POELS & POELS
[2020] FamCA 860
•14 October 2020
FAMILY COURT OF AUSTRALIA
| POELS & POELS | [2020] FamCA 860 |
| FAMILY LAW – COSTS – Between parties – Where the husband was wholly unsuccessful in resisting the wife’s application for exclusive occupation – Wife’s costs of application granted at scale. |
| Family Law Act 1975 (Cth) s 117 |
| Banks & Banks (1973) NSW R233 Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 Dean & Dean (1977) FLC 98-213 Nada & Nettle (Costs) (2014) FLC 93-612 Phillips & Hansford [2020] FamCAFC 28 Rankin & Rankin (No. 3) [2019] FamCAFC 133 Sfakianakis & Sfakianakis [2019] FamCAFC 54 Worth & Worth and ICL (No. 2) [2019] FamCAFC 126 |
| APPLICANT: | Mr Poels |
| RESPONDENT: | Ms Poels |
| FILE NUMBER: | SYC | 8084 | of | 2019 |
| DATE DELIVERED: | 14 October 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Henderson J |
| HEARING DATE: | In Chambers |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Reeve |
| SOLICITOR FOR THE APPLICANT: | Marsdens Law Group |
| COUNSEL FOR THE RESPONDENT: | Ms Petrie |
| SOLICITOR FOR THE RESPONDENT: | Lighthouse Law Group |
Orders
The husband is pay the wife’s costs in the amount of $8,860.00 with such sum to be paid as follows:
(a) $3,003.33 being Counsel’s fees within 7 days;
(b) The remainder to be deducted from the husband’s share of the final property settlement.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Poels & Poels has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 8084 of 2019
| Mr Poels |
Applicant
And
| Ms Poels |
Respondent
REASONS FOR JUDGMENT
This is a costs application made by the wife matter of Poels.
The wife is the respondent in the substantive proceedings for property settlement and the husband is the applicant.
The wife’s costs application follows a successful application for exclusive occupation filed by the wife on 28 April 2020 and heard on 15 May 2020. Ms Petrie of Counsel appeared for the wife and Mr Reeve appeared for the husband at the hearing.
Counsel for the wife, Ms Petrie, made an application for costs immediately following my ex tempore oral judgment on 15 May 2020 and I heard her submissions at that time.
I then made directions for the wife’s solicitors to provide to the husband’s solicitors the quantum of their costs sought within 5 days, with the husband to respond to the wife’s costs application by way of written submissions, which has been done.
I have had regard to the following in relation to this costs application:
a)Ms Petrie’s oral submissions on 15 May 2020;
b)A letter from the wife’s solicitors to the husband’s solicitors dated 21 May 2020 setting out the quantum of costs with a breakdown of same;
c)Mr Reeve’s written submissions received in Chambers on 12 June 2020;
d)The wife’s Application in a Case filed 28 April 2020;
e)The wife’s Affidavit filed 28 April 2020;
f)The husband’s Response to Application in a Case filed 8 May 2020; and
g)The husband’s Affidavit filed 8 May 2020.
The wife’s application filed 28 April 2020 sought orders for exclusive occupation of the former matrimonial home, that the husband pay the mortgage in relation to the former matrimonial home as well as the mortgage in respect of three investment properties in Queensland, that the husband pay all outgoings for the three Queensland investment properties. The wife agreed to pay the outgoings on the former matrimonial home.
The husband in his Response filed 8 May 2020 sought the wife’s application be dismissed.
The short Chronology
The husband and the wife have been separated since 22 March 2018 but living under the same roof in the former matrimonial home.
The wife said the relationship had been strained post-separation and that the continuation of both parties living under the same roof has become intolerable.
The wife also deposed to not knowing the husband had rented a unit in Suburb B until disclosure occurred in the matter, sometime after 26 March 2020.
The husband’s rental agreement for the Suburb B property indicated the agreement commenced on 30 May 2019, almost 12 months prior to when the wife discovered this document.
The husband agrees he entered into a lease of the Suburb B property on 30 May 2019 for a period of 6 months. This has now expired and the husband says it is now a month-to-month arrangement.
The husband agrees the Suburb B property is the home of the father’s new partner.
He says their relationship is in its early stages and he does not wish to live in the Suburb B apartment with his new partner.
The husband says his new partner pays the rent of the Suburb B property, while the husband paid the initial bond.
The wife says the husband would come and go from the former matrimonial home as he pleased staying away for nights and then returning without warning.
The orders I made on 15 May 2020 were as follows:
1. The matter is listed on 11 June 2020 before Registrar Ryan.
2. The husband is to vacate the former matrimonial home known as F Street, Suburb C in the State of New South Wales no later than 4pm on 21 May 2020 and thereafter the wife is to have exclusive occupation of the former matrimonial home.
