Tappert & Tappert (No 2)
[2020] FCCA 3499
•23 December 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
Tappert & Tappert (No 2) [2020] FCCA 3499
File number(s): MLC 9629 of 2019 Judgment of: JUDGE MCNAB Date of judgment: 23 December 2020 Catchwords: FAMILY LAW – Costs – husband did not file response to wife’s application for costs – wife expended substantial costs by reason of the unreasonable conduct of the husband – costs fixed by the court Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Abdi v Equitable Financial Solutions Pty Ltd & Anor [2020] FCCA 2521
Tappert & Tappert [2020] FCCA 3107
Beach Petroleum NL v Johnson (No. 2) (1995) 57 FCR 119
Browne v Green (2002) FLC 93-115
Idoport Pty Ltd v the National Australia Bank Ltd [2007] NSWSC 23
In the Marriage of Greedy (1982) 8 Fam LR 669
Thompson & Finch & Ors [2020] FamCAFC 230
Number of paragraphs: 22 Date of last submission: 1 December 2020 Date of hearing: On the Papers Place: Melbourne Counsel for the Applicant: Ms K Paull Solicitor for the Applicant: WL Lawyers Counsel for the Respondent: Mr D Mort Solicitor for the Respondent: Vassis & Co ORDERS
MLC 9629 of 2019 BETWEEN: MS TAPPERT
Applicant
AND: MR TAPPERT
Respondent
ORDER MADE BY:
JUDGE MCNAB
DATE OF ORDER:
23 DECEMBER 2020
THE COURT ORDERS THAT:
The Respondent Husband pay the Applicant Wife’s costs fixed in the sum of $31,641.00 by 4.00pm on 16 February 2021.
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 under the pseudonym Tappert & Tappert (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MCNAB:
INTRODUCTION
On 18 November 2020 the Court entered judgment in this matter under the media neutral citation ‘Tappert & Tappert [2020] FCCA 3107’ (“the decision”), effectively in favour of the Wife. These reasons should be read in conjunction with the reasons set out in the decision.
In this matter, parenting orders were made by the Court with the consent of the parties.
The Court then had to determine the appropriate division of the asset pool. In delivering Judgment, the Court made orders for there to be a division of the asset pool of 64% to the Applicant Wife and 36% to the Respondent Husband. This constituted an adjustment of 14% in favour of the Wife.
In making orders for the division of the asset pool in the proceeding, the Court made further orders inviting the parties to make an application for costs as follows:
(10) The parties make any application as to costs with:
(a) any application for costs to be filed and served by way of submissions (which should include the quantum of costs) with such submissions to be filed within 14 days of the date of these orders, and to consist of no more than four A4 pages.
(b) any response to the application for costs to be filed and served by way of submissions within 28 days of the date of these orders and to consist of no more than four A4 pages.
(c) the question of costs, including the quantum of the costs, to be determined on the papers.
The Applicant made an application for costs by filing an Application in a Case on
1 December 2020, supported by further submissions filed on that date. The Respondent did not file a response to the Wife’s application for costs, pursuant to the orders set out above.
Judgment was reserved on 1 December 2020 and the Court must now determine the question of costs in this proceeding, including the quantum of those costs.
APPLICANT’S SUBMISSIONS
The Applicant seeks that the Respondent pay the Applicant’s costs fixed in the sum of $61,982, and for that amount to be paid on or before 16 February 2021 (being the day on which settlement of the property orders made by the Court on 18 November 2020 are due).
The Applicant submits at [2] of her submissions that the amount sought are calculated in accordance with the Family Law Scale of Costs and expressed inclusive of GST. The Applicant further submits that:
2. […]The fixed sum sought amounts to the costs associated with the Respondent’s conduct ($42,344), costs of this application ($2,763) and a portion of the costs otherwise incurred associated with the final hearing (50% or $16,875).
