Peake & Benedict (Costs)
[2014] FCCA 2723
•5 December 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PEAKE & BENEDICT (COSTS) | [2014] FCCA 2723 |
| Catchwords: FAMILY LAW – Costs – de facto relationship – application for costs stemming from proceedings where a section 90RD declaration was sought – party has been wholly unsuccessful as regards the section 90RD declaration – absence of offers of settlement – party has not demonstrated an appropriately, responsible, outcome focused approach towards the address of the dispute – failure to engage in meaningful negotiation – failure to observe or act upon the objects of the Federal Circuit Court Rules being “the just, efficient and economical resolution of proceedings” – limit and discount of costs on basis of applicant’s litigious conduct and refusal to negotiate in circumstances where the parties jointly own property and their dispute must still be resolved. |
| Legislation: Family Law Act 1975, ss.4AA, 13C, 43, 60I, 90RD, 90SM(1), 117 Federal Circuit Court Rules 2001, schedule 1, rr.1.03, 4.03, 11.03, 14.06, 21.02, 21.10, 24.04 |
| Aon Risk Services & ANU [2009] HCA 27 Michos v Council of the City of Botany Bay (No.3) [2012] NSWSC 1465 State of Victoria v Grawin Pty Ltd [2012] VSC 157 Pine Rivers, Caboolture and Redcliffe Group Training Scheme Inc (t/as East Coast Apprenticeships) v Group Training Assoc Qld and Northern Territory Inc [2013] QSC 87 Kenneally v Pouras & Ors [2007] SASC 303 Tasmania (see Hayward v Forest Practices Tribunal (No.3) [2004] TASSC 14 Re Malley SM; Ex parte Gardner [2001] WASCA 83 |
| Other: Lord Woolf, Final Report to the Lord Chancellor on the civil justice system in England and Wales, July 1996. |
| Applicant: | MR PEAKE |
| Respondent: | MS BENEDICT |
| File Number: | PAC 736 of 2011 |
| Judgment of: | Judge Harman |
| Hearing date: | By written submissions |
| Date of Last Submission: | 1 August 2014 |
| Delivered at: | Parramatta |
| Delivered on: | 5 December 2014 |
REPRESENTATION
| Solicitors for the Applicant: | Watts Mccray Lawyers |
| The Respondent is self-represented. |
ORDERS
Ms Benedict shall pay the costs of Mr Peake fixed in the sum of $25,000.00.
The above costs shall be payable by Ms Benedict to Mr Peake within 28 days of the parties entering into a binding agreement as to resolution of their dispute under the Conveyancing Act 1919 (NSW) or the Real Property Act 1900 (NSW), the making of orders by a Court resolving said dispute or the sale of the [E] property, whichever first occurs and provided that payment is made in compliance with this order interest shall not accrue.
The above costs shall be, until paid in full (together with any interest as may accrue thereupon by operation of the above order) a charge upon Ms Benedict’s interest in the [E] property of which she and Mr Peake are joint registered proprietors.
All extant applications and responses are dismissed.
All issues are removed from the list of cases awaiting hearing.
IT IS NOTED that publication of this judgment under the pseudonym Peake & Benedict (Costs) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 736 of 2011
| MR PEAKE |
Applicant
And
| MS BENEDICT |
Respondent
REASONS FOR JUDGMENT
These proceedings have an unfortunate and lengthy history before this Court. The proceedings have already required two substantial written judgments dealing with, respectively, evidential issues and a declaratory hearing regarding the existence or non-existence of a de facto relationship (section 90RD of the Family Law Act 1975).
On this occasion the Court is called upon to determine an application for costs made by the Respondent to the substantive proceedings. The Respondent seeks an order for costs on an indemnity basis or, in the alternative, on a party-party basis.
Past conduct of proceedings
The substantive proceedings between the parties were commenced by an Initiating Application filed 21 February 2011 by Ms Benedict. That Application sought orders with respect to property adjustment under part VIIIAB of the Family Law Act 1975 and with jurisdiction founded upon an alleged de facto relationship between the parties, as defined in section 90RD, suggested to have commenced in 1992 and have concluded with separation 18 February 2010.
By a Response filed by Mr Peake 25 July 2011 dismissal of Ms Benedict’s Application was sought and on the bases, in the alternative, that:
a)A de facto relationship had never existed between the parties; or
b)Any de facto relationship which had existed between the parties had ceased in 2006 (being a date prior to the conferral of jurisdiction in de facto property adjustment causes upon this Court or any other Federal Court).
By the above Response Mr Peake also sought an order that the Respondent pay his costs on an indemnity basis.
The Response filed by Mr Peake sought a number of interim or interlocutory orders, seeking to obtain, with Ms Benedict’s authority, copies of documents lodged by her with or created by the Australian Taxation Office and Centrelink. This plea for interlocutory relief was ultimately dealt with by the Court, having, like all other issues in dispute between the parties, been incapable of resolution on a consensual basis.
Past court events
It is both instructive and relevant to the determination of issues as raised in submissions by the attorneys for Mr Peake to consider the past history and conduct of the proceedings and the various court events which have occurred.
Mr Peake submits that significant delay in determination of the proceedings has been occasioned by the actions of Ms Benedict (amongst other things). It must be highlighted, with no relish on the part of the Court, that a significant contribution to the delay in finally determining the proceedings have been pressures of work before the Court. As a consequence the proceedings have, on at least one occasion, been marked as “not reached”.
As will otherwise be apparent from that set out below, two hearing events scheduled for the proceedings have been unable to proceed, at least as regards a determination of the applications as made by each party, as a consequence of:
a)An inadequate estimate by the parties of time required to hear the matter. Thus when the matter was first listed for hearing, as a one-day fixture, it was agreed that the matter could not possibly conclude within that time and counsel for the parties would not be available to allow the matter to proceed to completion through a continuation of the hearing the following day. Thus, subject to affording the parties an opportunity to engage in negotiation (which will be dealt with also in these Reasons) the hearing was, in effect and by consent, abandoned; and
b)On one occasion a two-day listing of the proceedings was consumed (as regards the first day of hearing and the second day then abandoned) in dealing with an interlocutory and evidentiary application by Mr Peake and resulting in judgment with respect to that issue (an Elias Principle argument) being reserved and subsequently the first of two lengthy written judgments in these proceedings being delivered. As indicated this resulted in the second scheduled day of hearing not being utilised.
The proceedings first came before the Court on 28 March 2011. On that date Ms Benedict, the Applicant, was represented by her attorneys. Mr Peake appeared in person. It is unclear when service of the Application had occurred, however, it is probable that service had been effected, as the Federal Circuit Court Rules 2001 require, relatively soon after the Application was filed (21 February 2011).
Each party sought orders with respect to disclosure by provision and exchange of financial documents. A number of orders were made to facilitate such exchange as well as further and additional orders to enable notice to third parties who might potentially be affected by orders sought by one party or the other. The proceedings were adjourned for further mention and directions to 16 May 2011.
The adjourned return date was subsequently varied such that the proceedings came back before the Court on 5 May 2011. On that date orders of a similar nature to those made 28 March 2011 were, again made. It is important to note that the orders issued that day record that Mr Peake had not filed a Response as directed and each party, again, alleged that they had not been provided with full and proper disclosure. Accordingly, orders were again made (for the second time) requiring that Mr Peake file a Response and requiring each party to comply with rules 14.06 and 24.04 of the (then) Federal Magistrates Court Rules.
In particular the orders and directions made on each occasion, as sought by the parties and each of them and thus with their consent, required that the parties to exchange, by a date certain, the following documents:
a)Copies of income tax returns, assessment notices and BASs for the last 3 completed financial years for that party personally and for any entity in which that party has an interest (such as a private company, trust or partnership);
b)An up to date statement with respect to any superannuation interest of that party together with a valuation of the fund if not an accumulation interest;
c)Copies of bank statements for the period from “the date of separation to date” for any account in that party’s name (whether singularly or jointly with any other person or in trust) and in the name of any entity in which that party has an interest such as a private company, trust or partnership;
d)Copies of credit card statements for the period from “the date of separation to date” for any account in that party’s name (whether singularly or jointly with any other person or in trust) and in the name of any entity in which that party has an interest;
e)Market appraisals with respect to any parcel of real estate in which any party has an interest;
f)Any document proving or tending to prove any allegation contained in that party’s Financial Statement or Affidavit;
g)Copies of market appraisals or computer site print outs as to value of any motor vehicle the value of which is not agreed; and
h)Copies of any documents as requested in writing within 14 days.
The proceedings were next before the Court, 25 July 2011. On that date (indeed on that very day) Mr Peake filed a Response. The Response was filed some 5 months after service (whereas the Federal Magistrates Court Rules (as they then were) require that a Response and supporting Affidavit be filed within 14 days of service). Directions for trial were made to deal with and determine whether a declaration could be made pursuant to section 90RD of the Family Law Act 1975. The trial date fixed for the proceedings was 27 January 2012.
Shortly prior to the hearing and on 8 December 2011 an order was made in Chambers and by consent extending time for the filing of material by Mr Peake (the Respondent).
On 25 January 2012 orders were again made in Chambers and by consent. The effect of those orders were as follows:
a)Vacate the hearing date 27 January 2012;
b)Note that the parties are to engage in a settlement conference 27 January 2012;
c)In the event that the matter does not settle the parties be granted liberty to apply for further hearing dates and directions; and
d)Order that both parties’ costs be reserved.
It would appear that a settlement conference occurred between the parties on or around 27 January 2012 (the original scheduled hearing date). The proceedings were not resolved and the Court was advised of this reality in March 2012. Following receipt of this advice and on 19 March 2012 orders were made in Chambers relisting the proceedings for mention 27 March 2012.
On 27 March 2012 both parties appeared and were legally represented. The proceedings occupied at least one half of the day (although it is not suggested that the matter occupied the totality of that period but purely that the proceedings were first called at 9:30am and the matter was not concluded until 1:30pm).
As a consequence of the listing 27 March 2012 the proceedings were adjourned for hearing “in relation to a declaration as to the existence or otherwise of a de-facto relationship”. Dates were fixed for 13 and 14 December 2012. Further directions for the filing of affidavit material were made.
