Pamplin and Pamplin (Costs)

[2009] FamCA 1291

FAMILY COURT OF AUSTRALIA

PAMPLIN & PAMPLIN (COSTS) [2009] FamCA 1291

FAMILY LAW – COSTS – Wife ordered to pay part of the husband’s costs – Husband made offers that eclipsed the wife’s ultimate ordered settlement – Conduct of each party contributed to a lengthening of the trial process – Balancing the factors an order for costs is justified

APPLICANT: Ms Pamplin

RESPONDENT: Mr Pamplin

FILE NUMBER: SYF 3838 of 2006

DATE DELIVERED: 9 December 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Warnick J

HEARING DATE: 9 December 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hodgson

SOLICITOR FOR THE APPLICANT: Aitken Lawyers

COUNSEL FOR THE RESPONDENT: Mr Othen

SOLICITOR FOR THE RESPONDENT: Barkus Doolan Kelly

Orders

1. The wife pay the husband’s costs as agreed and in default of agreement as assessed in relation to the application filed 17 September 2007.

2. There be no orders as to costs in relation to the applications filed 11 March 2008 and 3 December 2008.

3. The wife pay one third (1/3) of the husband’s costs of and incidental to the application for property settlement as agreed and in default of agreement as assessed.

4. The wife pay one third (1/3) of the husband’s costs of and incidental to the application for costs heard today, as agreed and in default of agreement as assessed.

IT IS NOTED that publication of this judgment under the pseudonym Pamplin and Pamplin (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3838 of 2006

MS PAMPLIN

Applicant

and

MR PAMPLIN

Respondent

REASONS FOR JUDGMENT

1. These are applications in relation to the costs of a property settlement trial, in respect of which I delivered judgment on 30 October 2009.  The wife makes an application that the husband pay her costs.  I reject that application.  I intend to order that the wife pay a part of the husband’s costs.  I will not give separate reasons in relation to the rejection of the wife’s application, but trust that the reasons for the rejection of that application will be virtually the same as and apparent from my reasons for making the order that she pay part of the husband’s costs.

2. Apart from the costs of the substantive application, there are also costs reserved or costs sought in respect of a number of interim or interlocutory applications.  On 17 September 2007, the wife applied for the appointment of an expert to conduct an assessment of, and investigation of, various financial transactions.  She abandoned that application.  For that reason alone, in my view, and in the context of the matters that I will later discuss, she ought to pay the costs of the husband.

3. The next application was instituted by way of amended response of the husband on 11 March 2008.  Whatever might be said of the commerciality of the stance taken by the wife in relation to that application, the fact is, it did not succeed and I do not intend by virtue of some commercial assessment to order that the wife pay the costs of an application against her which did not succeed.  In my view, it is an application that ought to be seen as simply necessitated by the unavailability of a final determination and a disagreement about an interim issue – difficult to assess in the circumstances of uncertainty in relation to the overall financial affairs of the parties.

4. In relation to the application of 3 December 2008, there was an order in relation to those parts resolved by consent that each party pay their own costs.  There was a reservation of costs in relation to some orders made on 9 December 2008.  I am simply not able to identify any circumstance in relation to that application, which, in my view, justifies taking it out of the usual rule that each party bear their own costs.  Again, I say that despite the fact that orders were made on the application, because I view it as the court making a decision for the release of funds on an interim basis when the parties were still unresolved in the substantive issue.

5. As to the costs of the substantive application, I make – initially – simply a number of observations.  The first is that I think there is validity in the aspects of the issues that both legal representatives before me in turn highlight.  I think it valid for Mr Othen to submit that, whilst there may have been legitimate doubt about the result of the case for add-backs pursued by the wife, that, in the end, one ought to make a decision to attempt to settle the matter, compromising upon even such issues as that.  In one sense, uncertainty about the likely outcome of an issue is every bit as much a circumstance in which compromise should be pursued as a situation in which there is no doubt about the asset pool or no other uncertainty of the same degree.

6. On the other hand, there is also validity in that aspect stressed by Mr Hodgson, that it is very difficult for legal advisors to recommend a settlement and structure a settlement offer where there are the types of issue that there were here to be pursued.  On balance, however, though I do not think I need to reach a conclusion one submission is right or wrong, I think there is a greater strength in the position put by Mr Othen.

7. The wife’s case on add-backs was variable in relation to some add-backs that she sought;  I think she had rather poor prospects in relation to the claim referred to as the S investment, for anything beyond the capital of $600,000.  That, in my view, was always rather – in common terms – shaky, whereas really, the wife, in the end, pursued all of the issues, irrespective of merit, with much the same enthusiasm. 

8. I have already, during the course of submissions, remarked upon the husband’s conduct in the trial;  I will not repeat the description of that conduct or what I said about it, but it is a factor that against the husband, that I take into account.  It lengthened the trial;  it certainly independently caused the involvement of another expert witness;  and that is a factor that weighs against him receiving not so much any, but certainly all, of his costs.

9. The wife’s case on waste was probably difficult to predict in terms of whether a court would find the husband’s conduct reckless or not, and Mr Hodgson quite rightly points to the fact that I expressed the view that, if left to my personal judgment, I might describe it as reckless.  However, I declined to find that, seen in a genre of investment, it was reckless conduct, because I felt I was not in a position to make that judgment without evidence about the conduct of investors in that entrepreneurial field.   But it would have been a difficult judgment to make, as to whether the wife’s case would meet what is described as the Kowaliw test or not.  What might have been easier to predict was the finding that I made ultimately about the wife’s knowledge of and acquiescence or agreement in the style of investing that the parties and/or the husband undertook during the cohabitation.  Now, again, I think the balance of those considerations favours an order that the wife pay at least something of the husband’s costs. 

10. In relation to the pursuit of the issues to trial and connected, obviously, then, with the way in which any offers exchanged are treated, is what I would describe as the use of the trial as a means of interrogation.  I accept that the wife came from a difficult position of a lack of knowledge of the detail of much of the parties’ financial affairs.  Whilst one might make inquiries during the preparation for trial and even deliver questions in the nature of interrogatories, those avenues of inquiry do not have quite the same prospects, perhaps, of uncovering what one might be seeking, as do questions in cross-examination on oath in a trial.

11. So I accept that part of the nature of the issues here propelled the wife towards a courtroom interrogation such as provided in a trial.  That is one of the reasons for which ultimately I do not make an order that she pay the entirety of the husband’s costs, notwithstanding offers made by the husband over quite a lengthy time approaching trial which were clearly better than the ultimate result that the wife received.  Those offers, of course, are entitled to considerable weight in my deliberations.

12. Finally, I take account of the financial circumstances of the parties.  Again, there are two-edged considerations here.  Part of the reason the wife is in rather poor financial circumstances is that she spent an incredible amount on legal fees.  I am not able to really form a view about whether that money was well spent or not, except to say that the very quantum causes one to raise eyebrows.  The reality is that those moneys are gone, but because they are brought into the wife’s account in the calculation of her share, she is left in the situation that I described as “rather poor.”

13. On the other hand, the husband might legitimately say he should not be deprived of costs otherwise justified, because of such an expenditure on the wife’s part.  Again, neither is right nor wrong;  they are simply factors that need to be brought into the equation.  In the end, I am satisfied that because of the offers and the result measured against the offers, that an order for costs ought to be made.  All of the other factors that I have referred to cause me to, however, considerably mitigate the impact on the wife.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Warnick.

Associate: 

Date:  22 December 2009