Morton and Morton (No. 2)

[2008] FamCA 855

FAMILY COURT OF AUSTRALIA

MORTON & MORTON (NO. 2) [2008] FamCA 855

FAMILY LAW – COSTS – Application for extension of time to seek costs

Family Law Rules 2004 r 1.14

Clivery & Conway [2007] FamCA 1435

APPLICANT: Ms Morton

RESPONDENT: Mr Morton

FILE NUMBER: MLC 9844 of 2007

DATE DELIVERED: 1 September 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Watt J

HEARING DATE: By written submission

REPRESENTATION

SOLICITOR FOR THE APPLICANT: David Stagg Tonkin & Co

SOLICITOR FOR THE RESPONDENT: Aitken Partners Pty Ltd

Orders

1. I dismiss the wife’s application filed 6 May 2008.

IT IS NOTED that publication of this judgment under the pseudonym Morton & Morton is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 9844  of 2007

MS MORTON

Applicant

And

MR MORTON

Respondent

REASONS FOR JUDGMENT

Application for extension of time to file costs submissions

1. In this matter, the husband instituted proceedings for property settlement in this court after the wife had, to his knowledge, already instituted proceedings in an English court seeking property settlement, spousal maintenance, and divorce.

2. The wife sought a stay of the husband’s proceedings in this court and in response, the husband sought an order restraining the wife from continuing with her proceedings in the English court. The case turned on whether the Family Court of Australia was a clearly inappropriate forum and I found that it was so.

3. On 10 January 2008 I granted the order sought by the wife staying the husband’s proceedings in this court, being satisfied that this court was a clearly inappropriate forum for the determination of the parties’ property proceedings. I gave reasons orally, indicating that they would be published when revised.

4. A major factor in my decision was that the English court in which the wife had instituted her proceedings had jurisdiction to make a pension sharing order in respect of the superannuation entitlements of the husband accumulated while he was a serving member of the UK armed forces during the marriage, but the Family Court of Australia could not, as I found, make a splitting order that would bind the UK trustee of that fund: see my reasons for judgment published on 7 March 2008 in this matter. There has been no appeal against that judgment.

5. On 18 March 2008 the wife’s solicitors wrote to my associate advising that the wife wished to make application for her costs of the proceedings before me. The letter sought direction as to whether the application should be made at an oral hearing, or based on written submissions. If the latter, the wife proposed the following timetable:

   1.That the applicant wife provide written submissions as to costs within 21 days;

   2.That the respondent husband respond within 14 days;

   3.That any reply of the applicant wife be delivered within a further 7 days.

6. In response to this letter, a telephone mention was listed for 9.30am on 27 March 2008, and the parties’ solicitors attended in court by means of a telephone conference by means of which they were clearly audible to me in the court. Such telephone mentions of cases that require directions or interim orders to be made have become standard practice in this court in recent years, and the use of them will no doubt increase as the court’s introduction of a judicial docket system is fully implemented, and judges are able to manage their docketed cases through such relatively inexpensive court events.

7. At this mention on 27 March, orders were made on an unopposed basis in the terms of the timetable proposed in the wife’s letter for the filing of written submissions set out above. In addition to fixing that timetable, I allowed a period of time within which either party could, after receiving the written submissions relied on by the other party, request a hearing for oral submissions - by telephone, if so requested -  “to supplement the written submissions”.

8. The timetable established by my order required the wife to provide her written submissions within 21 days, that is, by 17 April 2008.

9. A note to the order provided that “written submissions to be made in accordance with this order are to be filed by transmitting them to my associate in electronic form … and the other side is to be a copy addressee of that transmission.”

10. The wife’s written submissions are dated 6 May 2008 and were received by the court on that day. They were not received by the husband’s solicitors until 8 May. The notation to the order which provided for the husband’s solicitors to be a copy addressee of the wife’s emailed submissions was not followed. In short, the husband received the wife’s submission 21 days later than envisaged by my order.

11. The wife’s submission dated 6 May 2008 commences with an acknowledgment that it is filed late and seeks to remedy that situation. It commences with the following:

A.APPLICATION FOR EXTENSION OF TIME TO SEEK COSTS

By order of the Court, this Application for Costs should have been filed by 17^th April, 2008.

The wife seeks extension of that time to enable this Application to be dealt with.

The wife is resident in the United Kingdom and there have been difficulties in communicating with her.

It is submitted that there is no prejudice to the husband in such an extension.

1. In common with the wife, the husband did not follow the electronic filing procedure set out in the notation to my order dated 27 March 2008. His response bears the court’s filing stamp dated 22 May 2008 which is time-compliant with the direction that I made, in that it is the 14^th day after receipt by the husband of the wife’s submission. There was no submission in reply by the wife, nor was a request received from either party for an oral hearing.

