Wills and Wills
[2007] FamCA 1234
•28 August 2007
FAMILY COURT OF AUSTRALIA
| WILLS & WILLS | [2007] FamCA 1234 |
| FAMILY LAW – COSTS – Between parties |
| Family Law Act 1975 (Cth) |
| APPLICANT: | Mrs Wills |
| RESPONDENT: | Mr Wills |
| FILE NUMBER: | BRF | 3665 | of | 2006 |
| DATE DELIVERED: | 28 August 2007 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | O'Reilly J |
| HEARING DATE: | 5 June 2007 (on the papers with written submissions as ordered on 5 June 2007) |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Kent of Counsel |
| SOLICITOR FOR THE APPLICANT: | Ms Geysen, Solicitor, Barry & Nilsson Lawyers |
| COUNSEL FOR THE RESPONDENT: | N/A |
| SOLICITOR FOR THE RESPONDENT: | Ms Di Muzio, Solicitor, Trilby Misso & Company as town agent for Williams Roncolato Lawyers |
Orders
IT IS ORDERED
The husband pay the wife’s costs of and incidental to her application in a case filed on 22 March 2007, including any costs relating to that application incurred/reserved on 3 April 2007 (if any) not already included in the costs order made on that date, to be assessed on the standard basis if not agreed, the payment to be made within 30 days after the date of the costs assessment order or agreement.
IT IS NOTED that publication of this judgment under the pseudonym Wills & Wills is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRF 3665 of 2006
| MRS WILLS |
Applicant
And
| MR WILLS |
Respondent
REASONS FOR JUDGMENT
Wife’s costs application - background
By application in a case filed on 22 March 2007 the wife sought against the husband orders that he:
1within seven days comply with orders made by Registrar Green on 31 January 2007;
2pay (interim) spousal maintenance for the wife of $600 per week, the first payment within seven days, and after that on a weekly basis into a bank account nominated by the wife;
3within seven days pay $20,000 into the wife’s solicitor’s trust account by way of a Hogan order for the payment of her legal fees;
4pay the wife’s costs of and incidental to the application.
Orders
On 4 June 2007 I ordered:
1The oral application by the husband for his barrister to appear by telephone from Sydney is refused, no proper or timely application having been made.
2The husband’s application to file by leave his Form 1A response, Form 2A response, financial statement, affidavit and an affidavit of his solicitor is refused, no filing fee having been paid and the husband by his solicitors having had notice of the matter for at least two months since 3 April 2007 and being in default of Court orders in relation to the filing of material.
3The husband’s application for an adjournment of the wife’s application in a case filed on 22 March 2007 is refused.
On 5 June 2007 I ordered:
Compliance with orders
1The husband comply with the orders made by Registrar Green at the Case Assessment Conference on 31 January 2007 within seven days as follows:
(a)the husband file and serve his Form 1A response and Form 13 financial statement on the wife’s solicitors;
(b)the husband provide the wife’s solicitors with his most recent benefit statement with respect to his superannuation fund or funds;
(c)the husband produce to the wife’s solicitors documentation in relation to his employment with [T] Hotels including all remuneration arrangements (bonuses and/or shares) paid on his behalf;
(d)the husband pay the wife child support in the sum of $326 per week with the first payment to be made within seven days and after that on a weekly basis into a bank account nominated by the wife.
Spousal maintenance
2The husband pay to the wife the sum of $600 per week interim spousal maintenance the first payment to be made within seven days and after that on a weekly basis into a bank account nominated by the wife.
Hogan order
3The husband pay to the wife the sum of $20,000 to be deposited into the wife’s solicitor’s trust account within seven days for the payment of her legal fees.
Costs
4The wife within two days file and serve written submissions as to her costs application contained in paragraph 4 of the application in a case filed on 22 March 2007 and the costs reserved by Registrar O’Reilly on 3 April 2007.
