NARKIS & NARKIS

[2019] FamCA 197

FAMILY COURT OF AUSTRALIA

NARKIS & NARKIS [2019] FamCA 197

FAMILY LAW – STAY APPLICATION PENDING APPEAL – where the wife is self-represented – Where the orders subject to the appeal were made on discretionary grounds at a time when the wife was represented by counsel – Where there is no new evidence presented – Stay principles considered – Application for the stay refused.

FAMILY LAW – COSTS – where the husband sought costs on an indemnity basis – Where the costs should be granted in favour of the husband but not on an indemnity basis as the wife was misguided in her view about the stay – Costs fixed.

Family Law Act 1975 (Cth)

Jennings Construction Limited v Burgundy Royale Investments Pty Ltd [1986] HCA 84; (1986) 161 CLR 681
Prantage & Prantage[2013] FamCAFC 105; (2013) FLC 93-544
The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Ltd [No 1] [1986] HCA 13; (1986) 160 CLR 220

APPLICANT: Ms Narkis

RESPONDENT: Mr Narkis

FILE NUMBER: MLC 210 of 2014

DATE DELIVERED: 5 March 2019

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 25 February 2019

REPRESENTATION

THE APPLICANT:	In Person
COUNSEL FOR THE RESPONDENT:	Mr Strum QC

SOLICITOR FOR THE RESPONDENT: Cantwell Family Lawyers

Orders

1. That the wife pay the husband’s costs of the stay application fixed in the sum of $6,992.30.

2. The wife’s application for a stay of the payment of the costs is refused.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 210 of 2014

Ms NARKIS

Applicant

And

Mr NARKIS

Respondent

REASONS FOR JUDGMENT

1. Ms Narkis (“the wife”) applied for an order that paragraphs (1) and (2) of the orders made by the court on 18 December 2018 be “temporarily stayed until further order”.  It was not controversial that the wife was seeking a stay pending the determination of her appeal against the December 2018 orders. Mr Narkis (“the husband”) opposed the stay being granted.

2. Although the husband and the wife have been long-separated, I shall refer to them as I have, only for my convenience of description.

3. Paragraphs (1) and (2) of the 18 December 2018 orders read as follows:

   (1)All existing orders precluding the husband selling the property at M Street, Suburb N (“the M Street Property”) are discharged.

   (2)The husband have the right to sell the said M Street property and after discharge of all sale costs, outstanding liabilities and encumbrances, the balance of funds be placed in an interest-bearing account in his name, to be held upon trust for both parties pending further order of the Court.

4. This stay application is part of ongoing financial (and parenting) proceedings that have taken up significant court resources since 2014. The file contains many documents. By the measure of other proceedings in this Court, these parties have had many hearings. Suffice to say, the remaining substantive issue is the wife’s application under s 79A of the Family Law Act 1975 (Cth) (“the Act”) to set aside final property orders made in 2017.

5. Whilst there still appear to be many arguments, the wife’s main issues are that the final 2017 orders were inappropriately made on an undefended basis and that the husband (who lives in the United States of America) was not honest with her and the Court about his financial position. The proceedings have also resulted in the joinder of the husband’s adult son apparently revolving around an issue of a family trust.

6. The genesis of the stay application can be seen in the 2017 orders which gave the husband a right of sale over a property at Suburb N. The husband placed the Suburb N property on the market and an auction was to take place. I subsequently stayed the sale (with the husband’s consent) after the wife brought an urgent application before the court wherein it was evident that she intended to file an application under s 79A of the Act.

7. In December 2017 (incorrectly referred to as 2018 in [10] of the reasons of 18 December 2018) an order was made about the wife being responsible for the aborted auction costs. The parties did not resolve how the quantum of that was to be determined and were back before the court on 23 March 2018. 

8. The March 2018 order is the sequel to the 2017 hearing. It ultimately led to the December 2018 orders and consequently, the subsequent appeal and the present stay application.  The March 2018 order required the wife to pay, inter alia, land tax “as and when” the payments fell due.

9. In September 2018, the parties were back at the court before Johns J about what the wife had to pay.  Her Honour noted on the bottom of the Court’s orders that the parties were adjourning the proceedings to enable the “liability” to be “confirmed”.

10. In November 2018, the husband, dissatisfied with what the wife was doing in respect of payments, sought orders for the sale of the Suburb N property to, in effect, return to the position he had achieved in the 2017 orders.  It was that issue that brought the matter before the court on 18 December 2018.

11. At the December 2018 hearing, the wife was represented by counsel as well as solicitors. In the stay application before me, she confirmed that she had been present at court on that day albeit she said she arrived late because of a medical appointment.

