Venter & Venter (No 4)
[2023] FedCFamC1F 64
•20 February 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
FIRST INSTANCE
Venter & Venter (No 4) [2023] FedCFamC1F 64
File number: BRC 10651 of 2021 Judgment of: CAREW J Date of judgment: 20 February 2023 Catchwords: FAMILY LAW – COSTS – applications brought against the wife by the respondents – where the matter is proceeding by way of pleadings – where the costs incurred arose as a direct result of the wife’s failure, as found, to properly plead her case and to properly set out the relief sought
FAMILY LAW – PROPERTY – valuation of property – application brought by the wife for the appointment of a single expert to value three real properties and 22 entities and for the husband and additional respondents to bear the cost – where the wife has not addressed relevant matters necessary to support her application – application dismissed
FAMILY LAW – PROCEDURAL – consideration given to bifurcation to enable discrete issues to be determined – matter adjourned for further case management hearing
Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Fitzgerald vFish sub nom PBF v TRF (FLR) (2005) 191 FLR 294
Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23
Lenova & Lenova (Costs) [2011] FamCAFC 141
Nada & Nettle (Costs) (2014) FLC 93-612
Parke & the Estate of the Late A Parke (2016) FLC 93–748
Penfold v Penfold (1980) 144 CLR 311
Re Wilcox, Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151
Stopford Malloy & Malloy (Costs) [2018] FamCAFC 6
Venter & Venter (No 3) [2022] FedCFamC1F 278
VC & CG & Ors (2010) FLC 93-434
Number of paragraphs: 76 Date of hearing: 16 December 2022 Place: Brisbane Counsel for the Applicant: Mr Brown KC with Ms Matson Solicitor for the Applicant: Damien Greer Lawyers For the First Respondent: Litigant in person Counsel for the Second, Third, Fifth, and Seventh Respondents: Mr Newlinds SC with Ms Jeliba Solicitor for the Second, Third, Fifth and Seventh Respondents Barkus Doolan Family Lawyers For the Fourth Respondent Did not participate Counsel for the Eighth Respondent Mr Rogan Solicitor for the Eighth Respondent Pearson Emerson Family Lawyers ORDER
BRC 10651 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS VENTER
Applicant
AND: MR VENTER
First Respondent
MR B VENTER
Second Respondent
MR C VENTER (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
CAREW J
DATE OF ORDER:
20 FEBRUARY 2023
THE COURT ORDERS THAT:
1.The applicant wife pay the 2nd, 3rd, 5th and 7th respondents’ costs of and incidental to:
(a)those paragraphs of the Application in a Proceeding filed 6 December 2021 seeking to strike out various paragraphs of the wife's Points of Claim annexed to the applicant wife’s affidavit filed 12 October 2021;
(b)drafting and filing the Points of Defence of the 2nd, 3rd, 5th and 7th respondents annexed to the affidavit of the 2nd and 3rd respondents filed 24 January 2022;
(c)the hearing on 7 April 2022;
(d)review and consideration of the applicant wife's draft Amended Points of Claim;
(e)review and consideration of the wife's draft further Amended Initiating Application;
(f)review and consideration of the wife's Amended Points of Claim annexed to the applicant wife's affidavit filed 22 June 2022;
(g)review and consideration of the wife's further Amended Initiating Application filed 22 June 2022; and
(h)the Application in a Proceeding (costs) filed 15 July 2022,
with such costs to be as agreed and failing agreement as assessed on a party and party basis.
2.The applicant wife pay the 2nd, 3rd, 5th and 7th respondents’ costs thrown away as a result of the wife abandoning or amending the various interlocutory orders sought by the wife in her Initiating Application filed 11 August 2021, the Amended Initiating Application filed 12 October 2021, and the further Amended Initiating Application filed 22 June 2022, with such costs to be as agreed and failing agreement as assessed on a party and party basis.
3.The applicant wife pay the 2nd, 3rd, 5th and 7th respondents’ costs of and incidental to the Application in a Proceeding (costs) filed 14 October 2022, with such costs to be as agreed and failing agreement as assessed on a party and party basis.
4.The Application in a Proceeding filed by the applicant wife on 4 November 2022 is dismissed.
5.The applicant wife pay the 2nd, 3rd, 5th and 7th respondents’ costs of and incidental to responding to the Application in a Proceeding filed by the applicant wife on 4 November 2022 with such costs to be as agreed and failing agreement as assessed on a party and party basis.
6.The applicant wife pay the 8th respondent’s costs of and incidental to:
(a)the Response to Application in a Proceeding filed 16 February 2022;
(b)the hearing on 7 April 2022;
(c)drafting and filing the 8th respondent’s Points of Defence annexed to the Affidavit of Mr J dated 3 February 2022;
(d)review and consideration of the wife's draft Amended Points of Claim;
(e)review and consideration of the wife's draft further Amended Initiating Application;
(f)review and consideration of the wife's Amended Points of Claim annexed to the wife's Affidavit filed 22 June 2022; and
(g)review and consideration of the wife's further Amended Initiating Application filed 22 June 2022;
with such costs to be fixed in the sum of $30,000.
