Ryder and Bonham
[2018] FamCA 781
•28 September 2018
FAMILY COURT OF AUSTRALIA
| RYDER & BONHAM | [2018] FamCA 781 |
| COSTS – Appointment of experts - where husband has failed to comply with orders – where delay incurred - application for indemnity costs – where delay and non-compliance insufficient in this instance to warrant indemnity costs – costs ordered as agreed or assessed. |
| Quickley v Pelissier [2016] FamCAFC 124 |
| APPLICANT: | Ms Ryder |
| RESPONDENT: | Mr Bonham |
| FILE NUMBER: | CAC | 1571 | of | 2017 |
| DATE DELIVERED: | 28 September 2018 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Gill J |
| HEARING DATE: | 14 September 2018 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Pigdon Norgate Family Lawyers |
| SOLICITOR FOR THE RESPONDENT: | Mills Oakley |
Orders
That the Husband, Mr Bonham, pay to the Wife, Ms Ryder, the costs of the preparation of her Application in a Case and supporting Affidavit of 27 July 2018, and the costs of the preparation for, correspondence regarding, and attendance at, proceedings on 31 July 2018, as assessed or as agreed.
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 Ryder & Bonham 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 CANBERRA |
FILE NUMBER: CAC 1571 of 2017
| Ms Ryder |
Applicant
And
| Mr Bonham |
Respondent
REASONS FOR JUDGMENT
Background
The applicant wife in these proceedings is Ms Ryder; the respondent husband is Mr Bonham.
By way of her application in a case filed 27 July 2018, the wife sought the appointment of a number of single experts for the purpose of valuation of property. The wife also sought indemnity costs in relation to her application.
The wife contended that her application was necessitated by the husband’s non-compliance, and that whilst, ultimately, the experts were appointed by consent, the husband had unnecessarily prolonged the issue.
This sequence of events can be described as follows:[1]
[1] At [3]-[34] of the affidavit of Mr K of 27 July 2018.
a)On 30 October 2017 Orders were made by Registrar Payget which required the wife to file an application in a case on or before 3 November 2017 setting out her orders sought in relation to valuations.
b)The husband was required to file a response to the wife’s application on or before 7 November 2017.
c)On 3 November 2017 the wife filed this application. Order 3 nominated three single experts to undertake valuations of the husband’s business entities.
d)On 7 November 2017 the husband filed a response to the wife’s application in a case. The only order sought in this response was that the wife be restrained from instructing any experts, and be restrained from disclosing any financial documents relating to the husband to any accountant based in or who primarily practices in the Canberra area.
e)On 8 November 2017 the husband’s response seeking an injunction restraining the wife in relation to experts was dismissed.
f)On 10 January 2018 Pigdon Norgate sent a letter to Mills Oakley requesting that the husband provide a response to the Orders as sought by the wife in her 3 November 2017 application in a case, within 14 days.
g)On 2 February 2018 a letter was sent from Mills Oakley to Pigdon Norgate regarding the experts as nominated by the wife for the purpose of valuing property. The husband rejected the wife’s proposed experts, and nominated three alternative experts.
h)On 13 February 2018 Pigdon Norgate sent a letter to Mills Oakley regarding the valuation of the parties’ residential properties. The wife rejected the values the husband had provided in relation to these properties, and nominated three experts to value these residential properties.
i)On 14 February 2018 Pigdon Norgate sent a letter to Mills Oakley in response to Mills Oakley’s letter of 2 February 2018. This letter requested that the husband nominate one of the three valuers as proposed by the wife in her application in a case filed 3 November 2017, to value the husband’s business interests.
j)On 15 February 2018 Mills Oakley sent a letter to Pigdon Norgate in response to Pigdon Norgate’s letter dated 14 February 2018. Mills Oakley requested that the wife nominate one of the experts nominated by the husband’s letter of 2 February 2018, for the purpose of valuing the husband’s business interests. At this stage the parties were at an impasse in relation to the selection of experts for the valuation of the business. Each had selected three options and pressed the other to choose from that party’s nominated three.
k)On 2 March 2018 Pigdon Norgate sent a letter to Mills Oakley which enclosed a proposed minute of orders. Pigdon Norgate indicated that they would be seeking these orders at the next court event on 5 March 2018.
l)On 5 March 2018 Orders were made by Registrar Payget, which dealt with the appointment of expert valuers in relation to three classes of property, being:
i)A forensic accountant to value the husband’s business interests;
ii)A real estate valuer to value the real estate of both parties; and
iii)An rural valuer to value the horses, horse equipment, saddlery, rural and dressage equipment and all other livestock and livestock equipment owned by the wife.
