Tritton and Poyzer (No 2) - [2011] FamCA 713

FAMILY COURT OF AUSTRALIA

TRITTON & POYZER (NO 2)

[2011] FamCA 713

FAMILY LAW - COSTS – between parties – application by the wife seeking costs on an indemnity basis – application by the husband seeking a portion of his costs – whether the circumstances justify the making of a costs order – consideration of s 117(2A) factors – where the wife alleges that the husband failed to make full and frank disclosure – where the husband alleges that some issues agitated by the wife at trial were unnecessary – where neither the husband or wife were wholly unsuccessful in the proceedings – where the circumstances justify the making of a costs order in favour of the wife – orders that the husband pay a portion of the wife’s costs – husband’s application dismissed.

Family Law Act 1975 (Cth) s117
Family Law Rules 2004 rr 1.04, 1.05, 1.06, 1.07 & 1.08

D & D (Costs) (No 2) (2010) FLC 93-435
Kohan & Kohan (1993) FLC 92-340
Oriolo & Oriolo (1985) FLC 91-653
Rouse & Rouse (1981) FLC 71-073
Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029
Z (a solicitor) & Limousin (2010) FLC 93-433
ZH & N [2005] FamCA 828

APPLICANT:

Ms Tritton

RESPONDENT:

Mr Poyzer

FILE NUMBER:

ADF

1063

2001

DATE DELIVERED:

8 September 2011

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Dawe J

HEARING DATE:

27 April 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Jordan

SOLICITOR FOR THE APPLICANT:

City East Legal

COUNSEL FOR THE RESPONDENT:

Ms Pyke, QC

SOLICITOR FOR THE RESPONDENT:

Randle & Taylor

Orders

The husband pay to the wife the sum of TWO HUNDRED THOUSAND DOLLARS [$200,000.00] on account of her costs, such sum to be paid within three [3] months.

IT IS NOTED that publication of this judgment under the pseudonym Tritton & Poyzer (No 2) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADF 1063 of 2001

Ms Tritton

Applicant

And

Mr Poyzer

Respondent

REASONS FOR JUDGMENT

Introduction

Both the applicant wife Ms Tritton and the respondent husband Mr Poyzer seek orders against the other for costs of the Family Court of Australia property settlement proceedings.

Orders sought

By Application in a Case filed on 3 September 2010, the wife sought orders:
“That the husband do pay the wife’s costs of and incidental to these proceedings (financial matters only) on an indemnity basis in such amount as the Court shall determine.”
On page seven of the cost submission filed on behalf of the wife on 7 March 2011 (document 412) the orders sought by the wife are as follows:
“The husband pay the wife’s costs of and incidental to these proceedings (financial matters only) on an indemnity basis and in the amount of $995,764 or otherwise as the Court shall determine.”
On 13 October 2010, the husband filed an Application in a Case which sought orders:
“1.That the wife do pay all costs and incidental to, or alternatively a proportion to be determined by this honourable court of the costs of and incidental to the following issues, incurred by the husband namely
·The assertion that I held an interest in [AA Service]
·The [Suburb E] property issues
·[L Corp] property alligations (sic)
·The [GG ] property alligations (sic)
·The Lot 50 [M] property issues
·The [Lot 20, M] property issues
·The wife’s credit card analysis issues
·The unnecessarily long cross-examination of [Mr I]
·The needless cross-examination of [Mr L]
·The unnecessarily lengthy examination of the UK issues
·The costs associated with the Superannuation Funds
·The unnecessarily lengthy examination of the expenses relating to the [P property], car expenses and the [Y and YY ] property
2.That the wife do pay all of the court attendance fees charged by the single expert witnesses [Mr S] and [Mr J].”
On page four of the Outline of the husband’s argument in favour of the order that the wife pay to the husband a percentage of the husband’s overall costs (document 413) filed on 7 March 2011 the husband seeks an order that the wife pay a portion of his costs fixed in the sum of $495,316.64.