7.The applicant wife pay the 8th respondent’s costs of and incidental to the Application in a Proceeding (costs) filed 15 July 2022, with such costs to be as agreed and failing agreement as assessed on a party and party basis.
8.The applicant wife pay the 8th respondent’s costs thrown away as a result of the wife abandoning or amending the various interlocutory orders sought by the wife in her Amended Initiating Application filed 12 October 2021, and the further Amended Initiating Application filed 22 June 2022, with such costs to be as agreed and failing agreement as assessed on a party and party basis.
9.The applicant wife pay the 8th respondent’s costs of and incidental to the Application in a Proceeding (costs) filed 20 October 2022, with such costs to be as agreed and failing agreement as assessed on a party and party basis.
10.The Application in a Proceeding (costs) filed by the applicant wife on 21 October 2022 be adjourned to the first day of trial of this matter.
11.The payment by the applicant wife of the costs as provided in this Order be stayed until 28 days after the finalisation of the substantive proceedings.
12.All outstanding interim applications be otherwise dismissed.
13.The wife file and serve any submissions (no more than five pages) addressing the matters identified in paragraphs 73 - 75 of the Reasons for Judgment delivered on 20 February 2023 on or before 6 March 2023.
14.The 2nd, 3rd, 5th and 7th respondents file and serve any submissions (no more than five pages) addressing the matters identified in paragraphs 73 - 75 of the Reasons for Judgment delivered on 20 February 2023 on or before 20 March 2023.
15.The 8th respondent file and serve any submissions (no more than five pages) addressing the matters identified in paragraphs 73 - 75 of the Reasons for Judgment delivered on 20 February 2023 on or before 20 March 2023.
16.The matter be listed for a case management hearing before the Honourable Justice Carew on 27 March 2023 at 9.30am at which time all parties have leave to appear via Microsoft Teams.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Venter & Venter has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Carew J:
The substantive proceedings in this matter concern an application for property settlement by Ms Venter (“the wife”) against her estranged husband, Mr Venter (“the husband”).
In short, the husband says that he has no or very little net property, whereas the wife alleges that the husband controls and has a beneficial interest in a vast pool of property currently in the names of persons or entities within or associated with the Venter family i.e. the D Group. As part of the relief sought by the wife in the substantive property proceedings, she seeks to set aside two instruments which she contends were executed to defeat her property claim or irrespective of intention have that effect.
Current respondents in the litigation include the three adult children of the husband and wife, two of whom (Mr B Venter, the 2nd respondent and Mr C Venter, the 3rd respondent) have taken an active role in the proceedings to date whereas the third (Ms Glynn, the 4th respondent) has not participated at all. The remaining respondents are D Group Holdings Family Pty Ltd as trustee for the D Group Holdings Discretionary Trust (5th respondent), R Pty Ltd (7th respondent), and G Pty Ltd (8th respondent). There was a sixth respondent but it was removed on 8 July 2022.
I will refer to the 2nd, 3rd, 5th and 7th respondents collectively as “the respondents” because they are all represented by the same lawyers. Where I refer to them individually I will refer to them as ‘Mr B Venter’, ‘Mr C Venter’, ‘the Trust’ or ‘R Pty Ltd’, as required. I will refer to the 8th respondent as G Pty Ltd because it is separately represented in the proceedings.
The husband was the appointor of the D Group Holdings Discretionary Trust (“the Trust”) from mid-2016 until his resignation in mid-2020, and in early 2017 the husband and D Group Holdings Family Pty Ltd as Trustee of the Trust (“the Trustee”) executed a Deed of Variation of the Trust Deed by which the husband and the wife were removed as members of a class of beneficiaries of the Trust, and the husband, as appointor (at that time), was not entitled to any benefit under the Trust. The husband contends that he was appointed as the appointor of the Trust by accident, an interesting proposition. Mr B Venter, Mr C Venter and Ms Glynn are beneficiaries of the Trust.
Mr C Venter is the sole director and secretary of the Trustee and Mr C Venter, Mr B Venter and Ms Glynn are the shareholders. Mr C Venter is the sole director and secretary of R Pty Ltd and D Group Holdings Pty Ltd is the sole shareholder. Mr B Venter and Mr C Venter are joint directors of D Group Holdings Pty Ltd and the sole shareholder is D Group Holdings Pty Ltd Family Pty Ltd. A complete entity diagram will be required if this matter proceeds to trial so that the interconnecting nature of the ‘D Group’ can be identified.
A private mediation conducted on 19 October 2022 in relation to all issues in dispute was unsuccessful.
