Spurling & Ors and Spurling
[2019] FamCA 802
•31 October 2019
FAMILY COURT OF AUSTRALIA
| SPURLING AND ORS & SPURLING | [2019] FamCA 802 |
| FAMILY LAW – COSTS – Application by the husband seeking costs orders against the wife from 8 March 2018 as agreed or assessed or in the alternative seeking costs orders against the wife from 9 August 2019 as agreed or assessed – Order that wife pay the husband’s costs in a fixed amount. FAMILY LAW – COSTS – Application for costs by the first and second interveners seeking orders that the wife pay their costs of the proceedings as agreed or assessed – Order that wife pay the first and second interveners’ costs in a fixed amount. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) |
| PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & Ors [2005] FamCA 158 Cachia v Hanes (1994) 179 CLR 403 Prantage v Prantage (2013) FLC 93-544 Worth & Worth (No.2) [2019] FamCA 126 Catlin & Catlin (2018) FamCA 235 |
| 1st APPLICANT: | Mr J Spurling |
| 2nd APPLICANT: | Ms K Spurling |
| 3rd APPLICANT: | Mr Spurling |
| RESPONDENT: | Ms Spurling |
| FILE NUMBER: | HBC | 369 | of | 2017 |
| DATE DELIVERED: | 31 October 2019 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | By submissions |
REPRESENTATION
| SOLICITOR FOR THE 1ST APPLICANT: | Wright Lawyers |
| SOLICITOR FOR THE 2ND APPLICANT: | Wright Lawyers |
| SOLICITOR FOR THE 3RD APPLICANT: | Wright Lawyers |
| SOLICITOR FOR THE RESPONDENT: | FitzGerald & Browne |
Orders
Ms Spurling, the wife, shall pay legal costs of Mr J Spurling and Ms K Spurling of $80,000.
Ms Spurling, the wife, shall pay legal costs of Mr Spurling, the husband, of $20,000.
Payment of these costs shall be made at the time of the payment by the husband to the wife of the last $100,000 due to her under the property orders (and which may be paid by the husband to Mr J Spurling, Ms K Spurling and himself in lieu of payment of the costs directly by the wife).
All other extant applications for costs are dismissed.
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 Spurling and Ors & Spurling 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 HOBART |
FILE NUMBER: HBC 369of 2018
| Mr J Spurling |
First Applicant
And
Ms K Spurling
Second Applicant
And
Mr Spurling
Third Applicant
And
| Ms Spurling |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
Mr Spurling (‘the husband’) and Ms Spurling (‘the wife’) were involved in parenting and property proceeding in this Court (‘the Substantive Proceeding’). The wife joined the husband’s parents in the Substantive Proceedings, claiming equitable ownership of farm machinery, which had a substantial value.
The proceedings were heard over eight days in March 2018 and four days in August 2018. The reason for this extensive hearing time was that there were:-
(a)questions as to the proposed relocation of the children of the husband and wife from New South Wales to Tasmania;
(b)a complex property proceedings which included substantial advances of property from the husband’s parents Ms K and Mr J Spurling (‘the Interveners’) to the husband and wife;
(c)a claim pursuant to the Court’s accrued jurisdiction for some farming machinery, and
(d)a circumstance that part of property was a valuable crop, which needed to be harvested. The value of the crop and the cost of harvesting and processing the crop were not known until August 2018. In addition, the full and detailed extent of the various items of property, including farm machinery and the like, were not clear until August 2018.
On 31 May 2018 final orders in respect of parenting issues were made by this Court. It was agreed by the parties that reasons for judgment in respect of children’s proceeding should not be delivered until the reasons for judgment in respect of property proceeding were delivered. I accepted and adopted that course.
The property proceedings between the parties were concluded by way of both orders made and reasons published on 20 December 2018. The question of costs were to be determined pursuant to the Family Law Rules 2004 (Cth).
The property proceedings involving the husband, the wife and the accrued jurisdiction claim against the husband’s parents were quite complex and multiple issues needed to be ventilated and then determined. When reasons were delivered the parties were given leave to apply in respect of any mechanical issues arising from the property orders. Such an application was made and varied property orders were made on 31 January 2019 (‘the Orders’). The reasons were republished with an extensive corrigendum on 31 January 2019. Relevantly the Orders provided for:-
1. The claims made by the wife against the first and second interveners, including that for the plant and equipment valued at $2,692,500, are dismissed. [1]
2. The husband shall pay to the wife $1,908,146 and such sum to be paid:-
a)On or before 22 February 2019; or
b)such longer time as is agreed between the parties; or
c)at such other time determined by this Court at the request of either party; and
d)for a period of three months from the date these orders are perfected, leave is given to the parties or either of them to apply for variation of the time to pay.[2]
…
15. The parties forthwith do all acts and things to cause to be transferred the Horse Float, Horses, Saddlery and the 4WD (…) to the wife.[3]
[1] Orders made 31 January 2019 by determination.
[2] Ibid.
[3] Order 15, made by consent, of the Orders made 31 January 2019.
On the 28 February 2019 the Interveners and the husband filed an Application in a Case in the Family Court of Australia seeking costs (‘the Costs Application’) against the wife, who was the unsuccessful applicant in the proceedings against the husband’s parents.
On 7 March 2019 orders were made in Chambers setting out a timetable for the filing of material by the parties in respect of the Costs Application. Order 6 of those orders provided that the Costs Application would be reserved from 20 May 2019.
In their Costs Application the first intervener, the second intervener and the husband sought the following orders as against the wife:-
1. That the wife pay the husbands costs from 8 March 2018 as agreed or assessed.
In the alternative
That the wife pay the husbands costs from 9 August 2018 as agreed or assessed.
2. That the wife pay the first and second interveners costs of the proceedings as agreed or assessed.
In the husband and interveners’ ‘Written Submissions Costs’ dated 12 April 2019 the husband sought, in addition to the costs sought in the Costs Application, to be reimbursed for the ‘costs of the Transcript in the proceedings noting the prolonged nature of the litigation and the Court’s comments at paragraph 679 of the Reasons for Judgment’.[4]
[4] Husband and interveners Written Submissions Costs dated 12 April 2019 page 2.
The wife’s position is that she should not contribute to the husband’s costs.
However, the wife conceded that she ought to make a contribution to the costs of the interveners and proposes to pay them a fixed sum of $80,000. The wife says that because of her financial circumstances she will be unable to pay this amount to the interveners until she receives her share of the asset pool.
