Trevi and Trevi (No 2)
[2015] FamCA 610
•29 July 2015
FAMILY COURT OF AUSTRALIA
| TREVI & TREVI (NO 2) | [2015] FamCA 610 |
FAMILY LAW – INTERIM FINANCIAL – substantive property proceedings initiated - Wife’s application for interim spousal maintenance – Husband’s application to adjourn wife’s application refused – Wife’s application for periodic interim spousal maintenance refused – Husband’s costs application for previous interim hearing on 13 February 2015 reserved for determination at final hearing.
| Evidence Act 1995 (Cth), s 140 Family Law Act 1975 (Cth), ss 72,74(1), 75(2), 79, 117(1), 117(2) and 117(2A) Family Law Rules 2004 (Cth), r 9.08(3) |
| Bevan & Bevan (1995) FLC 92-600 Mitchell & Mitchell (1995) FLC 92-601 Nutting & Nutting (1978) FLC 90-410 Redman & Redman (1987) FLC 91-805; 11 Fam LR 411 Kelly & Kelly (2) (1981) FLC 91-108 |
| APPLICANT: | Mr Trevi |
| RESPONDENT: | Ms Trevi |
| FILE NUMBER: | MLC | 8475 | of | 2014 |
| DATE DELIVERED: | 29 July 2015 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Thornton J |
| HEARING DATE: | 27 May 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr North SC |
| SOLICITOR FOR THE APPLICANT: | King & Wood Mallesons |
| COUNSEL FOR THE RESPONDENT: | Mr Bartfeld QC |
| SOLICITOR FOR THE RESPONDENT: | Kennedy Partners |
Orders
The wife’s application for spousal maintenance is dismissed.
The question of the husband’s costs of the hearing on 13 February 2015 be reserved.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Trevi & Trevi 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: MLC 8475 of 2014
| Mr Trevi |
Applicant
And
| Ms Trevi |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for costs brought by the husband regarding an interim hearing before me on 13 February 2015 where he was successful in obtaining orders for the removal of caveats from four properties and obtaining an order restraining the wife from lodging any further caveats on the titles to those properties.
The application for costs is opposed by the wife, who brings an application for interim periodic spousal maintenance.
On the morning of the earlier hearing the wife was granted leave by a Registrar to file a Response to the husband’s Application in a Case. In that Response the wife sought that the husband’s application be dismissed or in the alternative that it be adjourned to a further hearing after the husband’s compliance with orders for discovery.
In that Response, the wife also sought (in paragraph 6) that until further order the husband pay her the sum of $2,200 per week by way of periodic spousal maintenance payable from the date of the filing of the wife’s Response and any arrears accrued be paid to the wife within 48 hours of these orders. That part of the wife’s response did not proceed at the earlier hearing because she had only filed the Response that morning and it was not listed to be heard on that day. That application for spousal maintenance was ultimately adjourned to the same date as this hearing being 27 May 2015.
The remainder of the wife’s Response to the husband’s Application in a Case was dealt with by way of Consent Orders on 20 March 2015 and by way of a determination where judgment was delivered on 2 March 2015 regarding the caveats on the properties.
The determination of the application for removal of caveats is set out in my reasons for judgment published on 2 March 2015.
Adjournment application
The husband sought to adjourn the wife’s application for interim periodic spousal maintenance on the basis that the material filed in support of the wife’s Response takes the husband by surprise because the new material filed includes an application for a Departure order.
I accept that the material was filed late on the part of the wife in relation to both the Departure order application and the interim spousal maintenance application but I do not see that there is any prejudice that will be suffered on the part of the husband if the application for interim spousal maintenance proceeds today given the husband has had notice of the material that was filed previously in support of that application in February.
The wife’s recent statement of financial circumstances is essentially an updating of her financial position for the purposes of today’s hearing. There is no change to her income from the previous financial statement.
I accept the case argued on behalf of the husband that the wife’s application for a Departure order is premature. The late service of the wife’s Amended Response does not comply with r 9.08(3) of the Family Law Rules 2004 (Cth) (“the Rules”) which provides that all affidavits in a case started by an Application in a Case or a Response to an Application in a Case must be filed at least two days before the date fixed for the hearing. The original Response filed by the wife in February did not include an application for a Departure order, so there is a prejudice to the husband in that regard and he is entitled to make some response to that material.
