Stinson & Goldsmith
[2020] FamCA 1115
•23 December 2020
FAMILY COURT OF AUSTRALIA
Stinson & Goldsmith [2020] FamCA 1115
File number(s): BRC 397 of 2018 Judgment of: CAREW J Date of judgment: 23 December 2020 Catchwords: FAMILY LAW – COSTS – Discretion – Where the husband makes an application for costs – Where the matter was listed for trial but was adjourned – Where the husband does not seek costs on an indemnity basis but seeks costs of a specific sum exceeding party and party costs –Where an Order is made that the wife contribute the fixed sum of $33,000 towards the husband’s legal costs – Where the wife has 30 days to pay. Legislation: Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)
Cases cited: Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Collins & Collins (1985) FLC 91-603
Di Carlo v Dubois & Ors [2002] QCA 225
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Anor (2005) 33 FamLR 123
Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23
JELv DDF (2001) FLC 93-083
J P Morgan Portfolio Sevices Limited v Deloitte Touche Tohmatsu [2006] FCA 84
Kennon & Kennon (1997) FLC 92-757
Kohan and Kohan (1993) FLC 92-340
Maurice & Barry (No 2) [2019] FamCA 639
Parke & the Estate of the Late A Parke (2016) FLC 93-748
Penfold v Penfold (1980) 144 CLR 311
Prantage v Prantage (2013) 49 Fam LR 197
Ragata Developments Pty Ltd v Westpac Banking Corporation (Federal Court of Australia, Davies J, 5 March 1993)
Re Wilcox, Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151
Sfakianakis & Sfakianakis (2019) 59 Fam LR 419
Stopford Malloy & Malloy (Costs) [2018] FamCAFC 6
Vanderclay Development Co Ltd v Inducon Engineering Ltd (1968) 1 DLR (3d) 337
Younghanns and Ors v Younghanns and Ors & Younghanns (2000) FLC 93-029
Number of paragraphs: 57 Date of last submission/s: 18 December 2020 Date of hearing: In chambers Place: Brisbane Counsel for the Applicant: Mr Kirk QC Counsel for the Respondent: Mr Williams QC Solicitor for the Applicant: Phillips Family Law Solicitor for the Respondent: HopgoodGanim ORDERS
BRC397/2018 BETWEEN: MR STINSON
Applicant
AND: MS GOLDSMITH
Respondent
ORDER MADE BY:
CAREW J
DATE OF ORDER:
23 DECEMBER 2020
THE COURT ORDERS THAT:
1.The Respondent Wife contribute the fixed sum of $33,000 towards the Applicant Husband’s legal costs.
2.The Respondent Wife pay the said sum within 30 days of the date of this Order.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Stinton & Goldsmith has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAREW J
On 6 August 2020, I set this matter down for a re-hearing to commence on 16 December 2020.
On 11 December 2020, it was apparent that the matter was not ready to proceed and both parties sought that the trial dates be vacated. The applicant husband now seeks the costs of and incidental to the adjournment, including the costs associated with the appearances on 7 and 11 December 2020 (when the matter was mentioned before me) and the costs of the application for costs itself, fixed in the sum of $45,000, to be paid by the respondent wife.
For the reasons which follow, I propose to order that the wife contribute the fixed sum of $33,000 towards the husband’s costs.
BRIEF BACKGROUND
Judgment was delivered in the original proceedings on 12 April 2019 and the wife appealed. Her appeal was successful and on 2 December 2019, the matter was remitted for rehearing before a Federal Circuit Court Judge other than the primary Judge. On 1 July 2020, the matter was transferred to this Court and on 6 August 2020 new trial dates were allocated and trial directions made.
The matter was relisted before me on 7 December 2020 as a result of the husband’s concerns that the matter may not be ready for trial for various reasons including:
(a)The wife’s delay in informing the husband she required updated valuations;
(b)The prejudice to the husband should he disagree with the valuation (yet to be provided) and wish to obtain an adversarial valuer;
(c)The wife’s failure to specify with particularity the order to be sought by her at trial;
(d)The wife’s raising for the first time in her affidavit of evidence in chief filed 20 November 2020 allegations of family violence and potentially a Kennon[1] argument; and
(e)The wife’s failure to serve the annexures to her affidavit of evidence in chief filed on 20 November 2020.
