WHITEHOUSE & WHITEHOUSE
[2010] FamCA 315
•23 April 2010
FAMILY COURT OF AUSTRALIA
| WHITEHOUSE & WHITEHOUSE | [2010] FamCA 315 |
| FAMILY LAW – COSTS – Circumstances justifying order FAMILY LAW – COSTS – Between parties FAMILY LAW – COSTS – Taxation of costs |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Brown v Brown (1998) FLC 92-822 |
| APPLICANT: | Ms Whitehouse (by her case guardian) |
| RESPONDENT: | Mr Whitehouse (by the executrices of his estate) |
| FILE NUMBER: | MLF | 3248 | of | 2006 |
| DATE DELIVERED: | 23 April 2010 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Mushin J |
| HEARING DATE: | By written submissions |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Kirkham QC Mr Moloney |
| SOLICITOR FOR THE APPLICANT: | C E Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr North SC Mr Sweeney |
| SOLICITOR FOR THE RESPONDENT: | Grice & Grice |
Orders
IT IS ORDERED THAT
Failing agreement between the parties as to costs within 28 days hereof or such further time as may be agreed between them in writing and subject to paragraph 2 hereof, the costs of the husband's estate of and incidental to the proceedings resulting in the orders of the Court made on 6 February 2009, including the costs of and incidental to these applications for costs, be assessed between the parties pursuant to Chapter 19 of the Family Law Rules 2004 and when so assessed be paid by the wife's estate.
Notwithstanding paragraph 1 hereof, the costs of the wife's estate of and incidental to the adjournment of the proceedings on 10 December 2007 be assessed as between parties pursuant to the said Rules and when so assessed be set off against the costs to be paid by the wife's estate to the husband's estate pursuant to paragraph 1 hereof.
All applications be otherwise dismissed and removed from the list of cases awaiting hearing.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel.
IT IS NOTED that publication of this judgment under the pseudonym Whitehouse & Whitehouse is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLF 3248 of 2006
| MS WHITEHOUSE (by her case guardian) |
Applicant
And
| MR WHITEHOUSE (by the executrices of his estate) |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
On 6 February 2009 I delivered reasons for judgement ("the reasons") and made orders ("the orders") dismissing the claim by the Estate of the Deceased Wife ("the wife's estate") for relief against the Estate of the Deceased Husband ("the husband's estate") pursuant to the accrued jurisdiction of the Court. The basis of those reasons was that the claim was void ab initio for want of jurisdiction.
The wife's estate appealed to the Full Court of this Court against that decision, Whitehouse & Whitehouse [2009] FamCAFC 207. The appeal was dismissed.
THE PRESENT APPLICATIONS
The parties indicated to the Court that they sought costs arising out of the orders. Accordingly, on 5 May 2009 Cronin J made directions for the filing of submissions in support of the competing applications for costs. Those submissions were referred to me and I made directions for the filing of further submissions. As a result, I have considered the following material:
· written submissions filed on behalf of the husband's estate on 26 May 2009;
· written submissions in response filed on behalf of the wife's estate on 9 June 2009; and
· written submissions in reply filed on behalf of the husband's estate dated 16 March 2010.
The husband's estate seeks an order that the wife's estate pay the entirety of the costs and disbursements incurred by the husband's estate "of and incidental to the proceedings" before me as a result of which the orders were made. In the alternative, the husband's estate seeks "75% of such costs or such other percentage as the Court determines to be just and equitable."
In response the wife's estate seeks costs from the husband's estate -
· “for the period between 20 February 2007 and 21 August 2007”;
· “the failed application of the husband's estate to adjourn applications so proceedings could be brought in the High Court”;
· the dismissal of the claim by the husband's estate; and
· “in the alternative … determine an amount of costs that is fair and reasonable to be paid by the estate of the late wife, rather than have the matter determined by a Taxing Registrar.”
THE RELEVANT LEGISLATION
The relevant legislation is contained in section 117 of the Family Law Act 1975 (" the section"). Subsection (1) provides:
Subject to subsection (2), … each party to proceedings under this Act shall bear his or her own costs.
Subsection (2) empowers me to "make such order as to costs … as the court considers just." In considering whether it is "just" to make an order as to costs I must take into account the various matters contained in subsection (2A) which I discuss below.
DISCUSSION
Proceedings under the Act
Before considering the provisions of subsection (2A), I must consider a preliminary submission made on behalf of the wife's estate that the Court effectively does not have jurisdiction to consider these applications for costs because the proceedings were not "proceedings under the Act" as required by subsection (1).
