MAYNE & MAYNE (No.2)

[2009] FMCAfam 910

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MAYNE & MAYNE (No.2) [2009] FMCAfam 910

FAMILY LAW – Practice and procedure – costs – extension of time for filing costs application – stay of earlier orders made – access to documents produced under subpoena.

Family Law Act 1975, ss.117(1), (2), (2A)(g), (3), (4), (5), 117AA, 117AB, 117AC, 118

Inwood & Barnett [2008] FMCAfam 1446
McAlpin (1993) 16 FamLR 888
Penfold v Penfold (1980) 114 CLR 311
Re LGM and CAM (2006) 35 FamLR 598
Starkey and Starkey (2009) 41 FamLR 177

Applicant: MR MAYNE

Respondent: MS MAYNE

File Number: CAC 114 of 2007

Judgment of: Neville FM

Hearing date: 5 August 2009

Date of Last Submission: 5 August 2009

Delivered at: Canberra

Delivered on: 4 September 2009

REPRESENTATION

Counsel for the Applicant: Mr Nash SC

Solicitors for the Applicant: Farrar Gesini & Dunn

Counsel for the Respondent: Mr Watkins

Solicitors for the Respondent: Strong Law Pty Ltd

ORDERS

1. The Wife’s application to extend time for the filing of an Application in a Case in relation to costs be refused.

2. The Wife is to pay the costs of the Husband in relation to the professional costs incurred by him by the attendance of Ms Bell to inspect late-produced documents on the first day of the trial.

3. Order 9(a) of the Orders of 5^th June 2009 be varied to the extent that the Respondent Wife pay the Applicant Husband’s costs, on an indemnity basis, in relation to the Court events set out in that Order.

4. The Respondent Wife pay the Applicant Husband’s costs, as agreed or taxed, in relation to the Application in a Case filed on 26^th June 2009.

5. Save for Order 1 herein refusing the Wife’s application to extend time to file an Application in a Case in relation to costs, all Orders made in relation to these proceedings be stayed.

6. The issue of access to documents produced under subpoenae be stood over to be dealt with by the Full Court of the Family Court of Australia.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
CANBERRA

CAC 114 of 2007

MR MAYNE

Applicant

And

MS MAYNE

Respondent

REASONS FOR JUDGMENT

A.    Introduction

1. 1.  On 5^th June this year I delivered judgment and made orders in property proceedings between these parties.

2. So far as is relevant, those orders provide as follows:

   (1) The Wife pay to the Husband the sum of $230,369.26 (“The Payment”) within 60 days of the date of these Orders (“The Due Date”).

   (2) If the whole of the Payment has not been made by the Due Date:-

   (a) The Wife do such things necessary to transfer to the Husband at the expense of the Husband a portion of her interest in the Property known as Property C, New South Wales being the whole of the land contained in the Certificate of Title Lots [omitted] Deposited Plan [omitted] and Lot [omitted] Deposited Plan [omitted] (“Property C”).

   (i) That the portion referred to in Order (2)(a) be equivalent in value to the Payment as referred to in Order (1).

   (ii)In the event that there is a dispute as to the value of the portion that Colin Davies & Associates be appointed as a joint valuer. 

   (3) If the Wife has not transferred a portion of her interest in “Property C” within 42 days of Order 2 coming into effect:-

   (a) The Wife shall, in addition to the Payment, pay to the Husband interest on the payment or the amount outstanding from time to time at the rate prescribed by the Family Law Rules to be calculated from the Due Date to the date of Payment.

   (b) The Wife shall do all things necessary to effect the sale of the Properties known as “Property C” situated at and known as Property C in the state of New South Wales and “Property S” situated at and known as Property S in the state of New South Wales. 

   (c)That the Husband and Wife do all things necessary to cause the proceeds of the sale of the Property to be distributed as follows:-

   (i) To pay all costs, commissions and expenses of the sale.

   (ii) To pay all the usual rates adjustments.

   (iii) To pay the amount required to discharge any encumbrances secured over the property.

   (iv) To pay so much of the Payment as is then outstanding together with interest in accordance with Order (3)(a) to the Husband.

   (v) To pay the balance to the Wife. 

   (d) Liberty be reserved to either party to apply to the Court on seven days’ notice to the other with respect to the terms and conditions of the sale.

3. The orders also made provision for the Applicant Wife to pay costs as set out in Orders 8 & 9.  Those orders read:

   (8) Pursuant to rule 21.02 of the Federal Magistrates Court Rules 2001, the parties may make an application for an order for costs within 28 days of the date of these Orders.