5The husband within seven days after the receipt of the wife’s written submissions file and serve written submissions in response.
6The parties must in their written submissions state whether in addition to the written submissions they wish to be heard orally in relation to costs.
On 3 April 2007 Registrar O’Reilly had ordered:
·The husband comply with Registrar Green’s orders made on 31 January 2007 “forthwith” (item 44)
·The parties and their lawyers on the record must attend a conciliation conference with a Registrar on 13 June 2007 (item 18)
·The husband’s solicitor liaise with the Court before the conciliation conference to confirm details to enable the husband to attend the conciliation conference by telephone (item 18)
·Each party deliver to the other and lodge with the Court at least three days before the conciliation conference a conciliation conference document (item 20)
·The husband pay the wife’s costs “of today” agreed at $1,000 (item 31.1)
·The case be adjourned to a list conducted by a Judge on 4 June 2007 for an interim hearing (item 1)
·The wife’s costs “of the proceedings” be reserved (item 31.3).
The permission for the husband to attend the conciliation conference on 13 June 2007 by telephone (item 18) was made, it seems, because the husband lives in Thailand.
The listing before a Judge for an interim hearing (item 1) was the listing of the wife’s application in a case filed on 22 March 2007 to which I have referred.
The return date of 4 June 2007 appears on the wife’s application in a case filed on 22 March 2007.
As the costs agreed on 3 April 2007 (item 31.1) were the wife’s costs “of today”, it does not appear to me that Registrar O’Reilly reserved any costs associated with the event listed on 3 April 2007 (being a conciliation conference scheduled for that date then adjourned to 13 June 2007).
It appears thus that the order that the wife’s costs “of the proceedings” be reserved (item 31.3) related to the wife’s application in a case filed on 22 March 2007 listed for hearing on 4 June 2007.
The parties each provided written submissions and each stated in them that they did not wish to be heard orally in relation to costs. (The wife’s written submissions contained a minor qualification of the possibility of addressing orally depending upon the content of the husband’s written submissions, but this subsequently was not taken up).
The particular costs orders sought
The particular costs orders that the wife seeks (written submissions, par 1) are:
1the husband pay the wife’s costs of and incidental to her application in a case filed on 22 March 2007, including the costs reserved by Registrar O’Reilly on 3 April 2007;
2Rule 19.18 of the Family Law Rules 2004 not apply and the wife be entitled to have her costs assessed on the indemnity basis.
Preliminary observations
The costs reserved on 3 April 2007
On 5 June 2007 I ordered (par 4) written submissions in relation to the wife’s costs application contained in her application in a case filed on 22 March 2007 and the costs reserved by Registrar O’Reilly on 3 April 2007.
The costs reserved by Registrar O’Reilly on 3 April 2007 (item 31.3) were the wife’s costs “of the proceedings”.
As I have observed above, it appears that the costs reserved thus related to the wife’s application in a case, which on 3 April 2007 was listed for hearing on 4 June 2007.
It is not clear to me whether separate costs were incurred on 3 April 2007 in relation to the wife’s application in a case filed on 22 March 2007, although I note that apart from the procedural direction that the application in a case be listed for hearing on 4 June 2007 the Registrar made an order (item 44) as sought in the wife’s application in a case filed on 22 March 2007 for compliance with Registrar Green’s earlier orders.
The difficulty is, as set out above, the wife already has the benefit of an order made by the Registrar on 3 April 2007 of her costs “of today” (item 31.1) agreed at $1,000. Possibly, those costs related only to the costs of the conciliation conference thrown away, by its being adjourned to 13 June 2007, the husband apparently not attending on 3 April 2007 in person or by telephone, the Registrar thus intending that any separate costs component related to the compliance order which she made be reserved to the interim hearing on 4 June 2007.
