MOORE & MOORE

[2014] FamCA 717

FAMILY COURT OF AUSTRALIA

MOORE & MOORE [2014] FamCA 717

FAMILY LAW – COSTS – where the husband seeks his costs of and incidental to the proceedings commenced by the wife on 18 December 2006 – where costs are sought on a party/party basis – where the wife opposes any order for costs on the basis of her financial circumstances – where there are circumstances which justify an order for costs being made – where impecuniosity is not a bar to an order for costs being made – where the wife was wholly unsuccessful in the proceedings – costs ordered as sought by the husband.

Family Law Act 1975 (Cth) s 117

APPLICANT: Mr Moore

RESPONDENT: Ms Moore

FILE NUMBER: ADF 4732 of 1998

DATE DELIVERED: 26 August 2014

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Strickland J

HEARING DATES: 26 August 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bleby SC

SOLICITORS FOR THE APPLICANT: Barnes Brinsley Shaw Lawyers

THE RESPONDENT: In person

Orders

1. The wife do pay the husband’s costs of and incidental to the proceedings commenced by the wife on 18 December 2006 in ADF 4732 of 1998 with such costs to be agreed and in default of agreement as taxed by the Registrar.

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

FAMILY COURT OF AUSTRALIA AT ADELAIDE

File Number: ADF 4732 of 1998

Mr Moore

Applicant

And

Ms Moore

Respondent

EX TEMPORE REASONS FOR JUDGMENT

Introduction

1. The application before the Court today is an application filed by the husband on 4 May 2012 seeking the following order:

   1.That the wife do pay the husband’s costs of and incidental to the proceedings commenced by the wife on 18 December 2006 and identified by the Family Court File Number: ADF 4732 of 1998 with such costs to be agreed and in default of agreement as taxed by the Registrar.

2. That application is opposed by the wife, and she filed a Response on 6 July 2012 seeking that the application be dismissed.

3. In support of the application two affidavits have been filed, both by the husband’s solicitor, Mr Andrew Barnes.  The first affidavit was filed on
   4 May 2012, and that is a short affidavit referring to the commencement of the proceedings, when judgment was delivered by me in relation to them, the order that I made, and the fact that the husband had instructed that an application for costs be made.

4. The second affidavit is an affidavit filed on 21 August 2014.  That affidavit annexes three letters from the husband to the wife, two of which contained offers of settlement.  Those offers were made on the cusp of the commencement of the trial in this matter.

5. Ms Moore, the respondent, appears today without legal representation.  There was a Notice of Ceasing to Act filed yesterday, namely 25 August 2014, by her previous solicitors.

6. Ms Moore has only filed one document, namely the Response referred to earlier in these reasons.  There has been no affidavit filed in support of that Response, and I particularly note that on 21 July 2014, at the request of her then solicitor, I made an order that the wife file and serve a Financial Statement and affidavit by the close of business on Monday 18 August 2014.  No Financial Statement has been filed, and to repeat, no affidavit has been filed.

7. As is apparent the application for costs relates to proceedings commenced in this Court by the wife on 18 December 2006.  The orders the wife sought in that application were as follows:

   1.That the approval of the Deed (executed by the parties on 23/11/00) ordered on 24/11/00 by the Honourable Justice Murray be revoked pursuant to s 87(8) of the Family Law Act, 1975 as amended.

   2.That pursuant to s 79 of the said Act and by way of settlement of property or alteration of interest in property the husband do pay to the wife such sum as this Honourable Court deems just and equitable.

   3.That the husband pay the wife’s costs.

8. Obviously the second order set out above could only come into play if the approval of the Deed was revoked.

9. The basis of the application to revoke the Deed was multifaceted, but significantly it entailed an allegation of fraud against the husband.  For various reasons which I need not address today, that application took some time to reach trial.  The trial commenced on 23 November 2010 and proceeded over a number of days thereafter in the months of November 2010, December 2010, April 2011 and finally, May 2011. 