2. For completeness, I should mention that on 27 May 2008 the husband’s solicitors wrote to my associate a letter stating that it encloses, inter alia, correspondence in relation to the late filing issue. The enclosed documents might have become relevant had the wife, in a submission in reply, joined issue with certain assertions of fact made in the husband’s response. She did not do so (as mentioned earlier, she did not file any reply) and so I can and do accept the husband’s assertions of fact without the need for supporting documents. To be clear, I have not read or had regard to the documents enclosed with the husband’s solicitor’s letter to my associate dated 27 May 2008.

3. Part A of the husband’s response responds to the wife’s application for an extension of time, and is in these terms:

A        APPLICATION FOR EXTENSIONOF TIME TO SEEK COSTS

As to the wife’s request for an extension of time to enable this application to be dealt with the Husband says as follows:

1.On 27 March 2008 it was ordered by consent that the Wife file any application for costs within 21 days, in other words by 17 April 2008. This order was made by consent upon the identical proposal of the wife’s solicitors set out in their letter dated 18 March 2008.

2.The husband’s solicitors received the wife [sic] application for costs, dated 6 May 2008, on 8 May 2008, being 21 days later than the date ordered.

3.The wife may apply for an extension of time pursuant to rule 1.14 of the Family Law Rules. This rule does not set out specific consideration for determining applications for extensions of time.

4.In such circumstances an applicant must show that there are adequate reasons which explain the delay – McMahon and McMahon (1976) FLC 90-038 at 75,144 (recently cited by the Full Court in Clivery and Conway [2007] FamCA 1435). The wife’s application for costs states that “The wife is resident in the United Kingdom and there have been difficulties communicating with her”.

5.The husband says there are no adequate reasons which explain the delay and no extension should be granted.

6.In the period 27 March 2008 to 17 April 2008 the husband has received emails from the wife on the following dates, which can be made available if required:

(a) 28 March 2008;

(b)       2 April 2008;

(c)       3 April 2008;

(d)       4 April 2008;

(e)       8 April 2008 (on seven separate occasions);

(f)        9 April 2008 (twice);

(g)       16 April 2008 (on seven separate occasions); and

(h)       17 April 2008.

7.The solicitor’s invoices show regular email contact with the wife for the entire period of the invoices. The wife’s solicitors have been, and presumably still are, in possession of a power of attorney for their client and were able to appear in her absence at all conferences and hearings in this matter. Other than the Application itself, the husband received no notice from the wife’s solicitors regarding any difficulties of communication in the period 27 March 2008 to 8 May 2008.

8.Otherwise the husband says the wife’s delay causes him continuing expense and uncertainty in the context of attempting to finalise the husband and wife’s financial settlement in English proceedings Most recently the [T] County Court conference set down for 6 May 2008 was adjourned for 21 days to allow the parties to consider matters.

The law to be applied

1. Rule 1.14 of the Family Law Rules 2004 provides as follows:

   RULE 1.14 SHORTENING OR EXTENSION OF TIME

   1.14(1) A party may apply to the court to shorten or extend a time that is fixed under these Rules or by a procedural order.

   1.14(2) A party may make an application under subrule (1) for an order extending a time to be made even though the time fixed by the rule or order has passed.

   1.14(3) A party who makes an application under subrule (1) for an extension of time may be ordered to pay any other party's costs in relation to the application. (My emphasis)

2. The authorities that consider and guide the proper exercise of discretions such as this to extend time were considered by the Full Court of this Court in Clivery v Conway [2007] FamCA 1435. That case concerned an extension of time to make application for security of costs for an appeal. After setting out Rule 1.14 (see above) the Full Court summarised the law as follows:

   (13)The principles in relation to extensions of time provided by Rules were discussed by McHugh J in Gallo v Dawson (1990) 93 ALR 479. Although his Honour was there considering an application for leave to appeal out of time, it is accepted that the principles he discussed are relevant to all applications for leave to extend time limits provided by Rules.

   (14)The principles emerging from Gallo v Dawson may be summarised as follows:

   ·    The grant of an extension of time is not automatic.

   ·    The object is to ensure that Rules which fix times do not become instruments of injustice.

   ·    Since the discretion to extend the time is given for the sole purpose of enabling the Court to do justice between the parties, the discretion can only be exercised upon proof that strict compliance with the Rules will work an injustice upon the applicant.

   ·    When determining whether the Rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time.

   ·    When considering an application for extension of time in which to file an appeal or an application, it is necessary also to consider the prospects of success of that appeal or application.

   (15)The High Court also had occasion to discuss time limits fixed by Rules of Court in FAI v Southern Cross (1988) 77 ALR 411. In that case the Court was concerned with a rule not dissimilar to Rule 1.14 of the Family Law Rules 2004. Wilson J, with whom Brennan, Deane and Dawson JJ agreed, said at 417:

   The plain meaning of these words is very wide.  The court may extend “any time” fixed by “any . . . order” and may do so as well after as before the time expires and even though the application to extend is not made until after the time has expired.  As Baggallay LJ said in Carter of the analogous English rule, it gives “very full discretionary power; indeed, I can hardly imagine a more extended discretion” … It is a remedial provision which confers on a court a broad power to relieve against injustice.