MATTERS FOR DETERMINATION
The matters requiring determination at this time are as follows:
(a)Costs applications brought against the wife by the respondents;
(b)Costs applications brought against the wife by G Pty Ltd;
(c)The wife’s application for the appointment of a single expert to value three real properties (and other unidentified real property) and 22 entities including two trusts, and for the husband and the respondents to pay the costs of valuations at least initially;
(d)Whether trial directions should be made; and
(e)Whether or not the final hearing should be bifurcated to enable discrete issues to be determined (see paragraph 1f of the order dated 25 October 2022).
A sixth matter concerning the wife’s application for costs relating to objections taken to subpoenas issued by her is not pressed at this time but rather is to be determined at trial.
When the matter was last before me on 25 October 2022, it was my intention that the parties would address me at this hearing, on the possible bifurcation of the trial and as to what issues might be determined at a first series of trial dates. As already noted above, the list of issues set out in paragraph 1f of that order specifically stated this to be a matter for my determination. Unfortunately, the issue of bifurcation was not addressed during the hearing (other than in a perfunctory way), as a result of a misunderstanding by the wife about the meaning of paragraph 3 of the order made on 25 October 2022, which is in the following terms:
Within 14 days of the date of this Order, the applicant wife provide to the other parties a list of particular issues that she contends could be heard as discrete issues, and within 14 days of receiving the list of particular issues from the applicant wife, the other parties respond, with the intention of reaching agreement as to a list of issues that may be heard at a discrete initial hearing of the matter.
The wife contended that, having considered the matter, and having regard to the Full Court’s observations in VC & CG & Ors (“VC & CG”)[1], the view was formed that the issues could not be bifurcated. I accept this was a genuine position taken by the wife but it was not my intention that the decision about bifurcation would be left entirely to the parties. The respondents submitted that as it is the wife’s case, they were waiting for her proposal about bifurcation before considering their position. The respondents were not in a position to make submissions about bifurcation in those circumstances. Again, while I accept that is a genuine position, it is really most unhelpful to the Court. As was my intention when the matter was last before me, I will consider the issue of bifurcation but I will provide the parties with a further opportunity to be heard, if they so wish, by filing brief written submissions, and in particular to identify what issues might be determined in a first series of trial dates if I bifurcate the trial.
[1] (2010) FLC 93-434.
The reason for considering bifurcation arises in large part as a result of an impasse between the parties about whether valuations are necessary at this time and who would pay for them (if ordered), it being common ground that the wife is impecunious and the husband claims to be impecunious. Understandably, the other parties to the litigation, who are strangers to the marriage, resist any order that they pay for the valuations, which it is agreed will be a considerable impost, and if the wife does not succeed in the substantive proceedings, there will be no prospect of them recovering those funds.
In relation to the various applications for costs against her, the wife resists any award for costs or in the alternative seeks that the applications be adjourned to the final hearing. The wife contends that if her arguments in the substantive proceedings are successful, the property from which the costs have been paid by the respondents to date will be found to be property in which she has an interest. However, even if the wife is ultimately successful in the substantive proceedings, it is not her case, as I understand it, that the entirety of the property is her property. The wife cannot resist a costs application at this time on that basis.
As it is common ground that the wife would not currently have the capacity to meet any costs order, the respondents and G Pty Ltd are content for the payment of any costs awarded to be stayed until finalisation of the proceedings.
APPLICABLE PRINCIPLES - COSTS
In this Court, each party generally bears their own costs (s 117(1) of the Family Law Act 1975 (Cth) (“the Act”)). However, where there are circumstances that justify an order for costs, the Court is able to make such order as is considered just having regard to the matters contained in relevant subsections of s 117 and applicable Rules of Court (s 117(2)).
The list of matters to which the Court must have regard when determining a costs application are set out in s 117(2A) of the Act and since the commencement of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCOA Act”) on 1 September 2021, there are additional matters to which the Court must have regard.[2]
[2] The notation to s 117(2) of the Act refers to s 69(4)(d) and (e) of the FCFCOA Act.
The matters set out in s 117(2A) of the Act are as follows:
(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.
When considering the factors set out in s 117(2A) of the Act, it is sufficient for one factor to be present.[3]
[3] Fitzgerald vFish sub nom PBF v TRF (FLR) (2005) 191 FLR 294 at 301, [41].
Impecuniosity, of itself, is not a bar to making a costs order.[4]
[4] Nada & Nettle (Costs) (2014) FLC 93-612 at 79,589, [11]; see also Lenova & Lenova (Costs) [2011] FamCAFC 141 at 3, [12].
An additional source of power to award costs in an appropriate matter is to be found in s 69(4)(d) and (e) of the FCFCOA Act, which empowers the Court to award costs against a party and that the costs awarded be assessed on an indemnity basis or otherwise.
There is an additional mandatory requirement created by s 68(4) of the FCFCOA Act which requires the Court to take into account any failure to comply with the duty imposed by ss 68(1) or (2), which require the parties and the lawyers for the parties to conduct the proceedings in a way that is consistent with the overarching purpose of the family law practice and procedures provisions of the FCFCOA Act. The overarching purpose is set out in s 67 and requires, among other things, the proceedings to be conducted as “quickly, inexpensively and efficiently as possible”.