[1] Kennon & Kennon (1997) FLC 92-757 – relating to the consequences of a history of family violence on property proceedings.
At the mention on 7 December 2020, the wife argued that her affidavit filed 20 November 2020 at [434] to [471] set out the order she seeks at trial and the reasons for same. In my view, a party should not have to wade through paragraph after paragraph of evidence in order to glean what might be said to be the terms of a final order sought at trial. The wife also argued that she has previously filed two Responses and therefore the husband could not be unaware of what order she was seeking at trial. The wife further argued that there was no order requiring her to file an further Amended Response and the precise terms of the order she is seeking at trial was only required to be included in the Outline of Case which was not due to be filed until three business days before the commencement of the trial. The fact that her latest further Amended Response filed on 8 December 2020 indicates that the 35 paragraphs of the order now sought by the wife are all different to that previously sought, demonstrates the folly of her submissions.
By the time of the hearing on 7 December 2020 the parties had sourced an alternative valuer who was able to provide valuations in time for the trial. As a consequence, the trial was to proceed on the allocated dates. It was nevertheless noted that an application for an adjournment might be made by the husband depending upon what occurred between then and the trial.
An order was made on 7 December 2020 requiring the wife to file and serve a Further Amended Response setting out with particularity the final order sought and serve the annexures to her affidavit by 4.00pm on 8 December 2020. The husband was given leave to file a reply affidavit to address any Kennon argument.
It seems that the Outline of Case filed on behalf of the wife on 9 December 2020 raised for the first time the prospect of an adjustment in her favour pursuant to the Kennon principles. It does not seem that this was agitated as an issue at the previous trial nor was it raised as an issue when the matter was relisted for trial.
The wife finally served the annexures to her affidavit of evidence in chief on the morning of the 9 December 2020 (contrary to the order I made on 7 December 2020 that they be served by 4.00pm on 8 December 2020). The annexures comprise an extraordinary 1,116 pages.
The matter returned to me on 11 December 2020 with a joint application that the trial dates be vacated given that the updated valuations could not be completed in time. Unfortunately, the alternative valuer took other work by the time the joint letter of instruction was finalised on 10 December 2020 and he was no longer available.
The parties’ request for an adjournment was granted and new trial dates have been allocated commencing 21 April 2021. While I did give consideration to simply returning this matter to the general pool of matters awaiting a trial date, I ultimately considered that to do so would be unnecessarily harsh to the husband in circumstances where there could be no serious suggestion that the reasons for the adjournment could be attributed to any failure on his part.
The husband was granted leave to make an oral application for the costs thrown away by the adjournment and the parties agreed that the costs application should proceed by way of written submissions without the need for further appearance. Each party was granted leave to file and serve one further affidavit in relation to the costs application. Pursuant to that leave, a further affidavit was filed on behalf of the husband setting out matters relevant to the costs application and the calculation of the husband’s costs thrown away. No further affidavit was filed on behalf of the wife.
Ultimately, the reason for the adjournment on 11 December 2020 was the unavailability of the valuer to undertake an updated valuation. That will be the focus of these reasons although I note that s 117 (2A)(c) refers to conduct “in relation to the proceedings” not limiting the conduct to the particular event about which the Court may be concerned.
HUSBAND’S SUBMISSIONS
It is common ground that the trial could not proceed because there was no current joint valuation for the three farm properties known as ‘Property D’, ‘Property P’ and ‘Property E’.
The husband submits that the following matters are relevant to the application for a costs order against the wife:
(a)The financial circumstances of the parties is not such that would preclude an order;
(b)The conduct of the wife as particularised below; and
(c)The appearances on 7 and 11 December 2020 were necessitated by the failures of the wife.
Relevant to the wife’s conduct, the husband refers to the following background:
(a)When the matter was mentioned on 7 December 2020, the husband raised the following concerns about the state of readiness of the matter for trial:
(i)The wife had not served the annexures to her affidavit despite having served her affidavit on 20 November 2020;
(ii)The wife had not particularised the final order she sought at trial in circumstances where advice from a surveyor may be required depending upon what order was sought and the instructions to the valuer may also be impacted because individual lots may need to be valued. The wife responded to the husband’s numerous requests for particulars with a statement that he would be informed when her case outline was filed (due three business days before trial);
(iii)Even if Mr DD could prepare valuations prior to the scheduled trial date, the husband would be denied the opportunity to obtain an adversarial valuation if he took issue with the valuation.
