Webster & Glover
[2022] FedCFamC1F 868
Federal Circuit and Family Court of Australia
(DIVISION 1)
Webster & Glover [2022] FedCFamC1F 868
File number(s): BRC 11228 of 2016 Judgment of: BAUMANN J Date of judgment: 9 November 2022 Catchwords: FAMILY LAW – COSTS – Where the husband seeks an order for costs against the wife – Where the wife is an undischarged bankrupt – Where the husband’s financial position is superior to the wife – Where the wife’s applications have been mostly unsuccessful – Fixed costs order made in favour of the husband Legislation: Bankruptcy Act 1966 (Cth) s 60
Family Law Act 1975 (Cth) s 117
Cases cited: Glover & Webster [2021] FedCFamC1A 69
Lenova & Lenova (Costs) [2011] FamCA 141
Mallory & Mallory [2020] FamCAFC 62
Webster & Glover [2021] FamCA 127
Division: Division 1 First Instance Number of paragraphs: 13 Date of last submission/s: 1 August 2022 Date of hearing: In chambers on the papers Place: Brisbane Solicitor for the Applicants: Damien Greer Lawyers Counsel for the First Respondent: Mr Clark The First Respondent: Litigant in person The Second Respondent: Litigant in person ORDERS
BRC 11228 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR WEBSTER
First Applicant
S PTY LTD
Second Applicant
AND: MS GLOVER
First Respondent
R PTY LTD
Second Respondent
order made by:
BAUMANN J
DATE OF ORDER:
9 November 2022
THE COURT ORDERS:
1.That the First Respondent wife, Ms Glover, pay a contribution to the costs of the Applicant husband fixed in the sum of $22,000, by no later than 4.00pm on 9 January 2023.
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 Webster & Glover has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
On 16 March 2021, the Court delivered Reasons for finding that a binding financial agreement dated 1 July 2010 covered all the interests of the parties (see Webster & Glover [2021] FamCA 127) and pronounced Orders to that effect on 8 April 2021, when it formally dismissed the Application by Ms Glover.
As she was, at the time, entitled to do, Ms Glover filed an appeal, however by mid-July 2021, Ms Glover had become bankrupt so that it was necessary for the Trustee in Bankruptcy to make an election as to whether the Trustee wished to prosecute the Appeal (pursuant to s 60(2) of the Bankruptcy Act 1966 (Cth)).
On 16 August 2021, the Trustee of Ms Glover’s bankrupt estate informed the appeal registrar that they not did propose to prosecute the action.
As a result, when the appeal came before the Full Court (Strickland, Ainsley-Wallace & Aldridge JJ), Counsel for the other party Mr Webster made an oral Application that the Appeal should be dismissed as Ms Glover lacked standing to prosecute the appeal because of her bankruptcy. After receiving further submissions, and in the Reasons then published on 19 November 2021, the Full Court ordered that the appeal be dismissed (see Glover & Webster [2021] FedCFamC1A 69).
On 17 December 2021, the Full Court dismissed an Application by Mr Webster for costs on the appeal finding that “there is nothing in the material that we have read that indicates that the appellant acted unreasonably in bringing the appeal”, and further chose to observe that indeed that “there was a basis for thinking that the appeal outcome had reasonable prospects of success”. No clearer picture emerges from the reasons of the Full Court as to what was the “basis” referred to in the costs Reasons.
Subsequently to the determination of the appeal, the Applicant Mr Webster pursued his standing Application for an order for costs of the substantive proceedings, which application is opposed by Ms Glover.
The principles relating to the exercise of the Court’s power to make an order for costs are well settled, and succinctly whilst s 117(1) of the Family Law Act 1975 (“the Act”) provides that each party shall bear their own costs of proceedings, if the Court is satisfied in the circumstances of the particular case (and after consideration of the factors contained in s 117(2A)), that an order for costs is justified, then the Court is empowered by s 117(2) to make such order as to costs as the Court considers just.
In respect of this dispute, the Court has received and considered the following written submissions:
(a)Written submissions by the Applicant filed 29 April 2021 (before the appeal had been decided) seeking an order that Ms Glover pay the Applicant’s costs from 10 November 2016 to 8 April 2021 “to be assessed on a party-party basis” or, in the alternative, costs so assessed from 17 December 2018 to 8 April 2021;
(b)Further written submissions by the Applicant filed 28 June 2022 (after the Appeal had been determined) seeking an order for costs “in the sum of $20,000”, together with an order for costs in preparing written submissions in the sum of $8,000. Between the two sets of submissions, an affidavit of Mr Webster was filed on 26 May 2021 referring in part to “offers of settlement”; and
(c)Ms Glover filed brief written submissions initially on 24 May 2021 (whilst the appeal was pending), and then filed more substantive written submissions on 25 July 2022 seeking the Application for costs be dismissed. On 1 August 2022 the Applicant filed further written submissions in reply.