Hearing

When final orders were made for property settlement and judgment delivered on 3 August 2010, the orders also included directions in relation to costs. The order provided that:
“(22)Any costs application by either party is adjourned to a date to be fixed upon the Court receiving any request in writing from either party provided such written request is forthwith served on the other party and is made to the Court before 3 September 2010.”
The wife filed her application for costs and initial supporting affidavit on 3 September 2010.
A further order was made on 30 September 2010 directing that the husband file any application and supporting affidavit in relation to costs he might seek within 14 days of 30 September 2010. On 29 October 2010, at an interim hearing before me, both parties indicated that more work was required to be done before any costs argument could be heard. The matter was therefore adjourned for a costs argument for hearing on 28 and 29 March 2011. Directions were made in relation to further documents to be filed.
At the request of both parties, a consent order was made in Chambers on 2 March 2011 extending the time for the parties compliance with paragraph 3 of my order made on 29 October 2010 to 7 March 2011.
When the matter was listed for hearing before me on 28 March 2011 the applicant wife was represented by Mr Jordan of Counsel. The husband was represented by Ms Pyke, QC of Counsel. On that date the matter was adjourned for further submissions to 27 April 2011. The father was ordered to file and serve further submissions by 4.00 pm on 8 April 2011 and the mother to file and serve a response by 4.00 pm on 15 April 2011. On 27 April 2011 further submissions were heard from both counsel. Judgment was reserved.
The parties relied on the applications in a case and affidavits in relation to costs with significant annexures to the affidavits. There are also detailed written submissions received by the Court from both parties’ counsel.

Background

Considerable detail is provided in the judgment delivered on 3 August 2010. For the purposes of the costs argument some of the significant details are as set out below.
The property settlement proceedings commenced in November 2001. There were also proceedings in relation to the child of the parties which were heard from time to time by Justice Strickland. Orders were made by him in relation to the child.
There were numerous interim applications and a substantial number of directions hearings in relation to the property settlement proceedings. The Court endeavoured to prepare the matter for final hearing, however, preliminary issues and interim matters delayed the listing.
Based upon counsel’s estimate that the trial would take 10 days, the matter was listed for final trial in November 2007. The matter was further listed and resumed part-heard over a period of years, concluding in June 2010, when the judgment which was delivered in August 2010 was reserved.
The applicant wife was represented for part of the trial by Ms Nelson, QC (with Mr Whittle). For part of the trial the respondent husband was represented by Ms Pyke, QC. For the balance of the trial the parties appeared unrepresented.
More detailed information concerning the background financial circumstances and issues are dealt with in the 97 page judgment delivered on 3 August 2010 which should be read together with this judgment.
Since the judgment was delivered the husband has filed an appeal to the Full Court from the orders made on 3 August 2010. There have also been subsequent hearings in relation to stay, child support, spouse maintenance and other matters.
The Full Court has not yet heard the appeal.