THE EVIDENCE
In support of their costs application the second intervener, the first intervener and the husband relied upon:-
(a)their Costs Application filed 28 February 2019;
(b)an affidavit of their lawyer Dean Wright filed 28 February 2019; and
(c)an affidavit of the wife filed 22 March 2019;
(d)their Written Submissions Costs dated 12 April 2019; and
(e)Reasons for Judgement.
The wife relied upon her:-
(a)affidavit filed 22 March 2019; and
(c)her Written Submissions as to Costs filed 3 May 2019.
In accordance with the Family Court Rules 2004 (Cth) (‘the Rules’) and a written request made by my legal associate on 22 August 2019 the interveners and the husband relied upon their letter dated the 5 September 2019[5] and the wife relied upon her letter dated the 2 September 2019[6] setting out their barristers’ fees.
[5] Exhibit E50.
[6] Exhibit E51.
The husband and interveners’ barristers fees were as follows:-
Mr BE SC/QC - $99,000 (GST Inclusive) - 11 days @ $11,000 p/d [per day]
Mr BJ - $110,000 (GST inclusive) - 20 days @ $5,500 p/d [per day]** NB
1) Mr BJ’s professional fees from 7 March 2018 are $66,000 (GST inclusive) 12 days @ $5,500 p/d [per day]
2) Mr BJ’s professional fees from 8 August 2018 are $33,000 (GST inclusive) 6 days @ $5,500 p/d [per day]
The wife’s barristers fees were as follows:-
Invoice dated 14 December 2017 (for the period 6/12/17 to 14/12/17 including GST) $ 3,465.00
Invoice dated 28 February 2018 (for the period 18/12/17 to 28/2/18 including GST) $ 9,051.35
Invoice dated 27 May 2018 (for the period 1/3/18 to 22/3/18 including GST) $37.400.00
Invoice dated 27 August 2018 (for the period 9/7/18 to 24/8/2018 including GST) $19,126.25
Invoice dated 19 December 2018 (for the period 29/8/18 to 29/8/19 including GST) $ 5,775.00
Invoice dated 1 February 2019 (for the period 20/12/18 to 31/1/19 including GST) $ 1,155.00
Total $75,972.60 including GST
There is one aspect of the above accounts I wish to point out.
The invoice dated the 14th of December 2017 included work done associated with written submissions concerning the valuer.
The account was paid by [the wife], on the 19th of December 2017.
His Honour issued Reasons for Judgment dated the 27th of December 2017. In those reasons, His Honour said that written submissions were superfluous and ought not to have been charged for.
As the account had already been issued for that work and paid prior to his Honour issuing those Reasons for Judgment, Ms BK adjusted for this by reducing her next invoice, dated the 28th of February 2018 by 3.5 hours for the work done on those written submissions. That had the effect of complying with His Honour’s decision.
Unfortunately, I became unwell in late April 2019 and I was absent from work until October 2019. Consequently, the preparation and delivery of these reasons has been delayed.
BACKGROUND
The background to the proceedings is set out at paragraphs 54 to 85 of the Substantive Reasons, which I repeat here:-
54.Counsel for the husband asserted that the Court could rely on the chronology prepared by counsel for the wife.
55.The first intervener is aged 64 and the second intervener is aged about 63. They are farmers.
56.The wife is aged 37 and she describes her occupation as a farm director, although her primary function at the moment is as carer for the parties’ children. The wife was a consultant for a number of years and eventually took work in L Town after the parties’ commenced cohabitation. She is in good health.
57.The husband is aged 36, he is a farmer by occupation. He commenced employment with the interveners in 2000. He has expertise in farming as set out in his affidavit and he was not seriously challenged in terms of that expertise.
58.The interveners purchased C Street Farm in September 2003 and the husband commenced management of that property.
59.The parties commenced a relationship in December 2004. In September 2005 the parties commenced living together at the C Street Farm, which was then owned by the interveners. The parties married in 2008.
60.In August 2010 the interveners leased E Street Farm. That is a five hectare property located about fifty kilometres south of L Town. It has water rights.
61.In 2011 the parties’ elder child was born, six weeks prematurely. This involved the elder child being in hospital for a period of time and the maternal grandmother and grandfather came to the L Town area to assist the wife. The elder child is presently aged seven years.
62.A diamond ring was given to the wife in mid-2011. That ring has been returned to the interveners, although its value is treated as an asset of the parties for the purpose of these proceedings. The existence of that asset was a significant contribution by or on behalf of the husband’s family and I have had regard to that in terms of contribution. I have treated it as property of the husband.
63.The parties established a company called F Pty Ltd and the Spurling Partnership in November 2012. In December 2012 the husband and wife completed the first transfer of the purchase of E Street.
64.In 2013 the younger child was born. She is presently aged five.
65.In July 2013 the second transfer of E Street Farm with water was completed and the parties borrowed just under two million dollars from the ANZ Bank and had the assistance of cash of $730,000 and a crop income provided by the interveners since December 2012. There was a loan of $520,000 from the interveners to the husband and wife. That liability of $520,000 was acknowledged as a liability by the parties. The loan was evidenced by an undated deed and undated and unregistered mortgage, apparently signed by the parties. The deed and mortgage provided that the loan was interest free. That is a significant contribution and I have had regard to it.
66.During 2014 the interveners were involved in a dispute with the National Australia Bank.
67.In March/April 2014 the husband and wife acquired shares in N processing plant. The loan for that purchase was guaranteed by interveners. I have had regard to that in terms of contribution. This is a grower-owned processing plant. The interveners paid some interest on the loan, to the extent of $135,189. I have had regard to the money advance and the interest paid in terms of contribution.
68.C Street Farm is 907 hectares of property contiguous to E Street. It has water rights and a dam. At the end of August 2015 the parties purchased C Street from the intervener’s and the contract did include some limited plant and equipment.
69.In 2016 the parties refinanced the National Australia Bank loan for N shares and the interveners were released from their guarantees.
70.In February 2017 the parties had an argument in the context of the husband wanting to purchase an irrigation system. In the same month the wife travelled to Hobart between 12 and 21 February 2017. The parties attended joint counselling in February 2017.
71.On 12 April 2017 the wife travelled with the children to Tasmania and notified the husband on 21 April 2017 that the marriage had broken down. I accept that the date of separation was 21 April 2017.
72.The wife enrolled the elder child at a private school in Hobart where he remained from May 2017 until July 2017.