(b)The Court declined to vacate the dates at the mention date on 7 December 2020 preferring to see if the matter could in fact be ready. The husband’s costs associated with the mention on 7 December 2020 were adjourned to the first day of trial;
(c)Included in the trial directions made on 6 August 2020 were provisions requiring property to be valued if agreement as to the value was not reached. A process for that to occur was set out in the order at [9] to [11];
(d)On 31 July 2020 the husband’s solicitor communicated with GG Valuers to enquire as to their estimated fees and time frame to prepare updated valuations. The husband’s solicitor received a response from Mr FF indicating that he would need three to four weeks and estimated his fees to be $10,000 but also advised that he was unsure if he would be available for the trial dates but would confirm that at a later time. This information was provided to the wife’s solicitor on 26 August 2020;
(e)Follow up letters were sent to the wife’s solicitor on 22 September 2020, 7 October 2020 and 22 October 2020 seeking an “urgent response” as to whether the wife wanted updated valuations;
(f)It was not until 5 November 2020 that the wife’s solicitor advised that she required EE Valuers (formerly GG Valuers) to be appointed. On 17 November 2020 the parties were advised that Mr FF was no longer employed with EE Valuers and that a valuation report could not be provided until after the scheduled trial dates;
(g)Unsuccessful attempts were then made to secure the services of alternative valuers. On 4 December 2020 DD Valuers advised that they could have the valuations completed in time for the upcoming trial;
(h)The joint letter of instruction to Mr DD was provided to the husband’s solicitors at 5.05pm on 7 December 2020, however, the wife’s Amended Response (ordered to be filed and served by 4.00pm on 8 December 2020) was not served until 5.07pm on 8 December 2020 (after the deadline) and it was not until the following morning i.e. 9 December 2020 (after the deadline) that the wife served the annexures to her affidavit which comprised 1,116 pages;
(i)The husband contends that he required time to consider the order sought by the wife in her Amended Response before signing off on the letter of instruction to Mr DD because “[t]here may be matters that emanate from the Orders sought (such as easements, right of carriageways etc.) which will need to be put to the valuer”. At 10.52am on 9 December 2020 the husband’s solicitor communicated their request for amendments to the joint letter of instruction to Mr DD including the following:
… we require the following amendments:
We note that your client seeks Orders for there to be a boundary adjustment between Property P (Lot …) and Property D home (Lot …) in the terms set out at paragraphs 9(a) and 12(a) of her Further Amended Response. Accordingly, the joint letter should ask Mr DD to comment on whether such boundary adjustment would affect the values of the properties;
We note that your client seeks alternate Orders in relation to the properties that she wishes to retain and access to these properties will depend on what Final Orders are made. Accordingly, the joint letter should ask Mr DD to consider the impact that the possible division of properties will have on the value, given that access may not be through neighbouring lands in the party's ownership.
…
(j)The joint letter of instruction was provided to Mr DD at 1.12pm on 9 December 2020. At 1.35pm on 9 December 2020, Mr DD advised that he could no longer meet the deadline. The husband’s solicitor was informed by Mr DD that he would require a couple of weeks to prepare the valuation report “as there was quite a bit of detail in the 5 or 6 questions asked such as access and there was a fair bit to consider and take on”.
In the first trial heard in late 2018 and early 2019 the farm properties had been jointly valued by Mr FF from GG Valuers as follows:
Property D $900,000
Property P $600,000
Property E $550,000
In a final attempt to avoid the trial dates being vacated the husband offered to adopt an increased value for each farm namely:
Property D - $922,500 (but that lot … be valued at $28,320)
Property P - $615,000
Property E - $563,700
No response was received to the open offer.