3. The husband is to continue to pay the mortgage on the property.
4. I direct the wife to join in any application made by the husband to the bank to reduce the mortgage repayments in relation to the former matrimonial home to interest-only repayments.
5. The wife is to pay all outgoings in relation to the property including, but not limited to, water rates, council rates, electricity, telephone, internet, home and contents insurance and the like whilst in occupation of the home.
6. Leave is granted to both parties to issue as many subpoenas as they deem appropriate.
7. The wife is to provide to the husband the quantum of her costs of this application within 5 days.
8. The husband is to file and serve written submissions in relation to the wife’s costs application within 28 days.
9. The wife may file and serve written submissions in reply within 14 days thereafter.
The Law
It is correct that in the Family Court of Australia each party bears their own costs however the Court retains a discretion to order costs be paid by one party pursuant to section 117(2) of the Family Law Act 1975 (Cth) (“the Act”).
I must determine whether or not to exercise my discretion under section 117(2) to order costs given the usual order in this Court is each party bears their own costs. The relevant matters under section 117 are as follows:
(1) Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, 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), (5) and (6) 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.
The husband submits he is under financial pressure. His Affidavit filed 8 May 2020, at paragraphs 38 to 67, set out that his business owes a debt of some $600,000 to D Company however has been able to pay his legal costs from his business income whilst the wife has deferred hers having no such luxury.
The husband submits his business is not in a position to meet the terms of repayment required in relation to this debt and that litigation for enforcement of the debt will be taken against him yet no action has commenced.
The husband also deposes in his Affidavit that his business also has significant debts to the Australian Tax Office of $165,000.
Whilst the husband submits that he is under financial pressure, impecuniosity is not a barrier to the making of a costs order as follows from the decision of Nada & Nettle (Costs) (2014) FLC 93-612 where the Full Court (May, Ainslie-Wallace and Austin JJ) held at [11]:
That a party is impecunious, even indigent, is not a bar to the making of a costs order if the Court is otherwise of the opinion that such an order ought to be made.
The wife submits the husband has been in full financial control of the family finances including business income throughout the relationship and post separation, and that she does not have access to the income he has and this is correct. Her income is $80,000 per annum and I am unable to find what the husband’s income is without that issue being tested.
Neither party is in receipt of legal aid.
Conduct looms large as an issue in this application.
The husband submits that this is simply a matter where section 117(1) of the Act should not be departed from and each party should bear their own costs and that there are no reasons why a Court would exercise its discretion to order costs under section 117(2).
The husband submits that the law sets a high bar for an exclusive occupation order, see: Banks & Banks (1973) NSW R233; Dean & Dean (1977) FLC 98-213 and that both parties should bear their own costs.
That the wife was not wholly successful in her application in relation to who was to pay the mortgage on the home. That argument is fallacious as the husband was wholly unsuccessful in his resistance to the wife’s application and that is the test under the section not that the wife was not wholly successful.
The salient facts are that the husband entered into a rental agreement for the Suburb B property on 30 May 2019 and that agreement continues today.
The husband’s Initiating Application was filed on 28 November 2019, some 5 months after entering into the lease for the Suburb B property, at a time where the husband was legally represented and he failed to disclose the existence of this agreement during pre-action procedures and after proceedings had commenced, leaving the wife completely in the dark as to this important and relevant fact.
The reality is, the husband has been coming and going from the former matrimonial home as he pleases, whilst having alternate accommodation and to use the vernacular, having the best of both worlds, a consequence of which is that the wife has found her living conditions intolerable never knowing when the husband will turn up.
It was only when the wife’s solicitor sought disclosure from the husband that the wife was made aware of the leasing of the Suburb B property. Had the husband disclosed the lease of the Suburb B property as he should have, this hearing may well have never taken place.
Section 117(2A)(d) of the Act is not relevant.
The orders I made on 15 May 2020 are broadly in line with the orders sought by the wife in her Application.
The reality is his resistance to her claim was doomed to failure on the facts given he had another residence to live in and he should have known this was the likely outcome had been properly advised, using the words of Sheppard J in Colgate Palmolive Co v Cussons Pty Ltd[1].
[1]Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801.
In light of these facts this is a matter where the Court will exercise its discretion to make a costs order under section 117 of the Act.
Quantum of Costs
Four recent decisions of the Full Court of the Family Court deal with the issues of costs namely Phillips & Hansford,[2] Rankin & Rankin (No. 3),[3] Worth & Worth and ICL (No. 2),[4] and Sfakianakis & Sfakianakis,[5] are each relevant to this matter and deal with the broad discretion of the Court in relation to a costs application.
[2]Phillips & Hansford [2020] FamCAFC 28.
[3]Rankin & Rankin (No. 3) [2019] FamCAFC 133.