The Law

Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides:
Costs
(1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(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.
Rules 1.04 to 1.08 are relevant.
1.04Main purpose of Rules
The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.
NoteSection 43 of the Act sets out the principles that the court must apply when exercising its jurisdiction under the Act.
1.05Pre-action procedure
(1)Before starting a case, each prospective party to the case must comply with the pre‑action procedures, the text of which is set out in Schedule 1.
(2)Compliance with subrule (1) is not necessary if:
(a)for a parenting case -- the case involves allegations of child abuse or family violence, or the risk of child abuse or family violence;
(b)for a property case -- the case involves allegations of family violence, or the risk of family violence, or fraud;
(c)the application is urgent;
(d)the applicant would be unduly prejudiced;
(e)there has been a previous application in the same cause of action in the 12 months immediately before the start of the case;
(f)the case is an application for divorce;
(g)the case is a child support application or appeal; or
(h)the case involves a court's jurisdiction in bankruptcy under section 35 or 35B of the Bankruptcy Act.
Note 1The court publishes a brochure setting out the pre‑action procedures for financial cases and parenting cases.
Note 2The court may take into account a party's failure to comply with a pre‑action procedure when considering whether to order costs (see paragraph 1.10 (2) (d)).
Note 3Subsections 60I (7) to (12) provide for attendance at family dispute resolution before applying for an order under Part VII of the Act in relation to a child.
1.06Promoting the main purpose
The court must apply these Rules to promote the main purpose, and actively manage each case by:
(a)encouraging and helping parties to consider and use a dispute resolution method rather than having the case resolved by trial;
(b)having regard to unresolved risks or other concerns about the welfare of a child involved;
(c)identifying the issues in dispute early in the case and separating and disposing of any issues that do not need full investigation and trial;
(d)at an early stage, identifying and matching types of cases to the most appropriate case management procedure;
(e)setting realistic timetables, and monitoring and controlling the progress of each case;
(f)ensuring that parties and their lawyers comply with these Rules, any practice directions and procedural orders;
(g)considering whether the likely benefits of taking a step justify the cost of that step;
(h)dealing with as many aspects of the case as possible on the same occasion;
(i)minimising the need for parties and their lawyers to attend court by, if appropriate, relying on documents; and
(j)having regard to any barriers to a party's understanding of anything relevant to the case.
1.07Achieving the main purpose
To achieve the main purpose, the court applies these Rules in a way that:
(a)deals with each case fairly, justly and in a timely manner;
(b)encourages parties to negotiate a settlement, if appropriate;
(c)is proportionate to the issues in a case and their complexity, and the likely costs of the case;
(d)promotes the saving of costs;
(e)gives an appropriate share of the court's resources to a case, taking into account the needs of other cases; and
(f)promotes family relationships after resolution of the dispute, where possible.
1.08Responsibility of parties and lawyers in achieving the main purpose
(1)Each party has a responsibility to promote and achieve the main purpose, including:
(a)ensuring that any orders sought are reasonable in the circumstances of the case and that the court has the power to make those orders;
(b)complying with the duty of disclosure (see rule 13.01);
(c)ensuring readiness for court events;
(d)providing realistic estimates of the length of hearings or trials;
(e)complying with time limits;
(f)giving notice, as soon as practicable, of an intention to apply for an adjournment or cancellation of a court event;
(g)assisting the just, timely and cost‑effective disposal of cases;
(h)identifying the issues genuinely in dispute in a case;
(i)being satisfied that there is a reasonable basis for alleging, denying or not admitting a fact;
(j)limiting evidence, including cross‑examination, to that which is relevant and necessary;
(k)being aware of, and abiding by, the requirements of any practice direction or guideline published by the court; and
(l)complying with these Rules and any orders.
(2)A lawyer for a party has a responsibility to comply, as far as possible, with subrule (1).
Note The court recognises that a lawyer acts on a party's instructions and may be unable to establish whether those instructions are correct.
(3)A lawyer attending a court event for a party must:
(a)be familiar with the case; and
(b)be authorised to deal with any issue likely to arise.
NoteThe court may take into account a failure to comply with this rule when considering costs (see subrule 19.10 (1) and subclause 6.10 (1) of Schedule 6).
(See Z (a solicitor) & Limousin (2010) FLC 93-433).
In Yunghanns & Ors & Yunghanns & Ors & Yunghanns (2000) FLC 93-029, the Full Court referred to the decision of Kohan & Kohan (1993) FLC 92-340 confirming that an indemnity cost order is a departure from the normal standard and said at 87,471:
“It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought. All that is required is that the Court asked to exercise the discretion be satisfied that some “particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party and party basis”: per Shepherd J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233.”

