Tzirinis and Tzirinis and Ors (No. 2)

[2008] FamCA 697

FAMILY COURT OF AUSTRALIA

TZIRINIS & TZIRINIS AND ORS (NO. 2) [2008] FamCA 697

FAMILY LAW – COSTS –  Assessment

Family Law Act 1975 (Cth)

In the Marriage of McAlpin (1993) 16 Fam LR 888
In the Marriage of Collins (1985) 9 Fam LR 1123

APPLICANT: Ms Tzirinis

RESPONDENT: Mr Tzirinis

2^nd RESPONDENT: P Pty Limited

3^rd  RESPONDENT: Ms M

FILE NUMBER: SYF 5062 of 1994

DATE DELIVERED: 13 August 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Cohen J

HEARING DATE: 8 July 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lloyd

SOLICITOR FOR THE APPLICANT: Slade Manwaring

SOLICITOR FOR THE RESPONDENT: Ms R of R Lawyers

Orders

It is ordered that:

1.Subject to orders 4. and 5. the wife shall pay P Pty Limited’s costs of the proceedings including the costs application as agreed or taxed within one month of such agreement or taxation.

2.Subject to orders 4. and 5. the wife shall pay 80% of the husband’s costs of the proceedings including the costs application incurred after 12 March 2005 as agreed or taxed within one month of such agreement or taxation.

3.The wife shall pay Ms M’s costs of the proceedings including the costs application as agreed or taxed within one month of such agreement or taxation.

4.The costs payable by the wife to the husband and P Pty Limited shall not cumulatively exceed $125,000.00 and in the event that the taxed costs of both cumulatively exceed that sum, the amounts due to each from the wife shall bear the same proportion of $125,000.00 as the taxed costs of each bear to the sum of the taxed costs of both.

5.Orders 1., 2. and 4. are hereby stayed until the proceedings brought by the wife against the husband which are still extant herein for variation and arrears of spousal maintenance are finally determined.

6.All the claims for costs herein against Ms R, solicitor, by the husband, Ms M and P Pty Ltd are hereby adjourned to a date to be fixed before me after the proceedings brought by the wife against the husband which are still extant herein for variation and arrears of spousal maintenance are finally determined.

7.I hereby disqualify myself from further hearing of the proceedings referred to in order 5.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 5062  of 1994

MS TZIRINIS

Applicant

And

MR TZIRINIS

Respondent

P PTY LTD

2^nd Respondent

MS M

3^rd Respondent

REASONS FOR JUDGMENT

1. These are applications by all respondents for costs against the applicant wife and her solicitor Ms R. The first respondent husband and a company associated with him, the second respondent P Pty Limited, was represented by Mr Lloyd of Counsel whereas his wife, the third respondent Ms M, was represented by Mr Bell of Counsel. Ms Winfield of Counsel sought leave to appear for Ms R’s professional indemnity insurer. That leave was granted.

2. There is no doubt that by s.117 of the Family Law Act, the Court has discretion to order costs against a party. In the exercise of that discretion, the Court must consider the matters stated in s.117(2A). However, there may still be a lingering doubt about the Court’s power to order, and the basis for ordering, costs against a non-party such as a solicitor for a party. I regard myself as bound by In the Marriage of McAlpin (1993) 16 Fam LR 888. In that case the Full Court refused to follow the decision in In the Marriage of Collins (1985) 9 Fam LR 1123, an earlier decision of the Full Court, and said that Collins “no longer represents the law”. It was held by the majority that the power to order costs under s.117(2) is not, on any ordinary reading of the words of that subsection, limited to parties. In saying this, their honours recognised that subsections 117(1) and (2A) both refer to parties but that did not alter the meaning of s.117(2) which does not. It appears to apply to any persons against whom an order for costs might be made. Of course, not all of s.117(2A) does refer to parties. Only paragraphs (a) to (f) inclusive do. Paragraph (g) simply requires the Court to consider “such matters as the Court considers relevant” in deciding what, if any, costs order to make.

