Milstead and Richards and Anor (No.2)

[2019] FCCA 106

FEDERAL CIRCUIT COURT OF AUSTRALIA

MILSTEAD & RICHARDS & ANOR (No.2) [2019] FCCA 106

Catchwords:
FAMILY LAW – Costs.

Legislation:

Family Law Act 1975 (Cth), ss.117, (1), (2A)

Cases cited:

Prantage & Prantage (2013) FLC 93-544

Kohan & Kohan (1993) FLC 92-340

Colgate-Palmolive Company & Anor & Cussons Pty Ltd [1993] FCA 801

JEL & DDF (No.2) (2001) FLC 93-075

Applicant: MR MILSTEAD

First Respondent: MS RICHARDS

Second Respondent: COMPANY E PTY LTD

File Number: LNC 481 of 2010

Judgment of: Judge McGuire

Hearing date: 9 January 2019

Date of Last Submission: 9 January 2019

Delivered at: Launceston

Delivered on: 31 January 2019

REPRESENTATION

Counsel for the Applicant: Mr C Gunson SC
appearing with Ms J Sawyer as junior Counsel

Solicitors for the Applicant: Chris Boland

Counsel for the Respondents: Mr M Turnbull

Solicitors for the Respondents: Fitzgerald & Browne

The second Respondent appeared in person

ORDERS

1. That both the applicant’s and first respondent’s applications for costs filed on 28 September 2016 be dismissed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT HOBART

LNC 481 of 2010

MR MILSTEAD

Applicant

And

MS RICHARDS

First Respondent

And

COMPANY E

Second Respondent

REASONS FOR JUDGMENT

Application

1. I have before me competing applications for costs following lengthy litigation between these parties and involving two separate trials.

2. The applicant, Mr Milstead, seeks costs against the first and second respondent jointly and severally and on an indemnity basis.  Although he asks that his costs be taxed, Mr Milstead’s Counsel estimates his solicitor/client costs to approximate $500,000.

3. The first respondent, Ms Richards, asks for costs on a party/party basis against the applicant for the second only of the two trials.

4. The applicant and first respondent are both represented in this application where submissions occupied a day of Court time. The second respondent company, like at the trials, is unrepresented but where its director, Mr Beable, appears in person and opposed the applicant's application. 

Background

1. There were lengthy and hard-fought property proceedings between the parties.  The first trial occupied nine days in a matter which had been initially listed for two days and, as is apparent from a reading of my Reasons in the substantive matters, should reasonably have been completed within that time period.

2. My judgment in the first trial was reserved on 16 August 2013. During the period of being reserved, the second respondent through its director Mr Beable, placed the company, Company E Pty Ltd as trustee for the Family Trust, into voluntary administration and did so without prior notice to either the applicant or to the Court. My Reasons were handed down on 21 February 2014 and, unsurprisingly, the administrators then led an appeal given that the voluntary administration had effectively stayed proceedings pursuant to s.44OD of the Companies Act. Somewhat unusually the Full Court then remitted the matter to me although in hindsight perhaps understandably given that I had made findings of fact and credit after a nine day trial and where the subject matter of the Appeal might be seen as a technicality (leaving aside the timing and lack of advice as to the voluntary administration!).

3. The matter returned to me for continued hearing on 26 November 2015. Properly in my view, Counsel for the parties agreed that my findings of fact from the first trial should stand. Nevertheless, and generally in accordance with the conduct of this matter, the trial then occupied another seven days of Court time. It must be noted, however, that the placing of the company into voluntary administration did feature prominently in the evidence at the second trial with the assertion that this had been done as a sham and so as to defeat the applicant's entitlement under the Family Law Act.

Evidence

1. The applicant in this matter relies upon his financial statement sworn 9 January 2019 and an affidavit of his solicitor, Christopher John Boland, sworn 28 September 2016.  I also took from the applicant an exhibit being the Orders of Lindsay J in the Supreme Court of New South Wales in … being in respect of proceedings in that Court as to the Will and estate of the late Mr A which featured prominently in my own Reasons for judgement in both trials.

