Pilcher and Pilcher (No. 4)
[2018] FCCA 1785
•6 July 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PILCHER & PILCHER (No. 4) | [2018] FCCA 1785 |
| Catchwords: FAMILY LAW – Costs– where the wife sought orders permitting her to adduce further evidence as to the value of the former matrimonial home in circumstances where a similar Application was dismissed some two months prior to this Application being filed – where the wife’s Application was dismissed on the grounds of res judicata -where the husband seeks his costs of that Application on an indemnity basis. |
| Legislation: Family Law Act 1975 (Cth), s.117 |
| Cases cited: I & I (No 2) (1995) FLC 92-625 |
| Applicant: | MR PILCHER |
| Respondent: | MS PILCHER |
| File Number: | MLC 4567 of 2015 |
| Judgment of: | Judge Small |
| Hearing date: | 25 January 2018 |
| Date of Last Submission: | 26 February 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 6 July 2018 |
REPRESENTATION
| Counsel for the Applicant: | Dr Smith |
| Solicitors for the Applicant: | Pearsons Lawyers |
| Counsel for the Respondent: | Ms Johnston |
| Solicitors for the Respondent: | Clancy & Triado |
ORDERS
Within 30 days of the date of these orders the wife shall pay the husband’s costs of the Application in a Case filed 12 December 2017 in the sum of $9,013.
All extant Applications are otherwise dismissed and removed from the Court’s list of pending cases.
IT IS NOTED that publication of this judgment under the pseudonym Pilcher & Pilcher (No.4) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 4567 of 2015
| MR PILCHER |
Applicant
And
| MS PILCHER |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for costs made by the husband Mr Pilcher (“the husband”) after the release of the Court’s judgment in relation to the second Application in a Case filed by the wife Ms Pilcher (formerly Pilcher) (“the wife”) during the period when the Court was preparing judgment in the substantive proceedings of this matter.
The substantive proceedings in this case were for property settlement arising from the breakdown of the marriage between the parties.
Judgment in that matter was delivered on 16 March 2018[1].
[1] Pilcher & Pilcher (No.3) [2018 ]FCCA 551
Background
The trial in the substantive proceedings was held on 7, 8 and 9 March 2017, after which I reserved my judgment, having informed the parties both at the commencement and the conclusion of the trial that judgment was unlikely to be delivered within the next six months because of the workload of the Court.
The wife filed an Application in a Case on 8 September 2017 (“the first Application”), almost exactly 6 months after the completion of the trial. At that time, I estimated that the first draft of the substantive judgment was between one-half and two-thirds complete.
The first Application sought the following orders:
1.That all times be abridged to enable this Application to be listed, heard and determined with priority.
2.That Judgment in these proceedings be stayed pending further evidence.
3.That the Applicant Wife have leave to adduce further evidence.
4.That the parties re-engage Mr S of Valuations as single expert witness to prepare a further and up to date valuation of the former matrimonial home property at Property A.
5.That the parties pay the costs of the single expert witness equally.
6.Such further and/or other orders and directions as are deemed appropriate or necessary in the circumstances.
After a hearing on 10 October 2017, I delivered judgment on 13 October 2017 dismissing the wife’s Application and publishing my Reasons[2]. No costs were awarded in those proceedings.
[2] Pilcher & Pilcher [2017] FCCA 2545
The wife did not appeal that decision.
Procedural History
On 7 December 2017, the wife filed a further Application in a Case (“the second Application”), seeking the following orders:
1.That all times be abridged to enable this Application to be listed, heard and determined with priority.
2.That Judgment in these proceedings be stayed pending further evidence.
3.That the Applicant Wife have leave to adduce further evidence and in particular a report and valuation by ValueIt as to the current market value of the former matrimonial home property situate at and known as Property A.
4.Such further and/or other orders and directions as are deemed appropriate or necessary in the circumstances.
As I had done upon the filing of the first Application, as soon as I became aware of the filing of the second Application, I ceased writing the substantive judgment. At that time, I estimate that the substantive judgment was approximately 80% to 85% complete.
After hearings on 15 December 2017 and 25 January 2018, I delivered judgment in the second Application on 5 February 2018[3].
[3] Pilcher & Pilcher (No.2) [2018] FCCA 260
I made the following order on 25 January 2018 after reserving judgment in relation to the second Application:
2. In the event that the wife is unsuccessful in her Application in a Case filed 7 December 2017, and the husband wishes to pursue his costs of that Application, he shall file written submissions in relation to the issue of costs no later than 14 days after delivery of judgment in relation to that Application, and the wife shall file her submissions no later than 14 days after service upon her of the husband’s submissions.
On 5 February 2018, I made a single order dismissing the wife’s Application in a Case filed 7 December 2017, and published Reasons stating that the dismissal was ordered on the grounds of res judicata/issue estoppel.
The husband filed submissions in relation to costs on 15 February 2018 and the wife filed her responding submissions on 26 February 2018.
Issues and Evidence
The sole issue in these proceedings is whether the Court should make an order that the wife pay the husband’s costs of the second Application, and if so, in what sum.
The husband’s submissions
The husband seeks an order that the wife pay his “costs of and incidental to the husband’s Response to an Application in a Case filed 12 December 2017, fixed in the sum of $9,013”.
After setting out a short history of the proceedings overall, the husband’s submissions address the matters set out in s.117 of the Family Law Act 1975 (Cth) (“the Act”).
The relevant parts of s.117 state as follows:
Costs
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
Essentially, the husband bases his application for costs on the fact that the wife was wholly unsuccessful in the second Application in circumstances where that Application failed on the grounds of res judicata/issue estoppel.