12. In the December 2018 hearing, after hearing the parties’ respective submissions, I ordered the sale take place and that gave rise to the wife appealing. I shall return to the basis, or reasons for, that order (that is orders (1) and (2) of 18 December 2018) below.

13. The wife filed Notice of Appeal and then an amended Notice of Appeal, the latter on 14 January 2019. By that time, she had apparently no longer retained the lawyers who had been acting for her during the previous 12 months although no formal notice of address for service relating to the substantive proceedings was filed until February. She drew the Notice of Appeal herself.  The grounds of appeal are relevant to the stay issue so I set them out verbatim.  They were simply listed as follows:

    1.      Substantial injustice

    2.      Special circumstances

    3.      Mistake of fact

    4.      Mistake of law

    5.      Denial of procedural fairness

    6.      Denial of natural justice

    7.      Miscarriage of justice

    8.      Failure to take relevant circumstances into account, discretion miscarried

    9.      Lack of sufficient evidence

    10.    Materially less prejudicial to grant appeal and injunction/stay; relative prejudice

    11.    Balance of convenience in granting injunction/stay

14. With respect to the wife, those are not grounds of appeal but rather a series of complaints which make the assessment of the prospects or merit of the appeal difficult.  That situation has not been made easier by the wife’s complaint that her lawyers did not follow her instructions and indeed, had been given instructions that, she seems to say, exculpated her from the findings that were made in the December 2018 hearing.

15. The wife’s submissions on the stay have to be gleaned largely from her two affidavits filed in the present stay application.  She also initially objected to the husband’s senior counsel relying upon an affidavit in reply to her material as a consequence of which, senior counsel withdrew reliance upon it.  The wife later returned to that same document wanting to rely upon it herself and as such, despite some confusion, I have admitted all of the material into evidence.  The respective annexures to the relevant affidavits were also admitted subject to some matters to which I now turn.

16. As the wife is without representation, latitude had to be (and in my view, was) given.  Appeals are difficult as an area of law because of the need to point to error rather than just expecting a rerun of the earlier hearing.

17. Before summarising the wife’s affidavit, I also observe that some parts were struck out on the submission of senior counsel for the husband because they were scandalous.  I agree that they were.

18. The remaining parts of the wife’s affidavit set out argument more so than facts but even so, what is now summarised are the dot points of what the wife said:

    ·    She had an arguable prospect for a successful appeal and she and the parties’ daughter would suffer prejudice if the order was not stayed because there were arguable and reasonable grounds of success in the appeal.  The stay application was important because of the need to preserve the property and not sell it in the interim until further hearing/appeal could be heard;

    ·    There were issues to be tried on appeal including the husband’s history of misleading the court to continue his “modus operandi” to significantly and adversely affect and harm the wife and the parties’ daughter;

    ·    The husband’s presented material on the undefended hearing was described by the court in April 2017 as vague, inadmissible or unhelpful and the husband had a history of being opaque in respect of his financial position and had blatantly persisted in misleading the court;

    ·    The internet searches of the husband’s companies produced results of those companies taking funds and engaging in capital-raising that promised and represented a lot but ultimately did not deliver and the husband had become extraordinarily wealthy escaping with everyone’s money.

    That last dot point is entirely irrelevant because at best, it goes to the matter of the s 79A application. I return to the affidavit.

    ·    The court was requested to preserve unsold the last remaining Melbourne residence that the daughter and “her family” lived in and to which the daughter felt a connection and family history.

    It soon became apparent when the last dot point was contemplated, the parties’ daughter at best lived in the Suburb N property whilst she was in kindergarten or primary school, or alternatively, visited the property with the wife during rent collection and property management.  The daughter is now 17 years of age.

19. It is also of importance to note that the wife had not sought in her s 79A application (drawn by her former solicitors) specific relief that she be given the Suburb N property. That was so despite the fact that in December 2017, she had sought to stay the auctions because she wanted to live in the property. When that observation was made by senior counsel for the husband, the wife commented that she intended to amend her application.

20. It must be noted that the wife had been represented at previous hearings by not only senior counsel but junior counsel and if my recollection is correct, at least on one occasion, by a number of solicitors who were present throughout the hearing.  It was that same junior counsel who appeared for the wife on 18 December 2018. 

21. I do not consider that the husband had been taken by surprise by the absence of a formal claim for relief for the Suburb N property to be transferred to the wife having regard to the nature of the wife’s application in December 2017.

22. In returning to the wife’s affidavit, she referred to the parenting proceedings and the husband’s actions but I consider those matters irrelevant given my assessment that the parties’ now 17 year old daughter has had no obvious connection with the Suburb N property for years.  The wife said that the “balance of convenience” lay in granting her application because of the “relative” imbalance financially between the parties “even though the child has been living with the wife”.