In my view, it is a novel proposition that the wife should seek to rely on the Court's accrued jurisdiction in order to seek the relief which was the subject of these proceedings and then suggest that having failed in that endeavour the proceedings were not "proceedings under the Act" and therefore did not attract the costs jurisdiction provided by the section. As I found in the reasons and was common ground before me, the Court has an accrued jurisdiction which arises from section 31(1)(a) of the Act and the authorities thereunder. Had the wife's estate succeeded in establishing the Court's jurisdiction to hear the application made pursuant to the accrued jurisdiction, it could not have been said that the Court did not have the power to order costs pursuant to the section. Conversely, the fact that the wife's estate failed in establishing the jurisdiction in this matter cannot, and does not, remove the Court's power to consider costs arising out of such an application. Accordingly, I find that I have the power to consider these applications for costs.
THE LEGISLATION
Subsection (2A)(a) - parties' financial circumstances
I now turn to a consideration of the various factors required by subsection (2A). The first of those is the parties’ financial circumstances. Each of the parties has provided me with probate documents in respect of the other’s estate. Those relating to the husband’s estate demonstrate total assets in excess of $2,600,000. In respect of the wife's estate, the total net value of assets amount to approximately $250,000. Accordingly, the husband's estate is valued at very considerably in excess of the wife's estate.
Subsection (2A)(b) - legal aid
Neither party is in receipt of assistance by way of legal aid. Accordingly, this paragraph is not relevant.
Subsection (2A)(c) - the conduct of the parties
In support of the application by the wife's estate for costs relating to part of the proceedings, it is submitted that the conduct of the husband's estate is relevant. That submission relates to two specific instances.
20 February 2007 to 21 August 2007
The first claim of the wife's estate relates to the abandonment of an issue by the husband's estate which was made prior to the death of both the husband and the wife. In support of that claim the following written submission was made:
9. The preliminary question of whether or not there was a separation and whether the proceedings were thus without jurisdiction or an abuse of process, as asserted by the husband, were dismissed and the costs arising from that application are sought by the estate of the wife. These costs are sought from 20 February 2007 until the dismissal on 21 August 2007
10. The costs are sought on the basis that the husband, and thereafter the representatives of his estate, knew that the wife was ill and elderly and that she sought a priority hearing to have the trial determined before her death. The conduct of the parties is therefore relevant in "creating" an issue that lacked merit and which was ultimately dismissed by the court.
The relevant facts are these. On 20 February 2007 the husband and the wife attended a conciliation conference with a Registrar of the Court. The matter was not resolved at that conference and the applications were referred to a hearing to determine what priority, if any, the substantive applications should receive.
On 1 May 2007 the husband by his Case Guardian filed an application which among other things sought:
· the dismissal of –
… the wife's Application for expedition of the trial listed before Justice Mushin on 2 May 2007; and
· a declaration -
… that the marriage between husband and wife has not irretrievably broken down irretrievably (sic) and that separation has not occurred.
The husband’s Case Guardian swore an affidavit in support of the application which deposed to the facts on which he relied.
On 2 May 2007 the matter came on before me at which time I made orders which included an order that:
The wife’s application for priority be dismissed by virtue of the husband having filed an application on Form 2 on 1 May 2007 and the Court’s determination that that application should be heard as a preliminary issue …
As I found in the reasons, the husband died in May 2007. Accordingly, while his application filed on 1 May 2007 was not dismissed until 21 August 2007, that application effectively died with him as the relevant facts could not be primarily supported other than through him. Further and obviously, the husband could no longer be cross-examined on the contents of his affidavit and any other relevant facts.
It follows from the above analysis that on any view the husband's application raising the issue of separation as a relevant preliminary matter could not have proceeded beyond the date of his death. Accordingly, if the wife's estate can succeed on an application for costs in respect of the separation issue, in my view it cannot succeed beyond the date of the husband's death.
However, prior to that time the application for costs has other difficulties. In the first place, the assertion on behalf of the wife’s estate of ""creating" an issue that lacked merit and which was ultimately dismissed by the court" is not supported by the facts. There is no evidence to suggest any ulterior motive on the part of the husband's estate. Secondly, as the issue of the separation was only raised on behalf of the husband on 1 May 2007, the concept of costs between the conciliation conference and that last date is untenable. Finally, the submission on behalf of the wife's estate has not satisfied me that any extra cost was incurred as a result of the separation issue. Accordingly, I reject this application on behalf of the wife's estate.
Adjournment of 10 December 2007
The second issue which is submitted to be relevant to conduct is an adjournment of the proceedings on 10 December 2007 on the application of the husband's estate to allow the estate to consider removing the proceedings to the High Court of Australia to argue a constitutional issue. Ultimately, the husband's estate did not proceed with that application. I accept the submission that the only reason for the adjournment was to enable the husband's estate to obtain legal advice and consider whether an application should be made for the removal of the proceedings to the High Court of Australia.