[4]Worth & Worth and ICL (No. 2) [2019] FamCAFC 126.
[5] Sfakianakis & Sfakianakis [2019] FamCAFC 54.
That broad discretion is to award costs on an indemnity basis, solicitor/client basis, party/party basis, scale costs, costs as assessed by the Court or a taxation by a Registrar. As always in family law proceedings, each case turns on its particular and unique facts.
The wife seeks that the Court order costs at scale or on a party/party basis.
I will assess the wife’s costs at scale
The wife seeks her costs of counsel settling of her Application in a Case, Affidavit, including tender bundle, case outline document and a conference with the instructing solicitor and client, being, at scale, 6 hours at $411.85 per hour, totalling $2,471.10.
On that point, the husband submits the reasonable time spent for drafting a case outline and attendance at a conference would be no more than 3 hours, totalling $1,235.55. He also submits it is not reasonable for costs to be allowed for counsel to settle the Application in a Case, Affidavit and tender bundle.
As the husband says in his submissions, the bar for the making of an exclusive occupation order is high, meaning extra care must to be taken to ensure the application, affidavit, tender bundle and case outline document are drafted correctly. This argument hardly helps his resistance to the wife’s quantum claim rather reinforces it. As such, I find that the costs sought by the wife are reasonable in this regard.
The wife seeks the costs of Ms Petrie, her Counsel, appearing at the hearing for a one day at $3,000.33.
The husband submits that the hearing was less than 3 hours and therefore the wife has incorrectly applied Item 205, being a trial of one day. The husband submits that Item 203 should be applied, being an attendance of less than 3 hours, for example a procedural hearing or summary hearing.
I find the husband’s submissions are incorrect and inconsistent with his submission of the high bar such applications set. Further, this matter did proceed as a one day hearing as the wife submits and it was not a procedural matter or summary hearing. The matter commenced at 10am and concluded at approximately 1:45pm, after Ms Petrie’s costs submissions and thus was clearly a one day matter and I will allow Counsel’s fees in full of $3,000.33.
The husband says there is no allowance for a filing fee in Schedule 3 and therefore it cannot be ordered.
Given that I found the husband’s application was wholly unsuccessful and the wife was required to bring this application, I will allow the filing fee of $120.00.
The wife seeks the costs of her solicitor drafting the Application in a Case, Affidavit, preparation of her tender bundle, conference with counsel and perusing financial disclosure documents for 8 hours, totalling $2,012.00 at $251.50 per hour.
The husband submits this is an unreasonable amount of time. He says that paragraphs 20 to 27 and 29 to 49 of the wife’s Affidavit filed 28 April 2020 were copied from her Affidavit sworn 17 January 2020. He submits a reasonable time for the preparation of those documents should be no more than 4 hours.
As I have stated earlier, the husband submitted the bar for an exclusive occupation order is high, meaning the time taken to prepare the documents to be relied upon will be longer to ensure they are correct and I find 6 hours’ preparation cost is reasonable, being $2,012.
The wife also seeks $1,257.50, being the costs of a solicitor appearing at the interim hearing for 5 hours at a rate of $251.50.
The husband submits that the wife’s solicitor was not in the same room as counsel during the interim hearing and therefore, would be of no assistance. He submits that Item 109 ought apply, essentially being the time of a clerk, at a rate of $163.04 per hour.
In these days of parties appearing in Court by way of Microsoft Teams, it is not uncommon for solicitors to not appear with their Counsel, for various reasons. While the wife’s solicitor may not have been in the same room as her counsel, they were attending to matters that arose during the hearing, obtaining instructions, and the like. The use of Microsoft Teams makes it even more of an imperative that a solicitor instructs Counsel as in contrast to an old fashioned face to face hearing all 3 parties may be in different places whilst the hearing runs. This was a difficult matter and I will allow the costs claimed as at $1,257.50.
The total costs to be paid by the husband to the wife is $8,860.93 rounded down to $8,860 and I will so order.
The husband also submits that if a costs order is made, the payment should be deferred to settlement. He submits his financial position and the fact that the wife’s solicitors have agreed to their costs being paid at settlement are factors that would impel me to make the same order here.
I take into account the husband’s earlier submission in relation to his difficult financial position together with the result of my orders being that the wife has been granted exclusive occupation of the former matrimonial home, with the husband continuing to pay the mortgage on same.
This is not a matter where it is unlikely either party will receive a substantial amount at settlement, and as such, I will order the husband pay the wife’s costs in the amount of $8,860 with Counsel’s fees, a disbursement to be paid within 7 days and the remainder of the order to be deducted from the husband’s share of the final property settlement.
I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Henderson delivered on 14 October 2020.
Associate:
Date: 14 October 2020
0
6
1