2. Ms Richards, the first respondent, relies on her own affidavits sworn 29 September 2016, 27 October 2016, 15 June 2018, 7 November 2018 and 31 December 2018. The second respondent did not bring further evidence.

3. The matter proceeded before me on the basis of submissions only.

Relevant Law – costs

1. Section 117(1) of the Family Law Act 1975 (‘the Act’) provides a general rule that each party in family law proceedings shall bear his or her own costs subject to subsection (2) which empowers the Court to exercise a discretion to make an award for costs if there are 'justifying circumstances'.

2. Subsection (2A) provides:

   In considering In considering what order (if any) should be made under subsection (2), the Court shall have regard to:

   (a)  the financial circumstances of each of the parties to the proceedings;

   (b)  whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;

   (e)  whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

(g)    such other matters as the Court considers relevant.

1. It is well established that the 'usual' for awards of costs is made on a party/party basis[1].  There is, however, no doubt that Courts have the power to make awards of costs on an indemnity basis being on a broader base of all solicitor/client costs reasonably incurred. The Full Court in Kohan & Kohan[2] acknowledged the discretion in the Court to make indemnity costs orders but identified the caution to be taken in exercising that discretion and in departing from the 'usual order' perhaps best articulated in the well-known decision of Colgate-Palmolive Company & Anor & Cussons Pty Ltd[3] where the Court noted some of the circumstances where such departure might be entertained including:

   (a) where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success.  In such cases, the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts …

   (b)making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud…

   (c)evidence of particular misconduct causing loss of time to the Court and to other parties…

   (d)the making of allegations that ought never to have been made, or the undue prolongation of a case by groundless contentions…

   [1] Prantage & Prantage (2013) FLC 93-544

   [2] (1993) FLC 92-340

   [3] [1993] FCA 801

   (e)     an imprudent refusal of an offer of compromise.

2. The Full Court of the Family Court in JEL & DDF (No.2)[4] observed that the category of cases in which it would be appropriate to make an order for indemnity costs does not appear to be fully defined but held that the failure to accept an offer to compromise was, alone, insufficient to justify the making of a costs order on an indemnity basis.  Their Honours stated:

   In our opinion, the failure to accept an offer which, in retrospect, perhaps, should have been accepted is, without more, insufficient to justify the making of a costs order on an indemnity basis.  The rejection of the offer must be, at the very least, imprudent.  We express no opinion as to when the rejection of an offer may be so classified…

   [4] (2001) FLC 93-075

The Applicant's Case

1. The applicant says that there are special or unusual features of the conduct of the respondents in this matter such as to cause the Court to move from the 'usual' order for costs on a party/party basis. Those 'special features' also ground the application for costs generally, namely that the conduct of the trial by the first and second respondent was dilatory and drawn out and primarily because of a lack of disclosure by the respondents.  That is, the inordinate length of these trials was directly caused by the lack of disclosure necessitating lengthy and intrusive cross-examination by the applicant's Counsel at the trials such that might have been avoided by proper disclosure.

2. Secondly, the applicant argues, more discreetly, that the first and second respondents should have been informed by my findings at the first trial including as to the percentage distribution of the property pool such that the final result should have been known and obvious to them and hence so as to avoid a further seven days of hearing.  Counsel for the applicant notes that agreement was reached between Counsel at the trial and the Court prior to the start of the second trial that my findings of fact and credit would stand at the second trial and also that the result was, in the end, of little divergence.  To this end, Counsel for the applicant leaves it open to me to make an order for costs only as to the second trial.

