Purcell and Fitch (No.2)

[2013] FCCA 2139

FEDERAL CIRCUIT COURT OF AUSTRALIA

PURCELL & FITCH (No.2) [2013] FCCA 2139

Catchwords:
FAMILY LAW – Costs application of wife – written submissions – alteration of Final Property Orders – Orders made by consent – s.79A(1)(b) of the Family Law Act 1975 (Cth) – not impracticable for the Orders to be carried out – no attempt made by the husband to satisfy the Orders – Application for costs of wife acceded to – indemnity costs.

Legislation:  

Family Law Act 1975 (Cth), ss.79A(1)(b), 117

Applicant: MR PURCELL

Respondent: MS FITCH

File Number: MLC 1857 of 2011

Judgment of: Judge Hartnett

Date of Last Submission: 20 September 2013

Delivered at: Melbourne

Delivered on: 24 December 2013

REPRESENTATION

Solicitors for the Applicant: J Kotsifas & Associates

Solicitors for the Respondent: Nicholes Family Lawyers

THE COURT ORDERS THAT:

1. The husband pay the sum of $17,685.80 to the wife within 14 days from the date hereof, being the legal fees incurred by the wife with her solicitors Nicholes Family Lawyers from the date these proceedings were issued.

2. The husband pay the sum of $1,500 to the wife within 14 days from the date hereof, being the costs incurred by the wife in briefing Counsel to appear on her behalf at the hearing on 28 February 2013, the costs of which are reserved pursuant to paragraph 2 of the Orders made on 28 February 2013.

3. The husband pay to the wife the sum of $7,000 within 14 days from the date hereof, being the costs incurred by the wife in briefing Counsel to appear on her behalf at the final hearing on 2 May and 3 May 2013.

4. In the event the husband fails to comply with orders 1, 2 and/or 3 herein that penalty interest accrue on any part of the outstanding payment in accordance with the Family Law Rules 2004 (Cth).

5. Otherwise all extant applications are dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Purcell & Fitch (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT MELBOURNE

MLC 1857 of 2011

MR PURCELL

Applicant

And

MS FITCH

Respondent

REASONS FOR JUDGMENT

1. In final Orders made 23 August 2013, the husband’s Amended Application filed 6 February 2013 and made pursuant to s.79A of the Family Law Act1975 (Cth) (‘the Act’) was dismissed. Order 7 of those Orders provided as follows:-

   “The wife’s costs of these proceedings are reserved and there is liberty to the parties to make written submissions with respect thereto in the next 28 days.”

2. Each of the parties filed written submissions in respect of those costs of the proceedings. The wife seeks the husband pay her costs on an indemnity basis. She seeks orders as follows:-

   “1. That the husband pay the sum of $17,685.80 to the wife within 14 days from the date hereof being the legal fees incurred by the wife with her solicitors, Nicholes Family Lawyers, from the date these proceedings were issued.

   2. That the husband pay the sum of $1,500 to the wife within 14 days from the date hereof being the costs incurred by the wife in briefing Counsel to appear on her behalf at the hearing on 28 February 2013, the costs of which are reserved pursuant to paragraph 2 of the Orders made on 28 February 2013;

   3. That the husband pay to the wife the sum of $7,000 within 14 days from the date hereof being the costs incurred by the wife in briefing Counsel to appear on her behalf at the Final Hearing on 2 May and 3 May 2013.

   4. That in the event the husband fails to comply with Orders 1, 2 and/or 3 herein that penalty interest accrue on any part of the outstanding payment in accordance with the Family Law Rules.

   5. Such further and other Orders as this Honourable Court deems appropriate.”

3. The husband seeks that there be no order as to costs, save the following:-

   “1. That pursuant to s117(1) of the Family Law Act 1975(Cth) each party bear his or her own costs.

   2. Such further and other Orders as this Honourable Court deems appropriate.”

4. The husband argued at trial that his application was founded upon his financial inability to comply with the final property Orders made by consent on 25 August 2011, not only at the time of the making of the s.79A of the Act application but also as he discovered subsequently on information obtained from his bank, at the time of entering into the final orders made on 25 August 2011. To compel him to comply would be to compel him to suffer hardship he argued. The husband submits in respect of the costs questions that his financial position does not exceed that of the wife and that:-

   “some assets alleged to be in the possession of the husband do not belong to the husband but are rather at the disposal of the husband by virtue of his employment and relationships.”