   (9) Subject to any application made pursuant to Order 8:-

   (a) the Wife pay the Husband’s costs, either agreed or taxed, in relation to the following Court events:-

   (i) 22^nd November 2007;

   (ii) 5^th March 2008;

   (iii) 25^th March 2008; and

   (iv) 30^th April 2008.

   (b) The Wife pay $500.00 in relation to the Husband’s costs of the application to re-open.  

   (c) Otherwise, each party pay their own costs.

4. On 26^th June, the Husband filed an Application in a Case seeking orders that “the wife pay the husband’s costs of and incidental to these proceedings on an indemnity basis”, as well as the costs of the Application itself.

5. On 3^rd July, the Wife filed an appeal in relation to the orders made on 5^th June.

6. On 22^nd July, the Wife filed a Response to the Husband’s Application that was filed on 26^th June.  She sought orders as follows:

   (1) Leave to extend the period for filing a Costs Application in accordance with orders 8 and 9(a) and (b) made on 5 June 2009.

   (2) Pending further Order the proceedings commenced by way of Application in a Case filed on 25 June 2009 be stayed.

   (3) That Orders 1,2,3,4 and 9(a) of the Federal Magistrates Court of Australia at Canberra made on 5 June 2009 be stayed pending the appeal of the Ms Mayne filed on 3 July 2009 being determined, dismissed, discontinued or abandoned.

7. There was one other issue raised at the hearing on 5^th August. It concerned access to documents produced under two subpoenae issued by the Wife on 23^rd July.  They were directed to (a) The Director of [G] Funding and (b) The Administration Co-Ordinator of State Government Employees [C] Limited.  Access to documents produced was resisted by the Husband, inter alia, on the grounds that the documents were irrelevant to the proceedings, and or that they were privileged because they arose out of advice regarding the conduct and funding of the litigation.

8. By way of summary, in the light of the above, the Husband seeks an indemnity costs order against the Wife in relation to the substantive proceedings.  In essence he relies upon various findings that I made against Ms Mayne which are set out in my reasons for judgment to which I have already referred.

9. For the Wife’s part, she seeks leave of the Court to file out of time her application in relation to costs.  She also seeks a stay of the orders made on 5^th June.

10. I heard all of these applications on 5^th August. As at the hearing,

    
    

    Mr Watkins appeared on behalf of Ms Mayne and Mr Nash SC appeared on behalf of Mr Mayne in relation to the respective applications.  I will deal firstly with the wife’s application to extend time for filing her costs application.

B.        Application to extend time

1. I have already noted the orders made on 5^th June in relation to costs, and in particular the order requiring the parties to make any formal application for costs within 28 days.  The time within which any costs application should have been filed expired on or about 3^rd July.  Curiously or not, that date coincided with the date of Ms Mayne filing her Notice of Appeal.

2. Apart from any other consideration, the filing of the Notice of Appeal is most telling.  This is to say that the Wife and her legal advisers were obviously very actively engaged in their focus on procedural aspects of the matter – hence the filing of the Notice of Appeal.  In such matters, as in all litigation, procedural time-limits are critical.  In my view, it is inconceivable that attention to one matter (the Notice of Appeal) would be given and no, or insufficient, attention be given to another, significant aspect of the proceedings (the costs application).

3. Moreover, there was no explanation given to the Court as to why the Wife’s costs application was filed three (3) weeks out of time.  This omission was significant.

4. For these reasons, the application to extend time for filing a Costs Application must be refused.

C.        Application for indemnity costs of substantive proceedings

1. Subject to ss.117AA, 117AB, 117AC and 118, section 117 (1) – (5) of the Family Law Act1975 (“the Act”) governs the Court’s power or jurisdictional range in relation to orders concerning costs.

2. Summarily, and subject to the sections noted, the Act provides that each party is to bear their own costs. Section 117(2) provides that if 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)), “make such order as to costs … as the Court considers just.”

3. Section 117(2A) provides for matters to which the Court “shall have regard” if an order under s.117(2) is to be made. Section 117(2A) is of very wide compass. It concludes with sub-section (g), as follows: “Such other matters as the Court considers relevant.”

4. It is otiose to retail the matters already set out in the Reasons for Judgment in the substantive proceedings. Only one further matter warrants particular mention. Reference was made to it in the substantive reasons in some detail.[1]  In my reasons I noted that a significant quantity of documents were produced by Ms Mayne both on the day before the trial commenced and on the morning it began.  I also noted the significant and adverse impact it had on Mr Mayne and the conduct of his case (not to mention that it was one further impediment to the Court to the smooth and efficient conduct of the trial, albeit that it was not an insurmountable one).