At the time the substantive proceedings commenced, the Rules applicable to costs applications were contained in the Family Law Rules 2004 (Cth), but those Rules were repealed on 1 September 2021 by the Family Law Repeal Rules 2021 (Cth), and replaced with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), with effect from 1 September 2021. Note 1 to r 1.02(2) of the Rules states as follows:
… The new Rules apply to a proceeding that was commenced in accordance with the old Rules and was not determined before the repeal of the Rules.
Part 12.5 of the Rules deals with ‘orders for costs’ and, among other things, empowers the Court to set a time for payment.[5]
[5] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), r 12.13(5).
Part 12.6 deals with ‘calculation of costs’ and provides as follows:
12.17 Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c) to be calculated in accordance with the method stated in the order; or
(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
(2)If costs are payable under the Family Law Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party and party basis.
(3) In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable proceedings;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre‑action procedures;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
Rule 12.08(2) (referred to in r 12.17(3)(b)) provides as follows:
(2)In considering whether a party’s legal costs have been fairly, reasonably and proportionately incurred, regard must be had to all relevant matters including, but not limited to, whether a lawyer representing the party, a lawyer representing any other party, or any self‑represented litigant has:
(a)complied with all relevant rules and orders of the court, including requirements that documents be filed or provided to other parties by a given date; and
(b)acted reasonably in raising, pursuing or contesting a particular allegation or issue; and
(c)made reasonable efforts, subject to the client’s instructions, to resolve the dispute through negotiation, mediation or arbitration; and
(d) made reasonable efforts to narrow the issues in dispute; and
(e)filed no more interlocutory applications than are reasonably necessary in the circumstances of the proceeding; and
(f)filed no more affidavits or other documents than are reasonably necessary in the circumstances of the proceeding.
When determining an application for costs, the Court may make such order as to costs as it considers just.[6] An applicant for costs bears no “additional or special onus” other than the establishment of “justifying circumstances”.[7]
[6] Family Law Act 1975 (Cth) s 117(2).
[7] (1980) 144 CLR 311 at 315 (“Penfold”).
As to the identification of such circumstances by the Court, the High Court of Australia in Penfold v Penfold[8] said the following:
Sub-section (2) [of s 117] does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised. Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
[Citation omitted]
[8] Penfold at 315–316.
The Court will not lightly make an order for costs to be paid on an indemnity basis. There needs to be some circumstance of an exceptional kind to justify that course.[9]
[9] Kohan and Kohan (1993) FLC 92-340 at 79,614; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (“Colgate-Palmolive”) at 233.
The tensions created by the differing objectives sought to be addressed by a costs order awarded on a party and party basis as opposed to an indemnity basis were discussed in Re Wilcox, Ex parte Venture Industries Pty Ltd[10] where the Full Court of the Federal Court said at 156:
The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.
The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225.
[10] (1996) 72 FCR 151 at 156 (‘Re Wilcox’).
The Full Court went on to restate the principles from Colgate-Palmolive Co v Cussons Pty Ltd (“Colgate-Palmolive”)[11] in the following terms:
(a)the Court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the Court in departing from the usual course;
(b)the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the Court in departing from the usual course;
(c)whilst the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis. [12]
[11] Colgate-Palmolive (fn 9).
[12] Re Wilcox (fn 10) at 156–157.
While there is no exhaustive list of what circumstances may warrant an order for costs to be paid on an indemnity basis, some particular circumstances that have been found to justify such an order were identified by Sheppard J in Colgate-Palmolive[13] as follows:
(a)Making allegations of fraud knowing them to be false;
(b)Making irrelevant allegations of fraud;
(c)Evidence of particular misconduct that causes loss of time to the Court and to the other parties;
(d)Commencing or continuing proceedings for some ulterior motive or in wilful disregard of known facts or clearly established law;
(e)Making allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and
(f)An imprudent refusal of an offer to compromise.[14]
[13] Colgate-Palmolive (fn 9).
[14] Colgate-Palmolive (fn 9) at 233.
Not only does this Court have the power to order a specific amount for costs,[15] it has been the policy (at least of the former Appeal Division of this Court) for a specific amount to be ordered rather than requiring an assessment of costs.[16] This is because the latter approach will inevitably involve the parties in yet further conflict, delay, and cost.[17]
[15] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), r 12.17(1)(a).
[16] Stopford Malloy & Malloy (Costs) [2018] FamCAFC 6 at [10]–[12] (“Stopford”).
[17] Stopford (fn 16).
In Parke & the Estate of the Late A Parke,[18] Murphy J quoted with approval the observations made by Einstein J in Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus[19] when that court was considering an analogous provision to that contained in r 12.17(1)(a) of the Rules:
130.If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court” (Beach Petroleum NL v Johnson (No 2) [1995] FCA 1250; (1995) 57 FCR 119, at [24]cited in Idaport at [9]). The process does not “by its very nature ... envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”. (Idaport at [9](v), citing Harrison v Schipp[2002] NSWCA 213; (2002) 54 NSWLR 738).
