Sanders & Sanders (No 6)
[2023] FedCFamC1F 141
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Sanders & Sanders (No 6) [2023] FedCFamC1F 141
File number(s): SYC 7660 of 2020 Judgment of: CHRISTIE J Date of judgment: 10 March 2023 Catchwords: FAMILY LAW – PRACTICE & PROCEDURE – COSTS – Where final property and parenting orders were made – Where the wife seeks costs at scale and on an indemnity basis – Where the husband seeks costs in a fixed sum – Where the circumstances do not warrant an order for indemnity costs – Where the wife is awarded a portion of costs at scale. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd [1993] 119 CLR 118; [1993] FCA 801
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123; [2005] FamCA 158
Sanders & Sanders [2022] FedCFamC1F 213
Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157
Munday v Bowman (1997) FLC 92-784; (1997) 22 Fam LR 321
Prantage & Prantage (2013) FLC 93-544; (2013) 49 Fam LR 197
Division: Division 1 First Instance Number of paragraphs: 80 Date of hearing: 22 February 2023 Place: Sydney Solicitor for the Applicant: Ms Ward, Minors Family Law The Respondent: Litigant in Person ORDERS
SYC 7660 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SANDERS
Applicant
AND: MR SANDERS
Respondent
order made by:
CHRISTIE J
DATE OF ORDER:
10 March 2023
THE COURT ORDERS THAT:
1.The husband pay the wife’s costs of the Application in a Proceeding for a recovery order in the sum of $2,228 in five instalments:
(a)the sum of $500 per week for four consecutive weeks from the date of this order; and
(b)the sum of $228 on or before 14 April 2023,
to the bank account nominated by the wife in writing.
2.The husband’s Response to an Application in a Proceeding filed 21 February 2023 is dismissed.
3.The wife’s Application in a Proceeding filed 19 February 2023 is otherwise 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 Sanders & Sanders has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
This matter came before the Court for final hearing in January and February 2022.
Final orders relating to parenting and financial matters were made on 7 April 2022. The husband filed a Notice of Appeal in respect of those orders on 4 May 2022.
On 5 May 2022 the wife filed an Application in a Proceeding seeking an order that the husband pay her legal costs.
In circumstances where the husband had appealed the final orders, the wife’s application for costs was adjourned to be heard following the delivery of the appeal judgment.
The appeal was dismissed on 22 November 2022 and on 27 January 2023, the husband was ordered to pay the appeal costs of the wife in the sum of $8,900.37.
The wife filed an Amended Application in a Proceeding on 19 February 2023 which sought:
1.That the Respondent pay the Applicant’s costs for Court file number SYC7660/2020 as follows:
a.In respect of costs incurred for the purpose of the Final Hearing before Justice Christie, to be calculated at scale in accordance with Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, for the period 1 December 2021 to 19 January 2022;
b.In respect of costs incurred for the purpose of the Final Hearing before Justice Christie and delivery of Judgment, to be calculated on an indemnity basis for the period 20 January 2022 to 7 February 2022 (inclusive), 7 April 2022, and 12 April 2022;
c.In respect of costs incurred for the purpose of the Application in a Proceeding filed by the Applicant on 13 April 2022 (Recovery), to be calculated on an indemnity basis for the period 11 April 2022 to 14 April 2022 (inclusive).
2.That for the purpose of Order 1 above, the Respondent’s salary shall be garnished at $844 each week and paid to the Applicant as she so directs until such time as full payment has been made.
(As per the original)
The husband filed a Response to Amended Application on 21 February 2023. In that Response the husband sought interlocutory orders as follows:
1.All previous final orders made by Her Honour Justice Christie on 7th April 2021 be dismissed.
2.The Recovery Orders made by Her Honour Justice Christie 14th April 2021 be dismissed.
3.The false reports of abuse occasioned by the father to the children, that were given by DCJ and others to NSW Police be corrected.
Financial
4.That the Applicant, [Ms Sanders], pay the Respondent’s costs or a fixed sum of $250,000
5.That the Applicant, [Ms Sanders], pay retrospective child support costs of $36,000 (for past period between August 2020 to April 2022, and between September 2022 to present)
6.That the Applicant, [Ms Sanders], from the present date until October 2028 pay weekly child support costs of $350.00 per week to the Respondent, [Mr Sanders].
