WGOC and GH and Anor (No. 3)

[2007] FamCA 1125

FAMILY COURT OF AUSTRALIA

WGOC & GH AND ANOR (NO. 3) [2007] FamCA 1125

FAMILY LAW – COSTS – Between parties

Family Law Act 1975 (Cth)

APPLICANT: WGOC

RESPONDENT: GH

2^nd RESPONDENT: GJK

FILE NUMBER: BRF 1742 of 2000

DATE DELIVERED: 4 September 2007

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

COSTS JUDGMENT OF: Barry J

HEARING DATE: 12 July 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Cooke of Counsel

SOLICITORS FOR THE APPLICANT: Mills Oakley Lawyers

COUNSEL FOR THE FIRST RESPONDENT: Ms Mazur, Solicitor

SOLICITORS FOR THE FIRST

RESPONDENT:

Butler McDermott Lawyers

COUNSEL FOR THE SECOND RESPONDENT: Ms Carew of Counsel

SOLICITORS FOR THE SECOND RESPONDENT: Bradley & Bray, Solicitors

Orders

1. The Applicant to pay the Second Respondent’s costs on an indemnity basis of and incidental to the Application filed 20 June 2007.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRF1742/2000

WGOC

Applicant

And

GH

First Respondent

And

GJK
Second Respondent

REASONS FOR JUDGMENT – COSTS

1. On 2 August 2007 I made Orders following various applications heard on

   
   12 July 2007

   .  I now have to deal with the issue of costs arising from that hearing. 

2. The applicant and the first respondent were the husband and wife to these proceedings which have been in train for a number of years.  The second respondent is the accountant appointed by the Court as trustee with power of sale to effect the sale of the A Unit.

3. The Orders which issued on 2 August 2007 were in the following terms:

   “IT IS ORDERED THAT:

   (1)The amount of $792.00 be immediately disbursed to Legal Aid Queensland on account of the previous costs orders made in favour of the Third Respondent.

   (2)The amount of $141,226.25 be paid from the trust account of Bradley & Bray Solicitors to the trust account of Butler McDermott, lawyers for the First Respondent, such funds to be retained in the solicitor’s trust account pending the determination by the Full Court on the issue of the Wife’s costs of the proceedings (other than the appeal).

   (3)Butler McDermott be at liberty to invest the sum of $141,226.25 in such form as is considered most appropriate to gain the best return, subject to such investment being in accordance with authorised investments for trust accounts pursuant to Queensland law.

   (4)The amount of $139,495.12 is to be paid from the trust account of Bradley & Bray to Mills Oakley Lawyers for release to the Applicant after payment of any outstanding fees.

   (5)Pending further Order the balance of funds retained in the trust account of Bradley & Bray to be invested in such form as is considered most appropriate to gain the best return, subject to such investment being in accordance with authorised investments for trust accounts pursuant to Queensland law.

   (6)No Order to be made pursuant to paragraph 2 of the Applicant’s Application in Form 2 filed 20 June 2007.

   (7)      Costs reserved.”

4. Order (1)

   Was made by consent.

5. Order (2)

   The amount of $141,226 represented costs payable pursuant to a costs assessment order covering the wife’s costs in relation to the 11 day trial in 2005.

   In his application filed on 20 June 2007 the husband sought an order in terms as ordered namely that funds be retained in the wife’s solicitor’s trust account pending the determination by the Full Court of the husband’s appeal on the issue of the costs of trial.

   The wife in her response document had opposed the moneys being retained in the solicitor’s trust account largely on the basis that no stay order had been sought, the costs had been ordered to be paid and were outstanding.  She sought an order that the moneys be distributed in final payment of outstanding costs and/or in payment to her.

6. Order (3)

   This was a procedural order to facilitate the investment of the sum of $141,000 retained in the wife’s solicitor’s trust account.

7. Order (4)

   The husband in his application had sought the release of the sum of almost $205,000 to himself.  Ultimately the Court ordered the release of just under $140,000, a significantly lesser amount.

8. In the orders of 1 July 2005 I had ordered that the husband’s entitlement to his share of the proceeds of sale of the A Unit not be released:

   “- - until the determination of all issues relating to costs orders sought by the Children’s Representative and the wife had been determined.”

   The husband was seeking to lift this injunction.  The husband has already had to pay the wife’s costs of the appeal assessed at almost $50,000.