23. The last observation just mentioned strays into the area of the parenting dispute.  Having regard to the age of the parties’ daughter, and absent any other evidence, that must be seen as irrelevant.  Importantly, the undefended hearing in March 2017 occurred at a time when the court was told that there were significant concerns about the wife’s care of the teenage daughter.  Persistently throughout the stay application, the wife made reference to various health issues of both the daughter and herself but no specific details were provided and certainly none that might connect her own health with some need to retain the Suburb N property.  It can be seen that upon the sale, the proceeds will remain in trust pending the wife’s application being determined. 

24. It is also not disputed that the 2017 orders were parenting orders made for the child to live with the husband but those later failed and the child now resides with the wife. 

25. As to the need for the daughter to retain some connection with Suburb N, the wife said that the “relative prejudice” would be greater if the stay was not granted because the daughter had been assessed by her “life-long treating doctor and others” that it was best that she have a “restoration of certainty, security, familiar environment and family history” by returning to her former home at Suburb N.  That is not evidence of any merit bearing in mind the number of years since the daughter had lived in that property.  There were other residences of these parties in Melbourne and the United States of America. It is therefore impossible to understand how the wife can argue there is “relative prejudice” to the daughter in this particular stay application.

26. As to how her former lawyers have handled the proceedings, the wife said:

    The balance of convenience and relative prejudice lies in granting the stay because the wife and child were prejudiced as her lawyers did not provide information as per her instructions before the December hearing and otherwise when the wife instructed them to file material to put before the court.

27. The wife then said that the husband had been “effectively kept immune” because he was in credit from the “overpayments made by the wife”.  There was no downside for the husband according to the wife because of his “relative wealth” and because the wife would continue to make the payments after the court took into account that she had overpaid.  Below, I return to the reasons for judgment made in December 2018 and more specifically, to the submissions that were put on behalf of the wife at that time. To the extent that the wife asserts that her counsel and solicitors did not put proper submissions before the court, those are matters that can be taken up with the relevant professional bodies.  There was no application to specifically deal with a reconsideration of the basis of the December 2018 hearing based on negligence on the part of the lawyers. The wife’s affidavit said that she had made the required payments but again, I refer to the reasons below which formed the basis of the December 2018 to reject that proposition.

28. In essence, the wife argues now that the husband is not honest but those are matters that go the s 79A application. For the reasons later set out, the appealed orders were determined on specific grounds.

29. Of the husband’s affidavit relied upon by the wife, he said he “continued to rely upon” a whole raft of previous affidavits. His practitioners should know that their client cannot do so as those affidavits were designed for a specific (and now determined) hearing.

30. The husband said that the Suburb N property had already been scheduled for auction since the 2018 orders and that some repairs had been done and others were to be done.  The properties were “bleeding” cash and he was willing to sell before auction if a reasonable offer was made.  He had signed exclusive sales authorities and dates for auctions had been listed on ….  It was the reference to his willingness to sell prior to auction that gave rise to concerns expressed by the wife.  She wanted an assurance that Suburb N would be auctioned to avoid what she alleged was a possible contrivance by the husband.  I have indicated that she can make a proper application when she considers that necessary and as senior counsel for the husband said, if the husband was doing something wrong, she had her remedies. 

31. The approach to a stay application pending an appeal is hardly controversial.  There are a number of authorities that guide the exercise of discretion (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Ltd [No 1] [1986] HCA 13; (1986) 160 CLR 220 and Jennings Construction Limited v Burgundy Royale Investments Pty Ltd [1986] HCA 84; (1986) 161 CLR 681). All of the authorities stress the discretionary nature of the power. Indeed, the wife acknowledges that.

32. In addition to the matters just mentioned, the principles indicate that the onus to establish a proper basis for the stay is on the applicant although she does not need to demonstrate special or exceptional circumstances.  Importantly, the husband is entitled to the benefit of the judgment because he can presume that the judgment is correct. 

33. The court is obliged to examine the bona fides of the applicant.  The court must weigh the balance of convenience and the competing rights of the parties.  The competing rights of the parties here are quite stark.  The husband says that orders were made finalising his property rights at a time that the wife could have participated but chose not to and the hearing proceeded on an undefended basis.  As I have earlier observed, the husband asserts that the properties are “bleeding” and he wants to wind up what is an unhappy financial relationship arising out of the breakdown of the marriage. As against that, the wife wants to retain the property and asserts that it has unique qualities.  I return to that uniqueness below. 