3. It seems to me that when the Court is confronted with an application for costs against a non-party, s.117(1) does not apply because it merely requires each party to bear his or her own costs unless there are circumstances which justify a costs order. The consequences of a reading of the entirety of s.117, including subsections (3), (4) and (5), is that the Court need not necessarily consider s.117(2A)(a) to (f) inclusive, but should decide the issue of costs against a non-party by considering whether the circumstances justify an order having regard to all matters which the Court views as relevant.

4. In Collins, the Court held that the jurisdiction to award costs against a non-party is founded on the fact that an application for costs is a matrimonial cause and that the Court has inherent power to order costs against a non-party. In that circumstance, if any order for costs is not based on s.117 because s.117 is read to refer only to parties, it could be imposed after undertaking exactly the same considerations which would be undertaken under s.117 if that section applies to non parties. It would, therefore, be irrelevant whether s.117 does, or does not, apply to non parties. Nevertheless, as I have indicated, I shall proceed on the assumption that s.117 does apply.

5. Baker J.A.. dissented in McAlpin. In doing so he did not find any need to canvass the issue of the source of power to make a costs order against a non-party and did not specifically find that the Court has or does not have the power to make such an order. However, it is implicit in his judgment that the Court has that power because he held that, as the costs order against the wife was made in the expectation that a third party would pay the costs if she became liable, because it was the Court’s real intention to require the 3^rd party to pay those costs, the 3^rd party should have been given a right to be heard.

6. The judgement of Baker J.A. raises a consideration which I regard as important. His Honour correctly said that before a non-party can properly be subjected to any order for costs an opportunity must be given to that party to be heard. Although Ms R continues to appear for the wife in the costs application despite Mr Lloyd’s properly made comment to the effect that she should consider whether she has a conflict of interest, she did not purport to represent or defend herself per se. All her submissions were in defence of the wife. Although I think she was, by Mr Lloyd’s comment, less than subtly warned of the conflict she was in, she was not clearly made aware of her entitlement to be heard in her own defence and, if she was heard, to defend herself would manifest her current conflict of interest. That was my fault. I should have realised that she may not have appreciated all the implications of Mr Lloyd’s relevant comment and should have made the situation clear to her. As shall later become apparent, I do not think my failure could have made any difference to the outcome in these proceedings.

7. The case against the wife for the husband and P Pty Ltd recognises that the wife has no funds. At present, this must be regarded as the situation because she is a disability pensioner with no prospects of bettering herself through income earning activities, has only $11,000.00 in assets, most of which would not be available to meet a costs order, and lives in government subsidised rental accommodation. However, the husband and P Pty Ltd submit they are entitled to take into account her still viable claim for lump sum arrears and future maintenance. Although I dismissed most of her claims, I left the wife with the capacity to continue her application for a spousal maintenance variation and arrears for a limited time retrospectively, as well as a claim for future maintenance including limited lump sum future maintenance. The only prospect of a significant sum being awarded to the wife as a result of the part of the claim which was not dismissed is if the wife obtains a significant variation for past maintenance and/or a lump sum future maintenance award against the husband. All claims against P Pty Ltd and the husband’s current wife have been dismissed.

8. The husband is barely, if at all, in arrears on his past assessed spousal maintenance obligation to the wife. It only involves a four year period. I have limited the wife’s claim for lump sum future maintenance to five years and $125,000.00. Currently the husband is liable to pay maintenance at the rate of $25 per week. This liability has been constant since August 2004. It is not likely that the wife will gain a large increase in spousal maintenance for the four years since August 2004. Less than $100,000.00 is likely to be found to be due to her for arrears. Thus, the wife is unlikely to receive in future in a lump sum more than $225,000.00, but it could be much less. In fact, I have grave doubts about the wife’s solicitor being capable of proving the best case which might be proven against the husband. It is likely that the wife will receive little or no retrospective variation and therefore little or no arrears and no lump sum for future maintenance irrespective of the periodic sum she becomes entitled to for future maintenance.

