Meadows v Vance
[2016] FCCA 1814
•20 July 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MEADOWS & VANCE | [2016] FCCA 1814 |
| Catchwords: COSTS – Application for costs – where Respondent seeks costs of hearing that did not proceed due to illness of counsel for the Applicant – indemnity costs – party and party and party costs – costs certificate – where hearing had to be adjourned due to illness of Applicant’s Counsel – whether a costs certificate should issue under Federal Proceedings (Costs) Act 1981 (Cth), s.10(3) – whether costs should be assessed on an indemnity basis. |
| Legislation: Family Law Act 1975 (Cth), ss.79, 90RA, 90RD, 90SF, 90SK, 90SL, 90SM, 117 Federal Proceedings (Costs) Act 1981 (Cth), s.10 |
| Cases cited: Bevan & Bevan (2013) 49 Fam LR 387; FLC 93-545;[2013] FamCAFC 116 W & S (2005) 192 FLR 214; 33 Fam LR 546; FLC 93-229; [2005]FamCA 568 Zawadzki & Zawadzki [2014] FamCA 238 |
| Applicant: | MS MEADOWS |
| Respondent: | MR VANCE |
| File Number: | SYC 1466 of 2011 |
| Judgment of: | Judge Scarlett |
| Hearing dates: | 25 May 2015, 19 August, 22-23 March 2016 |
| Date of Last Submission: | 28 April 2016 |
| Delivered at: | Sydney |
| Delivered on: | 20 July 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jefferis (until 1 December 2015), Mr Siggins |
| Solicitors for the Applicant: | Kenneth Harrison Solicitor |
| Counsel for the Respondent: | Ms De Vere |
| Solicitors for the Respondent: | Cleary Finlay Solicitors |
ORDERS
The Applicant is to be solely entitled to the exclusion of the Respondent to the all items of personal property in her possession or standing in her name including:
(a)The boat and replacement engine;
(b)Ford Falcon (omitted);
(c)Mitsubishi Pajero;
(d)Mobile home;
(e)All items of furniture and furnishings; and
(f)All bank accounts, insurance policies, superannuation interests and all other items currently in her sole name or possession.
The Respondent is to be solely entitled to the exclusion of the Applicant to all of his right title and interest in the real property being Lot (omitted) in Deposited Plan (omitted) situate at and known as Property S in the State of New South Wales.
The Respondent is to be solely entitled to the exclusion of the Applicant to the all items of personal property in his possession or standing in his name including:
(a)All motor vehicles including motor cycles;
(b)All items of furniture and furnishings; and
(c)All bank accounts, insurance policies, superannuation interests and all other items currently in his sole name or possession.
The Applicant is to indemnify the Respondent and keep him indemnified in respect of all liabilities including mortgages, loans and credit card debts in her name.
The Respondent is to indemnify the Applicant and keep her indemnified in respect of all liabilities including mortgages, loans and credit card debts in his name.
The Applicant is to pay the Respondent’s costs thrown away in respect of the proceedings on 1 December 2015 fixed in the sum of $5,136.00 within six (6) months of the date of this Order.
In the event that either party seeks an order that the other party should pay their costs of these proceedings then that party or parties must file and serve an Application in a Case and an affidavit setting out the amount of costs sought and the basis upon which those costs are calculated by Monday 25 July 2016.
All other Applications are dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Meadows & Vance is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 1466 of 2011
| MS MEADOWS |
Applicant
And
| MR VANCE |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application for property settlement. It is a matter that has had a chequered history in this Court, having been commenced as long ago as 10th March 2011, when the Applicant filed her initiating Application. She was represented by a solicitor at the time (although not her current solicitor, Mr Harrison).
On 19th September 2011 the Application was dismissed under the provisions of Rule 13.03C for non-attendance by the Applicant (Meadows & Vance[1]).
[1] [2011] FMCAfam 1163
The matter was later restored to the list and on 13th August 2012 the Respondent sought an order that the Applicant provide security for costs in the sum of $10,000.00. This Application was dismissed on 10 October 2012 (Vance & Meadows[2]).
[2] [2012] FMCAfam 1069
The parties attended a Conciliation Conference with a Registrar on 9th November 2012 but no settlement was reached.
The Application was set down for final hearing. The hearing commenced on 25th May 2016 and was adjourned part-heard to 19 August 2015. Further evidence was taken on that day and the matter was adjourned part-heard to 1st and 2nd December 2015, Regrettably, Counsel for the Applicant was unable to proceed with the case, due to illness. The Respondent’s costs of the aborted hearing on 1st and 2nd December 2015 were reserved.
The Respondent filed an Application in a Case on 4th March 2016 seeking an order for costs of the two days lost on 1st and 2nd December 2015. The Application is supported by an affidavit of the Respondent’s solicitor, Mr Gary Cleary, sworn 2nd March 2016.
The Application was adjourned and required two further hearing days, on 22nd and 23rd March 2016. The evidence occupied the whole of the allotted two days and directions were made that the parties’ Counsel should provide written submissions by 8th and 29th April 2016, which they did.
Orders Sought
The Applicant, by an Amended Initiating Application filed on 10th September 2013, seeks the following declarations and orders:
Family Law Act 1975
1.A Declaration pursuant to Section 90SM of the Family Law Act 1975 (“the Act”) that the Applicant and Respondents[3] entered into a de facto relationship on or about 8th February[4], 2006.
2.A Declaration that the Applicant holds an equitable interest in the property at [5]Property S (“the Property”) to the extent of a 50% share of the property, or such other share as this Court may determine.
3.A Declaration that the Respondent on or about 1st April 2008 entered into an agreement with the Applicant in relation to the Property, to the effect that if the parties ceased living together, the Respondent would pay to the Applicant the sum of $150,000 and/or the property would be sold if necessary to give effect to that agreement.
4.A Declaration that in or about October or early November 2010 in the course of refinancing the property and obtaining a joint home mortgage loan , the Respondent agreement agreed the Applicant would then become a joint registered proprietor of the Property.
5.An Order that the Respondent transfer a one half share of his right, title and interest of the Applicant, subject only to encumbrances and mortgages such as were in existence as at the date of separation of the parties.
6.In the alternative, that this Honourable Court make an order pursuant to section 90SM(1)(a) and (1)(c) of the act, ordering the Respondent to pay a settlement to the Applicant in substitution for her interests in the amount of $190,000.00.
[3] sic
[4] Also claimed to be 8 March 2006 rather than February
[5] sic
Proprietary Estoppel
7.A Declaration that in equity the Respondent is estopped from denying that the Applicant, due to the conduct and representations of the Respondent, has altered her position in the expectation of obtaining an equitable and proprietary interest in the Property.
8.An Order that the beneficial interests of the Applicant and Respondent in the property be altered to give effect to the Applicant’s expectation, in such manner as is just and equitable.
9.Such further or other orders as may be required to do justice in the proceedings.
10.The costs and incidentals to these proceedings be paid by the Respondent.
It was submitted by Mr Siggins, Counsel for the Applicant, that the Court has jurisdiction to deal with and resolve financial property matters arising out of de facto relationships. New South Wales is a participating jurisdiction (Family Law Act 1975 (Cth), s.90RA).
Both parties were residents of New South Wales (s.90SK). The Applicant claims that they commenced living in a de facto relationship from about 8th March 2006 until about 29th November 2010. The Respondent contends that the parties did not commence living in a de facto relationship until about the end of May 2008 and they separated on 30th November 2010.
The Respondent seeks the following orders in respect of the substantive Application.
1. That the Application be dismissed.
2. That the Applicant pay the costs of the Respondent.
Costs
On 4th March 2016 the Respondent filed an Application in a Case, seeking costs thrown away by the adjournment of the part-hear proceedings on 1st and 2nd December 2015 due to the illness of the Applicant’s Counsel. The orders sought are:
1.That the Applicant, Ms Meadows, pay the respondent, Mr Vance, costs of the proceedings in the Federal Circuit Court on 1st and 2nd December 2015 of $16,196.00 on an indemnity basis or otherwise as agreed or assessed.
2.In the first alternative, that the Applicant, Ms Meadows, pay the Respondent, Mr Vance’s costs of the proceedings in the Federal Circuit Court on 1st and 2nd December 2015 pursuant to Schedule 1 of the Federal Circuit Court Rules 2001.
3.In the second alternative, that the Respondent, Mr Vance, be granted a certificate pursuant to Section 10(4) of the Federal Proceedings (Costs) Act 1981 in relation to the costs of the 1st and 2nd December 2015.
The Application is supported by an affidavit of the Respondent’s solicitor, Mr Cleary, sworn on 2nd March 2016.
The Proper Approach to the Determination of a Property Application
The proper approach to determination under, in this case, section 90SM of the Family Law Act 1975 (Cth), is, first of all, to follow the principles set out by the High Court of Australia in Stanford v Stanford.[6]
[6] (2012) 247 CLR 108; 47 Fam LR 481; FLC 93-518; [2012] HCA 52
First, the Court must consider the requirements in subsection 90SM(3) of the Act, which are in similar terms to those in subsection 79(2). Subsection 90SM(3) provides that:
The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
The High Court held in Stanford that the Court must first identify:
…the existing legal and equitable interests of the parties in the property.
Second, their Honours held at [38] that, although section 79, which is the equivalent of s.90SM:
...confers a broad power on a court to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion.
The third principle, and perhaps the most important, is:
Whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial contributions) set out in subsection 79(4).[7]
[7] In this case, subsection 90SM(4); [2012] HCA 52
Thus, the decision in Stanford means that the Court must consider the requirements of subsection 79(2) or 90SM(3), as the case may be, before embarking on the four step process set out by the Full Court of the Family Court in Hickey & Hickey.[8] In Hickey, the Full Court set out a process of four interrelated steps that must be taken by a court when determining a property application:
Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of subsection 79(4)(a), (b) and (c)[9]and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in subsection 79(4)(d), (e), (f) and (g).[10] (“the other factors”) including the matters referred to in subsection 75(2)[11] so far as they are relevant. Fourthly, the Court should resolve what order is just and equitable in all the circumstances of the case.[12]
[8] (2003) 30 Fam LR 35; FLC 93-143; [2003] FamCA 395
[9] Subsection 90SM(4)(a),(b) and (c)
[10] Subsection 90SM(4)(d), (e), (f) and (g)
[11] In this case, the matters referred to in subsection 90SF(3)
[12] [2003] FamCA 395 at [39] per Nicholson CJ, Ellis & O’Ryan JJ
It is neither contradictory nor redundant to consider again whether a proposed order is just and equitable under subsection 90SM(3), because the Court is considering the matter after having undertaken the three previous steps referred to in the Hickey decision.
Background
The Respondent was born on (omitted) 1959.
The Applicant was born on (omitted) 1969.
The Respondent separated from his former wife, Ms D, in January 2006. On 14th July 2006 they entered into Consent Orders resolving the property issues between them. A property at Property S, New South Wales, was transferred into the name of the Respondent. At the time it was valued at about $400,000.00.
On 24th August 2006 the Respondent refinanced the mortgage over the property and paid the sum of $150,000.00 to his former wife. The balance of the mortgage then stood at $280,102.07.
In September 2006 the Respondent moved into the Housing Commission home occupied by the Applicant and paid her rent whilst renovations were being done to the Property S property.
The Respondent paid the Applicant $3,500.00 in September 2006.
A (omitted) truck was purchased for the Applicant in February for $10,000.00. The parties’ evidence differs as to which of them paid the money for the truck. The Applicant says that she paid cash for the truck but the Respondent says that he did so by way of a cheque from his (omitted) Bank account.
Between February 2008 and November 2010 the Respondent paid the sum of $11,500.00 to the Applicant to reimburse her for items purchased on her credit card for the renovation of the Property S property.
The Applicant claims that the parties commenced living in a de facto relationship in February or March 2006. The Respondent asserts that it was not until 2008 that the parties commenced cohabitation as de facto spouses.
Between July 2008 and November 2010 the Respondent paid the Applicant’s private health insurance in a total amount of $3,056.60.
Between February 2009 and November 2020 the Respondent paid the Applicant’s Optus accounts in the total sum of $1,244.75.
Between March and November 2010 the Applicant arranged for two (country omitted) students to move into the property at Property S and pay rent to her of $145.00 per week each.
In April 2010 the Applicant shipped the (omitted) truck to her father in (omitted) and received the sum of $15,000.00 in return.
In June 2010 the Respondent purchased a Ford Falcon (omitted) for $5,500.00 and spent $600.00 on the vehicle. The Applicant took this vehicle on separation.
In August 2010 the Respondent purchased a boat for $5,000.00 and spent another $1,000.00 replacing the engine. The Applicant took the boat with her when the parties separated.
The property in Property S was valued at $455,000.00.
The parties separated on 29th[13] or 30th[14] November 2010. The Applicant left the home in Property S, removing the furniture. Cohabitation never resumed.
[13] Applicant’s account
[14] Respondent’s account
On 2nd December 2010 the Respondent to an Apprehended Violence Order against him on a “without admissions” basis. He was also charged with seven criminal offences as a result of a complaint by the Applicant. The charges were all dismissed after a hearing.
The property in Property S was valued at $450,000.00 on 14th January 2013.
Hearing and Evidence
The hearing commenced on 25th May 2015. No oral evidence was taken on that day but the parties’ Counsel were granted access to material produced on subpoena. A Notice to Produce was called on but no documents were produced.
The Applicant gave oral evidence on 19th August 205 and was cross-examined by Ms De Vere for the Respondent. Her evidence did not conclude on that day and the proceedings were adjourned part-heard until 1st and 2nd December 2015.
On 1st December 2015 the Applicant’s then Counsel. Mr Jefferis, sought an immediate adjournment as he was unwell and required medical treatment. The proceedings were adjourned to 15th December 2015 for mention only.
On 15th December Mr Jefferis was granted leave to withdraw for medical reasons.
The hearing proceeded on 22nd and 23rd March 2016.
The cross-examination continued on 22nd March and the evidence was concluded.
The Applicant relied on an affidavit by Mr P, a valuer, affirmed on 27th November 2015. Mr P valued the property at Property S at $625,000.00. He was not required for cross-examination and the parties agreed on his valuation.
The Respondent gave oral evidence on 22nd March and was cross-examined by Mr Siggins, who had taken over the brief. His cross-examination continued the following day. Later that day the Court also heard oral evidence from Ms J who gave evidence as part of the Respondent’s case. She was cross-examined by Mr Siggins.
Just and Equitable
It was submitted by Counsel for the Respondent, Ms De Vere, that it would not be just and equitable to make any order altering existing interests.
The Parties’ Assets and Liabilities
I find the parties’ assets and liabilities to be as follows.
Non-superannuation Asset Pool
I find the value of the non-superannuation asset pool to be
a)Property S (Respondent) $625,000.00[15]
[15] Agreed value, see affidavit od Mr P 27.11.2015
b)Boat plus replacement engine (Applicant) $6,000.00
c)Ford Falcon (omitted) (Applicant) $6,100.00
d)Applicant’s Holden Commodore (written off) $Nil
e)Mitsubishi Pajero (Applicant) $3500.00
f)Applicant’s household furniture pre-relationship $unknown
g)Furniture purchased during the relationship (Applicant) $9,540.00
h)Applicant’s mobile home (purchased at separation) $25,000.00
Total $675,140.00
The Applicant received an amount of $2,800.00 from her motor vehicle insurer after Holden Commodore was written off.
The Respondent has disclosed a (omitted) motor cycle acquired after separation. I regard it as a financial resource available to the Respondent.
I find the gross value of the non-superannuation pool to be $675,140.00.
Liabilities
I find the liabilities to be as follows:
a)Mortgage outstanding (Respondent) $294,000.00
b)Respondent’s Visa Card debt $ 1,500.00
c)Respondent’s car loan $ 9,600.00
Total liabilities $305,100.00
By deducting the liabilities of $305,100.00 from the assets of $675,140.00 I arrive at a total of $370,040.00.
I find the net total of the non-superannuation asset pool to be $370,040.00.
Superannuation
In his Financial Statement of 1st May 2014 the Respondent shows a superannuation interest of $105,000.00 with (omitted). As Ms De Vere correctly submits, the Applicant is not seeking a superannuation splitting order.
The Contributions of the Parties
The parties’ evidence differs as to the value of their respective contributions during their relatively short de facto relationship.
It is the Applicant’s case that the Respondent benefited financially from the time that he commenced living with the Applicant, as he did not pay any rent. This enabled him to continue making the mortgage payments.
Counsel for the Applicant submitted that the Applicant made substantial contributions, both in terms of funds and work and effort put into the property once the parties moved into property in Property S in June 2008. On her evidence the Applicant contributed money to the purchase of various materials, household expenses, repairs and improvements and she carried out work undertaking home improvements.
Further, the Applicant claims that she contributed her earnings from operating the truck. She was never asked for rent, nor did she pay rent.
It was submitted by Mr Siggins that the Applicant has not obtained any property or funds from the assets in the relationship since the parties separated in 2010 and her financial position has not altered. He submitted that:
She is homeless. Further she is wholly dependent upon Commonwealth payments for income.[16]
[16] Outline of Submissions for the Applicant (undated) paragraph [20]
It is clear that at the commencement of the relationship the Applicant had what Ms De Vere described as “minimal assets” and the vast majority of the original contributions came from the Respondent. Whilst the Applicant claimed to have purchased the (omitted) truck in April 2008 from her savings, she provided no evidence at the hearing that she had any savings. Her income was the Newstart allowance which she retained until June 2008, when she notified Centrelink that she was living in a de facto relationship. I am satisfied that the truck was purchased by the Respondent at a cost of $10,000.00.
I accept the evidence of the Respondent that the duration of the relationship between the parties extended from May 2008 until the end of November 2010. The fact that the Applicant continued to receive Centrelink benefits until June 2008 suggests that she did not regard herself as being in a de facto relationship until about that time.
Thus, the relationship was a short one of approximately two and a half years.
The Respondent was employed on a full-time basis during the relationship. He was made redundant by his then employer on 31 January 2008 and received a payout of $30,085.07. He applied these funds to the costs of the renovation of the Property S property.
The Respondent purchased the (omitted) truck for $10,000.00. The truck was operated as a business for a while and the evidence suggests that the bulk of the work was performed by the Respondent. In around April 2010 the Applicant shipped the truck to her father in (omitted). He still has the truck in his possession. The evidence is unclear as to how much the Applicant’s father paid her for the truck, whether it was $25,000.00 or $15,000.00, but $15,000.00 seems to be more likely, noting that the truck was purchased for $10,000.00. The Applicant retained those funds. They will be regarded as a financial resource available to the Applicant.
I am satisfied from the evidence that the Respondent paid for most, if not all, of the parties’ household expenses, along with the Applicant’s private health insurance and her telephone accounts.
The Applicant claimed that she contributed to the work involved in the renovation of the house at Property S but her work appears to have mainly been limited to ordering items and paying for them on her credit card, for which she was reimbursed by the Respondent. The Applicant has not made any payment towards the ongoing costs of maintaining the property since separation at the end of November 2010.
As for non-financial contributions, there were no children of the relatively short relationship. The Applicant’s niece and other members of her family stayed with the parties from time to time. The Applicant had two (country omitted) students staying and paying board which she retained. The Respondent gave unchallenged evidence that after the parties’ separation he had to repay the initial bond monies to the two students.
It was submitted that the Court would accept the evidence of the Respondent as to the work that he performed in the renovation of the property. Both parties appear to have contributed to the household duties.
It must be said at this stage that where the evidence of the parties differs about their contributions and about other matters I prefer the evidence of the Respondent. The Applicant’s evidence throughout the hearing was unsatisfactory, uncorroborated and generally unconvincing. The Respondent was frequently able to corroborate his assertions by the production of documentary evidence.
The Respondent’s Counsel, Ms De Vere, has made these submissions about the legal principles to be considered, referring to a decision of Hogan J in Zawadzki & Zawadzki[17] , where it was held at [289] that these legal principles should be remembered when considering the relevant matters mandated by s.79 of the Act:[18]
a)Community of ownership arising from marriage has no place in the common law (Stanford[19] at 39], citing Hepworth v Hepworth[20] per Windeyer J at 317);
b)The exercise of the discretion conferred on the Court must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity (Bevan & Bevan[21] at [73]);
c)There is no presumption of equality of contribution between parties to a marriage, irrespective of the length of their union (Mallet v Mallet[22]);
d)The assessment of the contributions made by parties is holistic and not a matter of mathematical computation (G & G[23] at 79,697; Norbis v Norbis[24] at 523);
e)The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship (Dickons & Dickons[25] ; Lovine & Connor[26]; Bolger & Headon[27] at [28]); and
f)A trial judge is bound to analyse and weigh all of the contributions including indirect contributions (which are to be given significant weight (Mallet v Mallet[28]) and should not be undervalued (Ferraro & Ferraro[29]); and
g)There is no requirement that contributions be ‘tied’ to particular assets and the Court’s role is to evaluate the significance of various contributions (Farmer & Bramley[30]).
[17] [2014] FamCA 238 – The copy on the Family Court Database bears the citation [2014] FamCA 236 but that appears to be an error
[18] These matters are, of course, equally relevant in considering s.90SM
[19] supra
[20] (1963) 110 CLR 309
[21] [2013] FamCA 116
[22] (1984) 156 CLR 605
[23] (1984) FLC 91-582
[24] (1986) 161 CLR 513
[25] [2012] FamCAFC 154
[26] (2012) FLC 93-515
[27] [2014] FamCAFC 27
[28] (1984) 156 CLR 605
[29] (1993) FLC 92-335
[30] (2000) FLC 93-060
In my view, the contributions of the Respondent vastly outweigh those of the Applicant. I find that the contributions favour the Respondent over the Applicant by 90% to 10%.
Other Factors taken into account under subsection 90SM(4)(d) to (g) of the Family Law Act
Paragraph (d) of subsection 90SM(4) requires the Court to take into account the effect of any proposed order on the earning capacity of either party to the relationship. It does not appear that the earning capacity of either party to the relationship will be affected to any great degree, if at all.
Paragraph (e) of subsection 90SM(4) requires the Court to take into account the matters referred to in subsection 90SF(3) so far as they are relevant.
The Applicant was born on (omitted) 1969. She is 47 years of age. She is said not to be in good health but there is no evidence on this issue.
The Respondent was born on (omitted) 1959, so he is 57 years of age. He appears to be in good health.
The Applicant has financial resources in the form of the money paid to her by her father for the (omitted) truck and the amount of $2,800.00 she received from her insurer when her Holden Commodore was written off. The Respondent has his superannuation and the (omitted) motorcycle.
There are no children of the relationship and neither party has a duty to maintain any child or other person.
There are no factors under s.90SF(3) that call for any adjustment in favour of one or other party. Thus, the assessment of the parties’ contributions at 10% by the Applicant and 90% by the Respondent remains unchanged.
Application for a Declaration seeking an equitable interest in the property at Property S – Proprietary Estoppel
The Applicant seeks relief under the equitable doctrine of proprietary estoppel. It is contended by her Counsel that, by his words and actions, the Respondent through his conduct encouraged the Applicant to believe that she had an interest in the property. It is further contended that the Respondent reinforced this with his later actions when seeking to refinance. It is contended by the Applicant but denied by the Respondent that it was accepted by both parties that the Applicant would acquire a part of the property.
It was submitted that the Applicant had security in her Department of Housing accommodation and had no reason to leave it. However, the Applicant claims that on the basis of discussions between the respondent and herself from October 2007 onwards she was led to believe that the Respondent was offering to her that if she agreed to move into his house she would obtain an interest in the property. The Applicant further claimed that the parties agreed that if she did move into the Property S property and they later split up, the Respondent would pay her an amount of $150,000.00.
The Applicant claims that she relied on those representations by the Respondent when she surrendered her Department of Housing unit. It was submitted that the Applicant was very involved in assisting with the renovation of the Property S property and expended her own money in doing so, which is denied by the Respondent because she believed that she was going to acquire an interest in it.
The parties made a joint application for finance to the building society to obtain further funds on the security of the property which the Applicant submits is evidence of their mutual agreement that she would obtain an interest in the property.
Counsel for the Applicant submitted that the Applicant has suffered a detriment because the Respondent resiled from an agreement which included the term that she would receive the sum of $150,000.00 if the parties were to separate. If there had not been an agreement, the Applicant would not have surrendered the lease on her Department of Housing unit. Thus, she has suffered a considerable detriment as she now has no accommodation or property and in the circumstances equity should intervene. I note, however, that the Applicant stated in evidence on 19 August 2015 that she does have accommodation at (omitted), on the New South Wales (omitted).
Mr Siggins submitted that under the doctrine of proprietary estoppel the Court is empowered to adjust the interests of the p[arties if it is satisfied that it is just and equitable in all the circumstances to do so. The contributions of the Applicant in this case were made under her understanding and belief that she was in a relationship with the Respondent.
Mr Siggins submits that in the present circumstances there is nothing to suggest that the Applicant’s expectation was less than that stated by her, namely that in the event the parties separated she would receive a monetary payment of $150,000.00. The remedy that should be afforded to the Applicant, he submitted, is to compensate her for the failure by the Respondent to adhere to the promise to meet his obligation and pay the agreed sum. It is not otherwise feasible to fix an amount to remedy the damage. The Applicant has lost the tenure of her Housing Commission unit which is not able to be redressed.
The Applicant relies on a number of authorities, including Delaforce v Simpson-Cook[31] where it was held that a proprietary estoppel had arisen where a husband had agreed to leave a property to his wife in his will but failed to do so before he died (see also Grundt v Great Boulder Proprietary Gold Mines Ltd[32]).
[31] [2010] NSWCA 84
[32] (1938) 59 CLR 641
It was submitted that proprietary estoppel by encouragement such as is contended in the present case can come into existence where the conduct of the party estopped did not comply with the expectation (Plimmer v Mayor of Wellington[33]; Flinn v Flinn[34]; Gillett v Holt[35]).
[33] (1884) 9 App Cas 699
[34] [1993] 3 VR 712 CA
[35] [2001] Ch 210 CA
Further, Mr Siggins submitted that there is no limit on the relief that may be afforded to reverse the detriment suffered by the party entitled to the estoppel (Giumelli v Giumelli[36]).
[36] (1999) 196 CLR 101
It was submitted that, prima facie, the Court should enforce the reasonable expectation of the Applicant which the Respondent created and encouraged. The Applicant was in a position where she had security in terms of tenure of the Department of Housing unit which she occupied for a modest rental. She had no reason to want to move given the length of time that she had been on the waiting list to obtain the unit (see Jennings v Rice[37]).
[37] [2003] 1P & CR 100
It was submitted that the detriment that followed the parties’ separation and affected the Applicant cannot be said to be anything less than serious and substantial. Without the representations made by the Respondent and his urging the Applicant would have remained living in her unit.
The Applicant altered her position in good faith and in the circumstances it is submitted that she is entitled to enforce the agreement between the parties.
The Applicant contends that the Court should order equitable damages in the sum of $150,000.00.
Counsel for the Respondent submitted that the orders and declarations sought by the Applicant are misconceived and the Court does not have jurisdiction to determine this issue.
Ms De Vere submitted that the Applicant did not seek to invest the Court with cross-vested jurisdiction in her various Applications, nor was the issue raised by either of the Applicant’s Counsel at any time during the hearing of the Application.
Ms De Vere went on to submit that, if the court were against her on this point, the Applicant did not make out a case for the Court to find a promise or inducement as alleged. The purported promise is that the Respondent would “give” the Applicant his house. The evidence of the Respondent is that he had acquired the property in a property settlement with his former wife, he never offered to give the Applicant his home, he never intended to sell his home and he never offered the Applicant a sum of money of their relationship came to an end.
It was conceded that in cross-examination Ms J agreed that she and the Applicant had had a discussion before the Applicant moved into the respondent’s home and that one issue discussed was the Applicant’s concern about leaving her Department of Housing home. Ms De Vere submitted, however, that this evidence does not confirm that an inducement was ever offered by the Respondent. The evidence of the Applicant was also that at that time another person was also registered on the lease with the Department of Housing.
Further, it was submitted that the Applicant did not make out a case for the Court to find that she suffered a detriment. The purported detriment is that the Applicant gave up her unit which she had “for life”. No evidence was called to support that assertion. The Applicant failed to give the Court any evidence as to when she applied for Department of Housing accommodation after the parties separated. The evidence establishes that the Applicant had at least applied by 2014 at which time she was offered accommodation, which she rejected.
The evidence is that the Applicant has accommodation in (omitted), so she is certainly not homeless, as was submitted.
Conclusions
Even if I were persuaded that the Court does have cross-vested jurisdiction to entertain the Applicant’s equitable claim of proprietary estoppel, I would not be minded to make the declarations that she seeks. The Applicant’s evidence throughout the case has been unsatisfactory and unconvincing and very light on corroborative detail.
I am not persuaded that the Applicant’s evidence shows that either:
a)there was a representation made by the Respondent that, if the Applicant were to give up her Department of Housing accommodation and move into the property at Property S with him, he would give her a proprietary interest in the property and if the parties were to separate, he would pay her the sum of $150,000.00; or
b)that the Applicant has suffered the detriment that she claimed, namely that she has lost her accommodation and is now homeless, as the evidence is that she is residing in premises in (omitted).
The Applicant’s account of this alleged agreement was, at best, highly improbable and her evidence in support was unconvincing.
Turning now to the case for a property settlement under s.90SM of the Family Law Act, I have found that the Respondent’s contributions outweigh those of the Applicant by 90% to 10%.
Of the assets set out in paragraphs [50]-[57] above, it appears that the Applicant received the following assets:
a)The boat $6,000.00
b)The Ford Falcon (omitted) $6,100.00
c)Mitsubishi Pajero $3,500.00
d)Furniture $9,540.00
e)The mobile home $25,000.00
Total $50,140.00
The assets retained by the Applicant represent approximately 13.55% of the net non-superannuation asset pool. As her contributions have been assessed at 10%, her entitlement would only be to an amount of $37,040.00.
Counsel for the Respondent has submitted that the Court should not make any adjustment and that the assets retained by each of the parties would be just and equitable in the circumstances when one considers the length of the relationship, the length of the post-separation period and the various contributions.
Whether the proposed orders under s.90SM(4) are just and equitable
Subsection 90SM(3) requires the Court to consider whether, in all the circumstances, it is just and equitable to make the proposed orders under s.90SM(4).
If, as I propose to do, I order that the Respondent should be responsible for the debts, the parties would find themselves in the situation where the Respondent’s entitlement would see him with a figure of $333,036.00 and the Applicant’s entitlement would see her with an entitlement amounting to $37,040.00.
As the Applicant has already retained assets to the value of $50,140.00, this would put her in the unfortunate position of having to pay the Respondent the sum of $13,100.00.
I recently considered this situation in a similar case recently, where an equally unsuccessful Applicant found himself in such a situation (Harding & North[38]). I formed the view then that it would not be just and equitable to require the Applicant to make a payment in that situation.
[38] [2016] FCCA 1673
What the Respondent asked for in that case was for the Application to be dismissed with costs, as is the case here.
I propose to take a similar approach on this occasion. I am satisfied that it would be just and equitable to order that the parties should retain the property that they currently have in their name or possession and that the Respondent should retain his superannuation intact.
The Respondent should be responsible for his debts, including the mortgage secured over the property at Property S.
Costs
The Respondent has brought an Application in a Case, seeking his costs of the two days thrown away on 1st and 2nd December due to the sudden application for an adjournment made by Counsel then appearing for the Applicant on the morning of 1st December 2015.
The reason for the application for the adjournment was the illness of Counsel for the Applicant and the stated need for urgent medical tests to be undertaken. Counsel for the Applicant subsequently sought leave to withdraw on 15th December 2015, for medical reasons. That leave was granted.
The Respondent in the Application in a Case seeks initially costs for the two days on an indemnity basis in the sum of $16,196.00. In the alternative, the Respondent seeks:
a)costs in accordance with Schedule 1 of the Rules; or
b)a certificate under S.10(4) of the Federal Proceedings (Costs) Act 1981.
The affidavit of the Respondent’s solicitor, Mr Cleary, sworn on 2nd March 2016, succinctly sets out the reason for the claim at paragraph [4]:
On 1 December 2015 the matter was unable to proceed due to the Applicant’s Counsel’s incapacitating condition. I had had received no prior notification from the applicant’s solicitor or counsel that this condition, which I understand had been known to him for several weeks, would necessitate an adjournment of the hearing.[39]
[39] Affidavit of G. Cleary 2.3.2016 at [4]
Mr Cleary’s account accords with my understanding from the situation as it was told to the Court on the morning of 1 December.
The Applicant has not filed a Response to this Application in a Case nor was the issue addressed in the Written Submissions of her Counsel.
Whether a Costs Certificate should issue
The first matter to be considered, in my view, is whether this is a proper case for a certificate under s.10 of the Federal Proceedings (Costs) Act 1981.
I had occasion to consider this issue in a recent decision of Griffin & Croft[40], which was a case where a party successfully obtained a certificate in respect of costs thrown away on two occasions before this Court due to the non-availability and then the late arrival of the Family Report.
[40] [2015] FCCA 2685
I noted in that case that the Federal Proceedings (Costs) Act makes provision for the limited reimbursement of costs incurred by a party in certain circumstances.The Court can, at its discretion, provide a certificate stating the Court’s opinion that it would be appropriate for the Attorney-General to bears some part of a party’s costs.
The grant of a costs certificate is entirely discretionary (In the Marriage of Tyson (No.2)[41].
[41] (1993) 16 Fam LR 795; FLC 92-401
Subsection 10(3) of the Federal Proceedings (Costs) Act provides relevantly that:
Subject to this Act, where:
(a)the hearing of any proceeding in a court to which this section applies is discontinued and a new hearing is ordered; and
(b)the discontinuance and new hearing are not attributable to the neglect, default or improper act of any party to the proceedings,
the court may, on the application of a party to the proceedings, grant to that party a costs certificate in respect of the proceedings.
This case can be distinguished from the decision of Mullane J in Redshaw & Redshaw[42] where a hearing could not proceed on 4th and 5th July 1989 because the Judge who was to hear the matter had become ill on 29th June. The hearing did not commence on either day because there was no Judge available to hear it.
[42] (1989) 13 Fam LR 495; FLC 92-053
Mullane J declined to grant the application on the basis that the hearing had not commenced.
Halligan FM[43] followed Redshaw in Lummis & Lummis[44], as did Guest J in W & S[45]and Pascoe CFM[46] followed W & S in Marsh & Marsh.[47]
[43] As his Honour then was
[44] [2008] FMCAfam 1274
[45] (2005) 192 FLR 214; 33 Fam L:R 546; FLC 93-229; [2005] FamCA 568
[46] Now Chief Judge Pascoe
[47] (2009) 42 Fam LR 310; [2009] FMCAfam 1160
In an earlier decision of Minchin & McDonald[48] I granted an application for a costs certificate in circumstances where, in part-heard proceedings, the Applicant’s Counsel had received a telephone call that very morning from the Commonwealth Attorney-General offering her an appointment as a Judge of the Family Court which she accepted.
[48] [2012] FMCAfam 1328
In accordance with the protocol that dictates that the particular barrister was precluded from continuing to appear before any Court following her acceptance of an appointment to be a Judge, she sought leave to withdraw which was granted. The hearing, quite obviously, could not continue as the Applicant needed to brief another barrister.
In the present case before me, the hearing had definitely commenced and was quite clearly part-heard on 1st December 2015, which meets the requirement of paragraph 10(3)(a).
However, it does not appear to me that the test in paragraph (b), being that “the discontinuance and new hearing are not attributable to the neglect, default or improper act of any party to the proceedings”, has been met.
This case can be distinguished on its facts from Minchin & McDonald, where Counsel for the Applicant had received the telephone call that very morning. There was little that she could do at such short notice other than immediately seek leave to withdraw.
In the present case, Counsel for the Applicant had not suddenly taken ill that morning without warning. He had known for some time that he was ill and he told the Court that his doctor had previously advised him to have an MRI scan which he had not done. However, his symptoms had deteriorated and he made the decision that morning that he was unable to proceed with the case.
As harsh as it may sound, Counsel for the Applicant should have made the decision at least the day before and informed his instructor as a matter of urgency. It is likely that if the Respondent’s solicitor had been informed the day before that the Applicant’s Counsel was unwell and unlikely to be in a position to attend Court the following day, then it would have been possible to take action to mitigate the amount of costs thrown away.
This is not a case where it is appropriate to issue a certificate under s.10(3) of the Federal Proceedings (Costs) Act and that Application will be refused.
Application for Costs
It appears to me that the relief sought by the Respondent in respect of the costs and disbursements thrown away should be sought under s.117(2) of the Family Law Act. The subsection provides that if, in proceedings under this Act, the Court is of the opinion that there are circumstances that justify it in doing so it may subject to subsection 117(2A), make such order as to costs whether by way of interlocutory order or otherwise as the Court considers just.
Subsection 117(2A) sets out those matters to which the Court must have regard in considering what, if any, order should be made under subsection 117(2). Not all of them are relevant to this Application for costs but I note the following:
a)The Applicant’s financial circumstances are strained and not as favourable as those of the Respondent;
b)Neither party is in receipt of assistance by way of legal aid;
c)The conduct of the parties in relation to the proceedings is a particularly relevant matter, as I am of the view that the Applicant’s counsel should have made a decision about his health prior to the morning of the adjourned hearing, so that his instructor could have contacted the Respondent’s solicitors the day before. Had this been done, the solicitors could have agreed on an administrative adjournment without the need for Counsel and their instructors to appear on 1st December 2015.
I am therefore of the view that an order for costs is warranted, but not in the terms sought by the Respondent.
I note that the primary application is for costs to be assessed on an indemnity basis.
It is well established that costs will only be awarded on an indemnity basis (also known as a solicitor-client basis) where there are unusual or exceptional circumstances (see Colgate Palmolive Co v Cussons Pty Ltd[49]; In the Marriage of Kohan[50]; Prantage & Prantage[51]).
[49] (1993) FCR 225; 118 ALR 248; [1993] FCA 536
[50] (1992) 16 Fam LR 245; (1993) FLC 92-340
[51] (2013) 49 Fam LR 197; FLC 93-544; [2013] FamCAFC 105
In my view, there is nothing unusual or exceptional so as to warrant an order for costs on an indemnity basis. Costs will be assessed on the basis of Part 1 of Schedule 1 to the Rules.
I am not of the view that the circumstances warrant an award of costs for both days, 1st and 2nd December. It was known to the parties on the morning of 1 December that the proceedings had to be adjourned and there was no likelihood of any evidence being taken on 2nd December. The proceedings were adjourned to 15th December for mention, so it was clear to the Respondent’s lawyers that they would not be required at Court the following day.
I my view there are circumstances that justify making an order for the costs thrown away on 1st December, including any necessary disbursements.
I propose to allow costs on the basis of:
a)Item 8 – preparation for final hearing, additional day $1,158.00
b)Item 13 – daily hearing fee, full day $2,048.00
c)Item 12 – advocacy loading $1,024.00
d)Disbursements:
i)Mr S – witness expenses $440.00
Ms J – witness expenses $466.00
Total $5,136.00
Counsel’s fees are not allowed as a separate disbursement where the advocacy loading applies (Colan Products Pty Ltd v Luxon (No.2)[52]).
[52] [2002] FMCA 90
I propose to order that the Applicant is to pay the Respondent’s costs of the day in the sum of $5,136.00. I will allow six months to pay.
Orders
In the substantive matter, I intend to order that the parties will retain the assets which they present hold or in their names and the Respondent is to indemnify the Applicant in respect of the debts in his name.
All other applications will be dismissed, except that if either party seeks an order for costs of the substantive proceedings, he or she must make an application by Monday 25th July.
I certify that the preceding one hundred and fifty (150) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Date: 20 July 2016
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