Marello and Marello (Costs)
[2013] FamCA 868
FAMILY COURT OF AUSTRALIA
| MARELLO & MARELLO (COSTS) | [2013] FamCA 868 |
| FAMILY LAW – COSTS – where the husband seeks an order that the wife pay his costs of the property component of the proceedings on an indemnity basis – where the wife resists the application – where the husband made three offers to the wife all of which would have provided the wife with a better result than that which she ultimately received at trial – where the wife refused each such offer – where the wife says her refusal was legitimate – whether the presumption in s 117(1) ought be displaced –where the wife’s conduct in refusing the three offers warrants the making of an order for costs against her – whether the wife should pay costs on an indemnity basis – where that costs order confined to the property component of the proceedings – where wife ordered to pay 2/3 of the husband’s costs on a party and party basis. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Australian Securities and Investments Commission v Rich (2009) 236 FLR 1 Colgate-Palmolive Company and Anor v Cussons Pty Ltd (1993) 46 FCR 225 D & Y (1995) FLC 92-581 |
| APPLICANT: | Mr Marello |
| RESPONDENT: | Ms Marello |
| FILE NUMBER: | BRC | 11438 | of | 2010 |
| DATE DELIVERED: | 5 September 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Murphy J |
| HEARING DATE: | 29 July 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Hackett |
| SOLICITOR FOR THE APPLICANT: | Hirst & Co |
| COUNSEL FOR THE RESPONDENT: | Mr Page QC |
| SOLICITOR FOR THE RESPONDENT: | Jones McCarthy |
Orders
IT IS ORDERED BY CONSENT THAT:
There be no order as to costs in respect of the Application in a Case filed by the husband on 5 June 2013 (which was dismissed on 11 June 2013).
IT IS ORDERED THAT:
The wife pay two-thirds (2/3) of the husband’s party and party costs of and incidental to the proceedings for settlement of property as agreed in writing between the parties or, failing agreement, as assessed on a party and party basis.
The Amended Application in a Case filed 19 July 2013 is dismissed.
Each party bear their own costs of and incidental to that Amended Application.
IT IS FURTHER ORDERED THAT:
The parties provide, by joint communication to …@familycourt.gov.au, a Minute of Consent addressing paragraph 51A of Exhibit “A”, within twenty-eight (28) days of today’s date.
In the event that the parties are unable or unwilling to reach agreement as contemplated by paragraph 5 of these Orders, the matter be listed before Murphy J, or another Judge if Murphy J is unavailable, at a date and time to be advised.
In the event that it becomes necessary to list the matter as contemplated by paragraph 6 of these Orders, each party shall file and serve not less than seven (7) days prior to the said listing, all such material as might be necessary so as to allow the Court to determine the issue of the costs of and incidental to that listing.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Marello & Marello (Costs) 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 BRISBANE |
FILE NUMBER: BRC 11438 of 2010
Mr Marello
Applicant
And
Ms Marello
Respondent
REASONS FOR JUDGMENT
On 19 April 2013, I delivered Reasons for Judgment in respect of competing applications for settlement of property and parenting orders heard at a trial over three days from 11 to 13 February 2013. The husband applies for his costs of the property settlement component of that trial assessed on an indemnity basis. The wife resists that claim.
In addition to the Application in a Case seeking costs, the husband filed an Application in a Case seeking orders relating to specific disbursements from the sale proceeds of a piece of real property. That issue has resolved. The husband seeks his costs of that application. The wife also resists that claim.
On 5 June 2013, the husband applied for an injunction in respect of actions proposed by the wife. That application was dismissed on 11 June. Costs were reserved. The parties inform the Court that they are agreed that there should be no order for costs of that application. An order will be made accordingly.
The orders made on 19 April 2013 directed the parties to file minutes of order giving effect to the judgment that the wife should receive 60 per cent of the parties’ property interests and the husband 40 per cent. Further significant conflict between the parties of the type referred to in the trial Reasons continued between the parties. On 30 May, the Court was informed that, although the parties had reached “substantial agreement” on the minutes of order, a further hearing was required. That hearing took place before me on 11 June, at which time the Court was advised that the parties were agreed on the proposed minutes of order save for one issue embraced by paragraph 51A of them. Orders were made by agreement to give effect to my determination as to the balance and I made orders requiring the parties to forward a joint minute of order regarding paragraph 51A within seven days. Those orders provided for the relisting of the matter in the event that the parties were unable to reach agreement. The parties have not reached agreement. The parties have together now spent well over $1.2 million in legal fees in respect of a pool of property and superannuation interests found by me to total about $775,000. Ludicrous though it may sound, the parties continue in dispute over paragraph 51A and it would appear that further legal costs will attend the hearing of this discrete issue. Orders will be made affording a further opportunity for the parties to resolve that issue, failing which it will be listed for hearing.
Applications for Costs – A “Mini-Trial”?
The husband’s application for the costs of trial is accompanied by an affidavit which is 2cm thick. It contains over 160 pages of annexures. In responding to the application, the wife filed an affidavit and Financial Statement from herself and affidavits two witnesses. The wife was represented by Senior Counsel and the husband by counsel. An application was made by the husband’s counsel to cross-examine the wife and her witnesses. The hearing commenced with the seriatim consideration of objections to evidence.
Those features of the application in this case are indicative of a very disturbing trend in this Court where applications for costs are taking on the appearance, and virtually all of the attributes, of a trial. In my view, such an approach is justified neither with respect to the Family Law Act 1975 (Cth) (“the Act”) or Family Law Rules 2004 (Cth) (“the Rules”) nor authority and is to be strongly discouraged.
There is, of course, a tension between the proper desire (and duty) for courts to bring an end to litigation and the requirements of justice in individual cases and no less so when the issue is costs (see, for example, Byron v Southern Star Group Pty Ltd (1995) 13 ACLC 301, per Kirby P). Equally, it goes without saying that the parties must be given an appropriate opportunity “to present a proper case” (Re Watson; Ex parte Armstrong (1976) FLC 90-059 at 75,269-75,270). As a result, it is neither possible nor desirable to set precise parameters as to the evidence or procedures that might apply to particular applications or types of applications (see, for example, R v Australian Broadcasting Tribunal; Ex parte Hardiman(1980) 144 CLR 13 at 34). Yet, nor can it be said that hearings of applications for costs are without guiding principles.
Authorities beyond family law contain specific admonitions against applications for costs becoming “mini-trials” (see, for example, Boylan v Collingwood-Smith [2010] NSWSC 651 at [36], per Lindgren AJ; Australian Securities and Investments Commission v Rich (2009) 236 FLR 1 at [7334], per Austin J). Those comments have extended even to applications for indemnity costs (see, Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [16], per Basten JA).
Within this Court’s jurisdiction, those statements might be seen to be all the more apposite by reason both of the applicable legislation and Rules and clear statements in the authorities.
First, in respect of all proceedings in this Court, s 97(3) provides, “[i]n proceedings under this Act, the court shall proceed without undue formality and shall endeavour to ensure that the proceedings are not protracted.” The Rules also give expression to that statutory edict. In general terms, examples include, rr. 1.04, 1.05 and the Pre-Action Protocols to which the latter rule refers, and r 1.07, particularly sub-rules (c) and (d). Obligations cast upon practitioners reflect the same principles (see, for example, r 1.08). So do the specific provisions of the Rules relating to costs (see, for example, r 19.18(3) and the Rules relating to a court review of assessed costs once an order is made (r 19.56(2)(a))).
Authorities in this Court have consistently emphasised those principles as being applicable to proceedings generally in this Court, including trials (see, for example, D & Y (1995) FLC 92-581 at 81,762 and 81,765) and interim proceedings (see, for example, C & C (1996) FLC 92-651). Further, it might be noted that such an approach is also consistent with the position adopted in other like jurisdictions (see, for example, Re B (Minors) (Contact) [1994] 2 FCR 812 at 817 per Butler-Sloss LJ).
Specifically as they might apply to applications for costs, the principles just discussed can be seen to be particularly applicable. Applications for costs are, of their nature, “highly discretionary” (Hitch & Hitch [2012] FamCAFC 124 at [83], per May and Ainslie-Wallace JJ). Further, “…decisions about costs in the family law jurisdiction are to be made on the basis of the judicial officer’s sense of what is ‘just’, albeit guided by reference to prescribed factors” and “[t]here is arguably no more imprecise word in the legal lexicon” (Hitch at [116]-[117], per Thackray J).