9. It is put on behalf of the husband and P Pty Ltd that I should order the wife to pay costs because of the prospective possibility that she will receive a lump sum, but that I should protect her from the possibility that what she receives will not meet a costs order by staying the order until and unless she receives something. It is argued that the husband has a right to be protected in this way and that it would be unfair, if costs should otherwise be ordered, to refuse to order them because of the wife’s impecuniosity when, later, she could receive a significant sum from the husband. It is argued that it would be fair to permit such a sum to be set off against a costs debt to the husband. A similar argument is advanced on behalf of P Pty Ltd but of course, P Pty Ltd would only have resort to the fund, if any, received by the wife from the husband after the husband’s set off was extinguished.

10. There seems to be little doubt that the Court can look at a party’s financial situation rather than assets and income to decide the issue of costs. It is not the case that a costs order cannot be made against a person who has no assets or means to meet it when it is made if that person will or may be in a situation to meet it at a later time. The person’s financial situation at the time the order is made would include the fact that later he or she would or may be able to pay such an order. (See McAlpin at pg 893.35). It follows that it is proper to consider the possibility and likelihood that the wife may later be in a position to pay the costs as distinct from the situation of certainty in current incapacity to meet a costs order.

11. A related possibility and its implications should, in my opinion, also be considered. Not only is the husband and P Pty Ltd seeking costs from Ms R, so is Ms M. The orders the husband and P Pty Ltd seek are a little confusing in this respect, in that the case application does not ask for an order for the solicitor to pay their costs or a part of them directly, it seeks that the Court determine what part Ms R should pay of any orders for costs in their favour against the wife. They are really asking for a contribution order. Ms M, on the other hand, simply asks for an order, cumulatively or in the alternative, that Ms R pay her costs. Another difference in the costs applications of the two sets of applications is that, whereas Ms M has not quantified or limited her costs claim, the husband and P Pty Ltd have, as a result of Mr Lloyd’s submissions, asked that I order the wife to pay costs, not on an indemnity basis as is contained in their application, but assessed by the Court at $125,000.00 on the basis that the costs would, if taxed as party party costs, exceed $125,000.00.

12. It is of considerable concern to me that there is an obvious side effect in orders like those Mr Lloyd asks the Court to make. It is that they will tend to stifle continuation of parts of the wife’s application which are still viable and that this appears to have been an intended consequence of the costs applications as they were finally presented. I shall discuss this problem at a later stage.

13. The situation with Ms R complicates the application for costs against the wife because of the possibility that Ms R will, irrespective of any order this Court might make, become liable for the wife’s costs on the ground of her negligence or other wrongful conduct of the wife’s case in this Court. Ms R’s indemnity insurers did not seek leave to appear for no reason. Ms R could therefore be liable to meet some or all of the costs of the proceedings which would otherwise be payable by the wife on three different bases. Firstly, because this Court orders her to pay some of the costs that the wife is ordered to pay the other parties; secondly, because this Court orders her to pay some of the respondent’s costs directly; and, finally because the wife sues her in another jurisdiction and she is ordered to pay damages to the wife to compensate the wife for costs the wife has been ordered to pay the other parties. I do not know the terms of the professional indemnity insurance Ms R has, but it is likely that she is insured for each of the three possibilities, so I do not need to know Ms R’s financial circumstances to conclude that, if Ms R becomes liable for any costs of the husband, P Pty Ltd and/or Ms M, there is likely to be a fund to meet that liability. It follows that in such a case, irrespective of the wife’s financial situation, any of the costs ordered against the wife which are in respect of a period since Ms R has been acting as her lawyer, which would involve most of those costs, could be met by the wife’s resort to Ms R. In such a situation, an order for costs against the wife is much less likely to stifle her inclination to pursue her current claims against the husband.