In other words, he says the wife should pay his costs of the second Application in circumstances where that Application failed on the same or similar subject matter as the first.
He says that the wife’s conduct in bringing the second Application has caused him to incur further legal costs in that he has been required to instruct solicitors and counsel to appear at two court hearings, provide written submissions, and obtain a transcript in order to prepare those submissions.
He sets out a table particularising his costs, with his actual costs amounting to $9,013, and scale costs amounting to $5,405. The husband notes that the Court scale does not provide for fees for counsel to draft written submissions, or for the costs of obtaining a court transcript.
The husband then addresses the financial circumstances of the parties, stating that after a workplace injury which occurred after trial in 2017, he is now working casually as a (occupation omitted), albeit on full time hours.
He acknowledges that the wife is in receipt of Centrelink benefits in the form of a disability support pension, but submits that she will have the means to pay his costs from any sum received as a result of the substantive proceedings.
In addition, the husband points out that the wife has had the benefit of living in the family home rent-free while the husband has paid the Line of Credit secured by mortgage over that property for some years.
I note that the final orders made in the substantive proceedings on 16 March 2018 provide for the husband to pay to the wife the sum of $380,627 within 75 days of that date, that is by 30 May 2018. Those orders provided a default clause for the sale of the property in circumstances where the husband did not pay that sum by the due date.
While the court is unaware whether the husband paid the required sum to the wife by 30 May 2018, it is clear that the wife is, or will be able to pay the sum sought from the property settlement provided by the orders of 16 March 2018.
The wife’s submissions
The wife submits “that the circumstances of the case do not justify an order for costs against the applicant wife”.
In addressing the matters set out in s.117(2A) of the Act, she submits that the financial circumstances of the husband at the time of filing the submissions “outweigh those of the wife” because of his greater property interests and superior earning capacity at that time.
The wife then submits that because the financial circumstances of the parties would not be known until the delivery of judgment in the substantive proceedings, the determination of the husband’s application for costs ought to be deferred until after the delivery of that judgment.
Of course, judgment in the substantive proceedings has now been delivered, and I take the financial circumstances of the parties as a result of that judgment into account under s.177(2A)(g).
The wife submits that, apart from the fact that she was wholly unsuccessful in the second Application, which she concedes, her conduct in bringing the second application does not “warrant a departure from the usual rule that each party meet their own costs”.
Having conceded that she was wholly unsuccessful in the second Application, the wife refers to the decision of the Full Court in I & I (No 2) (1995) FLC 92-625, where the court found that no one of the matters set out in s.117(2A) is more important than any other, saying:
(the matters listed in s.117(2A)) must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs.
She says that in this case, the fact that she was wholly unsuccessful in the second Application ought not to take precedence over any other factor and submits that “the overall circumstances do not justify the making of an order for costs”.
The wife opposes the husband’s application for indemnity costs, pointing out that such costs should only be awarded in “exceptional circumstances”.
She refers to the decision of the Full Court in Munday & Bowman (1997) FLC 92-784, where the Full Court “identified a number of circumstances in which costs on an indemnity basis may be warranted”.
Those circumstances are:
(a)where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he (sic) had no chance of success;
(b)making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud;
(c)evidence of particular misconduct causing loss of time to the court and to the parties;
(d)the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;
(e)an imprudent refusal of an offer to compromise.
The wife submits that none of the five circumstances set out in Munday & Bowman applies to this case, although she does concede “that the circumstances warranting an order for costs on an indemnity basis is (sic) not closed”.
She then quotes from the judgment of the Full Court in Yunghanns & Ors & Yunghanns & Ors & Yunghanns [2000] FamCA 681 where Their Honours said:
It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought. All that is required is that the Court asked to exercise the discretion be satisfied that some ‘particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party and party basis’.
The wife submits that there are no such “particular facts or circumstances” in this case, and that therefore the court should not award indemnity costs against her.
She then submits that the husband has erred in his calculation of his costs on a party/party basis, and sets out her own estimation of the scale costs, those amounting to $5129. The wife says that if the court is minded to make an order for costs, then that amount is the appropriate amount to award.
Conclusion
This is a case where the wife, having been unsuccessful in the first Application, and not having appealed that decision, filed the second Application which I found, in my judgment in relation to the second Application, to have been based on the same or similar subject matter as the first Application.
First of all, I am satisfied that, pursuant to s.117(2) of the Act, it is just to depart from the general rule that each party should bear their own costs of the second Application.
In making that decision, I take into account the matters set out in s.117(2A), and particularly the matters set out in subsections (a), (e) and (g) of that section.
First, the wife’s financial circumstances, as a result of the property settlement orders made on 16 March 2018, do not preclude her from satisfying the costs order sought.
Second, it is not disputed that she was wholly unsuccessful in relation to the second Application.
Third, this was the second application made by the wife on the same or similar subject matter.
I also find that it is appropriate in this case to award indemnity costs in the sum sought by the husband against the wife.
The “particular facts and circumstances of the case” upon which I base that finding are the wife’s persistence in attempting to have the question of the value of the family home reopened in the second Application when the Reasons for Judgment in the first Application made clear that as a matter of law, the value of the family home for the purposes of the property settlement was to be the value agreed upon at trial.
Despite that finding, she obtained a sworn valuation of the property and filed the second Application.
In my view, that action can be said to satisfy sub-paragraph (a) of the matters set out in Munday & Bowman in paragraph 37 hereof, in that “it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that (she) had no chance of success.
I will therefore make an order for the wife to pay the husband’s costs of the second application in the sum of $9013.
I will order those costs to be paid within 30 days of the date of the orders.
I certify that the preceding fifty three (53) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 6 July 2018
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Res Judicata
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