Nevett and Nevett (No. 2)

[2007] FamCA 741

FAMILY COURT OF AUSTRALIA

NEVETT & NEVETT AND ANOR (NO. 2) [2007] FamCA 741

FAMILY LAW - COSTS – Wife wholly unsuccessful

Family Law Act 1975 (Cth)

Penfold v Penfold (1981) 44 CLR 311

APPLICANT: MRS NEVETT

RESPONDENT: MR NEVETT

INTERVENOR: M PTY LTD

FILE NUMBER: MLF 2459 of 2006

DATE DELIVERED: 25 July 2007

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: BY WAY OF WRITTEN SUBMISSIONS

REPRESENTATION

COUNSEL FOR THE APPLICANT: IN PERSON

COUNSEL FOR THE RESPONDENT: MR KORFIATIS

SOLICITOR FOR THE RESPONDENT: WEBB KORFIATIS

COUNSEL FOR THE INTERVENOR: MR BERGER

SOLICITOR FOR THE INTERVENOR: BERGER KORDOS LAWYERS

Orders

1. That by 4.00pm on 1 November 2007, the wife pay the costs of the husband fixed at $1500.

2. That by 4.00pm on 1 November 2007, the wife pay the costs of M Pty Ltd the sum of $1500.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 2459  of 2006

MRS NEVETT

Applicant

And

MR NEVETT

Respondent

And

M PTY LTD

REASONS FOR COSTS JUDGMENT

1. On 6 July 2007 I made orders on an application by the wife dismissing all proceedings of an interim nature.  I made provision for the parties to give submissions in writing if anyone proposed to make an application for costs.

2. In this case, the husband and a third party company have made that application for costs.

3. I shall not repeat the findings I made in the reasons for judgment. Those will become evident when I deal with the provisions of s 117 of the Family Law Act 1975 (Cth) (“the Act”) below.

Husband’s submissions

1. The husband argued in his written submissions that prior to the hearing, he provided all of the documents in his possession that fell into the category of those described in the orders sought by the wife.  He further submitted that some of the issues pursued by the wife had already been litigated in previous interlocutory hearings and she had been unsuccessful.  He argued that the wife in this case was wholly unsuccessful as she had been on a previous occasion when she had also incurred an order for costs.

2. The husband claimed an order for $2500 without specifying any calculation.

The third parties’ claim

1. The third party is a company M Pty Ltd.  It was represented by its solicitor in these proceedings.

2. The third party submitted that prior to the hearing, it had provided the wife with the documents that she had sought two days before the application was served.  I note that the wife in reply says there is a dispute about the date of the posting of those documents but little turns on that because having been served, the third party asked the wife to withdraw the proceedings.  It says that that request was not responded to.

3. As a consequence, the third party seeks $3385 on an indemnity basis.  Those costs have been calculated mostly on an hourly basis of $275 per hour. 

4. Whilst the wife disputes the timing issue to which I have referred, she does not deal with the issue of the fact that the third party had to respond as well as attend the court proceedings represented.

The wife’s reply

1. The wife sought to have the application for costs by both the husband and the third party dismissed on the basis that I dismissed all applications.  That ignores the fact that I made specific provision in paragraph 7 of the orders for an application for costs to be made.

2. In respect of the husband’s application for costs, the wife argued that his legal costs were incurred substantially by a total lack of response to her letter.  As a consequence, she argued, she filed her application directly out of a continued lack of disclosure by the husband and non-compliance by the husband in relation to prior court orders.  She then argued that notwithstanding the husband’s claim that he had provided full disclosure and compliance, she disputed that.

3. Having regard to the findings that I have made, there is little merit in her argument.

4. In paragraphs 13 to 24 of her written submission, the wife endeavours to effectively reargue the matter that has now been determined.

5. In respect of the application by the third party, similar issues have been canvassed.  What the wife argues is that the third party is still a party to the proceedings and has not sought to be removed.  The wife continues to argue that she has not been provided with adequate discovery.

