Stahl & Acker (No 2)
[2023] FedCFamC2F 1115
•25 August 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Stahl & Acker (No 2) [2023] FedCFamC2F 1115
File number(s): ADC 5736 of 2021 Judgment of: JUDGE MCGINN Date of judgment: 25 August 2023 Catchwords: FAMILY LAW – Application for costs – application following determination of preliminary issues as to length of de facto relationship and whether leave should be granted pursuant to s 44 – s 117(2A) (a), (c), (e), (f) – application refused – each party to bear their own costs Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Circuit and Family Court of Australia Division 2 (Family Law) Rules 2021
Cases cited: Anison & Anison [2019] FamCAFC 108; (2019) FLC 93 – 908 Division: Division 2 Family Law Number of paragraphs: 31 Date of last submission/s: 22 August 2023 Date of hearing: On the papers (considered in Chambers) Place: Adelaide Counsel for the Applicant: Ms Lewis Solicitor for the Applicant: Resolve Divorce Lawyers Counsel for the Respondent: Mr Roberts Solicitor for the Respondent: Lumond Lawyers (previously Thomson and Associates) ORDERS
ADC 5736 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS STAHL
Applicant
AND: MR ACKER
Respondent
ORDER MADE BY:
JUDGE MCGINN
DATE OF ORDER:
25 AUGUST 2023
IT IS ORDERED:
1.That the applicant de facto wife’s application for costs in respect of the applications determined by orders of 4 July 2023 do stand dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE McGINN:
Judgment was delivered on 4 July 2023 after a trial hearing in relation to the questions of the length of the de facto relationship, whether leave should be granted pursuant to section 44(6) of the Family Law Act 1975 (‘the Act’) to allow the applicant de facto wife to issue proceedings with respect to the question of property settlement arising out of the parties’ de facto relationship and in relation to the question of costs of a mediation.
The respondent de facto husband sought dismissal of those applications.
As a result of the judgment of this Court it was declared that the de facto relationship concluded on 20 August 2017, that leave be granted pursuant to section 44 for the applicant de facto wife to institute proceedings for property settlement and the dismissal of certain paragraphs of the applicant de facto wife’s Further Amended Initiating Application and dismissal of the applicant de facto wife’s application for costs of a mediation.
The applicant de facto wife pursuant to the orders made on 4 July 2023 has now sought orders for costs arising out of the determination of those matters.
The applicant de facto wife’s present application is for the respondent de facto husband to pay to her solicitors’ trust account costs on an indemnity basis of $129,593 within 60 days and, in the alternative, an amount said to be in accordance with the relevant scale under the Federal Circuit and Family Court of Australia Division 2 (Family Law) Rules 2021 in the amount of $51,626 be paid within 60 days.
In answer to that application the respondent de facto husband says that there should be no order as to costs and that each party should bear their own costs of the determination of the issues the subject of the judgment and orders of 4 July 2023.
The applicant de facto wife agitates her application on the basis that certain matters said to be arising under section 117(2A)(a), (c), (e) and (f) should cause the Court to be of the opinion pursuant to section 117(2) that there exist circumstances that justify the making of an order as to costs.
For the reasons set out below I have determined that there should be no order as to costs in respect of the matters that were determined by the orders of 4 July 2023.
The matters the applicant de facto wife puts forward in support of the application are set out in her written submissions sealed 25 July 2023 and 9 August 2023.
Those matters can be fairly summarised in my view as comprising:
(a)the financial circumstances of the parties are constituted, at least in part, of property just exceeding $8 million of which about $7.6 million is in the respondent de facto husband’s control and about $323,000 or thereabouts in the applicant de facto wife’s control and are said to lead to a conclusion that the respondent de facto husband has the capacity to meet an order for costs;
(b)that the respondent de facto husband’s conduct in seeking dismissal of the applicant de facto wife’s applications at trial was “tactical and unreasonable in all of the circumstances”;
(c)that the respondent de facto husband had been wholly unsuccessful in seeking the applicant de facto wife’s applications be dismissed; and
(d)that the applicant de facto wife presented offers to the respondent de facto husband in inviting the respondent de facto husband to consent to the applicant de facto wife’s application for leave to institute proceedings for property settlement which were not accepted.
The applicant de facto wife has agitated that there should be costs awarded on an indemnity basis on the grounds that the respondent de facto husband should have known that he had “no chance of success”.
The respondent de facto husband’s submission is that there should be no order as to costs and says that from a consideration of factors pursuant to section 117(2A) that it should be apparent that:
(a)that each party has sufficient assets to meet their own costs;
(b)that the applicant de facto wife having failed to lodge proceedings within the time needed to make an application in seeking appropriate leave;
(c)that there has been no meaningful criticism of the respondent de facto husband’s conduct of the proceedings;
(d)that neither party had been wholly unsuccessful in respect of the proceedings within the meaning of section 117(2A)(e); and
(e)that the applicant de facto wife’s letters of 26 May 2022 and 1 August 2022, said to be letters of offer, do not justify the making of an order for costs.