Most telling in the context under discussion are the authoritative statements of the High Court in Penfold v Penfold (1980) 144 CLR 311. They derive particular importance not merely from the obvious fact that they are statements of the High Court, but also because they are statements by that Court specifically about s 117 and applications for costs pursuant to that section. The plurality said (at 315-16):
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 sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in “a clear case”.
Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent [(1970) 92 WN (NSW) 503, at p 505]). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
(Emphasis added).
I repeat that it is neither possible nor desirable to be prescriptive about what material or procedure might apply in a particular application for costs. Yet, the Act envisages a broad assessment of a non-exclusive number of factors in the exercise of a particularly wide discretion. Generally speaking, that is not consistent with what has been called a “mini-trial” in the authorities; that is, an entirely new fact-finding process that subjects parties to yet more expense and yet more stress.
Should the Wife Pay the Husband’s Costs of Trial?
The husband’s application seeks orders as follows:
1.That the Wife pay the Husband’s costs on an indemnity basis in an amount fixed at $466,000.00, failing which that the Husband’s costs be assessed on an indemnity basis with respect to the costs incurred by the Husband in relation to property adjustment orders and child support departure.
2.That the Wife pay the Husband’s costs of and incidental to this Application on an indemnity basis.
3.Such further or other order as this Honourable Court may deem necessary.
The sum arrived at by the husband represents “60% of his [total] costs”, being those costs “associated with the property part of the proceedings.” I take the orders sought by the husband and the written submissions filed on his behalf to mean that the husband does not seek an order for costs in respect of the proceedings insofar as they pertained to final parenting orders. Given the parenting orders made, the fact that very many were made by consent, and the absence of notification to the Court of any written offers to settle the parenting component of the dispute, the husband’s application for costs is properly confined to the property component of the proceedings.
The wife seeks an order that the husband’s application be dismissed.
It has already been observed that the usual rule, prescribed in s 117(1) of the Act, is that each party should bear their own costs. The issue here is whether the circumstances justify an order for costs and, if so, its terms.
What Circumstances are Relied Upon in the Present Case?
Neither s 117(2) nor s 117(2A) demand that any one factor has more weight than any other factor nor is it necessary that more than one factor enumerated within the latter section must be present (Fitzgerald (as Child Representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123).
Significant attention was paid in this case to the making and terms of written offers to settle. The Full Court said in Lenova & Lenova [2011] FamCAFC 141:
10.In this jurisdiction, costs do not “follow the event”; the Act prescribes, relevantly, that “subject to subsection (2) … each party to proceedings under this Act shall bear his or her own costs” (s 117(1)). As a result, a litigant, or prospective litigant, cannot rely upon a costs order following upon success in the action as a means of dissuading the other party from pursuing unmeritorious litigation or as a means of seeking to persuade the other party from pursuing litigation.
11.A timely offer in writing genuinely made might, then, be seen as an important part of a limited armory available to prospective litigants seeking to avoid the costs of litigation. Conversely, where, consequent upon success in an action, a litigant can point to the making of a genuine and timely offer having been made, that offer might be seen as an important (albeit not the only) matter in the exercise of the discretion as to the ordering of costs.
12.That consideration must, of course, be balanced against a litigant having a limited capacity to meet a costs order, as well as any other relevant considerations. But, a limited financial capacity to meet an order cannot be determinative; if it were, a party would always be able to plead impecuniosity as a means of avoiding a costs order in circumstances where pursuit of the litigation has continued in the face of a reasonable offer to cease that litigation and the incurring of its attendant costs.
The comparison between an offer to settle and the ultimate result obtained at trial is a matter to be considered. But, it is not per se determinative. An offer that “beats” the ultimate result by $1000 is not per se more persuasive of an order for costs than an offer $1000 “worse” than the ultimate result. The circumstances of the making of an offer and its terms and timing should be considered together with other relevant circumstances in determining the s 117(2) questions.
Here, the husband contends that he made three offers, all of which were better than the result ultimately obtained by the wife. It is contended that each of those offers was made well prior to significant costs being incurred in and about the trial and its preparation. Each of those factors derives its importance (as the judgment in Lenova suggests) by reference to the genuineness of the desire by the husband to end the litigation and to end it at an early stage. A litigant has only two means of resolving litigation, including its constituent issues: settle or go to trial. Genuinely made and timely offers in writing can also be seen to derive importance in respect of prospective orders for costs by reference to the incentive they ought properly provide to take the former course.