7.That no further costs orders be made for the Applicant, [Ms Sanders], or for the Independent Children’s lawyer or in the event that Her Honour decides otherwise, that the sum total of those costs orders be paid at paid in instalments at the rate of $500 per calendar month from 31 January 2024.
8.That existing cost orders are revoked, including the Appeal Costs Order made on 27 January 2023, or in the event that Her Honour decides otherwise, that payment of the sum total of existing cost orders as at 20 February 2023 are deferred for a period until 31 January 2024, and thereafter paid in instalments at the rate of $500 per calendar month.
Parenting
9.The father have sole parental responsibility for the children [X] ( born […] 2009 ) and [Y] ( born […] 2010) (“the children”).
10.The children live with the father.
11.Notwithstanding anything in these orders the children shall spend time as follows:
11.1.With the mother during school terms each alternate Sunday from 9am to 9pm, starting from the first Sunday following the start of school term.
11.2.With the mother for the first four days of every school holiday, starting on the first Friday of the school holiday period. Each day from 9am to 9pm. No overnight stay.
11.3.With the mother on the first Sunday following […] (mother’s birthday) from 9am to 9pm.
11.4.With the mother on the first Sunday following [X’s birthday] from 9am to 9pm.
11.5.With the mother on the first Sunday following [Y’s birthday] from 9am to 9pm.
11.6.With the mother on 23rd, 24th, 25th December. Each day from 9am to 9pm. No overnight stay.
11.7.With the mother for four days starting from the first Friday following 18th January at 9am until 9pm each day. No overnight stay.
12.The children shall spend additional time, including overnight time, with the mother when agreed by both parties.
13.That each parent facilitate the children communicating with the other parent or any member of the other parent's family, including grandparents, by any means including Skype, telephone and email at all reasonable times as requested by the children.
14.Neither parent shall remove the children's mobile phones from either child, nor prevent the children from having access to their mobile phones for any reason.
15.The Father retain the children's passports at all times when the children are not undertaking any international travel, and the Father retain the children's birth certificates and other such official documentation for the children.
16.Each parent is hereby authorised to obtain from the children's schools all notices including but not limited to functions and school events, newsletters correspondence and school reports concerning the children, and school or such other activities or events to which the parents are invited.
17.Each parent shall keep the other informed of their current residential address, email address and telephone numbers and will provide the other with written notice of any change within 24 hours of such change.
18.Each of the parents shall keep the other informed of any medical emergency involving the children including but not limited to serious illness accident or hospitalisation and/or which requires urgent medical treatment within whilst in the care of that parent as soon as practicable and in any event not more than 12 hours of such event occurring.
19.Each parent is hereby restrained from making critical or derogatory remarks in relation to other parent while in the presence or hearing of the children and that each will respectively use her or his best endeavours to ensure that as far as possible no other person does so.
20.The mother is thereby restrained from making comments relating to suicide or self-harm while in the presence or hearing of the children.
21.The Mother be restrained from giving the children any herbal remedies, alternative medicines or other medicines not prescribed to the children by the children's treating medical professionals, unless recommended by the children's treating medical professionals in writing.
22.Both parents are restrained from physically disciplining the children and shall not permit any third parties to physically discipline the children.
23.The Mother be restrained from approaching within 100 metres of the Father's residence.
(As per the original)
As is plain in the husband’s Response, he sought orders which did not relate to the wife’s application for costs of the final proceedings and the recovery order.
The husband had agitated a change to the parenting arrangements and the financial orders when the matter was before her Honour Justice Brasch on 24 January 2023. That application was dismissed on 15 February 2023. Accordingly, apart from this application for costs, there are no proceedings before this Court.
I indicated to the husband that I could hear his costs application but the remainder of the application would be dismissed as it sought interim orders in circumstances where there are no applications for final orders before the Court and sought relief in the same or similar terms to his application before Brasch J. In addition, I did not have jurisdiction to deal with the husband’s orders relating to child support.
Accordingly, I dealt with the husband’s Response insofar as it related to his proposed orders 4, 7 and 8.
BACKGROUND
The parties were involved in parenting and financial proceedings which were determined on a final basis on 7 April 2022.
