White and West

[2016] FamCA 419

FAMILY COURT OF AUSTRALIA

WHITE & WEST [2016] FamCA 419

FAMILY LAW – COSTS – Where the wife seeks that the husband pay her costs on an indemnity basis – Where the costs sought by the wife are in relation to an unsuccessful contravention application by the husband – Where the wife made an offer in writing to settle the contravention proceedings – Where the husband was wholly unsuccessful in his contravention application – Where the parties have been engaged in a long history of litigation – Where the Court is not persuaded that the circumstances warrant an indemnity costs order – Order made that the husband pay the wife’s costs as agreed or as assessed on a party and party basis.

Family Law Act 1975 (Cth) – s 117

Colgate-Palmolive Co. and Anor v Cussons Pty Limited (1993) 118 ALR 248

APPLICANT: Ms White

RESPONDENT: Mr West

FILE NUMBER: NCC 3 of 2007

DATE DELIVERED: 27 May 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 7 February 2016

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Nessworthy, agent solicitor for Attwaters

FOR THE RESPONDENT: Mr West in person

Orders

1. That the husband pay to the wife’s solicitors her costs in the contravention proceedings as agreed or as assessed on a party and party basis.

IT IS NOTED that publication of this judgment by this Court under the pseudonym White & West has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: NCC 3 of 2007

Ms White

Applicant

And

Mr West

Respondent

REASONS FOR JUDGMENT

1. This is an application by Ms White (“the wife”) for an order that Mr West (“the husband”) pay her costs of his contravention application filed on 4 June 2014 as agreed or as assessed on an indemnity basis.  The husband seeks an order that the application be dismissed.

2. On 16 November 2015 I ordered that the husband’s contravention application be dismissed.  As indicated in my reasons for judgment on that occasion these parties have a very long history of litigation in this and other courts.  The husband had alleged two breaches of property orders.  The first alleged breach was that the wife sold the former matrimonial home below market value.  The second alleged breach was that the wife had not informed him of progress of the marketing and sale of the matrimonial home.  After considering the evidence in respect of each of the alleged breaches over two hearing days, I determined that the husband had not been able to establish either of the alleged breaches.  

Should the Costs Proceedings be Adjourned?

1. There was a preliminary issue about whether the Court ought to hear and determine the wife’s costs application at this point.  This was because the husband had filed a Notice of Appeal against the order dismissing his contravention application.  Initially the husband opposed the Court determining the costs application prior to completion of his appeal.  However, after hearing submissions and participating in some discussion about the merit of hearing the costs application at this point the husband agreed that, as a practical measure, it would be appropriate to do so particularly bearing in mind that the wife has not asked the Court to make a costs order in a specified amount.  Rather she has asked for any order to be on the basis that costs would be as agreed or as assessed.  The husband accepted that in the event that a costs order was made there would be further opportunity for him to endeavour to negotiate the quantum or failing agreement, he could make submissions in relation to an assessment. 

The Wife’s Case

1. The submissions on behalf of the wife were as follows.

2. The contravention proceedings were heard over two days namely 3 September 2014 and 29 January 2015.  On 21 November 2014, that is a couple of months after the first hearing day, the wife’s solicitors wrote to the husband and informed him that having regard to the concessions made by Mr H (the husband’s valuer) during cross-examination and the evidence of Mr Y contained in his affidavit, the wife had the view that the husband’s contravention application had no reasonable prospects of success.  The letter also informed the husband that the wife had incurred significant legal costs in defending his contravention application and that she would incur further costs if the proceedings continued on or beyond 29 January 2015 amounting to several thousand dollars.  The letter went on to inform the husband that if the husband agreed to bring the proceedings to an end before 29 January 2015 without the need for any appearance at Court that day, the wife would pay her own costs and would refrain from making any costs application against the husband.

3. The husband did not respond to the letter or otherwise inform the wife that he would accept her offer.  In these circumstances the wife returned to Court on the adjourned date of 29 January 2015, as did the husband, and the contravention hearing concluded on that day.

4. Proceedings between the parties in this Court and the Federal Magistrates Court have a long history. The wife’s solicitor estimates that there have been in excess of 100 appearances at Court. Mullane J had made an order in 2005 pursuant to the then s 118(1)(c) of the Family Law Act 1975 (Cth) (“the Act”) against the husband to the effect that he could not file any application without specific leave of the Court.