In relation to the wife’s application for interim spousal maintenance there is no prejudice suffered by the husband as a result of the wife filing the Amended Response and Affidavit and Statement of Financial Circumstances. There should be nothing in that material which is not known to him. I refuse the husband’s adjournment application regarding the wife’s interim spousal maintenance application.
As a matter of fairness to the husband he must be given an opportunity to respond to the new aspect of the wife’s Amended Response which is the wife’s application for a Departure order.
On 27 May 2015, at the request of counsel for the wife, the wife’s application for a Departure order was adjourned to be heard together with the substantive property proceedings.
The Substantive Applications
In my reasons for judgment published 2 March 2015 I set out the wife’s Initiating Application filed 19 September 2014 seeking final orders. The wife has now filed an Amended Initiating Application on 25 May 2015 seeking the following final orders:
1.That there be such orders as to property settlement and/or periodic or lump sum spousal maintenance as this Court may deem appropriate.
2.That pursuant to ss 116(1)(b) and 117 of the Child Support (Assessment) Act 1989 there be a departure from the administrative assessment of child support payable by the husband to the wife with respect to the child, [J] born … 1999 (“the child”) such that the rate of periodic child support for the child shall be as this Court may deem appropriate.
3.That pursuant to ss 116(1)(b) and 124 of the Child Support (Assessment) Act 1989 the husband pay or cause to be paid such expenses by way of non-periodic child support for the child in addition to the periodic child support payable pursuant to order 2 hereof as this Court may deem appropriate.
4.That the wife be excused from particularising the orders sought by her pending discovery being completed and valuations being obtained.
5.Such further and other orders as the Court deems appropriate.
The husband’s Response filed 31 October 2014 sought the following final orders:
1.That there be such orders as to property settlement as this Court may deem appropriate, in the event that the Court first determines that it be just and equitable that there be any such order.
2.That the applicant’s application for spousal maintenance be dismissed.
3.Such further or other orders as the Court deems appropriate.
In the previous hearing during submissions counsel for the husband stated that the husband’s estimate of the parties’ net asset pool is about $10 million. Counsel for the wife submitted that the wife’s estimate of the parties’ net asset pool is between $11 and $12 million.
Background
The husband is 52 years of age and is a partner in a law firm. The wife is 50 years of age and is engaged in home duties. The parties were married in 1989 and separated in September 2008. They divorced on 8 June 2015 and there are three children of the marriage aged 21, 20 and 15 years. The adult children live with the father and the middle and youngest child spend time with the wife three nights per week.
The untested evidence of the wife[1] is that she has not been in the workforce since the children were born other than for a very short trial period where she was employed. She deposes to having been largely dependent upon the husband for financial support but that she has enrolled in a two year course at RMIT which may be extended for an additional year to obtain a higher qualification. She deposes to being in good health and has not re-partnered.
[1] Affidavit of the wife filed 13 February 2015
By agreement between the parties the former matrimonial home at E Street, Suburb F (“E”) registered in joint names, was sold for $10,799,000 and settled on 12 December 2014.
On the same date the parties entered into interim Consent Orders before a Registrar. Amongst other orders, the orders provided that the wife be paid $2,616,400 by way of interim property distribution and this was applied by the wife to purchase a property at G Street, Suburb F (“G”). The wife currently resides in that property which is unencumbered. The deposit for the purchase of that property was also paid to the wife from proceeds of the sale of E.
The Consent Orders also provided for the proceeds of the sale of E to be applied to various liabilities and a further payment of $31,600 to the wife with the net balance of the proceeds of sale being divided equally between the parties. Notations made on those orders are as follows:
(1)The husband and the wife both agree to the above orders without admission that the 50 per cent distribution to each of them of the balance of the monies in any way represents an appropriate division of the assets of the parties.
(2)The wife asserts that each party shall be at liberty to argue at the trial of these proceedings as to the characterisation of the payments made [from the proceeds of the sale of the former matrimonial home]. The husband does not agree to this assertion.
(3)In total the wife received $3,460,172.62 from the sale of E, including the purchase price of her current property, the payment of $31,600 to the wife and half of the balance remaining after discharge of bank debts and sale costs.
Standard of proof
The wife bears the onus of proof in her application for interim periodic spousal maintenance. The husband bears the burden of proof that there should be a departure from the general rule that each party bear their own costs.