131.Obviously enough, the court must act judicially in fixing or specifying a sum of costs, but:
...the requirement that the power to award a gross sum should be exercised judicially does not mean that it must be exercised in any scientific or formulaic manner. At the heart of the judicial function is the responsibility to weigh up competing factors and considerations, many of which might conflict, to reach a determination. Acting judicially carries with it an obligation to apply the rules of natural justice, to act impartially and to apply the law to the facts. ...
[18] (2016) FLC 93–748 at 81, 943–81,944 [122]–[134].
[19] [2007] NSWSC 23 at [9].
APPLICATION FOR COSTS BY RESPONDENTS – STRIKE OUT COSTS
As a consequence of an application filed by the respondents on 6 December 2021 to strike out parts of the wife’s Points of Claim, the wife was ordered, on 29 April 2022, to file Amended Points of Claim and a further Amended Initiating Application setting out with particularity the orders sought against each of the respondents and G Pty Ltd. A process was to be followed to minimise any further interlocutory proceedings which required the wife to provide a draft of her amended material to the respondents and G Pty Ltd before filing it. That process was followed.
The wife filed a further Amended Initiating Application and Amended Points of Claim (annexed to an affidavit of the wife) on 22 June 2022.
The respondents seek an order for the wife to pay their costs of and incidental to seven categories[20] of work as follows:
[20] An eighth category was not pressed.
(a)those paragraphs of the Application in a Proceeding filed 6 December 2021 seeking to strike out various paragraphs of the wife's Points of Claim filed 12 October 2021;
(b) the hearing on 7 April 2022;
(c)review and consideration of the applicant wife's Draft Amended Points of Claim;
(d)review and consideration of the applicant wife's Draft Further Amended Initiating Application;
(e)review and consideration of the wife's Amended Points of Claim that is an annexure to the applicant wife's Affidavit filed 22 June 2022;
(f)review and consideration of the applicant wife's Further Amended Initiating Application filed 22 June 2022;
(g)drafting and filing of the Amended Defence of the 2nd, 3rd, 5th and 7th respondents arising as a consequence of the applicant wife's Amended Points of Claim.
In support of their application, the respondents rely on paragraphs 51 – 63 of the Reasons for Judgment delivered 29 April 2022[21] and in particular the following:
62. The Points of Claim as drafted fall well short of identifying the case to be met by the objecting respondents and the material facts upon which such a case is founded. On their face, the Points of Claim are embarrassing in many respects, as submitted on behalf of the objecting respondents.
[21] Venter & Venter (No 3) [2022] FedCFamC1F 278.
In my view, it is self-evident that the respondents have been put to additional expense because of the deficiencies identified in the original Points of Claim. It is relevant to also observe that the wife had been put on notice as to the basis for the strike out application and notwithstanding the sound basis for the application to strike out, continued to resist it.
In my view, the circumstances justify an order for costs of the strike out application and the application for costs of the strike out application filed 15 July 2022. However, the respondents would have been required to file Points of Defence, in any event, and it is not reasonable for them to recover the costs of drafting and filing the Amended Defence. I will include, though the costs of drafting and filing the original Points of Defence. It would have been my preference to fix those costs but in the absence of any schedule, I will order that the costs be as agreed and failing agreement on a party and party basis.
APPLICATION FOR COSTS BY G PTY LTD – STRIKE OUT COSTS
On 16 February 2022, the 8th respondent, G Pty Ltd, sought, among other things, to strike out part of the wife’s Points of Claim. As a consequence of G Pty Ltd’s application, the wife was ordered, on 29 April 2022, to file a further Amended Initiating Application setting out with particularity any order sought against G Pty Ltd (and others) and an Amended Points of Claim setting out the contentions of fact and law (including particulars) relied on in support of her case as against G Pty Ltd (and others).
G Pty Ltd has no formal or family association with the wife, the husband or the respondents. It was joined to the proceedings by the wife on the basis of an alleged personal relationship between its principal, Mr J, and the husband. G Pty Ltd is alleged to conduct its businesses for and on behalf of the husband under a sham arrangement or as a knowing recipient of the proceeds of a breach of director’s duty on the husband’s part.
G Pty Ltd was initially joined to the proceedings in the absence of any orders sought against it and where G Pty Ltd was not alleged to be part of the D Group. The original Points of Claim did not contain the allegations now contained in the Amended Points of Claim involving G Pty Ltd and no final orders were sought against G Pty Ltd in the Amended Initiating Application filed 12 October 2021.
