Takahashi and Manichaeus and Ors - [2011] FamCA 198

FAMILY COURT OF AUSTRALIA

TAKAHASHI & MANICHAEUS AND ORS

[2011] FamCA 198

FAMILY LAW – COSTS – Whether there are exceptional circumstances justifying an order for indemnity costs

Family Law Act 1975 (Cth): s 117(1), s 117(2), s 117(2A)

Colgate‑Palmolive Co and Another v Cussons Pty Ltd (1993) 46 FCR 225
Davida & Davida (Costs) [2011] FamCAFC 61
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123
Hackshaw & Hackshaw [2010] FamCA 1123
JEL & DEF (No.2) (2001) FLC 93‑083
Manichaeus & Manichaeus [2010] FamCA 397
Munday v Bowman (1997) FLC 92-784
Penfold v Penfold (1980) 144 CLR 311
Steele & Stanley [2009] FamCAFC 39
Stephens & Stephens & Anor (Enforcement) (Costs) [2010] FamCAFC 172
Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029

APPLICANT:

Ms Takahashi (formerly Manichaeus)

RESPONDENT:

Mr Manichaeus

SECOND RESPONDENT

B Pty. Ltd.

THIRD RESPONDENT

Manichaeus Pty. Ltd.

FOURTH RESPONDENT

C Pty. Ltd.

FILE NUMBER:

CAC

857

2007

DATE DELIVERED:

25 March 2011

PLACE DELIVERED:

Canberra

PLACE HEARD:

Canberra

JUDGMENT OF:

Faulks ACJ

HEARING DATE:

18 November 2010

Written submissions of the applicant filed 13 December 2010
Written submissions of the respondent filed 13 December 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms A. Tonkin

SOLICITOR FOR THE APPLICANT:

Strong Law Pty. Ltd.

COUNSEL FOR ALL RESPONDENTS:

Mr D. Lardner

SOLICITOR FOR ALL RESPONDENTS:

David Lardner Lawyers

Orders

IT IS ORDERED THAT:

Within 30 days, the husband, Mr Manichaeus, either personally, or in his capacity as the director of the corporate entities comprising the Manichaeus Group (being the B Pty. Ltd., Manichaeus Pty. Ltd., C Pty. Ltd. which are the second, third and fourth respondents to these proceedings) will pay the sum of one hundred and seventy-five thousand ($175,000) to his former wife, Ms Takahashi (formerly Manichaeus) for costs.
All extant applications before the Court are dismissed.
The matter is removed from the Pending Cases Inventory.

IT IS NOTED that publication of this judgment under the pseudonym Takahashi (formerly Manichaeus) & Manichaeus (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 857 of 2007

Ms Takahashi (formerly Manichaeus)

Applicant

And

Mr Manichaeus

First Respondent

And

B Pty. Ltd.

Second Respondent

And

Manichaeus Pty. Ltd.

Third Respondent

And

C Pty. Ltd.

Fourth Respondent

REASONS FOR JUDGMENT

Introduction

Before the Court is an Application in a Case filed 11 August 2010 by the applicant wife, Ms Takahashi (formerly Manichaeus) (“the wife”), for costs. This arises following the conclusion of proceedings pursuant to s 79(1) of the Family Law Act 1975 (Cth) (“the Act”) which were first commenced by her in 2007.
The respondent husband is Mr Manichaeus (“the husband”); the second, third and fourth respondents are corporate entities which are or have been operated by him commercially (known collectively as “the Manichaeus Group”) which owned property of the parties beneficially.
In her application, the wife sought the following orders:

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] FamCA 198
Decision Date

CaseChat Overview and Summary

This case concerned an application for costs made by the applicant wife, Ms Takahashi, following the conclusion of proceedings under section 79(1) of the Family Law Act 1975 (Cth). The respondent husband, Mr Manichaeus, and three corporate entities operated by him, collectively referred to as the Manichaeus Group, were the respondents. The wife sought costs on an indemnity basis, as well as on a party/party basis, for both the substantive proceedings and the costs application itself. The husband sought his own costs, or alternatively, no order as to costs, and in the event he was ordered to pay some of the wife's costs, that such costs be on a party/party basis and exclude costs related to the involvement of ANZ Bank. The Family Court of Australia heard the matter.

The primary legal issue before the Court was whether there were exceptional circumstances justifying an order for indemnity costs, pursuant to section 117(2) of the Family Law Act 1975 (Cth). This required the Court to consider the various factors outlined in section 117(2A), including the financial circumstances of the parties, the conduct of the parties in relation to the proceedings, whether proceedings were necessitated by a failure to comply with previous orders, whether any party was wholly unsuccessful, and any offers to settle. The Court also had to determine the appropriate basis for any costs order, considering the general rule that parties bear their own costs under section 117(1) unless circumstances justify a departure.

The Court considered the case law regarding the exercise of discretion in awarding costs, particularly on an indemnity basis. It was noted that while section 117(2A) mandates consideration of specific factors, no single factor is determinative, and the Court's discretion is not limited to the enumerated factors. The Court acknowledged that the categories of circumstances that may enliven the discretion to award indemnity costs are not closed and do not require proof of collateral purpose or fraud. The Court also referred to the principle that section 117(2) overrides section 117(1) when justifying circumstances are found, and that a judge is not legally required to specify the circumstances justifying an order, although the inclusion of section 117(2A) places a greater obligation to give reasons.

Ultimately, the Court ordered that within 30 days, the husband, either personally or in his capacity as director of the corporate entities, would pay the sum of $175,000 to the wife for costs. All extant applications before the Court were dismissed, and the matter was removed from the Pending Cases Inventory.

Orders