Singer & Singer & Anor (No 2)

[2010] FamCA 579

FAMILY COURT OF AUSTRALIA

SINGER & SINGER AND ANOR (NO. 2) [2010] FamCA 579

FAMILY LAW – COSTS –  third party reticent about providing husband access to funding for litigation funding order – Long delays in getting to trial – Variety of issues litigated some more important than others – No justification for costs order

Family Law Act 1975 (Cth)

APPLICANT: Ms Singer

RESPONDENT: Mr X Singer

2^nd RESPONDENT: Mr Y Singer

FILE NUMBER: MLF 7095 Of 1997

DATE DELIVERED: 9 JULY 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: BY WAY OF WRITTEN SUBMISSIONS

SUBMISSIONS RECEIVED FROM:

COUNSEL FOR THE APPLICANT: MS MACMILLAN SC

SOLICITOR FOR THE APPLICANT: LANDER & ROGERS

COUNSEL FOR THE RESPONDENT: MR BARTFELD QC

SOLICITOR FOR THE RESPONDENT: TAUSSIG CHERRIE AND ASSOCIATES

COUNSEL FOR THE SECOND RESPONDENT: MR O'SHANNESSY

SOLICITOR FOR THE SECOND RESPONDENT: MIDDLETONS

Orders

1. That the application of the wife filed by written submission on 22 January 2010 and similarly the husband filed 5 February 2010 for costs are all dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Singer & Singer and Anor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 7095  of 1997

MS SINGER

Applicant

And

MR X SINGER

Respondent

And

MR Y SINGER
2^nd Respondent

REASONS FOR COSTS JUDGMENT

1. After a contested interim hearing on 21 December 2009, I reserved judgment. On 30 December 2009, I announced orders dealing with the issues in dispute and published reasons for judgment.

2. Paragraph 13 of the orders provided for parties to seek costs.

3. As to those costs, the wife filed submissions on 22 January 2010. She sought costs against the husband and the third party. The husband filed submissions on 5 February 2010 opposing an order for costs against him but seeking orders that the third party pay his costs or that costs as between the husband and wife be reserved for the trial. Albeit late apparently because of not having the husband’s document, the third party filed submissions on 16 February 2010.

4. Because of the complexity of the issue, I propose to ignore any concerns about lateness.

5. There were six issues in the interim dispute.

6. The first issue related to the valuation of an entity described as A Group. The second related to division and disposal of furniture and photographs. The third related to a disparity between the parties of the sum of $37,500 which the wife said needed to be adjusted and for the husband to forthwith pay. The fourth concerned disclosure of documents. The fifth concerned a valuation of the major corporate entity and structure. The sixth concerned a litigation funding order sought by the wife.

7. As a general impression, the wife was successful in relation to the first and sixth issues but unsuccessful in relation to the third issue. Both husband and wife were successful in relation to the fourth issue. Neither party was successful in relation to the second issue. The fifth issue was a matter that I have left to the trial.

8. In respect of the A Group entity, the parties could not agree on who was to value it in circumstances where it had previously been agreed that it would not be valued. Things had changed. I found that of the nominated valuers, the appropriate person was the one nominated by the wife.

9. The problem of the furniture and photographs concerned the enforcement of previous orders. Neither party had been proactive. In the reasons for judgment, I said:

   In my view, there is no basis for me to alter the existing orders leaving them for trial.  The orders were made after careful thought.  Neither party was troubled about not enforcing them.  They can remain until the issue is determined more comprehensively at trial.  If either party wishes to enforce their rights under those orders, they are entitled to do so.

10. The $37,500 issue arose because in 2003, an order was made for an adjustment arising out of the valuation of some motor car number plates. Recent valuations had given rise to an argument as to whether the order of 2003 should be altered so that the adjustment should be made now. I said:

11. Notwithstanding the wife’s current impecuniosity, I see no reason to say that the delay is a significant change of circumstances to warrant altering the orders to which the parties consent in 2003.

12. In respect of disclosure of documents, each sought documents from the other. The dispute was really about the time to be given to respond. Little was involved in that dispute.

13. The fifth issue concerned the valuation of the enterprise conducted between the husband and his brother who is the third party. Orders had been made about it but there was a dispute by the third party about the valuer’s instructions and anticipated costs.

14. The third party’s position was that the husband and the third party should pay $30,000 and it be capped at that sum.  The third party wanted each of the husband and wife to pay one half.  This had all been the subject of earlier orders.  Whilst the valuation was fundamental, responsibility for payment was a matter for trial. I saw no reason to alter the earlier orders.

15. The wife sought a litigation funding order. The husband said each should look after themselves as the wife had dividends distributed to her. The third party pointed to the access to money problem but I found the wife had an entitlement and the access to funds was an enforcement issue.

16. The submissions of all parties addressed the matters just mentioned.

17. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party should pay their own costs unless there are circumstances which justify the Court departing from that principle. If that justification can be shown, the Court must consider the matters set out in s 117(2A).

18. Amongst the six issues, the major argument concerned the valuations and the access by the wife to litigation funding. The other matters were really not significant. In that sense, both the husband and the wife have been largely successful and the third party not. That is not the basis for departing from the principle set out in s 117. The party seeking costs must show that there is some circumstance that justifies the order.

19. The wife made clear her financial difficulty which was compounded by inadequate funding and access to it in circumstances where she could show that ultimately, she will be entitled to the funds. The difficulty was in getting access to those funds but that in turn was an enforcement issue.

20. Section 117(2A) requires the Court to consider the financial circumstances of the parties. Whilst the wife may have current difficulties, it seems common ground that there are substantial funds ultimately coming her way. No party is struggling in a capital sense and it was not suggested to me that there was any call on legal aid funding.

21. Section 117(2A) refers to a party being wholly unsuccessful as a consideration and in this case, no party could say that has happened. No party could say that there has been a distinct non-compliance with the rules of court although there were arguments about disclosure.

22. The major issue in this case related to the wife having to struggle in getting the case to trial because of funding issues. The wife’s counsel said in her submissions that the conduct of the husband and the third party was continuing to cause enormous expense and delay. I would not go that far but it is clear that the wife has had to push the case along by seeking orders.

23. The husband pointed to the focus being on the third party as having “vigorously” resisted each application. Whilst that language is probably also too strong in this case because the third party took the view that he wanted to contain costs and there were problems about access to money, it is clear that the third party’s reluctant position has restrained the wife in particular from getting quickly to trial now that the momentum has been started. I well-understand why a third party might not want to be involved but this case is unusual in that the husband’s entitlement is very much bound up with that of the third party. It is acknowledged by the third party that that entitlement exists to the extent that he has a stated desire to buy out the husband.

24. Although the submission of the third party was that his opposition could not be demonstrated to have added to the costs of the husband and wife, the reticence of the third party has to some extent caused the wife to bring the application. The application culminated in her obtaining orders which have the effect when implemented, of getting the case closer to trial.

25. It was said by the third party, and I think correctly, that the husband had not pointed to any evidence of moral or procedural turpitude on the part of the third party which would require the departure from the s 117 principle.

26. The difficulty in this case is that there were a variety of issues about which the parties including the third party, litigated. It would not be difficult to say which one was more significant or pressing than the other but all required legal resources and court time.

27. Whilst the problem between the husband and the third party in not being able to sort out valuations and cash releases meant that the wife was justified in complaining, she too had been sitting on matters for some time.

28. In those circumstances, I find that there is no justification for departing from the s 117 principle.

29. I do not propose therefore to make any order for costs.

I certify that the preceding Twenty Nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  9 July 2010