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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Webster & Glover

Details

AGLC: Webster & Glover [2022] FedCFamC1F 868
Case: [2022] FedCFamC1F 868
Decision Date

CaseChat Overview and Summary

The case of Webster & Glover involved a dispute between the Applicant, Mr Webster, and the Respondent, Ms Glover, regarding the costs incurred in their legal proceedings. The legal issues before the court revolved around the factors to be considered under s 117(2A) of the Family Law Act, particularly the financial circumstances of the parties, their conduct, the outcome of the proceedings, and the settlement offers made. The court had to determine the appropriateness of awarding costs against the financially weaker party, Ms Glover, who was an undischarged bankrupt, and whether her unsuccessful appeal could be considered in the costs assessment.

The court found that the Applicant's financial position was significantly better than that of the Respondent. While it was acknowledged that Ms Glover's impecuniosity could not be an absolute bar to a costs order, her current financial status and her status as an undischarged bankrupt were significant factors. The court also considered the conduct of both parties, noting that while there were unsuccessful interlocutory applications brought by Ms Glover, neither party's conduct was deemed extraordinary. The court highlighted that the major dispute arose from the emotional fallout of the breakdown of their personal and business relationship, rather than the legal complexities. Ms Glover's persistence in claiming that the Binding Financial Agreement did not cover all entities led to further proceedings, which were largely unsuccessful. The court rejected the notion that Mr Webster's motivation was to financially devastate Ms Glover, instead attributing his persistence to the ongoing claims and animosity between the parties.

Ms Glover was wholly unsuccessful in her claims, except for one interim order that required Mr Webster to pay her $20,000 towards legal costs. The court found that Mr Webster's offer to settle the proceedings on 12 July 2019 should have been accepted by Ms Glover, especially given her worse position after subsequent orders. The court also noted that Ms Glover did not address the settlement offer or provide any basis for its rejection. Ms Glover's counter-offer of $24,000,000 was deemed unreasonable and akin to an ambit claim. Despite Ms Glover's submissions about the arguable nature of her appeal, the court determined that it would be unjust to set aside the costs orders against her.

The court concluded that given the financial disparity between the parties, the unsuccessful nature of Ms Glover's claims, and the lack of extraordinary conduct, it was appropriate to make a costs order against her. The court ordered that Ms Glover pay the Applicant's costs of the proceeding, with specific details to be agreed upon or determined by the court.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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… andraises the legitimate question that it would be unjust and inequitable for the Court to now make costs orders against the First Respondent.CONCLUSION

Ratio Decidendi

Legal Principle Established

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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

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