The standard of proof is the balance of probabilities under s 140 of the Evidence Act 1995(Cth).
Spousal maintenance application
The matter proceeded by way of oral submissions from counsel and each party relied upon the material filed for the interim proceedings. Accordingly, the evidence remains untested and in determining this matter I have relied upon the facts which are agreed or not in issue.
The evidence
Evidence relied upon by the wife
The wife relied upon the following evidence in support of her Response to the husband’s Application in a Case:
· Affidavit of the wife filed 13 February 2015;
· Affidavit of the wife filed 25 May 2015;
· Financial Statement of the wife filed 13 February 2015;
· Financial Statement of the wife filed 25 May 2015.
Evidence relied upon by the husband
The husband relied upon the following evidence in support of his Application in a Case:
· Affidavit of the husband filed 18 March 2015;
· Affidavit of the solicitor for the husband filed 18 March 2015;
· Affidavit of the husband in support of his Application in a Case, filed 28 January 2015;
· Husband’s Financial Statement filed 2 March 2015.
Relevant Law
The right of a party to a marriage to spousal maintenance is found in s 72 and
s 74(1) of the Family Law Act 1975 (Cth) (“the Act”).
72Right of spouse to maintenance
(1) A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2)
...
74Power of court in spousal maintenance proceedings
(1) In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
The matters to be taken into account in relation to spousal maintenance are set out in s 75(2) of the Act. The following factors are relevant to the circumstances of this case:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)the commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
…
(f)the eligibility of the parties for an allowance or benefit under a superannuation fund or scheme; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
…
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
…
(n)the terms of the order made under section 79 in relation to:
(i)the property of the parties; and
…
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.
In Bevan & Bevan (1995) FLC 92-600, the Full Court of the Family Court of Australia outlined the four general principles (at 81,982) that an award of spousal maintenance requires:
a)a threshold finding under s 72;
b)consideration of s 74 and 75(2);
c)no fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit; and
d)discretion exercised in accordance with the provisions of s 74, with “reasonableness in the circumstances” as the guiding principle.
The wife’s interim application for spousal maintenance
In her Response to an Application in a Case filed 13 February 2015 at paragraph 6, the wife sought that the husband pay periodic spousal maintenance from the date of filing of the wife’s Response of $2,200 per week.
In her Financial Statement filed 25 May 2015 the wife deposes to income of about $200 per week, being bank interest and a total expenditure on herself and the children of $3,569 per week. There was no issue taken with the wife’s income which is earned from the proceeds of sale of the former matrimonial home which has been deposited in a bank account and the wife deposes that the amount in this account is $593,410 which has been reduced from the amount of $788,971 which was in her bank account on 12 February 2015. She deposes that the decrease in her bank account is due to the significant shortfall between her income and expenditure, legal costs or disbursements incurred and initial expenditure on repairs to her new home.
The wife deposes that whilst she has paid for some of the repairs to her new home there is a further amount of $186,000 for works to the property which she anticipates and other expenses including legal costs of about $100,000 and a payment of about $24,000 due for the balance of the purchase price of a new car. The wife deposes that she has arranged to trade in the minibus for a new Japanese 4WD on or around 28 May 2015. The value of the minibus in her financial statement is the amount she anticipates receiving for the trade in ($26,000) plus the cash deposit already paid on the 4WD ($1,000). She points to the fact that the husband has two motor vehicles which are valued at $38,000 and $178,000 whilst she has only one vehicle.
There is no dispute between the parties that there is a significant disparity of income and the husband does not assert that there is no capacity on his part to pay spousal maintenance. The husband does not assert that the wife is in a position to earn any income other than the interest she receives from the lump sum which she has invested.
The husband opposes the wife’s application for spousal maintenance on the basis that she cannot establish the threshold right to spousal maintenance under s 72 of the Act in that she cannot establish that she is unable to support herself adequately. He relies upon the fact that the wife is living in an unencumbered property which was purchased from the proceeds of sale of the former matrimonial home and valued at approximately $2.48 million, according to the wife’s own Financial Statement, and that she has income from the lump sum which is invested from which to draw for her weekly expenses. Counsel for the husband also asserted that some of the expenses outlined by the wife are unreasonable and entirely disproportionate given her living circumstances. Examples referred to include the sums she requires for maintaining the family pet, maintaining and cleaning her property, and paying for her educational expenses.
