Shorland and Rich
[2018] FCCA 1928
•8 August 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SHORLAND & RICH | [2018] FCCA 1928 |
| Catchwords: FAMILY LAW – De Facto couple – Application for leave to institute property proceedings on the basis of hardship – section 44(6) – where the applicant is 9 months out of time – where the parties were in a de facto relationship for 8 years – where the respondent invites the Court to dismiss the application in accordance with the views expressed by the High Court in Stanford v Stanford – Costs. |
| Legislation: Family Law Act 1975, ss.44, 117 Federal Circuit Court Rules 2001 r.21.02 |
| Cases cited: Chancellor & McCoy [2013] FCCA 740 Sharp & Sharp [2011] FamCAFC 150 Slocomb & Hedgwood [2015] FamCAFC 219 Stanford v Stanford (2012) 247 CLR 108 Whitford& Whitford (1979) FLC 90-612 Yunghanns & Yunghanns (2000) FLC 93-029; (2000) 26 Fam LR 331 |
| Applicant: | MR SHORLAND |
| Respondent: | MS RICH |
| File Number: | SYC 4800 of 2016 |
| Judgment of: | Judge Monahan |
| Hearing date: | 29 March 2018 |
| Date of Last Submission: | 29 March 2018 |
| Delivered at: | Sydney |
| Delivered on: | 8 August 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Schonell |
| Solicitors for the Applicant: | Michael Conley Lawyers |
| Counsel for the Respondent: | Mr Hodgson |
| Solicitors for the Respondent: | Andrew Cohen Solicitor |
ORDERS
THE COURT ORDERS THAT:
The Applicant have leave to institute proceedings under Part VIIIAB of the Family Law Act 1975 (Cth).
All extant applications be otherwise adjourned to this Court on 24 October 2018 at 9:30am for directions (“the directions hearing”).
Any Application in a Case or Objection to Subpoena made returnable by the Registry from the date of these orders until the date of the directions hearing will not be heard on that date without the express leave of Judge Monahan, however directions in respect of that Application or Objection may be given.
The Applicant make, file and serve any Further Amended Initiating Application, updated Financial Statement and supporting affidavit by no later than 4:00pm on 5 September 2018.
The Respondent, make file and serve an Amended Response, Financial Statement and affidavit in support by no later than 4:00pm on 3 October 2018.
The question of costs arising from this decision be reserved.
AND THE COURT NOTES THAT:
A.The directions hearing has been listed prior the commencement of final hearing listed that day.
B.The purpose of the directions hearing is to:
(i) consider any joint balance sheet;
(ii)if appropriate, consider referring the matter to a Conciliation Conference or private mediation;
(iii)ascertain whether the parties press any costs application or whether such are not sought or whether such may be deferred for consideration at any final hearing; and
(iv)in the event the parties remain in dispute, ascertain the ambit of the dispute and make further directions.
IT IS NOTED that publication of this judgment under the pseudonym Shorland & Rich is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT LAUNCESTON |
SYC 4800 of 2016
| MR SHORLAND |
Applicant
And
| MS RICH |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
The only issue for determination in this decision is whether the Initiating Application filed by the applicant should to be dismissed for having been filed ‘out of time’ (as the respondent seeks) or whether leave should be granted to the applicant to pursue the proposed application for ‘hardship’ reasons (as the applicant seeks). Both parties also seek a costs order against the other party.
There is no dispute that the parties entered into a de facto relationship in early November 2005 and separated eight years later in early November 2013. Consequently, the Initiating Application was filed approximately eight to nine months after the two year limitation period applicable to de facto relationships expired.
The parties were legally represented by counsel at the hearing on 29 March 2018; the applicant by Mr Schonell and the respondent by Mr Hodgson.
Any statutory references I make in these reasons are to the Family Law Act 1975 (“the Act”) and the Federal Circuit Rules 2001 (“the Rules”).
Background
Relationship history
The applicant was born on 1952 and is currently 66 years of age. The respondent was born on 1962 and is currently 56 years of age.
As stated, the parties commenced cohabitation on or about 2005 and separated on a final basis in November 2013.
There are no children in the relationship.
Neither party has re-partnered.
Procedural history
The applicant filed his Initiating Application on 1 August 2016 (“the Application”), amended on 5 October 2016. The respondent filed her Response on 9 November 2016.