14. Nevertheless, an order for costs arising from the unsuccessful part of proceedings should not be used to inhibit proceedings which have been held to be properly open to the party liable for the costs. If the intent of the husband and P Pty Ltd is to obtain a costs order merely to inhibit continuation of the balance of the proceedings against the husband, even if the balance of the proceedings appears to be heading in the same direction as the part which I have already dismissed, and I apprehend there is a significant possibility of this, the husband cannot be permitted to be able to obtain and rely on the costs order to inhibit progress of the proceedings. He has proper remedies. A further application for summary dismissal, a claim for orders pursuant to s.118 of the Family Law Act or a further claim for security for costs are available to him. Nevertheless, if there is a possibility that an order for costs will have undesirable side effects despite there being other proper reasons for making it, the Court should not be prohibited from making it. It should weigh all the circumstances for and against making an order and do what is just.

15. Here, the type of order the husband seeks could but may not be useless to him unless it inhibits the wife from continuing her spousal maintenance by making it of little or no value to her because any lump sum or even a periodic payment order she gains can be set off against the costs order. There is a realistic possibility that the wife might be able to succeed in a claim for indemnity for any order for costs against Ms R or that Ms R might be ordered by this Court to contribute directly to any costs the wife becomes liable to pay the husband. In those circumstances, despite the order sought by the husband which limits the extent of the wife’s liability for costs to him for the maximum lump sum she might become liable for pursuant to a spousal maintenance order, the wife may still be in a position to pay the husband’s costs even if she does not succeed in gaining any variation in her level of past or future spousal maintenance and/or lump sum maintenance. Thus, a costs order against the wife will not necessarily be ineffectual because she has no funds at present.

16. The situation with Ms R creates significant difficulty. As Ms R has not had the opportunity to defend herself, it might be thought that it would be proper to adjourn the proceedings without making findings on any issue as to costs to give her the chance to be heard. I do not think this would solve the most perplexing problem the circumstances have thrown up. It is that Ms R will not necessarily be able to defend herself fully in any event. To do so, she might have to resort to privileged information. The privilege is not hers and, in these proceedings, the wife has not, and cannot be considered to have by implication, waived her privilege. She only would have waived privilege if she had already claimed indemnity for her costs from Ms R in these or other proceedings. She has not made such a claim in this Court. I do not know if, and cannot find on balance that, she has made any claim for indemnity against Ms R in any other manner. Ms R’s indemnity insurers may have sought leave to appear because Ms R warned them of such a prospect with the prospect having yet to come to fruition or because a claim has already been made.   

17. If Ms R is not able to defend herself properly against a costs order, an adjournment to give her the opportunity to be represented, to be heard and to withdraw from representing the wife will not solve the major problem she could face in defence of herself in this Court, unless there is an adjournment until the wife’s outstanding maintenance claims against the husband have all been decided. It would be quite unjust for this Court in these proceedings to make an order for costs against Ms R at this stage, irrespective of the form of the order. The proper course is to adjourn the claim for costs against her. This will not irreversibly disadvantage the wife or the respondents. It will simply put off to another day and possibly another court, any decision on whether Ms R should become indirectly or even directly liable for any of the respondents’ costs. That decision might be made as between the wife and Ms R’s relevant insurers. In such a case, it may not be necessary for this Court to decide the claims for costs against Ms R. But as this might not occur and, despite the respondents’ entitlement to be subrogated to the rights against Ms R, if Ms R is liable to indemnify the wife for costs this Court should hear any outstanding application for costs against Ms R rather than risk forcing the respondents into another court to make such a claim. I shall adjourn all claims for costs against her until the dispute between the husband and wife is over.

18. It is also necessary to consider the matters required by s.117(2A) in order to decide whether there should be an order for costs against the wife in favour of the husband and, if there should, what order to make

    (a)       The financial circumstances of the parties: I do not know those of the husband and P Pty Ltd other than that their solicitor’s costs have exceeded $125,000.00. Because the husband and P Pty Ltd have chosen not to file evidence of their financial circumstances, I should assume both can, without hardship, afford to pay their solicitors. If they had wished to assert otherwise, they should have provided the Court with evidence of their financial situations. They have failed to discharge the onus on them to prove they will suffer any financial hardship by having to meet all of their own legal costs. Ms M is in the same situation as the husband in this respect except that, in Ms M’s case, there is no limit on the costs and I know nothing of the extent of her costs.      

