On and On

[2007] FamCA 41

FAMILY COURT OF AUSTRALIA

ON & ON [2007] FamCA 41

FAMILY LAW - COSTS – Order for costs made following interlocutory proceedings in the course of which the husband failed to disclose information relevant to his application.  Counsel for husband conceded indemnity costs.  Issue for further costs relevant to wife’s application ordered on a party/party basis.

s 117(1 ,) (2), (2A) Family Law Act 1975

JEL v DDF (No. 2) (2001) FLC 93-083

APPLICANT: Mrs Onslow

RESPONDENT: Mr Onslow

FILE NUMBER: MLF 7114 of 2001

DATE DELIVERED: 7 February 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Guest J

HEARING DATE: Written Submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kirkham QC with Mr Sweeney of counsel

SOLICITOR FOR THE APPLICANT: Kennedy Wisewoulds

COUNSEL FOR THE RESPONDENT: Mr J St John SC

SOLICITOR FOR THE RESPONDENT: Alan Wainwright J Okno & Co

Orders

1. That the husband do pay the wife’s costs of and incidental to the Form 2 Application filed by him on 17 July 2006 on an indemnity basis or in default of agreement as assessed under the Family Law Rules 2004 (Cth).

2. That the husband do pay the wife’s costs of and incidental to the Form 2 Application filed by her on 7 July 2006 on a party/party basis as agreed or in default of agreement to be assessed under the Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 7114  of 2001

Mrs Onslow

Applicant

And

Mr Onslow

Respondent

REASONS FOR JUDGMENT

introduction

1. Following argument on 18 August 2006 and for the reasons stated in my judgment handed down on 30 August 2006 I ordered, inter alia, that the wife’s Form 2 Application in a Case filed 7 July 2006 and the husband’s Form 2 Application in a Case filed 17 July 2006 be dismissed.  I reserved the issue of costs and have since had the benefit of written submissions forwarded on behalf of the wife under cover of letter dated 1 September 2006, answering submissions filed on behalf of the husband on 11 September 2006 and submissions in reply on behalf of the wife filed on 18 September 2006.

2. The reasons set out I my substantive judgment are comprehensive and formed the basis of the submissions for costs.  In coming to my determination I have proper regard to those submissions which I found to be most helpful on the issue for my determination and which have necessarily truncated my task.

3. The wife seeks an order that the husband pay her costs:

   3.1of and incidental to his Form 2 Application in a Case filed on 17 July 2006 on an indemnity basis, and

   3.2of and incidental to her Form 2 Application in a Case filed on 7 July 2006 on a party/party basis.

4. Dealing first with paragraph 3.1 hereof.  The submissions filed on behalf of the wife correctly surveyed the law and otherwise analysed the factual foundation for an award of costs in her favour on an indemnity basis.  For the husband, it was observed that the wife’s application for costs was “overwhelmingly” based upon the husband’s non-disclosure of the sale of the property at G and acknowledged that it was inappropriate conduct on his part.  It was submitted, and properly so in my view, that insofar as the costs of the wife related to the husband’s application to encumber the T property, an order for costs and disbursements properly assessed “on the prevailing costs agreement” was not opposed.

5. At that point in the written submissions filed on behalf of the husband, Mr St John next addressed criticism, for the reasons there stated, in relation to the quantum of costs sought on behalf of the wife, referring to the affidavit of Ms G as to quantum and various affidavits filed in the proceedings annexing a detailed schedule of objections to the content of the affidavits filed on her behalf.

6. In the submissions filed on behalf of the wife, it was argued that the wife sought “costs to be fixed to save the parties expense of what is likely to be a prolonged taxation” (par 2).  In relation to her Form 2 Application filed 7 July 2006, the wife sought costs fixed on a party/party basis in the sum of $11,816.50 and in relation to the husband’s Form 2 Application she sought indemnity costs in the sum of $39,088.18.  The submissions then sought to argue the various issues of objection raised in the husband’s submission.

7. I will not do this and nor is it, in my view, an appropriate task for me at this stage. Rather, it is one to be assessed on proper argument pursuant to the provisions of Division 19.6.2 of the Family Law Rules 2004. There seems to me to be fertile and arguable ground for debate in relation to a number of issues raised which may be considered on argument by the Registrar, who will be alerted to whether or not the process of assessment and challenge is brought for proper reasons. Accordingly, at this stage and given the submissions as to principle, my function is a somewhat limited one.

8. In my substantive judgment delivered 30 August 2006, I there set out in summary form the orders sought by the husband in his Form 2 Application filed 17 July 2006 which was, in my view, the most significant one for my determination.  See generally paragraphs 22 to 24, inclusive.  Having regard to the concessions made on behalf of the husband, I propose to order that he do pay the wife’s costs of and incidental to this application on an indemnity basis.  In doing so, I take into account the limitation addressed by Mr St John in his submissions (par 8).  Such an order sits seamlessly within what the Full Court had to say in JEL v DDF (No. 2) (2001) FLC 93-083 at par 62 (and onwards) and the authorities there cited.

9. I next deal with the wife’s Form 2 Application filed on 7 July 2006, the terms of which were summarised in my substantive judgment delivered on 30 August 2006 at paragraph 6 and in respect of which the wife has sought that the husband pay her costs of and incidental to that application on a party/party basis.  On the other hand, it was submitted on behalf of the husband, for the reasons set out in his written submissions, that there be no order for costs.