On one view, if I were to order that the wife have her costs “of and incidental to” her application in a case filed on 22 March 2007, that would include in any event any costs component related to that application incurred on 3 April 2007. However, as the matter is not clear, it seems to me that if I were to make an order for costs in the wife’s favour it should refer to her costs “of and incidental to” her application in a case filed on 22 March 2007, including any costs relating to that application incurred/reserved on 3 April 2007 (if any) not already included in the costs order made on that date.
Indemnity costs
The wife’s application in a case filed on 22 March 2007 did not seek costs on the indemnity basis.
Rule 19.18 provides:
RULE 19.18 MAXIMUM AMOUNT CHAREABLE
19.18(1) This rule sets out the maximum amount of costs a lawyer may charge and recover for work done for a case, or in complying with pre-action procedures:
(a) for a client;
(b) if the court orders that costs are to be paid and does not fix the amount; and
(c) if a person is entitled to costs under these Rules.
19.18(2) The maximum amount of costs that a lawyer may charge and recover is as follows:
(a) for fees — an amount calculated in accordance with Schedules 3 and 4;
(b) for an expense mentioned in Schedule 4 (other than item 101) — the amount specified in Schedule 4 for that expense;
(c) for any other expenses — a reasonable amount.
19.18(3)However, for lawyer and client costs only, if there is a valid costs agreement between a lawyer and a client:
(a) subrule (2) does not apply; and
(b) the maximum amount of costs that the lawyer may charge and recover is the amount calculated in accordance with the costs agreement.
Rule 19.19(1) provides:
RULE 19.19 PARTY AND PARTY COSTS
19.19(1) The court may order that rule 19.18 does not apply and that a party is entitled to costs:
(a) …
(b) as assessed on a lawyer and client basis or an indemnity basis;
(c) …
(d) … .
Rule 19.08 provides:
RULE 19.08 ORDER FOR COSTS
19.08(1) A party may apply for an order that another person pay costs.
19.08(2) An application for costs may be made:
(a) at any stage during a case; or
(b) by filing an Application in a Case within 28 days after the final order is made.
19.08(3) A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement in relation to those costs and, if so, the terms of the costs agreement.
Note 1 The court may make an order for costs on its own initiative (see rule 1.10).
Note 2 A party may apply for an order for costs within 28 days after the filing of a notice of discontinuance by the other party (see subrule 10.11 (4)).
Note 3 A party may apply for an extension of time to make an application (see rule 1.14).
19.08(4)In making an order for costs, the court may set a time for payment of the costs that may be before the case is finished.
The wife has complied with Rule 19.08(3) by reference to in and annexure to the affidavit of Tracy-Lynne Geysen filed on 30 May 2007 a costs agreement between the wife and her solicitors.
However, as I have said, the wife’s application in a case filed on 22 March 2007 did not seek costs on the indemnity basis.
Thus, the wife’s claim for costs on the indemnity basis is made only by inclusion in the written submissions.
I will deal separately however with the question of the wife’s claim for indemnity costs, and will proceed now to consider the costs claim made in her application in a case the subject of the order I made (par 4) on 5 June 2007.
The principles upon which costs applications must be decided
Section 117 of the Family Law Act 1975 (Cth) applies. Pursuant to s 117(1) and (2) the parties are to bear their own costs, unless the Court forms the opinion that there are circumstances to justify a costs order in which case it may make such order as it considers just. Before making a costs order the Court must identify the circumstance or circumstances on which it relies to justify the order, and must have regard to the matters in s 117(2A).
In Penfold & Penfold (1980) 144 CLR 311 the High Court said at 315:
It is an accurate description of s.117(1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s.117(2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. …
Grounds
The wife relies on the following grounds as justifying circumstances “individually or in combination”:
·S 117(2A)(e): the husband has been wholly unsuccessful in the wife’s application and the wife wholly successful
·S 117(2A)(g): the subject matters in issue on the application were entirely of a financial nature
·S 117(2A)(c): the husband’s conduct in relation to the proceedings
·S 117(2A)(d): the necessity for the wife’s application (in part) by the failure of the husband to comply with previous orders of the Court
·S 117(2A)(g): at all relevant times the husband has had legal representation
·S 117(2A)(a): the financial circumstances of each of the parties, in particular an “existing and continuing” financial disparity between the parties.