3. The following costs orders have been made in favour of the Applicant:
a. Costs for the directions hearing on 05 May 2020 reserved.
b. Costs for the interim defended hearing on 07 May 2020 reserved.
c. Costs for the interim defended hearing on 25 August 2020 awarded to the Applicant in a method to be determined at trial by Court Order dated 25 August 2020.
d. Costs thrown away at the listing on 02 December 2019, fixed in the sum of $500.
e. Costs thrown away at the Conciliation Conference, fixed in the sum of $2,000.
The Applicant’s application for costs is made pursuant to s117 of the Family Law Act 1975 (Cth) (“the Act”).
As to s117(2A)(a) the Applicant submits at [4(a)] that:
The parties’ differing financial circumstances including the Applicant’s significantly lower income and 100% care of the children, but also the Respondent’s control of the main financial resources available to the parties during the relationship and post separation. He withdrew $51,324 from the joint mortgage on 15 May 2019 without the Applicant’s consent or knowledge and withheld them from the Applicant together with significant savings to her financial distress. The Respondent further refused to cooperate with the agent appointed to sell the Applicant’s property so that she would be able to move away from the property next door to him.
As to s117(2A)(c), the Applicant variously submits at [4(b)] – [4(d)] that:
(1)the Respondent took active steps to hide approximately $250,000, following being served with the originating application in this proceeding, for which he did not disclose or discover. The Respondent’s conduct was only discovered due work done by the Applicant’s solicitor. The Respondent’s failure to make such discovery led to an increase in cost for the Applicant which should be given significant weight:
see Browne v Green (2002) FLC 93-115 at [54]. The failure also constituted the Applicant acting unreasonably by failing to produce documents or otherwise obstructed the Applicant, which should result in him being liable to contribute to the Applicant’s costs: see In the Marriage of Greedy (1982) 8 Fam LR 669 at [24];(2)there were four interim defended hearings/applications which were “necessitated by the Respondent’s conduct including his failure to abide by Court orders as to financial disclosure and interim property distributions to the Applicant.”;
(3)adequate financial disclosure by the Respondent did not occur until 3 June 2020, approximately 10 months after the originating application. This led to further cost due to Respondent’s conduct and delay, which included the issuing and inspection of subpoenaed documents; and
(4)the Respondent ignored correspondence from the Applicant’s solicitors and when corresponding with the Applicant’s solicitors did so inappropriately at times, by way of yelling and abuse.
As to s117(2A)(d), the Applicant submits at [4(d)] – [4(e)] that:
(1)the Respondent failed to properly consider a reasonable without prejudice offer made by the Applicant on 12 June 2020, failed to respond to the offer despite being represented at the time, and failed to attempt to compromise with the Applicant; and
(2)the Respondent’s position did not deviate until a few days prior to the Final Hearing, with that position being that the originating application should be dismissed, the children should live with the parties on an equal basis, and the Applicant should receive 45% of the property pool, save that parties retain their own superannuation entitlements (42.7% overall): see also Respondent’s Response filed on 24 January 2020.
On that basis, as well as on the basis of the Respondent’s other conduct as set out above, the Applicant submits at [6] that she had no opportunity to settle the proceedings, which precipitated the need for the proceedings. The Applicant further submits that:
The policy of the Family Law Act is to encourage conciliation, and the Respondent’s failure to take part in negotiations in a genuine manner contributed to delays and costs, and obstructed the proper resolution of the matter (In the Marriage of Greedy (1982) 8 Fam LR 669, [23]). It is submitted that it would therefore be appropriate for the Respondent to contribute towards 50% of the Applicant’s costs otherwise associated with bringing the application to a final hearing (which amounts to $16,875).
As to s117(2A)(e), the Applicant submits at [4(e)] that, in respect of the Respondent’s position, which did not change until a few days prior to the Final Hearing as set out above, the Respondent was wholly unsuccessful.
As to s117(2A)(f), the Applicant made the offer without prejudice on 12 June 2020 which would have amounted to the Applicant receiving approximately $84,107 more than what was ordered by the Court on 18 November 2020, and 60% of the asset pool: see Applicant’s submissions at [4(d)]. The Applicant made a further without prejudice offer to settle the question of costs on 19 November 2020: see Applicant’s submissions at [8]. The offer fixed the Applicant’s costs at $40,000, which were “expressly limited to the costs associated with [the Respondent’s] conduct”. The Respondent failed to respond to either offer and made no further attempt to compromise with the Applicant: see Applicant’s submissions at [4(d)], [8].