5. The wife has been wholly successful. She is an unskilled worker working shift work. She still supports the two youngest of the parties’ five children. She has only ever received the minimum child support from the husband which is approximately $10 per month. The wife is not eligible for legal aid. The wife made the offer in writing to settle the proceedings pursuant to s 117(2A)(f) of the Act by way of the letter from her solicitors referred to above.

6. This is a matter where the Court should exercise its discretion to make a costs order in favour of the wife and costs should be assessed on the indemnity basis.

The Husband’s Case

1. The husband’s submissions were to the following effect.

2. Having made concessions in the property proceedings, in the interests of not having to engage in further litigation, in order to arrive at the consent property orders, the husband trusted the wife to comply with the orders so that he would receive sufficient funds “to get another start in life” at age 55 or thereabouts.  As it is, he has ended up living in a caravan park.

3. The husband offered the Court a valuation by a registered valuer yet the Court accepted a valuation by a real estate agent and this should not have been accepted.  His family law research particularly of the Family Law Handbook, has informed him that the measure usually employed by courts to determine what is fair market value is the price a willing but not desperate buyer with adequate information would pay for the property.

4. Another reason for not accepting evidence of a real estate agent is that the other party might have difficulty accepting the impartiality of a real estate agent.

5. In relation to the comparable sales, the former matrimonial home was constructed on bearers and joists whereas the V3 was not.  And the former matrimonial home is in V2 which is a more desirable area than V3.  One of the homes used as a comparable sale but at a higher sale price had not been completed and in relation to the former matrimonial home, one could not distinguish whether it was a project home or an architect-designed home. 

6. In relation to the requirement for the wife to inform him about the progress and marketing of the former matrimonial home it was not sufficient for the wife only to communicate with him about the sale over the telephone.  In any event the wife just would not speak to him.

7. Accordingly, the husband considers that he has a reasonable prospect of being successful in his appeal.

8. Sub-section 117(1) of the Act provides that each party should pay their own costs and this should happen here. It shall be a matter for the Court to determine whether there has been any false allegation. The husband’s financial circumstances are dire, being that he is living on a pension in a caravan park and is self-represented.

Discussion

1. As both Ms Nessworthy, agent solicitor for the wife, and the husband have submitted, the usual position as set out in s 117(1) of the Act is that each party to proceedings under the Act shall bear his or her own costs. That is subject to a power given to the Court by s 117(2) of the Act to make a costs order if it considers it just to do so upon a consideration of the relevant matters in s 117(2A) of the Act.

2. The first relevant matter is the financial circumstances of each of the parties.  Neither party presented detailed material about their respective financial circumstances.  I accept that the husband is living on a pension in a caravan park.  He says that his circumstances are relatively impoverished.  He says that whereas previously he was living in the former matrimonial home with the wife which they owned, he has found himself now in relatively impoverished circumstances.  On the other hand the wife has quite limited means.  She is an unskilled worker working in shift work.  She still has to support the parties’ two youngest children and she receives the minimum amount of child support from the husband.

3. The next relevant matter is that neither party is in receipt of assistance by way of legal aid. 

4. There is nothing particularly relevant about the conduct of the parties. Ms Nessworthy made the observation that her principal had estimated that these parties had been involved in the vast number of appearances before this and other courts referred to above and that the husband is subject to an order pursuant to s 118 of the Act, and therefore unable to file any application without specific leave of the Court. In my view these matters are of historical interest only. It is the case that the husband was prepared to make a concession at this immediate hearing, this being that it would be appropriate to determine the costs application prior to determination of his appeal.

5. The application is really made on the basis that the husband has been wholly unsuccessful in the contravention proceedings and despite the wife having given him an opportunity to avoid any order for costs by her letter to him dated 21 November 2014 conveying an offer to resolve the proceedings, the husband persisted to press the continuation of the hearing on 29 January 2015.

