispute.
I granted the wife’s former bankruptcy trustee leave to appear in the proceedings. By this stage, it had become apparent to me that it would be impossible for the earlier arranged final hearing to proceed as scheduled, given the number of parties now involved and the overall complexity of the matter. I was also concerned at the rapidly diminishing asset pool.
On this basis, the proceedings were adjourned until 19 February 2009 for further directions. In the intervening period, the parties undertook to have some discussions with one another regarding an overall resolution of the case.
Given its status, as an unsecured creditor, these discussions did not include the third party. However, Ms Amabili made it clear that her client remained aggrieved at having been involved in the proceedings, particularly given that its involvement had not resulted in it recouping any of its judgment debt.
Prior to 19 February 2009, the husband’s bankruptcy trustee, Mr S, the wife’s former bankruptcy trustee and the wife and each of their respective legal advisers met at a privately convened settlement conference.
At this conference it was agreed that both the [L] and [S] properties should be sold by public auction and thereafter the proceeds of sale be dispersed as follows:
·Firstly to discharge any security registered over either property;
·Secondly to pay the necessary costs of sale of each of the properties;
·Thirdly twenty percent up to a maximum of $45,000.00 to be paid to the wife with the balance to be divided between the husband’s bankruptcy trustee and the wife’s former bankruptcy trustee.
As a consequence of this agreement, the wife agreed to vacate the [S] property within seven (7) days of the settlement of sale of the property. Orders were made with the consent of each of the parties concerned to these orders.
The wife remains suspicious about the husband’s conduct prior to his bankruptcy. In particular, she remains concerned that there may be assets of value remaining after the various creditors have been paid, particularly in the form of assets such as [omitted], which the husband utilised in [A].
However, at this juncture, the wife cannot point to any specific items of property in this regard. Accordingly, with the acquiescence of the husband’s trustee in bankruptcy and the wife’s former trustee in bankruptcy but not the wife, I did not fix any further date for the hearing of the matter. I could not see the point. I did however give the wife liberty to re-list the matter if any further assets came to light.
That left the issue of costs between the wife and the third party. It is the third party’s position that the wife should pay its costs, which it has calculated amount to $5,000.00. The wife resists this application. It is her position that she had no alternative but to join the third party in these proceedings and she has acted reasonably throughout in her attempts to safe guard her position, particularly so far as the [S] property is concerned.
Essentially, it is the wife’s position that it was only because of the husband’s lack of disclosure and his conduct in respect of the operation of the business, which compelled her to join [R] Pty Ltd in the first place. Accordingly, she asserts that the husband should be compelled in some way to either pay the costs concerned or contribute to them in some significant way.
Ms Maley remains suspicious of the relationship between Mr W and her former husband. It remains her case that her suspicions were based on proper grounds and it was reasonable for her to involve the third party in the proceedings, particularly given the third party’s apparent reluctance to take concrete steps to execute against the [L] property.
The third party’s position is clear. It has long maintained that it has no wish to be involved in the proceedings between the husband on the one hand and the wife on the other. It merely wishes to be paid its now unsecured judgment debt, which it claims was genuinely incurred by the husband. Given Mr Maley’s bankruptcy, the third party doubts the husband will be in any position to contribute towards its costs. In those circumstances, it looks to the wife whose application brought it into the proceedings in the first place.
The legal principles applicable
The making of a costs order is governed by section 117 of the Family Law Act which provides as follows:
“Costs
(1)Subject to sub-section (2) and sections 117AA and 118, 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) and (5) 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 sub-section (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, in accordance with section 117C or otherwise, 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.”
Section 117 (1) abolishes, for the purposes of Family Law Act proceedings, the general rule that in civil proceedings costs follow the event. Section 117(2) then provides the court with a general discretion to make costs orders if it is of the opinion that there are circumstances that justify it in so doing. Section 117(2A) sets out the matters that the court shall have regard to.[1]
[1] See Browne v Green 29 Fam LR 428 at 432
The discretion in respect of costs placed in the court pursuant to section 117 is a wide one, which must be exercised having regard to the matters set out in section 117 (2A) so far as they are relevant. In the case of In the marriage of I and I (No.2)[2] the Full Court said as follows:
“Section 117 confers upon the court a broad discretion in relation to costs. That discretion is one which the Court should not seek to fetter. As was pointed out by the High Court in Penfold v Penfold.[3]
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 subsection is not paramount to s 117(2). As subs (1) is expressed to be subject to subs (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.