G Pty Ltd seeks to recover its costs of and incidental to:
(a)the Response to Application in a Proceeding dated 16 February 2022 (the strike out application);
(b)G Pty Ltd of Defence annexed to the Affidavit of Mr J dated 3 February 2022;
(c)the hearing on 7 April 2022;
(d)Order of 29 April 2022;
(e)review and consideration of the wife's Draft Amended Points of Claim;
(f)review and consideration of the wife's Draft Further Amended Initiating Application;
(g)review and consideration of the wife's Amended Points of Claim that is an annexure to the wife's Affidavit filed 22 June 2022;
(h)review and consideration of the wife's Further Amended Initiating Application filed 22 June 2022;
(i)drafting and filing of the Amended Defence of G Pty Ltd arising as a consequence of the wife's Amended Points of Claim; and
(j)drafting and filing of the Amended Response to Initiating Application by G Pty Ltd arising as a consequence of the wife's Further Amended Initiating Application for final orders.
G Pty Ltd seeks its costs on an indemnity basis or alternatively on a party and party basis calculated at scale in accordance with Schedule 3 of the Rules. Party and party costs are of course calculated on scale and in this case Schedule 3 of the Rules contains the relevant scale. Helpfully, a schedule of costs has been provided and the costs on an indemnity basis are $79,774 and on a purported party and party basis are $42,447.49. G Pty Ltd further seeks the costs of the application for costs.
The costs incurred and claimed by G Pty Ltd arose as a direct result of the wife’s failure, as found, to properly plead her case and to properly set out the relief sought. In those circumstances, G Pty Ltd should be awarded costs but I am not persuaded that the circumstances are exceptional such as to warrant an award on an indemnity basis.
The wife made no submissions about quantum.
As to the schedule, some of the costs claimed appear to be solicitor and client costs, rather than party and party costs. In addition, it is not clear what “costs of and incidental to the order of 29 April 2022” would relate to, other than as otherwise specified. Further, it is not my understanding that G Pty Ltd filed an Amended Response. Lastly, I do not consider it reasonable for the wife to pay the costs of both the original Points of Defence and the Amended Points of Defence. G Pty Ltd would have been required to file a Defence. I will allow the claim for former but not the latter.
Taking into account those four matters I consider that it is reasonable for the wife to pay G Pty Ltd’s costs in the sum of $30,000. G Pty Ltd should also have its costs of and incidental to the application for costs filed 15 July 2022 as agreed and failing agreement on a party and party basis.
APPLICATION FOR COSTS BY THE RESPONDENTS – COSTS THROWN AWAY
The respondents apply for their costs and disbursements (disbursements are generally included if a costs order is made) thrown away by the wife abandoning various iterations of applications for interlocutory orders, including a previous application for valuations of property. The wife had first sought interlocutory orders in her Initiating Application filed on 11 August 2021. The orders sought were amended in an Amended Initiating Application filed 12 October 2021. The latest iteration of the wife’s application for interlocutory orders as contained in her further Amended Initiating Application filed 22 June 2022 was dismissed by consent on 20 September 2022. Prior to dismissal, the application had been listed for hearing over two days on 13 and 14 October 2022. Notice of the abandonment by the wife of the interlocutory relief sought was provided by letter on 25 August 2022. Notwithstanding that notice, no Notice of Discontinuance was filed by the wife, which is the formal means by which applications or parts thereof are generally discontinued. I do not regard the wife’s intimation that she would “instead” seek urgent trial directions as indicating that she somehow was not abandoning the application for valuations.
I readily accept the respondent’s contention that they have been put to unnecessary expense in reviewing, providing instructions and taking advice on the various iterations of the interlocutory orders sought by the wife which were then abandoned.
I am satisfied that a costs order is justified in the circumstances. In the absence of any schedule of costs I will order that the costs be as agreed and failing agreement assessed on a party and party basis. The respondents should also have their costs of the application for costs filed 14 October 2022 (but not the amendments thereto) as agreed or on a party and party basis.
APPLICATION FOR COSTS BY G PTY LTD – COSTS THROW AWAY
G Pty Ltd seeks the costs of and incidental to the interlocutory orders sought against it, in the wife’s Amended Initiating Application filed 12 October 2021 and the further Amended Initiating Application filed 22 June 2022, on an indemnity basis or in the alternative on a party and party basis. G Pty Ltd further seeks the costs of the application for costs filed 20 October 2022. No schedule of costs was provided.
On 22 June 2022, the wife filed a further Amended Initiating Application which included different interlocutory orders to that contained in her earlier versions of the Initiating Applications.
On 8 July 2022, the wife’s application for interlocutory orders was listed for hearing on 13 and 14 October 2022.
On 12 August 2022, the wife sought an extension of time to file her material in support of the application for interlocutory orders. No material was filed by the extended date but on 25 August 2022, the wife gave notice that she was withdrawing all pending interlocutory applications. The letter relevantly stated:
…
Our client is withdrawing all pending interim applications before the Court due to be heard on 13 and 14 October and will be seeking an urgent trial listing.