It the premises, it is argued by the husband that a costs order is warranted in this case and the costs thrown away are particularised as follows:
Legal fees (solicitor) thrown away $23,094
Counsel’s fees thrown away $20,240
Costs associated with this application $5,060
Total $48,394
While costs are not sought on an indemnity basis, it is submitted by the husband that an order for the payment of $45,000 is just in the circumstances. The husband contends that he “ought not be punished in not recovering the majority of costs thrown away by reason of the Wife’s conduct”. Reliance is placed on a decision of Maurice & Barry (No 2)[2] where the Full Court’s decision of Sfakianakis & Sfakianakis[3] was cited and in particular the following paragraph at [10]:
It is, however, a mistake to think that if a costs order is made, that order can only be on a party and party basis or on an indemnity basis. The words “such order as to costs ... as the court considers just” permit the Court to fashion an order that is apt to the circumstances. One such well-known example is assessment on a trustee basis, which is more generous than party and party costs, but falls short of an indemnity. Orders for a partial indemnity or for a particular period are obvious possibilities. The Court may also fix costs in a particular sum, taking account of all relevant circumstances; that type of order too is neither one for party and party costs nor an indemnity costs order. For convenience, in these reasons we shall refer to such orders as a “special costs order”.
[2][2019] FamCA 639.
[3](2019) 59 FamLR 419 at 420-421, [10] (“Sfakianakis”).
WIFE’S SUBMISSIONS
The wife resists any order for costs against her. She concedes that there was delay in engaging with the husband on the issue of updated valuations preceding 5 November 2020 but contends that delay is not determinative of the costs application.
The wife submits that the order made on 6 August 2020 required the same valuer to undertake updated valuations in the event of disagreement about values. The wife contends that there has been “no shortage of efforts made to secure a valuer” since 6 November 2020. She contends that it was not until 17 November 2020 that the solicitors for both parties were informed that Mr FF no longer worked for GG Valuers (which had become ‘EE Valuers’). Thereafter every effort was made to source an alternative valuer and Mr DD was secured by the wife on 4 December 2020. The husband was provided with a draft joint letter of instruction on the afternoon of 4 December 2020 but their office had closed at 3.00pm that day. On 7 December 2020 a follow up communication was forwarded to the husband’s solicitor which was not responded to by the time of the Court mention at 2.00pm that day. As a consequence of the mention, the letter of instruction was amended. The husband’s solicitor then sought further amendment and the letter was sent on 9 December 2020 by which time Mr DD was no longer able to meet the deadline.
The wife argues that the further delays that occurred, in circumstances where other valuers delayed in responding to requests about availability, were outside the wife’s control.
The wife submits that her failure to file a further Amended Response setting out with particularity the order she sought did not infect the process of obtaining a valuer because the properties were being valued individually.
The offer made by the husband cannot be taken into account because it is impossible to evaluate until the updated valuations have been completed. If the updated valuations exceed the proposed notional increase, the offer will not assume any weight.
In the premises, it is submitted by the wife that there should be no departure from the usual course, namely, that each party bears their own costs.
Alternatively, the issue should be deferred to the trial once updated valuations are available.
As to quantum, while no issue is taken by the wife with the methodology of the calculations or rates adopted, it is submitted by the wife that what the husband is seeking is in reality costs on an indemnity basis when one compares the total costs calculated to be thrown away ($48,394) with the costs claimed ($45,000) and the costs calculated on a party and party basis ($29,036.04).
The wife submits that exceptional circumstances must be established before a court will order costs on other than a party and party basis.[4] Further, that “[a]bsent a rule of court providing otherwise, the reason why a Court does not lightly depart from the party and party basis of assessment was explained in Vanderclay Development Co Ltd v Inducon Engineering Ltd[5] at 344:
If [the party and party basis] were departed from, other than in exceptional cases, it is not difficult to visualize the indirect harm that could well be done by inhibiting prospective litigants from bringing to the attention of the Courts matters which they have every right to have put into litigation. At the same time the existence of the jurisdiction [to make special orders] does afford a real deterrent to persons who may be disposed to make wanton, scandalous and vicious charges against persons with whom they are in conflict.
[4] Reliance is placed by the wife on: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 226-227 (Shepherd J) (“Colgate-Palmolive”); Ragata Developments Pty Ltd v Westpac Banking Corporation (Federal Court of Australia, Davies J, 5 March 1993); Di Carlo v Dubois & Ors [2002] QCA 225 at [40] (per White J and with whom Williams JA and Wilson J agreed); Younghanns and Ors v Younghanns and Ors & Younghanns (2000) FLC 93-029; JELv DDF (2001) FLC 93-083.
[5] (1968) 1 DLR (3d) 337 at 344 (Keith J); and reliance is also placed on Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406 at 415, [40] (Callinan J); J P Morgan Portfolio Sevices Limited v Deloitte Touche Tohmatsu [2006] FCA 84 at [5].