34. The 2018 reasons indicate the basis upon which I made the determination.  There is no new evidence presented by the wife that would indicate that I could have the confidence that her compliance with the obligations arising from previous orders would occur.  Accordingly, the balance of convenience, when considering the competing rights of the parties, favours the husband.

35. A fundamental question is whether or not a refusal to grant the stay would render the appeal nugatory. That argument can only focus on the loss of the property but if the wife’s view is correct, she would ultimately have the benefit of the net proceeds instead.  The “uniqueness” of the property is a difficult thing to assess but some indication can be gleaned from her affidavit where she said that the mental health of the 17 year old daughter required that she had this particular property.  The absence of any evidence to support that assertion requires the court to reject the argument. 

36. In my view, the refusal of a stay would not render her appeal nugatory.

37. The court has to assess on a preliminary basis the strength of the proposed appeal.  That can be assessed in two lights. The first relates to the grounds of appeal to which I have already referred and the other relates to the reasoning given for the orders in the first place. With some trepidation bearing in mind I am reviewing my own approach to the 2018 hearing and orders, when assessing both issues, my view is that the appeal has little merit.

38. The court is also obliged to consider the time before which the appeal could be heard and whether satisfactory arrangements may support the granting of a stay in the interim.  There is no evidence before the court as to when the appeal could be heard and as I have already observed, the current Notice of Appeal could hardly be seen as proper grounds of appeal at all.  Importantly, as I have also observed, the husband maintains that the financial consequences of not selling the property are difficult for him. The wife’s argument is that she would fulfil the obligations but I have no confidence about that. I have no confidence that the wife has the capacity to make the payments. 

1. I therefore return to the December 2018 reasons for judgment. Because of the submissions of the wife as to such things as the “special circumstances” and denials of fairness and natural justice, along with the discretion having miscarried, I quote what I said in December.  I begin with the reference to the wife’s claim that there was an argument between the solicitors for both parties about the land tax debt.  It is best that I set out the reasoning in full:

   [21]For reasons that remain unclear, whatever correspondence was provided between solicitors, the wife’s solicitor was not satisfied. Subpoenae was then sought to be issued to the State Revenue Office to provide the land tax assessments from 2012 to date and various pieces of correspondence between the husband and that office.  The State Revenue Office quite correctly pointed to the fact that they were not to be so subpoenaed, and the solicitor then sought an alternative method of obtaining the information. The wife said that in October 2018, the husband’s solicitor provided to her solicitor 228 pages of documents that had been provided by the State Revenue Office.  To the extent that the wife intended I draw an inference that this was an overwhelming amount of material, I do not do so. In my view, the document that was provided earlier in the year by the husband is quite clear and her obligations could have easily been ascertained with some cooperation which was not sought. No plausible explanation has therefore been given for the delays.

   [22]To the extent that the wife was asserting that she did not have to pursue what her obligations to pay the land tax were because the husband was the debtor, I reject any such suggestion. Whilst that was not specifically put by counsel for the wife, the wife’s position had that strong flavour. The orders of the Court were clear. The wife had the obligation to pay as and when the payments fell due. The evidence of the husband, which seems to me to be uncontested, is that he provided the accounts as they were received. The silence of the wife and her solicitors remains unexplained.

   [23]The husband issued the application in a case on 9 November 2018 seeking the sale of the property.  He supported that with an affidavit which set out the history of the matter and he expressed his frustration because of the impact upon his financial position.  The husband deposed to the fact that in October he received further correspondence from the State Revenue Office demanding immediate payment by which time, the outstanding sum was $26,364.27. Importantly, that included $1,000 of penalty interest, but of course it was in the name of the husband.  The husband deposed to a conversation between the respective solicitors wherein the wife’s solicitor said they would have a response by the end of the week. That would have been 2 November 2018. No such response followed.

   [24]With the stand-off, State Revenue Office referred its claim to a solicitor to commence legal proceedings against the husband. The wife’s solicitor was advised of that. The husband requested payment by 2 November 2018, failing which he would seek to have the property sold. No response was received. More importantly, no payment was made.  (My emphasis).

   [25]When the husband issued the proceedings on 9 November 2018, the land tax bill had been outstanding for seven months.  The wife has given no explanation for her non-compliance.  (My emphasis).

   [26]In her affidavit filed at the hearing, the wife deposed to the fact that on 3 December 2018, she borrowed $26,600 from friends and paid it into her solicitors trust account from which the debt of $26,502.47 was paid to the State Revenue Office.