10. I have carefully considered the written submissions filed on behalf of the wife (par 22 to 26), the submissions filed on behalf of the husband (par 17 to 28) and the wife’s submissions filed in reply (par 25 to 27).  In my view, given the terms of my substantive judgment, it is appropriate in the particular circumstances of these proceedings to make the order sought.  With the husband no longer proceeding with his principal application (par 148 of my judgment) I then considered the contested issues remaining for my determination.  They are set out in my substantive judgment (par 149 to 163) and in respect of which the wife was wholly successful for the reasons stated by me.  There were other more modest issues between the parties that were, sensibly in my view, resolved by consent.  See paragraphs 1 to 3 of my orders made 30 August 2006.  I agree with the submission filed on behalf of the wife save that, for the reasons I have earlier set out, I will not be drawn into an assessment of the quantum of costs sought by her.  That will be, in the result, a matter for assessment by the Registrar.

11. I am satisfied from the overall orders sought by the wife in her application and having regard to the Form 2A Response of the husband filed on 24 July 2006 and having given consideration to the facts and circumstances associated with all the matters that brought the proceedings to court, that the orders made by consent and under contest are such that it is appropriate to make the costs order in favour of the wife as sought.  The submissions advanced on her behalf are, in my view, compelling and, in the exercise of my discretion, warrant the making of such an order.

conclusion

1. The applicable section of the Family Law Act (1975) (as amended) is as follows:

   “117(1)[Party bears own costs]  Subject to sub-section (2) and sections 117AA and 118, each party to proceedings under this Act shall bear his or her own costs.

   117(2)[Costs Orders]  If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in so doing, the court may, subject to sub-sections (2A), (4) 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.”

2. Section 117(1) of the Act is the basic provision which lays down the general principle pursuant to the Act that each party shall bear his or her own costs of the proceedings.  However, if there are circumstances which “justify it in so doing”, I may make an order for costs (s 117(2)).  In considering what order, if any, I should make under sub-section (2), I am obliged to have regard to the matters set out in sub-section (2A).  This section sets out matters I am required to take into account.  In so doing, I note that it is not, however, an exclusive list having regard to the wide terms of para (g), namely “such other matters as the court considers relevant”. 

3. Accordingly, when considering an application for costs in the circumstances of a particular case before me, I should, where necessary, and appropriate to do so, identify and balance the relevant matters enumerated in that section in order to determine whether or not to make such an order.  There is clear authority directing me to that course.  That task is not a difficult one given the discrete circumstances before me and the submissions filed on behalf of the wife with which I am in favour.

4. Further, it is not necessary that I be satisfied there is a “clear case” or an “an exceptional case” in order to justify an order for costs.  The requirement is that there are matters in the combination of s 117(2) and (2A) which “justify” the conclusion that costs should be ordered.  Accordingly, the overall structure of the relevant sub-sections is to provide to me a broad discretion, the exercise of which commences with the general rule stated in s 117(1) of the Act.  I might add, there is no distinction in principle between a child welfare case and a financial matter.

5. As I earlier made clear (par 11), I am satisfied, in the discrete circumstances before me, that it is appropriate to order the husband to pay the wife’s costs of and incidental to her Form 2 Application, filed 7 July 2006, for there are clear circumstances, in combination, justifying such an order. 

6. A combination of factors underpin the exercise of my discretion in favour of the wife and, without limiting the generality of my earlier commentary include the fact that paragraphs 4 to 6 of her application concerned the property at G which was, as I said, “defeated or rendered nugatory (by the husband’s) arguably surreptitious conduct”.  Prompt and frank disclosure by him of all matters relevant to the disposition of that property was withheld.  On 24 July 2006, the husband filed a Response seeking that the wife’s application be dismissed.  I thought par 40 of his affidavit filed 24 July 2006 was less than helpful and that the submissions of his senior counsel before Mushin J that day, quite revealing.  The wife only learned of the sale of that property through the issue of subpoenas.

7. I also take into account that it was not until the hearing on 18 August 2006 that the wife’s request for monies to be raised against the title to the T property (which had substantially increased in value following the judgment of Bell J on 8 September 2004) was acknowledged.  To do this, she required a withdrawal of the caveat registered against the title.  It was conceded by the husband at the hearing that some monies were required to be borrowed against the title to the property.  It was the quantum that was in dispute.  I have made my findings on this issue.

8. I also take into account that the wife agreed to the production of some documents referred to in the husband’s Form 2A Response filed on 24 July 2006 which, it appears to me as submitted on her behalf were subsumed by the overall thrust of the submissions in relation to the more substantial issues.  I have read the husband’s submissions in relation to these issues, but they do not persuade me, in the exercise of my discretion, that it would be inappropriate to make the orders sought.

9. Finally, I note that the husband has sought a stay of the order made by Mushin J on 24 July 2006 that he pay the wife’s costs of that day in the sum of $8,100.00.  Given the substantial financial circumstances of the husband and his resources, I have no hesitation in rejecting that application.  There has been no proper reason advanced to suggest otherwise.  In my view those monies should be paid forthwith.

10. In the circumstances I propose to order:

    21.1That the husband do pay the wife’s costs of and incidental to the Form 2 Application filed by him on 17 July 2006 on an indemnity basis or in default of agreement as assessed under the Family Law Rules 2004 (Cth).

    21.2That the husband do pay the wife’s costs of and incidental to the Form 2 Application filed by her on 7 July 2006 on a party/party basis as agreed or in default of agreement to be assessed under the Family Law Rules 2004 (Cth).

I certify that the preceding twenty one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Guest.

Associate: 

Date:  7 February 2007

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