3. A third but connected argument for the applicant is based on the different financial circumstances of the parties. The connection is where the applicant complains that the trial was drawn out because of the lack of full disclosure by the respondents in circumstances where the first respondent made it clear from the outset (by seeking an order for 103% of the property pool) that she was desirous of the applicant receiving nothing from these proceedings and where she was a person of some wealth and resources as against the applicant who was individually of parlous financial circumstances.  That is, the applicant asserts that it is open for the Court to find that the first and second respondents by reason of their inactions and action in failing to disclose, acted to financially preclude the applicant from any meaningful result from these proceedings on the basis of their superior financial positions.  Put simply, the applicant asserts that the respondents were prepared to lengthen the proceedings to the extent that any award for the applicant would be 'eaten up' in his own costs. 

The First Respondent's Case

1. The first respondent denies the assertions of the applicant above and bases her own application essentially on offers of settlement put throughout the proceedings and which are now disclosed in which were each rejected by the applicant.

2. My order at the conclusion of the second trial included a cash adjustment to the applicant from the respondents of $289,661 on a 40% distribution of the property pool to him.  The applicant also retained certain assets.  There was only one offer made by the applicant being at or before the first trial of a cash adjustment to him of $500,000, which he obviously did not better.

3. The respondents made numerous offers as follows:

   (i)11/2012 - $50,000;

   (ii)1/8/2013 - $110,000;

   (iii)14/8/13 - $200,000;

   (iv)31/7/2015 - $260,000;

   (v)8/10/15 - $350,000; and

   (vi)6/10/15 - $500,000.

4. The last of the above offers in the sum of $500,000 was withdrawn before the expiration of time allowed for consideration and therefore has little impact on my determination here.  The offer of $260,000 was made prior to the commencement of the second trial and where my Reasons on the first trial awarded a cash adjustment to the applicant of $259,808 or effectively the same amount.

5. It is clear that the offers of 31 July 2015 (within context) and 8 October 2015 were not bettered by the applicant at the second trial with particular weight being put on the offer of $350,000 made before the start of the second trial and where the applicant was ultimately awarded $289,661.

Section 117(2A) considerations

(a) the financial circumstances of each of the parties

1. Firstly, Counsel for the first respondent concedes her capacity to meet any costs order including an indemnity costs order.  Further, it is appropriate to note that Ms Richards is now a person of some means.  However, a closer examination of her financial circumstances is relevant in respect of the applicant's argument that Ms Richards was less than forthcoming in her evidentiary disclosures or in her evidence in the trials generally and also in respect of the applicant's application that Ms Richards used her superior financial position to drag out the substantive proceedings with a view to leaving the applicant without any net benefit from any award after meeting his own legal costs.

2. By orders made in the Supreme Court of New South Wales of 29 October 2018, Ms Richards benefited substantially from the estate of Mr A including a legacy of $2,500,000 and dividends to a value of a maximum of $500,000 per annum from shareholdings together with the use of the two Suburb B units.  It is not an oversimplification to say that Ms Richards pleaded relative impecuniosity at the trial before me and indeed, if my memory serves me correctly, she claimed to be in receipt of a Centrelink benefit at that time and despite, even then, receiving significant benefits from Mr A.

3. By contrast, the applicant is not a person of substantial wealth.  My Reasons at the trials note some concerns as to the veracity or accuracy of his evidence as to his income.  He is, however, not a young man.  His financial statement shows an income of $70,200 per annum.  He discloses superannuation of only $55,000.  He does not own real property. On the submissions of his Counsel, he has incurred solicitor/client costs of some $500,000 by reason of these proceedings.  Prima facie, he would seem to have some difficulty in meeting any costs order in favour of the first respondent, whatever its quantum. I emphasise, however, that impecuniosity of itself is prima facie not a bar of a costs order.

4. The second respondent retains the farming property at Suburb C as its major asset.  I expect that its financial position was negatively impacted by the apparent less than financially prudent decision by its director, Mr Beable, to place the company into voluntary administration as noted in my Reasons at the second trial at [20xiii] as follows:

   I accept the submission of Mr Boland that, given that funds were available to meet the legal costs of Ms Richards and Company E and/or that Ms D was prepared to delay prosecution of her demand, that the administration served to save Company E only $11,799.84 with the costs and disbursements on the administration were $272,043.89.