The wife seeks the costs of those proceedings for the period commencing 1 December 2021 to 12 April 2022. She seeks those costs on an indemnity basis for the period 20 January to 7 February and 7 and 11 to 14 April 2022.
If a costs order is made she seeks a garnishee order for recovery of those costs.
The husband seeks the wife pay his costs in the sum of $250,000.
It is necessary to understand the parties’ respective financial positions.
At paragraph 219 of Sanders & Sanders [2022] FedCFamC1F 213 (“the reasons”) I found:
219 … Overall the agreed assets, liabilities and superannuation should be divided so as to provide that the wife receives 58 per cent of the net pool (and the husband receives 42 per cent). That requires that in addition to the agreed superannuation split the husband should pay to the wife the sum of $632,290 or in default there should be a sale of the [Suburb E] property.
220The effect of the above findings is that the assets, liabilities and superannuation should be divided as follows:
Husband receives Wife receives Asset Value Asset Value [C Street, Suburb E] 1,300,000 CBA […] Account (account number […41]) $2,732 [G Bank] Account (account number […12]) $3,981 CBA […] Account (account number) […68]) $52 [G Bank] Account (account number […13]) $100 [HH Finance] (Salary Packaging and Employee Benefits Card – subscriber no. […76]) $592 Westpac […] Account (account number […65]) $100 [Motor Vehicle 2] $2,600 Westpac […] Account (account number […34]) $1,000 Interim property distribution $30,000 [Motor Vehicle 1] $6,000 Payment from the husband $632,290 Interim property distribution $25,000 Total Assets $1,336,181 Total Assets $668,266 Liabilities Value Liability Value Westpac Home Loan Account $399,156 Income Tax ye 2020 $12,009 Payment to the wife $632,290 Total Liabilities $1,043,455 Total Liabilities NIL Superannuation Value Superannuation Value [Super Fund 2] (formerly [Super Fund 3]) $207,679 [Super Fund 4] $91,063 [Super Fund 1] $85,660 from husband’s superannuation ([Super Fund 1]) $50,000 Total Superannuation $293,339 Total Superannuation $141,063 Net Assets received $586,065 Net Assets received $809,329
And further at paragraph 221 that from the funds she was to receive “[t]he wife will be required to repay the funds belonging to the parties’ children from the funds she receives from the husband”.
Each of the parties had outstanding debts for monies borrowed to pay legal fees.
The husband says he is not currently employed although he accepts he is likely to obtain work in the near future.
The wife is employed and earns about $2,000 net per week.
THE LAW
The general rule is that each party pays his or her own costs.
Each party seeks a departure from the usual rule and, the wife, in respect of specified periods, seeks an order for indemnity costs.
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out the basis upon which the Court is empowered to award costs. The relevant subsections provide:
(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.
Those provisions make clear that, while the general rule in family law proceedings is that each party bears his or her own costs, the Court may order a party to pay the costs of another where there are circumstances justifying the making of such an order.
Regard must be had to the considerations set out in s 117(2A) of the Act in determining whether or not to order a party to pay the costs of another. For the wife to be successful in her costs application, she must establish that the justice of the case requires an order for costs, by reference to the non-exhaustive list of statutory considerations set out in s 117(2A) of the Act.
(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.
No one factor under s 117(2A) prevails over any of the other factors. It is a matter of weight that is accorded to each of the relevant factors in the judge’s discretion (Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 per Strickland J).
While, there is “nothing to prevent any factor being the sole foundation for an order for costs” being made (Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123 at [41]) the factor must constitute the justifying circumstances.
In some cases, the justifying circumstances may be the financial circumstances of each of the parties.
The manner in which costs are to be assessed is dealt with in r 12.17(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules"), which provides:
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b) as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c) to be calculated in accordance with the method stated in the order; or
(d) for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
Rule 12.17(3) sets out matters that may be considered in the determination of the quantum of costs, providing that:
(3) In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness of each party's behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable proceedings;
(d) whether a lawyer's conduct has been improper, unfair, unreasonable or disproportionate;
(e) the time properly spent on the proceedings, or in complying with pre-action procedures;
(f) whether expenses (paid or payable) are fair, reasonable and proportionate.
The provisions of the Act and the Rules confer a broad discretion on a judge hearing and determining a costs application.