In ZH & N [2005] FamCA 828 the Full Court of the Family Court of Australia considered the previous authorities. Bryant CJ, with whom Coleman & May JJ agreed, said at paragraph 13, 14, and 17:
“13.In Roth v Quinn [2005] FamCA 6, an unreported judgment of the Full Court delivered on 6 January 2005, the Court considered the question of indemnity costs. In that case their Honours referred to the decision of the Full Court in JEL v DDF No 2 (2001) FLC 93-013 at 88,441-2, where the Full Court said:
The category of cases in which it would be appropriate to make an order for indemnity costs does not appear to have been fully defined. The Full Court has, however, set out some general principles.
14.I do not intend to repeat the long quote from JEL v DDF that their Honours then referred to; suffice it to say that that case considers a number of authorities, including the well-known case of Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; (1993) 118 ALR 248, a number of Federal Court authorities, Family Court authorities, including Yunghanns v Yunghanns (2000) FLC 93-029 where again the Full Court specifically acknowledged the category of cases that may give rise to an indemnity order not being closed. At page 87,471 the court in Yunghanns said as follows:
It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought. All that is required is that the court asked to exercise the discretion be satisfied that some particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party-party basis (per Sheppard v Day and Colgate Palmolive Co v Cussons Pty Ltd).
…
17.I would, for my part, be prepared to infer on that basis that the appeal was instituted as a delaying tactic. But in any event, it is not necessary, as the Full Court in Yunghanns said, that some collateral purpose be established. I am satisfied, for my part, that there are particular facts and circumstances in this case in the nature of the appeal and its subsequent abandonment that warrant the making of an order for the payment of costs other than on a party-party basis. Having regard to the matters in section 117(2A) of the Act, I am satisfied from the concessions made by the appellant that the financial circumstances of the appellant are sufficient to warrant an order for costs, that neither party is in receipt of legal aid, that the conduct of the appellant in the filing and subsequent discontinuance of the appeal is a relevant matter. In particular, under subsection (g) the nature of the appeal itself is also a relevant matter.”
The Full Court further discussed these issues in D & D (Costs) (No 2) (2010) FLC 93-435.
Counsel for the husband relied upon the decision of Rouse & Rouse (1981) FLC 91-073 in the context of the wife’s “unsuccessful pursuit of undisclosed assets”. That case can be distinguished because of the findings I made in this judgment which supported the wife’s concerns about issues of disclosure.

Summary of submissions

The wife filed a document in excess of 30 pages in March 2011 setting out the costs submissions on her behalf. Annexed to this was a schedule summarising costs in excess of $1 Million of which approximately $78,000 was attributed to children’s issues.
That document comments on each of the factors in s117 (2A). Primarily the wife relies upon the husband’s failure to make full and frank disclosure of his financial position and dealings and the consequential need to issue subpoenas, call witnesses and cross-examine the witnesses at considerable length.

The husband’s current solicitors, Randle & Taylor, filed a short outline of argument in relation to the husband’s claim for a percentage of his costs on 7 March 2011. That outline maintained that a vast amount of the legal work which the husband “was put to by the wife” was “unnecessary or out of all proportion to considering its relevance to the resolution of financial issues between the parties”.
The husband relied upon an assessment by his staff member, Ms O, of the alleged percentage of time spent in the Court in dealing with various issues. The husband complained of the cost spent by him in relation to the issues “[Suburb E]/[Mr A], [Mr D]/[GG property], [L Corporation], Superannuation Fund, [Mr W]/[Lot 20, M]”.
The husband’s counsel also filed a 39 page submission on behalf of the husband in response to the wife’s submissions for costs. This document filed on 11 April 2011 contained a substantial chronology together with a document referred to as “Relevant Findings Justice Dawe”.
The wife also filed a response to the husband’s costs submissions on 13 April 2011.