   Section 117 (2A) is in the following terms:

   “117(2A)[Considerations relevant] In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   a.the financial circumstances of each of the parties to the proceedings;

   b.whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party/

   c.the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   d.whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

   e.whether ay party tot he 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.”

1. Counsel for the applicant made reference to a letter from the wife’s solicitors to the husband’s solicitors of 12 June 2007.

   That letter is in the following terms:

   “We refer to your correspondence dated 7 June 2007 received by us on 8 June 2007.

   With respect to your proposal we make the following comments:

1.As to the sum of $10,000 being retained by the Trustee we would have thought that that amount was inadequate and insufficient.  That is, however, a matter for the Trustee.  You can no doubt take that matter up with the Trustee.

2.With respect to the sum of $792.00 on what basis do you suggest that these funds ought to be paid out of the settlement funds held in trust?  The Orders were made against your client and ought to be paid by your client from his own funds.

3.As to the amount of $141,226.25 we confirm that we have been corresponding with the Trustee in relation to payment of this amount.  There is no reason why this amount ought not to have been paid and we anticipate that those monies will be paid in the very near future.

4.As to item 4 we will take some further instructions in relation to that request, however, there is not much point in taking instructions until items 1, 2 and 3 have been resolved as they are still outstanding.”

As to the terms of paragraph 1 of that letter it was conceded by the legal representatives for the husband during the Court hearing before me that the amount to be retained by the Trustee should be $45,000 not $10,000.  The legal representatives for the Trustee suggested $50,000 should be retained.  For reasons I gave at the time I ordered that the sum of $50,000 be retained.

The solicitors for the wife were quite correct to point out that there has been no stay of the order for the payment of the child costs.  The amount is due and payable.  However, out of an excess of caution I made the orders that I have made namely that they not be released to the wife.

The solicitors for the wife were not categorically refusing to confirm the release of funds to the husband they simply wanted matters in paragraphs 1, 2 and 3 of their letter dealt with in a more appropriate fashion. 

1. The husband’s solicitors commenced proceedings on 20 June just over a week after receiving the letter referred to above. 

2. In relation to the terms of section 117(2A) I am aware of the financial position of the parties.  It was dealt with extensively in the reasons for judgment published on 1 July 2005. 

3. I am informed the wife has only received $18,000 out of the funds paid to her.  Her share of the proceeds of the sale of the A Unit have been absorbed in legal fees.  Presumably if I had ordered payment of the sum of $141,000 a considerable portion of this amount would have been made available to the wife.

4. In relation to the terms of paragraph (e) I am of the view that neither party has been “wholly unsuccessful” for the purposes of that subsection.

5. On balance I would call the result a draw as between the husband and wife.  I do not propose to make any order for costs.  Each party can bear their own costs in relation to the interim hearing of 12 July 2007.

6. Second Respondent’s Costs

   I turn to consider the issue of costs sought by the second respondent.

   Counsel for the second respondent submitted the second respondent’s costs should be paid on an indemnity costs basis.

   Counsel for the husband submitted the husband and wife should pay equally these costs on a party and party basis.

7. In his application of 20 June 2007, paragraph 3, the husband sought a specific order that the first and second respondents pay the applicant’s costs.

   Counsel for the second respondent submitted that but for the seeking of this order the second respondent could simply have abided the order of the Court.

8. The view that I take is the husband was the applicant and there was no justification for specifically joining the second respondent nor in seeking a costs order against him.

9. I fail to see why an accountant appointed to carrying out duties in furtherance of a Court order should be out of pocket, absent negligence or incompetence.  There is no suggestion of that here.

10. The Trustee was also brought into the arena by the husband seeking an order that the Trustee and the solicitors he had engaged, Bradley & Bray, give detailed particulars of their accounts.

11. I ruled that sufficient particulars had been given and the accounts were reasonable.

    I further ruled that in any event the husband had his redress in other forums.

12. I fail to see why the wife should have to bear any portion of the Trustee’s costs.  She did not institute the further proceedings.  She did not seek to bring the second respondent into the proceedings by questioning the particulars of the accounts rendered.

13. I will order the husband to pay the Trustee’s costs on an indemnity basis.  I find the indemnity basis is appropriate as the application against the second respondent was so totally without merit.

I certify that the preceding twenty two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry.

Associate

Date:  4 September 2007