At issue here is whether the wife should be expected to deplete her cash reserves any further to pay her living expenses in circumstances where the husband has a surplus of income to meet his expenses and this allows him to save funds.
Counsel for the wife relied upon Mitchell & Mitchell (1995) FLC 92-601 (“Mitchell & Mitchell”) as authority for the proposition that the wife need not entirely deplete her capital in order to satisfy the statutory requirement. He conceded that the wife did have monies available to her but pointed to her weekly outgoings and the husband’s capacity to pay to support the wife’s application for maintenance.
At 81,995-6 the Full Court (comprising Nicholson CJ, Fogarty and Jordan JJ) stated that:
It is also necessary in determining this issue to have regard to the standard of living of the parties and the financial circumstances of the other person: s. 75(2)(b) and (g). The days are long gone when it is necessary for an applicant for maintenance to use up all of her assets and capital in order to satisfy the requirement that she is unable to support herself ''adequately''. Where the line is to be drawn will depend upon the circumstances of individual cases.
Counsel for the husband submitted that Mitchell & Mitchell, properly understood, is of assistance to the husband rather than the wife. He quoted the passage of Nicholson CJ, Fogarty and Jordan JJ, stressing that the question to be asked as a result of that dictum was: “out of the funds available to [the wife] now, is she in a position to support herself?” To which he submitted the answer was yes, with some heavy criticism of the wife’s stated weekly expenses.
Counsel for the husband pointed to correspondence between the parties’ solicitors demonstrating that at no stage had the husband refused to give the wife money to support herself. In any case, he submitted that the wife was more than capable of supporting herself using her cash reserves until final property settlement.
The husband is critical of the wife’s expenditure.[2] Should the wife establish the threshold for spousal maintenance, it would be a question of what is reasonable in the circumstances.[3]
[2] Affidavit of the husband filed 18 March 2015, paragraph 3.2(o)
[3]Nutting & Nutting (1978) FLC 90-410
Relying on the husband’s Financial Statement filed 2 March 2015, counsel for the wife points to income of the husband being $29,696 per week and expenditure of $23, 006 per week. Counsel for the wife argued that the surplus income of the husband is in fact between $6,690 and $11,456 per week at the time he swore his Financial Statement because his expenditure in reality is only $18,240 per week as he has not provided balancing figures by way of rental income or a reduction in his tax obligations for the “anticipated investment property expenses” which the husband listed in item 32 of his Financial Statement, for a property which he had not purchased at the time.
There have been issues between the parties regarding discovery which were not the subject of any application before me. The parties are continuing to have discussions about discovery generally.
I have disregarded the question of child support which remains in dispute between the parties as the wife asserts that assessment was made by the Child Support Agency on 8 April 2015 covering the period 12 March 2015 to 11 June 2016 requiring the husband to pay to the wife $201.16 per week in respect of the youngest child. The wife asserts that the husband filed an objection to the assessment on 5 May 2015. However before me in these proceedings, counsel for the husband asserted that the husband has withdrawn that notice of objection and the circumstances regarding child support remain unclear. This is a matter in issue between the parties which I cannot resolve for the purposes of the interim spousal maintenance application. While the youngest child does not live with the wife full time, there does not seem to be an issue between the parties that he regularly stays with the wife about three to four nights per week. It is this fact which I have taken into account.
Counsel for the wife argued that after payment of the anticipated expenses of the wife her capital holdings will be depleted to about $285,000. He submitted that the husband enjoys a comfortable standard of living with access to a luxury sports car, a renovated home and a relationship with a person who earns an income which the husband declines to reveal. There is an issue between the parties about whether the husband’s new partner resides with him and this cannot be resolved in an interim hearing. The parties continue to negotiate discovery.
Counsel for the wife also relied upon s 75(2)(j) of the Act in respect of the substantial contribution made by the wife to the husband’s income and income earning capacity during the long marriage. This issue is relevant to the factors under s 75(2) of the Act which I must consider in deciding if the wife is unable to support herself adequately.