Section 117(2A)(e) - husband wholly unsuccessful/wife wholly successful
The husband was wholly unsuccessful in the wife’s application in that all orders sought by the wife against the husband under the subheadings in the application “Compliance with Orders”, “Spousal Maintenance” and “Hogan Order” were made, despite opportunity by the husband to avoid the incurrence of costs by the wife by (1) complying with the orders made on 31 January 2007 and 3 April 2007; and (2) agreeing in a timely way with the wife’s reasonable requests for spousal maintenance and a Hogan order put by her solicitors in correspondence before the wife’s application was filed on 22 March 2007. See in particular annexure KW2 to the wife’s affidavit filed on 19 March 2007, being a letter from her solicitors to the husband’s solicitors dated 26 February 2007.
The husband, in his written submissions, has sought to argue that the wife was not wholly successful and the husband not wholly unsuccessful in the wife’s application in a case filed on 22 March 2007. The submissions refer to negotiations between the parties between the final separation in August 2006 and the hearing on 4 June 2007, culminating in the husband’s response to the wife’s application in a case (part of ex 1) which was provided by the husband’s solicitors to the wife’s solicitors in late May 2006. The husband’s argument I think is flawed for two reasons. First, it is directed to the parties’ negotiations, rather than the terms of the husband’s response to the wife’s application in a case. Secondly, the terms of the response at Part B item 3 specifically said, as to which parts of the wife’s application the husband agreed, “Nil”; and further at Part B item 4 did not address at all the wife’s application for an order that he comply with the existing Court orders; proposed that he pay the wife $20,000 but on conditions which expressly in the reasons for judgment given on 5 June 2007 I rejected (reasons for judgment, par 25); and did not refer at all to the wife’s application for spousal maintenance but clearly opposed it by seeking that otherwise the wife’s application in a case be dismissed.
Otherwise, the bulk of the husband’s written submissions address (belatedly) the substance of the wife’s application, upon which judgment already has been given. See the reasons for judgment 5 June 2007. In these circumstances, with one exception, I will not refer to these parts of the husband’s submissions as being directed to matters already having passed into a judgment on the record.
The exception is what appears to be a complaint by the husband (written submissions, par 39) that there was no need for the inclusion of pars 1(b) and (c) in the compliance order which I made on 5 June 2007, for the reason that by letter dated 15 March 2007 and its enclosures the husband’s solicitors already had disclosed to the wife’s solicitors financial documents including the husband’s letter of appointment in relation to his employment dated 1 March 2006 “thereby disclosing the terms of his employment”, and his Stock Plan Services Report relating to shareholding arising from his employment for the period up to 3 February 2007 (the letter dated 15 March 2007 being annexure C to the affidavit of the husband’s solicitor Rhys Garfield Williams affirmed 1 June 2007 comprising part of ex 1 in the proceedings). The disclosed documents referred to appear to be documents 15 and 19 enclosed with the letter. The husband further contended (written submissions, par 42) to the effect that the letter dated 15 March 2007 disclosed also the husband’s most recent benefit statement with respect to his superannuation fund or funds which, by reference to the letter 15 March 2007 possibly would appear to be document 18 enclosed with the letter. (The written submissions refer to Mr Williams’s affidavit as being affirmed on 31 May 2007. The affidavit in evidence, comprising part of ex 1, shows it as affirmed on 1 June 2007. However, nothing turns on this.) In relation to the disclosure matters, I would refer also to par 13 of Mr Williams’s affidavit sworn or affirmed on 2 April 2007 (ex 2), containing further reference to the letter dated 15 March 2007 and its enclosures, specifically as including “our client’s letter of appointment, superannuation statement and his employer’s stock plan service report”.