It is argued by the wife that “none of the circumstances relied upon by the [husband] can, on any legitimate view, properly be said to fall within either (sic) that “exceedingly rare” class of case to justify such an order”.
HOW COSTS APPLICATIONS ARE DETERMINED
Although each party generally bears their own costs in this jurisdiction (s 117(1) of the Family Law Act 1975 (Cth) (“the Act”)), the Court has a broad discretion[6] to make such order as to costs as the Court considers just where there are circumstances that justify it in doing so (s 117(2)).
[6] Collins & Collins (1985) FLC 91-603 at 79,877.
An applicant for costs bears no “additional or special onus” other than the establishment of “justifying circumstances”.[7]
[7] Penfold v Penfold (1980) 144 CLR 311 at 315.
In the exercise of the discretion to award costs, regard must be had to the factors set out in s 117(2A) of the Act, so far as they are relevant.
Those factors are as follows:
(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.
It is sufficient for one factor in s 117(2A) to be present.[8]
[8] Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Anor (2005) 33 Fam LR 123.
A court will not lightly make an order for costs to be paid on an indemnity basis. There needs to be some circumstance of an exceptional kind to justify that course.[9]
[9] Kohan and Kohan (1993) FLC 92-340 at 79,614; Colgate-Palmolive (n 4) at 233.
Rule 19.08(3) of the Family Law Rules 2004 (Cth) (“the Rules”) requires the terms of any costs agreement to be disclosed when indemnity costs are sought.
The tensions created by the differing objectives sought to be addressed by a costs order awarded on a standard basis as opposed to an indemnity basis were discussed in Re Wilcox, Ex parte Venture Industries Pty Ltd (No 2)[10] where the Full Court of the Federal Court of Australia (Cooper & Merkel JJ) said at 156:
The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.
The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225.
[10] (1996) 72 FCR 151 at 156 – 157 (Cooper & Merkel JJ) (“Re Wilcox”).
The Full Court in Re Wilcox, Ex parte Venture Industries Pty Ltd[11] went on to restate the principles from Colgate-Palmolive[12] in the following terms at 156-157:
(a)the Court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the Court in departing from the usual course;
(b)the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the Court in departing from the usual course;
(c)whilst the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis.
[11] Re Wilcox (n 10). .
[12] Colgate-Palmolive (n 4).
While there is no exhaustive list of what circumstances may warrant an order for costs to be paid on an indemnity basis, some particular circumstances that have been found to justify such an order were identified by Sheppard J in Colgate-Palmolive[13] as follows:
(a)Making allegations of fraud knowing them to be false;
(b)Making irrelevant allegations of fraud;
(c)Evidence of particular misconduct that causes loss of time to the Court and to the other parties;
(d)Commencing or continuing proceedings for some ulterior motive or in wilful disregard of known facts or clearly established law;
(e)Making allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;
(f)An imprudent refusal of an offer to compromise.
[13] Ibid at 233.
The explanatory guide to the Rules provides a useful definition of costs on an “indemnity basis”, namely: [14]
[A]n entitlement to costs, including costs under a costs agreement, for all costs incurred, other than costs that are unreasonable in amount or that have been incurred unreasonably.
[14] Prantage v Prantage (2013) 49 FamLR 197 at 200, [17].
The Rules provide specific powers to the Court when considering what costs order to make and set out particular matters that may be considered. Rule 19.18(1) empowers the Court, when awarding costs, to make an order:
(a)of a specific amount;
(b)as assessed on a particular basis (e.g. lawyer and client, party/party or indemnity);
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount assessed in accordance with Schedule.3
In considering what specific order should be made, r. 19.18(3) provides that the Court may consider any of the following factors:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the case;
(c)the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with pre-action procedures; and
(f)expenses properly paid or payable.
DISCUSSION
As already noted, this matter was transferred to this Court on 1 July 2020 and trial directions were made on 6 August 2020. The matter was prioritised in this Court. Speaking generally, it is most inconsiderate, to say the least, for a party to fail to be ready for trial on allocated dates. This is because trial dates are a precious resource for the Court and other litigants. When trial dates are vacated close to the allocated dates there is often no prospect of another matter being able to utilise those particular trial dates.
In this case, it was anticipated when trial directions were made on 6 August 2020 that updated valuations would be required if the parties could not reach agreement on values. The husband sought the wife’s input on the question of valuations on four occasions between 26 August 2020 and 22 October 2020 and sought her urgent response in the last three communications. It was not until 5 November 2020 that she indicated her requirement for updated valuations.