   [1] See Reasons for Judgment at [21] – [34] & [48] – [49].

5. During the “indemnity costs” application, Mr Nash submitted that the action to which I have just referred necessitated the engagement of a further solicitor (Ms Bell) to undertake the urgent task of combing through the “late-breaking” documents. 

6. I do not accept Mr Watkins’ submission that the costs of going through these very-lately produced documents was a cost that was going to be incurred in any event `in the ordinary course of things’ and should not be treated as an additional cost that should be borne by his client.  The fact was that his client’s conduct took the lack of or late production of documents out of “the ordinary course” of litigation. It was

   
   

   Ms Mayne’s conduct that resulted in the extra attendance and work being done in circumstances of the trial effectively being underway. 

7. In my view, Mr Watkins’ client should bear the extra cost incurred by Mr Mayne in this regard. This is to say that the costs paid by

   
   

   Mr Mayne specifically in relation to Ms Bell attending Court to consider the documents produced by Ms Mayne the day before and on the morning of the hearing are to be paid by the Wife.

8. The High Court in Penfold v Penfold,[2] spoke of there being “circumstances justifying the making of an order for costs”,[3] and likewise circumstances that effectively put the other party to the expense of disproving certain facts and which “tend to undermine the integrity of proceedings.”[4]

   [2] (1980) 144 CLR 311.

   [3] 144 CLR at p.315 (Stephen, Mason, Aickin & Wilson JJ).

   [4] 144 CLR 311 at p.318 (Murphy J).

9. Penfold has, of course, been consistently followed by many other cases, including the Full Court decisions of McAlpin (Nicholson CJ, Baker & Maxwell JJ),[5] and in Re LGM and CAM (Holden, Coleman & May JJ).[6]  In the latter case, the Full Court said, at [39], that “no particular facts or circumstances must be established in order to constitute “circumstances” that “justify” an order for costs.”[7]

   [5] (1993) 16 Fam LR 888.

   [6] (2006) 35 Fam LR 598.

   [7] Recently, see also Starkey and Starkey (2009) 41 Fam LR 177 (Murphy J).

10. On the facts of the case as detailed in my reasons for judgment, and having regard to the extra labour required precisely because of

    
    

    Ms Mayne’s conduct in relation to very significant delays in relation to production of documents, in the light of the application made by

    
    

    Mr Mayne, in my view, in addition to the costs order concerning the legal services required to be provided by Ms Bell (to which I have already referred), it would be just to make an indemnity costs order, but only in relation to the Court events in relation to the dates specified in Order 9(a) made on 5^th June 2009.  Such an order will be made.

11. It also follows, in my view, that the costs of the Application in a Case, filed on 26^th June 2009, should also be granted.  Those costs are to be either agreed or taxed.  I turn to the issue of the stay sought by

    
    

    Ms Mayne.

D.        The stay application

1. The principles in relation to such applications are well known and well settled.  Among other places, I have summarised them in Inwood & Barnett.[8]  In that judgment, at [3] – [7], I said:

   [3] The cases might be distinguished, however, between stay applications in commercial litigation as opposed to stay applications in family law proceedings.  That distinction was recognised specifically by Kirby J, sitting alone in the High Court in JRN & KEN v IEG & BLG (1998) 72 ALJR 1329.  At p.1332 [16] his Honour said:

   In my opinion, some adaptation of the rules stated in the cases governing stays in this Court must also occur in cases which affect significantly third parties who are not parties before the Court and, in particular, children whose welfare must always be in the mind of a court in making an order affecting their interests.

   [8] [2008] FMCAfam 1446.

   [4] This distinction was recognised and accepted by the Full Court of the Family Court of Australia in EJK v TLS (No 2) (2006) 35 FLR 590 at 594 [17], where their Honours cited the observations of Kirby J in JRN & KEN to which I have just referred. 

   [5] In family law stay applications, the invariable original touchstone is the judgment of Nygh J in Clemmett v Clemmett (1981) FLC 93-103.  More important recent important cases from the family law jurisdiction are O v L (2005) 196 FLR 224 (Boland J); Elspeth v Peter [2007] FamCA 254 (Benjamin J); and a decision of his Honour Altobelli FM in M v DB [2007] 36 FLR 501. 