73.The wife commenced proceedings in the Federal Circuit Court on 20 April 2017 and sought parenting orders, including permission to remain in Tasmania. Those proceedings were heard in the Federal Circuit Court on 21 and 22 June 2017. On 26 June 2017 orders were made that the children return to the Region W area no later than seven days before the commencement of the next New South Wales Gazetted School Term, and that the children live with the wife and spend time with the husband.
74.There was a finding in that proceeding that the wife had unilaterally relocated the children to Tasmania in April 2017; that fact was not in issue. In accordance with the order made in the Federal Circuit Court the wife returned to L Town and she has resided there since that time.
75.In June or October 2017 the parties made preparation for liquidation of the assets and relocation of both parties to Tasmania, although this was not pursued by the husband. In December/January 2018 the parties disagreed over the control issues of their company and the husband attempted to put the company into administration. The parties resolved the issues by negotiation.
76.In January 2018 the parties attended mediation to try and resolve their conflict. This was not successful.
77.The proceedings were listed for hearing in the Federal Circuit Court in March 2018. In December 2017 the hearing before the Federal Circuit Court was vacated and the proceedings were transferred to the Family Court.
78.On 13 December 2017 the interveners were joined as parties to the proceedings.
79.The proceedings were heard over eight days in March 2018 and four days in August 2018. At the commencement of hearing the parties agreed that the property proceedings should also be determined under Division 12A of the Act.
80.I viewed the properties of C Street and E Street in May 2018. I was accompanied by the solicitor for the wife and counsel for the husband. We were guided by Mr Z. Mr Z is a farm manager/agronomist and manages the properties for the husband and wife. He was reminded and accepted that anything he said in terms of explaining the properties was subject to the oath he gave in March 2018.
81.Final parenting orders were made in late May 2018.
82.The husband and interveners chose to use Mr Wright of Wright Lawyers to represent them during the course of these proceedings. In the March 2018 hearing days Mr BJ of counsel represented the interveners and the husband. In fairness the Court had been told that Mr BE was to appear for the interveners, but that he was unable to appear in March 2018 as he was involved in a criminal trial, which had taken longer than expected.
83.When the matter came back for further determination and submission in August 2018 the interveners were represented from that time by Mr BE SC. Mr BJ continued to represent the husband. Mr BE SC and Mr BJ were each instructed by Mr Wright. No objection was taken by the wife or her advisors to this course.
84.The parties indicated in their final submissions that the final agreed balance sheet would be forwarded soon after the hearing was adjourned on 24 August 2018. That final balance sheet was provided on 24 October 2018. The parties said that they would send an agreed form of consent mechanical orders soon after the hearing adjourned on 24 August 2018. That form of consent order was sent on 19 November 2018. I made some cosmetic changes to those orders such as deleting the word ‘that’ at the commencement of some orders. I made the money order, which was contested in a form I determined. Further, I provided that the dates for undertaking tasks could be varied by agreement between the parties or by mechanical order of this Court.
85.In addition as the wife made claims against the interveners under the accrued jurisdiction of the Family Court. I made orders disposing of her claims in an orderly way.
(Footnotes omitted)
There are two areas to which I need to address the law. The first is in relation to whether a costs order ought to be made at all, and the second is in relation to whether it ought to be on an indemnity basis.
THE LAW RELATING TO COSTS
Costs orders generally
The power to make costs orders are set out in s 117 of the Family Law Act 1975 (Cth) (‘the Act’), which relevantly provides:-
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
In Penfold v Penfold (1980) FLC 90-800 the majority of the High Court expressed the general rule that s 117(1) is not paramount to s 117(2) of the Act. A court must make a finding that there are circumstances justifying the making of a costs order before proceeding to make the orders.
There is no guidance in the legislation between the two sub sections nor any additional special onus on the applicant for an order as to costs.
It is necessary to consider the facts in the light of the provisions set out in s 117(2A) of the Act. While the list in s 117(2A) gives rise to a wide range of factors there is nowhere in s 117(2A) that says any one factor provides a hierarchy in relation to the other factors, it is a matter of weight that is accorded to each of the relevant factors in the Court’s discretion (see Medlon and Medlon (No.6) (Indemnity Costs) (2015) FLC 93-664 per Strickland J). One factor may be enough. In PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & Ors [2005] FamCA 158, the Full Court held:-
41. Nowhere in subsection 2(a) or elsewhere in section 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subsection (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
As such the Court has a broad discretion in determining costs.
It is of value to repeat what I have said in earlier judgments that the Court needs to consider the difference between the various types of unquantified costs orders available under the Act. There are many variations of types of costs orders, but they generally fall into three types:-
a)Party and party costs - which are calculated having regard to the schedule of costs under the Family Law Rules 2004 (Cth);
b)Lawyer and client costs – these are essentially indemnity costs, with the onus upon the costs applicant to satisfy the taxing authority that such costs are on balance fair, reasonable and proportionate; and
c)Indemnity costs - these are essentially lawyer and client costs, with the onus upon the costs respondent to satisfy the taxing authority that such costs are on balance not fair and reasonable and not on balance proportionate, that is the reversal of the onus of proof.
It should be borne in mind that costs orders are restorative and not punitive, and costs cannot exceed the amount actually incurred. They are an indemnity or partial indemnity. In Cachia v Hanes (1994) 179 CLR 403 the plurality of the Court, comprising Mason CJ, Brennan, Deane, Dawson and McHugh JJ observed:-
Whilst the restricted basis upon which party and party costs are awarded may be debated as a matter of policy, it is to be borne in mind that party and party costs have never been regarded as a total indemnity to a successful litigant for costs incurred, let alone total recompense for work done and time lost. Putting to one side the question posed by the relatively rare exception of a solicitor acting in person, there is no inequality involved: all litigants are treated in the same manner. And if only litigants in person were recompensed for lost time and trouble, there would be real inequality between litigants in person and litigants who were represented, many of whom would have suffered considerable loss of time and trouble in addition to incurring professional costs. The partial indemnity which the law allows represents a compromise between the absence of any provision for costs (which prevails as a matter of policy in some jurisdictions) and full recompense. In these days of burgeoning costs, the risk of which is a real disincentive to litigation, the proper compromise is a matter of both difficulty and concern.
This costs application was considered and determined under the provisions of s 117 of the Act, and I discuss the reasons for this approach later in this judgment.
Principles relating to indemnity costs
The law in relation to cost is well established and the general rule is that costs will be awarded on a party and party basis rather than an indemnity basis. In a recent Full Court decision of Worth & Worth (No.2) [2019] FamCA 126 the Full Court comprising of Strickland, Kent and Hogan JJ confirmed the ‘authorities are clear, that for the usual basis to be departed from, exceptional circumstances need to be demonstrated (see, eg, Limousin & Limousin (Costs) (2007) 38 FamLR 478).’[7]
[7] At paragraph 9.
The Full Court went on to say:-[8]
[8] Ibid.
The categories of such circumstances are not closed (Yunghanns & Yunghanns (2000) FLC 93-029), but some examples are provided in the oft-quoted decision of Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (“Colgate-Palmolive Co”), and usefully, Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660, drew from his Honour’s decision the following:
(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)
In Prantage v Prantage (2013) FLC 93-544 the Full Court of the Family Court reviewed the law in relation to costs and affirmed that there needed be exceptional circumstances to justify an order for indemnity costs. Thackray and Ryan JJ considered other matters relevant to indemnity costs and observed:-
100. His Honour’s statement, at [50], that Sheppard J’s emphasis in Colgate-Palmolive was “on parties who must have or should have known their approach was simply imprudent” does not, in our view, accurately reflect the law as explained in Colgate-Palmolive and other cases dealing with indemnity costs.
101. It is true, as the trial Judge noted, that Sheppard J included in the list of situations that might give rise to an order for indemnity costs “the imprudent refusal of an offer to compromise”. However, in our view, imprudence by a party in “their approach” is not sufficient to enliven the power to award indemnity costs.
102. It is important in this context to recognise, as Lindgren J did in NMFM Property Pty Ltd v Citibank Ltd (No 2) (2001) 109 FCR 77 at [56], that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation”.
103. Lindgren J went on to point out (original emphasis):
Even in a proved case of fraud, for example, in my opinion the presumption is that a costs order against the fraudulent party will be on the party and party basis. The conduct of a party that is relevant to the issue of indemnity costs is the party’s conduct as litigant. But, as noted below, the knowledge that a party has, including knowledge of his or her past conduct, may be relevant to an assessment of his or her conduct as litigant.
I also adopt the observations of Berman J in Catlin & Catlin (2018) FamCA 235 at paragraphs 37 to 38 giving a broader definition of ‘wholly unsuccessful’:-
37.In Penfold & Penfold (1980) FLC 90-800 consideration was given by the Full Court to the extent to which an applicant had been substantially successful in the relief sought and whether that should be a factor in determining an order for costs. The majority of the Full Court said at 75,054:-
… True it is that the appellant obtained only some of the orders which she sought. However, it appears that she would have obtained other orders, those relating to the enrolment of the children as boarders in educational institutions, but for the circumstance that after the hearing before the vacation judge and immediately before the hearing before Allen C.J. in F.L.D. the respondent agreed to the arrangements proposed. …
38.I consider that for a finding to be made that the husband was “wholly unsuccessful” does not require the wife to establish that no part of the husband’s claim for a set off was successful.
WHETHER THERE SHOULD BE A COSTS ORDER AGAINST THE WIFE
In her submissions the wife’s legal representative set out the present law, as he saw it in relation to costs in proceedings exercising the Court’ accrued jurisdiction. He submitted:-[9]
[9] Wife’s submissions as to costs filed 3 May 2019, pages 1 and 2.
Does section 117 apply to the Interveners’ claim for costs?
Ought State legislation govern the consideration of costs for [the Interveners], or does section 117 of the Act apply? After some divergence of opinion between various learned first instance judges, it is submitted that the Court can comfortably conclude that section 117 applies.
Costigan & Costigan and Ors (No 2) [2017] FamCA 886 dealt with an application by the wife for the husband to pay her costs arising from the dismissal, inter alia, of the husband’s application for a stay of the wife’s proceedings in Australia. The wife argued that although section 117 of the Family Law Act normally governs how an application for costs is determined, the proceedings concerning a stay of proceedings in favour of a foreign court were not proceedings under the Act as the Court was exercising its ‘inherent’ jurisdiction. She argued that consequently, her costs application ought to be considered under relevant State legislation.
Carew J extensively examined the development of the relevant jurisprudence and concluded:
In my view the jurisprudence in relation to this issue has developed since Skinner such that the phrase ‘proceedings under this Act’ is now given a much wider meaning. Where once it was thought that s 117 applied only where a costs application arose out of a claim brought pursuant to a provision of the Act, it is now apparent that it applies in any case where the Court is called upon to exercise its original jurisdiction in a single matter before it, whether that involves an exercise of its ‘implied’ powers, accrued jurisdiction or a determination of whether it has jurisdiction at all.
In Hampton & Farley and Ors (No 3) [2013] FamCA 890 Le Poer Trench said:
164.The decision of the Full Court of the Family Court in C Pty Ltd v S Pty Ltd is binding on trial judges. It also resolves the dilemma which is created by the words “proceedings under this Act” as the words appear in s 117 of the FLA.
165.Once “a proceeding” is a “matrimonial cause”, as defined by the definition of matrimonial cause in s 4 of the FLA, then s 31 of the FLA is called into play and the proceeding falls within the original jurisdiction of the court.
166.Consequently, once the court has determined that it is appropriate to exercise its accrued jurisdiction in relation to a proceeding which would otherwise be outside of the court’s statutory jurisdiction, then that proceeding will invariably become a matrimonial cause, as defined by s 4 of the FLA. Thus, s 117 of the FLA becomes available to the court should an application for costs be made relating only to the proceeding which was considered by the court having to accrue jurisdiction to do so.
It should also be mentioned that the neither the Interveners nor [the husband], correctly on their part it is submitted, asserted that any examination of costs ought be determined other than pursuant to section 117.
I am not sure whether costs in accrued jurisdiction are pursuant to section 117 or otherwise.
Certainly, when exercising original jurisdiction, such as under the Corporations Act 2001 (Cth), s 117 the Act would not apply.
However, when exercising accrued jurisdiction, for example such as a compensation claim exercising common law accrued jurisdiction or a combination of both common law and statuary powers, a court would need to be cognisant of any law, legislation or practice as to costs. Whether that is done in its own right or pursuant to s 117(2A)(g) of the Act as to ‘such other matters as the Courts considers relevant’ is yet to be jurisprudentially determined.
In this case, given the circumstance and the parties’ respective submissions I have determined this costs application pursuant to s 117 of the Act.
Consequently, in considering what order, if any, should be made under ss 117(2A) of the Act, I have had regard to:-
(a)the financial circumstances of each of the parties to the proceedings;
The husband and the interveners did not advance any argument in respect of their financial vulnerability if their application in a case was unsuccessful.
In her written submissions the wife contended that the husband was and will remain in a vastly superior financial circumstance to her. In support of this submission the wife said that the learned Judge ‘found a net asset pool of $8.2M and from that she was awarded $2,051,803 and the husband was awarded $6,155,407’.[10]
[10] At page 3 of the wife’s submissions as to costs filed 3 May 2019.
Of this amount the wife says that she retains possessions of $143,657 and has been paid $339,407.93 from which she has paid legal costs, associated fees and disbursement in the sum of $297,144.30, leaving a balance of $1,611,001.70 owing, together with any interest which may accrue.
The wife in her submissions asserted that the husband has ‘not disclosed his fee, retainer, the quantum of his legal costs not (sic) whether he has paid them’. She concludes that the husband ‘has not completed his refinance yet, based on her observation that he is yet to pay her the balance funds or present her with discharge of loan/guarantee documents.’[11]
[11] Ibid.
Finally, the wife asserted that the husband’s financial position in 2019 will be better than 2018. She bases this assertion on her continuing involvement as an owner of the farm and Director of the Company. She says that she and the husband have commenced ‘pre-selling this year’s crop to a purchasing entity with an anticipated selling price of $650/bale’ and asserts it is a significant increase on the bale price achieved last year, thus giving ‘some indication of the success or otherwise of this year’s crop.’[12]
[12] Ibid.
Similarly, the wife asserted that the interveners have not disclosed their fee retainer, or any details of their financial position, including any schedule of legal fees. In support of this assertion she submitted:-[13]
Regard can be had by the learned Judge to the agreed fact that they own two significant farms upon which they produce grapes and other crops; that they had the wherewithal to financially assist the Husband and wife to an extraordinary degree; that they have $6.2 million dollars’ worth of plant and equipment which they do not require themselves in their farming operations; and by their retention of Senior Counsel.
[13] Ibid page 4.
However, the wife goes on to say that the Court may also take note of the ‘highly leveraged nature of farming’.[14] She submits that the only indication of the interveners’ legal fees are in Mr Wrights letter of 5 March 2018, where he says:-[15]
Your client is on notice that our client’s costs to the completion of the hearing will be between $55,000 and $65,000 inclusive of Senior Counsel Fees.
It should be noted that [the husband] and [wife] paid for the valuation of the Interveners’ plant and equipment, as well as their own plant and equipment. The total cost of valuing both sets of plant and equipment was $4,400. Thus, the Interveners are not out of pocket as to the valuation costs of their machinery.
[14] Ibid.
[15] Ibid.
I accept that the husband retains considerable assets and that he will be equally responsible for the considerable debts. I also accept that while the husband has a good earning capacity, this is subject to the vagaries of weather and farming life. Finally, I accept the submission of the husband that he bears the costs associated with spending time with the children in Tasmania.
The husband and interveners asserted in their written submissions that the wife has the capacity to meet a costs order because of the financial position she finds herself in pursuant to the Orders made 31 January 2019.
The wife disputes this assertion and, inferentially, contends that her financial circumstances are such that she does not have the capacity to pay the husband’s costs. The wife deposes in her affidavit filed 22 May 2019 that:-
7. On the 11 February 2019, … an amount of $339,407.93 was transferred to my lawyers account from Mr Dean Wright.
8. Out of that sum received … I have repaid my parents … the amount of $297,144.30 for Court fees, legal fees and accountant’s fees in relation to these proceedings. I have retained the balance of $42,263.63.
In her affidavit filed 22 March 2019 the wife deposes that she is studying full time and does not intend to obtain any paid employment given her studies and the care of the children. I accept that the wife is studying full time and has two young children in her care. I note the comments I made in the reasons about the wife’s capacity to undertake paid employment in the substantive reasons.[16]
[16] Substantive Reasons for judgment paragraphs 639 to 647.
The wife complains that the husband ceased paying her the weekly amount of $2,500 upon payment of the amount of $339,407.93 to her lawyers. She says she is no longer able to use the Farm Overdraft Account to make Bp payments for Aurora and the Telstra accounts or use the farm card to purchase her fuel. The wife submits that her estimated weekly expenditure is $1,632. However, the wife’s submissions do not reveal how the shortfall in her income over expenditure is met.
The wife contends that she has incurred additional legal fees associated with responding to the husband and interveners’ Costs Application.
Further, the wife infers that she has no assets of significance as she is currently renting a property in which she and the children reside. However, the wife acknowledges that she intends to buy a commercial property from the monies that the husband is due to pay her. The wife will end up with property totalling about $2 million and as such will have substantial assets.
I have had regard to the wife’s financial circumstances set out in her affidavit filed in support of these proceedings and my findings in the substantive reasons. I accept the wife is yet to receive the balance funds from the husband pursuant to the Orders.
I do not accept that the wife has limited capital and limited income. The wife will receive the balance of the funds owed to her by the husband in accordance with the Orders. Further, while there has been delay in the balance funds being paid to the wife the Orders provide that interest shall accrue at the prescribed rated under the Rules from the date the payment was due until the date of actual payment. When the wife receives the balance funds and the interest which has accrued she will have both capital and income available to her.
The fact that a party is impecunious does not prevent the making of a costs order if the Court is ‘otherwise of the opinion that such an order ought to be made’. (see Nada & Nettle (Costs) (2014) FLC 93-612 and Lenova & Lenova (Costs) 2011 FamCA). I do not accept that the wife is impecunious, although her net assets are less than those of the husband. I have had regard to those circumstances.
(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;
This is not a relevant consideration as neither party is in receipt of legal aid.
(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;
The wife asserted that the conduct of the husband in these proceedings particularly the manner in which he ‘advanced his case as to his parents’ contributions’,[17] made her ‘life very difficult’.[18] She says that initially the contributions were set out in summary form at paragraph 94 of the first intervener’s affidavit filed 27 February 2018 and were in short form with no supporting documentation being provided. She says that as the hearing progressed, disclosure was made and further items of some significant value were added half way through the hearing. The wife complains that the piecemeal manner in which this occurred ‘significantly detracted from her capacity to appreciate and weigh the case she had to meet’.[19]
[17] Ibid.
[18] Ibid.
[19] Ibid.
I do not accept that the conduct of the husband or the conduct of the Interveners was a concern in this case. The property issues were complex and the property and the respective financial history of various items of property was at times confusing and contradictory. From my perspective the approach by each of the legal practitioners for the parties was constructive and solution-based. Ownership, encumbrance and use of many items of farm equipment was is issue and the nature of the business was such that the property of the parties was far from clear, despite the best endeavours of the parties and those whom advised them.
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
Neither party made submissions in respect of that provision.
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
In their written submissions the interveners conceded that the ‘mere fact that a party has been wholly unsuccessful does not in itself justify the making of an order for costs’ (see Re Collins and the Victorian Legal Aid Commission (1984) FLC 91-508).
However, the interveners went on to assert that the words “wholly unsuccessful” must be taken at face value, as there are many cases where one party is substantially unsuccessful but not completely so’.[20] They relied upon the case of Medlon & Medlon (No.6) (2015) 54 Fam LR 1; [2015] FamCAFC 157 where it was held that a party who was entirely unsuccessful should pay the costs of the other party on an indemnity basis because the party had made serious but entirely unverified allegations and should have known that she had no prospect of success.
[20] Husband and interveners Written Submissions Costs dated 12 April 2019 page 6.
The first and second interveners in their written submissions asserted that the ‘wife’s claim against them arose out of the Court’s accrued jurisdiction and she was wholly unsuccessful’.[21] In support of this assertion they rely on paragraph 445 of the Reasons for Judgement where the Court found:-
Given all the evidence and findings the wife’s claim that the disputed plant and equipment is property of the husband and her, fails and her claim in that regard is dismissed.
[21] Ibid page 3.
In their written submissions the interveners contended that the wife’s conduct in ‘continuing to advance an argument in relation to [their] plant and equipment, in circumstances where any objective assessment of the evidence was doomed to fail, was reckless’[22] and as a consequence they should be entitled to an order for costs on an indemnity basis. In support of their submission they noted:-[23]
(a)The wife sought to introduce additional equitable remedies in relation to the interveners’ Plant & Equipment at the end of the hearing and the evidence had closed.[24]
(b)The Court found in relation to the issue of the interveners’ Plant & Equipment that the wife’s evidence had elements of fabrication.
“… As is often the case some parts (of evidence) are accurate while others have an element of fabrication, such as the gift of the plant and equipment and exaggerations as I have referred to earlier”.[25]
[22] Ibid.
[23] Ibid.
[24] Page 4, Paragraph 28 – Substantive Reasons for Judgement.
[25] Page 40, Paragraph 312 – Substantive Reasons for Judgement.
I have considered the detailed submissions of the first and second interveners and of the wife. I am satisfied that the wife was wholly unsuccessful in terms of her claim against the Interveners.
I am satisfied that neither the husband nor the wife were wholly unsuccessful in terms of the property and parenting issues, even with the broader view outlined by Collier J in Lenardi & Lenardi (No. 2) 2011 FAMCA 604, where he said:-
29. Mr Campton further asserted that the husband was successful in that a number of findings that were made were contrary to the interests of the wife or critical of her. I am satisfied that “wholly unsuccessful” as it appears in subsection (e) refers to success as to the ultimate outcome of the proceedings. Even allowing that findings of the kind asserted by Mr Campton were made against the wife (and they were), I am satisfied that to have such a finding made against the other party is not to demonstrate that the party against whom the finding has been made has been wholly unsuccessful within the meaning of the subsection as I understand it.
30. “Wholly unsuccessful” is difficult to define. However, to my mind, what it means is that a party has completely failed to attain what he or she sought by way of substantive relief.
I accept the wife’s assertion that ‘she prevailed with respect to parenting arrangements in that she was permitted to relocate the children’s principal place of residence to Tasmania’.[26] This was, however, a finely balanced decision and whist the wife ‘prevailed’ it did not mean that she was wholly successful.
[26] Wife’s Submissions as to Costs filed 3 May 2019.
The wife asserted that she prevailed with over $400,000 worth of plant and machinery claimed by the interveners. The wife says that the interveners abandoned their claim that they owned Farm machine 5 during the hearing after it was contested by her. Similarly, she says that the interveners abandoned their claim to the Farm machine 6 to a value of $45,000 and Farm machine 7 of $20,000 after she contested this. I am not sure that ‘prevailed’ is the correct term; this family acquired various items of machinery in various names and it was only in the material prepared in the run up to the August 2018 hearing days that there was some level of clarity and to which machinery was equitably owned by whom.
However, in her written submissions the wife concedes that her claim in respect of the alleged gifting of the plant and machinery ‘was not accepted by the trial judge as against [the interveners], she was almost entirely unsuccessful’. The wife says she succeeded ‘in that claim to some significant items by the interveners was abandoned by them at trial, but on the whole she was unsuccessful’.[27]
(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
[27] Ibid page 5.
The husband made two relevant Offers of Compromise to the wife during the litigation. The first Offer of Compromise (‘the Initial Offer’) was made to the wife on the 6 March 2018. In the written submissions the husband says that this offer would provide, in addition to the wife receiving the horses valuing $58,000, the 4WD valuing $20,000, and Saddlery valuing ($16,057the wife an initial payment of $1M (to be paid no later than 30 November 2018), together with ten additional payments of $100,000 per annum. These payments were to commence on 1 December 2018 and continue through to 1 December 2018. The husband claimed that the overall net effect of this Initial Offer to the wife was $2,094,057, noting that 50 per cent of this offer was to be paid by way of instalments.
The Initial Offer was open to the wife until the 7 March 2018. The husband says the wife did not accept the Initial Offer prior to it lapsing or at any time after that.
While the wife acknowledges that such an offer was made by the husband she contended that it should be given little weight for two reasons. The first being because the Offer was silent on when she would be discharged from her farming liabilities and the second was because the payment schedule was over a period of ten years. The husband asserts that the Initial Offer was $42,254 better than what the wife received at judgment.
However, the husband acknowledges in his written submissions that at the time he made his Initial Offer the property pool of the parties was not agreed and ‘could fairly be said to be in flux, given the uncertainty of the result of the 2018 cotton harvest’.[28] The husband contended that this in itself:-
strongly militates towards [his] genuine commerciality in making his initial offer in circumstances were the 2018 crop failed of achieved lower than expected yields, he would have been arguably in a considerably poorer financial position.[29]
[28] Husband’s Written Submissions Costs 12 April 2019, page 3.
[29] Ibid.
However, the husband did concede that whilst the principal payment to the wife was $1,000,000, the remainder was by way of instalment payments of $100,000 over a period of ten years.
Given the nature of the offer and the state of ‘flux’ as to the precise definition of the property in April 2018, the wife ought not to be criticised for not accepting the Initial Offer made by the husband.
The husband made a further Offer of Compromise (‘the Second Offer’) to the wife in a letter (accidentally dated 8 March 2018) received on 8 August 2018. The Second Offer comprised of a single payment to the wife of $2,000,000, payable on or before 15 January 2019. This was in addition to the wife retaining the horse float ($12,000), horses ($52,000), the 4WD ($20,000) and Saddlery ($16,057). The husband asserted in his written submissions that the Second Offer was in totality $48,254 better than what the wife received at judgement.
This Second Offer remained open until 4.00pm on 8 August 2018. The husband says the offer was not accepted before it closed or any time thereafter.
It is the husband’s case that both of his offers, if accepted by the wife, would have resulted in an outcome which was better than what the wife received at judgement. I accept that submission, subject to the comments I have made earlier in terms of the Initial Offer.
The wife in her written submissions acknowledges that she did slightly worse than this at trial by some $48,254.
However, the wife contends that in relation to the Second Offer the circumstances of the case are such that the Judge should not exercise his discretions to make a costs order because:-[30]
(a)she was under the pressure of cross-examination that day, and given the offer expired at 4pm that day (i.e. it was open for about 9 hours) had only the lunch hour to consider and confer;
(b)she had yet to hear the cross-examination of the First Intervener and thus was unable to evaluate it;
(c)the offer was not greatly superior to the eventual result;
(d)it may be said that with two small children in her primary care, no recent demonstrated income earning capacity, together with the financial disparity between the parties financial positions, and the $2.6M financial resources the husband had in the form of his parents plant and equipment, the section 75(2) adjustment made by the trial judge in favour of the wife at 5% was (whilst of course within the range) at the lowest end of a reasonably wide discretionary rang, and thus not totally foreseeable by her.
[30] Wife’s Submissions as to Costs filed 3 May 2019.
I am not satisfied that on the evidence before me and on the submissions that the Initial Offer from the husband was greater than that amount which the wife received pursuant to the determination of the Court, given the repayment schedule proposed in that offer.
I am satisfied that on the evidence before me and on the submissions that the Second Offer from the husband was greater than that amount which the wife received pursuant to the determination of the Court.
The first and second interveners made an Offer of Compromise (‘the Interveners’ Offer’) to the wife on the 6 March 2018. The Interveners’ Offer proposed that they be declared the legal and equitable owners of all their plant and equipment in their name, save for seven items which were conceded to be the assets of the husband and wife. In addition to this they offered to pay their own costs of the proceedings. That offer was open until the 7 March 2018 and was not accepted. The interveners in their submissions assert that the wife’s claim against their plant and equipment was wholly unsuccessful, which I have discussed elsewhere in these reasons.
(g) such other matters as the court considers relevant.
In her written submissions the wife contends that she has yet to be discharged from her liabilities as set out in paragraph 24 of the Orders and is yet to receive the majority of the monies due to her. She asserts that the husband no longer pays the $2,050 per week and she does not have the use of the credit card. She says that as far as any lender is concerned she is still a joint owner of the farms, a Director and retains all relevant liabilities. I have noted that interest accrues on the sum and I reiterate the comments made by me earlier in these reasons.
Given all of the circumstance I am satisfied that there are circumstances justifying an order for costs in the interveners’ favour and that there ought to be an order for costs from the Second Offer in favour of the husband.
The issue needs to be addressed is whether the costs of the interveners should be calculated on a party/party basis or an indemnity basis.
Whether the wife should pay the interveners costs on an Indemnity basis?
The interveners in their written submissions asserted that the wife’s claim against their plant and equipment was exceptional in the circumstances of this particular case to justify the making of an order for costs on an indemnity basis. In support of this assertion they say that:-
… what is clear is that the [wife’s] claim in relation to the interveners’ Plant and Equipment meets 4 of the 8 tests set out in the Colgate and Palmolive case including her conduct:
(a)persisted up to judgment in what should on proper consideration have been seen as a hopeless case;
(b)of making allegations which ought never to have been made;
(c)unduly (sic) prolongation of a cause by requiring the interveners to defend the claim;
(d)were imprudent in her refusal of an Offer to Compromise’.[31]
[31] Ibid page 8.
The interveners contend that they ‘would not have been required to incur cost in their own right, save to defend a claim which ultimately was quantified at $2,692,500, which was brought and strongly and vigorously prosecuted by the wife and her legal team at all material times’.[32] The consequences of defending this claim they say has caused them to incur legal costs and expenses which they ‘would not have otherwise have had to meet’. [33]
[32] Ibid.
[33] Ibid.
The wife contends that apart from her ‘successes … in defending her ownership of Farm machine 5 and some other ancillary equipment she was unsuccessful as against the interveners.’[34]
[34] Wife’s Submissions as to Costs filed 3 May 2019 page 9.
The wife concedes ‘it is a matter of record that the wife’s evidence did not find much favour with the learned trial judge.’[35] She contends that while she can take no solace from the characterisation of her evidence by the trial judge as:-
entitled, reluctant to give any or any meaningful acknowledgment of other’s contributions, a tendency to exaggerate, “difficult to satisfy” in terms of finances, and ‘not an impressive witness’,
the ‘plain speaking of the trial judge falls short of the censure which would attract indemnity costs’.[36]
[35] Ibid.
[36] Ibid.
The wife contends she worked hard as a litigant in the Substantive Proceedings to:-[37]
prepare tables better identifying all aspects of contributions, the disputed plant and equipment, and the asset pool, and considerably shortened the hearing by reaching agreement as to those issues, as well as the final orders which ought to be made.
[37] Ibid.
Further, the wife asserted that there were ‘no allegations of fraud, of concealing assets, of not making proper discovery, or behaving otherwise than as a litigant should in the running of the case’.[38]
[38] Ibid.
Finally, the wife contends that in laying claim to the interveners’ machinery she relied upon the comments of others including the husband, the characterisation of which is not to the ‘standard of fraud, deceit and deliberate untruthfulness that characterises successful indemnity costs applications’.[39]
[39] Ibid page 10.
Finally, the wife contended that neither the husband nor the interveners have advised ‘the quantum of their costs, provided a schedule of their costs; or disclosed any costs agreements’, save and except for the details of barristers’ fees.[40]
[40] Ibid page 11.