What was referred to at the hearing as “the first offer” by the husband was made on 7 March 2011 and, it is submitted, was “more than 100% of the pool [as found at trial]”. The husband offered to pay the wife $785,000, transfer $50,000 of his superannuation and that the wife retain her superannuation and half of the parties’ furniture. It is submitted that, in total, his offer “…equated to $1,069,424 as opposed to the $465,537 [the wife] receive[d] pursuant to the judgment.” The wife rejected this offer.
A second offer was made by the husband on 1 June 2012. It is also contended to be “for more than 100% of the pool [as found at trial] because the husband offered to allow the wife to retain the former matrimonial home with only a $275,570 mortgage or alternatively the property be sold.” It is said that the offer “…equated to $1,110,565 as opposed to the $465,537 the wife received pursuant to the judgment”. Further, it is contended that, at that time, all of the relevant valuations were to hand. The wife rejected the husband’s second offer. She made an offer on 14 August 2012 which, the husband contends, was based on a “notional pool of $1.796M because of the view taken by the wife as to add-backs”. The wife’s offer was that she receive 70 per cent of that sum which equates to about $1,257,200.
The husband’s final offer was made 5 September 2012 (that is, about five months before the trial). The husband contends that this was “for 93.9% of the pool [as found at trial].” That offer, in dollar terms, “equated to $725,820 as opposed to the $465,537 she receive[d] pursuant to the judgment.” At the time of the making of the 5 September 2012 offer, the husband (then acting for himself) was contending that there were “real tangible assets of $772,915 of which $515,000 is tied up as superannuation”. The value of assets found by me was $510,772.99 and the total superannuation interests were $265,122.
It is contended on behalf of the wife that the picture just painted is an unfair or incomplete account of the position taken by the wife in respect of offers. It is submitted on her behalf that, in addition to the offer made by her on 14 August 2012, she also made an offer following separation, on 6 December 2010 and that any offers made by the husband, and her, need to be seen in the context of assertions by her of a lack of proper disclosure for which she contended throughout the proceedings.
The offers made by each of the parties were attended by the sort of assertion and counter-assertion familiar to cases of extremely high conflict, of which this is plainly one. The offers are also redolent of the sort of suspicion that attends cases where one party asserts that the other party has been less than forthcoming in terms of the nature and extent of the disclosure made.
Counsel for the wife submits that the wife’s refusal of the husband’s offers was reasonable. The wife contends that the husband was not forthcoming in terms of disclosure and further contends that at least one of the offers was made “in terrorem”; the husband accused the wife of having committed fraud and theft and misusing her work email and threatened to report the conduct to her employer and to the relevant professional body.
I am not persuaded that either of those matters abrogates or limits the significant weight that ought be attached to the husband’s offers as a circumstance justifying an order for costs. No finding of any lack of disclosure was, ultimately, pressed at trial on behalf of the wife as productive of affecting the result and no findings were made to that effect. Taken together, the husband’s offers can be seen to be indicative of a strong desire to avoid the costs of trial (at least in respect of property issues) and its preparation. Their terms evidence a desire to offer an overall sum (and terms) designed to overcome issues outstanding between the parties about the value and constituent parts of the legal and equitable interests in property of each of the parties.
Financial Circumstances
As earlier referred to, the property pool in this case as found by me was $775,000. The sum received by the wife comprised assets and superannuation interests totaling about $465,000. Each of the parties is remuneratively employed; the wife is a senior public official and the husband a specialist healthcare provider.
The wife has apparently purchased a new matrimonial home with her current partner. Comments from the bar table suggest that it is agreed that the deposit used to purchase the property was sourced primarily from the wife’s father. Unusually, it might be thought, the wife owns only a 1/1000th share in the property and her partner owns a 999/1000th share. She owns a piece of real property at B Street referred to during the trial which is subject to a mortgage. The wife deposes to being equally responsible for the mortgage on the new matrimonial home together with her partner. She deposes to income in her financial statement of about $200,000 per year (noting claimed expenditure of over $300,000 per year).
