FAMILY COURT OF AUSTRALIA
| SWARB & SWARB (NO 2) | [2013] FamCA 996 |
| FAMILY LAW – COSTS – Where wife sought costs against husband on an indemnity basis or, alternatively, on a party-party basis – Where the husband opposed the making of such orders – Consideration of s 117 – Where the court is satisfied that the husband should pay a portion of the wife’s costs – Where the quantification of those costs is problematic on the basis of the evidence before the court – Where costs order is made on a party-party basis as agreed or as assessed. |
| Family Law Act 1975 (Cth) s117 |
| Colgate-Palmolive v Cussons Pty Limited (1993) 46 FCR 225 |
| APPLICANT: | Ms Swarb |
| RESPONDENT: | Mr Swarb |
| FILE NUMBER: | PAF | 1593 | of | 2005 |
| DATE DELIVERED: | 17 December 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Stevenson J |
| HEARING DATE: | 13 September 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Batey |
| SOLICITOR FOR THE APPLICANT: | Kazi Portolesi Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Jackson |
| SOLICITOR FOR THE RESPONDENT: | Lamrocks Solicitors |
Orders
That, on a party-party basis, the husband pay the costs of the wife incurred as a consequence of his assertion that he held a 25 per cent interest, rather than a 40 per cent share, in real estate known as “C” in Country D and including the costs of the wife’s valuation of that property, with such costs to be in a quantum agreed or assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Swarb & Swarb has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: PAF 1593 of 2005
| Ms Swarb |
Applicant
And
| Mr Swarb |
Respondent
REASONS FOR JUDGMENT
the proceedings
The parties now remaining in these proceedings, Mr Swarb and Ms Swarb, have been embroiled in litigation since 2005. Their competing applications for alteration of property interests were listed for trial before me in 2009 but adjourned for a combination of reasons. The matter ultimately proceeded to trial before Coleman J in March 2011 and April 2013. His Honour delivered judgment and made orders on 3 May 2013.
The wife now seeks orders that the husband pay her costs of the proceedings on three alternate bases:
1.on an indemnity basis as and from 28 February 2006 in the amount of $385,791.98
2.on an indemnity basis as and from 28 February 2006 as agreed or assessed
3.on a party/party basis as and from 28 February 2006 as agreed or assessed.
I was not informed of the significance of the date 28 February 2006. The husband opposed making any order for costs in favour of the wife.
The Evidence
The wife relied on an affidavit with annexures and exhibits which totalled 453 pages and had a thickness of approximately 5 centimetres.…
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- AGLC
- Swarb and Swarb (No 2) [2013] FamCA 996
- Case
- [2013] FamCA 996
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was whether the wife should be awarded costs against the husband, and if so, on what basis. This involved an assessment of the conduct of the parties during the proceedings, particularly the husband's alleged failure to disclose accurate information regarding his real estate holdings and their value, and the wife's overall success in the substantive proceedings.
Stevenson J reasoned that the husband's conduct, specifically his initial failure to disclose the full extent of his interest and the realistic value of the property in Country D, and his persistent assertion of an inaccurate 25 per cent interest valued at approximately US$7,500 to US$9,000, had significantly impacted the proceedings. The court found that the husband's assertions were demonstrably inaccurate, with the property's true value ultimately being determined to be $460,000. This necessitated the wife obtaining her own expert evidence, thereby incurring additional costs. The court also noted that the husband only obtained his own expert valuation evidence at a very late stage.
Consequently, the court ordered that the husband pay the wife's costs on a party-party basis, specifically those incurred as a consequence of his assertion of a 25 per cent interest in the Country D property, rather than his actual share, and the costs of the wife's valuation of that property. The quantum of these costs was to be agreed or assessed.
Orders
Orders of the court
1.
That, on a party-party basis, the husband pay the costs of the wife incurred as a consequence of his assertion that he held a 25 per cent interest, rather than a 40 per cent share, in real estate known as “C” in Country D and including the costs of the wife’s valuation of that property, with such costs to be in a quantum agreed or assessed.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The written submissions on behalf of the wife summarised the nub of her case for costs as follows: Primary S.117(2A) considerations in this matter:-5.1 117(2A)(c) the conduct of the proceedings – in summary, the wife’s claim for her costs include the costs associated with the husband unduly prolonging the proceedings by failing to either initially disclose his real estate holdings, then by failing to attend to obtaining expert evidence from suitably qualified valuers – this failure applied to both his property in [Country D] and the extent he relied on family members to disguise his actual real estate holdings and their value.5.2 117(2A)(e) the wife being wholly unsuccessful – in the sense identified by the Full Court hereunder the husband was wholly unsuccessful in the Orders sought by him that he either pay to the wife a sum equal to 50% of the net equity in the [Suburb E] property or some lesser amount, or in the face of a denial by him of any substantial real estate holdings in [Country D], that he transfer his interest in the property in [Country D] to the wife.” The conduct of the husband of which the wife complained was summarised in the written submissions on her behalf as follows: 6. Conduct:-6.1 It is submitted that the following is relevant in relation to this factor:-6.1.1 The disclosure purported to be relied upon by the husband as to the husband’s assets was from the commencement of the proceedings to the hearing before Justice Coleman deficient in both is % interest and the value of that interest in what became known as “Lot [C]”.6.1.2 The husband’s maintenance throughout the trial – notwithstanding the evolving evidence by the wife and her expert as to the likely holding of the husband at greater than 25% - and a significant value of his share saw the husband maintain a 25% interest in the property with a value he attributed at between US$7,500 AND us$9,000.6.2 The approach taken by the husband to the conduct of the litigation was initially a failure to disclose the full extent of his property holdings in [Country D] or their realistic value.” (references omitted) Dealing firstly with the value of property C, I have referred above to comments made by Coleman J as to difficulties with the valuation evidence in the case for each of the parties. It was clear that his Honour preferred the evidence of the wife’s expert but not without significant misgivings. Until the commencement of the trial listed before me in March 2009, the husband asserted an inaccurate quantum of his interest in property C and an unrealistic estimate of its value. For example, in his Financial Statement of 27 November 2007 he ascribed a value of $8,554 to his interest in this property. In his Financial Statement of 6 March 2009 he asserted that he held a 25 per cent interest in this property, to which he attributed a value of $7,500. In my view, it beggars belief that proper enquiries by the husband would not have equipped him to make a more accurate assessment of the value of his interest in this property. It seems to me that the wife had no alternative but to obtain her own evidence as to the value of this asset. It is extraordinary that the husband asserted a value of $7,500 on the eve of a trial, yet the Court found the appropriate figure to be $460,000. I appreciate that the husband obtained his own expert valuation evidence but he did so only at a very late stage in the proceedings.