On 27 March 2012 a contested interlocutory application was determined by the Court. It will be remembered that the Response filed by Mr Peake had sought orders to enable him to obtain, with the wife’s authority, copies of certain documents pertaining to dealings between Ms Benedict and the Australian Taxation Office and Centrelink.
Mr Peake sought an order that would require Ms Benedict to provide written authorities to him so that he might obtain those documents. That application was resisted by Ms Benedict and her counsel who sought instead, and in the alternative, that the material be excluded or, if the Court determined that it was necessary for it to be provided, that Ms Benedict obtain the documents and serve them upon Mr Peake.
Ultimately orders were made which required that Ms Benedict:
Forthwith and within 14 days provide to the attorneys for the respondent:
a. Copies of all income tax returns an assessment notices lodged by her with the Australian Taxation Office the financial years 30 June 1995 to date; and
b. Copies of any applications, documents, notes, records, claims and assessments the period 30 June 1995 to date.
Together with certain documents of similar nature and reflecting dealings between Ms Benedict and Centrelink for the same period.
Whilst the provision of documentation over such an extended period (some 17 years), might appear onerous and oppressive it was suggested, and it ultimately came to be, that those documents were of great significance and relevance to the determination of the fundamental controversy between the parties and as presented by them at hearing, namely, whether the parties had, within the definition of the legislation, lived together in a de facto relationship as alleged by Ms Benedict until a specific date or at all.
The proceedings came before the Court for hearing 13 December 2012. On that date the matter could not be accommodated within the Court’s workload and was, accordingly, marked “not reached” and adjourned for further hearing dates 30 April and 1 May 2013 (subsequently administratively varied to 2 and 3 May, 2013). I pause to observe that the matter being “not reached” on that date was no reflection upon the readiness of the parties to conduct their business before the Court. The Court’s workload is such that “special fixtures” are rare if not impossible. The matters listed for hearing upon my docket are generally listed for hearing at a listing ratio of not less than 300%. Notwithstanding this over-listing ratio it is relatively rare that matters are not reached as this matter was.
The Court’s business cannot be conducted, in light of the number of matters competing for hearing time, on the basis of “special fixtures”. Whilst it is regrettable that any litigants would ever find themselves in the position that Ms Benedict and Mr Peake did (having prepared for the hearing and being ready to proceed but the Court not being in a position to accommodate the hearing of the matter), the overall management of the Court’s business and the utilitarian principles which must be applied to avoid significant delays for the majority (and consistent with the Court’s management of its business as discussed, for example, by the High Court in Aon Risk Services & ANU [2009] HCA 27), are such that such circumstances cannot always be avoided.
When the proceedings came before the Court for hearing 2 May 2013 application was made by counsel for Mr Peake to exclude certain evidence sought to be led by Ms Benedict on the basis of the “Elias principle”. The entirety of the day was consumed in dealing with that interlocutory application. At the conclusion of the day judgment was reserved and after having received substantial oral and written submissions from counsel for each party. The second day of hearing was abandoned.
On 23 May 2013 judgment was delivered regarding the interlocutory application (which application was dismissed) and fresh hearing dates fixed for the matter namely 17 and 18 June 2013.
On 14 June 2013 the Court was called upon to deal with an Application in a Case filed by Mr Peake. That Application in a Case sought to vacate the scheduled trial dates of 17 and 18 June 2013 (notwithstanding that all affidavit material relied upon by the parties had been filed). The bases upon which vacation of the trial dates was sought was connected with Mr Peake’s personal circumstances and, in particular, his then (and current) partner having been diagnosed with a form of cancer and requiring and then undergoing treatment. Mr Peake alleged (and it was accepted by me) that to proceed with the hearing in those circumstances, wherein Mr Peake was transporting his partner for daily treatments as well as caring for the then adult or near adult child of the parties, conducting his business and being highly stressed and sleep deprived would deny him due process.
The application for vacation and adjournment of the hearing dates was opposed by Ms Benedict’s attorneys (presumably on instructions). Notwithstanding that opposition, the hearing dates were vacated and the matter instead listed for trial 16 and 17 December 2013.
The proceedings next came before the Court 16 September 2013 to deal with and address an Application in a Case filed by Ms Benedict’s prior attorneys and wherein they sought to be joined to the proceedings as a party to protect their interests as regards costs owed to them by
Ms Benedict. The Application in a Case required an appearance by both parties.
The Application was adjourned generally it having been conceded by counsel for the third party that until such time as a section 90RD declaration was made, investing the Court with jurisdiction, that there was no basis to entertain the intervenor’s Application. A further appearance was, however, necessitated by the Application.
The proceedings then came before the Court for trial on each of 16 and 17 December 2013. Cross-examination of the myriad witnesses called by each party was concluded. The matter did not conclude to finality within the scheduled days of hearing notwithstanding that the Court sat on each day to 6pm or thereabouts. The proceedings were, accordingly, adjourned on a part-heard basis to 10 February 2014 with an estimate that a further one half to one day hearing was required.
The evidence and submissions of the parties concluded 10 February 2014 but only as a consequence of the Court again sitting till after 6pm.
On 11 April 2014 judgment was delivered by me which concluded the proceedings. A declaration was made that the parties were not in a de facto relationship within the meaning of section 4AA of the Family Law Act 1975 at or at any date subsequent to 1 March 2009. As a consequence of that declaration the Court was absent jurisdiction to determine any issue in dispute between the parties, save costs arising from the proceedings. The consequence of the declaration was to terminate the proceedings then extant including the Application by
Ms Benedict’s former solicitors regarding security costs.
Following the termination of the substantive proceedings and on 9 May 2014 an Application in a Case was filed by Mr Peake seeking orders for costs on an indemnity basis or, in the alternative, on a party-party basis with costs to be assessed and fixed by the Court.
The Application in a Case filed by Mr Peake was supported by an Affidavit and served, one would presume, bearing in mind
Ms Benedict’s appearance on the first return date of the Application, upon Ms Benedict or her then attorneys.
The Application in a Case came before the Court 7 July 2014. On that date orders and directions were made as follows:
a)Leave is granted to the Respondent (Ms Benedict) to file in Court an Affidavit relating to costs.
b)Ms Benedict is to file and serve a Response to the Application in a Case within 14 days (i.e. by close of business 18 July 2014). That order has not been complied with and at the time of this determination no Response has been filed by Ms Benedict.
c)
The Applicant shall, by close of business 1 August 2014, file and serve written submissions of no more than 10 pages dealing with the issue of costs. Written submissions were filed on behalf of
Mr Peake on 1 August 2014 in compliance with that order.
d)The Respondent shall by close of business 29 August 2014 file and serve written submissions of no more than 10 pages dealing with the issue of costs. No submissions have been filed by or on behalf of Ms Benedict and the application is thus determined by reference to the material that has, in fact, been filed being that identified above.
Judgment was otherwise reserved to be published as soon as practicable following the closing of submissions. There has been some delay in these Reasons being provided to the parties as a consequence of, again, pressures of workload particularly created by regional circuit commitments and a diminution in resources of the Registry arising from the transfer of one Judge to another Registry and the retirement of another and a consequent significant increase in workload within a short space of time. I apologise to the parties for that delay which, regrettably, has been unavoidable. This has arisen, in part, as a consequence of scheduled judgment writing days having been sacrificed to enable the hearing of matters and to seek to avoid inconvenience to other litigants with pressing matters before the Court.
Material considered
In dealing with these proceedings I have read and considered each of the following:
a)The Application in a Case filed by Mr Peake 9 May 2014;
b)The Affidavit of Mr Peake affirmed 8 May 2014 and filed 9 May 2014;
c)The written submissions submitted on behalf of Mr Peake by his counsel 1 August 2014;
d)The Affidavit of Ms Benedict sworn or affirmed 7 July 2014 and filed in Court the same day;
e)The Application in a Case filed by Ms Benedict’s former attorneys 21 June 2013 (which has been considered on the basis that reference is made thereto by the written submissions of Mr Peake’s counsel);
f)The Affidavit of Ms Geovanna Baute sworn 21 June 2013 and filed the same day and being an Affidavit by a solicitor employed by Dooley & Associates Solicitors Pty Ltd and filed in support of the Application in a Case by the intervenor third-party (which has, again, been considered on the basis that it is referred to and relied upon by Mr Peake in the submissions filed by his counsel on his behalf);
g)The Reasons for Judgment delivered by me on each of 23 May 2013 and 11 April 2014;
h)Each of the orders made by the Court during the course and conduct of the proceedings.
As indicated, Ms Benedict whilst afforded the opportunity to make written submissions to the Court, has declined or failed to do so. The matter thus proceeds on the basis of a consideration of submissions by counsel for Mr Peake only and takes into account the evidence and other materials referred to above.
I do not propose to set out in these Reasons the totality of evidence or to discuss it in detail. There are, however, a number of issues which I propose to discuss briefly and which arise from the evidence. I propose to refer to relevant portions of the evidence by reference to the submissions before the Court and in dealing with each of the relevant considerations to which my attention has been directed and to which I propose to have regard.
Suffice to say that the totality of material identified and enumerated above has been considered by me and has been taken into account by me in determining the application by Mr Peake.
Erudite submissions are provided by counsel for Mr Peake in identifying the relevant sections of the Family Law Act 1975 (section 117 and its subparagraphs) and case law. I propose to consider case law additional to that identified by counsel for Mr Peake and particularly as the submissions made on behalf of Mr Peake with respect to indemnity costs do not refer to the Full Court of the Family Court’s most recent determination with respect to same in Prantage & Prantage [2013] FamCAFC 105.
When additional case law has been identified and relied upon by me with respect to specific aspects of this determination, I am satisfied that each party has had the opportunity to fully and properly make submissions and that each has been afforded due process sufficient to enable the matter to be determined without invitation of further submissions.
From the outset I observe that Mr Peake’s evidence, which I accept as it is unchallenged, establishes that he has in dealing with these proceedings before this Court, expended in excess of $100,000.