10. On 18 April 2012 I delivered my reasons for judgment and made an order dismissing the wife’s application.

11. The wife filed a Notice of Appeal against that order and that appeal has now been heard.  Importantly from the wife’s point of view, there has been an order for costs made in relation to that appeal, and I will return to that later in these reasons.

12. This application was adjourned to await the outcome of the appeal, and given the appeal has now been disposed of, the application is now proceeded with.

The relevant legislation

1. Costs orders are governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”), and that section relevantly provides as follows:

   (1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.

   (2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

   (2A)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.

2. Mr Bleby SC for the husband has filed written submissions, part of which addresses the relevant factors in s 117(2A). I now turn to those factors.

Discussion

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

1. As Mr Bleby SC has correctly pointed out, neither party has filed a Financial Statement for the purposes of this hearing.  However, I am aware of the terms of the settlement between the parties which was contained in the Deed approved in late 2000, and of course, during the trial I became aware in general terms of some aspects of the respective financial circumstances of the parties; I hasten to add though, not in any detailed way such that I am able to identify specifically what the financial circumstances of the husband are, or indeed the financial circumstances of the wife.

2. The wife tells me and I accept, that she is in some financial difficulty in terms of income for example.  She tells me that she is not employed, and she is not currently receiving any Commonwealth benefits.  She tells me that she resides in the property at TE Street which was the subject of the settlement in late 2000, that no other person resides in that home, and there is a mortgage over that property.  She tells me the home is furnished and she has the use of a car.  She tells me that there is a person who is providing her with some financial support, and in terms of her particular personal circumstances, she had been in a lengthy de facto relationship of some 12 years which has now come to an end, and her partner has moved interstate.

3. In relation to liabilities, the wife is also facing an order for costs of the appeal, somewhere in the region of $120,000, and she has a debt to her solicitors of the order of $30,000. 

4. As to terms of the settlement in 2000, that entailed the wife receiving assets to a total value of in excess of $3,000,000; the primary asset being the house at TE Street.  Although I do not propose to refer to it in any detail, the specifics of the settlement and the property that the wife received thereby is set out at [50] of my reasons for judgment delivered on 18 April 2012.

5. To repeat, the wife is still residing in the home at TE Street.  I have no valuation of that property before me, and no figure to put to its value, but, I can proceed on the basis that it is a home of some substantial proportions, and of significant value.

6. I am prepared to proceed on the basis that the wife is in some financial difficulty, particularly in terms of income, but of course her financial circumstances, and indeed the financial circumstances of the parties generally, is but one of the relevant factors to be taken into account.  I will address the other factors shortly, but at this point I indicate that there is clear authority that impecuniosity is not a bar to an order for costs, if such an order is otherwise justified.  It is a matter of according appropriate weight to not only the financial circumstances of the parties to the extent that they are known to the court, but also to the other factors which are relevant.

(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;

1. It is clear that this subparagraph does not apply here as neither party is in receipt of legal aid.

(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;

1. This is a significant factor in favour of an order for costs being made.

2. Mr Bleby SC in his written submission has taken me to several aspects of the conduct of the wife in relation to the proceedings.  Specifically there are four matters which Mr Bleby SC has emphasised.

3. First, there is the issue in relation to a letter referred to as the “[ST] letter”.  The allegation was made in opening that that letter had not been discovered in the original proceedings, but it then transpired that that was incorrect and that it had been discovered.  As I set out in my reasons for judgment (at [111]-[112]) the wife through her counsel attempted to repair that position by suggesting that there was an onus on the party making discovery to particularly identify that letter.  I found that to be an untenable position.

4. Secondly, there is the amendment to the pleadings of the wife by the insertion of paragraphs 14A to 14F.  That was a late amendment to the pleadings after the affidavits had been filed and it was allegedly done on the basis of, as
   Mr Bleby SC describes it, a single word namely, “gift”, being referred to in the husband’s affidavit.  In any event the insertion of those paragraphs prolonged the trial and, as I ultimately found in my reasons for judgment (at [180]–[182]), each of those assertions made in those paragraphs were untenable.

5. Thirdly, there is, as Mr Bleby SC describes it in his written submissions, “the claim about the demand and so-called threat about the [O Nominees Pty Ltd] mortgage”.  As Mr Bleby SC suggests, that was a mischievous claim, and I agree, and I said as much in my reasons for judgment (at [190]-[201]).That demand was precipitated by the wife’s own allegations of forgery and sham.  There was no evidence presented by her though to found those allegations, and in the end, to repeat, I rejected those allegations entirely.

6. Fourthly, as Mr Bleby SC describes it, “during the wife’s evidence at trial there emerged a broader claim of undue pressure/undue influence than was pleaded”.  That led to the trial being prolonged, and in the end result, as is again obvious from my reasons for judgment (at [209]), I found there was no basis on which to make such claims.

7. In my view, and I accept the submissions of Mr Bleby SC in this regard, the conduct of the wife in the proceedings, to put it generously, left a lot to be desired, and in many respects not only led to the application itself being pursued, and a substantial trial taking place, but the trial taking far longer than otherwise would have been the case.

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

1. I agree with Mr Bleby SC that this factor does not apply, and I need not concern myself with it.

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

1. It is patently obvious that the wife has been wholly unsuccessful in the proceedings, and that is a significant factor in justifying an order for costs.

2. I also accept Mr Bleby SC’s submissions that it is particularly significant in this case, this case not being what can be described as the “usual” property settlement case which might come before this court.  This was a case where, as I have indicated earlier, there was a claim of fraud.  It was a case of all or nothing; it was wholly adversarial, and it was either the case that fraud was found, or fraud was not found, and the result of that determined who was successful, and who was not successful.

3. I accept Mr Bleby SC’s submission that the evidence presented by the wife failed to establish the claim of fraud, as again is obvious from my reasons for judgment, and the evidence demonstrated that the institution of the proceedings by the wife was unreasonable.  Thus that factor weighs heavily in justifying an order for costs.

(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

1. This factor brings into play the correspondence annexed to the affidavit of
   Mr Barnes filed on 21 August 2014.  It is apparent that the two offers made in that correspondence, in the context of this case, were exceedingly generous to the wife.  The wife says that she didn’t accept those offers because she was looking to, as she put it “win the case” and be successful in her claim.  As I have explained to the wife though, there are consequences of that given the subsequent dismissal of her application, and the fact that she has been wholly unsuccessful in the proceedings.

2. Thus those offers of settlement, and the wife’s rejection of them, are highly relevant in support of, and in justifying an order for costs being made.

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

1. My approach to this factor is that it can pick up for example, conduct which is not caught by paragraph c).  Paragraph c), as is obvious in its terms, relates to the conduct of the proceedings in terms of “pleadings, particulars, discovery, inspection”, and the like.  Thus I accept and take into account the submissions of Mr Bleby SC that the application was “opportunistic and unmeritorious”, and that “[i]t amounted to an unwarranted attack on the integrity of proceedings that had long been settled.” 

Conclusion

1. An overview then of the relevant factors is that all but one of them can be said to justify an order for costs being made, and it would only be the financial circumstances, for example, of the wife, which might mitigate against such an order.  However, given that each and every other relevant factor justifies an order for costs being made, in my view, the difficult financial circumstances of the wife cannot in this case prevent an order for costs being made.  The husband has been unnecessarily put to the expense of defending the allegations of fraud, allegations that were not only without merit, but were also disingenuous.

2. I am comfortably satisfied that there are circumstances here that justify an order for costs being made.  Those circumstances are the conduct of the wife in relation to the proceedings, the fact that the wife has been wholly unsuccessful, the offers in writing made on the cusp of the commencement of the hearing of the trial, and the other matters to which I have referred in relation to the conduct of the wife generally.

3. In terms of the costs themselves I am told that the approximate amount of costs is likely to be $750,000.  However, I am not asked to make an order fixing the costs, I am asked to make an order that those costs be taxed in default of agreement.  I propose to make such an order.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the

ex tempore reasons for judgment of the Honourable Justice Strickland delivered on 26 August 2014.

Associate:     

Date:              1 September 2014