We propose that all other costs applications including our client’s cost application that was reserved from the dismissal of the First Respondent’s subpoenas and the dismissal of the objections by the First, Second, Third, Fifth and Seventh Respondents be heard at trial.
Please advise by midday tomorrow, 26 August 2022 whether your clients agree to the above course. We will be writing to the Court tomorrow advising them that our client is withdrawing her applications.
On 26 August 2022, the wife unilaterally contacted my chambers to advise that she was withdrawing all applications that were due to be heard on 13 and 14 October 2022. The communication was not copied to the other parties. The appropriate course would have been to file a Notice of Discontinuance and then inform chambers and copy in the other parties.
On 31 August 2022, G Pty Ltd communicated with the wife advising that it had released counsel for 13 and 14 October 2022 but querying as a matter of urgency how the wife proposed to formalise her decision to withdraw all interlocutory applications. Having not received a response or a Notice of Discontinuance, G Pty Ltd again wrote to the wife on 6 September 2022 asking as a matter of urgency for her to confirm her position.
The wife did not file a Notice of Discontinuance and it was not until 20 September 2022, when the Court listed the matter for mention, that a proposed Minute of Order was provided by the wife to the other parties dismissing the wife’s application for interlocutory orders and vacating the hearing dates on 13 and 14 October 2022. An order in those terms was made.
It is of some significance that the wife sought numerous injunctions against G Pty Ltd, the form of which changed and were ultimately withdrawn.
In my view, a costs order is justified and in the absence of a schedule, I will order that the wife pay G Pty Ltd’s costs of and incidental to the interlocutory orders sought against it, in the wife’s Amended Initiating Application filed 12 October 2021 and the further Amended Initiating Application filed 22 June 2022, to be agreed and failing agreement to be assessed on a party and party basis.
G Pty Ltd will also be awarded the costs of and incidental to the application for costs thrown away filed on 20 October 2022 as agreed and failing agreement on a party and party basis.
THE WIFE’S APPLICATION FOR VALUATION
Notwithstanding the wife’s abandonment of an interlocutory application for the appointment of a single expert for the valuation of six identified real properties and nine entities (including three trusts) on 30 September 2022, the wife filed an Application in a Proceeding on 4 November 2022 seeking the appointment of a single expert for the valuation of 3 identified real properties and other unidentified real properties and 22 entities (including two trusts). The wife’s application seeks an order that the costs of the valuations be paid for by the husband and the respondents at least initially.
The application is opposed by the respondents. The husband represented himself at the hearing and made no submissions but as I understand it, his position is that he has no funds to pay for the proposed valuations.
The application for valuations is made in the context of the wife seeking trial dates for the substantive proceedings.
In order to succeed in her application for the appointment of a single expert the wife must address a number of matters set out in the Rules and in particular the following:
(a)That the appointment of a single expert as sought by the wife is consistent with the overarching purpose to facilitate the just resolution of the dispute according to law and as quickly, inexpensively and efficiently as possible (r 1.04);
(b)That the expert evidence is restricted to that which is necessary to resolve or determine the proceeding (r 7.02(b));
(c)That the persons whom the wife seeks to have appointed as single experts, consent to the appointment (r 7.04(3)); and
(d)That the single expert fees and expenses are reasonable (r 7.06(1)).
The wife has not addressed any of the above matters other than in a most perfunctory and unsatisfactory way. The scope of the valuations sought to be obtained has changed considerably. Previously the wife sought to appoint a single expert to value nine entities including three trusts. Now the wife seeks that 22 entities including two trusts be valued. The wife does not address why all of these valuations are necessary. The valuation fees for the three identified real properties is estimated to be $23,430. There is no identification of what “other real property owned personally by the husband and wife or held in any company or trust referred to at paragraph 2” of her application might mean i.e. whether there a few or tens or hundreds of real properties. The wife suggests that the value of the Trust may be $270,498,430 and that R Pty Ltd had net assets as at 28 February 2019 of $59,197,047 and that another company, VV Pty Ltd may have assets valued at $38,756,909. One can only surmise that the valuation fees will be substantial. There is no estimate at all for such valuations and there is no evidence that the proposed single experts consent to the appointments.
The wife’s application for the appointment of single experts at this time will be dismissed and the respondents should have their costs of and incidental to responding to the application.
BIFURCATION
My reasons for considering bifurcation have been referred to earlier in these Reasons at [12].
In VC & CG[22] the Full Court disapproved of a decision by a trial judge to proceed to determine that certain instruments should not be set aside pursuant to s 106B of the Act, having determined that they were likely to defeat the wife’s property order. The Full Court said that once it had been determined that the instruments were likely to defeat the order sought by the wife, the trial judge should have postponed her determination of whether or not to set aside the transactions until she had completed her consideration of the substantive issue and that it was unsafe to dismiss the wife’s application to set aside the instruments at the outset of proceedings. The Full Court said in particular:
Why the s 106B proceedings were determined as they were is understandable when regard is had to the circumstances which confronted the trial Judge. However, we discern many of the issues which have arisen in this appeal could probably have been avoided if the wife’s applications under s 106B had not been ‘‘severed’’ from the substantive proceedings under s 79, and we think it is appropriate we should express our view that it is generally undesirable to have a discrete hearing of a s 106B application. This is especially so where, as was the case here, findings of credibility are likely to be important. The judge may well make a favourable or unfavourable finding in determining the s 106B questions but, in the light of what subsequently transpires in the balance of the s 79 proceedings, wish that he or she had not done so.