Whilst Ms Benedict has not placed any material before the Court as to that which has been expended by her, I have no difficulty in accepting that she would, in all probability, have expended a similar amount. That position is supported by reference to the affidavit of Ms Baute which discloses to the Court that costs had been incurred by Ms Benedict in retention of their services totalling $63,298.42. After the termination of the retainer between Ms Benedict and those attorneys, fresh attorneys were instructed who then engaged in further preparation and were involved in presentation of Ms Benedict’s case before the Court over three days of hearing and, by reference to the costs incurred prior (but without finding that the costs would be identical only comparable) it would appear reasonable that Ms Benedict would have incurred further and additional costs at hearing such as to increase her entire indebtedness to attorneys as a consequence of these proceedings to an amount comparable to that expended by Mr Peake.
Finally, and before turning to a discussion of the relevant issues, it must be observed and remembered that these parties, Mr Peake and
Ms Benedict, are the joint registered proprietors of a parcel of real estate at [E] with a value, as alleged by each of them respectively, of $1,350,000-$1,600,000 and encumbered by a mortgage, as alleged by Mr Peake, of $350,000. Thus there is equity in the jointly owned property of these parties of at least $1 million[1].
[1] Mr Peake also alleges a debt comprising a loan from his mother of $300,000 which, by reference to the substantive judgments already delivered, may have some relevance and bearing upon available equity.
Notwithstanding the litigation that these parties have conducted between themselves (and leaving aside for one moment Ms Benedict’s failure to satisfy the Court as to jurisdiction to deal with and entertain any application to adjust interest in that property under the Family Law Act), it remains the reality that the parties jointly own a significant asset and will need to determine the dispute between them regarding ownership and ongoing ownership of that asset and subsequent division of equity.
Pre-action procedures, disclosure and attempts at resolution
I propose to briefly touch upon this issue, prior to turning to and dealing with the application for costs by Mr Peake, as it would appear to be a matter of some moment.
The Family Law Rules 2004 contain specific pre-action procedures. Those procedures require that parties engage in certain steps and actions so as to make a genuine attempt to resolve issues in dispute or, absent final resolution, limit issues in dispute between them prior to commencing proceedings.
I make clear that I do not seek to suggest that such pre-action procedures as are contained within the Family Law Rules apply to proceedings determined by the Federal Circuit Court (formally Federal Magistrates Court). The decision of the Full Court in Thompson & Berg [2014] FamCAFC 73 would provide authority for the converse proposition. However, I identify those pre-action procedures as indicative of the modern approach to litigation adopted within the rules of courts both State and Federal and being focused upon that which is referred to within the various State Civil Procedure Acts as “the overriding purpose” of resolution of proceedings and the efficient conduct of litigation.
At a Federal level and applicable to the Federal Circuit Court, one has the Civil Dispute Resolution Act 2011 (Cth). However, proceedings under the Family Law Act 1975 are expressly excluded from the provisions of that legislation and mandated pre-action procedures contained therein.
The Federal Circuit Court Act 1999 and Federal Circuit Court Rules 2001 do contain provisions which provide for or at least infer, to a limited extent, pre-action procedures and fulfilment of obligations regarding disclosure.
Rule 1.03 of the Federal Circuit Court Rules provides “objects” for the Rules. These are not specifically pre-action procedures but do give some clue as to the Court’s preference for negotiated, consensual resolution and especially utilising means of dispute resolution other than litigation. Rule 1.03 is in the following terms:
Objects
(1) The object of these Rules is to assist the just, efficient and economical resolution of proceedings.
(2) In accordance with the objects of the Act, the Rules aim to help the Court:
·to operate as informally as possible
·to use streamlined processes
·to encourage the use of appropriate dispute resolution procedures.
(3) The Court will apply the Rules in accordance with their objects.
(4) To assist the Court, the parties must:
·avoid undue delay, expense and technicality
·consider options for primary dispute resolution as early as possible.
(5) If appropriate, the Court will help to implement primary dispute resolution.
Section 21 of the Federal Circuit Court Act defines “dispute resolution processes" (without the prefix of “primary” which had been included in the prior Federal Magistrates Act and previously also in the now repealed section 14 of the Family Law Act) as including:
(a) counselling; and
(b) mediation; and
(c) arbitration; and
(d) neutral evaluation; and
(e) case appraisal; and
(f) conciliation
Neither of the above provisions specifically provide “pre action procedures” and as the rules apply to proceedings before the Court they more specifically apply, absent provision to the contrary, to litigation once commenced rather than litigation that is contemplated and to be avoided. The definition, curiously, does not include a broader category of “negotiation” or the specific subset of “lawyer assisted negotiation”.
Part 4 of the Federal Circuit Court Act contains extensive provisions regarding dispute resolution for proceedings other than those conducted under the Family Law Act.
Importantly, section 42 of the Federal Circuit Court Act provides:
In proceedings before it, the Federal Circuit Court of Australia must proceed without undue formality and must endeavour to ensure that the proceedings are not protracted.
One might infer from the above mandate that the Court might, whether sitting in its family law or general federal law jurisdiction, actively engage and encourage parties to participate in forms of dispute resolution other than litigation, such as, mediation and conciliation.
Potentially set against such an inference to engage parties in dispute resolution are provisions of the Family Law Act 1975, under which the Family Court operates but which do not apply to this Court, such as section 90SM(9)[2] which provides:
(9) The Family Court must not make an order under this section in property settlement proceedings (other than an order until further order or an order made with the consent of all the parties to the proceedings) unless:
(a) the parties to the proceedings have attended a conference in relation to the matter to which the proceedings relate with a Registrar or Deputy Registrar of the Family Court; or
(b) the court is satisfied that, having regard to the need to make an order urgently, or to any other special circumstance, it is appropriate to make the order notwithstanding that the parties to the proceedings have not attended a conference as mentioned in paragraph (a); or
(c) the court is satisfied that it is not practicable to require the parties to the proceedings to attend a conference as mentioned in paragraph (a).
[2] Section 79(9), applying to proceedings between married parties, is in identical terms.
Chapter 3 of the Federal Circuit Court Rules, which deals with mediation and alternate dispute resolution, does not apply to proceedings conducted under the Family Law Act 1975 but only general federal law proceedings. Accordingly, within the Federal Circuit Court Rules there are no analogous provisions to those contained within the Family Law Rules requiring the parties to engage in pre-action procedures.
In light of the above and as the Family Law Rules (and pre-action procedures prescribed thereby) do not apply within the Federal Circuit Court (see Thompson & Berg [2014] FamCAFC 73) one must look to either the specific legislation applied (the Family Law Act 1975) or the general law to find bases upon which parties might be required to engage in pre-action procedures or addressing the manner in which parties should approach and conduct their litigation.
Part VIIIAB of the Family Law Act 1975, under which these proceedings are addressed, does not contain any statement of objects and principles which would be of assistance as regards the parties’ obligations towards dispute resolution or the conduct of litigation generally.
Part IIIA of the Family Law Act 1975 does impose obligations upon legal practitioners to advise parties of non-court based services which may be of assistance to them in dealing with and addressing issues arising from their separation. This would, presumably, extend to relevant advice regarding alternate dispute resolution services whether as a corollary to, in place of, or utilised during or prior to the commencement of proceedings.
Section 13C of the Family Law Act 1975 permits the Court to refer parties to such non-court based services and, in particular, family dispute resolution (which whilst most commonly referred to and utilised in addressing parenting disputes also allows referral of parties to mediation conducted by a family dispute resolution practitioner to address financial or jurisdictional issues).
Principles of general application to all proceedings conducted under the Family Law Act 1975 are contained in section 43. However, none of those principles would be relevant to establishing a general obligation to engage in alternate dispute resolution and/or pre-action procedures.
Thus, on the basis of legislative imperative there is no clear obligation upon parties[3], when conducting Family Law Act 1975 proceedings before the Federal Circuit Court, to engage in any form of pre-action procedure or attempted resolution or definition of issues prior to commencing proceedings.
[3] Other than in parenting proceedings when section 60I of the Family Law Act applies.
There is a body of case law which addresses the general obligation of parties to ensure the effective use of the Court’s resources (and their own) and addressing, without prescribing, the manner in which parties should approach and conduct litigation.
For illustrative purposes (I do not propose to suggest that they are in any way binding or determinative in proceedings before the Federal Circuit Court including but not limited to these proceedings) in the United Kingdom the Woolf Report, Access to Justice, recommended the adoption, in civil litigation proceedings, of pre-action procedures:
…which enables the parties to a dispute to embark on meaningful negotiations as soon as the possibility of litigation is identified, and ensures that as early as possible they have the relevant information to define their claims and to make realistic offers to settle” and so as to:
(a) focus the attention of litigants on the desirability of resolving disputes without litigation;
(b) enable them to obtain the information they reasonably need in order to enter into an appropriate settlement; or
(c) to make an appropriate offer (of a kind which can have costs consequences if litigation ensues); and
(d) if a pre-action settlement is not achievable, to lay the ground for expeditious conduct of proceedings.
Similarly, the Civil Procedure Act 2005 (NSW) and the Civil Procedure Act 2010 (VIC) provide an overriding purpose being “the just, quick and cheap resolution of the real issues in the proceedings” (section 56 of the Civil Procedure Act 2005 (NSW)). Decisions of the supreme courts of New South Wales and Victoria provide some illumination of the Courts’ attitude, when operating under that legislation and the overriding purpose created thereby, towards parties who have departed therefrom.
In the recent decision of Bryant v Hawkesbury Radio Communication Co-operative Society Limited [2014] NSWSC 848 Sackar J opined [at 110]:
In my view, in the modern era and consistent with section 56 of the Civil Procedure Act parties have an obligation to constructively collaborate not just on the issues to be ventilated but on the most efficient methods to do so. As has been otherwise said, litigation is not a game and the expense of the courts to the public is so great that their use must be made as efficient as is compatible with just conclusions.
Sackar J further opined [at 157]:
Whilst the system of justice administered by courts in this state is adversarial, in the modern era in my view parties have a distinct and clear obligation to cooperate with each other and the court to achieve a quick and inexpensive solution to their grievances including in my view good faith settlement discussions.
Commentary on the decision, in an excellent case note by Clayton UTZ in the LEADR Update August 2014 concludes:
As Sackar J's judgment shows, even a party with an 'open and shut' case may be effectively penalised on the issue of costs if they have exploited their position in the litigation for tactical advantage at the expense of a genuine attempt to resolve the dispute.