6. Turning to the relevance of the offer, the contravention proceedings commenced on 3 September 2014.  The husband, to support his allegation that the wife had sold the former matrimonial below market value, had arranged for a valuation by a Mr H, a certified practising valuer.  I have referred in some detail to the circumstances of this evidence in my reasons for judgment in the contravention proceedings.  Mr H had provided a valuation of $575 000 as at the date of sale which was significantly more than the $530 000 which was achieved on sale.  As indicated in my reasons for judgment Mr H was cross examined in considerable detail by telephone by learned solicitor for the wife, Mr Fox.  Mr Fox took Mr H through a summary of the marketing program and the feedback from prospective purchasers.  After considering these matters Mr H conceded that in those circumstances in which the property had been on the market for as long as it had been and that it had been inspected by multiple groups of prospective purchasers it was reasonable for the wife to have accepted the offer of $530 000. 

7. In my view, the husband’s case in relation to the first alleged breach appeared to have been weakened at this point.

8. In considering the relevance of this offer it is important also to note that at the time I would regard the husband to have received the letter, namely, by 30 November 2014, the situation so far as the hearing was concerned was as follows.  The hearing had reached the end of the first day (3 September 2014) at which time the husband had completed his case.  I had made a finding that the husband had established a prima facie case for each of the alleged breaches.  This was notwithstanding the evidence which Mr H had given.  The wife’s case still had to be heard and there were issues of credit in relation to each of the parties which I regarded as being particularly important.

9. The offer in the wife’s solicitor’s letter of 21 November 2014 related mainly to the first of the alleged breaches although it also warned the husband that he would not obtain an order for compensation.  In any event, at that stage, what the likely outcome of the husband’s application might be, was not at all clear to me.  The wife still had opportunity to present her case.  As it turned out, upon hearing the wife’s case I formed the view that despite my initial findings of a prima facie case, I was not persuaded to find that the wife had committed the alleged breaches, even on a balance of probabilities. 

10. So while the offer indicated that the wife would be prepared to offer a compromise by informing the husband that if he brought the litigation to an end she would not seek any costs, the likely outcome of the continuation of the proceedings was not readily foreseeable in my view.  Accordingly, in my view the offer was of little relevance although it demonstrated a preparedness on the part of the wife to compromise.

11. In relation to the significance of the husband having been wholly unsuccessful in the proceedings, in my view upon the husband having served the wife with a contravention application, she had little choice but to respond.  This is because a finding that she had breached a current Court order could then obviously be met with the imposition of a sanction on her.  This is a serious matter and she took the appropriate course of re-engaging her solicitor to represent her in the contravention proceedings.  Clearly this has come at considerable cost although the details are not immediately before the Court.  On the other hand, the husband is self-represented and apart from some cost presumably having been incurred for the assistance of Mr H, the husband would appear to have incurred little cost in these proceedings.

Conclusion

1. The wife has incurred considerable legal costs in the contravention proceedings.  I have referred to the financial circumstances of each party in a general sense.  The husband has been wholly unsuccessful in the proceedings.  In all the circumstances, in my view, it would not be just for the wife to have to pay all of the costs incurred by her in having to respond to the husband’s unsuccessful contravention application.  In my view, some order for costs should be made in favour of the wife.

2. As I have said, the wife is seeking that any costs order be on the basis of indemnity costs.  The principles relating to an order for indemnity costs are set out in the well-known authority of Colgate-Palmolive Co. and Anor v Cussons Pty Limited (1993) 118 ALR 248. Sheppard J said at page 256 as follows:

   …

   2. The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis.

   …

   4. … The circumstances of the case must be such as to warrant the Court in departing from the usual course.  …

3. His Honour referred to various circumstances in which indemnity costs orders have been made including the making of allegations of fraud knowing them to be false, particular misconduct that causes loss of time to the court and to other parties, commencing or continuing proceedings for some ulterior motive or in wilful disregard of known facts or clearly established law, making allegations that never ought to have been made, undue prolongation of a case by groundless contentions or an imprudent refusal of an offer to compromise.  His Honour also made it clear that the categories for properly making indemnity costs orders are not closed.

4. While I am persuaded that the circumstances of this case, particularly the fact that the husband has been wholly unsuccessful in his contravention application, justify the making of a costs order in favour of the wife, I am not persuaded that there exist circumstances which would warrant the Court departing from the usual course of ordering costs on the party and party basis.

5. I shall order that the husband pay the wife’s costs as agreed or as assessed on a party and party basis.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 27 May 2016.

Associate:     

Date:              27 May 2016