CONSIDERATION
The husband filed an affidavit in support of his Response. The wife took formal objections to that affidavit largely on the grounds of relevance. In the main, I accepted that the objections taken by the wife were valid and large portions of the affidavit were not admitted. I allowed some material to remain as submissions. I permitted the husband to give evidence of matters relating to offers of settlement, his current financial circumstances, the success or otherwise of past applications and matters relating to the conduct of the proceedings.
The husband’s affidavit was largely concerned with contending that the wife had misled the Court. I understand this evidence to be in support of a submission by the husband that the wife’s conduct is relevant to her application for costs. I accept, if I had found that the mother had lied or misled the Court, it may be relevant to her application for costs or the husband’s own application for costs. The difficulty with the husband’s argument is that no such findings were made at the final hearing and were not open on a costs application which was being determined without cross-examination.
The affidavit also appears to raise an issue of bias, although I note there is no formal application for me to recuse myself.
It is necessary to say something about the contention of bias before considering the application proper. The husband’s assertion appears to be grounded in the findings in the final reasons (i.e. that the husband disagrees with the conclusions and resulting orders). He does not point to any matter which constitutes either actual or apprehended bias.
The wife filed an affidavit in support of her application for costs. The wife provided a copy of the costs agreement with her solicitors in support of her application for indemnity costs.
As discussed above, the husband’s application, as it relates to financial orders, parenting orders and child support, will be dismissed in circumstances where the final property and parenting orders remain in place and no application for child support orders on a final basis has been made nor have any of the prerequisites to this Court hearing and determining a child support application been met.
The competing costs applications
The husband and wife both ask that I depart from the usual rule which provides that each party bear his or her own legal expenses.
The husband seeks a lump sum of $250,000 largely in reliance on his contention that the wife’s conduct would constitute justifying circumstances.
He also seeks to be relieved of past costs orders and to pay existing (and any subsequent) orders in instalments.
It is necessary to consider the different periods set out in the wife’s application separately:
(a)1 December 2021 to 19 January 2022 (pre-trial);
(b)20 January 2022 to 7 February 2022 (pre-trial and trial), 7 April 2022 (delivery of reasons) and 12 April 2022; and
(c)11, 13 and 14 April 2022 (recovery order application).
The wife seeks her costs of preparation, trial and recovery orders proceedings. In respect of the trial and recovery orders proceedings she seeks an indemnity costs order. In the wife’s case her application is premised on an assessment of the parties’ respective financial positions, offers of settlement, the fact that the husband was wholly unsuccessful and the husband’s conduct.
The husband raises, as an answer to the wife’s application for costs, his financial position.
I will therefore turn to the relevant s 117(2) matters identified by the parties.
Financial circumstances
The wife is employed part time as a permanent employee and part time as a casual employee for two employers. She estimates her net salary at about $2,000 per week ($2,627 before tax as per the wife’s Financial Statement of 14 January 2022).
The husband’s income at trial was gross $4,588 per week. He says he is not currently working or earning income but agrees that when he is employed he is likely to earn a similar amount. It is plain that the husband is in a stronger financial position than the wife as regards income.
I accept that neither party has significant assets as a consequence of the legal fees they incurred during these proceedings. The former matrimonial home had an agreed value at trial of $1,300,000. The husband was unable to raise the funds to pay the wife the sum provided in the orders and the property was consequently sold. The property was sold for $1,200,000. The effect of the sale at a price less than the value agreed for the purpose of the proceedings was that the husband did not receive any funds from the sale. Had the husband been able to retain the property (as he sought), the equity he would have notionally held would have been $1,300,000 less $399,156 (being that portion of the mortgage not referable to the husband’s legal fees) less the payment to the wife of $632,290, namely $268,554. As the sale by auction did not achieve $1,300,000 the notional equity may be reduced to $168,554. There were costs attendant on sale.
The costs of sale are set out in the wife’s evidence:
Commission 18,000
Marketing 6,415.42
Auction 770
Gardening 180
Key cutting 8.95
Plumbing 200
Waste removal 984.50
Total: $26,558.87
The costs of sale need to be deducted from the sale proceeds. The parties’ mortgage needed to be discharged. The amount payable on discharge was $546,877.94. That figure included $150,000 which the husband had borrowed to pay legal fees. The net effect was that the husband received the benefit of the discharge of the loan ($150,000) and no further amount. The wife received an amount less than the sum in the orders.
