Tiernan and Tiernan and Ors

[2017] FamCA 600

FAMILY COURT OF AUSTRALIA

TIERNAN & TIERNAN AND ORS [2017] FamCA 600

FAMILY LAW – COSTS

Family Law Act 1975 (Cth)

APPLICANT: Mr L Tiernan

RESPONDENT: Ms Tiernan

2^ND RESPONDENT: Mr F Tiernan

3^RD RESPONDENT: Mr G Tiernan

FILE NUMBER: MLF 2364 of 2006

DATE DELIVERED: 7 July 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 7 July 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Devine

SOLICITOR FOR THE APPLICANT: Brooks Hall Lawyers

COUNSEL FOR THE RESPONDENT: In person

THE 2ND RESPONDENT:	No appearance
THE 3RD RESPONDENT:	In person

Orders

1. That each of the three respondents be jointly and severally liable for the applicant’s costs fixed in the sum of $7000.

2. That the reasons this day be transcribed and be placed on the court file.

3. That there be a stay of payment of one month.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Tiernan & Tiernan and Ors 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 MELBOURNE

FILE NUMBER:  MLF 2364 of 2006

Mr L Tiernan

Applicant

And

Ms Tiernan And Mr F Tiernan And Mr G Tiernan

Respondent, 2^nd and 3^rd Respondents

REASONS FOR JUDGMENT

1. This is an application for costs arising out of a proceeding that should never have been necessary.  This case has been going for at least 10 years and could only be described as an internecine war now involving a third generation of this family. 

2. In December 2016, in what could only be described as an arrangement that was suspicious, Ms Tiernan transferred some water right entitlements to the third generation, her two grandsons.  Only weeks later, the Court made an order that the water entitlements belonged to her former husband.

3. Nothing was mentioned in that January hearing about what had happened in December.  When the case was concluded, Mr Tiernan went to organize his lawful rights only to find that the transfer transaction had occurred as I have just described.  He then waited a short while and on 4 March, wrote to the grandsons who were then the holders of the water rights, explaining that they had no entitlement to them and those rights should be returned to him, failing which he would issue proceedings.  Nothing happened.

4. Mr Tiernan then decided the only way he could get his lawful rights was to take the matter back to court and he did so.  The grandsons were the legal holders of the water rights at that stage, so he had no alternative other than to seek to set the transactions aside.  The proceedings in this court were set down for 23 June.  Almost immediately prior to that hearing, an arrangement was made under which the water rights were transferred back to Mr Tiernan.  That solved the problem save as to costs.

5. The parties are to be commended by that stage, Mr Tiernan was out of pocket with his own lawyers for having to achieve what was ultimately accepted by his former wife, and indeed by his grandsons, as the correct position. 

6. When the matter came on for hearing before me on 23 June, there was no appearance by a lawyer on behalf of the grandsons and much of what I have indicated is what was told to me by Ms Tiernan.  Because Mr Tiernan’s application  for costs was the only reason the matter was then before the Court, I indicated that as it was going to be sought against the grandsons, they needed to be heard if they wanted to; hence the matter had to be adjourned.

7. To her credit, Ms Tiernan says she would have worn the responsibility and whilst some might take some comfort in that, Mr Tiernan’s position is that he already had a costs order against her.  He says she was impecunious to the point of being unable to pay and he doubted very much whether he would ever recover costs against her.  On the other hand, his two grandsons seem to be struggling young men who are trying to make their way in the world and don’t have any assets but, as I have observed today, any judgment debt which will be carrying interest from today onwards will be good for the next 15 years.

8. Section 117 of the Family Law Act provides that in proceedings under the Act, each party shall bear their own costs unless there are circumstances to justify a departure from that principle. If the Court finds such a justifying circumstance, it must then consider the matters set out in section 117(2A) of the Act. I have no doubt that the two grandsons are parties and although Ms Tiernan says they should never have been joined, it is hard to understand how the Court could have dealt with them otherwise, bearing in mind the proceedings were issued at a time where there had been no response by them to the letter from the solicitors for Mr Tiernan.

9. In my view, the very fact that nothing happened after 21 March and that precipitated the application, justifies a departure from the principle that each party pays their own costs. 

10. On the basis of the financial circumstances, one might conclude that no one other than Mr Tiernan has any money in this case but impecuniosity is not a basis not to make an order, it is simply a factor to take into account.  Ms Tiernan says that she has gone through the lawyer’s bill and it claims amounts of money relating to conferences that she says did not occur.

11. It seems to me that that is a matter between Mr Tiernan and his own lawyers.  The reality here though is that he will be out of pocket.  There is an application for indemnity costs, which is an order to cover all of the costs.  Because of the dispute just mentioned, that is a good reason here why an indemnity costs order should not be made.  I have no clear understanding of what actually happened but it seems to me that I can use the scale as a guide here, predominantly on the basis that the application had to be issued as a result of the non-compliance with the notice given in March 2017.

12. The saddest thing is that on 23 June, I made a suggestion that the parties sort out amongst themselves who was paying Mr Tiernan’s costs and, according to counsel for him today, there has been a deathly silence.  That is probably not surprising, having regard to the nature of the relationship of Ms Tiernan and her grandsons with her former husband and their grandfather.  In those circumstances, counsel had to come back again today to hear what the grandsons had to say.

13. In my view, this is a case where the conduct of the parties, which is the reference in section 117(2A), is a good indication that there is little cooperation to sort a problem out, which requires the Court’s intervention. In any event, Mr Tiernan will be out of pocket because his own lawyers are charging him above the scale. In my view, however, I can assess what costs should be incurred here by the respondents because I can determine most of the items and see where they fit within the scale.

14. The largest amount of costs here though relate to counsel’s fees.  She is charging slightly above the scale for the nature of the application.  On any view of the facts, however, Mr Tiernan should not be entirely out of pocket and the only reason I am not giving him all of his costs is because I accept he is probably in a financial position, stronger than at least his grandsons.  He already knows what his former wife’s position is. 

15. In my view, the appropriate amount of costs is a total of $7000 and I propose to make the order against all respondents on the basis that it is a matter for Mr Tiernan as to which, if any of those respondents he seeks to recover the costs from.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 7 July 2017.

Associate: 

Date: 15 August 2017