Also the questions that are answerable in a discrete hearing may be more limited than is often appreciated. Questions of intention and whether an order was ‘‘anticipated’’ or not may be answerable, but whether, even if those questions are answered affirmatively, an anticipated order is likely to be defeated, might well not be answerable until the completion of s 79 proceedings.[23]
[22] VC & CG & Ors (fn 1) at [154]–[161].
[23] VC & CG & Ors (fn 1) at [8]–[9].
The latter observation, namely, that it may not be possible to answer whether an anticipated order is likely to be defeated, seems unlikely in this case because the husband and wife claim they have no property (to speak of) currently. This is not a case where one would have to determine whether or not a property settlement order, if made, could be met from existing property of the husband and the wife.
While taking on board the pitfalls identified by the Full Court in VC & CG, this is one of those rare cases which the justice of the case is likely to require a different case management hearing pathway.
The wife cannot afford the costs of the valuations which are likely to be substantial and if the wife is ultimately unsuccessful in the substantive proceedings, the respondents and G Pty Ltd would have no way of recovering the costs of valuations if they are ordered. While I am acutely conscious that the orthodox approach to property settlement trials involves not only an identification of the wife’s and husband’s existing legal and equitable interests in property but also the value of that property, the valuation part of the exercise may not be one that has to occur at the same time.
One option might be to list a first series of trial dates to determine all issues other than what property settlement order is appropriate. At this stage I have in mind listing the matter to commence on 10 July 2023. It seems to me that at least five days would be required but I will hear submissions on the likely length of a first series of trial dates. If the wife’s claims against the husband, respondent and G Pty Ltd are ultimately unsuccessful there may be no need to have a second series of trial dates. If the wife is successful, then valuations could be prepared and a second series of trial dates allocated to determine any dispute about the value of any property, what property settlement order is appropriate and how that would be achieved.
A second option might be to list the following issues (or other issues) for a first series of trial dates (the difference between option one and option two may not ultimately be great):
(1)Was the Deed of Variation of the D Group Holdings Discretionary Trust Deed dated early 2017 an instrument or disposition made by or on behalf of, or at the direction or in the interest of the husband?
(2)If yes, was it made to defeat an existing or anticipated order in the proceedings for property settlement between the wife and the husband or which, irrespective of intention is likely to defeat such order?
(3)If yes, should it be set aside at this time or at all?
(4)Was the Deed of Appointment of New Appointor and Resignation of Existing Appointor for the D Group Holdings Discretionary Trust dated mid-2020 an instrument or disposition made by or on behalf of, or at the direction or in the interest of the husband?
(5)If yes, was it made to defeat an existing or anticipated order in the proceedings for property settlement between the wife and the husband or which, irrespective of intention is likely to defeat such order?
(6)If yes, should it be set aside at this time or at all?
(7)What are the wife’s existing legal and equitable interests in any property?
(8)What if any difference to the wife’s existing legal and equitable interests in any property will the setting aside of either or both of the instruments referred to in paragraphs (1) and (2) have?
(9)Does the wife have a source of financial support, other than any property in which she has an existing legal or equitable interest, which she can reasonably expect will be available to her to supply a financial need or deficiency?
(10)What are the husband’s existing legal and equitable interests in any property?
(11)What if any difference to the husband’s existing legal and equitable interests in any property will the setting aside of either or both of the instruments referred to in paragraphs (1) and (2) have?
(12)Does the husband have a source of financial support, other than any property in which he has an existing legal or equitable interest, which he can reasonably expect will be available to him to supply a financial need or deficiency?
The parties will have an opportunity to file brief written submissions (no more than five pages) to address the above options. If it is submitted that particular issues should not be determined at the first series of trial dates or that additional or alternative issues should be determined on those dates or that no bifurcation should occur, the submissions should address such matters.
The matter will be listed before me for a further case management hearing at which time trial directions as to the filing of any further affidavit material will be made in the event that a first series of trial dates are to be allocated. The parties should confer about such directions.
I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 20 February 2023
SCHEDULE OF PARTIES
BRC 10651 of 2021 Respondents
Fourth Respondent:
MS GLYNN
Fifth Respondent:
D GROUP HOLDINGS FAMILY PTY LTD ATF THE D GROUP HOLDINGS DISCRETIONARY TRUST
Sixth Respondent
REMOVED
Seventh Respondent:
R PTY LTD
Eighth Respondent:
G Pty Ltd
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