The fact that the property sold for less than the value which the parties had adopted for hearing is not unusual since valuation is not an exact science and the best indication of value is sale on the open market. The husband says the fact that the property did not fetch the agreed price is a consequence of actions taken by the wife as trustee for sale. The evidence does not support such a finding. In any event my task is not to determine (absent evidence) whether the property was sold under value but to examine the financial consequences, for each party, of the sale. The conclusion that I reach is that the net proceeds of sale were applied as follows:
Husband – discharge legal fee loan 150,000
Wife – discharge legal fee loan 172,633.55
Wife – payment on settlement 421,069.58
Wife – payment from deposit $33,441.13
The wife’s evidence is that she applied the funds she received to legal fees such that she had $115,748.77 remaining of which $24,000 represents monies she is obliged to pay to the children. Her affidavit material sets out a variety of other debts.
The husband gave evidence on this application that he has a tax debt of around $100,000. The documents annexed to his affidavit suggests that a company H Pty Ltd had a tax debt as at 6 September 2022 of $99,834.62. This debt accrued in circumstances where the husband’s evidence was that he was not making PAYG payments. The question of taxation liabilities was the subject of findings at paragraphs 206 – 208 of Sanders & Sanders [2022] FedCFamC1F 213.
I accept that the parties’ respective financial circumstances are such that each of them has in all likelihood expended those assets which were available on payment of the legal fees associated with the proceedings. I accept that the wife may have a small modest sum available to her. The husband has greater superannuation but he has no present entitlement to those funds.
The husband urged the Court not to make a costs order on the basis that he does not have the capital available to meet it. He has not complied with the costs order made by the appeal division.
He was not arguing that he is impecunious. He argued that it would impose financial hardship on him and on the children. The husband repeatedly emphasised that the children would be living with him and hence inferentially he would be responsible for their financial support. That submission cannot assist him as the children remain in his care contrary to the terms of the final orders.
I find that the husband’s financial position as regards capital (as opposed to income) speaks strongly against the making of the costs orders sought by the wife.
The husband sought an order that I discharge existing costs orders. I do not have the jurisdiction to discharge an order of the appeal division. I do not propose to discharge my own order that he pay the costs of the independent children’s lawyer. The proper basis to challenge a final order is by appeal. Accordingly, I will dismiss the husband’s applications in so far as they seek to discharge past costs orders.
The husband sought an order that he be permitted to make payment of his indebtedness under existing or future costs orders by instalments. I propose to do so in respect of the orders I will make, albeit not on the terms he sought.
I accept that the husband does not have the capital at present to make payments and it would be appropriate that he attend to payment of outstanding costs orders by instalments (even absent an order).
The wife’s financial circumstances are not such as to support the making of a costs order against her.
Conduct and failure to comply with court orders
Paragraphs 181 and 197 of the reasons in Sanders & Sanders [2022] FedCFamC1F 213 read in part as follows:
181 … The orders oblige the adult parties to comply with their terms. The husband’s history of non-compliance is part of the factual matrix taken into account by [Dr O] in forming the view that only orders which provide for a period of time during which the children live in the sole care of their mother, will be equal to the task of attempting to restore the children’s relationship with their mother ...
…
197 … for the orders to operate in the best interests of the children, the terms of the order must support the adults and the children to understand that orders are not optional suggestions or recommendations. There is a clear pathway set out in the orders designed to support the children’s relationships with each parent and the pathway will be undermined if there is non-compliance.
As regards the wife’s Application in a Proceeding dated 13 April 2022 (for a recovery order) there is no question that that particular application was necessitated by the husband’s failure to comply with court orders.
Further, the wife raises in support of her application the fact that the husband was, she submits, wholly unsuccessful in respect of the final hearing proceedings and the application for a recovery order. I accept that the husband’s conduct necessitated the wife’s application post final orders. I accept that the husband was wholly unsuccessful in those applications.
These factors speak strongly in favour of the relief the wife seeks at least for the recovery application. The wife seeks those costs on an indemnity basis.