5. The Court does not accept the submissions made by the husband and refers to its Reasons delivered in the proceedings.

6. The submissions of the wife set out the following grounds on which it is said the husband should pay the costs of the wife on an indemnity basis:-

   “1. The husband’s financial position is far superior to that of the wife and the evidence given by the husband during the Final Hearing on 2 May 2013 regarding his financial position was, in the opinion of the Court “not credible evidence” (per Section 117(2A)(a) of the Family Law Act 1975 and paragraph 30 of the Reasons for Judgment delivered by Her Honour Judge Hartnett dated 23 August 2013).

   2. The husband’s conduct in respect of his breaching Final Orders made on dated 25 August 2011 led to the current proceedings being initiated by the husband on 18 May 2012 (“the current proceedings”) (per Section 117(2A)(c)).

   3. The husband’s conduct “…has been positively abhorrent toward her {the wife}. He has made no attempt to satisfy the orders in any measure” (per Section 117(2A)(a) and paragraph 32 of the Reasons for Judgment).

   4. The husband’s conduct by changing his employment has created a situation where the Child Support Agency has been unable to recover the Child Support owing to the wife (per Section 117(2A)(c)).

   5. The conduct of the husband to the current proceedings by failing to comply with the wife’s reasonable requests for discovery (per Section 117(2A)(c)).

   6.  That the husband has failed to comply with paragraphs 2 and 3 of the Final Orders made on 23 August 2013 in the current proceedings (per Section 117(2A)(c).

   7. The husband initiated the current proceedings after failure by him to comply with the Final Orders made on 25 August 2011 (per Section 117(2A)(d).

   8. The husband’s Initiating Application filed 18 May 2012 was wholly unsuccessful (per Section 117(2A)(e).

   9. On 17 May 2013 the wife wrote to the husband on a “without prejudice save as to costs” [basis] in an attempt to settle the matter without further litigation, although no response was forthcoming from the husband who subsequently issued the current proceedings on 18 May 2013, the day after receipt of the wife’s offer to settle. The husband subsequently obtained a result less favourable than that which the wife was proposing in her offer of 17 May 2013. Thus on the basis of the authority set down in Cutts v Head (1984) Ch290 and Calberbank v Calderbank (1975) 3 All ER 333 the husband should be liable to pay the wife’s costs (also per Section 117(c)(ii).”

7. The Court accepts the submissions as made by the wife, save that the Court notes as an allegation of the wife, there being no enforcement proceedings instituted by her and thus no findings, the submissions as contained in paragraph 6. Given the vast amounts expended by the wife on legal costs to date, it is perhaps not surprising there have been no further proceedings instituted by her.

8. The husband was entirely unsuccessful in the proceedings, not a witness of credit in many instances and by the proceedings sought to avoid his obligations pursuant to earlier orders. The wife, as the successful party to the proceedings, should receive her costs and there is nothing in the facts of this case and following a consideration of those matters set out in s.117 of the Act that requires the Court to make a different costs disposition.

9. The wife seeks indemnity costs relying principally it would seem on the husband’s unreasonable refusal of her settlement offer in the form of a Calderbank letter of 17 May 2012. The wife further relies on the husband’s conduct in particular.

10. The Court has a discretion in respect of an award of costs in proceedings such as these. It is required to exercise that discretion by reference to those matters as set out in s.117 of the Act. Section 117 of the Act relevantly is as follows:-

    “(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.

    …”

11. The award of costs is to compensate the successful party for an outlay of costs that should have been unnecessary. Without adopting a punitive approach toward the husband in the circumstances of this case, it is clear that he has caused the wife further costs that should not have been incurred by her following the making of final orders. Not only were the proceedings instituted by him unsuccessful and unmeritorious, they were also delayed by discovery not being provided by him in a timely manner and by the need to cross-examine other witnesses who rendered the husband’s testimony false in those circumstances as described in the published Reasons of the Court.

12. The husband refused an offer of the wife made prior to his institution of proceedings seeking to set aside the earlier Orders of the Court. He subsequently obtained an outcome less favourable to him than that which the wife earlier proposed. Such conduct was unreasonable in the circumstances and facts of this case which included the husband’s poor prospects of success in the proceedings and the very clear position as stated by the wife. The wife is entitled to costs on an indemnity basis from 17 May 2012. This is the day before the husband commenced these proceedings. The orders as sought by the wife shall be made by the Court. The quantum of costs claimed are not unreasonable by reference to this Court’s scale of costs and by reference to the nature and complexity of the proceedings. The husband’s financial position as stated by him does not outweigh all the other factors required to be considered and considered as stated above.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Judge Hartnett.

Date:  24 December 2013