CONSIDERATION
The Court has a discretion to award a lump sum amount for costs without formal assessment or taxation: see Beach Petroleum NL v Johnson (No. 2) (1995) 57 FCR 119 at [120]. In fixing that sum, although the Court must act judicially in awarding a lump sum amount, the Court is not required to do so in any "scientific or formulaic manner": see Idoport Pty Ltd v the National Australia Bank Ltd [2007] NSWSC 23 at [10]; see also Thompson & Finch & Ors [2020] FamCAFC 230 at [52] – [53].
In Abdi v Equitable Financial Solutions Pty Ltd & Anor [2020] FCCA 2521, Judge Kelly stated at [56] – [57] that:
56. Part 21 of the Rules, which concerns the issue Costs provides, in Div 21.02, that an application to costs may be made at any stage in a proceeding and that in making an order for costs, the Court may set the amount of those costs, set the method by which they are to be calculated, refer the issue for taxation or set a time for their payment: r 21.02(1)-(2). Where the Court determines that the power to order costs is engaged and that it should exercise its discretion to do so, it is the invariable practice of the Court to fix costs: Alrjoob v Minister for Home Affairs [2018] FCA 1144 [20] (Collier J). There is no requirement, in either the Act or the Rules, that as a condition to the exercise of its discretion to award costs there should first be production of an itemised bill: AOJ15 v Minister for Immigration and Border Protection [2017] FCA 675, [44] (Burley J).
57. In fixing a lump sum for costs, the Court is to approach the task as one of estimation and assessment and not of arithmetic calculation or precision and is of a more broad brush approach than that which is to be taken upon taxation. Accepting those principles to be settled, the approach must be logical, fair and reasonable: Zaghoul v Jewellery & Gift Buying Service Pty Ltd [2020] FCA 1045, [172] (Banks-Smith J); see also BEL17 v Minister for Immigration and Border Protection [2020] FCA 1045, [26].
The Wife's cost submissions did not attach the written offer of settlement made by the Wife on 12 June 2020. Further, the orders of the Court made on 18 November 2020 did not deliver a benefit greater than the amount that the Wife offered to settle for by that offer.
The Wife has sought solicitor – client costs of the applications for disclosure and the costs of inspecting subpoenas ($42,344.29), 50% of the costs of the final hearing ($10,055.67), disbursements ($6819.72) and the costs of making this application for costs ($2763.05).
In my view, the Wife should receive 70% of the costs associated with the interim disclosure applications, being $29,641, and the costs of this application for costs, fixed in the sum of $2000. The Wife was put the expense of seeking to ascertain the asset pool in the face of nondisclosure by the Husband and by reason of the fact that $250,000 had been removed and hidden by the Husband. That removal of funds was discovered by the work of the Wife’s solicitor and, given the husband's uncooperative approach to all aspects of this litigation, the task would have been time-consuming and challenging. The applications before the Court were in large part necessitated by the conduct of the Husband.
However, parenting matters were also dealt with in the course of those applications and for that reason the Court will not make orders for the entire sums claimed by the Wife.
This is a case where the usual position in relation to costs, where each party should bear their own costs pursuant to s117(1) of the Act, has been displaced. The costs incurred by the Wife are out of the ordinary and were brought about by reason of the conduct of the Husband. I have regard to that conduct in considering this matter: see s117(2A)(c) of the Act.
I do not accept the Husband should bear 50% of the costs of the Final Hearing as there was nothing about how that hearing was conducted that added to the costs and the Husband was not wholly unsuccessful.
For these reasons, the Court will make orders that the Respondent Husband pay the Applicant Wife’s costs fixed in the sum of $31,641.00 by 4.00pm on 16 February 2021. This costs order takes into account costs already paid by the Husband in the course of the proceeding.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of Judge McNab. Associate:
Dated: 23 December 2020
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