I am satisfied that in all circumstances the adjournment of the proceedings on 10 December 2007 was occasioned by a lack of previous consideration of the issue. It cannot be said that the husband's estate and its legal advisers did not have sufficient notice of the potential issue of a constitutional challenge to enable proper consideration to be given to whether such a challenge would be undertaken.
Subsection (2A)(d) - failure to comply with previous orders
No submission has been made to suggest that this provision is relevant to the present applications.
Subsection (2A)(e) - whether any party wholly unsuccessful
The essential issue in these proceedings was whether the wife's application pursuant to the accrued jurisdiction of the court was intra vires or ultra vires. I found in favour of the husband's estate that the application was ultra vires. Accordingly, the wife's estate has been wholly unsuccessful in the proceedings.
Subsection (2A)(f) - open offer
It is common ground that neither party has made a relevant open offer.
Subsection (2A)(g) - any other relevant matter
It was submitted on behalf of the husband's estate that the failure of the wife's estate to file a Statement of the Claim (also referred to as a Statement of Claim) relating to the accrued jurisdiction issue might be relevant to these applications. I disagree with that submission. If I had found that the wife's application was intra vires, it may have been appropriate, in preparing the application for trial, to order the filing of a Statement of the Claim. However, the issue of jurisdiction was able to be argued without a Statement of the Claim being filed. No submission was made to the contrary. Accordingly, I find that the submission is not relevant to my consideration of these applications.
At paragraph 21(ii) and (iii) of the submissions on behalf of the wife’s estate, there is a reference to counsel for the husband’s estate having appeared amicus curiae on 15 and 20 June 2007. I do not understand this to be a submission against awarding costs for an appearance on that basis. However, if I am in error in that, the facts are that at that time the husband had died and no appointment had yet been made pursuant to s79(8) of the Act. Accordingly, the only basis on which the husband’s right to be heard could be protected was for counsel to appear amicus curiae. No authority has been advanced for that proposition and in the circumstances, in my view it does not have merit.
THE COSTS APPLICATIONS
The husband's estate
In my view, the relevant factors in determining the cost application on behalf of the husband's estate are the respective financial positions and the fact that the wife's estate has been wholly unsuccessful. While recognizing the considerable disparity in assets between the respective estates in favour of the husband's estate, in my view in the circumstances of this matter and the fact that the wife's estate may not be able to satisfy any costs order which is made against it should not be decisive. As Kay J held in Brown v Brown (1998) FLC 92-822, p85,347 -
In many cases there will be an outstanding feature of the case that makes an order for costs appropriate, a feature which so dominates the scene that it can outweigh any of the other s 117(2A) considerations.
In my view, in the circumstances of these applications and the fact that the wife has been wholly unsuccessful on a fundamental issue of jurisdiction is one of those outstanding features referred to in the quotation in the previous paragraph. That issue outweighs all other factors and particularly that of the financial circumstances of the parties to these applications. Accordingly, subject to one matter referred to below, it is just to make an order against the wife's estate in favour of the husband's estate for costs. I will discuss the details of that below.
The wife's estate
The wife's estate seeks costs in respect of two specific events, namely, the dismissal of the issue relating to the separation of the husband and the wife and the adjournment of the proceedings on 10 December 2007 to enable the husband's estate to consider removing the proceedings to the High Court of Australia. I have already indicated that in my view, the separation issue did not cause further costs to be incurred. However, the adjournment referred to above was unnecessary and should have been avoided. It cannot be attributed to the wife’s estate in any way. Accordingly, the husband's estate will be required to pay the wife's estate the costs of and incidental to that adjournment.
CONCLUSIONS
I have determined that the wife's estate should pay the costs of the husband's estate, subject to an order in favour of the wife's estate in respect of the costs of and incidental to the adjournment on 10 December 2007. That raises several other matters.
The costs to be paid to the husband's estate are to include the costs of these applications for costs.
I have not been satisfied that costs should be paid on any basis other than a party/party basis. At least one of the assessments of costs suggests that the costs should be as between solicitor and client. That proposition has not been supported.
There is also an issue as to the process by which the quantum of costs should be determined. The parties have provided me with estimates of their costs annexed to the written submissions in support of these applications. I have been urged to fix the costs rather than have them assessed. I do not accept those submissions. The estimates provided to me are detailed, extensive and raise costs issues which must be determined. That is not the task of a Judge in the first instance. Chapter 19 of the Family Law Rules 2004 provides a process by which costs as between parties may be assessed, previously known as taxed, by a Registrar of the Court. In the event that either party is dissatisfied with the determination of a Registrar, it is open to seek to review that decision. The review would be heard by a Judge of the Court.
However, it is appropriate, before undertaking the time-consuming and expensive process of an assessment of costs, that the parties have the opportunity to agree and thereby avoid the process. I will provide for a period of 28 days or such further time as may be agreed to give the parties the opportunity of resolving the issue.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Mushin
Associate:
Date:23 April 2010
0