It is not clear on what date the letter dated 15 March 2007 was received by the wife’s solicitors. The husband’s submissions, par 39, refer to 18 March 2007 (a Sunday) as the receipt date. The wife’s application is stamped as filed on 22 March 2007. Sometimes, there is a gap of a few days between the lodging of applications for filing and the attributed filing date, being the stamped filing date. Thus it is not clear whether the wife’s application may have been prepared and lodged for filing earlier than 22 March 2007, the attributed filing date.
However, I do not think anything turns on the letter dated 15 March 2007 and its enclosures, nor the precise date it was received, in relation to the incurrence of the wife’s costs of and incidental to her application, for the following reasons. Even if on 15 March 2007 the husband finally had complied with Registrar Green’s orders made on 31 January 2007, an earlier compliance order already having been made on 3 April 2007 for compliance with those orders “forthwith”, so that arguably pars 1(b) and (c) of the compliance order which I made ought not have been made (which presently I need not decide), nonetheless as at both 22 March 2007 and the hearing date 4 June 2007 the husband remained in default of at least two components of Registrar Green’s orders, namely those referred to in pars 1(a) and (d) of the compliance order which I made on 5 June 2007 relating to the filing and service of a Form 1A response and Form 13 financial statement and the payment to the wife of child support in the sum of $326 per week outstanding from 7 days after 31 January 2007. Further, the wife’s application related also to spousal maintenance and a Hogan order. In that context, it is not as if the wife’s costs would have been less if pars 1(b) and (c) had not been sought or made, or if initially sought, not pressed. Whether the husband now has or already had complied with pars 1(b) and (c) of the order is solely now a matter between the parties. However, in my view there is no ramification whatsoever as to the wife’s incurrence of costs on her necessary application for compliance, at least as to pars 1(a) and (d) of the compliance order made, and as to her applications for spousal maintenance and a Hogan order, which costs are unlikely to have been less if pars 1(b) and (c) had not been sought or made.
It is necessary now for the record to refer to other matters in the husband’s written submissions which are either erroneously stated or based upon erroneous assumptions, being matters which seem to me to be intended by the husband to relate to the wholly unsuccessful/wholly successful argument, as well as more broadly to the wife’s costs application and the exercise of the discretion to award costs but which it is nonetheless convenient to deal with under this head.
First, par 11 of the husband’s written submissions seems predicated on the notion that the hearing of the wife’s application exceeded one day because the husband’s solicitors and Counsel were not permitted to appear by telephone. This is wrong. As the transcript of 4 June 2007 shows, the hearing was completed on the allocated date, 4 June 2007, judgment was reserved overnight and the substantive orders made and reasons given on the morning of 5 June 2007, at 9.45am, before the Court list for that day commenced. It is not unusual at all for matters in the duty list to be reserved overnight, especially when (as in this case) the matter did not get on until 3.20pm and did not conclude until 4.34pm.
Secondly, par 12 of the husband’s written submissions states that, because the husband was “refused leave to file his material” in Court on 4 June 2007 the husband “has not had the opportunity to put evidence before the Court referable to the question of costs”. This is wrong. The husband’s material was not in Court at all on 4 June 2007 so as to be capable of being filed by leave on that date but, by the open admission of Ms Di Muzio, the Brisbane town agent for the husband’s Sydney lawyers, was on Mr Williams’s desk in Sydney. See Transcript 4 June 2007, T3/30-35 and T4/10-15. In these circumstances, I refused permission to Ms Di Muzio for copies to be filed by leave because the husband was in default of Court orders, the Form 1A response and Form 13 financial statement having been due within 21 days from 31 January 2007, and it being inappropriate otherwise to allow filing by leave of the other three documents comprising ex 1 as no Form 1A proceedings by the husband were on foot and it appearing that a filing fee may be payable. See the reasons for judgment 4 June 2007 (ex tempore) and Transcript 4 June 2007, T6-10 and 22. However, as is plain (same references) copies of the documents which I refused Ms Di Muzio permission to file by leave were tendered into evidence in any event as ex 1, and a further affidavit of the husband’s solicitor Mr Williams was tendered into evidence as ex 2. Thus, all evidence the husband wished to rely on was in fact in evidence, and indeed in part referred to in the reasons for judgment given on 5 June 2007 on the wife’s application in a case and referred to me also in this current exercise on the question of costs.