A growing body of case law, such as Ken Tugrul v Tarrants Financial Consultants Pty Ltd (No.5) [2014] NSWSC 437 have begun to evince and demonstrate a particular attitude, albeit in that case founded upon a legislative “overriding purpose”, towards costs when parties have acted other than with a keen, deliberate focus upon limiting issues and exploring resolution of disputes.
In Setka v Abbott [2013] VSCA 345 the plurality of their Honours constituting the Victorian Court of Appeal (Warren CJ, Ashley and Whelan JJA) observed in a joint judgment:
…the over-arching purpose which, by operation of the Civil Procedure Act 2010, applies to both litigants and their advisers, is not simply a pious but toothless statement of the considerations which are to motivate participants, lay and professional, in civil litigation. So much was powerfully emphasised by this court in Yara Australia P/L v Oswal. The just, efficient, timely and cost effective resolution of the real issues in dispute in a case cannot be facilitated if a party and the party’s advisers do not take adequate steps to identify the issues which require determination early in the life of the proceeding.
In Yara Australia P/L v Oswal [2013] VSCA 337 the court, within the context of the “overriding purpose” established by the Victorian Civil Procedure Act 2010, referred at [52] with disapproval to “… the culture of unnecessary expenditure in civil litigation”.
I hasten to add that the above authorities are not referred to for the purpose of, in any fashion or to any degree, being critical of the attorneys for Mr Peake. They have conducted Mr Peake’s litigation, as he himself has conceded in the submissions put on his behalf, in “a most effective, efficient and economical fashion”. I accept that
Mr Peake’s attorneys have acted upon his instructions and not otherwise.
In a similar vein to the above, the High Court has in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46 noted “unduly technical and costly disputes about non-essential issues are clearly to be avoided” (at [57]).
Again, I do not seek to suggest that Mr Peake or his attorneys have raised or sought to agitate “non-essential issues”. However, the attitude of the High Court towards an approach to litigation other than one focused upon the clear identification and limitation of issues and an approach directed towards resolution of such issues, is clearly expressed with disapproval.
The jurisprudence of the various superior courts of the States and Territories which have enacted uniform civil procedure legislation is littered with statements similar to the above and reflective of the court’s desire to ensure that litigants do not consume the court’s resources, let alone their own, in litigating proceedings or portions thereof needlessly or without a clear and active focus upon the resolution of a dispute[4]. Such considerations would specifically apply in circumstances such as those demonstrated in these proceedings wherein there is a clear and obvious “dispute” which must be resolved and whilst there has been jurisdictional controversy there has always been and remains a clear and certain reality that jointly owned property must, in some fashion, be divided irrespective of that jurisdictional controversy.
[4] see for example Wingfoot Australia Partner Pty Ltd & Anor v Jovevski [2014] VSCA 21 [59], Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No. 4) [2013] VSC 14, Matthews v SPI Electricity Pty Ltd & Anor (No. 3) [2013] VSC 116 (Derham J); Chan & Ors v Chen & Ors [2013] VSC 538; Matthews v SPI Electricity Pty Ltd & Anor (No. 2) [2013] VSC 86, Bare v Small [2013] VSCA 204, Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237, Eaton v ISS Catering Services Pty Ltd[2013] VSCA 361 Talacko & Ors v Talacko & Ors [2013] VSC 712 and Subway Systems Australia v Ireland (No. 2) [2013] VSC 693.
One of the difficulties faced by the parties in these proceedings arises from the very nature of our Commonwealth/State division of jurisdiction. There are and have always been two possible jurisdictions for determination of the dispute between these parties, namely:
a)An application under part VIIIAB of the Family Law Act 1975 (which requires, as a necessary precondition to exercise of jurisdiction, a declaration as to the existence of a relevant “de facto relationship”); and
b)An application under New South Wales legislation (such as the Conveyancing Act 1919 (NSW) or Real Property Act 1900 (NSW)) or utilising the Supreme Court’s general equitable jurisdiction.
Ultimately and irrespective of which jurisdiction is utilised (the Federal jurisdiction being subject to “conditions” primarily evidence establishing the existence of a de facto relationship of a particular nature and at a particular time[5]) these parties must clearly deal with their dispute.
[5] Particularly in light of the further complicating issue which arises from the State referral of powers and the commencement of Federal jurisdiction as of March 2009 and not before.
As Mr Peake has highlighted in his submissions it will now be “necessary” (absent agreement between the parties as to the resolution of the dispute in its totality or agreement between them to address their controversy through means other than litigation) for one or other of the parties to make application in the Supreme Court of New South Wales.
It is regrettable that all judicial controversy between parties cannot be dealt with in one court. However, that is the nature of our federated system and particularly so in light of the difficulties that were found to constitutionally afflict cross-vesting legislation[6]. If it had been possible for one or other of the parties to file an application in a single court and seeking relief on alternate bases then the present predicament would not have arisen. However it has.
[6] See for example Re Wakim [1999] HCA 27 (17 June 1999).
I have referred to the above case law fully conscious that the various State Civil Procedure Acts do not apply to these proceedings. I have referred to them for illustrative purposes and particularly to highlight the desirability, in this day and age, of parties being focused upon resolution of their “dispute” rather than upon legal and technical issues which, whilst relevant and important (indeed fundamentally so as regards the determination of jurisdiction by this Court), do not assist in bringing to an end the dispute or controversy which these parties, at the conclusion of lengthy and expensive litigation before this Court, continue to have.
Legal professional privilege
I have some concern that Ms Benedict would appear, I accept inadvertently and without having necessarily first had and obtained independent legal advice, waived such legal professional privilege as she is entitled to maintain in these proceedings and through the disclosure by her of her instructions to and advice received by her, from her former attorneys. As Mr Peake has submitted this may, in some part, have arisen from an attempt by Ms Benedict (clumsy as it would seem) to apportion some degree of “blame” to her attorneys as to the somewhat catastrophic, (from Ms Benedict’s perspective), conclusion of the proceedings.
I have referred to the conclusion of the proceedings in these terms as Ms Benedict has been, as Mr Peake correctly submits, wholly unsuccessful. It could not be suggested that Ms Benedict has been “successful” in obtaining any relief that she has sought and noting that a precondition to Ms Benedict seeking or being jurisdictionally entitled to seek any substantive relief was her establishing, to the Court’s satisfaction, the existence of a de facto relationship. Ms Benedict has not been successful in doing so.
Ms Benedict has annexed to her material a number of communications between she and her former attorneys, including communications expressly headed “private and confidential”. Those communications convey matters passing between Ms Benedict and her former attorneys which, by and large, are not relevant or significantly relevant to the issues which I must determine at this time (confined to an issue of costs). The communication of those matters, particularly the advice received by Ms Benedict from her former solicitors and counsel, would represent a waiver of legal professional privilege.
I am conscious that Ms Benedict has, no doubt, included such communications for the principal purpose of seeking to demonstrate criticisms of Mr Peake and suggested non-disclosure and non-willingness to negotiate. To the extent that the material is included for that purpose there is some utility and relevance. However, the disclosure of such advice has potentially significant consequences for Ms Benedict as regards any future litigation in which she is engaged with either Mr Peake or those attorneys (both Mr Peake and the former attorneys indicating that they have commenced or are in the process of commencing litigation in the Supreme Court of New South Wales in which Ms Benedict is or will be the defendant).
More concerning it would appear that without Ms Benedict’s knowledge, consent or instruction Ms Benedict’s former attorneys have disclosed to Mr Peake’s attorneys material which would, at the very least, inappropriately infringe Ms Benedict’s privacy and, more importantly, it would disclose otherwise privileged and confidential communications between she and her attorneys and disclosed without Ms Benedict’s knowledge or consent.
I accept that no issue is raised by Mr Peake’s attorneys regarding the above issue. Indeed, at paragraph 5 of Mr Peake’s Affidavit, he has quoted at some length the contents of a letter apparently forwarded by Ms Benedict’s former attorneys to Mr Peake’s attorneys dated 21 June 2012 and which correspondence is, in turn, annexed to the Affidavit of Ms Baute.
What is attached to the Affidavit of Ms Baute is correspondence between those attorneys and Ms Benedict which is headed “private and confidential”. That correspondence is not relevant to the application that the Affidavit was sworn in support of (being the Application in a Case seeking joinder to the proceedings to protect an interest in debt).
Clearly communication between Ms Benedict and her former attorneys became problematic prior to the termination of the retainer (and I need not be troubled as to the circumstances of such termination). It may well be that Ms Benedict, as Mr Peake alleges in the submissions filed on his behalf, seeks to apportion some “blame” to her attorneys for costs which have been incurred in the proceedings – both her own and Mr Peake’s. They are matters between Ms Benedict and those attorneys and with such involvement of external professional bodies as
Ms Benedict may choose to pursue. They do not impact upon the determination I am called upon to make.
To the extent that Ms Benedict seeks to raise any issue of culpability of her attorneys, whether as to costs or any action or inaction relating to same, I am conscious that such allegations are, at best, inferred and, further and importantly, that Ms Benedict’s former attorneys have not had the opportunity to make any comment with respect to those criticisms.
In the event that Ms Benedict feels that there is any arguable cause of action as between herself and her former attorneys or as regards any contribution towards or indemnity with respect to costs as may be ordered against her, then it will be a matter for her to pursue that through such means as may be available to her. In circumstances where Ms Benedict has failed to comply with any order of this Court as to the preparation and filing of material, I am not satisfied that further cost, inconvenience or delay should be occasioned to the Court, Mr Peake or, for that matter, Ms Benedict through further adjournment or relisting of these proceedings.
Costs
Costs are sought by Mr Peake on an indemnity basis and, in the alternative and in the event that the Court is not satisfied that costs should be ordered on an indemnity basis, on a party-party basis.
As is correctly and appropriately identified by Mr Peake’s attorneys the issue of costs is dealt with by section 117 of the Family Law Act. I am satisfied that notwithstanding the declaration made by me as to an absence of jurisdiction to deal with and determine the part VIIIAB proceedings that the Court retains jurisdiction to deal with any application for costs arising from the proceedings generally.
It is submitted on behalf of Mr Peake that “Family Law matters are ‘special jurisdiction’ given that in all other civil causes jurisdictions cost orders ‘follow the event’ as opposed to the policy laid down in section 117(1).”
