Preston and Maine (No. 2) - [2013] FamCA 524

FAMILY COURT OF AUSTRALIA

PRESTON & MAINE (NO. 2)

[2013] FamCA 524

FAMILY LAW – COSTS – Applicant to pay the respondent’s costs but not on an indemnity basis

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Colgate-Palmolive Company Pty Ltd (1993) 46 FCR 225
Haykal v Krawiec (No. 4) (2012) FamCA 748
I & I(No. 2) (1995) FLC 92-625
Kohan and Kohan (1993) FLC 92-340
Penfold v Penfold (1980) FLC 90-800
Prantage and Prantage [2013] FamCAFC 105
Yunghanns, PN & Ors v Yunghanns, DB & Orsand Yunghanns, MB (2000) FLC 93-029

APPLICANT:

Mr Preston

RESPONDENT:

Ms Maine

FILE NUMBER:

MLC

9572

2012

DATE DELIVERED:

15 July 2013

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

By way of written submissions

SUBMISSIONS RECEIVED FROM

COUNSEL FOR THE APPLICANT:

Mr Combes

SOLICITOR FOR THE APPLICANT:

Resolve Conflict Lawyers

COUNSEL FOR THE RESPONDENT:

Ms Wheeler

SOLICITOR FOR THE RESPONDENT:

Macgregor Barristers & Solicitors

Orders

That the applicant pay the respondent’s costs of and incidental to the proceedings but only from and including 3 April 2013 in such sum as may be agreed and failing agreement, as assessed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Preston & Maine (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 9572 of 2012

Mr Preston

Applicant

And

Ms Maine

Respondent

REASONS FOR COSTS JUDGMENT

On 23 April 2013 I delivered judgment dismissing an application by Mr Preston (“the applicant”) for leave to proceed out of time to seek orders for the alteration of property interests against his previous de facto partner (“the respondent”).
In dismissing that application, I observed that despite the applicant’s assertion to the contrary, the evidence supported the conclusion that he was out of time to bring the application. In making that finding, I rejected the applicant’s view about when the de facto relationship came to an end. Then, in contemplating the factors that might otherwise justify an order for the extension of time, I found the applicant’s claim had no merit or prospect of success.
In paragraph (3) of the 23 April 2013 orders, I granted the parties liberty to seek costs through written submissions. The respondent now seeks costs against the applicant including on an indemnity basis for the entirety of the proceedings, claiming $36,793.10. Each party filed written submissions.
The respondent always opposed the substantive application for a property settlement and not just on the jurisdictional issue. She maintained that she did not have an interest in property that could be altered nor the money or resources to enable any payment to be made to the applicant. Indeed, a careful analysis of the position disclosed that the respondent had a life interest in the relevant property.
The applicant opposed the costs order on the basis that he did not have the financial capacity…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] FamCA 524
Decision Date

CaseChat Overview and Summary

In *Preston & Maine (No. 2)*, the Family Court of Australia considered an application for costs following the dismissal of the applicant's, Mr Preston's, application for leave to proceed out of time to seek orders for the alteration of property interests against the respondent, Ms Maine. The applicant had asserted he was out of time to bring his application, and the court found his claim lacked merit and had no prospect of success. The respondent sought costs against the applicant, including on an indemnity basis, for the entirety of the proceedings.

The court was required to determine whether to make an order for costs against the applicant, and if so, whether those costs should be on a party-party or an indemnity basis. The court also had to consider the relevant factors under section 117(2A) of the *Family Law Act 1975* (Cth), including the financial circumstances of the parties, the conduct of the parties, and whether the applicant had been wholly unsuccessful.

Justice Cronin noted that while section 117(1) of the Act establishes a general rule that parties bear their own costs, section 117(2) grants the court discretion to make costs orders where circumstances justify it. The court identified several justifying factors for departing from the usual rule, including the applicant's failure to properly define his application, his persistence with a claim despite the respondent's clear lack of legal interest in the property, and his failure to address the respondent's life interest in the property. Regarding the request for indemnity costs, the court referred to *Prantage and Prantage* and *Kohan and Kohan*, emphasising that indemnity costs are a significant departure from the norm and require exceptional circumstances. The court found no exceptional circumstances in this case to warrant indemnity costs.

Balancing the factors under section 117(2A), including the parties' financial circumstances, the applicant's conduct in pursuing a flawed claim without addressing fundamental issues, and the applicant's complete lack of success, the court found it just to make an order for costs. The court ordered that the applicant pay the respondent's costs of and incidental to the proceedings, but not on an indemnity basis, and only from and including 3 April 2013, in such sum as might be agreed or otherwise assessed.

Orders