6. In respect of the costs issue, she argues that there was a total lack of any response prior to the service of the Form 2 application despite several requests for documents but again that ignores the fact that she continued the proceedings after the offer was made for them to be withdrawn.  The wife argues that the third party has incurred legal costs as a result of their own “actions or inactions” and she ought not be responsible for them.

Section 117 of the Family Law Act

1. Section 117 of the Act provides that each party shall bear his or her own costs unless the Court is of opinion that there are circumstances to justify it making an order. The Court must satisfy itself that it is just to make that order.

2. In respect of that issue, this is a case where the wife has persisted in the face of the husband and the third party indicating that either documents had been provided or would be provided and that litigation should not continue.  Both the husband and the third party complain that their offers were ignored necessitating them attending court.  These proceedings were not just about discovery.  A considerable amount of paperwork and time was spent canvassing issues which in my view, had been comprehensively determined in previous hearings.  To simply refer to an argument about lack of response or failure to disclose documents ignores much of what was litigated.

3. In Penfold v Penfold (1981) 44 CLR 311 the High Court (Stephen, Mason, Aickin and Wilson JJ) said:

   It is an accurate description of s 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s 117 (2). As sub-s (1) is expressed to be subject to sub-s (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.

   Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs.

4. In my view therefore this is a case where it is just to make an order for costs and to depart from the general position that each party should pay their own costs.

5. In the circumstances, having found that there are justifying circumstances, I turn to s 117(2A). That provision reads:

   (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.

6. The financial circumstances of each of the parties has been referred to in my reasons for judgment.  The husband and the wife are both on reasonable salaries and appear to have limited financial obligations.  What is sad, as has been mentioned on occasions prior to my reasons for judgment, is that there is a very limited equity to be divided between them in respect of the disputed property.  This is not a case however in which the parties are impecunious.

7. As far as I can tell from the proceedings, no party is in receipt of assistance by way of legal aid.

8. In respect of the conduct of the parties to the proceedings, particularly in relation to discovery and the production of documents, I have made specific reference to the fact that the husband and the third party have provided what information they have.  I repeat however that these proceedings were not just about the discovery issue nor were they about the failure of a party to the proceedings to comply with the previous orders of the Court.  Whilst that is a subject of some dispute on the part of the wife, as I pointed out in my reasons for judgment, the evidence was that the husband had provided the documents that he was obliged to provide and these were not enforcement proceedings in the strict sense of the word.

9. There can be no question in this case that the wife has been wholly unsuccessful.

10. Sub-section 2A also makes provision for an offer in writing and that may refer to the offer by the husband and the third party to the wife to withdraw the proceedings on the basis that there was no further document to be provided other than what they were then giving her.

11. Accordingly, having regard to each of those matters, it is appropriate that an order for costs be made against the wife in favour of the husband and the third party but not to the extent of the sums claimed.

12. As has been said many times, an order for costs is an exercise of discretion. 

13. The husband did not quantify the costs however, I am conscious of the fact that responding material was provided and the solicitor for the husband attended the hearing to argue the matter.  In my view, this is a matter in which it would be appropriate for the wife to pay $1500 towards the husband’s costs.

14. The same argument must apply in respect of the third party.  I reject the suggestion of the third party that costs should be ordered on an indemnity basis.  No cogent reasons were put forward as to why the normal rule should be departed from and I noted that the solicitor for the third party claimed an hourly rate of $275 where the current Family Law Rule Schedule 3 scale is $192.90 per hour.  In my view there is no basis to distinguish between the third party and the husband.  In those circumstances, I propose to allow $1500. 

15. I do not see this as a case in which there is any justification for ordering that there be a stay of the payment of the costs until the final hearing as that may be some considerable time away and ultimately, as the wife is not represented by legal practitioners, she has the advantage of not having to incur costs for herself at this stage whilst the third party and the husband have that problem.  In the circumstances, I propose to order that the costs be paid within three months of this date.

I certify that the preceding Thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate:

Date:  25 July 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as NEVETT & NEVETT