   [27]The absence of an explanation for the non-payment and the concerns of the husband about what may happen again shortly, bearing in mind the wife is borrowing money to pay these amounts, is very concerning. The history of this case gives me little comfort in circumstances where the very final orders were made on the basis that the wife had not cooperated. Twice, I asked counsel for the wife for an explanation as to why her instructors had not responded and she said she was unable to provide an explanation. I must therefore presume that the wife did not or would not, give instructions. It is timely to remember that in respect of obligations under Court orders, Rule 1.08 of the Family Law Rules 2004 (Cth) is also directed to lawyers. (My emphasis).

   …

   [29]The absence of explanation, the likelihood of a repetition and the continuation of the lack of response places the husband in the situation where the sorts of demands by the State Revenue Office may continue.

   [30]In my view, the wife has had ample opportunity to do what she was obliged to do (and more importantly consented to do) under the orders that can be traced to her request for an indulgence in December 2017. In my view, to avoid further litigation in respect of these issues, which unfortunately use up extraordinary amounts of court time, the only appropriate orders that the properties now be sold. The money will be retained in a controlled monies account bearing interest so to that extent, the wife’s s 79A application is partly prejudiced.

2. As to the wife’s argument to which I have already referred about the uniqueness of this property, I said:

   [31]Counsel for the wife submitted that the balance of convenience favoured the wife because once the property was gone, it could not be retrieved. In reality, that submission only has merit if it is accepted that the M Street property was “unique”. No doubt other people will also see this property as unique and be prepared to pay for it and the wife would then have ample access to cash to obtain the benefit of other property if she was ultimately successful under the s 79A application.

3. The wife then seemed to say that I had ignored the fact that she had made payments as she was obliged to do under the orders.  I reject that because I said in December:

   [33]It is important to acknowledge that the wife has paid sums of money but her indication that she has had to borrow points to the fact that she does not have the resources to keep this property unless she is ultimately successful on the s 79A application. That is not an easy bar to jump. If she has the capacity to borrow significant sums of money, no doubt she can make an offer to buy the property without it having to be sold on the public auction market.

4. I concluded:

   [34]In all the circumstances, it is just and equitable to make an order to sell M Street on the basis of the wife has failed to satisfy me that there will not be repetition of what has gone on over 2018.

5. The absence of any clear indication as to what miscarriage of justice had occurred, or where the denials of procedural fairness were, make it impossible to assess the merits of the appeal. 

6. Whilst the wife says the property’s uniqueness will be lost, the focus of her stay application was more about her daughter’s attachment to it than her own capacity to acquire another property if she is ultimately successful under s 79A. It is asserted by senior counsel for the husband that there can be no guarantee that the s 79A application will be successful and he has said previously that the husband is contemplating bringing a summary dismissal application. That has not eventuated.

7. The wife criticises her former lawyers for not following her instructions.  I know nothing about whether that is correct but in past hearings, the wife has made allegations of financial fraud and impropriety against the husband and produced no evidence of substance that could be relied upon. Her present affidavit is largely a repetition of her past allegations.  Another year has gone by and the matter of a permanent resolution of the parties’ financial circumstances seems no closer.  It is therefore important to acknowledge that the husband already has the final 2017 orders and is presumed to be entitled to the fruits of the judgment.  That entitlement is therefore now almost two years old. 

8. Nothing was said by the wife about recasting her grounds of appeal other than that she intended to do it. I have no indication as to which headings (if any) have substance. No indication was given as to whether she would have legal representation to undertake any such task. 

9. Thus, notwithstanding the wife’s assertions, I have no concept of how she could be successful on an appeal where, in December 2018, I considered the balance of convenience of both parties and specifically, her counsel was unable to explain why there had been no response by her instructors to the requests of the husband’s solicitors which would have answered his basic concerns about the future.

10. If, as the wife now alleges, she had given those instructions, it is hard to see how it would have made any difference when the focus was on whether or not the problems that gave rise to the husband’s applications would arise again.  I therefore do not accept the wife’s assertion that her lawyers just ignored her. She asserted in the stay application that it was unsurprising that the lawyers would not confess that they had made a mistake.  That assertion is too simplistic having regard to the fact that the evidence presented to the hearing in December by the wife was by affidavit which she had only sworn just prior to the hearing itself.

11. The court must determine this on the usual discretionary principles.  In my view, nothing I have heard warrants a stay being granted here and accordingly the application must be dismissed.

12. Senior counsel for the husband then sought costs.  The wife responded by saying that she wanted those costs reserved.  In my view reserving the costs here would be of little value bearing in mind the need to make a determination under s 117 as to whether or not there were circumstances to justify a departure from the principle that each party pays their own costs. 

13. I gave the wife an opportunity to file a written submission because she said she was not in a position to proceed at that time with her costs argument.  I gave the husband’s counsel an opportunity to respond. 