Thirdly, par 13 of the husband’s written submissions asserts that “the failure of the applications made on behalf of the husband to enable his representatives to appear by telephone or alternatively adjourn the matter” (see Transcript 4 June 2007, T1-6 and T7-27) “resulted in the matter essentially being heard on an ex parte basis”. This is fundamentally wrong. The matter was not heard ex parte. It was heard on notice to the husband, it being common ground that the husband’s solicitors were served with the wife’s application in a case filed on 22 March 2007 by 28 March 2007, and common ground that the return date of 4 June 2007 was allocated, at the latest, by the Registrar on 3 April 2007, at which the husband was represented by the husband’s Sydney solicitor’s town agent, Ms Di Muzio. As is well understood, an ex parte application is one brought other than on notice to the other party.
There are several other misstatements of fact or erroneous assumptions in the husband’s written submissions. However these ones, at least, which relate to matters of procedural fairness, require correction on the record.
In relation to the wholly unsuccessful/wholly successful ground, I am satisfied, as explained, that the husband was wholly unsuccessful, and satisfied also in all of the circumstances that it was reasonable for the wife to prosecute the application in a case against the husband at least in relation to pars 1(a) and (d) of the compliance order and as well as in relation to her claim for spousal maintenance and a Hogan order.
Section 117(2A)(g) – matters entirely of financial nature
I do not regard the circumstance that the subject matters in issue on the wife’s application were entirely of a financial nature as a relevant circumstance in considering her costs application, and am not persuaded by Mr Kent’s submissions as to this ground “individually” or “in combination” with any other ground.
Section 117 (2A)(c) – husband’s conduct in relation to the proceedings
Mr Kent’s written submissions provide a detailed analysis of the pre-action history to the wife’s application in a case. I have considered all of the evidentiary matters referred to, and the submissions made in light of them, in sections 4-7 and 8(b) of Mr Kent’s written submissions. However, it seems to me that all or most of the matters relied on by Mr Kent under this head overlap with s 117(2A)(e) and (d). Otherwise, if the husband should persist in not paying ordered child support, or should breach the orders which I made on 5 June 2007, his conduct, as outlined by Mr Kent, more appropriately may be considered in contempt or contravention proceedings. I am not concerned with such matters here, but only the question of costs. I have dealt elsewhere with s 117(2A(e) and will now deal with s 117(2A)(d).
Section 117 (2A)(d) – necessity of application by failure to comply with Court orders
There is no doubt that it was appropriate for the wife to include in the application in a case filed on 22 March 2007 an order that the husband comply with the orders made by Registrar Green on 31 January 2007 although, as I have mentioned already, even though there may be argument as to pars 1(b) and (c) of the compliance order which I made, there can be no argument and is not argument as to the husband’s outstanding and overdue compliance as at 5 June 2007 with the subject matter of pars 1(a) and (d) of that order. Technically, it is arguable that the compliance part of the application was not “necessary” because Registrar Green’s orders were already in place. However, it was “necessary” in a practical sense, because of the husband’s failure to comply with Registrar Green’s orders, that is to say, at least in relation to the subject matters of pars 1(a) and (d) of the compliance order I made.
Otherwise I would refer, without repetition, to the reasons for judgment given on 5 June 2007, pars 6-14.
Section 117 (2A)(g) – husband at all relevant times legally represented
If the husband had been a litigant in person, and there had been evidence that he did not understand Court process, this may have been a relevant factor to consider in relation to the wife’s costs application.