The applicant de facto wife in her submissions in reply submitted that whilst the respondent de facto husband had an entitlement to challenge the applicant de facto wife’s claims at trial, the exercise of that entitlement had to be consistent with section 67 of the Federal Circuit and Family Court of Australia Act 2021 and this Court's Central Practice Direction. The applicant de facto wife submitted that this had not occurred in that the respondent de facto husband failed to consent to an order granting the applicant de facto wife leave to issue property settlement proceedings pursuant to section 44(5)(b) and that such a failure was not consistent with conducting litigation as quickly, inexpensively and/or efficiently as possible.
No objection was taken in the respondent de facto husband’s written submissions of the connection to the applicant de facto wife’s written submissions of the correspondence of 26 May 2022 and 1 August 2022 and further reference to the applicant de facto wife’s retainer agreement with her solicitors and an updated schedule of costs on an indemnity and scale basis.
The overall value of the parties’ property and the parties’ relative holdings of that property does not in and of itself persuade me that an order for costs should be made.
There is no evidence that satisfies me that the respondent de facto husband’s position to seek dismissal of the applications was “tactical and unreasonable in all of the circumstances”.
The respondent de facto husband in seeking dismissal of the applicant de facto wife’s claims at trial as to the declaration of the conclusion of the de facto relationship on a particular date and for leave to be granted to bring the application for property settlement was not wholly unsuccessful in that the date of the conclusion of the de facto relationship was found and declared to be that which was contended for by the respondent de facto husband and not that which the applicant de facto wife promoted. Further, the applicant de facto wife’s application for costs of a mediation was dismissed.
Ultimately the Court, after making orders as to the declaration of the duration of the de facto relationship and granting the applicant de facto wife leave to institute proceedings for property settlement and dismissing her application as it then was for costs of the mediation, ordered the dismissal of each parties’ respective applications then before the Court for determination.
In those circumstances I do not consider that the respondent de facto husband was wholly unsuccessful within the meaning of section 117(2A)(e).[1]
[1] Anison & Anison [2019] FamCAFC 108; (2019) FLC 93-908.
The letter of 26 May 2022 is at best a letter of demand and a statement of position, rather than an offer, in respect of one of the applications that were brought before the Court for determination by the judgment of 4 July 2023 and the application for costs in relation to the mediation which was to have occurred on 8 March 2022. The letter did not contain a concession on behalf of the applicant de facto wife in respect of that position other than in foregoing firstly an application for costs of the mediation which was, as it has turned out to be, unsuccessful and secondly an application for her costs with respect to her application for leave to that date, the result of which would have to be regarded as uncertain.
The letter of 1 August 2022 is not of any different character.
The applicant de facto wife has not taken me to any particular matter relating to the conduct of the parties in relation to the proceedings other than the respondent de facto husband’s failure to consent to an order in favour of the applicant de facto wife for a grant of leave to bring her application for property settlement.
The determination of the date of separation and conclusion of the de facto relationship was a matter of significance for the purposes of determination of the applications for leave before the Court affecting the exercise of the Court’s discretion with respect to the determination of the granting of leave and a matter about which the giving of evidence took up much of the trial hearing time.
The granting of leave to commence property settlement proceedings out of time is not a matter of relative informality or mere technicality.
In all the circumstances I do not consider that a failure of the respondent de facto husband to simply consent to an order for leave to be granted to issue property settlement proceedings justifies an order for costs.
No party agitated that any other matter should be brought to account pursuant to section 117(2A). However, it should be stated that I do not overlook in considering the respective positions of the parties as to the present cost applications that the applicant de facto wife in seeking an extension of time was seeking an indulgence from the Court under the legislation to bring her application for property settlement beyond a standard application period.
Should I be wrong in my view of the nature of the applicant de facto wife’s letters of 26 May 2022 and 1 August 2022 or in my understanding of the parties’ financial circumstances I still would be of the view that each party should bear their own costs of the matters dealt with resulting in orders of 4 July 2023.
It is also my view that a consideration of the matters put forward by the applicant de facto wife, taken either separately or together, do not lead me to the opinion that an order for costs in favour of the applicant de facto wife should be made.
Having so determined, I do not need to consider the applicant de facto wife’s application as to the basis upon which costs should be awarded.
However, for the sake of completeness, I do not consider that the circumstances of the applications disposed of by the judgment of 4 July 2023 or the manner in which those applications were conducted by the parties were so exceptional as to justify an order for costs on an indemnity basis.
Further, I am not of the view that the schedules submitted on behalf of the applicant de facto wife found in her written submission sealed 25 July 2023 would justify the amounts sought either on an indemnity basis or a party/party basis given the nature of the description of some of the items referred to in those schedules.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of Judge McGinn. Associate:
Dated: 25 August 2023
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