Discussion and findings
(a) Husband’s application for percentage of his costs

The husband seeks a proportion of his costs in relation to particular topics on the basis that the work and time at the trial spent on certain issues was unnecessary.
The topics relied upon in this regard are as follows:
·    Suburb E/Mr A
·    Mr D
·    L Corporation
·    Superannuation Fund
·    Mr W
·    The Y and YY properties
·    AA Service
The “[Suburb E/Mr A]” topic is dealt with at length in particular in the judgment commencing at paragraph 310.
Paragraphs 321 to 323 of the judgment state:
“321.During cross-examination the husband admitted that he had invoiced tenants of [E Street, L] on behalf of the [Adelaide Business Centres] until a short time before the trial commenced.
322.The evidence, in particular exhibits, disclose the payment by the husband, usually through [Tritton] Properties accounts, of expenses in relation to both developments and detailed correspondence between various businesses associated with both developments. The evidence clearly establishes the significant involvement of the husband in arrangements for planning, consent and development of the projects. The evidence also indicates the husband’s primary role in setting-up the companies and trusts which became the owners of the ventures.
323.The evidence and the exhibits disclose the husband’s failure to discover significant documents in relation to the developments, in particular the [O Street, L] development, even when repeated requests for full disclosure were made on behalf of the wife.”
These findings are significant in the context of determining the question of costs on those issues.
Also in this context of costs paragraphs 343, 344, 347 and 352 should be considered:
“343.The evidence of [Mr A] is not entirely consistent with the evidence of the husband. The husband’s evidence suggested his involvement with the development of [E Street, L] was considerably more than that of [Mr A].
344.The evidence of the husband, when considered carefully with the evidence of [Mr A], indicates that the husband had a substantial involvement in both ventures assisting [Mr A] to a considerable degree. There were detailed, completed negotiations in relation to the husband having options to purchase a significant share of the developments at a cost, plus interest basis.
…
347.The husband has spent money and considerable effort in relation to both the [E Street, L] and [O Street, L] developments. The evidence also raises a strong inference that the husband did not execute documents which would have confirmed his legal interest in the properties because of his concerns about the need to disclose them in these property settlement proceedings.
352.The husband’s involvement in the ventures, payments made and negotiations and preparations for the possible options (together with ongoing failure of the husband to disclose documents until the persistent efforts of the wife) indicate that the wife was justified in raising these issues.”
Under the heading “[GG Property]” in paragraphs 355 to 377 of the judgment some of the “[Mr D]” issues are considered. In particular paragraphs 374 to 377 clearly support the efforts of the wife in raising this issue in the proceedings. In particular paragraph 376 states:
“376.The Court is satisfied that the evidence and the involvement of the husband in the [GG] property was sufficient to form a basis for the considerable concerns held by the wife about a possible interest of the husband in this property.”
The “[L Corporation]” topic presumably is a reference to the beneficial ownership of the units in the L Unit Trust. The relevant sections of the judgment are contained in paragraphs 230 to 236. In particular paragraph 232 says:
“232.The evidence of the husband in relation to [Mr D’s] involvement in the [L] Unit Trust was unsatisfactory and not convincing. The significant benefit to [Mr D] and related subsequent loss to the [Poyzer] Group’s interest in the [S] venture is a loss attributable to the actions of the husband if the transactions were indeed genuine.”
The “Superannuation Fund” topic is dealt with in the judgment in paragraphs 237 to 270. Those findings indicate that the husband purchased and developed a property which resulted in the Superannuation Fund incurring a significant loss. It is also clear from those paragraphs of the judgment that there was a finding that the old superannuation fund was not compliant. Paragraphs 260, 261, 262, 268 and 269 of the judgment state:
“260.The evidence before the Court indicated that the husband attempted to obtain funds from the wife to meet the interest which might otherwise be payable by the Family Trust to the old superannuation fund. He did this after he had removed all of the other assets from the old superannuation fund to the new superannuation fund.
261.The wife did not cooperate with the request from the husband. In the circumstances her concern about the husband’s treatment of the old superannuation fund was justifiable.
262.The actions taken by the husband in dealing with the old superannuation fund and providing information to the auditors and the taxation authorities without the consent of the wife makes it appropriate that the husband bear the consequences of any decision about penalties upon the old superannuation fund or the trustees. The wife has been seeking to resign as a trustee from the old superannuation fund.
…
268.The actions of the husband in refusing to manage the group in a manner which would allow for the Family Trust to make the appropriate interest payments to the superannuation fund is such that the husband should bear the consequences of and indemnify the wife for any liability arising out of his failure.
269.It is therefore appropriate to bring into account the valuation of the superannuation funds in accordance with the figures assessed by [Mr J] as at 30 June 2008 namely, the husband’s interest in the old fund $377,316, the wife’s interest in the old fund $110,967 and the husband’s interest in the new fund $512,819.”
The judgment does not support any finding that the evidence in relation to the superannuation issues raised by the wife was unnecessary.
The “[Mr W]” topic. Apart from work carried out by Mr W on properties in which the husband had an interest, there was also an issue in relation to Lot 20, M. The husband maintained that Lot 20, M was sold to Mr W for an appropriate figure. Mr W’s evidence is dealt with in relation to the issue of Lot 20, M development in paragraphs 378 to 391 of the judgment.
Relevant paragraphs of the judgment in particular are paragraphs 386 to 391:
“386.The husband’s evidence was that he spent some time (he says less than an hour a week) in relation to the [M] development. He says that his involvement was consistent with his role over the years in the way he practised as a developer. His decision was that it was not a profitable venture and he decided not to proceed with it. He maintained that the evidence of [Mr W] (his witness) was incorrect or confused so far as it related to the profit which [Mr W] made.
387.[Mr W] gave evidence in a straight-forward fashion. The evidence of the substantial profit was clear and uncomplicated.
388[Mr W’s] evidence confirms that the husband spent considerable time and effort which assisted [Mr W] in making his profit.
389.The evidence does not establish on the balance of probabilities that the husband now has an enforceable claim against [Mr W] or had an enforceable equitable interest in the properties, notwithstanding the amount of time, expertise, effort and financial commitment provided by the husband.
390.The evidence uncovered by the wife justified her concern about the possible hidden asset.
391.The failure of the husband to make appropriate arrangements to benefit from his contribution to the [M] development by [Mr W] is a factor to be brought into account.”
The “[Y and YY Property]” topic. In the judgment paragraphs 113 to 126 deal with the issue “[Y and YY Property”. The husband asserts that this issue took up five per cent of the trial. The judgment indicates the Court took into account the benefit the husband received from the property as well as the work on the property (see paragraph 125).
The “[AA Service]” topic. The written submissions of the husband are based on Ms O’s analysis that five per cent of the trial was taken up in relation to the issue of AA Service. This topic is dealt with in paragraphs 303 to 306 of the judgment. The sum of $10,000 was not categorised as an asset but treated as income. This is an insignificant issue in the overall consideration of the question of either party’s costs.