Conversely, however, I do not regard the circumstance that at all relevant times the husband had legal representation as a relevant circumstance.
I would presume, as I am entitled to presume, that the husband’s solicitors carried out their duty to convey to the husband the Court’s orders made on 31 January 2007 and 3 April 2007 and their effect, so that at all times the husband was aware of his obligations under those orders. Also, the husband’s solicitors were aware, by the correspondence to which I referred (annexure KW2 to the wife’s affidavit filed on 19 March 2007) of the wife’s claims for spousal maintenance and a Hogan order.
However, these matters are not material considerations, in my view, and the more relevant circumstance is, as I have said, that I am satisfied in all of the circumstances that it was reasonable for the wife to prosecute the application in a case at least in relation to pars 1(a) and (d) of the compliance order sought as well as for spousal maintenance and a Hogan order, in respect of all of which the husband, as I have explained, was wholly unsuccessful.
Beyond that, I am unable to see the relevance of the circumstance that at all material times the husband was legally represented. The wife’s costs application is against the husband, not the husband’s solicitors.
Generally, however, I would observe that in relation to all of the matters the subject of the wife’s application, the husband’s solicitor deposed to difficulty (and the husband’s written submissions referred to difficulty) in taking instructions from the husband, who lives in Thailand, and on the evidence was travelling outside Thailand in the early part of 2007 related to his employment. See, for example, letter husband’s solicitors to wife’s solicitors 28 February 2007, annexure KW3 to the wife’s affidavit filed on 19 March 2007, first page, parts numbered 1 and 4; and ex 2, an affidavit by the husband’s Sydney solicitor Mr Williams sworn or affirmed on 2 April 2007 (ex 2) in particular pars 10, 17, 18 and 19. However, Court process must be given high regard by litigants, and the lawyers who have the privilege of practising in the Courts must give high priority not only to their clients’ compliance with Court orders, to the extent that this is within their ability to control, but also to the avoidance of Court applications that sensibly can be avoided by appropriate and timely advice as to agreements outside of Court, especially in relation to such matters as spousal maintenance and Hogan orders in financial matters.
However, as I have said, despite these observations, I do not regard as a relevant circumstance in the wife’s costs application that at all relevant times the husband was legally represented.
Section 117 (2A)(a) – the parties’ financial circumstances
As to the husband’s capacity to pay a costs order, I would refer to the analysis of his financial circumstances set out in the reasons for judgment given on 5 June 2007, pars 16-23. In addition, I would refer to the husband’s affidavit sworn or affirmed on 13 May 2007 (comprising part of ex 1) in which he refers to his own financial obligations including a responsibility for his pregnant new partner and anticipated additional associated costs as well as the husband’s written submissions.
As to the wife’s position, her financial statement filed on 30 May 2007 (leaving aside investment income which, I understand, is used for mortgage purposes) shows salary of $757 per week, tax of $214 per week (net $543) plus family benefits of $173, amounting to $930 gross per week and an after tax weekly income of $716, from which she pays for rented accommodation for herself and the parties’ child.
On any view, it appears to me that the husband has the capacity to pay a costs order which, according to Ms Geysen’s affidavit, par 7, even on the lawyer and client or indemnity basis would not exceed about $14,500. In so concluding, I take into account the husband’s obligations to his new partner and the circumstance of an imminent birth, as well as the other matters raised in the husband’s material and written submissions.
Further, there is currently significant disparity between the parties’ financial circumstances (leaving aside any later or ultimate s 79 division of their assets) in that the husband has income of about $3,000 from his employment (leaving aside investment income used for mortgaged purposes) whereas the wife earns much less, and also the circumstance that as the general manager of a hotel the husband has accommodation and meals provided, which the wife does not.