The fact that in these Reasons every submission or contention raised in the written material identified above is not referred to is not to be construed as those submissions having been ignored.
DISCUSSION
Within the matrix of the relevant s 117(2A) factors, the Court finds that:
(a)the Applicant’s financial position is far superior to that of the Respondent. Little utility arises from considering the parties’ alleged financial position in 2019 or even 2017, as the Applicant’s submissions contended. The Court needs to take into account their financial circumstances now, and the fact remains the Respondent is undischarged bankrupt. I accept that “impecuniosity cannot be used as an unconditional shield against a costs orders (see Mallory & Mallory [2020] FamCAFC62 at [9]) and that a “limited financial capacity to meet an order can not be determinative” (Lenova & Lenova (Costs) [2011] FamCAFC 141 at [12] per Murphy J). However, the Act prescribes the financial circumstances of the parties is a relevant consideration;
(b)as to the conduct of the parties (s 117(2A)(c)), at paragraphs 29 to 30 of his written submissions filed 28 June 2022, the Applicant submits for the reasons articulated, that Ms Glover “conducted herself” in a manner that resulted in extensive legal work and significant costs being incurred by the Applicant “to disprove the claims” such that he incurred costs “disproportionate to the issues in dispute”. I accept a number of interlocutory Applications were brought by Ms Glover, who was often unrepresented, and which were generally unsuccessful. There were some legal complexities in the proceedings involving the corporate parties, but the major dispute in the proceedings was the continuing emotional effect of the breakdown of the personal and business relationship – the reasons for which is revealed in the written submission of the Respondent and her perception that Mr Webster has:
retained businesses significantly built by the First Respondent, and has never adequately remunerated her. The First Applicant could have desisted from launching legal action, but since he knew such action would financially devastate the First Respondent he persisted…
I do not accept this was the motivation of Mr Webster, as after the judgment and Order of Judge Jarrett (as he then was), that could have been the end of the matter. It was the persistence of Ms Glover claiming that the terms of the Binding Financial Agreement did not cover all entities, which was the motivation for the second set of proceedings – fuelled by the high levels of animosity and mistrust between the parties. I do not find, in the circumstances, the conduct of either party in the adversarial process was in any way extraordinary;
(c)I accept that the Respondent Ms Glover was wholly unsuccessful save for one interim Order made on 29 May 2020 which required the Applicant to pay Ms Glover $20,000.00 towards legal costs. Ms Glover had, in that Application, sought an order for, essentially, litigation funding, in a sum of $400,000.00, but was clearly unsuccessful in that endeavour;
(d)on 12 July 2019, the Applicant made an offer to settle the proceedings. The terms of the offer made in the context of the earlier Orders of Judge Jarrett. In the light of the proceedings determined in this Court, the offer should have been accepted by Ms Glover. She was, after the Orders made on 8 April 2021, in a worse position. Ms Glover does not refer in her submissions (prepared by R.J Clark of Counsel), to the offer or any basis for its rejection. In the circumstances, where Mr Webster contends that Ms Glover’s counter offer that the Applicant pay her $24,000,000, should be categorised as an ambit claim, has some substance; and
(e)Ms Glover submits and points to the observation by the Full Court about her having an arguable case on appeal (which she was unable to pursue) to say:
if successful [on appeal]… may well have led to costs order being set aside…
and
raises the legitimate question that it would be unjust and inequitable for the Court to now make costs orders against the First Respondent.
CONCLUSION
It remains a mystery why, where there seems to be little likelihood of recovery from the bankrupt estate of Ms Glover, that the Applicant has spent more of his funds seeking a costs order.
However, I am satisfied that the circumstances do justify a costs order fixed in the sum of $22,000 – being the sum of $20,000 as claimed by the Applicant and $2,000 for preparing the costs submissions. In my view, burdening these parties with the process of taxing costs or otherwise having them assessed, would be unreasonable.
I make the order at the commencement of these Reasons accordingly.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 9 November 2022
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