Conclusion on husband’s claim for 80 per cent of his costs

The judgment indicates that the topics referred to by the husband as unnecessary were in fact appropriate and necessary topics for consideration by the Court. The husband has failed to establish any basis upon which the topics considered prior to the trial, and during the trial, should be deemed “unnecessary”. The judgment indicates to the contrary.
The significant factors under s117 (2A) in relation to the husband’s claim for costs against the wife are the factors in sub-sections (a), (c) and (e). The financial circumstances of the parties are referred to in the judgment and the subsequent Statements of Financial Circumstances. What is significant in relation to the claim by the husband is that the husband is unable to establish that the wife has been wholly unsuccessful in relation to these topics. Portions of the judgment to which reference has already been made indicate that the wife was successful in justifying the litigation on the relevant issues.
The husband failed to establish any ground upon which a costs order against the wife would be just.
The husband’s application for costs against the wife is therefore dismissed.

(b) Wife’s application for costs

The wife’s submissions on the factors to be considered by the Court were presented in detail in the written submissions.

(a) the financial circumstances of each of the parties to the proceedings.

In relation to the financial circumstances of the parties the submission correctly refers to the findings in the judgment as to the financial circumstances of the parties, but submissions also included the proposal that less regard should be paid to the husband’s financial position “less the payer be rewarded for his misconduct”.
The wife maintained that the husband retained sufficient assets and accessible superannuation entitlements to support a costs order being made against him.
The wife’s summary of her financial position indicated that she had the property at N, a motor vehicle, furniture and household effects and some savings of approximately $39,000, together with the expected payment due pursuant to the Family Court Judgment (being $414,657) but had remaining legal fees payable in excess of $285,000 and an estimated unbilled costs of $18,000.
The husband has health issues but has capacity to continue to receive an income from the businesses and assets he has retained. The wife has been offered employment as a clerk at the conclusion of the Family Court 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.

Neither of the parties have been in receipt of any legal aid.

(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, admission of facts, production of documents and similar matters.