The matter first came before me in my duty list on 10 November 2016 following which the matter adjourned for directions and the matter set down for a hearing of the Application on a date and time to be fixed.
The matter was ultimately listed to 15 February 2018 for trial directions and 29 March 2018 for hearing.
As stated, the hearing proceeded on 29 March 2018 following which the Court reserved its decision.
Orders sought
Applicant
In summary the applicant seeks leave to commence property proceedings out of time on the basis that hardship would be caused to the applicant if leave was not granted.
The precise orders, relevant to this Application, were as follows:
1. That the Applicant be granted leave pursuant to Section 44(6) of the Family Law Act 1975 to commence proceedings under Section 90SM of the Family Law Act 1975.
Respondent
As stated the respondent seeks the dismissal of the applicant’s application.
The precise orders sought were as follows:
1. That the final orders and procedural orders and interim orders sought in the Applicant’s Amended Initiating Application filed on October 5, 2016 be dismissed.
2. That the Applicant pay the Respondent’s costs of and incidental to these proceedings.
Issues
As stated, the only issue for decision at this stage of the proceedings is whether the Initiating Application ought to be dismissed for having been brought out of time or whether leave should be granted to the applicant to pursue the proposed application for ‘hardship’ reasons.
In addition, as stated, both parties seeks a costs order against the other.
Evidence
Both parties were cross-examined.
Applicant
The applicant relies on the following documents:
·Amended Initiating Application filed 5 October 2016;
·His Affidavit sworn and filed 1 August 2018;
·His Affidavit sworn and filed 22 March 2018;
·Affidavit of Dr M sworn 28 February 2018 and filed 1 March 2018; and
·Financial Statement sworn 22 February 2018 and filed 28 February 2018.
The applicant did not tender any documents.
The applicant presented as well spoken and was able to make concessions to reasonable propositions when asked.
Respondent
The respondent relies on the following documents:
·Response filed 9 November 2016;
·Her Affidavit sworn 5 November 2016 and filed 9 November 2016;
·Her Affidavit sworn 19 March 2018 and filed 21 March 2018;
The respondent did not tender any documents.
The respondent also presented as well spoken and was also able to make concessions to reasonable propositions when asked.
Relevant Law and Discussion
Leave to commence property proceedings ‘out of time’
Part V of the Act deals with the “Jurisdiction of Courts”. Section 44 deals with the institution of proceedings.
Section 44(5) of the Act provides that a party can only make an application for a division of property arising out of a de facto relationship provided the application is made within two years from the date the de facto relationship has ended.
This period is referred to as the “standard application period”.
Pursuant to section 44(6) the Court may grant a party leave to apply after the end of a “standard application period” if “hardship” would be caused to the applying party if leave was refused.
Leave to proceed out of time pursuant to s.44 of the Act (which is relevant to married couples) has been the subject of extensive case law. While the vast majority of the relevant cases including Whitford& Whitford (1979) FLC 90-612, and the more recent decisions of Sharp & Sharp [2011] FamCAFC 150 and Slocomb & Hedgwood [2015] FamCAFC 219, have involved parties to a marriage, these cases have been referred to and applied in the context of parties to a de facto relationship.[1]
[1] See for example, McCoy v Chancellor [2014[ FamCAFC 62; Wemble v Dautry [2017] FCCA 408; Montano v Kinross [2014] FAMCAFC 231.
In considering the question of whether the applicant has demonstrated hardship, the Court is required to consider if the applicant has a prima facie claim worth pursuing or a ‘real’ probability of success.[2] If there is no reasonable claim to be heard then the Court cannot be satisfied that hardship would be caused if leave was not granted.
[2] See for example Whitford (1979) FLC 90-612 (per Asche & Pawley S.JJ, Strauss J) at 78,144; Hall & Hall (1979) FLC 90-679 (per Evatt CJ, Fogarty & Yuill JJ) at 78,627; Sharp & Sharp [2011] FamCAFC 150 (per May & Ainslie-Wallace JJ) at [17] to [18].