Conclusion regarding spousal maintenance
The wife has received a part property settlement and purchased an unencumbered property for $2.4 million in which she resides. She is undertaking a course of study and has the youngest child staying with her for a number of nights during the week and on occasions her adult son during the week. She has an amount of $593,410 in her bank account but deposes to ultimately having that amount depleted by expenditure on works to her property, legal costs and paying the balance of the purchase price for a new motor vehicle. The balance in her account will then be depleted to about $285,000. This is not a case where the wife is caring for young children or has the permanent care of the youngest child who is 15.
Counsel for the husband does not challenge the capacity of the husband to pay spousal maintenance but counsel for the wife disputes the husband’s weekly expenses and there is also an issue about whether the husband has access to a corporate credit card. In Bevan & Bevan the Full Court of the Family Court outlined the general principles applicable to an award of spousal maintenance and the first principle is a threshold finding under s 72 of the Act.
I am not satisfied that the wife has proved on the balance of probabilities under s 72 that she is unable to support herself adequately by reason of having the care and control of a child of the marriage who has not attained the age of 18 years; by reason of age or physical or mental incapacity or for appropriate gainful employment; or for any other reason having regard to the factors referred to in s 75(2) of the Act. In Bevan & Bevan the court also stated there is “no fettering principle” that pre-separation standard of living must automatically be awarded where the respondent’s means permit. The shortfall referred to in the wife’s financial statement is not necessarily reasonable and it is a matter of degree as to when a sum of money should be quarantined for the purposes of financial security which might be less significant in circumstances where interim spousal maintenance is being considered.
While there is no obligation upon the wife to exhaust all her capital in order to be granted a maintenance order in her favour, she has over $700,000 immediately available to her according to her Financial Statement sworn 12 February 2015. At final property settlement she will receive what will be, on any account, a sizeable portion of a very large pool of assets. Considering the “circumstances of individual cases”, to quote the Full Court in Mitchell & Mitchell, in this case the wife has assets which can be put to her use for a significant period of time even on her calculation of her weekly expenses. I have placed some weight on the fact that this is an interim application.
In written submissions, counsel for the wife referred to the case of Redman & Redman (1987) FLC 91-805; 11 Fam LR 411 as authority for the proposition that an interim order is limited in time and requires consideration of the fact that “such an order is intended to be reconsidered”: at 76,081. The Full Court (per Evatt CJ, Lindenmayer and Nygh JJ) went on to state at 76,801 that:
...on an application for interim maintenance the court conducts ''not as final or exhaustive a hearing as would be the case if one were hearing the matter finally''. The evidence need not be so extensive and the findings not so precise. Having regard to those factors, and the general injunction of sec. 97(3), the court should in such matters have a greater degree of flexibility than it possesses in applications for maintenance which are intended to last for an indefinite period and can only be varied under sec. 83.[4]
[4] Citations omitted.
The capital expenditures referred to in the wife’s affidavit filed 13 February 2015 remain untested. Neither counsel sought to address me on this point, but I am unable to make a determination on them for the purposes of this decision.
On all the evidence for this interim application, I am not satisfied in the circumstances of this case that the wife has met the threshold test for spousal maintenance on the balance of probabilities and accordingly her interim application for periodic spousal maintenance is dismissed.
Costs of hearing the application in a case on 13 February 2015
The husband’s application for an order for costs against the wife for the hearing before me on 13 February 2015 is opposed by the wife.
Counsel for the husband submitted that there should be a departure from the usual rule that each party bear their own costs under s 117(1) of the Act. He relied for this proposition on the following factors:
· There can be no sensible contention that a costs order should be declined by reference to financial disadvantage on the part of the wife. She owns, unencumbered, a house with a value of approximately $2.5 million and has approximately $700, 000 in the bank. She asserts entitlement to further and additional property settlement in addition to those assets;
· The conduct of the parties in relation to the proceedings is relevant because of the delay on the part of the wife in responding to the husband’s Application in a Case filed 28 January 2015. The wife’s documents were filed on the very day the application was heard and the wife’s material failed to engage with the issue before the court. The correspondence annexed to the affidavit of the husband[5] sought to resolve the question of the caveats without recourse to litigation but the wife’s conduct and attitude necessitated the issue of the application and the contested interim hearing;
· The wife was wholly unsuccessful;
· The husband endeavoured to avoid proceedings through correspondence referred to in the annexures to his affidavit;
· Another relevant matter under s 117(2A)(g) of the Act is that the wife purported to have an interest in property which was described on the caveats as a “resulting implied or constructive trust” and as an interest which is capable of supporting a caveat. The caveats were registered by the Registrar on that basis but the wife in fact pursued an application under the Family Law Act 1975 (Cth) which was inappropriate for registration;
· The wife’s actions in lodging the caveats created a circumstance requiring relief discrete from any determination or alteration of property interest pursuant to s 79 of the Act. Accordingly costs should follow the event when the discrete application is commercial in nature;
· The listing of the husband’s Application in a Case was the only application listed on 13 February 2015 because the additional relief sought by the wife in her Response to the application was not referred by the Registrar for that hearing as the wife’s Response and Affidavit had only been served “after hours the evening before” accordingly the husband had not had the opportunity of responding to the wife’s other applications and those matters did not proceed on the day of the hearing. The hearing was confined to the question of the application for the caveats to be removed.