14. Before dealing with the relevant submissions, I wish to deal with the wife’s objection to the fact that at the conclusion of the hearing and upon the husband’s oral application, I certified that it was reasonable for him to be represented by senior counsel. I did not seek the views of the wife at that time but she has more than adequately dealt with the issue in her written submissions. The certification does not mean that, as a matter of course, the wife would be encumbered with greater costs. The quantum of costs still lies with the Court. The quantum of costs and the reasonableness of the husband having representation of the seniority that he chose are two different things. For the reasons that follow, and after reading the submissions of the wife, I would still not alter my certification.

15. Rule 19.50 of the rules of court reads as follows:

    The judicial officer hearing a case may certify that it was reasonable to engage a lawyer (including Queen’s Counsel and Senior Counsel) as counsel to attend for a party.

16. The submission of the wife was that whilst the husband could have whomsoever he chose as his lawyer, it was not reasonable to “pass on” the costs to her. She submitted the Court should not “endorse” in circumstances where the husband sought to have her pay those costs and where she was a self-represented litigant. In addition, she submitted, she had the responsibility of the child and there was “evidence of the husband’s significant wealth”. Whilst those matters cross over into the other areas of whether a costs order should be made or not, they are not directly relevant to whether the Court should certify for counsel.

17. In determining whether it was reasonable for a litigant to be so represented, the rule has no listed criteria. Different minds will disagree on whether or not a particular case has complexities that warrant experienced lawyers. One of the difficulties is that the court has to look at the issue retrospectively because the costs issue is not raised until the end of the hearing. 

18. One might conclude that senior counsel are engaged because of the complexities of a case rather than because of the wealth of the client although that may not always follow. In my view, it is not appropriate to see the role of senior counsel as simply being to be involved in final hearings as there are many interlocutory disputes that have considerable complexity impacting upon how a final hearing is to be conducted. It is also clear, at least in the Melbourne Registry, that there is a significant amount of complex work in both financial and parenting cases at an interlocutory level. Many of those interim hearings have a significant impact upon how a trial is ultimately conducted or resolved. Thus, the reasonableness of engaging senior counsel in any hearing in this Court cannot be restricted to just trial work.

19. In the present case, there are significant and consistent allegations by the wife of fraud against the husband. The proceedings involve arguments about the involvement of the husband in a family trust and it would seem, at least on the papers, there are international property issues at large. It cannot also be ignored that even though the wife now appears (as she did initially) representing herself, a number of hearings immediately after the urgent application was made to stay the auction in December 2017 were of sufficient importance to see her seek the assistance of not just senior counsel but also junior counsel and attending solicitors. Whilst, as the wife herself observed, it is a matter for the individual who they engage to represent them, I would have considered that the complexities of staying orders and bringing a s 79A application in this particular case warranted a “tag” of complexity.

20. Thus, there was a lot at stake in December 2017 for both litigants with the wife arguing that the husband had significant wealth that he had not discovered and that would have justified the Court then saying it was reasonable for both to be represented at the highest level of experience. It is difficult then to isolate subsequent interlocutory hearings and argue that they did not warrant the same experience of counsel. The consequences of the orders for both parties in December 2018 were great and I see no reason to distinguish the stay application bearing in mind the wife again raised issues of fraud along with claims that her lawyers had not put matters to the Court that should have been raised. In my view, the complexity is obvious.

21. The decision by the husband to engage counsel has to be made prior to the hearing and in assessing complexity for that hearing, he has to rely upon the affidavit material provided to him. So too, the Court should contemplate complexity based upon that same affidavit material but in the context of what has gone on before.

22. I consider it a significant consideration here that there were allegations of not just impropriety against the husband in the substantive proceeding but also since the orders were made. For example, as I have earlier mentioned, the wife asserts the husband will contrive the auction for his own benefit and to her detriment. Serious allegations such as those give at least colour to the issue of complexity. That is, it looks complex.

23. I consider that this stay hearing has to be seen in the context of the whole of the matter and, with the combination of the many things asserted here by the wife along with the issue of law relating to s 79A, this was a case where it was reasonable for the husband to be represented as he was.

24. Two other matters need to be mentioned. First, the wife said in the hearing and raised it again in her written submission that Mr Strum of Senior Counsel had advised both she and the husband years ago. That is the first time that accusation had been raised before me and at no stage had I read such an accusation in any written material of the wife. Senior Counsel informed the Court that the issue had been raised with him by junior counsel for the wife at the December 2018 hearing. He said he had then rejected the truth of the allegation and the matter went no further. Having regard to the fact that the wife has had solicitors, senior and junior counsel representing her for over a year and this issue was not ventilated in the Court, I consider the assertion mischievous. Senior Counsel will now have read the written submission of the wife and I am unaware of what response he would make to the written allegation but in his submission in the courtroom, he said that the factual assertion was untrue.