If the applicant establishes hardship the Court is then required to consider whether in the exercise of its discretion leave should be granted under section 44(6) of the Act. It is only if hardship is established that the Court’s discretion to grant leave is enlivened.[3]
[3] See Whitford at 78,145 to 78,146; Sharp (per May & Ainslie-Wallace JJ) at [22]; Montano & Kinross [2014] FamCAFC 231 (per Ainslie-Wallace, Murphy & Tree JJ) at [11].
As to the discretionary exercise, the Full Court stated the following in Whitford at 78,146:
… Due weight must be given to the expressed legislation intendment that ordinarily, proceedings should be commenced within a year from a date of the decree nisi, and the general policy of the Act which appears from s 44(3) and s 81 that financial relationships between the spouses should, wherever possible be brought to finality within a reasonable time after the dissolution of the marriage. Hence, such matters as the length of the delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay, and the strength on the merits of the applicant's case, and the degree of the hardship which would be suffered unless leave were granted, are matters affecting the exercise of the discretion. These matters are not necessarily the only ones.
The Court further observed in Whitford that while the relevant provision intends to confer power to grant leave to avoid hardship, the “… power should be exercised liberally in order to avoid hardship”,[4] albeit in a manner, which would not render nugatory the requirement that proceedings should be instituted within a statutory period.
[4] Whitford at 78,146.
In summary, to determine the issue of leave, it is clear that the Court must take the following into account:[5]
·Firstly, that there are reasons as to why time limitations exist and careful consideration must be given to an application for leave to proceed out of time.
·Secondly, the Court must be satisfied that hardship would be caused to the applicant if leave to proceed out of time is not granted.
·Thirdly, once hardship has been established, the Court must be persuaded that discretion should be exercised to grant the leave to proceed.
·Fourthly, the Court in considering whether to exercise the discretion must be satisfied that the respondent will not be prejudiced.
·Fifthly, where the Court is satisfied that hardship to the applicant will be caused if the leave is not granted, and that granting of leave will not prejudice the respondent, consideration must be had to the circumstances of the matter before leave is granted.
[5] See Chancellor & McCoy [2013] FCCA 740 at [43] (per Judge L. Turner).
Discussion
I will now consider the issues in light of the relevant law, available evidence and the parties’ submissions.
Applicant’s submissions
Firstly, the applicant submits that he will suffer hardship if the Court does not grant leave to institute property proceedings for the following reasons:
·The applicant’s financial circumstances are poor and he lives off a pension that does not meet all his living expenses;
·As a result of his mental and physical health, the applicant can only work casually;
·The applicant has drawn his superannuation such that only approximately $2,000 remains available to him;
·The applicant has also had to sell his shares to meet his living expenses; and
·In the event that leave is not granted, the applicant will be required to pursue his remedy in the State Courts which may not recognise his contributions to the relationship.
Secondly, the applicant invites the Court to exercise its discretion to grant the leave despite the delay in filing proceedings for the following reasons:
·The 9 months delay is insignificant when one compares it to an 8 year relationship;
·The delay in commencing proceedings was a result of the applicant being “effectively itinerant.” The applicant asserts he was moving from home to home and living off the generosity of family and friends. The applicant also asserts that he suffered psychologically and correspondence between the respondent was “abusive” and the requests from the respondent’s solicitors became overwhelming causing the applicant to have a panic attack and avoiding correspondence with the solicitors;
·The applicant has a demonstrable case for property adjustment and contributed to the parties’ joint enterprise considering inter alia he received an inheritance of $280,000 from the estate of his late aunt which was spent during the relationship and which he asserts was relevant to the loan approval for the respondent’s acquisition of Property A;
·Given the respondent’s choice not to provide financial disclosure in relation to the Property A property, the Court is unaware of whether the mortgage is covered by rent and/or by the respondent’s contributions;
·The respondent will not be prejudiced by the delay as she has not altered her property interests since separation; and
·If leave was not granted, the applicant will be left with comparatively minimal financial resources, relying primarily upon a post separation inheritance.
Respondent’s submissions
In summary, the respondent asserts that the applicant will not suffer hardship if leave was not granted. The respondent denies that the applicant has made significant contributions for the benefit of the respondent and asserts that the applicant’s contributions are only modest and were only made to utilities and certain living expenses. The respondent also denies that the parties had a joint endeavour in acquiring assets. The respondent has now removed the applicant as co-signatory to the mortgage.
The respondent further asserts that the applicant has diminished his assets and financial resources since the time of the cohabitation for his own benefit and has the capacity for gainful employment.