m)Order 1 of the 5 March 2018 Orders required the husband to select one of three experts nominated by the wife in her 3 November 2017 application, on or before 12 March 2018, for the purpose of valuing the husband’s business interests.
n)In relation to the parties’ real property, Order 2 stated that if the parties were unable to agree on the value of real property on or before 2 April 2018, then the wife was to nominate to the husband three valuers by 9 April 2018. The husband would then be required to nominate one of these valuers on or before 16 April 2018.
o)In relation to the parties’ rural property, Order 3 stated that if the parties were unable to agree on the value of the rural property on or before 2 April 2018, then the husband was to nominate three proposed valuers on or before 9 April 2018. The wife would then be required to nominate one of these valuers on or before 16 April 2018.
p)On 7 March 2018 Mills Oakley sent a letter to Pigdon Norgate enclosing a valuation report for the parties’ E Town property prepared by Mr M. On that same day Pigdon Norgate sent a letter to Mills Oakley requesting all correspondence between the husband and Mr M.
q)On 12 March 2018 Mills Oakley sent a letter to Pigdon Norgate advising that Mr M was instructed orally. The wife subsequently rejected Mr M’s valuation.
r)On 12 March 2018 Pigdon Norgate sent a letter to Mills Oakley proposing a valuation of the wife’ rural property.s)On 12 March 2018 Mills Oakley sent a letter to Pigdon Norgate, noting the requirement in the 5 March 2018 Orders for the husband to nominate a forensic accountant by 5.00pm that day. The husband advised in this letter that he required the wife to confirm which forensic accountant she proposed to retain from N Accountants.
t)On 26 March 2018 Pigdon Norgate sent a letter to Mills Oakley advising that the wife nominated Mr O of N Accountants.
u)On 3 April 2018 Mills Oakley sent a letter to Pigdon Norgate agreeing to the appointment of Mr O to to value the husband’s business interests.
v)On 3 April 2018 Pigdon Norgate sent a letter to Mills Oakley requesting that the husband provide a valuation of the D Town and G Town properties, and requesting that the husband respond to the wife’s letter of 12 March 2018 in relation to the value of the rural property.
w)On 6 April 2018 Pigdon Norgate sent a letter to Mills Oakley enclosing a draft letter of instruction to Mr O. No response was received to this letter.
x)On 24 April 2018 Pigdon Norgate sent a letter to Mills Oakley seeking a response to the wife’s letter of 6 April 2018. No response was received. By this stage the deadline for the nomination by the wife of experts to value the real property had passed, as had the deadline for the husband’s response to such a nomination. The wife appears to rely on her nomination of such valuers made on 13 February 2018.
y)On 23 May 2018 Pigdon Norgate sent a letter to Mills Oakley enclosing a minute of orders that the wife indicated that she would seek, in re-listing the matter due to the husband’s non-compliance with the Orders of 5 March 2018. Those terms sought the sending of letters of instruction to either Mr O or Mr P, to Mr Q and to Mr R.
z)On 18 June 2018 Mills Oakley sent a letter to Pigdon Norgate addressing the outstanding valuation issues, noting that because of an agreement between the parties to “disengage with the proceedings until 30 June 2018 in an attempt to reach a settlement agreement that our client has not engaged with the outstanding settlement issues.” Agreement was given for the appointment of Mr P re business and superannuation interests (although not in agreement as to payment), Mr Q for commercial properties, but not for Mr R for residential properties.
aa)On 19 June 2018 Pigdon Norgate sent a further letter to Mills Oakley addressing the outstanding valuation issues.
bb)On 3 July 2018 Pigdon Norgate sent a letter to Mills Oakley seeking a response to the letter of 19 June 2018.
cc)On 25 July 2018 Pigdon Norgate sent a letter to Mills Oakley noting the husband’s failure to comply with orders 1, 2 and 3 of the 5 March 2018 Orders. The wife advised that should the husband fail to provide a signed copy of the joint letter of instruction by 26 July 2018, the wife would make an application for the joint letters to be sent without the husband’s consent. She sought the appointment of Mr O, Mr Q, Mr R and Mr S.
dd)No response to the correspondence from Pigdon Norgate was produced.