    The wife’s situation is adequately stated in my judgment of 2 May 2008. It is parlous. She could not meet any order for costs if nothing changes from the present. However, as I have said, she might succeed in obtaining a lump sum for past and/or future spousal maintenance which could be used to set off an order in favour of the husband. Ms R might be liable to indemnify her for any order she must pay the respondent. 

    (b)       Legal Aid: No party has legal aid. It is noteworthy and I think relevant, that the wife, who undoubtedly was otherwise qualified to obtain legal aid, was refused it on the ground that the costs of the proceedings would not justify them. The relevance here, in my view, is limited to the fact that apart from any advice she had from Ms R, the mother has been, in effect, warned about the problems inherent in her case; the very problems the husband now relies on in part, at a very early stage of the proceedings, although after the husband became bankrupt.

    (c)&(d)   Conduct of the proceedings by the parties and failure to comply with orders: The respondents have merely conducted the proceedings to the extent they have been forced to by the wife’s claims and conduct of them. They cannot be regarded as having acted inappropriately, wrongfully or unfairly merely because their method of defence has been based on blocking tactics. There is a suspicion the husband has been obstructive and he, like the other respondents, certainly has provided no up-to-date financial information. In light of the manner in which the wife has conducted the proceedings and the ultimate conclusion that, largely, her case disclosed no prima facie cause of action and was dismissed summarily, I regard the conduct of all respondent’s defences as well within the bounds of propriety and reasonableness. Suspicions that the husband is a dishonest rogue or has deliberately attempted concealment or to divest himself dishonestly of funds and that the other respondents were involved  was raised to no higher level, were not prima facie established on balance as fact, and should not be successfully relied on in aid of the wife’s defence to an application for costs.

    The conduct of the wife’s case has been atrocious. The extent it had been unduly complicated by resort to hopeless attempts at proof and misguided argument in an attempt to support unrealistic and inflated claims cannot be described without going into detail which should not further burden me or the readers of this judgment. I have never seen a case conducted by a lawyer for a client which seems to have been more incompetently formulated and pursued. The matter is like the worse instances of litigation conducted in person by a laymen who is emotionally disturbed and/or who suffers from a personality disorder but has gained a little legal knowledge; the type of person who habitually inhabits the precincts of courts, typically the NSW Supreme Court, with a shopping trolley and storage bags full of documents. Among the dross in the proceedings are some flashes of ability and even clever argument; great knowledge of detail, much of it useless, but these are drowned in, in the main, by an overall inability to prove a worthwhile case.

    After August 2004 the wife’s case has been characterised by misguided claims, prolixity, and misunderstanding of much of the relevant law. It is a manifestation of the maxim that a little knowledge is dangerous. There has been systems abuse, especially in the issue of subpoenas and the constant changes in claims and in attempts to argue the wife’s case with little or no evidence to support it and an unrealistic attempt to claim there was, a frightening failure to understand what one can and cannot do to prove a case, and vain hope.

    This is not merely an instance where a party obtained a summary judgment. It was obtained after prolonged and overly complex litigation in which the husband and the other respondents must have been put to expense they should not have had to incur. The spousal maintenance arrears debt would not have been discharged by the Part X arrangement because ss. 58(5A) and 230(1) of the Bankruptcy Act as it stood at the time of the Part X arrangement, i.e., as amended up to 25 September 2001 (the last amendment before that date being on 9 August 2001), but the claimed arrears based on the claimed variation was grossly excessive, had to be defended and largely failed. It was only a little less unreasonable than the failed attempt to impose liability on the other respondents. The most unreasonable claims were that for the annulment of the bankruptcy, an initial and bizarre claim that the former matrimonial home should be transferred to the wife. Nevertheless, the wife’s claims were not wholly unsuccessful.