In Prantage & Prantage (2013) FLC 93-544 the Full Court of the Family Court (as it then was) confirmed that indemnity costs should only be awarded if the case has some special or unusual feature. Those special or unusual features were the subject of comment by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd [1993] 119 CLR 118 (“Colgate-Palmolive Co”). That decision was the subject of consideration by Holden CJ in Munday v Bowman (1997) FLC 92-784 (“Munday v Bowman”) at 84, 660 where his Honour provided the following non-exhaustive examples of special or unusual features:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties.
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
(e)An imprudent refusal of an offer to compromise.
(Citations omitted)
This is not a case where it could be concluded that the husband has commenced or continued an action in circumstances where, properly advised, he should have known he had no chance of success. Nor is it a case in which I could confidently find that the husband has made allegations of fraud, knowing them to be false or made irrelevant allegations of fraud. I formed the view that, for whatever reason, even though I did not accept that which the husband was contending was true, I could not be confident that he did not believe them to be true.
Again, this is not a case in which I could be satisfied that the husband had deliberately sought to cause loss of time to the Court or the other party or was advancing groundless contentions knowing them to be groundless for the purpose of prolonging the case.
I have below discussed the offer of settlement made by the wife. I consider that that is relevant to the making of a costs order. However, I do not think this is a circumstance in which I could find that the husband has imprudently refused an offer to compromise.
The wife has not stated explicitly that which is said to constitute special or unusual circumstances in this case. It is not enough to point to the fact of non-compliance alone as that factor provides the justifying circumstances for departure from the usual rule. Without more, failure to comply is unlikely to result in an order for indemnity costs. The proceedings were protracted and difficult but I am unable to find that there are special or unusual circumstances such as would ground an order for indemnity costs.
Offers of settlement
The offers of settlement about which I have evidence all related to the trial and not the application for a recovery order.
On 20 January 2022 the wife’s solicitors put forward a proposal which was a payment to the wife of $625,000 and $50,000 by way of superannuation.
The orders which were ultimately made provided for a cash payment to the wife of $632,290 and a superannuation split from the husband’s superannuation interest of $50,000. Had the husband accepted the offer which the wife made on 20 January 2022, he would have been $7,000 better off. Not to mention the amount which he was himself required to expend on his own legal representation at trial.
I accept that circumstances where the parties are litigating both in respect of parenting and property, it can be more difficult to resolve the proceedings. However, had the husband resolved just the financial aspect of the proceedings, then this would have been a good commercial result for the parties and reduced the issues for trial.
It is plain that the wife set out a proposal for resolution of the matter in respect of parenting issues as well. It is true to observe that the final orders which were made provided the husband with more time with the children than that proposal by the wife. The wife’s proposal was similar to the orders which the Court ultimately made, albeit the orders for time with the father which were made by the Court provided that the children live with the father five nights per fortnight.
The husband also relied on the fact that he had made offers of settlement in the proceedings. I accept that offers of settlement may be relevant to the consideration of whether or not to make a costs order even where the offer was not as good as or better than the ultimate outcome (as is the case here in respect of the offers which were made by the husband). Making an offer of settlement may demonstrate a proper engagement with the duty which parties have to make efforts to resolve their dispute without the need for judicial determination. However, here the husband’s offers were significantly different from the orders which were ultimately made and do not persuade me to make the orders he seeks nor do they dissuade me from making an order in respect of the recovery order application.
The matters which would seem to be engaged in this case are as set out above: offers of settlement, conduct of the litigation and whether a party has been wholly unsuccessful. There is also a disparity in the parties’ financial circumstances as regards income.
CONCLUSION
I decline to make an order that the husband pay the wife’s costs of the preparation for trial and the trial. I find that the husband’s financial circumstances are such that I should decline the application in respect of the trial costs. Different considerations arise in respect of the application for the recovery order.
The amount necessary to indemnify the wife in respect of the recovery order application according to annexure C to the wife’s affidavit would have been $7,359. As I have indicated that I do not intend to make an indemnity costs order I will make a costs order in a specific sum as permitted by r 12.17(1)(a) of the Rules. I have considered the sums set out by the wife in her affidavit and on the basis that the husband should be responsible for the costs of drafting the application and affidavit and the costs of the attendances before the Court, I find that the appropriate sum is $2,288.
The husband has not satisfied me that there are any justifying circumstances which would warrant departure from the usual rule such that the wife should pay his costs and accordingly his application will be dismissed.
I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 10 March 2023
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