It is then submitted that “the determination that there was no de facto relationship means that this matter should never have been brought and does not fall into the ‘special jurisdiction’. Accordingly a strong argument can be made that the policy inherent in section 117(1) should not apply.”
There are two aspects of the above submission which I do not accept. These are:
a)I do not accept that proceedings before this Court and especially proceedings under the Family Law Act 1975 constitute a “special jurisdiction”. Certainly a legislative position as regards costs is created by section 117 that is “different” to that of many civil jurisdictions. However, conduct of proceedings under the Family Law Act 1975 is not “special” and the Federal Circuit Court, in its family law jurisdiction, is not a “special” Court. The Federal Circuit Court, even when acting in its family law jurisdiction, is a Court which should and does act consistent with all other civil courts of similar level and standing as to its practice, procedures, application of rules of evidence and in all other respects, save to the extent that specific legislative provision provides for difference, should consider itself to be and to be seen as largely indistinguishable from other courts.
b)
Secondly and to the extent that there is reference to “… a strong argument can be made,” I do not accept that the failure of
Ms Benedict to establish the existence of the de facto relationship and thus jurisdiction under part VIIIAB obviates against the application of section 117 to the determination of issues of costs. The proceedings that were instituted by Ms Benedict were instituted under the Family Law Act 1975 and thus, I am satisfied, that the “general rule” established by section 117(1) that “… each party to proceedings under this Act [emphasis added] shall bear his or her own costs”, applies.
I am satisfied that the Court has a discretion to determine the costs dispute between these parties by reference to section 117 and to make such order for costs as is considered appropriate, subject to Mr Peake establishing, as subsection (2) requires, both a justifying circumstance for departure from the “general rule” and the justice and equity of doing so (see Re JJT & Ors; Ex Parte Victoria Legal Aid [1998] FLC 92-812). Such discretion includes the capacity to make an order for costs on an indemnity basis or party-party basis.
Mr Peake’s attorneys also submitted, as regards the alternate claim for relief on a party-party basis that the Court need not be bound by schedule 1 of the Federal Circuit Court Rules and the scale of costs, on an event basis, contained therein. I accept that submission. The scale is indicative and not prescriptive.
Section 86 of the Federal Circuit Court Act provides:
The Rules of Court may make provision for or in relation to:
(a) the giving of security; and
(b) the costs of proceedings in the Federal Circuit Court of Australia; and
(c) the fees to be charged by practitioners practising in the Federal Circuit Court of Australia for the work done by them in relation to proceedings in the Federal Circuit Court of Australia and the taxation of their bills of costs, either as between party and party or as between solicitor and client; and
(d) the kinds of proceedings or circumstances in which each party is required to bear his or her own costs.
Clearly subparagraph (d) above cannot be taken to permit the Federal Circuit Court to provide, by its Rules, a provision inconsistent with that contained within the Family Law Act 1975 and, accordingly, I am satisfied that the Court’s Rules would be taken into account by reference to section 117 of the Family Law Act 1975 only.
Rule 21.02 of the Federal Circuit Court Rules addresses the Court’s costs discretion and in the following terms:
Order for costs
(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded
I am urged by Mr Peake to fix an amount of costs to be paid rather than referring the parties for any form of taxation or assessment of costs. I am satisfied, for reasons that I will explain more fully, that this is entirely appropriate and, indeed, authorised, permitted and envisaged by the above rule.
Principally I am concerned, as is submitted by Mr Peake’s attorneys, that “there must be an end to litigation and an order for costs, whatever the quantum, should bring an end to the proceedings in this Court”. Such submission is persuasive.
Rule 21.10 of the Federal Circuit Court Rules provides:
Costs and disbursements
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:
(a) costs in accordance with Parts 1 and 2 of Schedule 1; and
(b) disbursements properly incurred.
I am satisfied that rule 21.10 does not preclude the Court making such order for costs as it considers just and equitable. Accordingly, whilst one must consider the indicative schedule of costs the Court is not strictly bound by it. The schedule is intended to provide guidance to parties as to that which might be expected to be ordered on a party-party basis rather than a prescription or limitation upon discretion.
In dealing with Mr Peake’s application for costs I propose to consider each of the factors enumerated in subsection (2A) of section 117 of the Family Law Act 1975 individually.
The financial circumstances of each of the parties
Mr Peake has led evidence as to his present financial circumstances including his assets and liabilities. Mr Peake’s evidence is not challenged and, accordingly, I have no basis to doubt the veracity of that alleged by him. Indeed, I accept his evidence as it is plausible and unchallenged.
Mr Peake deposes a limited and modest income from the [omitted] business conducted by him. The principal asset held by Mr Peake is the home at [E] in which Ms Benedict holds an interest. The determination of the dispute between the parties with respect to their respective legal and equitable ownership, such as it may be ultimately determined, is yet to be concluded. The conclusion of that dispute may well and, in all probability will, lead to some diminution of Mr Peake’s assets.
Nothing is known of Ms Benedict’s present financial circumstances as she has not filed material as directed nor, within the Affidavit that she has sworn and filed 7 July 2014, has she included any information as to her employment, assets or liabilities save to indicate, within the jurat of the document, that she is “employed”. What is known of
Ms Benedict’s financial position is the debt which she has incurred with her former attorneys (and in all probability her most recent attorneys), that debt being the subject of evidence by Ms Baute and suggesting an extant liability, excluding interest and associated fees and charges arising from litigation for recovery of that amount, of $63,298.42.
The financial circumstances of the parties are not dispositive of the controversy and would not, in this case, provide significant support to any finding or “justification” for an order for costs. The financial circumstances of each party would have some relevance as regards the justice and equity of any order as might be determined as justified and appropriate.
Mr Peake submits that he “… must now embark on Supreme Court proceedings and significant further cost and after significant delay”. In this regard it is to be noted that:
a)It has been open to the parties, at any point in time, to resolve their dispute consensually and through a variety of mechanisms available to them including direct discussion, lawyer assisted negotiation or such other form of alternate dispute resolution, including mediation, as they may desire.
b)To the extent that it is suggested that the parties “must” now engage further Supreme Court proceedings I reject that proposition. Indeed the parties would, prior to engaging in such proceedings, being governed by the very provisions of the Civil Procedure Act 2005 (NSW) to which I have referred above (imposing an obligation upon them, which may not have been statutorily imposed in the proceedings before this Court but which certainly was inferentially expected of them), are required to seek to resolve their dispute without recourse to litigation. It is regrettable that such a step has never been seriously taken.
I will return to the above issues in a consideration of offers of settlement. However, at this point, I am not satisfied that any consideration could be had by me to any future costs to be incurred by the parties or either of them in subsequent proceedings before the Supreme Court and noting:
a)It is within the control of the parties and each of them to avoid such proceedings through resolution or attempts thereat;
b)The parties would likely incur similar costs each;
c)Ms Benedict clearly has already incurred and will continue to incur costs with respect to collateral proceedings before the Supreme Court in which she is engaged with her former attorneys;
d)The commencement of further proceedings and further costs incurred with respect thereto are matters for the parties and which costs will be taken into account and determined within the context of those proceedings and by the Court then dealing with them.
Legal aid funding
Clearly neither party has been in receipt of legal aid funding
Conduct of the parties with respect to the proceedings
The majority of Mr Peake’s submissions go to this ground.
Mr Peake submits that:
a)Ms Benedict has filed “…numerous extremely voluminous Affidavits…[which] extended the length of the proceedings and the costs borne by Mr Peake”;
b)“Ms Benedict caused the parties to incur substantial extra costs in litigation in respect of the disclosure of Centrelink and Australian Taxation Office material”;
c)“[Ms Benedict’s] conduct in these proceedings was exposed to be a common course of conduct on her part to mislead public authorities and business associates…” With a number of suggested examples in support of that proposition then provided.
Certainly, Ms Benedict has filed a number of affidavits in the proceedings. Ms Benedict had filed affidavits by herself on each of:
a)21 February 2011;
b)13 December 2011;
c)10 December 2012;
d)26 February 2013;
e)7 March 2013; and
f)2 May 2013.
The Affidavit of Ms Benedict filed 21 February 2011 was filed in compliance with the Federal Circuit Court Rules and being an affidavit filed to identify issues in dispute. It is not and was not an affidavit which was relied upon at hearing.
The five affidavits filed by Ms Benedict and relied upon by her at hearing were excessive. There would ordinarily have been no basis for Ms Benedict to have filed more than two affidavits comprising an affidavit of evidence in chief and an affidavit in reply. However, I am conscious, as would be apparent from the chronology of Court events set out above, that:
a)The proceedings had been listed for trial 27 January 2012 which date was vacated, by consent and at the request of both parties by orders made by in Chambers 25 January 2012. Ms Benedict had filed her trial affidavit as directed and in anticipation of that hearing;
b)
The proceedings were then listed for trial December 2012.
Ms Benedict had, again, filed an affidavit in anticipation of the matter proceeding at that time. The matter was not reached and through no fault of the parties;
c)Prior to the further adjourned hearing of the proceedings in May 2013, Ms Benedict had then filed three further affidavits by herself (together with affidavits by a number of witnesses). The duplication of affidavit material had arisen, in part, through:
i)A change of attorneys retained by Ms Benedict; and
ii)
The availability of material produced as a consequence of orders for disclosure made at Mr Peake’s request and being the very documents from Centrelink and the Australian Taxation Office the subject of such controversy and ultimately a significant basis upon which I rejected
Ms Benedict’s contention that a de facto relationship between she and Mr Peake was established. The affidavits filed in this period and addressing the above disclosure of material were voluminous extending to two ring binders of documents by way of annexure to the affidavit material.
The material produced by Ms Benedict was, to a large extent, “the instrument of her own demise”. The material, cross-examined upon by Mr Peake’s counsel and the subject of significant tender in Mr Peake’s case, lead to a rejection of Ms Benedict’s evidence as credible as regards establishing a de facto relationship. However, it must also be noted that the use of one day of hearing and the abandonment of a second day of hearing, arose as a consequence of the interlocutory application on behalf of Mr Peake to exclude that very evidence.