This is a matter where the husband and the Interveners were prudent and careful in terms of legal costs. The one solicitor acted for the husband and interveners and the barrister for the husband represented the Interveners in the April 2018 hearing dates. This was entirely appropriate given the consistency of the cases of the husband and the Interveners in terms of the property issues. Further, the April hearing included significant time and application towards the children’s issues.
It was appropriate for the Interveners to be represented by separate counsel and senior counsel in the August dates given the need for cross examination and submissions for the Interveners.
QUANTIFICATION
In their written submissions the husband and interveners sought to clarify paragraph 3 of the wife’s affidavit filed the 22 March 2019. They contend that they used Mr Wright of Wright Lawyers to represent them during the proceedings. In the March 2018 hearing Mr BJ of Counsel appeared for the interveners and the husband. They say Mr BE SC was unable to appear for the interveners at the May hearing due to a trial overrun, but that he represented them from August 2018 onwards. Both Mr BJ and Mr BE SC were instructed by Mr Wright and they say no objection was made taken by the wife or her advisers to this course.
Consequently, they say that for ‘absolute clarity the husband and interveners costs ought to be dealt with by the Costs Assessor at Assessment or by agreement of the parties’.[41] They propose that Mr Wright’s costs should be allocated based upon for whom the work was completed and, where work was completed for both the husband and interveners the cost should be shared.
[41] Ibid page 2.
The wife, in submissions, asserted that this implied that if the interveners are paying for the husband’s costs that it ought to be accounted for as their costs. The wife contends that such an approach would ‘impermissibly conflate the intervener’s costs with the husband’s costs’[42] and should therefore be rejected.
[42] Ibid page 12.
As to quantum, it is contended on behalf of the wife that if an order is to be made costs should be a fixed amount. Her rationale being that any taxation of the matter would be time consuming given the nature of the hearing.
The wife concedes that she should make a contribution to the costs of the interveners and proposes that she pay them a fixed sum of $80,000 by way of contribution to their costs. The wife asserted that she will not be able to pay this amount until she receives her share of the asset pool.
In her written submissions the wife asserted that if Mr Wright ceased to act for the husband half way through the hearing, as asserted in paragraph 4 of his affidavit filed 28 February 2019, then all of Mr Wright’s costs as and from 8 August 2018 were incurred by the interveners. Consequently, the wife contends that Mr Wright’s statement is inaccurate. She asserted that at no time did he file a notice of ceasing to act nor advise the Court or opposing solicitors that he no longer acted. Further, she asserted that an offer of compromise dated 8 August 2019 purporting to be from the husband was written by Mr Wright. She says that at paragraph 83 of His Honour’s judgement he said:-
the interveners were represented from that time by Mr BE SC. Mr BJ continued to represent the husband. Mr BE SC and Mr BJ were each instructed by Mr Wright. No objection was taken by the wife or her advisors to this course.
The wife contends that:-[43]
Mr Wright appears to have stepped back from his assertion in paragraph (4) of the written submissions filed on behalf of [the husband] [the first intervener] and [the second intervener], although he does not expressly correct his affidavit. The troubling issue remains that the statement, if accepted, may well have had the effect of causing all (rather than part) of Mr Wright’s costs (as from 8 May 2018) to be relevant if [the second intervener] and [the first intervener], and not [the husband], were awarded costs. It would be unrealistic not to acknowledge that that [the interveners] case for costs is a stronger one that their son’s. In such troubling circumstances the sworn statement ought to have been specifically refuted, if indeed it is refuted.
[43] Ibid page 14.
CONCLUSION
The Interveners adopted a process of minimising costs by the joint use of one solicitor and the use of senior counsel in August 2018, albeit inadvertently given that Mr BE was to appear in April 2018 but became unavailable due to a trial overrun.
I am satisfied that there ought to be a costs order in favour of the Interveners as against the wife. Those costs, in the circumstances, ought not be on an indemnity basis, given the comments made earlier. I am further satisfied that the amount submitted by the wife, viz. $80,000 is in all of the circumstances an appropriate amount. I will so order.
As to the husband’s cost application, a sensible offer was made in August 2018 which ought to have been accepted and was not. The wife ought to be responsible for some part of the husband’s costs.
In terms of those costs, some must be included in the $80,000 she offered to the Interveners as their costs, noting Mr BE’s fees were for 11 days and the August 2018 hearing days ran for 5 days.
Given that circumstance and the matters discussed earlier I intend to order the wife to pay part of the husband’s costs incurred on and after 8 August 2018 at an assessed amount of $20,000. I have based this a partial payment of Counsel’s fees over the period of the final hearing days.
In the husband and interveners’ Written Submissions Costs the husband said that in addition to the costs sought in the Costs Application he sought to be reimbursed for the ‘costs of the Transcript in the proceedings noting the prolonged nature of the litigation and the Court’s comments at paragraph 679 of the Reasons for Judgment’.[44]
[44] Husband and Interveners Written Submissions Costs dated 12 April 2019 page 2.
The wife’s position is that she should not have to bear this expense. The wife contends that the husband paid for a transcript during the first part of the proceedings from the parties’ joint account. She argues that she has already paid for half of the transcript and for the Court to make an order requiring her to so would result in her paying for the other half.
Further, the wife claims that the husband in his submissions has failed to advance ‘any particular argument as to why [she] ought to bear the whole of the transcript costs, when the transcript was equally of use to the other parties’.[45] In particular she contends:-[46]
1.The transcript was of more use to the [interveners] as their senior counsel was unable to appear at the first tranche of these proceedings.
2.The transcript was of the first tranche of the proceedings, which was dominated by the parenting proceedings in which [the wife] was successful.
3.The transcript was of the first tranche of the proceedings, when the asset pool was unknown; the extend of the contributions by [the interveners] had to be crystallised nor any proper disclosure made with respect to them; and the list of the disputed plant and equipment had not yet been settled.
[45] Ibid page 5.
[46] Ibid pages 15 and 16.
I have considered the submissions in respect of whether an order ought to be made that the wife reimburse the husband for the ‘costs of the Transcript in the proceedings and I have determined that the wife ought not be required to contribute to those transcription fees, having generally accepted her submissions in that regard.
It was not clear if the costs applications included a claim by the husband and the Interveners of this costs application. Given that circumstance and the need to end the litigation between the parties, I have treated the applications as implicitly including such a costs application. Having regard to the overall outcome and the reasons set out earlier, I have determined that there ought not to be orders for costs on this costs application.
I certify that the preceding one hundred and eleven (111) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 31 October 2019.
Associate:
Date: 31 October 2019
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