5. Nevertheless, and despite the questionable business prudency set out above, Mr Beable appears to remain the sole director of Company E which, of course, is the company of which Ms Richards is formerly a director and which is the umbrella for her late father’s Trust.  Further, his Honour in the New South Wales Supreme Court ordered the transfer to Ms Richards of the benefits of a mortgage held by the late MR A over Company E’s property in a quantum of $340,000 and I therefore expect that Company E is likewise in a position to meet any costs order.  Certainly, Mr Beable did not argue to the contrary before me in this application. 

(b) Whether any party is in receipt of legal aid?

1. This consideration is not relevant here.

(c) The conduct of the proceedings

1. This consideration is the fundamental basis of the applicant's argument.

2. It is fair to say that each party now and historically has been critical of the other party’s conduct of the proceedings. The respondent criticise the applicant's Counsel at the trial for lengthy and 'mathematical' cross--examination where a long line of authority decrees that the Courts do not take such a strict mathematical approach to property settlement applications. The applicant, in turn, says that the lengthy cross-examination was justified and necessary because of the lack of disclosure by the respondents and the lack of candidacy in the first respondent's evidence and, for the second trial, because of Mr Beable placing Company E into voluntary administration during the reserved period of my decision and in circumstances which might be reasonably considered suspicious as to motives.

3. I was referred by both Counsel here to various parts of my Reasons at both trials in respect of my observations as to the conduct of the trials and some of which are worthy of inclusion here as follows:

First Judgment

[1] - These are proceedings for property settlement.  To say that they have been vigorously fought is an understatement and evidenced by the fact that the trial was listed by Orders of 13 September 2012 for final hearing “for no longer than two days”.  The evidence proceeded over nine days and final submissions were received in writing. 

[2] - It is proper for me to observe that the parties have litigated this matter with some difficulty. The applicant and the first respondent both claim to have been relatively impecunious.…  Similarly, the applicant claimed prior to the trial and variously throughout it that the prosecution of his application was limited by issues of full and proper disclosure and discovery.  There is some merit to his claims and I observe only that the lack of consistency of representation and the conduct of pre-trial and interlocutory procedures has been such as to lengthen the trial and obviously the expense for both the applicant and the respondents.  Indeed, normal pre-trial procedure seems to have been virtually non-existent…

[3] - My observations are that the cross-examination of the parties and most witnesses was long and often unnecessary should proper pre-trial and interlocutory procedure have been conducted.  Probative evidence was often not adduced and notably there being no accounting evidence of any nature (and certainly no forensic accounting evidence) in respect of a major issue been the status and financial workings of a Trust and Trustee Company, Company E Pty Ltd (“Company E”) in which Ms Richards is alleged to hold a controlling interest and it clearly been alleged by the applicant that she uses the assets of that Trust for her own benefit.  Accounting evidence was forthcoming only on the last day of evidence and only at the urging of myself … Suffice for me to observe that the forensic responsibilities of trial preparation, evidence and argument fall on solicitors or Counsel, and it is presumptuous and dangerous to leave such forensic exercises to judges, as it is also to urge findings of fact based on speculation and unsubstantiated claims and assertions.

[5] - My comments as to the nature of and conduct of this matter are perhaps best evidenced in the orders sought by the parties.  The applicant, Mr Milstead seeks an order inter alia that the first and/or second respondent pay to him a sum of $1,200,000.  Conversely, the respondents propose orders whereby the applicant pays to the second respondent an amount of $202,761 and an amount $20,000 to the estate of Ms Richards’ late father.  Consequently, the ambit of the dispute is some $1,400,000 within the context of a relationship of relatively short duration and where the property pool is not substantial.  The obvious inference to draw is that any negotiations towards settlement within the pre-trial forum provided by these Courts has been utterly unsuccessful most likely because of a lack of forensic accounting and valuation evidence …

[22] - Nevertheless, the conduct of the case, and particularly cross-examination, was often directed at length and in minute detail to particular contributions to specific assets … Similarly, the tenor of the applicant’s argument and the tendency of his Counsel’s cross-examination was often, and laboriously, directed to his contributions to particular assets.

