Pitney & Amato (No 2)
[2022] FedCFamC1F 487
•14 July 2022
Federal Circuit and Family Court of Australia
(DIVISION 1)
Pitney & Amato (No 2) [2022] FedCFamC1F 487
File number(s): NCC 1317 of 2021 Judgment of: CAMPTON J Date of judgment: 14 July 2022 Catchwords: FAMILY LAW – INTERIM COSTS – Application for costs of and incidental to an interim hearing – Where a raft of interlocutory disputes were resolved by consent – Where the applicant was unsuccessful in a factional part of the proceedings but not the proceedings as a whole – Where the parties and their legal representatives conducted the interim litigation consistent with the overarching purpose of the rules of Court – Circumstances do not justify an order for costs – Respondent’s application for costs dismissed. Legislation: Family Law Act 1975 (Cth) ss 90SM, 117
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Anison & Anison (2019) FLC 93-908; [2019] FamCAFC 108
Atkins & Hunt [2017] FamCAFC 131;
Pitney & Amato [2022] FedCFamC1F 436
Division: Division 1 First Instance Number of paragraphs: 19 Date of last submission/s: 29 June 2022 Date of hearing: 10 June 2022 Place: Sydney Counsel for the Applicant: Mr Willoughby Solicitor for the Applicant: Hannaway Lawyers Pty Ltd Counsel for the Respondent: Mr Puckey QC Solicitor for the Respondent: Medson Legal ORDERS
NCC 1317 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS PITNEY
Applicant
AND: MR AMATO
Respondent
order made by:
CAMPTON J
DATE OF ORDER:
14 July 2022
THE COURT ORDERS THAT:
1.That the respondent's application for the applicant to pay his costs of and incidental to the interim hearing on 10 June 2022 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Pitney & Amato has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
Introduction
This is an application by Mr Amato (“the respondent”) for costs payable by Ms Pitney (“the applicant”) in a fixed sum of and incidental to an interim hearing which took place before me on 10 June 2022.
The applicant commenced proceedings for adjustment of property pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”) by way of an Initiating Application filed on 25 April 2021, subsequent to the termination of a de facto relationship between she and the respondent that commenced in June 1998 and concluded in either May (on the respondent’s case) or August 2020 (on the applicant’s case).
A raft of interlocutory disputes existed between the parties prior to the listing of the matter before me on 24 November 2021. Some were resolved by consent orders made on that day and others adjourned for hearing on 10 June 2022. A further number of the interlocutory disputes were resolved by additional consent orders made on 10 June 2022. Three remaining disputes that could not be compromised were heard and determined by me on 10 June 2022. These reasons for judgment assume familiarity with the primary judgment delivered on that date, being Pitney & Amato [2022] FedCFamC1F 436. As recorded in those reasons, to the credit of the parties and their legal representatives, the three interlocutory issues requiring determination were:
(a)Whether two real properties held by the parties’ self-managed superannuation fund ("the fund") ought to be sold; and
(b)The mechanism by which a dispute as to the value of a liability payable by the fund to a company of the respondent ought to be determined. The parties agreed that a liability exists and must be paid by the fund, but do not agree as to its value. The applicant contends the value of the liability is $248,000 and the respondent contends it is $435,000; and
(c)Which party should meet the costs, if any, of a further single expert witness or witnesses (who may be an engineer or a quantity surveyor) to implement a part of the instructions provided by the parties to the agreed single real property valuation expert for use by that expert in undertaking an alternate valuation methodology of a property at Lot …, Suburb BB (“the Suburb BB property”) pursuant to the orders made on 24 November 2021.
The law and principles
The relevant principles with respect to costs are well settled, and are set out in detail in the Full Court decision of Atkins & Hunt [2017] FamCAFC 131.
While the general position established by s 117(1) of the Act is that each party should bear their own costs, s 117(2) allows a court to make such costs order as it considers just if there are circumstances that justify doing so.
In considering what order for costs should be made (if any) and in what form, the Court is required to have regard to the considerations set out in s 117(2A) of the Act. The relevance of the particular matters will depend on the circumstances of each case.
The respondent seeks an order that the applicant pay his costs of and incidental to the hearing on 10 June 2022 fixed in the sum of $10,800.35. The applicant implicitly seeks that the respondent’s application for costs be dismissed.
The applicant identifies that the financial circumstances of the parties are outlined broadly in a table of assets and liabilities filed on 10 March 2022, and in their respective Financial Statements filed on 17 February 2022 and 18 June 2021. It is uncontroversial that by implementation of the consent orders of 10 June 2022, the superannuation interests of the parties are to be equalised and thereafter they will each have superannuation member entitlements valued at greater than five million dollars. The table of assets and liabilities document records the applicant’s contention that the non-superannuation property available for adjustment is greater than $26 million, and the respondent contends that property is in the range of $8 million. The applicant says that in large part the discrepancy centres upon the value of the Suburb BB property held by the respondent’s corporate entity, Q Pty Ltd.