   [6] From the non-family law jurisdiction, but which cases are not infrequently referred to in family law proceedings, are the New South Wales Court of Appeal judgment in Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 (Kirby P, Hope and McHugh JJ), Commissioner of Taxation (Cth) v Myer Emporium Limited (No 1) (1986) 160 CLR 220 (Dawson J), and Jennings Construction Limited v Burgundy Royale Investments Pty Limited (No 1) (1986) 161 CLR 681 (Brennan J).  More recent High Court discussion of the principles applicable in stay applications, almost invariably citing one or more of the cases to which I have just referred (especially Myer Emporium and Jennings Construction), can be found in Hayne J’s recent ex tempore judgments in Nauru Phosphate Royalties Trust v Harris [2007] HCA Trans 329 (27th June 2007) and Gheorghiu v Perpetual Trustees Victoria Limited [2008] HCA Trans 5 (24th January 2008).

   [7] In the light of the jurisprudence articulated over many years the following may be taken as a summary of the principles to be applied in relation to a stay in the family law jurisdiction:

   An appeal does not, of itself, confer or require the granting of a stay as of right.

   A stay does not constitute a “parenting order” per se and thereby immediately or directly invoke the operation of s.60CA regarding the best interests of the child being paramount.

   …

   The application must not be a mere delaying tactic.

   The grounds of appeal must be substantial.

   The Court must consider whether the refusal to grant a stay would render the appeal nugatory in any respect.

   …

   A Court is required to assess the issue of “hardship” on each of the parties should the stay be granted or in the event the stay is refused. (See here the discussion of Boland J in O v L at pp.230-231).

2. Among other submissions, Mr Nash SC pressed the point that the grounds of appeal were not substantial, and inferentially, that the appeal was something of a delaying tactic.  However attractive such a submission is to the judicial officer whose judgment is being appealed, I do not see that it is useful for me otherwise to comment on this aspect of submissions.  Rather, whether of her own making or not, I am moved more by the consideration of hardship, to which Boland J referred in O v L, in the determination of the stay application.

3. “Hardship” in this case is not all one-sided.  There are few litigants who do not experience both financial and emotional pressures as a result of being embroiled in litigation.  Family law litigation is uniquely fraught.  I am mindful of the financial pressures on both parties in these proceedings.  I am also mindful that Mr Mayne is entitled, in effect, to the fruits of the orders made.  At the same time, Ms Mayne is entitled to some protection from orders being implemented but which would have to be “undone” in the event that the appeal is successful.  The transfer of property, and its re-transfer, would be somewhat onerous.  Both parties are entitled to “move on” with their lives, as best they can in the circumstances in which they [still] find themselves.

4. On balance, and having regard to the principles set out above, I would grant the stay application in relation to all orders made by me thus far in the proceedings, except in relation to Ms Mayne’s application in relation to costs.

E.        Access to documents produced under subpoena

1. The final matter to address, and briefly so, relates to documents produced under subpoena sought by Ms Mayne.  They relate to funding arrangements Mr Mayne has put in place concerning the litigation.  Unsurprisingly, access to the documents was opposed by Mr Mayne.  That was on the basis, among other things, that the litigation in this Court was now at an end, and in any event, such matters were irrelevant.  Mr Nash SC also observed that the two subpoenae were also couched in extremely wide terms.  They could, in his view, also likely embrace a range of documents that would otherwise be the subject of legal professional privilege.

2. For his part, Mr Watkins submitted that while the substantive issues before this Court were closed, the issue of costs was not.  Therefore, he submitted, it was open to his client to seek the information contained in the documents produced.

3. For my part, if I needed to express a view, (a) there is insufficient evidence before me to make a considered decision about the applicability or otherwise in relation to the legal professional privilege argument; (b) the terms of the subpoenae are wide and could, not unreasonably, be considered something of a fishing expedition; (c) rather than make any formal ruling on the documents, it would be better for this aspect to be dealt with by the Full Court in the course of the appeal in the light of its consideration of the appeal proper and its ruling(s) thereon.  I also raised with Counsel that a more appropriate course might be that, subject to the directions and or ruling(s) of the Full Court, the appellant might ultimately make an application to adduce further evidence in the course of the appeal.

4. In the light of the above, subject to any ruling or other decision by the Full Court in these proceedings, formally I stand over the issue of access to any documents produced under subpoena to be dealt with by the Full Court of the Family Court in the course of, or in the light of, the result in the appeal.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Neville FM

Associate:  D-R. Gale

Date: