Mendicino and Mendicino and Ors

[2014] FamCA 692

FAMILY COURT OF AUSTRALIA

MENDICINO & MENDICINO & ORS	[2014] FamCA 692
FAMILY LAW – COSTS – Where the wife did not comply with orders and filed an amended pleading outside the timeframe ordered  – Where each of the respondents seek an order that the wife pay their costs thrown away by the amended pleading – Whether there are circumstances justifying an order for costs – Whether each party’s costs of and incidental to the applications for strike out should be reserved – Where the considerations in s 117(2A) can only be properly addressed when the substantive claims are determined
Family Law Act 1975(Cth)
APPLICANT:		Ms Mendicino

FIRST RESPONDENT: Mr Mendicino

SECOND RESPONDENT:	Mr D Mendicino
THIRD RESPONDENT:	Ms E Mendicino
FOURTH RESPONDENT:	M F Mendicino
FIFTH RESPONDENT:	G Pty Ltd
FILE NUMBER:	BRC	875	of	2013

DATE DELIVERED: 27 August 2014

PLACE DELIVERED: 27 August 2014

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 27 August 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr S Doyle QC with
Mr SJ Williams of Counsel

SOLICITOR FOR THE APPLICANT: Cooper Grace Ward

COUNSEL FOR THE FIRST RESPONDENT: Mr N Beaumont SC with Mr A Macauley of Counsel

SOLICITOR FOR THE FIRST 

RESPONDENT:

Hopgood Ganim Lawyers

COUNSEL FOR THE SECOND, THIRD AND

FIFTH RESPONDENTS:

Mr D Savage QC with Dr J Brasch of Counsel

SOLICITOR FOR THE SECOND AND

THIRD RESPONDENTS:

Phillips Family Law

COUNSEL FOR THE FOURTH 

RESPONDENT:

Mr M Kearney SC

SOLICITOR FOR THE FOURTH AND FIFTH RESPONDENTS: Emanate Legal

Orders

It is ordered that

1. The costs of each party of and incidental to the applications of the respondents to strike out the applicant’s statement of claim, including the costs of the applicant filing and serving on 25 August 2014 an amended statement of claim, be reserved to the trial judge.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Mendicino & Mendicino & Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 875 of 2013

Ms Mendicino

Applicant

And

Mr Mendicino

First Respondent

And

Mr D Mendicino

Second Respondent

Ms E Mendicino

Third Respondent

M F Mendicino

Fourth Respondent

G Pty Ltd 

Fifth Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. Ms Mendicino whom I refer to as the wife and Mr Mendicino whom I refer to as the husband met and commenced a relationship in 1988; married in 2000 and finally separated in August 2012.  Their divorce was pronounced on 5 January 2014.  The marriage produced four children now aged between 12 and 6 years.

2. On 7 February 2013 the wife commenced property settlement proceedings within the meaning of Part VII of the Family Law Act 1975 (Cth) (“the Act”).

3. By an amended application filed on 14 April 2014 the wife joined three of the husband’s siblings, together with the fifth respondent as trustee of the Mr B Mendicino Family Trust, to the proceedings.

4. A number of companies and trusts comprise what may conveniently be referred to collectively as “the C Group”.  The C Group holds substantial property interests.

5. By her amended application the wife sought declarations that the husband and two of his siblings, the second and third respondents, hold their interests in the C Group as partners as to a one third interest each; and that the husband and his three siblings hold their interests in the fifth respondent as to a one quarter interest each.  The wife sought property orders framed by reference to such declarations.

6. On 6 June 2014 I made an order that on or before 20 June 2014 the wife file and serve upon the respondents a pleading of the statement of facts and causes of action and claims for relief the wife sought to advance.

7. In response to the wife’s pleading filed on 20 June 2014, aside from requesting and receiving further and better particulars of the pleading, each of the respondents filed applications seeking an order for the striking out of the wife’s pleading.

8. On 6 August 2014, at a time when the hearing today had been listed, I made an order directing the wife to file and serve any amended pleading upon which she intended to rely by 4.00 pm on 22 August 2014, in advance of today’s hearing.

9. On 25 August 2014, obviously after the date stipulated in the order referred to, the wife filed and served an amended pleading.

10. In the meantime, each of the respondents (other than the fourth respondent) had prepared and filed written submissions for the purpose of the hearing of the strike out applications listed for today.  Obviously, those submissions were directed to the previous pleading.

11. In light of the amended pleading of the wife delivered, I reiterate, only on Monday of this week, outside the timeframe of my orders of 6 August 2014, the respondents determined not to pursue their strike out applications.

12. However, each of the respondents seek, in the circumstances, an order that the wife pay their costs thrown away by the amended pleading.

13. On one level there are justifying circumstances, within the meaning of s 117(2) of the Act, for the orders for costs sought by the respondents. The wife had, by the order of 6 June 2014, an opportunity to properly plead a case against the background of having determined upon the relief sought in her amended application filed on 14 April 2014. The amended pleading demonstrates the fundamental inadequacies of the wife’s earlier pleading.

14. Further, the wife did not comply with the ordered requirement that she file and serve any amended pleading no later than the 22 August 2014 – an order sought and designed for the purpose of the respondents not addressing the earlier pleading in their strike out applications if there was to be an amended pleading.

15. Given the course now taken by the respondents in light of the amended pleading it can legitimately be inferred that had the wife framed the pleading in the first place in conformity with the amended pleading the respondents would not have mounted and pursued strike out applications.  Further, if the amended pleading had been delivered within the timeframe ordered the relevant respondents would not have incurred the cost of preparing and filing submissions addressed to the now obsolete previous pleading.

16. Notwithstanding these features I have resolved that the appropriate order as to costs at this stage is to reserve each party’s costs of and incidental to the applications for strike out.

17. A trial will obviously be required to resolve the claims now advanced by the wife in her amended pleading.  Nothing I say now can be taken as any kind of determination or expression of opinion as to the merits or otherwise of the wife’s pleaded claims.

18. One outcome may be that in the end result the wife fails to establish at a trial any of the claims she advances as to the husband’s interests in property.  In that event questions as to costs and the costs of the respondents, other than the husband, being included as parties to these proceedings will no doubt be

    
    

    re-visited in that context.

19. At the other end of the spectrum the wife might establish one or more or all of the claims she mounts as to the husband’s interests in property for the purposes of s 79.  Given the nature and content of those claims as pleaded, the corollary of the establishment at trial of any of those claims is that the husband will be seen to have failed to discharge his absolute duty of disclosure in the s 79 proceedings.  The wife would be in a position to contend, as to costs, that she was put to very significantly more expense, and expense that would have been avoided, by the husband’s conduct.

20. I cannot at this stage, and do not, make any assessment as to which outcome is more likely.

21. In my judgment having regard to the divergence in possible outcomes at a trial the considerations in s 117(2A) including in particular conduct in

    
    

    sub-section (c) can only, in all of the circumstances, be properly considered in light of the outcome of the substantive proceedings.

22. No party is prejudiced by an order for costs to be reserved and that is the order I make.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 27 August 2014.

Associate:

Date: 27 August 2014