    These proceedings were only instituted because the husband failed to comply with the orders he consented to on 15 December 1994. I would be surprised if, when he executed them, he did not know he was facing bankruptcy. He probably knew he was and would not be able to comply with the consent orders for both the transfer of his interest in real estate and payment of spousal maintenance at the rate of $300.00 per week. After all, he must have known by early March 1995, or even earlier, that his situation was hopeless, because his debtor’s petition was filed on 6 March. The parties’ home was worth $200,000.00 and his debts exceeded his assets by $208,000.00.

    There has been what might best be described as a snowballing of non-compliance with orders of the Court as a result of the husband’s failure to pay spousal maintenance to the wife. The wife obtained consent orders in October 1995 for the husband pay $15,000.00 in costs and arrears. In April 1997 another consent order was obtained which required the husband to pay $23,700.00 in arrears to 11 April 1997. This was to be paid at the rate of $25.00 per week, so was barely worthwhile to the wife. The husband’s obligation for spousal maintenance was also varied from 1 May 1997 to $25.00 per week. These orders recognised the husband’s inability to pay more. The wife, later, claimed a variation of spousal maintenance to unspecified lump sum for an unspecified period to the date of hearing. Her application which made this claim was filed on 30 August 2004. By then she had done nothing to assert her property rights since the bankruptcy in 1995 and her spousal maintenance rights since April 1997.

    The husband’s failure to comply with property orders was really because it was impractical for him to comply with them before he became a bankrupt. If he had complied, the compliance would probably have been set aside on application by the Trustee in Bankruptcy. After bankruptcy, he had no power to comply. The wife was not given notice of the composition with creditors and did not attempt to prove as a creditor. The husband was still liable to her for maintenance arrears falling due between bankruptcy and the Part X arrangement. The statutory notice provisions of the Bankruptcy legislation and the wife’s failure to serve notice of his debt to her on the Trustee would have altered nothing.

    After 1 May 1997 the husband had made regular spousal maintenance payments of $25.00 per week for most of that time. Later, $10,250.00 of the arrears of $23,700.00 was paid in a lump sum. The wife alleges this payment and the payment of some later arrears were the result of the commencement of these proceedings as a whole. This allegation is probably correct. Both amounts made up a payment which was made on 11 March 2005. It was for $11,600.00 (see Exhibits ‘H’ and ‘I’ to the Affidavit of the wife sworn 4 July 2008). It was not made in response to the specific proceedings I dealt with by my Judgment; it was made in response to proceedings which were commenced for enforcement of orders and for contravention at or about the same time as the Application for Final Orders was filed. However, all the wife’s claims are really part of the one proceeding, as she has assumed they are for the purpose of her submissions.

    The balance of arrears which I found to have been due in April 1997; $13,450.00, is not suggested by the evidence before me on the costs application to have been owing when the payment of $11,600.00 was made. The whole $23,700.00 arrears which had accumulated at the rate of $300.00 per week until 11 April 1997 was only payable at the rate of $25.00 per week once the agreement to discharge the arrears at that rate was made. The balance of the $23,700.00 had not fallen due by the time the $11,600.00 arrears payment was made in March 2005. Only the $10,250.00 or thereabouts was by then owing out of the $23,700.00. Thus, although the proceedings were commenced in August 2004, by mid March 2005 any effect they had on gaining payment of actual overdue amounts had run it course. The balance due at any time thereafter was nominal. The cost to the husband of defending the claims which wholly failed was probably quite large by comparison to any amounts paid as a result of the relatively small, limited and uncomplicated claims for unpaid arrears which might have subsequently fallen due and were later paid. I do not regard the main claims which were dismissed as being justified by the small success the wife has had.