On 27 July 2018 the wife filed an application in a case seeking as follows:
a)That the letter of instruction to Mr O annexed “A” to these Orders, be sent as a joint letter of instruction forthwith.
b)That the letter of instruction to Mr Q annexed “B” to these Orders be sent as a joint letter of instruction forthwith.
c)That the letter of instruction to Mr R annexed “C” to these Orders be sent as a joint letter of instruction forthwith.
d)That the letter of instruction to Mr S annexed “D” to these Orders be sent as a joint letter of instruction forthwith.
e)That the Husband provide copies of any documents and information requested by any of the experts who are engaged pursuant to Orders 1, 2, 3 or 4 to the Wife’s solicitor for the Wife’s review within 14 days of the expert issuing any such request.
f)That the Husband provide the disclosure requested in the letter from Pigdon Norgate Family Lawyers dated 26 March 2018 being the letter annexed “E” to these Orders, within 7 days of the date of these Orders.
g)That the Husband provide the information requested in the letter from Pigdon Norgate Family Lawyers dated 19 June 2018 being the letter annexed “G” to these Orders, within 7 days of the date of these Orders.
h)That the matter be relisted for telephone directions before the Court no earlier than 28 days after the date of these Orders with respect to the Husband’s compliance with these Orders, at the earliest available date suitable to the Court.
i)That the hearing of the matter be expedited.
j)That the Husband pay for the Wife’s costs of this application, calculated on an indemnity basis.
Ultimately orders were made by consent on 31 July 2018 for the provision of joint letters of instruction to be sent to each of four single experts, being Mr P (rather than Mr O, for the business and superannuation), Mr Q (commercial properties), Ms T (rather than Mr R, in relation to residential properties) and Mr S (horses). Orders were also made by consent corresponding to Orders 5 – 8 of those sought by the wife, dealing with provision of documents to the experts and with disclosure and response issues.
While the wife has also raised questions of the husband’s compliance with the disclosure aspects of the orders of 31 July 2018, this alleged non-compliance is not supported by evidence.
Discussion
The parties have had orders in place since 5 March 2018 dealing with the mechanisms for the appointment of experts to value the property of the parties. The correspondence identified by the wife indicates that she has taken steps beyond what was required of her to accommodate the husband in respect of the appointment of experts. The combination of the orders made by Registrar Payget and the accommodations offered by the wife were insufficient to bring the valuation issue to a close.
Given the apparent lack of response by the husband after correspondence sent by Mills Oakley of 18 June, the wife had no realistic option other than to seek the relisting of the matter and to prepare for contested proceedings that day.
Ultimately the matter was resolved by consent orders. The proceedings that brought about the consent orders were brought on by the wife, following lack of response to the wife’s attempts to finalise the issue for in excess of a month.
While s117 of the Act provides that, as a starting point, each party will bear his or her own costs, the failure of the husband to comply with the regime set by Registrar Payget, or to respond to the efforts made by the wife to otherwise resolve the issue, are sufficient to justify a departure from the starting point. This approach is reinforced by the relative strength of the parties financially, as set out by the wife in her submissions, as reflective of the matters that were dealt with in respect of the interim property and spousal maintenance orders.
While the wife sought indemnity costs, the bar for such is high. The principles to be applied in relation to indemnity costs are neatly set out by the Full Court in Quickley & Pelissier:[2]
We then turn to consider whether costs should be awarded on a party/party or indemnity basis.
In Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 at 256, Sheppard J referred to the "settled practice" that where a court orders one party to pay another party's costs, the order is for costs to be paid on a party/party basis. His Honour also said "there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice" at 257.
In an appropriate case the court has a discretion to order costs on an indemnity basis. An order made in the exercise of that discretion is a very great departure from the normal approach and the circumstances justifying the departure should be of an exceptional kind (Kohan and Kohan (1993) FLC 92-340).
In the recent case of Madin & Palis (Costs) [2016] FamCAFC 25 this Court made reference to the increasing number of applications for indemnity costs and said at [23]:
Finally, we take the opportunity to observe that in so far as the appellant sought an order for indemnity costs, applications for such costs should only be made, and such costs will only be ordered, in the most extreme cases. This is particularly so having regard to the fact that the primary rule in this jurisdiction is that each party should pay their own costs.
[2]Quickley v Pelissier [2016] FamCAFC 124 at [120].
The husband’s delay and non-compliance, while sufficient to justify a costs order, does not meet the description of being “one of the most extreme cases.”
The husband should pay the costs of the wife of the proceedings, and of the preparation for the proceedings of 31 July 2018, but as assessed or as agreed.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 28 September 2018.
Associate:
Date: 28 September 2018.
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