The wife maintains that the husband failed to comply with his duty to make full and frank disclosure of the matters relevant to the financial proceedings. In this regard the following paragraphs of the judgment are significant:
“213.The sale of the unit to [Mr K] was not a sale on the open market. The husband’s delay in promptly disclosing the full details raises serious questions about the husband’s behaviour to the extent that it justifies the concerns of the wife. An open market sale however would have incurred some costs. It is therefore not appropriate to bring into account the further sum of $15,000.
…
218.The evidence of the husband, his reticence and avoidance in relation to the transactions concerning [S property] were a justifiable basis for the wife’s concerns about the veracity of his claims in relation to the [S] ventures.
…
231.The investment of [Mr D] and the transactions between the husband and [Mr D] concerning the [L] Unit Trust certainly call into question the practical or financial benefit to the husband of these transactions and raise serious questions about the genuine nature of [Mr D’s] interest. For an initial contribution of $17,813.76 (some 10 months after the shares were transferred to him) [Mr D] received $68,986 from the sale of unit 3, $58,369 from the sale of Unit 4 and $72,572 for the purchase of his remaining interest in the Unit Trust.
232.The evidence of the husband in relation to [Mr D’s] involvement in the [L] Unit Trust was unsatisfactory and not convincing. The significant benefit to [Mr D] and related subsequent loss to the [Poyzer] Group’s interest in the [S] venture is a loss attributable to the actions of the husband if the transactions were indeed genuine.
…
261.The wife did not cooperate with the request from the husband. In the circumstances her concern about the husband’s treatment of the old superannuation fund was justifiable.
262.The actions taken by the husband in dealing with the old superannuation fund and providing information to the auditors and the taxation authorities without the consent of the wife makes it appropriate that the husband bear the consequences of any decision about penalties upon the old superannuation fund or the trustees. The wife has been seeking to resign as a trustee from the old superannuation fund.
…
276.The wife submits that the sale to [Mr F] “is and was always a sham”. (Page 62 of her submissions). The evidence relating to the history of transactions and disclosure of the husband’s dealings formed a basis for the wife’s reasonable concerns. However, the Court is unable to declare the transactions false.
…
323.The evidence and the exhibits disclose the husband’s failure to discover significant documents in relation to the developments, in particular the [O Street] development, even when repeated requests for full disclosure were made on behalf of the wife.
…
352.The husband’s involvement in the ventures, payments made and negotiations and preparations for the possible options (together with ongoing failure of the husband to disclose documents until the persistent efforts of the wife) indicate that the wife was justified in raising these issues.
…
363.In January 2008 the wife attended the [M Centre] and discovered for the first time a file in relation to the [G] properties which had not previously been made available. This file contained evidence in relation to the [GG] property.
…
374.All the evidence in relation to the husband’s dealings with [GG property] support a conclusion that the husband initially proposed to have an arrangement whereby he would be rewarded for his efforts, but determined to avoid any written or legally binding record of his claim due to his involvement in the Family Court proceedings. The evidence established that he put considerable time and effort into the [GG] property.
…
376.The Court is satisfied that the evidence and the involvement of the husband in the [GG] property was sufficient to form a basis for the considerable concerns held by the wife about a possible interest of the husband in this property.
…
390.The evidence uncovered by the wife justified her concern about the possible hidden asset.”
There are other examples of the husband failing to provide discovery or making claims without providing the usual documents, for example, renovation costs and travel costs (judgment paragraphs 138 and 140), and funds held overseas (paragraph 95 of the judgment).
The submissions of the wife in relation to the time spent on evidence of the parties and the witnesses are detailed. In summary the wife argues that the length of trial was brought about by the behaviour of the husband. Notwithstanding the extraordinary length of the trial, and in parts the lengthy cross-examination of the witnesses, the wife maintains that the cross-examination of the witnesses called by the husband was brought about primarily because of the husband’s failure to disclose and his evasive behaviour.
Although the evidence of Ms O which related to the credit card expenditure was initially relied upon by the husband, such evidence when subject to detailed cross-examination brought about a situation in which the Court determined in the judgment at paragraph 513:
“513.Taking into account the evidence of the husband, the wife, [Ms O] and [Mr I], I am satisfied that the wife has established a significant basis to reject the accounts kept by or on behalf of the husband in relation to the drawings attributed to the wife. The husband has failed to establish that the figures which are provided in the accounts are sufficiently reliable for the Court to accept that they represent benefits received by the wife.”
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

Not applicable other than as referred to in relation to discovery and disclosure issues discussed previously.

(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings

The wife maintains that the husband’s failure to provide prompt and full disclosure prevented her from making any settlement offer to the husband. On behalf of the wife it is maintained that she was more successful than the husband. The wife asserts that the husband was generally unsuccessful in several of the matters which he put to the Court.
The husband correctly asserts that the wife was unsuccessful in establishing all of her claims about the husband’s assets and financial position.

(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

It was conceded that there had been no filed offers made in the proceedings. The wife again maintains that this was because she was unable to determine the true net asset pool because of the husband’s failure to make full disclosure.