[5] Exhibit MAT4; MAT5; MAT6
Counsel for the wife argued that there is no reason to depart from the general rule that each party should bear their own costs under s 117(1) of the Act and to do so would be a conflation of the discretion in s 117(2) of the Act with the matters in s 117(2A) of the Act.
Counsel for the wife argued that there is a significant discrepancy between the parties’ respective financial positions which on its own is sufficient justification for declining to exercise the discretion. For that proposition he relied upon Kelly & Kelly (2) (1981) FLC 91-108. He emphasised that if the current situation persists, the wife will exhaust her savings well before a trial in approximately 12 months on living expenses and legal fees and any costs orders made against her will only exacerbate those difficulties.
Counsel for the wife argued that in considering matters under s 117(2A)(c) of the Act, the conduct of the wife was appropriate having regard to the following matters:
· The position the wife adopted in respect of the husband’s application was appropriate in view of precedent cases, albeit from lower courts, for example the judgment of Bryant CFM (as the Chief Justice then was) in W & D [2003] FMCA FAM 391;
· The wife, in her response to the husband’s application, was prepared for his application to be adjourned pending discovery, rather than dismissed;
· The conduct of the husband was inappropriate insofar as he failed to provide adequate discovery and remains non-compliant with his discovery obligations.
Counsel for the wife argued that a number of interim applications were “live” at the hearing on 13 February 2015 but that ultimately only the caveat issue was to be determined due to time constraints and the balance of matters were adjourned. It was submitted that the parties had to attend to receive directions in relation to these other matters and in the circumstances the costs of the day were not thrown away solely on the caveat issue.
Counsel for the wife submitted that if the court declined to dismiss the costs application, that the question of costs should be reserved to the trial Judge. This is because the caveat application is one of a panoply of applications which are intertwined with applications which the court will have to determine if the matter does not resolve.
The Relevant Law
The general rule is that each party should bear his or her own costs of proceedings under the Act. However, the Court is empowered to make an order for costs if it is of the opinion that there are circumstances which would justify such an order.[6]
[6] Family Law Act 1975 (Cth), s 117.
Section 117(2A) of the Act mandates the factors to which the Court must have regard in considering whether to make an order for costs. They are:
(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.
Conclusion regarding husband’s costs application for hearing on 13 February 2015
This might be a case where it would be appropriate to depart from the rule that each party bears their own costs under s 117(1) of the Act. The wife was put on notice by the husband’s solicitors about the need for the Application in a Case for removal of caveats and the question of costs and failed to deal adequately with the legal issues involved. The wife was wholly unsuccessful in resisting the husband’s application.
The wife’s application for interim spousal maintenance was not listed for hearing on 13 February 2015 but only for mention as there had been no opportunity for the husband to consider that part of the wife’s Response which had only been filed that morning. For these reasons I do not propose to dismiss the husband’s application for costs.
However the husband’s Application in a Case was heard in the context of complex property proceedings at a relatively early stage, further discovery is yet to be completed and had not been completed at the time of the hearing. There remain a number of unknown factors for consideration in a final hearing. The question of the parties’ interests in the investment properties which were the subject of the caveats is intertwined with the other aspects of the substantive applications. In these circumstances it is appropriate to reserve the question of the husband’s costs of the hearing on 13 February 2015 for determination by the trial Judge in the final hearing.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 29 July 2015.
Associate:
Date: 29 July 2015
Key Legal Topics
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Family Law
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Civil Procedure
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