[36] – Mr Milstead gave evidence and was cross-examined.  His evidence was clear and confident and in the terms of his affidavit material.  He showed a good recollection of detail.  The weight to be attached to his evidence, however, is dependent upon many of the necessary findings of fact and credit.  Much of Mr Milstead’s evidence is uncorroborated and, in a sense, self-serving of his own arguments.  He adduced no forensic accounting evidence in his case but often relied on minute evidence from bank statements and various transactions which in each particular were of little probative value within wider contexts.  His Counsel similarly cross-examined, and at times laboured, particular points such as items from a bank statement with resultant submissions and argument on a mathematical basis which did not necessarily assist the process under s. 90 and did not always reflect overall reality.  Generally the Court is more assisted by forensic accounting evidence by an independent expert in matters involving Trust and Corporate entities and particularly where a party alleges misuse of bank accounts.  Mr Milstead, for instance, produced a number of “spread sheets” prepared by him and from his own analyses.  Such evidence is often, of course, simply self-serving … As I have said, these difficulties (and perhaps the trial itself) may have been avoided by a more rigorous approach to the interlocutory and forensic exercises pre-trial and by the engagement of appropriate forensic experts.

[40] - I did not find Ms Richards to have been as forthcoming a witness as Mr Milstead.  She was at pains to emphasise her argument and the factors which she thought to favour her case.  Ms Richards was keen to a fault to highlight any perceived negatives in the applicant’s case or indeed his character.  Each of the applicant and the respondent were reluctant to concede any positive contributions by the other but were ready to criticise at every opportunity. 

[41] - My impression of Ms Richards, however, was of a witness prone and ready to be selective in her responses and also to exaggeration or embellishment of her evidence when it suited.  She at times claimed vagueness of memory with the implication or express excuse that her illness was to blame whilst at other opportune moments she demonstrated a capability of very detailed memory and capacity. I consider the credit of her evidence accordingly…

[42] - Generally, I did not find Ms Richards to be an impressive witness. I am not satisfied, without medical evidence, that the symptoms of her unfortunate illness are currently or consistently so debilitating as she would have the Court believe. Her claims as to relinquishing control of Company E and a lack of understanding of its financial intricacies were, in my view, unconvincing and opportunistic. Generally her evidence and that of her witnesses was highlighted by negativity and criticism of Mr Milstead which in itself does her little credit and which often was unsubstantiated when placed under scrutiny. .

[46] - I found his (Mr Beable) evidence generally, and particularly in the witness box to be partisan to Ms Richards and often uninformed and unnecessarily critical of Mr Milstead and his credibility suffered easily under cross-examination.

[105] - consistent with much of the argument and many of the issues in this matter, I have been provided with no valuation of the plant and equipment now again in the possession of Company E. There is no current inventory in evidentiary form.

[106] - Whilst this is a further example of the dilatory trial preparations in this matter and I have considered re-listing the matter to direct that evidence be adduced of nature and value of plant and equipment (and stock), this trial had already occupied much more than its anticipated duration and over many months…

[109] - Again this issue demonstrates the forensic failings in the applicant's argument. There is no evidence of there being any ‘farming crop’ whatsoever.  Rather, the applicant simply speculates as to one's existence and value.  This is not evidence.

[110] - The difficulty for the Court again is the paucity of evidence, the tendency to rely on gross mathematical calculations, and the lack of expert forensic evidence.