Much of the respondent’s argument focused on her contention that the application for property settlement should be dismissed because it would not be just and equitable to make an order adjusting property interests. As stated, the respondent argues that there was no merging of the parties monies and that there was no joint endeavour in acquiring the relevant assets. Given the lack of contributions made by the applicant towards the respondent’s property, coupled with the applicant’s delay in commencing these proceedings, the respondent invited the Court to dismiss in accordance with the views expressed by the High Court in Stanford v Stanford (2012) 247 CLR 108. In this respect the respondent asked the Court to consider decision of the Full Court in Chancellor & McCoy [2016] FamCAFC 256 (“Chancellor”) where the Court dismissed appeal against the trial judge’s decision to dismiss an application for property settlement on the basis that it was not just and equitable to make an adjustment order.
The case of Chancellor involved a couple living in a de facto relationship some 27 years. Although the relationship was a committed one, the Court found that the parties kept their financial affairs almost entirely separate during the course of their relationship. By the time of separation, the respondent’s assets worth more than double those of the applicant.
The Full Court in Chancellor outlined the trial judge’s reasons at paragraphs 16 to 29. In relation to making an order if it was “just and equitable” to do so, the Full Court reiterated the trial judge’s reasons at paragraph 16 to 20:
16. Relying on the High Court’s decision in Stanford v Stanford (2012) 247 CLR 108, the trial judge accepted that she could only make an order altering existing property interests if she was persuaded that it was “just and equitable” to do so. This proposition and the other legal principles that her Honour discussed are not the subject of any controversy in this appeal.
17. Her Honour observed that the High Court had recognised “that in the majority of matters the circumstances will immediately lead the court to the conclusion that it is just and equitable to proceed to a property division” (at [22]). In support of this proposition, her Honour recited the following paragraph from Stanford (original emphasis):
[42] In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).[6]
18. The trial judge went on to say that where one party contends that a property division would not be “just and equitable”, Stanford provides “guidance as to what needs to be considered in determining just and equity [sic]” (at [23]). Here her Honour recited the following extracts from Stanford (original emphasis, footnotes omitted):
36 The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. …
…
40… whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
19. Her Honour then quoted from Bevan & Bevan (2013) FLC 93-545, where an application for adjustment of property interests was dismissed in circumstances where the parties had lived apart for 18 years after a long marriage. In that matter, Bryant CJ and Thackray J said (original emphasis):
[84.] Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added).
[85.] This requirement to consider the s 79(4) matters in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. But there will be a range of cases, of which arguably the present is a good example, where determining whether it is just and equitable to make any order altering property interests will not be so clear cut and will therefore require not only separate but very careful deliberation.
20. We think it useful to mention that in Bevan, Finn J also expressed a similar view when she said:
[169].. Findings of fact concerning the parties’ financial history (ie their contributions) and their present circumstances and future prospects made in the context of s 79(4) will also assist, but such findings cannot (according to Stanford) be conclusive in determining whether or not it is just and equitable to make an order altering any particular property interest.
Despite some limited factual similarity, it should be noted at this stage of this decision that notwithstanding the final outcome in Chancellor, the applicant in that case had been earlier granted leave by the same trial judge to file property proceedings ‘out of time’ (see Chancellor & McCoy [2013] FCCA 740). In that case the applicant filed the relevant proceedings three to four months after the two year limitation period applicable to de facto relationships expired. At paragraphs 61 to 65 (of [2013] FCCA 740), the trial judge made the following findings as to ‘hardship’ to the applicant:
61. I find that the applicant has established hardship.
62. I base my findings on the following:-
a) The applicant has a “prima facie” right as provided in Part VIIIAB Family Law Act 1975 to bring proceedings for a de facto property division. (McDonald& McDonald and Sharp & Sharp)
b) The pool is substantial and therefore the claim cannot be seen as “trifling”. (Whitford & Whitford)
c) It is little consequence that the applicant may not be in “necessitous circumstances”. (Whitford & Whitford)
d) As the de facto relationship was for 27 years, there is a “reasonable claim to be heard”. (Althaus & Althaus)
e) As a reasonable claim has been established, the ultimate outcome of the property division, as suggested by the respondent, is not a factor that need be considered in this matter. It is “not a decision about whether the claim will succeed” (Hedley & Hedley) or that “the applicant would receive no more or even less, than he or she owns in law or in equity”. (Whitford & Whitford)
f) It is not just about the “financial considerations” but the ability for the applicant to “have the financial and property relations of the parties adjusted and resolved.” (Sharp & Sharp)
g) I accept that the “applicant would suffer a substantial detriment as a consequence of the loss of the right to institute the proceedings” if leave was refused. (Sharp & Sharp)
63. This has been a long relationship where the parties intermingled their personal and financial lives over the years and where separation has been problematic.