   (16)The principles governing applications for leave to extend time have also been stated by this Court on many occasions.  In one of the first published decisions of the Court, Evatt CJ said in McMahon v McMahon (1976) FLC 90-038 at 75,144:

   The general principles governing applications for leave to extend time are established by a number of cases.  In summary, the applicant must show that there are adequate reasons which explain the delay; that there is a substantial issue to be raised on appeal; and that no hardship or injustice is caused to the Respondent which cannot be compensated by orders as to costs or otherwise.

   (17)As was pointed out in Tormsen and Tormsen (1993) FLC 92-392 at 80,018, the principles referred to in McMahon are factors to be taken into account, rather than legislative directions.

3. Applying the relevant principles to the case before me, I will turn to consider the three main areas identified in the authorities as likely to be relevant to the exercise of the discretion, namely, explanation for delay, prospects of success, and prejudice to the parties if an extension is granted, or not granted.

Explanation for the delay

1. The wife’s explanation, put forward by her solicitor, was that she had been difficult to contact during the relevant time. The husband disputes this, listing a series of dates on which he received electronic communications from the wife. He also points to the fact that the wife’s solicitor’s accounts submitted in support of her costs applications show a level of communication that is inconsistent with the assertion contained in the wife’s submission.

2. As appears from the judgment in Clivery and Conway, parties will sometimes rely on the argument that their practitioner was unaware of the existence of the rule that imposed the time limit: see paragraphs 19 and 21 of that judgment. Here, however, the time limit extension of which is sought were set in accordance with a timetable that was proposed by the wife, through her solicitor, and accepted by the other party (and the court) at a hearing where the wife was represented by the same firm of solicitors.

3. If there were subsequent difficulties in obtaining relevant instructions in order to comply with the time limit set in such circumstances, the obvious course was to request an extension of time from the other side and if refused, to request a further telephone mention of the case to explain the difficulty and seek an extension from the court. The existence of the power, in Rule 1.14(2) to extend time ex post facto, ie, after the time has expired, should not be seen as providing a reason for failing to seek an extension before the time expires where one is clearly going to be needed, and the timetable is one set at the suggestion of the late-running party.

4. In the circumstances that I have set out, I am not satisfied that the wife has adequately explained the delay. This does not, of itself, doom her application to failure if the justice of extending time is so clearly required by other factors to do justice between the parties. I now turn to the prospects of success in the substantive application.

5. In respect of the application that the wife brought for a stay of the proceedings in this court, she succeeded and the husband was wholly unsuccessful in resisting her application, as he was in seeking an injunction restraining the wife from proceeding with her application in the English Court at T.

6. Such a lack of success in a proceeding is of course a relevant matter for the court to consider under s 117(2A)(e) of the Family Law Act 1975, and will often lead to the making of an order for costs. In this case, however, the point on which my judgment turned, namely that the Family Court of Australia did not have the power to make an order that bound the UK-based trustee of the husband’s pension fund, was not clearly established in the documents initially filed on behalf of the wife (for the hearing before me in January 2008) and I therefore gave a direction a few days in advance of the hearing for further submissions to be filed that addressed this issue. Whilst I did not accept it, the husband’s argument at the hearing before me that the wife had failed to establish that there was no such power was not entirely without merit. I would not categorise the matter as one where the husband persisted in resisting the application in circumstances where the wife had clearly demonstrated the correctness of the case she was contending for. I do not find this to be a case, therefore, where the outcome of the costs application, if time was extended, is so obvious that a failure to extend time works a significant injustice on the wife.

7. The husband relied on the prejudice caused by ongoing uncertainty as to his financial position in the property/maintenance proceedings. There is some merit in this argument to which the wife makes no response. Whilst there might be no greater delay in determining the costs application itself than in determining this application for extension of time, the determination of an application for costs, that is, a finding that a party must pay some part or all of the costs claimed, does not necessarily provide an end to the matter: the order made will usually end with the words “such costs to be taxed in default of agreement” and it was clear from the parties’ written submissions that there was no agreement as to the quantum of the wife’s costs that would be payable if the order was made. Taxation of a bill of costs involves the preparation of detailed bills and the potential for extensive argument about items that should or should not be included in the costs payable. This can take a considerable time to be heard and determined by an appropriate officer of the court.

8. Such uncertainties (as to the quantum of a costs order) make it much harder for parties to negotiate and on balance, I consider that there would be prejudice to both parties if time was extended and the costs argument was determined, leading, as I consider likely, to a taxation of the costs payable if an order was made.

9. I therefore consider that in circumstances where the wife has failed adequately to explain the delay in complying with the timetable fixed by my order of 27 March 2008, the merits of the case is being arguable, and the potential prejudice (to both parties) of the kind asserted by the husband if time was extended, I should refuse the wife’s application.

10. I will therefore dismiss the wife’s application for extension of time filed 6 May 2008. It follows that her application for costs, because it now forms part of the court file, prematurely, as it turns out, should also be dismissed.

I certify that the preceding twenty seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watt

Associate:  …

Date:  1 September 2008