[113] - Indeed, documents as simple (and being mindful of my comments in respect of financial statements made above) as profit and loss statements for the most recent financial year may have been of some assistance. They were not forthcoming by tender or by way of evidence from any accountant. I again note the criticism by the applicant’s counsel of the respondents in respect of lack of disclosure. There is however an onus on a party asserting a fact to prove that fact on the balance of probabilities. It is not for the other party to disprove a bare assertion. The interlocutory procedures and tools available in this court and under the Act are broad and, in my experience, usually effective. Judges of this court are readily available to deal with interlocutory applications. Orders for formal discovery and the issue of subpoena are regularly made. Consequently I can place little weight in the criticisms made by the applicant of the respondents in respect of lack of disclosure although it is clear that the applicant’s forensic task was made more difficult by the respondents’ lack of voluntary disclosure. Perhaps an application for formal discovery on affidavit (as is the practice in most civil jurisdictions) would have rectified these evidentiary deficiencies?

Second Judgment

[33(vi)] - Such a response is indicative, on my observations, of Ms Richards’ evidence in these proceedings which at times lacked veracity and proper disclosure and which on occasion tended towards the flippant or glib … In this respect I easily prefer the evidence of Mr Milstead and share Mr Boland's concerns as to Ms Richards’ evidence.

[33(viii)] - Considerable time spent in both hearings in cross-examination of Ms Richards as to her personalty including jewellery and works of art.  Whilst I have some sympathy for Mr Boland in his difficulties in obtaining full disclosure and repeat my findings generally as to the veracity of Ms Richards’ evidence…

[33(x)] - Generally as to credit, I have no satisfactory explanation as to why this information was not forthcoming from Mr Milstead at the first hearing.

(d) Whether the proceedings were necessitated by the failure of a party to comply with pre-trial orders of the Court

1. The matters of failure to disclose and/or comply with the interlocutory procedures towards trial are noted in detail in my Reasons in the substantive trials and as repeated above.

(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. Strictly speaking, neither party was wholly successful or relatively wholly unsuccessful which is not surprising given both their unrealistic positions at the commencement of the trials. 

(f) Offers of settlement

1. The particular offers made and rejected in this matter are set out above.  Counsel for the first respondent asks the Court to note, firstly, that the applicant’s sole offer was unrealistic and made at or around the commencement of the first trial.  He otherwise did not initiate any offers towards settlement.  Secondly, the first respondent's Counsel points to the many offers put by his clients as evidence of her desire to settle and also as rebuttal of the applicant's argument here that her motives were to 'bleed' the applicant to a position of no tangible reward.

2. Of direct importance are the latter two offers rejected by the applicant which must be viewed in the context of his ultimate entitlement.  Certainly, the offer of $350,000 if accepted would have relieved the applicant of the costs of a second trial and given him a sum greater than his ultimate award.

3. As raised with Counsel during their helpful submissions, I am of the view that offers themselves must be viewed and considered within a broader context.  That is, it is one thing to refuse an offer where fully informed, but perhaps another entirely to refuse such an offer where there are collateral unknowns such as for example the content and value of a property pool.

(g) Other circumstances

1. Not relevant.

Consideration and Findings

1. Individually there is merit superficially to the arguments put by both Counsel as to an award for costs in favour of the applicant and the first respondent.

2. A re-reading of my Reasons for judgment in both trials exposes my concerns as to the conduct of the trial by the applicant and also both respondents.  Certainly, whilst I was unable to make a positive finding as to conspiracy or malafides in the second respondent placing Company E into voluntary administration in such bizarre circumstances, at the very least, Counsel for the applicant was well within his right to explore such suspicious activity at the second trial.  Further, my views as to the veracity of the first respondent's evidence is transparent from my Reasons and set out by example above.  I am comfortably satisfied that both respondents were less than forthcoming with the discovery process and I accept to a degree that the applicant's Counsel’s cross-examination, as lengthy and 'mathematical' as it was, had some justification.

3. Nevertheless, I accept the submissions of Counsel for the first respondent that it is disingenuous for one party to simply blame the other for 'lack of disclosure' where the many tools for obtaining such evidence were not utilised at the pre-trial stage by the complaining party. For reasons best known to himself, the applicant did not independently obtain various valuations or other documents in the forensic exercise and appeared to prefer instead to utilise cross-examination in an attempt to expose such material. Certainly, independent valuations would have saved considerable Court time.