With respect to the above Mr Peake also relies upon the protraction of the proceedings by Ms Benedict and as a consequence of the manner in which she instructed her counsel to proceed with cross-examination. It is submitted by Mr Peake that cross-examination was unnecessarily extensive, prolix, canvassing irrelevant matters and thus causing the proceedings to be heard over three rather than two days as initially scheduled. I do not accept that submission.
I do accept, as is submitted by Mr Peake, that his counsel conducted his affairs and, in particular, the hearing of the proceedings in a most focused and erudite fashion at least as regards the three days of hearing in December 2013 and February 2014.
What I do not accept with respect to the above submission is that the hearing of the proceedings occupied three days. The hearing, in fact, occupied four days as the hearing initially commenced 2 May 2013 and the entirety of that day was consumed with the “Elias principle” argument which “argument” Mr Peake lost. The argument was revisited in closing submissions.
I do accept that portions of Ms Benedict’s material were unnecessarily voluminous, canvassing at great length issues of little or tangential relevance to the proceedings and thus increasing the cost or potential cost of preparation. However, that is not to accept the submission that the entirety of Ms Benedict’s case was afflicted with such prolixity.
I do not accept that significant cost was incurred by the parties in addressing disclosure of material from Centrelink and the Australian Taxation Office. That issue was dealt with and addressed on the first occasion that any relief in that regard was agitated for, namely 27 March 2012. On that date the proceedings were listed for mention following the failed attempt at negotiation between the parties which had been the subject of the vacation of the initially allocated trial date 27 January 2012.
Generally as regards disclosure and delay in the proceedings I note:
a)The proceedings came before the Court on two occasions before a Response was filed by Mr Peake. It is unclear the date upon which Ms Benedict’s Application was served on Mr Peake. Assuming that service had occurred at least 14 days prior to the first return date of the proceedings then clearly, by reference to the Federal Circuit Court Rules (rule 4.03) a Response should have been filed by Mr Peake before the proceedings first came before the Court;
b)
On two occasions Mr Peake was ordered to file a Response and Affidavit. Mr Peake did not, on either occasion, file the Response by the date directed. Indeed, a Response was not filed by
Mr Peake until the morning that the proceedings were before the Court for the third occasion, namely, 25 July 2011. Thus a delay of five months (and of at least two unnecessary Court events) occurred as a consequence.
Once a Response had been filed by Mr Peake on 25 July 2011 a trial date was allocated to the proceedings. That trial date, 27 January 2012, was ultimately vacated at the request of and with the consent of both parties and to enable them to engage in discussion. Prior to the trial date Ms Benedict had filed the affidavit material to be relied upon by her at hearing. Prior to that scheduled and anticipated trial, Mr Peake had also filed an affidavit of evidence to be relied upon at hearing (together with various affidavits by witnesses).
Whilst Ms Benedict had filed a number of affidavits (and more affidavits than the Federal Circuit CourtRules entitle and permit her to) Mr Peake was not required to answer any affidavits by three other witnesses.
Whilst Ms Benedict had filed further and additional affidavits
Mr Peake was not put to the cost of filing further affidavits and did not. The only affidavit relied upon at trial by Mr Peake was that filed by him 10 January 2012. Accordingly, whilst Mr Peake would have been required to consider the additional affidavits filed by Ms Benedict and provide instructions to his attorneys with respect to their contents, no further evidence was filed by him and his preparation was thus limited to providing instructions to his counsel to enable cross-examination of Ms Benedict with respect to her evidence.
Mr Peake has filed two affidavits since 10 January 2012. However, one was in support of his Application in a Case seeking vacation of trial dates (filed 6 June 2013) and one is in support of this application for costs (filed 9 May 2014). Thus, to the extent that Mr Peake suggests that significant additional preparation was necessary on his part, I accept that:
a)Some additional preparation was necessitated but limited to the provision of instructions to enable cross-examination; and
b)Such additional preparation as occurred was not significant nor out of the ordinary.
The “Elias principle” argument made by Mr Peake on the first scheduled hearing date of the proceedings, 2 May 2013, caused a significant delay in the hearing and conclusion of the proceedings. As a consequence of that application, which was wholly unsuccessful, the matter could not proceed on the dates scheduled 2 and 3 May 2013 and, as a consequence of the (entirely appropriate) application for vacation of hearing dates subsequently allocated in June 2013, the hearing did not then commence until December 2013. To that end, a delay of some 11 months occurred from the initial listing of the matter in May 2013 until the final disposal of the matter April 2014. That delay was significantly created, in first instance, by the “Elias principle” argument raised by Mr Peake, then the application for vacation of earlier listed trial dates and, finally, by the inability to contain the proceedings within the two days allocated and thus requiring an adjournment, on a part-heard basis, to a third trial date in February 2014.
On one occasion the proceedings were marked “not reached” and adjourned. That was a circumstance beyond the control of either party.
I am not satisfied that the manner in which Ms Benedict has conducted her proceedings and conducted her business with the Court would constitute a justifying circumstance for an order for costs. As I will take into account, the events as outlined above, during 2013, were the primary cause of delay in the proceedings together with the delay of some five months which occurred at the commencement of the proceedings and as a consequence of Mr Peake’s failure to file a Response notwithstanding the operation of the Federal Circuit Court Rules and two orders made by the Court as to filing, neither of which were complied with.
Whether any party has been wholly unsuccessful
The submission by Mr Peake that Ms Benedict was “wholly unsuccessful” is irresistible. Ms Benedict was unsuccessful in persuading the Court as to the existence of the factual circumstances (the existence of a de facto relationship of the requisite nature and at the appropriate time) such as to found the Court’s jurisdiction. On that basis the Court has not had basis to proceed to consider or determine the substantive merit of any claim by either party as regards property adjustment. They are matters that will now need to be dealt with by the Supreme Court of New South Wales absent resolution of issues by the parties (a resolution they have been incapable of procuring or, it would seem, even pursuing to date).
In further considering this ground I am conscious of the Full Court’s decision in Davida & Davida (Costs) [2011] FamCAFC 61 and the passage therefrom:
The other justifying circumstance is the husband’s relative success. True it is that the relevant paragraph in S.117(2A) refers to a party being “wholly unsuccessful”, but I think it is fair to say that the practice has been to look what one might term the relative merits of success between the parties, even if necessary doing that under the last matter mentioned in S.117(2A), being any “other” matter”.
In that context “wholly unsuccessful” means there was no justified basis for the position adopted having regard to the outcome of the proceedings. Being “wholly unsuccessful” must look not just at the outcome but the position adopted by the party as well.
In many proceedings before the Court it is difficult to determine what might constitute “success” or an absence of success.
As regards an absence of success I am concerned that, to some extent, neither party has been “successful”. This is connected with the discussion undertaken above. At the conclusion of these proceedings the parties are left with a judicial controversy to address between them and the clear and certain reality that they continue to jointly own a parcel of real estate with significant value and equity and will need to determine, by agreement or judicial determination, the severing of their financial relationship with each other.
The issue that has been determined by this Court has been one of jurisdiction. In that regard I accept the submission put by Mr Peake’s counsel that Ms Benedict has been wholly unsuccessful in establishing jurisdiction. That would potentially, on its face and by and of itself, be a justifying circumstance for an order as to costs.
Mr Peake has been successful in resisting the jurisdiction to resolve the dispute as preferred and argued by Ms Benedict and Ms Benedict has been unsuccessful in invoking that jurisdiction. Neither party has been successful in extricating themselves from land ownership or dispute with the other. It would seem this lack of “success” in resolution of the “dispute” is connected with lack of attention and effort, especially “genuine effort” towards resolution of the real dispute.
Offers of settlement
No submission is put by Mr Peake regarding any offer of settlement, written or otherwise.
It is tempting to infer from the absence of evidence put by Mr Peake that no offer has been made by him at any time.
On one level the absence of any offer by Mr Peake would be explicable and justifiable. Mr Peake has made clear, since prior to the commencement of proceedings, that he is in heated disagreement as to the existence of a de facto relationship at any relevant point in time as would found the Court’s jurisdiction (i.e. a de facto relationship subsisting on or after 1 March 2009). Ms Benedict has not ultimately been successful in establishing that fact, being a necessary precondition to the exercise of the Court’s jurisdiction as Ms Benedict has sought to invoke.
The only evidence with respect to offers of settlement comes from that material introduced to the proceedings by Ms Benedict by her Affidavit 7 July 2014. That is in the somewhat unusual and unfortunate circumstances wherein legal professional privilege would also appear to be waived.
What the material annexed to Ms Benedict's Affidavit would suggest is that the only serious and significant attempt at any resolution of issues in dispute between the parties or of the controversy extant between the parties at large, was a settlement conference which occurred between the parties and their legal representatives 27 January 2012 (the date when the proceedings had been first listed for trial) and further discussion when the proceedings were listed before the Court 28 March 2012. There is no evidence of any attempt at settlement of the matter (or the substantive subject matter of the dispute) at any other time.
Evidence is introduced by Ms Benedict in the form of correspondence between Ms Benedict and her attorneys (and including a report from counsel retained) as to that which occurred 27 January 2012 and 28 March 2012.
Mr Peake raises some issue of controversy as regards the suggested settlement negotiation. However, the contrary evidence of Mr Peake does not seek to cavil with that suggested to have occurred in relation to “negotiation” if it might be so described (and I am concerned that it would be misleading to describe that referred to in the relevant correspondence as “negotiation”).
At Annexure J to Ms Benedict's Affidavit is a copy of a report from her counsel to her attorneys dated 27 January 2012. It suggests that the parties were in agreement that the “asset pool” would be taken to comprise the [E] property only and that the parties agreed that all other assets and liabilities would be excluded for the purpose of discussion. It is clear that there was some significant issue between the parties as to the value of the property, Ms Benedict alleging its value (as at January 2012) at $1.6million and Mr Peake $1.3million. The correspondence then suggests that some attempt was made to negotiate a “for the purpose of negotiation” figure but without success.
Correspondence then indicates to the extent relevant:
[Mr Peake’s counsel] requested the first offer from our client… Our client’s first offer was that she obtain half of the net value of the property… This offer abruptly stopped settlement negotiations – the husband obviously thought that our client was not negotiating reasonably, and [Mr Peake’s counsel] described it as “not an offer”.