True it is that from 5 November 2020 there was no shortage of effort to obtain a valuer to undertake the task, but had the wife responded in a timely fashion, the process could have started a lot earlier and it seems likely that the valuations would have been concluded as required.
The wife is unable to offer any reason for the delay in responding to the husband’s numerous entreaties. The adjournment of the trial arose as a direct result of the wife’s failure to respond in a timely fashion.
In those circumstances, it seems to me that the husband’s costs thrown away should be met by the wife including his application for costs and the appearances on 7 and 11 December 2020.
There is no financial impediment to a costs order.
The quantum sought by the husband is in effect a ‘partial indemnity’ or a ‘special costs order’, falling as it does between a full indemnity and party and party costs. “Decisions as to the appropriate basis for any costs order are, of course, guided by principle”[15] which includes not only the matters set out in s 117(2A) of the Act but also the principles discussed in Colgate-Palmolive[16] when something other than party and party costs are considered. While the circumstances of this case do not warrant a full indemnity, I do consider that the loss of time to the Court and to the other parties caused by the wife’s unexplained delay warrants an award of costs other than on a party and party basis.
[15] Sfakianakis (n 3) at 421, [11].
[16] Colgate-Palmolive (n 4).
Additionally, the Rules identify particular factors that may be considered when considering what costs order to make, which in this case include the following:
(a)The unreasonableness of the wife’s behaviour in failing to respond to correspondence in a timely fashion;
(b)The failure of the wife to offer any explanation for the delay;
(c)The rates ordinarily payable to lawyers in comparable cases;
(d)The time properly spent on the case;
(e)Expenses properly paid or payable.
The gap between party and party costs and indemnity costs in this case, namely, between $29,036.40 and $48,394, is a stark reminder of the tensions discussed in Re Wilcox, Ex parte Venture Industries Pty Ltd[17] referred to earlier in these Reasons.
[17] Re Wilcox (n 10).
It is the preference of this Court to fix a sum if possible.[18] In Parke & the Estate of the Late A Parke,[19] Murphy J in a separate judgment incorporates a helpful discussion of the process involved in awarding a specific sum and in so doing draws upon the observations made by Einstein J in Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus[20] when considering an analogous provision to that contained in r 19.18(1)(a) of the Rules. Murphy J said in particular at [130]:[21]
130.If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court” (Beach Petroleum NL v Johnson (No 2) [1995] FCA 1250; (1995) 57 FCR 119, at [24]cited in Idaport at [9]). The process does not “by its very nature ... envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”. (Idaport at [9](v), citing Harrison v Schipp[2002] NSWCA 213; (2002) 54 NSWLR 738).
131.Obviously enough, the court must act judicially in fixing or specifying a sum of costs, but:
...the requirement that the power to award a gross sum should be exercised judicially does not mean that it must be exercised in any scientific or formulaic manner. At the heart of the judicial function is the responsibility to weigh up competing factors and considerations, many of which might conflict, to reach a determination. Acting judicially carries with it an obligation to apply the rules of natural justice, to act impartially and to apply the law to the facts. ...
(Idaport, at [10] per Einstein J.)
[18] Stopford Malloy & Malloy (Costs) [2018] FamCAFC 6 at [10] – [13] (Thackray, Strickland & Murphy JJ)
[19] (2016) FLC 93-748 at 81,943–81,944, [122]–[134] (“Parke & Parke”).
[20] [2007] NSWSC 23 at [9].
[21] Parke & Parke (n 19) at 81,944, [130]-[133].
In determining a just sum I have had particular regard to the following matters:
(a)The retainer agreements between the husband and his solicitor and Queen’s Counsel;
(b)The gap between party and party costs and indemnity costs;
(c)A number of the items claimed would have been incurred whether or not the matter was adjourned;
(d)Queen’s Counsel’s estimate of fees include an anticipated sum for reading any reply affidavit (which did not occur); and
(e)The retainer for Queen’s Counsel includes a cancellation fee of $6,000 which not all counsel impose.
I conclude that a just sum for the wife to contribute towards the husband’s legal costs is $33,000. As no submissions were made in relation to time to pay, I consider 30 days to be reasonable.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 23 December 2020
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