Subsection (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs.”
[2] In the Marriage of I and I (No.2) 22 Fam LR 557 at 558
[3] Penfold v Penfold (1980) 5 Fam LR 517 at 582; FLC 90-800 at 75,053
The injunction against the third party, in this case, was made pursuant to the provisions outlined in Part VIIIAA of the Family Law Act which is entitled Orders and Injunctions Binding Third Parties.
The object of the Part is to enable the court to make an order in relation to the property of a party to a marriage, under either section 79 (alteration of marital property interest) or 114 (the injunction power) of the Act, which is directed to or alters the rights, liabilities or property interests of third parties.
Section 114 grants the court the power to make any injunction it considers “proper” in proceedings which relate to a matrimonial cause. Proceedings relating to the division of matrimonial property are such a matrimonial cause.
In particular the relevant portion of the section reads as follows:
“114(1)…the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including –
…
(e) an injunction in relation to the property of a party to the marriage; or
(f) an injunction relating to the use or occupancy of the matrimonial home.”
The machinery section of Part VIIIAA so far as orders made by the court under section 114, which bind third parties, is section 90AF. Specific powers are set out in section 90AF(1) and (2). They include the power to alter the property rights or interests of a third party.
I am satisfied that the restriction of a party in its right of enforcement of judgment debt, against a specified piece of property, is such an alteration of property rights or interests.
The conditions required for such an order can be made are set out in subsection (3). They are as follows:
·the making of the order contemplated must be reasonably necessary or appropriate to effect a division of the marital property of the parties concerned in the substantive application;
·further if the order concerns a debt of one of the parties or both of them, it is not foreseeable at the time the order or injunction is made, that it will result in the debt not being paid in full;
·the third party affected has been accorded procedural fairness in relation to the making of the order or injunction;
·the court is satisfied that it is proper to make the injunction sought; and
·a number of other matters which are set out in (4) are satisfied.
These latter matters relate to potential expenses arising as a result of the making of the injunction concerned. They include the taxation and social security implications of the order and importantly, in the context of these proceedings, the administration costs of the third party incurred in complying with the order.
Accordingly, the powers available to the court under Part VIIIAA, so far as they affect the rights of third parties, are subject to a number of strict preconditions for their use, which can be summarised as follows:
·Firstly, their use is subject to an objective standard of reasonableness and their application must relate to what is necessary to affect an appropriate division of matrimonial property.
·Secondly, it is proper to make the injunction concerned.
·Thirdly, it cannot be foreseen that the making of the injunction will result in any debt affected not being paid in full.
·Fourthly, the third party concerned is given a right to be heard about the consequences of the order sought which concerns its rights.
·Finally, regard must be had to the financial consequences for others, including both government instrumentalities and the third party itself, of the making of the injunction contemplated.
Essentially, the powers available to the court under Part VIIIAA are closely circumscribed and their use should not result in the loss of any substantive rights by a third party, who is extraneous to the marital relationship before the court.
The legislation concerned also makes specific reference to the expenses of any third party affected by the making of an injunction pursuant to section 90AF. Pursuant to section 90AJ, if such an injunction is made and the third party concerned has incurred expense as a necessary result of the order, the court may make such order as it considers just for the payment of the reasonable expenses of the third party incurred as a necessary result of the order or injunction [section 90AJ(2)].
Accordingly, section 90AJ(2) picks up the terminology of section 117(2), in the sense that the court may make the order for the payment of a third parties’ expenses as it considers it “just”. In my view, this power must be considered in the overall context of Part VIIIAA as a whole, which enjoins the court to avoid the imposition of expense onto third parties, who are not otherwise concerned with the division of property between the spouses involved in the substantive proceedings.