The husband maintained that any asserted failure to disclose material was overcome by the fact that, when the trial commenced in November 2007 “virtually all relevant documents were within the possession and control of the wife through the subpoena and discovery process” (page 7 the husband’s submissions). However the husband had an obligation to make full disclosure. (Oriolo & Oriolo (1985) FLC 91-653).
Although in the judgment the disputed asset pool did not conform to the wife’s submissions, there were significant allowances made because of the assertions by the wife about the acceptability of the husband’s evidence and claims.
On behalf of the husband it was maintained that the proposal made by the husband was substantially closer to the sum awarded than the sum which the wife sought.
In the judgment the wife was successful on some issues however was unsuccessful in maintaining some of the claims.

Summary and conclusion

The significant factors in relation to these costs proceedings are the following:
(1)the financial circumstances of the parties;
(2)the significant findings by the Court about the husband’s financial dealings and disclosure which supported the wife’s investigations and concerns about the husband’s declared asset position;
(3)some of the claims made by the wife in relation to assets to be considered as the husband’s property, add-backs and other financial adjustments which were not supported in the judgment.
The provisions of s117 emphasise that if there are circumstances which justify the Court in making a costs order, it may make such order as the Court considers just.
Taking into account the findings in the judgment in relation to the husband’s failure to provide full disclosure and the unreliable nature of some of the evidence of the husband, I accept that there are circumstances in this matter which would justify the Court making an order for costs in the wife’s favour. The Court is required however to consider what order should be made having regard to the financial circumstances of the parties, the conduct of the parties to the proceedings and whether any party to the proceedings has been wholly unsuccessful in the proceedings. (See s117(2A)(a), (c) and (e)).
Each of these factors has some relevance to the application for costs by the wife. The husband has not been wholly unsuccessful in the proceedings as he was successful in defending some of the claims by the wife. The financial circumstances of the parties indicate that both have incurred significant costs in these proceedings. On the findings made by the Court the husband does not have significant assets from which he could readily make payment of a large amount of costs to the wife.
The conduct of the parties to the proceedings however is such that the wife has established a claim for costs.
It is necessary for the Court to exercise its discretion taking into account all of the significant factors.
The wife has not established a basis for an order that the husband pay all of her costs of the proceedings from the commencement to the conclusion of the trial nor do the circumstances of this case justify an order for costs on an indemnity basis.
The Court is however satisfied that the wife has established circumstances which justify making an order for costs representing a proportion of the costs incurred by her.
An order that the husband pay a fixed sum will save both parties further costs of assessment and taxation of costs.
The Statement of Financial Circumstances filed by the husband on 20 October 2010 (document 396) indicated that the husband had an estimated income of $2,500 per week from the M Centre business. That document described most of the husband’s assets and liabilities as “as per court findings”. His description of his total assets, including his superannuation, was in excess of $2 Million with his estimated liabilities at $1,390,949.
The husband’s liabilities include an estimated $668,000 payable by him pursuant to the property settlement order which is the subject of his appeal.
Paragraph 552 of the judgment of 3 August 2010 stated:
“552.The husband would retain net assets (after taking into account the “add-backs”) totalling $1,548,272.”
The wife’s Statement of Financial Circumstances filed on 15 October 2010 (document 395) set out her total assets as $1,356,735, superannuation $725 and liabilities of $540,591.
The assets of the wife included the amount of $668,000 which was payable to her pursuant to the judgment which is the subject of the appeal.
Taking into account all of the factors discussed above, it is established that it is just for an order to be made that the husband pay the wife a portion of her costs in relation to the proceedings. This portion takes into account the need to remove costs incurred in relation to proceedings concerning the child of the parties, the financial circumstances of the parties and the balancing factors required in relation to the significant findings made critical of the husband’s conduct in the proceedings.
The wife’s Schedule of Costs annexed to the Costs Submission of the Wife filed on 7 March 2011, sets out the total costs paid by the wife to that date of $1,056,180.60 of which $78,676.47 was in relation to children’s issues. Not all of the costs incurred by the wife were in accordance with the appropriate scale of costs.

I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 8 September 2011.

Associate:

Date: 8 September 2011