ON & ON - [2008] FamCA 70

[2008] FamCA 70

FAMILY LAW ACT 1975

FAMILY COURT OF AUSTRALIA

AT MELBOURNE NO. MLF 7114 of 2001

IN THE MATTER OF:

MR ON (Husband)

and

MRS ON (Wife)

COSTS JUDGMENT DELIVERED BY
THE HONOURABLE JUSTICE GUEST

Date of Hearing:               14 August 2007, 21 September 2007, 18 December
  2007
Date of Judgment:            12 February 2008

Appearances:

Mr Kirkham QC, instructed by Kennedy Wisewoulds, Solicitors, on behalf of the Applicant (wife)

The Respondent (husband) in person

CATCHWORDS:

FAMILY LAW – COSTS - Following a successful and lengthy retrial of a property application brought by the wife, application was made by her for costs assessed on an indemnity basis – Husband was entirely unsuccessful and serious findings had been made of his wilful failure to make full and frank disclosure, his unilateral treatment of the joint assets of the parties following separation, extravagance and reckless behaviour – Orders made for wife’s costs of trial to be assessed on a lawyer and client basis.

INTRODUCTION

Following handing down my reserved judgment on 10 July 2007 in the substantive property proceedings, the wife issued an Application in a Case on 3 August 2007 seeking an order that the husband pay her costs of and incidental to the final hearing and that such costs be calculated on an indemnity basis. The application was supported by an affidavit sworn by her and also filed on 3 August 2007. I have regard to the contents of that affidavit in which she deposed that as matters then stood, her total estimated costs amounted to approximately $723,147. She is bound by a Costs Agreement, dated 1 July 2001 and a variation to that agreement dated 28 June 2006. Copies of those Agreements were annexed to her affidavit.
The application came before me on 14 August 2007 on which day I ordered the wife to file and serve written submissions on or before 28 August 2007. I further ordered the husband file and serve his written submissions on or before 11 September 2007. The wife complied with my order and filed her submissions on the due date. The husband failed to comply and there has been no compliance even to this day by him in relation to my order, despite the passage of some five months, and longer.
On 13 September 2007 the husband caused to be filed an Application in a Case in which he sought an order that the wife pay his costs of the substantive proceedings. That application was supported by an affidavit sworn by the husband and also filed that day.
In his affidavit, the husband referred to his Form 1A Response filed on 29 November 2001 to the Form 1 Application filed by the wife initiating the proceedings on 5 November 2001. Given the lack of material provided by the husband, despite the various orders made by me, I propose to set out the contents of his affidavit which is as follows:
“2. In my response filed on 29/11/2001 I sought orders by which:
(a)the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: ON & ON [2008] FamCA 70
Case: [2008] FamCA 70
Decision Date: 12 February 2008

CaseChat Overview and Summary

In the Family Court of Australia, Justice Guest considered an application for costs following a lengthy property dispute between the wife (Applicant) and the husband (Respondent). The wife had been successful in a retrial of her property application, and she sought an order for her costs to be assessed on an indemnity basis. The husband had been entirely unsuccessful in the proceedings, and significant findings had been made against him regarding his wilful failure to disclose assets, his unilateral dealings with joint property after separation, and his extravagant and reckless financial behaviour.

The legal issues before the court were whether the wife was entitled to an order for costs against the husband, and if so, on what basis those costs should be assessed. Specifically, the court was required to determine if the circumstances of the case justified departing from the usual rule that each party bears their own costs, and whether those circumstances warranted an assessment on an indemnity (lawyer and client) basis rather than a party and party basis. The court also considered the husband's prior settlement offers in light of section 117(2A)(f) of the *Family Law Act 1975* (Cth).

Justice Guest reasoned that the husband's conduct throughout the proceedings, including his wilful failure to make full and frank financial disclosure, his unilateral and often concealed dealings with joint assets, and his breaches of court orders, constituted exceptional circumstances justifying a departure from the ordinary rule regarding costs. The court noted that the husband had repeatedly failed to comply with court orders for the filing of submissions, despite numerous opportunities. Applying the principles from relevant case law, particularly *Kohan v Kohan* and *Colgate-Palmolive Company & Anor v. Cussons Pty Ltd*, the court found that the husband's conduct, including misleading the court and causing significant loss of time and expense to the wife, warranted an order for costs on a lawyer and client basis. The court also considered the husband's prior settlement offers but found them to be made at a time when full disclosure had not occurred and therefore did not warrant a reduction in the wife's entitlement to costs.

The court ordered that the husband pay the wife's costs of the trial, to be assessed on a lawyer and client basis. This decision reflected the court's finding that the husband's conduct was of a nature that justified awarding costs on a more generous basis than the usual party and party assessment, due to the exceptional circumstances and the significant impact of his actions on the litigation.

Orders