    There has been no failure by P Pty Ltd or the husband’s current wife to comply with orders. They have not engaged in any conduct which might undermine the claims they have for costs.

    (e) Whether a party to the proceedings has been wholly unsuccessful: The wife has not been wholly unsuccessful.  She maintains a part of her claims and obtained about $12,750.00 in recovered arrears after she commenced proceedings. Nevertheless, she has been largely unsuccessful in relation to the claims she has made; those which were summarily dismissed and are listed in order 1. of the orders of 2 May 2008 and claims which have been made and not pursued, obviously because they were worthless. These made up the bulk in quantum or dollar value of her claims and certainty would have involved the husband in the bulk of his costs from 1 September 2004 to date. The wife has been wholly unsuccessful against P Pty Ltd and Ms M.

    (f) Offers made in writing: The wife relies on an offer made on her behalf by letter from Ms R on 12 April 2005. The offer is to the husband, P Pty Ltd and a company which has never been a party to the proceedings. The offer is clearly a response to the 11 March 2005 payment to the wife by the husband. It is an offer that the husband, P Pty Ltd and the non-party company pay the wife’s costs of the contravention and enforcement applications filed in late 2004 as taxed on a party party basis together with disbursements of $8,903.00 up to 11 March 2005. There is also an offer for the husband to pay the wife’s costs of obtaining the 21 April 1997 orders assessed at $5,350.00. There is no suggestion that the proceedings as a whole would be discontinued on acceptance of the offer, so this so called offer is one which the husband could barely benefit from by accepting it. It could fairly be said of it that it is an offer which might be made when the offeror does not intend to make a realistic offer of compromise at all. In the circumstances, it is an offer which would have been, if accepted, less advantageous to the husband than nonacceptance has been. I cannot understand why the wife has argued that it should be relied on. That argument is typical of the illogical stances the wife has attempted to maintain and justify. If it is relied on to suggest that the wife has not been wholly unsuccessful, it takes the matter no further than the considerations I have already undertaken.

    There has been no offer involving the husband’s current wife.

    (g) Other relevant matters:  The wife, for the first time since the matter has been before me, asserted at the costs hearing that one of the reasons she should not pay costs although she had been unable to prove her case was that she had been effectively restrained from inspecting material produced on subpoena by orders I made on 20 June 2005 and, therefore, could not rely on any such material which might have assisted her case. It follows, if her submission is accepted, that it is the Court’s fault that she could not prove her case even on a prima facie basis.

    On 3^rd February 2005 a Registrar made orders about inspection of documents produced on subpoena. All parties were permitted to inspect documents produced by numerous persons or organisations in answer to some of the subpoenas. Despite the husband’s objections, documents produced by three banks were dealt with differently. In the case of these documents, leave was granted to inspect one group of documents; those where the material produced related to the husband either alone or in his dealings with others, including his present wife. The issue of inspection of another group of these documents was stood over to 11 March 2005. These were documents which did not relate to the husband but related to his current wife and others. The wife was restrained from issuing further subpoenas without leave of a judge, judicial registrar or registrar. A further order was made which stayed, until 12.00 on 4 February, all inspections. If by that time the husband had filed an application for review, the order further stayed inspection until the review was determined.

    The husband filed an application for review which was eventually listed for mention before me on 20 June 2005. By that time the husband had also filed his application for security of costs. I ordered that the security for costs application should be heard and dealt with to finality before any other matters were to be dealt with and stood the application for review of the inspection dispute over to a date to be fixed. I specifically ordered that no applications were to be heard before the security for costs application was heard and determined except by leave of a Judge.

    During arguments that day, before I made orders, I was informed that the subpoenas were essentially issued in relation to the wife’s then contravention application which relied on non-payment of assessed spousal maintenance. Ms R told me specifically that, although when the subpoenas were issued about $22,000.00 was due and unpaid, because of the 11 March 2005 payment only about $4,000.00 was then due. There was a suggestion that one or two of the subpoenas might be of use in the wife’s wider claim. As the issue of security for costs did not involve the husband’s financial circumstances and was limited to the wife’s financial situation, there was no need to deal with the subpoenas until the security for costs issue was determined.