I find that by way of the consent orders made on 24 November 2021 and 10 June 2022, each party will receive significant partial property settlements. In those circumstances, it is not contested that the applicant has capacity to meet an order for costs sought in the sum of $10,800.35. I find this factor to be neutral in the exercise of a costs discretion.
The gravamen of the respondent’s submissions generating a costs discretion in his favour is twofold, being:
(a)
As to the conduct of the applicant, by reference to s 117(2A)(c) of the Act. He submits that the applicant opposed the relief he sought in his Amended Response to an Application in a Proceeding filed 20 May 2022 for an equal division of the
fund. That opposition continued until the applicant filed her Case Outline document on 7 June 2022, three days prior to the interim hearing, when she conceded to that part of the respondent’s relief. He submits that delay by the applicant caused him to incur unnecessary costs as he was required to engage with the applicant's evidence on that compromised topic; and
(b)That the applicant had been wholly unsuccessful in the terms of s 117(2A)(e) of the Act. He accurately submits that the applicant’s relief for the fund to dispose of the properties at 1 R Street and 2 R Street, Suburb E (“the Suburb E properties”) was dismissed. He submits that the quantification of the liability of the fund to a corporate entity of the respondent ought not to have been the subject of dispute and was appropriately referred to an assessor. The third limb of his submission pursuant to this section is that the applicant’s resistance to any variation of the orders as to the costs of funding an alternate valuation methodology of the Suburb BB property ought not to have been pursued at the interim hearing. Putting it another way, the respondent contends he was wholly successful in the issues that were the subject of dispute, judgment and orders on 10 June 2022.
The applicant concedes she was unsuccessful in her relief as to the parties’ self-managed superannuation fund effecting a sale of the Suburb E properties, but contends that she was not unsuccessful on any other matter. She submits that the fund’s inter-entity liability dispute was resolved consensually following exchanges with the Court, and that until the value of the liability is determined, neither party has been successful or unsuccessful on that issue. She further submits that the issue as to the funding of the costs of the alternative valuation methodology of the Suburb BB property is yet to play out.
For her part the applicant contends that the respondent delayed or dragged his feet in respect of disclosure relevant to the compromise of the equal splitting of the parties’ superannuation interests, and that the respondent’s declaration of his position 21 days prior to the hearing did not permit her sufficient time to give “serious consideration” to those weighty issues. It is the applicant’s contention that the circumstances do not justify an order for costs, and that each party should bear their own cost of the hearing on 10 June 2022.
I do not accept the submission of the respondent that the applicant has been “wholly unsuccessful” for the purposes of s 117(2A)(e) of the Act. The reference to wholly unsuccessful is a reference to success or otherwise “in the proceedings”.
In Anison & Anison (2019) FLC 93-908 the Full Court said as to s 117(2A)(e):
37.It is well settled that paragraph (e) refers to a situation where proceedings as a whole have been unsuccessful. For example, where an application without merit has been dismissed. In the oft-cited authority in this area of Robinson and Higginbotham earlier referred to, Nygh J (with whom Simpson & Smithers JJ agreed) said:
Her Honour then makes a reference to the question of which party was wholly successful but, of course, as counsel for the mother rightly submitted, paragraph (e) deals with a situation in which the proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed.
(Citations omitted)
The applicant has not been “wholly unsuccessful” in the proceedings. The issues determined on 10 June 2022 related only to a factional part of the proceedings. The substantive proceedings remain on foot.
The overarching purpose of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) and s 67 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) require proceedings to be dealt with in an efficient, cost effective and expeditious manner. The parties and their legal representatives, to my mind, have consistently applied themselves so as to achieve that overarching purpose in the conduct of the litigation for the purposes of, and specifically during the course of, the interim hearing on 10 June 2022.
The consensual resolution of the issue as to the superannuation split, as is evident from the complexity of the orders, resonates against the exercise of a costs discretion. Orders of the terms and character as made would not be easily achieved on a defended basis. Each party will realise significant benefits from the intricate, specialised work undertaken in crafting those consent orders.
The issue as to the value of the inter-entity liability of the fund was determined on a basis not identified by either party but by the Court. To the credit of the parties, they adopted it as a sensible and cost effective solution to that part of their dispute. The issue as to the funding of the costs of the implementation of the agreed alternate valuation methodology of the Suburb BB property is yet to be resolved. These factors scales against an exercise of discretion in favour of the respondent as to costs.
Taking those matters into account, notwithstanding that the applicant was unsuccessful in her relief to require the fund to dispose of the Suburb E properties, I am satisfied on balance that the circumstances do not justify an order for costs of the hearing on 10 June 2022 and hence the respondent’s application for those costs will be dismissed.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 14 July 2022
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