The wife deposes that an order for costs, in any amount, would result in her filing for bankruptcy. That, in turn, would “have the potential to affect [the wife’s] ability to obtain employment … ”
I accept that the financial circumstances of the parties is a highly relevant consideration, including the financial consequences of an order for costs. Yet, again, that factor cannot be determinative; if it was, an impecunious litigant could litigate with impunity and, indeed, immunity. Present and possible future financial consequences is each an important factor, but only one such factor.
The wife was legally advised during much of the proceedings, although I note that at times she was self-represented. Unlike most self-represented litigants who come before this Court, however, the wife is a senior public official. Advice was available to her as to the possible consequences of proceeding to trial, including the possible costs consequences of doing so. As earlier indicated, the evidence at trial was that the parties had spent approximately $1.2million between them on legal fees; more than one and a half times the value of the pool as ultimately found by me.
Conduct
A number of assertions are made in respect of the wife’s conduct, including that she failed to comply with pre-action procedures. I note in that respect an earlier judgment by Kent J delivered on 18 October 2011 was to the effect that each of the parties had breached undertakings with respect to expenditure in the pre-trial period.
The husband points to the wife seeking relief which, in respect of the interests in property as found, amounted to more than 100 per cent of the value of the legal and equitable interests in property (and superannuation interests) of the parties. That claim derived from her assertion, ultimately rejected, that monies should be added back or treated in a particular way. It is contended, accurately as it seems to me, that the wife did not change her position in relation to joining a bank as a party to the proceedings until day two of the trial. Equally, it is contended, again accurately as it seems to me, that the wife did not provide a copy of her final application until after the close of evidence at trial.
The husband also points to the wife sending, on his calculation, some 103 separate items of correspondence to his then solicitors during a time when she was self-represented.
The wife sought, as part of her final orders, a departure from the assessment of the Child Support Agency. That application was judged incompetent by me as a result of the wife’s failure to comply with the mandatory requirements of such an application.
I take account of those matters, but, when taken together, within a climate of high suspicion and intense conflict, I do not attribute significant weight to them.
One Party Wholly Unsuccessful
The Reasons for Judgment indicate that many of the issues relating to the property interests of the parties were agreed as between them by the commencement of trial. There were though, a number of issues that needed determination by the Court (for example, the treatment of a lease and the add-back of $717,000 sought by the wife).
It is contended on behalf of the husband that he was “largely successful” in respect of those issues. I consider the submission accurate, but I do not consider it unreasonable for the relevant issues to have been agitated at the trial. I do not give significant weight to this factor.
Contentions are also made about whether the overall result was “closer” to that contended for by either of the parties, but I place little store in that.
Conclusion as to Order for Costs
As the submissions filed on behalf of the husband state, the husband’s application for costs is “…for 60% of his costs (associated with the property part of the proceedings).” As I have earlier said, I take the husband’s application to pertain to the property component of the proceedings and, in any event, I consider it should be so confined.
I am satisfied that the circumstances outlined above and, in particular, the making of offers to settle in writing by the husband at the times and in the terms in which they were made justifies an order for costs, insofar as they pertain to the application for settlement of property.
What Order for Costs Should be Made?
Sections 117(2) and (2A) of the Act make it clear that the non-exclusive list of matters enumerated in the latter section must be taken into account not only in determining whether the circumstances justify a costs order but, if so, its terms.
In this case two issues arise: should there be an order for indemnity costs and, if not, what should be the terms of an order for party and party costs.
Indemnity Costs?
In seeking an order for indemnity costs, counsel for the husband relies upon the familiar statements by Shepherd J in Colgate-Palmolive Company and Anor v Cussons Pty Ltd (1993) 46 FCR 225 and subsequent statements by the Full Court of this Court in Yunghanns & Ors & Yunghanns & Ors & Yunghanns (2000) FLC 93-029. The basis of the claim for indemnity costs is said to be the wife’s:
… imprudent refusal of three (3) offers to settle made by the husband and her conduct while legally represented in seeking to prosecute a claim for more than 100% of the pool and for orders affecting the interests of a third party bank without joining it.
The husband has incurred costs in the sum of $793,638. As indicated, he has incurred costs of $66,000 since the end of the trial. A costs order against him was made in the sum of $16,670. The husband’s claim for indemnity costs of $466,000 is for the property component of the proceedings, and is explained to be about 60 per cent of the net amount of the costs paid by him.