    Subsequently, no application was made to me for inspection or to hear what had become an application by the husband to set aside the subpoenas. This is despite the subsequent claim for summary judgment. This claim might have made the material in Court on subpoena relevant and therefore might have made it appropriate to determine the dispute over the subpoenas and inspection before the security for costs issue was determined and before the wife complied with the orders I made on 4 June 2007. This order was designed to allow the wife to put her case on all issues before the Court in a way which could be fully appreciated. The wife’s solicitor must have appreciated that because I specifically told her of this purpose.  The fault, if the material available on subpoena would have helped the wife’s case, was with the wife for not making any application designed to gain inspection. My orders of 20 June 2005 specifically provided for an application to me or any other judge to inspect documents produced on subpoena; an application which might have been successful because the wife could have argued that she needed to inspect the documents in Court on subpoena before complying with the order I made in June 2007. Of course, one cannot say whether inspection would have improved the wife’s case. The wife’s failure to seek inspection after the summary judgment claim was made, as well as after the order of June 2007, in my view prevents the wife from gaining any benefit on the costs application from her claim that her case was not as hopeless as it seemed to be and that this was caused by the Court’s refusal of her application to inspect documents in Court of subpoena. The submission highlights yet another example of the manner in which these proceedings have been conducted on behalf of the wife although I cannot say whether the failure to apply again for inspection was due to any failing by the wife’s solicitor rather than in the wife’s instructions to her.

1. A weighing of all the circumstances leaves me with the overall conclusion that the wife should pay the costs of the husband’s current wife and of P Pty Ltd including their costs of the costs hearing. She has failed on a prima facie basis against them yet has probably caused each to incur significant cost. The fact of prima facie failure and the manner of the conduct of the proceedings are highly indicative, and I find it to be a fact, that it was not reasonable of the wife to take proceedings against them. The husband’s wife is bound to have incurred costs despite never having filed any documents. The wife’s argument that Ms M has not incurred costs because she has filed nothing of substance is typical of the manner in which the wife’s case has been conducted. It ignores reality.

2. In the husband’s case, the wife was reasonable to a small extent to bring proceedings against him and she has not wholly failed. However, aspects of the proceedings were unreasonably conducted and some claims were so beyond what might be regarded as having a proper prospect of success that there should be a substantial order for costs against the wife. Unreasonable conduct of the wife’s case must have caused the husband to incur significant necessary costs. Nevertheless, the wife’s little success, success which brought her some funds, ought to be taken into account, in that, not only were some of her costs and the costs she caused the husband to incur justified, she might have been entitled to a small sum for costs if she had limited her claim to recovery of arrears of the $23,700.00. I shall take this into account here. In my opinion, the wife should pay 80% of the husband’s costs from 12 March 2005 to date including his costs of the costs hearing as assessed or taxed.

3. As the husband and P Pty Ltd put a limit of $125,000.00 on their claims for costs, I should adhere to that limit otherwise the wife should have been liable to pay the whole of P Pty Ltd’s costs as agreed or taxed. In the even that the combined agreed or taxed costs of the husband and P Pty Ltd exceed $125,000.00, each of these respondents should be entitled to the proportion of $125,000.00 which his or its individually agreed or taxed costs bear to the total of both these respondents’ agreed or taxed costs. As the husband and P Pty Ltd asked that any costs order be stayed until the proceedings against the husband brought by the wife have been determined, it would be unfair to the wife if no stay of orders for costs in favour of the husband and P Pty Ltd is ordered.

4. I have already informed the parties that I regard it as appropriate that I disqualify myself from further proceedings in this matter other than the continuation of the costs proceedings and told them my reasons. No formal order has been made. I shall add an order to the formal orders otherwise arising from this judgment.

I certify that the preceding twenty three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen.

Associate: 

Date:  13 August 2008