Murdoch & Brown (No 3)

[2013] FamCA 876

FAMILY COURT OF AUSTRALIA

MURDOCH & BROWN (NO. 3) [2013] FamCA 876

FAMILY LAW – COSTS – Respondents to pay some of applicant’s costs

Family Law Act 1975 (Cth) s 117

APPLICANT: Ms Murdoch

RESPONDENTS: Mr Savva and Mr Gould as Executors of the Estate of the late Mr Brown

FILE NUMBER: MLC 9886 of 2010

DATE DELIVERED: 7 November 2013

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: By way of written submissions

SUBMISSIONS RECEIVED FROM:

SOLICITOR FOR THE APPLICANT: Kennedy Partners

SOLICITOR FOR THE RESPONDENT: Schetzer Constantinou

Orders

1. That the respondents Mr Savva and Mr Gould pay the wife’s costs of the enforcement application and its surrounding attendances as indicated in the reasons for judgment this day, by agreement and in default of agreement as assessed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Murdoch & Brown (No. 3) 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 MELBOURNE

FILE NUMBER: MLC 9886 of 2010

Ms Murdoch

Applicant

And

Mr Sevva and Mr Gould as Executors of the Estate of the late Mr Brown

Respondents

REASONS FOR COSTS JUDGMENT

1.   In her written submission filed 30 August 2013, the Applicant sought costs arising out of an order that I made on 30 August 2013. The costs sought were on a solicitor and client basis in the sum of $39,029.69. In the alternative, she sought party and party costs of $22,345.51.

2.   The respondents to the application are the Executors of the Estate of the Applicant’s late husband. Their submission filed 13 September 2013 maintained that there should be a limited order for costs.

3.   In the unusual circumstances of this case, I agree with some of the submissions of both parties.

4. The law in relation to costs was not in dispute between the parties. S 117 of the Family Law Act 1975 provides for costs to be awarded at the discretion of the court, subject to a general rule that each party “shall bear his or her own costs”. The general rule gives way when consideration of the factors in s 117(2A) is seen to justify an order for costs. The question to be determined is “whether the overall circumstances justify the making of an order for costs” (I & I(No. 2) (1995) FLC 92-625 at 82,277).

5. Each of the matters referred to in s 117(2A) was set out in the written submissions of the parties.

6.   In her submission filed on 30 August 2013, the Applicant wife said:

·    Her financial position was of marginal relevance but she had no independent source of income and the capital she had was from a partial distribution of property in the interim proceedings. On the other hand, the Estate had ample resources;

·    The respondents’ conduct justified the making of the order because she had to issue proceedings to enforce an order. She referred to the reference by counsel for the respondents that the delay which precipitated the application should not have happened. The actions of the respondents had included failing to cause various boxes to be delivered, failing to transfer a motor vehicle, failing to provide access to banking accounts and failing to arrange a business valuation;

·    She had to seek an injunction against the Executors to restrain them using a particular solicitor because of their conduct. This, it was said, was based on a number of factual matters about which the Court found the solicitor’s conduct in acting in a conflicted position caused concern;

·    Upon the respondents attending the Court, they raised an issue about the validity of an earlier order based on an argument as to jurisdiction. She complained this argument had been raised without notice and submitted there was no jurisdiction to make.

7. Before looking at the discrete factors in s 117(2A), it is important to understand the respondents’ position in relation to the submissions of the wife. They said:

·    They had only been given notice of the application on the night before the hearing;

·    The jurisdiction issue was a proper matter upon which to resist the wife’s enforcement application because it went to the “heart” of their responsibilities to administer the estate;

·    It was stated that the Executors did not want the orders set aside for the sake of convenience but rather counsel thought it necessary to bring to the Court’s attention the jurisdictional point;

·    There could be no serious criticism of the respondents based on them being “somewhat slow” in complying with orders and that was reflected in the Court declining to make orders;

·    The wife sought the different order in relation to the injunction against the solicitor and that was an amendment to her application; and

·    Agreement was reached on a number of matters.

8. Litigation of this type at an interlocutory level is always difficult with the swirling issues going on around the parties. There is little doubt that the obligations created by the Family Law Rules 2004 create positive obligations on all parties to do things in a timely and reasonable way. The issues in this case that were litigated were contentious. The jurisdiction issue was raised by a concern of counsel whilst indicating that the respondents did not wish to alter their obligations to do the things they had agreed to and been ordered to. The proceedings for the injunction against the solicitor were brought because of the wife’s dissatisfaction with what position he took about acting. She was well within her rights to do so but those cases are often determined on a very subjective basis albeit from a conservative slant.

9. The one issue that cannot be disputed is the fact that the respondents had not been as diligent as they could have been in respect of their obligations, “serious” or not, the obligations should have been dealt with promptly and the undisputed submission is that it was not just one issue. The reference to the Court not making orders arose because I considered that as they were professional people who should have been expected not to be embroiled in the emotional matters but rather to have taken an objective view. Their delay in that emotional time precipitated the wife justifiably bringing the proceedings on the basis that she considered she was being ignored. I turn then to the s 117(2A) matters.

10. The financial circumstances of each of the parties to the proceedings are significantly different. I do not accept that because of the nature of the respondents’ position that costs should follow the cause. That said, there is an obvious disparity of financial strengths and the respondents are legally responsible to administer the Estate for the benefit of other beneficiaries. The wife can ill afford to be litigating and should not have had to.

11. Neither party was legally aided.

12. I have dealt with the conduct issue and the fact that the proceedings were in part necessitated by the “delay” referred to above. There were a number of matters in this case and both sides sought orders which had complexity. The ameliorating aspect is that other matters were compromised.

13. There appears to have been little negotiation but I would not criticise the precipitous action of the wife having regard to her view that the respondents were not taking the matter seriously.

14. Whilst it might be thought that the absence of the orders being made win respect of the application which precipitated the proceedings is telling, there can be little doubt that both parties were successful. As such, neither party was wholly unsuccessful. That is only one of the factors to be considered and as was submitted, no one factor is of any more significance than others.

15. Taking all of these matters into account, it not appropriate to make the orders sought by the applicant either as to indemnity costs or the party and party claim. However, having regard to what I have said about why this started, the wife should have some of her costs. Taking into account the various things that each otherwise then began to litigate about, I consider that the costs associated with the issuing of the proceedings and the first appearance should be paid by the respondent. I agree with counsel for the respondents that as a result of what was said in the authorities to which he referred, this is not a case where indemnity costs should be awarded. Accordingly, I will order that the respondents pay the applicant’s costs of the issuing of the proceedings, correspondence associated with that, the briefing and attendance of counsel and an instructing solicitor. If agreement cannot be reached, the costs should be assessed.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 7 November 2013.

Associate: 

Date:  7 November 2013