It has been suggested that an erstwhile “usual rule” that costs should, in the ordinary course of events, be awarded on a party and party basis has been displaced because of an asserted disparity between the amount of those costs and costs actually incurred. That suggestion has been firmly rejected by both the Full Court of the Federal Court and the Full Court of this Court. The latter, in Prantage & Prantage [2013] FamCAFC 105, in referring to a number of authorities from different states and the Federal Court, made it clear that although a court retains a discretion to order costs other than on a party and party basis (including on an indemnity basis) the “ordinary rule in favour of party and party costs” ought remain.
Despite the reference in s 117(2A) of the Act to “the conduct of the parties to the proceedings in relation to the proceedings…” and “whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders” it ought be remembered that neither costs nor indemnity costs are awarded as a form of punishment (see, for example, Latoudis v Casey (1990) 170 CLR 534 at 543).
I am not persuaded by reference either to the specific factors referred to in Colgate-Palmolive or the other authorities to which I have earlier made mention, that the circumstances of this case warrant an order for indemnity costs.
The Terms of the Order for Party and Party Costs
I have considered each and all of the circumstances outlined above in determining what I consider to be the order for costs which is “just”.
I am also conscious of the fact that, by reason of the parenting orders made, the parties are to co-parent children, one of whom is significantly disabled with autism. In his case, that co-parenting is likely to continue for some time into the future and probably beyond his attaining adulthood. Independent of any order for costs, each of the parties will need to meet enormous legal costs of their own (which, it should be said, are out of all proportion to the value of the matrimonial acquest). Those obligations must be met in the context just described.
As I have earlier indicated, I am not persuaded that those factors (together with the wife’s financial circumstances more broadly) are such that they outweigh other factors; an order for party and party costs in respect of the parties’ competing applications for final property orders is justified. Yet, I consider those factors are important in assessing an order for the quantum of costs which is just.
Taking into account all of the matters I consider to be relevant, I consider it just that the wife pay to the husband in respect of his costs of and incidental to the parties’ respective applications for final property orders, an amount equivalent to two-thirds of his party and party costs. I will make provision for that amount to be agreed or, failing agreement, assessed.
The Costs of the Application in a Case
As noted at the outset of these Reasons, the husband also seeks an order that the wife pay his costs of an Amended Application in a Case filed 19 July 2013. That application sought orders regarding disbursements from the sale proceeds of the parties’ former matrimonial home.
As the husband points out in his affidavit filed in support of the Application, paragraph 51 of the consent orders made by me on 11 June 2013 required that:
That within seven (7) days of settlement of the sale of the former matrimonial home in accordance with these Orders, the Husband and Wife shall jointly instruct Denise Maxwell, solicitor as to the dispersal of the net proceeds of sale of the former matrimonial home and that failing such agreement within 7 days of the settlement of such sale the issue be determined by the Court.
The sale of the parties’ former matrimonial home settled on 11 June 2013. The husband’s solicitors wrote to the wife’s former solicitors on 1 July 2013 enclosing a joint letter of instruction addressed to Denise Maxwell for the wife to sign. The husband’s solicitors were subsequently informed that the wife was no longer represented by that firm and, on 5 July 2013, sent a letter direct to the wife seeking, inter alia, her “…response regarding this issue [of disbursements] by 4pm on Wednesday, 10 July 2013, failing which [the husband] will raise the matter before Justice Murphy at the hearing on 29 July 2013.” As at 19 July 2013, the wife had not responded to the letter from the husband’s solicitor and an Application in a Case seeking orders regarding the disbursements was filed that day by the husband.
The wife filed a Response to the husband’s Amended Application in a Case on 25 July 2013, together with an affidavit which cites the change in her solicitors (stemming from the retirement of her former solicitor on 30 June 2013) as the reason for her failure to respond to the correspondence from the husband’s solicitors. Email correspondence dated 3 July 2013 from the wife’s current solicitor to the husband’s solicitor states:
This firm has today been retained to assist [the wife] in relation to a cross Application for costs arising from the recent trial in this matter…
We have only received part of the voluminous material in this matter late yesterday and have not been in a position to read it. Nor have we had the opportunity to meet our client as yet…
On 5 July 2013, the wife’s current solicitor emailed the husband’s solicitors advising that his “instructions extend only to the issue of costs”.