The husband’s only counter-offer was that our client transfer her interest in the property to him, and each party pay his/her own costs. Obviously, this was not an offer made in good faith.
The letter then opines somewhat pessimistically “… it appears that the parties will have to incur the cost and inconvenience of a hearing or hearings”. Clearly it was apprehended (as the letter went on to detail) that a jurisdictional hearing would need to occur and that the parties would then be required to engage in a second hearing in either the Federal Circuit Court or the Supreme Court, (the latter if a declaration was not made as sought by Ms Benedict).
The correspondence then clearly places before the Court the advice which Ms Benedict had received, at that time, from her then counsel. Ms Benedict, no doubt if she was properly represented and advised at this time, would not have disclosed that information and I will return to it later.
What is clear is that:
a)The discretion to award indemnity costs should be based upon the “particular facts and circumstances of the case in question”; and
b)The awarding of indemnity costs, as particularly emphasised by the Full Court in Prantage & Prantage [2013], represents a “departure from the normal standards.”
I am not satisfied that the circumstances of this case, as discussed in some detail above, are such as to establish a basis for, or warrant an order for indemnity costs or “departure from normal standards”.
Each of these parties has embarked upon litigation regarding what was, in essence, a forum or jurisdictional issue each championing a different factual position which would support or obviate against the assumption of jurisdiction by this Court in preference to another. Each has been fully aware at all times that the determination of the jurisdictional issue by this Court (based solely upon factual findings rather than any principle of law) would lead to further litigation to deal with the primary or substantive dispute between them being the determination of their legal and/or equitable interests in a valuable parcel of real estate presently jointly owned by them. Further hearing was always anticipated before this Court or the Supreme Court.
The absence of any genuine attempt at a resolution by Mr Peake (again noting that Mr Peake has included no reference to any settlement negotiation or offer of settlement in his evidence or submissions) and the failure of these parties to use or even suggest mediation (or any other form of alternate dispute resolution other than adversarial “chest beating” or “shirt fronting” litigation) would obviate against the award of indemnity costs even if I was satisfied that one of the categories of conduct referred to in the various superior court authorities as founding such an exercise of discretion, had been found rather than having been found to be absent.
Justifying circumstance for costs
As indicated above I am satisfied that section 117 of the Family Law Act 1975 applies to the determination of this costs issue. These have been proceedings under the Family Law Act 1975. The application of section 117 includes the “general rule” in section 117(1) of the Act.
Whilst it is submitted by Mr Peake’s counsel that “… a strong argument can be made that the policy inherent” in the section should not apply nothing is put in support of that contention nor to advance what the bases might be for such a “strong argument”.
I must be satisfied that a justifying circumstance exists to enliven the exercise of discretion to award costs, as a departure from the “general rule”, as is made clear by section 117(2) of the Act.
I am satisfied that a justifying circumstance has been established to enliven the Court’s costs jurisdiction on a party-party basis and such as would warrant an order for costs (subject to a finding that it is just and equitable). This is so as:
a)Ms Benedict has clearly failed in establishing her evidential burden to prove the existence of a relationship of a particular type at a particular date;
b)At least as and from 27 January 2012 Ms Benedict was aware of the difficulties she faced in discharging the above evidential burden and chose, in those circumstances, to continue these proceedings and to engage in no further settlement negotiations nor attempt mediation or other forms of alternate dispute resolution.
I make clear that but for the last of the above points (Ms Benedict’s clear knowledge of the difficulties she faced in prosecuting her position and which evidence only comes before the Court through Ms Benedict’s ill-advised or inadvertent waiver of legal professional privilege) I might not be satisfied that a justifying circumstance was established.
The attitude demonstrated by Mr Peake (and Ms Benedict) towards use of mediation or any process (such as lawyer assisted or facilitated negotiation) that might have guided them towards a focus upon and resolution of the primary issue in dispute between them (which was not the issue to be heard and determined by this Court) was so disingenuous and absent any rational consideration of the best use of the resources of the Court or the parties as to obviate against any consideration of costs. To be clear Mr Peake’s conduct of his litigation has, absent any genuine effort to resolve the dispute, been reprehensible.
As I would hope is highlighted by the above discussion the exercise that these parties have engaged in before this Court, over a space of three years and having consumed not less than five days of Court hearing time (together with other resources) has, to some extent, been futile. During the entirety of that period neither parties’ gaze has been able to be distracted from their jurisdictional dispute with each other and turned towards the real controversy between them, being their joint ownership of property the division of which remains entirely unaddressed if indeed yet considered.
It would appear that at no point did the parties or those advising and representing them pause to consider, let alone communicate to the other, “look this is stupid! We are the joint registered proprietors of an incredibly valuable home. We have a daughter together. We need to sort this out!”
Justice and equity
Each of the parties has incurred legal costs of or in excess of $100,000. That, to a large extent, has been a matter of choice for these parties and each of them.
Whilst I am highly critical of the attitude that these parties and each of them have demonstrated towards this litigation it remains litigation commenced by Ms Benedict and to which Mr Peake was, at least initially, a non-willing participant. Mr Peake’s willingness to participate in the proceedings had certainly increased by early 2012 even if not his willingness to participate in any genuine effort or good faith attempt at resolution.
It would be ideal if litigants in the circumstances of Mr Peake and
Ms Benedict were not faced with the “uncertainty” of our federated systems of justice, wherein the two potential jurisdictional bases for resolution of their controversy, whilst founded upon the same evidence, must be determined in separate Federal and State systems. It is an unintended consequence of our federated system of justice but one of which the parties were well aware and advised. I accept they each also knew the risks, costs and consequences including the “general rule” as regards costs and the absence of guarantee of any order for costs (and certainly the reality that costs would not follow the cause as it does in most civil jurisdictions).
Ms Benedict was clearly aware of both the competing jurisdictions in which the controversy might be addressed and, more importantly, was well aware of the evidential shortcomings she faced in maintaining her position before this Court at least as and from 27 January 2012.
In light of those matters I am satisfied that it would be just and equitable, as between the parties, that an order for costs be made.
Quantum of costs
As Annexure A to his affidavit affirmed 8 May 2014, Mr Peake sets out a schedule of costs calculated in accordance with schedule 1 of the Federal Circuit Court Rules. That schedule is set out below:
EVENT
AMOUNT
21 February 2011 to end of First Return Date 28 March 2011
Initiating or opposing an application up to the completion of the first Court date (Daily Hearing Fee $1,994 + $271)
$2,265.00
25 July 2011
Directions Hearing
$271.00
27 January 2012
One day Defended Hearing and preparation for Defended Hearing
$4, 250.00
Daily Hearing Fee
$1,994.00
27 March 2012
Interim Hearing re produced of documents from ATP and Centrelink
$997.00
Advocacy Loading
$498.50
13 and 14 December 2012
Two day Defended Hearing and preparation for Final Hearing
$4,250.00
Daily Hearing Fee
$1,994.00
2 May 2013
Listed for two day Defended Hearing and preparation for two day Final Hearing
$5,270.00
Daily Hearing Fee
$1,994.00
Advocacy Loading
$997.00
23 May 2013
Judgment Hearing
$271.00
14 June 2013
Directions Hearing
$271.00
16 and 17 December 2013
Two day Final Hearing and preparation for Final Hearing
$5,270.00
Full day Hearing fee $1,994 x 2
$3,988.00
Advocacy Loading $997 x 2
$1,994.00
10 February 2014
Defended Hearing and preparation for Final Hearing
$1,128.00
Advocacy Loading
$997.00
11 April 2014
Judgment Hearing
$271.00
TOTAL
$38,970.50
The scale of costs set out within schedule 1 of the Federal Circuit Court Rules is indicative and not prescriptive. It does not bind legal practitioners in that which they charge their clients nor does it expressly bind the Court in its exercise of jurisdiction.
The schedule must be taken into account although the Court may depart from it. I am urged by Mr Peake to do so particularly by reference to submissions put on his behalf that the manner in which the wife has conducted her case has increased and inflated his costs (particularly as regards the filing of multiple affidavits by Ms Benedict).
I am satisfied that departure from the “scale” (if it might be so described as it is illustrative only and thus not binding) is not warranted in this case. The purpose of the schedule is to signal to litigants that which is reasonably to be expected in the event that an order for costs is made.
I am not satisfied that the manner in which the Ms Benedict has conducted her case has inflated Mr Peake’s costs. Certainly to the extent that she has filed a number of affidavits of evidence by her:
a)These were all served prior to the scheduled commencement of the hearing 13 December 2012; and
b)They have never been formally “responded to” by Mr Peake although I accept that he and his legal advisers would have been required to read and consider that material and to prepare to meet it through cross-examination. To the extent that the material has annexed significant documents, I am satisfied that those documents fall within the categories of material which the parties would be obliged to disclose each to the other and, to that extent, do not represent a significant departure from that which would ordinarily be required in the conduct of litigation.
I propose to deal with each of the various events or classes of events as set out in Mr Peake’s material to give some indication as to that which will be allowed and not allowed. This is not intended to be an authoritative assessment or taxation of costs. It is intended to illustrate the bases for the ultimate order that I will make and thus the reason why portions of orders sought have been included or not included.
21 February 2011 to end of First Return Date 28 March 2011
Costs are sought on the basis of the lump sum for opposing an application to completion of the first court date and court attendance. I do not propose to allow this amount.
Prior to the first return date of the proceedings 28 March 2011,
Mr Peake had not filed a Response. Mr Peake appeared in person on the first return date. Accordingly, no work in “opposing” Ms Benedict’s application could be demonstrated as having been performed and no legal costs are incurred with respect to Mr Peake’s attendance.
Directions hearing 25 July 2011
I do not propose to allow this amount. This arises as an earlier directions hearing had been scheduled for 16 May 2011. That directions hearing had been vacated administratively and the proceedings further adjourned to afford to Mr Peake some further opportunity to file a Response.
The Federal Circuit Court Rules allow a period of 14 days from service for a Response to be filed. Mr Peake failed to discharge that obligation and had failed to do so by 5 May 2011 (the date upon which the administrative adjournment was granted in Chambers) and notwithstanding orders which had been made on the first return date requiring the filing of a Response by 29 April 2011.