25. The second matter is that the wife raises in her written submission that the Court did not call upon the husband’s counsel to respond to her case. One explanation for that is that I had specifically listed the wife’s stay application on a day where I was part heard in a long-running trial. The wife ventured into a number of areas that, as I have observed above, could not justify the Court exercising the discretionary power to grant her application but she also raised a number of other matters including issues about the parties’ child and the auction that were not raised in her application. Having regard to the pressure on the Court to deal with matters expeditiously, and having teased out of the wife just what her argument was about the stay, I considered there was little, if anything, the husband’s counsel could say that would assist. I had the benefit of the husband’s affidavit and his application making clear that he opposed the exercise of the discretion in favour of the wife. In those circumstances, there was no reasonable basis to hear from the husband further. That cannot be read as a basis to say that it was inappropriate to certify as I have. The wife’s case did not justify the exercise of the discretion.

26. I turn then to the costs application which is for an indemnity costs order. As far as the Act sets out the approach which the Court must follow, the wife had done her research. In her written submission she referred to the relevant provisions of the Act and also an authority in relation to indemnity costs. I am satisfied she is well-versed in the approach the Court can take.

27. Section 117(1) of the Act provides that, subject to subsection (2) (and other sections not relevant here) each party shall bear his and her own costs. Subsection (2) provides that if the Court is satisfied that there are circumstances that justify it in doing so, the Court may, subject to s 117(2A) of the Act, make such Order as to costs as the Court thinks just.

28. Section 117(2) requires a finding of justifying circumstances as an essential prerequisite to the making of an order and if that arises, the Court is obliged to consider the matters in s 117(2A). As for justifying circumstances, there does not need to be exceptional circumstances. The question to be asked is whether or not whatever the circumstances are, they justify an order.

29. It is the combination of the justifying circumstance(s) and the factors in s 117(2A) that give rise to the entitlement of the Court to depart from the Legislature’s edict that each party shall bear their own costs.

30. It is only if and when such an order is made that the Court can contemplate the quantum of the costs sought and specifically then, whether there should be an indemnity type order.

31. The gravamen of the husband’s case is that the wife’s application could not have succeeded on the material she put before the Court. The wife’s written argument reads as follows:

    Put simply my case is that the decision made in December 2018 to discharge the stay that had been in place for the best part of a year was with respect an exercise of discretion which I am entitled to challenge on appeal even though its (sic) entirely understandable that your Honour believes that he got the decision right. I believe….the Court took into account irrelevant considerations and failed to take into account a number of matters including the fact that I had already pay away substantial funds in accordance with the orders granting the stay and had complied (albeit late) with the Husband’s demand (which I say was unreasonable) that I pay arrears of Land Tax following a reassessment which could not properly be considered to be a part of holding the Husband harmless for holding costs incurred after the stay had been granted not those accrued many years earlier which the Husband would have had to pay regardless of the stay.

1. There are a number of matters in that long sentence that I have already addressed in these reasons. However, I repeat that the wife was represented by counsel at the December hearing and I am at a loss to understand what the assertions are of “irrelevant considerations” and “failed to take into account a number of matters”. These are not apparent from her grounds of appeal and not addressed in the affidavit. The wife is correct that the decision in December was an exercise of discretion and thus, the authorities on appeal make clear such a challenge is difficult unless the irrelevant considerations or ignoring of relevant matters can be shown. I do not know to what the wife is referring and as she acknowledges in her written submission, as a self-represented litigant, she prepared the grounds of appeal herself. Those grounds would normally give a clear indication of the irrelevant considerations or failure to consider relevant matters. As earlier mentioned, I could not discern those.

2. In my view, the wife cannot rely upon her self-representation here as she was represented at the December hearing and, as already mentioned, she filed the notice of appeal in January. I have presumed she retained solicitors after the December hearing for some time. In addition, self-representation alone cannot be a basis for avoiding an order for costs as it would mean that people could plead ignorance and cause the other party significant inconvenience.

3. In this case, the wife had plenty of time to get alternate advice if she was dissatisfied with her then solicitors. She has shown by her written submission that she has research capacity. She may not have practiced as a lawyer but she has tertiary qualifications. She is certainly capable of cogent and logical argument as the courtroom saw. She argued that she (and her daughter) have health issues and whilst that may be so, I am unaware of how those assertions, if true, affect her daily activity. I do not know whether she is inhibited in some way and she has regularly filed documents including pages that are in typed format.