1. As set out in the extracts from my Reasons above, it was not only the respondents who were culpable in the conduct of the trial but Ms Milstead, and also his legal representatives, were subject to criticism.

2. I accept generally the argument mounted by Counsel for the first respondent that a Court should be cautious in confusing an unmeritorious assertion or argument with arguments put unsuccessfully but where there lay some evidentiary merit.  That is, I would not ordinarily expect costs to attach to the latter whereas an order may be made in respect of frivolous or unsubstantiated argument or assertion. As Counsel correctly and simply put in his submissions, this was a case where numerous assertions of fact and credit were put by all parties against the other and where some were successful and some were not.

3. The applicant also asked me to consider the relative financial positions of the parties.  Obviously, I must do so within the context of the case and not in isolation.  That is, it is well-established that impecuniosity is not a bar to a costs order and it should also not, of itself, be determinative of a costs order.  Essentially, the applicant asked me to find that the respondents conducted these trials with a motive of exhausting the applicant's financial capacity and leaving him penniless from the result.  I do not accept this argument if only that it is transparently contrary to the many offers of settlement and the terms of such offers made by the respondents during the course of the proceedings.

4. On consideration of the above, I am not persuaded that the applicant should have his costs.  The force of the applicant's case is the lack of disclosure by the respondents having lengthened the case and caused unnecessary cost.  I prefer that the applicant and the two respondents were all culpable to a degree in this respect. I accept the submission of Counsel for the respondents that the applicant's choice to use cross-examination rather than the tools available for discovery contributed to the length of the trials. That being the finding, I cannot give any weight to the argument that the discrepancy in financial position should, together with conduct, tend towards a costs order in favour of the applicant. Rather, and I repeat, the first respondent’s offers of settlement were all rejected and this argues against the assertions of malafides made by the applicant.  Still further, I reject the argument that the respondents should have been advised by my findings as to property alteration in my first Reasons and hence settled accordingly in the second trial because of the ultimate similarity in the awards.  The difficulty with this argument is that Mr Beable for the second respondent voluntarily placed the company and hence one of the major assets being the property at Property C into administration during the period of the reserving of my judgment such that continued to be its status during the course of the second trial.  The suspicious and untimely nature of that action properly, in my view, required testing at the second trial, and certainly within the context of my findings generally as to the veracity of the respondent’s evidence.

5. The force of the first respondent's argument for costs sits with the offers of settlement made and rejected by the applicant, two of which were obviously at or above the ultimate award. As mentioned above, there is superficial attraction to such an argument. However, such a consideration, like all of the mandatory factors in s.117(2A) is not determinative of an order for costs but simply matters which lend to the discretion of the judge and must, in my view, be considered therefore within general context. That is, this was not a situation of offers being made to a fully informed opponent where there was no disagreement as to the relevant contingencies, for example, as to the nature and value of the property pool. Rather, in this matter the relevant offers were made in circumstances and within context where one of the assets, namely Company E’s property, had been placed into voluntary administration and effectively removed from my consideration and in circumstances which were objectively suspicious as to motivation. With such unknowns and outstanding contingencies at large, it is understandable that a properly advised party might be reluctant to accept any offer. Related to this are, of course, my findings generally as to the lack of disclosure and concerns with the veracity of the evidence of the respondents and outlined in my two judgments. A prime example is the first respondent's evidence in respect of her personal and financial relationships with the late Mr A where her assertions in this Court appear to be generally at odds with the benefits she ultimately received in the Supreme Court of New South Wales. Consequently, and whilst I accept that Mr Milstead did not achieve an award at or better than the final offer made by the respondents, I do not believe within the context that this is such as to cause an award for costs in the respondent's favour.

Conclusion

1. I conclude, therefore, that both applications for costs will be dismissed.

I certify that the preceding forty-six (46) paragraphs are a true copy of the Reasons for judgment of Judge McGuire

Date: 31 January 2019