The wife deposes that as at 25 July 2013, the “matters” the subject of the Application in a Case had been “completed” and it is uncontroversial that by the time of the hearing before me on 29 July 2013, the matters the subject of the husband’s Amended Application in a Case had resolved and, consequently, the application was dismissed.
In those circumstances, I indicated to counsel for the husband that, in my view, the only costs potentially recoverable in respect of the Amended Application in a Case were those associated with the preparation, filing and serving of the application and the supporting affidavit. Counsel for the husband agreed and, consequently, those are the only costs sought in respect of the Amended Application in a Case filed on 19 July 2013.
The sending of the letters by the husband’s solicitors seeking the wife’s agreement occurred at a time when the wife’s former solicitor had only very recently retired. The wife’s new solicitors were still obtaining instructions. The matter resolved prior to a hearing which was required in any event in order to hear the husband’s application for costs.
I do not consider the circumstances warrant the making of an order for costs against the wife associated with the preparation, filing and serving of the application and supporting affidavit.
Discourtesy to the Court
I cannot leave this matter without referring to a matter which I regard as a serious discourtesy to the Court.
At paragraph 6 of the written submissions made on behalf of the wife, it is contended:
The Court has been critical of the Wife in its judgment (paragraph 73) in that she asserted an entitlement in the proceedings to 94% of the property. If this claim was in fact made at the trial (and there is a dispute as to whether that statement referred to is made by her counsel) such a claim was not consistent with the Response filed by the Wife or any of the documents preliminary to the trial. It was always the intention of the Wife expressed in those documents that she receive 70% of the property.
(Emphasis added).
It should be assumed that statements are not made in Reasons without careful checking as to their accuracy. Of course, it goes without saying that errors (both appealable and non-appealable) are made in Reasons for Judgment. It might be thought that very significant care would attend the making of a statement to a court (by anyone, much less counsel) that suggests a judge has made an untruthful statement in Reasons for Judgment. In that respect, legal representatives can readily seek access to audio recordings of proceedings. Transcripts are available upon payment of a fee. The Court has a legitimate right to expect that a practitioner would not make a statement – as part of considered written submissions – without checking one or the other and all the more so when a significant inaccuracy – or untruth – on the part of the Court is alleged.
As was pointed out to counsel for the wife on the hearing of this application (who did not appear for her at the trial), reference to the audio would have readily revealed the following exchange between the Bench and then counsel for the wife:
HIS HONOUR: What do you say the calculation is in percentage terms of the available pool if that result is to be effected in favour of your client?
MR CAMERON: Look, I don’t cavil with it. It would be effectively about 94 per cent of the pool.
HIS HONOUR: How does your client get 94 per cent on any view?
MR CAMERON: Yes.
HIS HONOUR: Your client wants to talk to you, I think, Mr Cameron. I suspect part of the answer to my own question is contained at least – I think Mr Hackett, he will correct me, I am sure, if I’m wrong, has done a calculation based on the superannuation coming in.
MR CAMERON: Yes.
HIS HONOUR: Part, at least, of the answer to my question I suspect is that that’s one of the reasons that your client says that the super should roll into the husband’s account, thereby as it were freeing up a quarter of a million dollars so as to reduce the impact of that, but
MR HACKETT: I’ve done the figures now. I will take your Honour through those in a minute.
HIS HONOUR: But I still struggle with it, I have to tell you.
MR CAMERON: Yes.
HIS HONOUR: So how does your client get 94 per cent?
…
(Emphasis added).
That was not the first time that the figure had been mentioned. The quoted exchange occurred during submissions; a similar figure had been postulated by counsel for the husband at the commencement of the proceedings (although, at that stage, not adopted by counsel for the wife).
The relevant statement was checked before the Reasons were delivered. It might be thought that, as a basic tenet of professional responsibility, the same courtesy would be accorded to the Court and all the more so when it is suggested that a statement made by a judge in Reasons for Judgment is not true.
Directions
As I have earlier indicated, provision will be made for the filing of a consent minute in respect of Item 51A of the Minutes. Directions for a hearing of that issue will be made if it is not resolved within 28 days.
I order accordingly.
I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 5 September 2013.
Associate:
Date: 5 September 2013
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