In deciding whether to make an order under section 90AJ, the court is directed to take into account “the principle” that the parties to the marriage concerned should bear the reasonable expenses of any third party affected “equally”.
Conclusions
In this particular case, I consider it just to make an order for costs in favour of the third party. I accept that the third party has consistently resisted being involved in these proceedings and its involvement in them has resulted in it incurring costs.
In addition, one of the main themes of Part VIIIA of the Family Law Act is that third parties should not be put to expense, if they are inadvertently caught up in property litigation between spouses brought pursuant to the Act. To use the jargon of the times, the court must be mindful of pecuniary “collateral damage” being occasioned to third parties by such litigation.
Regrettably, from the wife’s perspective, the necessity for the injunction has been overtaken by events. The husband’s bankruptcy has meant that both pieces of real property concerned in the matrimonial property litigation will have to be realised, largely to satisfy the husband’s creditors.
As such, the wife’s aspiration of retaining the [S] property has come to naught. Accordingly, the injunction has served no enduring forensic purpose for the wife. Rather, it has made it less likely that the third party will be able to recoup the moneys owed to it in full pursuant to its judgment debt.
The wife’s position is that the husband’s conduct was the direct cause of her seeking the injunction in the first place. Given the resolution of the property proceedings between the husband’s bankruptcy trustee and the wife, I am not now in a position to resolve definitively the various evidentiary issues which arise between the parties and indeed between the wife and the third party.
The wife was necessarily the sole protagonist of the application for an injunction against the third party. I am unable to resolve definitively whether there was any collusion between the husband and the proprietor of [R], particularly regarding the bonafides of the judgment debt entered in favour of the latter.
As a consequence, I have come to the conclusion that it would be unjust for costs to attach to the husband who, ostensibly at least, was disinterested in the outcome of the wife’s application. Throughout the proceedings it has been his constant position that he and the business operated by him were teetering on the brink of insolvency.
I accept that the wife is not a person of strong financial means. She has been employed as a bookkeeper receiving a modest wage. She also has primary responsibility for the care of two children.
Most importantly, she has only been able to salvage a modest amount of capital from the financial catastrophe surrounding the end of her marriage to Mr Maley.
However, I have to bear in mind the wife’s financial position against the background of the other legislative considerations, particularly that the third party was an unwilling participant in these proceedings and the wife has been unable to establish any malafides against it.
For these reasons, I have reached the conclusion that it would be just to make an order against the wife alone in respect of the third parties’ costs. The more difficult tasks is to determine what the quantum of those costs should be.
As previously indicated, the third party is seeking the sum of $5,000.00 in respect of its costs. The costs have been calculated pursuant to schedule 1 of the Federal Magistrates Court Rules.
The Court has a wide discretion as to the calculation of costs. Pursuant to rule 21.02(2) of the Federal Magistrates Court Rules:
In making an order for costs in a proceeding, the Court may:
a) set the amount in costs; or
b) set the method by which the costs are to be calculated; or
c) refer the costs for taxation under order 62 of the Federal Court Rules or under order 38 of the Family Law Rules; or
d) set a time for payment of costs, which maybe before the proceeding is concluded.
However, pursuant to rule 21.10:
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 to schedule 1; and
b) Disbursements properly incurred.
Pursuant to Rule 21.15:
The Court or a Registrar may certify that it was reasonable to employ an advocate, or more than 1 advocate, to appear for a party in a proceeding.
In this case, the third party has sought a fifty percent advocacy loading in respect of the various short mentions of this matter, six in total ($307.50 each) and the sum of $3,000.00 in total in respect of firstly opposing the wife’s application against it and then more recently bringing its only application to have the wife’s injunction discharged.
In this case, I have regard to the schedule of fees and also the overall complexity of this matter. In all these circumstances, I have come to the conclusion that it is reasonable and proper for the wife to pay the third parties costs fixed in the sum of $2,500.00.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding ninety-four (94) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: P Smith
Date: 26 June 2009