27 January 2012
I do not propose to include the daily hearing fee for this occasion as the matter was not listed before the Court that day. The listing had been vacated with the consent of both parties to enable them to engage in a “settlement conference”. That conference would appear to have been extraordinarily brief (from the account given in the report of
Ms Benedict’s then counsel).
I do propose to allow preparation for the matter as scheduled 27 January 2012, being preparation for a one day defended hearing at $4,250. Prior to the scheduled hearing (albeit later than the day fixed but subsequently varied by Chambers order made by consent)
Mr Peake had filed his affidavit of evidence in chief being that which was relied upon by him in the proceedings.
27 March 2012
Claim is made for the conduct of an interim hearing on that date and relating to the production of documents from the Australian Taxation Office and Centrelink.
I do not propose to make any allowance with respect to the suggested interim hearing. Whilst certainly the matter proceeded to interim hearing and a determination by the Court was necessary this arose purely through the failure of the parties and their legal representatives to resolve the issue appropriately and consensually.
The material annexed to Ms Benedict's Affidavit makes clear that she had, by 27 January 2012, advanced her position wherein she undertook to obtain documents and provide them to Mr Peake’s attorneys rather than acceding to the position advanced by Mr Peake being the provision of a written authority so that Mr Peake’s attorneys could obtain directly such documents as they desired.
As the High Court dealt with in the Expense Reduction Analysts Group Pty Ltd [2013] litigation this is an interlocutory matter which it was beholden to the parties to resolve appropriately between themselves. The matter should have been dealt with on that basis.
13 and 14 December 2012
Preparation for a two day defended hearing and a daily hearing fee with respect to a one day hearing is sought.
On this occasion the proceedings were listed for a two day hearing. The matter could not be accommodated due to pressures of work before the Court. The proceedings were marked “not reached”.
It is not apparent that any further preparation was required prior to this hearing and, accordingly, I do not propose to allow further preparation. That which had occurred with respect to the hearing initially scheduled 27 January 2012 would have been applied towards this hearing and was not “wasted”.
For reasons that will become apparent in dealing with the listing of the proceedings 2 May 2013, I do not propose to allow the daily hearing fee for the attendance 13 December 2012. No attendance was required 14 December 2012.
2 May 2013
On this occasion costs are sought with respect to preparation for a two day hearing together with a daily hearing fee and advocacy loading.
Prior to the hearing on this occasion I am satisfied that further work was required to be undertaken by Mr Peake and his attorneys.
Ms Benedict had filed, whether as a consequence of her change of attorneys or otherwise, three further affidavits by herself and including that which contained two ring binders of annexures. Even though
Mr Peake did not file any further affidavit material after that filed by him 10 January 2012, the further preparation that would have been required to address this material, in preparation for cross-examination if nothing else, is substantial.
The hearing was scheduled to occupy two days. However, as addressed above, the entire first day of the scheduled hearing was consumed in dealing with submissions and argument with respect to the exclusion of vast portions of Ms Benedict’s evidence by reference to the “Elias principle”. Mr Peake failed in that argument. However, it was the argument that consumed the entire first day of trial and caused the abandonment of the second day of trial.
On the basis that Mr Peake was completely unsuccessful on this occasion I am satisfied that:
a)No award for costs for attendance at hearing on that day should be made in favour of Mr Peake;
b)Ms Benedict, having incurred fees with respect to that issue and as to which Mr Peake was wholly unsuccessful and Ms Benedict wholly successful (although the evidence admitted as a consequence was ultimately a substantial contributor to her failing to prove the existence of a de facto relationship) were costs which were “thrown away”; and
c)Costs, including those incurred by Ms Benedict on that occasion, should offset the claim for a daily hearing fee made by Mr Peake for the attendance 13 December 2012.
23 May 2013
A claim is made for costs with respect to delivery of judgment on this day. In addition to judgment being delivered fresh hearing dates were fixed (as part of the Reasons delivered).
The attendance 23 May 2013 was for some minutes. I accept that an appearance was necessary. However, as Mr Peake has been wholly unsuccessful as regards the subject matter of the judgment, I am satisfied that the costs for the appearance on that date are costs which should be borne by him.
14 June 2013
Costs are sought for a directions hearing on this date. The matter was, in fact, listed on that date to deal with an Application in a Case supported by affidavit and filed by Mr Peake. As addressed above the basis for the application was the desire to adjourn the hearing of the proceedings as a consequence of Mr Peake’s current partner having been diagnosed with and in the process of receiving treatment for cancer. The vacation of the hearing dates was opposed by Ms Benedict.
Again, by reference to the High Court’s decision in the Expense Reduction Analysts Group Pty Ltd [2013] litigation, such an application should never have been necessary. There was a fundamental absence of humanity in the position advanced by Ms Benedict together with a failure to accept the impact that Mr Peake’s address of those matters with his partner would cause as regards due process.
In those circumstances I am satisfied that Mr Peake would be entitled to his costs with respect to the Application in a Case and appearance (which was brief). Accordingly, I propose to allow the schedule 3 amount (interim or summary hearing as a discrete event) together with the appearance fee as sought. This would equate to $1,661 with respect to preparation of the application and $271 for the appearance totalling $1,932.
16 and 17 December 2013
Costs are sought with respect to preparation for the trial as a two day hearing together with the two days of court attendance.
I am satisfied that an allowance for preparation should be made. I do propose allow for 2 days preparation being $5,270. I also propose to make allowance for the hearing dates as sought and being $3,988 together with advocacy loading of $1,994.
Hearing 10 February 2014
Clearly a mathematical or typing error is contained within the schedule advanced by Mr Peake. What is intended to be sought with respect to this appearance is, I accept, an appearance fee of $1,994 together with advocacy loading of $997.
I accept that Mr Peake would be entitled to these costs.
11 April 2014
Costs are sought with respect to attendance to take judgment. The costs as sought, $271 are appropriate and awarded.
Costs with respect to this determination
Application is made for costs with respect to the determination of this costs issue. Costs are sought on the basis of:
a)Initiating or opposing an application $2,265; and
b)Preparing written submissions $1,661.
It is submitted that, in reality, Mr Peake has incurred costs in the order of $4000 in addressing the costs issue.
I am satisfied that an award with respect to the costs application is appropriate noting that:
a)The application was made by way of Application in a Case supported by affidavit.
b)On the first return date of the proceedings the issue could have been heard and determined without further expense or delay to the parties but for Ms Benedict having sought an adjournment to enable her to file a Response and further material, including written submissions, with respect to the issue. No such material has been filed and thus the adjournment of the proceedings has incurred cost for Mr Peake and his attorneys in preparing detailed and written submissions. Significant Court resources have also been consumed now addressing the issue which could have been dealt with on its first return date and on the basis of oral submissions and extempore judgment.
The application for costs is not commenced by an Initiating Application but is appropriately commenced by an Application in a Case. Accordingly, I propose to award costs by reference to item 3 (interim or interlocutory application as a discrete event) together with an allowance for the submissions which have been prepared and submitted by Mr Peake’s attorneys. In addition an appearance on the first return date of the Application in a Case (7 July 2014) was also required. Those amounts, in accordance with the schedule as sought, would amount to $3,593.
The total costs which would be awarded by reference to the above are $24,289. I propose to round that award to an amount of $25,000 and to take into account additional disbursements which have, in all probability, been incurred such as the filing fee payable with respect to Mr Peake’s Response, photocopying and the like.
In closing
As is submitted by Mr Peake’s attorneys one would hope that this determination would be a conclusion, for these parties, of their business before this Court and in this jurisdiction. However, that is a matter entirely for them.
I have quantified costs as I accept the submission of Mr Peake’s counsel that “there must be an end to litigation in an order for costs, whatever the quantum, should bring an end to the proceedings in this court”.
To the extent that I am urged to take into account:
The Court should have regard to the fact that there will be proceedings in the Supreme Court which have now been delayed for over three years as a result of the unfortunate and unjustified proceedings brought by Ms Benedict. The Court should also have a wider perspective of the overall impact upon Mr Peake’s life as this litigation has effectively kept his life “on hold” unable to progress to conclusion in the correct jurisdiction.
I, again, observe that it is entirely a matter for these parties as to whether fresh litigation, in the Supreme Court of New South Wales or otherwise, occurs. It has at all times been open to these parties to resolve their dispute, through lawyer assisted negotiation, mediation or otherwise, rather than deplete their own resources as well as those of the Court and community (and importantly their daughter).
These litigants are parents of a child arising from their “relationship” (however that relationship might be described). The amount which these litigants have expended to date and will likely expend prior to the conclusion of their truck with each other, would have provided a sufficient fund to their daughter to enable her to purchase, albeit with a mortgage no doubt guaranteed by her loving parents, a property of her own. In the event that these parties or either of them now choose to embark upon fresh litigation in the Supreme Court, no doubt incurring costs comparable to those which have been created in perpetrating this litigation, then the reality will be for them and their daughter that the opportunity to purchase a modest home for their daughter, largely if not entirely unencumbered, will have been lost and wasted.
One would hope, by this experience, that these parties might now seek to utilise mediation or other forms of dispute resolution other than litigation conducted in the fashion that the litigation before this Court has been conducted. Sadly, after more than three years of litigating with each other, these parties are no closer to a resolution of their primary dispute and, in all reality and as a consequence of the experience of this litigation, further apart.
The parties would appear to have conducted this litigation as though they did not owe themselves or each other any obligation to find a clear focus upon real issues in dispute and the resolution let alone an obligation to the Court and the community to use their own resources and the Court’s in an appropriate and responsible manner.
I remind the parties that should either of them consider it necessary to now commence litigation in the Supreme Court of New South Wales that they will need to comply with the “overriding purpose” of the Civil Procedure Act 2005 (NSW) which mandates “the just, quick and cheap resolution of the real issues in the proceedings”. A legislatively mandated obligation will now apply to these parties and their legal representatives to assist the Court (and themselves) in ensuring the just, quick and cheap resolution of the real issue between them, being a commercial dispute with respect to the joint ownership of a parcel of real estate.
I certify that the preceding two hundred and eighty-three (283) paragraphs are a true copy of the reasons for judgment of Judge Harman
Associate:
Date: 5 December 2014
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