4. The rules of the Court make clear that lodging an appeal does not stay the operation of the order and that would have alerted the wife to the fact that she had to seek a stay. She did that and as such, she could have ascertained from the authorities the long-standing principles about a stay.

5. Whilst the granting or rejecting a stay is in itself a discretionary act, the wife’s application here had no discernable merit in the light of what she had to prove. The most fundamental concern was her assertion that this property was unique yet the sale of the property (in which she was not living) would have seen the net proceeds of some substance placed in a trust account pending the determination of her substantive claim. In my view, the husband was put to an unnecessary expense because of the nature of the wife’s application. That unnecessary approach justifies a departure from the principle that each party should bear their own costs.

6. That then requires an examination of s 117(2A). The considerations include the respective financial circumstances of the parties. The wife asserts impecuniosity but has had the benefit of a property order and had the assistance of what I could only describe as a team of lawyers. In the absence of specific evidence to highlight her financial circumstances, I remain skeptical about her impecuniosity. Despite that, the wife maintains that there are assets not disclosed to the Court and if she is successful in that assertion, I have presumed that she considers there will be significant money due to her. Thus when considering the financial circumstances of the parties, the Court may take into account what the litigant considers will be the future based upon the case they say is arguable.

7. Another consideration is her conduct as a litigant. The wife’s affidavit traversed issues unconnected with the December determination resulting in some parts being struck out but otherwise, this factor does not assist me.

8. There are apparently no legal aid considerations here or at least none were raised.

9. The wife has been wholly unsuccessful and I am unaware of any negotiations as to offers.

10. In the circumstances, the primary factor justifying an order for costs here is the misguided approach of the wife in bringing the application based on the material she did. That wasted the husband’s costs. That justifies an order for costs notwithstanding the assertion of impecuniosity.

11. The husband sought costs on an indemnity basis.  In Prantage & Prantage[2013] FamCAFC 105; (2013) FLC 93-544, the Full Court set out the relevant approach to such a claim. The Full Court recognised that an order for costs on an indemnity basis was a very great departure from the “norm”, that is, from not just that each party should bear their own costs but also from the scale for costs in the court’s rules. But it is also clear that the Full Court was talking about the Court being well aware that if a party made such a claim, the court had to understand not only what their contractual obligation was but also how far outside of the scale costs, the contracted sum was. In this case, I do not have that information but in any event, I would not find this case to be outside the norm. In my view, with a litigant in person, the Court might presume that the approach that person takes will often not be as well-thought out as that of a lawyer. Self-represented litigants are very much a part of the court’s diet and if the other party who is represented by a lawyer contracts out of the scale, they must understand the associated risks of not getting all of what they incur back. As I observed in Prantage, it is rare these days to see lawyers acting other than on a commercial rather than a scale basis. The Full Court held that that was not a basis to make an indemnity costs order; indeed, Murphy J was of the view that it is a good reason not to make such an order. As all lawyers who contract out of the scale are required to advise their clients of that risk, it ought come as no surprise to such a litigant when the court rejects the indemnity costs claim.

12. In my view, the principle that the scale costs are justified should apply here.

13. Should the costs here be fixed or assessed? Rule 19.18(1)(a) provides the option for the court to fix the costs. As the wife is without representation and an assessment would incur further costs for the husband, I consider fixing the costs will be quicker and less cumbersome.

14. On an assessment, albeit contemplated in the negative rather than the positive, the registrar must consider whether the costs claimed were reasonably necessary for the attainment of justice and proportionate to the issues in the case.

15. The husband’s affidavit in reply to that of the wife was measured and appropriate. I have already said that it was appropriate to have senior counsel having regard to the complexity of the matter generally even if the stay application of the wife was misconceived. It might reasonably have been anticipated that the wife would endeavour to “fix up” the inadequacies at the stay hearing but as it turned out, she did not.

16. Although no specific amounts of costs were mentioned, I consider that as I intend to allow costs on scale, I can determine what is reasonable here.

17. I propose to allow the preparation of the affidavit and response, obtaining instructions and reading the wife’s material, briefing counsel and attending to instruct in the total sum of $1281.24. I propose to allow senior counsel’s fees at scale including preparation at $5711.06. The total is therefore $6992.30.

18. The wife sought a stay until the properties are sold and the “final accounting” with the husband occurred. I have no understanding of how long that will be nor whether the wife will be successful. If she is not, that “final accounting” presumably will not occur. I consider timing of the the payment of the costs is an issue between the parties and if necessary, can be an enforcement issue which will then take into account in greater detail than I can apply, the question of the wife’s capacity to pay. I therefore decline to make an order staying the payment of costs in the way sought by the wife.

I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 5 March 2019.

Associate: 

Date:  5 March 2019