64. The applicant is entitled to finalise the financial dealings by way of a property division.
65. Further it is evident from the limited information before the Court that emotionally it would also be of benefit to both party that their ties are severed on all levels and Court orders for a property division would assist in that regard.
In relation to the ‘prejudice/hardship’ to the respondent in Chancellor, the trial judge stated at paragraphs 71 to 74 (of [2013] FCCA 740):
71. Undoubtedly the respondent has experienced hardship since separation, but unfortunately, this is not uncommon when relationships, especially long relationships, come to an end.
72. The issues raised by the respondent are issues relevant to the property proceedings and as foreshadowed in Hedley & Hedley:
“can be ameliorated by the court in the substantive property proceedings making assessment and giving weight to contributions and the various factors under s75(2)….Any prejudice to the respondent can be factored into the ultimate deliberation.”
73. Another underlying issue is the concern raised by the respondent of the applicant not providing adequate disclosure as to the extent of her inheritance, and the difficulty that has caused to the respondent in attempting to successfully negotiate consent orders and the applicant not acknowledging the debt to her parents.
74. Again these are issues that can be dealt with in property proceedings.
Notwithstanding, in this case the respondent argued that the application should be dismissed for the ‘Stanford’ arguments advanced.
Applicant’s reply
In reply, the applicant argued that given the authority of the Full Court’s decision in Jacenko & Jacenko [1986] FamCA 25 (“Jacenko”), should he establish a prima facie case and sufficient ‘hardship’, he should be given the opportunity to prosecute his application.
I note that at paragraphs 14 and 15 of the Jacenko decision, Nygh J (with Fogarty and Walsh JJ agreeing) stated:
14. But the general principle is that on the issue of the establishment of a prima facie case the Court proceeds on the basis that the evidence of the applicant, unless it is inherently unbelievable or contradictory, should be accepted, and the Court should therefore decide whether or not on that basis a prima facie case has been made out. If leave is granted, then it is for the Court conducting the ultimate hearing to determine whether that prima facie case can be established.
15. That, as I understand, is certainly the practice in other Registries of this Court, and as I indicated in argument, it may be due to the peculiarities of the Sydney bar that it has not always been accepted in this Registry as the correct procedure.
In other words, despite the potential ‘Stanford’ arguments in this case, the applicant’s claim was not “inherently unbelievable or contradictory.”
Findings
Overall, I am satisfied and find that the applicant has established hardship.
Firstly, I am satisfied that the applicant has established a prima facie case for property adjustment. The parties were in an eight year de facto relationship from November 2005 to November 2013. While the applicant concedes that he did not contribute directly to the payment of the mortgage whilst he was living with the respondent in the relevant properties she owned, there is evidence that he shared expenses and household costs with the respondent. The applicant’s income was also taken by the Bank in approving finance to the respondent to purchase a new home in Property A in 2013. There is also some evidence that the applicant made indirect contributions to the household during the relationship and assisted the respondent with her business.
Secondly, in relation to ‘hardship’, it appears that the applicant has fallen on harder times since separation and has been somewhat itinerant having moved from home to home reliant upon the goodwill of friends. As a consequence of his financial circumstances, the applicant has incurred further debt and gives evidence that he had to sell shares in order to meet his living expenses. Nevertheless, I note that well after filing these proceedings, and shortly before the leave hearing, the applicant received an inheritance of $204,091.00 from his late brother’s estate. That said, the applicant, who at 66 years of age is 10 years older than the respondent, suffers depression and anxiety and is only able to secure employment on a casual basis.
Thirdly, in relation to the issue of delay, I accept the applicant’s submission that a delay of approximately 9 months is relatively insignificant when compared to an eight year relationship. In addition, the Court accepts that the applicant’s relatively poorer circumstances and mental health post separation made it difficult for him to focus on the legal issues arising from the end of the relationship with the respondent. I accept the applicant’s submission that there is no real prejudice to the respondent by reason of the delay apart from the nuisance factor of having to respond to a property claim following the end of an eight year de facto relationship.
Consequently, as stated, I am satisfied that the degree of hardship suffered by the applicant outweighs any prejudice to the respondent as a consequence of granting leave.
Legal Costs
Relevant principles
Pursuant to r. 21.02 of the Federal Circuit Court Rules 2001 (“the Rules”), this Court has the power to make an order for costs at any stage in a proceeding.
Generally speaking, a costs order is not intended as some form of punishment for engaging in litigation “but rather to act as a compensation for the party who has had to participate when they probably ought not to have been there”.[7]
[7] Arman & Arman [2009] FamCA 8 at [16] (per Cronin J).
In family law matters, the Court also needs to consider s.117(1) of the Act which states the principle that each party shall pay their own costs. The exception to that rule is contained in s.117(2), which relates to circumstances where the Court finds there is justification for departing from the principle. This exception is subject to the matters referred to in s.117(2A) of the Act.
Section 117(2A) of the Act states:
In considering what order, if any, should be made under subsection (2), the Court will 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 the pleadings, particulars, discovery, inspection, directions to answer questions, admission of the facts, production of documents and similar matters;
(d) Whether the proceedings were necessitated by a failure of a party to the proceedings to comply with the 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) Any such other matters as the Court considers relevant.
Quantum of costs
Unless the Court otherwise specifies, costs are paid on a “party/party” basis.
“Party/party” costs are costs necessarily incurred, paid at a reasonable rate. As previously stated, the Rules incorporate a schedule of costs as a guide to party/party costs in family law proceedings. Party/party costs would not ordinarily cover all the legal costs incurred by a party.
“Indemnity” costs are ordered when the Court intends the costs order to cover all the legal costs reasonably incurred by that party. When a costs agreement is involved, the charges to be imposed on the other party are subject to the requirement of reasonableness. I note that “indemnity costs” are not defined in the Rules.
The authorities in family law cases are very clear that indemnity costs will only be made in exceptional circumstances. In Fennessy & Gregorian [2009] FamCAFC 44; (2009) FLC 93-399 the Full Court of the Family Court of Australia[8] discussed the issue at length and made reference to a number of cases in which the question of indemnity costs was considered including Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; Kohan & Kohan (1993) FLC 92-340; (1992) 16 Fam LR 245 and Yunghanns & Yunghanns (2000) FLC 93-029; (2000) 26 Fam LR 331.
[8] Coleman, Boland and Thackray JJ.
Lastly, I note that Reg.21.02 of the Rules allows the Court to refer the costs for assessment via Chapter 19 of the Family Law Rules 2004. That said, when party/party costs are ordered, the usual approach of this Court is to fix the amount pursuant to Schedule 1 of the Rules.
Discussion and Findings
As the issue of costs was not the subject of specific submissions by the parties, the Court will simply reserve the question of the costs of this aspect of the proceedings, and it can be considered at the appropriate time if pressed.
Conclusion
As stated, the Court is satisfied and finds that leave should be granted to the applicant to institute proceedings under Part VIIIAB of the Act.
Given this finding, I will make orders for both parties to file an updated Financial Statement and affidavit in support, for the Applicant to file an amended Initiating Application and the Respondent to file an amended Response. I will also make an order for the parties to comply with their obligations in relation to financial disclosure under the Rules and to respond to any reasonable requests for disclosure.
As stated, I will also reserve the question of the costs arising from this decision.
The matter will otherwise be adjourned for directions on 24 October 2018. On this date the Court may consider referring the matter to a Conciliation Conference or a private mediation and ascertain whether either party presses an application for costs.
There will be Orders and Notations of the Court to reflect these reasons.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Judge Monahan
Date: 8 August 2018.
[6] Stanford was decided under Part VIII of the Family Law Act 1975 (Cth), which deals with financial matters between parties to a marriage. The present matter falls for consideration under equivalent provisions in Part VIIIAB, which deals with parties to de facto relationships. The equivalent to s 79(4) in Part VIIIAB is s 90SM.
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