Justifying circumstance
Having considered all the matters which I am required to consider, it seems to me that there are circumstances to justify a costs order, which I identify as the husband being wholly unsuccessful in relation to the wife’s application, being satisfied that it was reasonable for her to bring the application for spousal maintenance and a Hogan order, and in practical terms necessary for her to bring the application for a compliance order (as qualified above), the wife in effect being compelled to this course in relation to the spousal maintenance application and Hogan order application by unsuccessful pre-action negotiation and in respect of which, even by his proposed response to her application in a case (comprising part of ex 1), as I have explained, he continued to resist her reasonable requests for assistance without necessity for her to have recourse to the Court and thereby incur considerable expense which otherwise would not have been incurred if the husband had complied with the Court orders and been reasonable in relation to her requests otherwise. I am mindful, as explained in Penfold’s case (referred to above) that whilst s 117(1) expresses a general rule, it is not paramount to s 117(2) and expressly is subject to that provision.
I am satisfied, as explained, that the husband has the financial capacity to pay a costs order and that the comparative financial circumstances of the parties have the effect that in all of the circumstances it would be just to make a costs order.
Indemnity basis, or alternatively lawyer and client basis, rather than standard basis
I have referred above to the circumstance that Mr Kent’s written submissions claim costs on the indemnity basis, whereas the wife’s application in a case does not.
Further, Mr Kent’s written submissions (par 9.7) seek that if I am not persuaded to order costs on the indemnity basis, they be assessed on the lawyer and client basis, rather than the standard basis, for the reasons already set out in his submissions in support of costs on the indemnity basis.
Rule 19.08(2) expressly allows an application for costs to be made “at any stage during a case”. However, it must be observed that the wife’s application that the costs she seeks be assessed on the indemnity basis, or alternatively on the lawyer and client basis, was made in effect not “during” the currency of the wife’s application in a case, but after judgment on it had been pronounced. Arguably, Rule 19.08(2) is sufficiently wide to allow an application for costs on the standard basis to be enlarged to an application for costs on the indemnity or alternatively the lawyer and client basis “during” the currency of the principal proceedings, even though the particular application to which the costs relate has been finalised and passed into the record, or within 28 days of a final order in the principal proceedings, or even later if an extension of time be applied for and granted.
However, in my view the governing principle in relation to the wife’s enlarged application that costs be on the indemnity or alternatively the lawyer and client basis is whether procedural fairness has been accorded to the husband and in my view it has not. In short, the husband had no notice that the wife would seek costs on the indemnity or alternatively the lawyer and client basis until after I had given judgment on the application.
In all of the circumstances of the case relied upon by Mr Kent in support of costs being awarded on the indemnity or alternatively the lawyer and client basis, exhaustively set out in his written submissions at sections 4-9, it is surprising that the wife’s application in a case did not, as it might have, expressly seek that costs be on the indemnity or alternatively the lawyer and client basis, in particular because as between herself and her solicitors she is bound by a costs agreement. It may be that, even if the wife’s application in a case had sought costs on the higher basis or bases, the husband’s attitude to it may have been the same. However, it would be wrong for me to infer that, as equally it may be that if the application had sought costs on the higher basis or bases, the husband’s attitude to the application may have been different. Be that as it may however, the fundamental aspect of the matter is that procedural fairness is required in all cases and must be afforded to all parties and, as I have said, during the currency of the application the husband had no notice of the higher claim.
I am mindful of the authorities relating to the discretion to award costs on the indemnity basis (referred to, for example, in the husband’s written submissions at par 3 and the wife’s written submissions at pars 9.2-9.3). However, even though in this particular case the finding may have been open to me that the husband’s conduct throughout the matter warrants the making of an order for costs other than on the standard basis, the requirements of procedural fairness prohibit my ability to further consider or make such a finding.
In any event, even if I were able to proceed to consider this aspect of the matter further, it may be that my ultimate conclusion would be against the award of costs on a higher basis because of the reality of the husband living in Thailand and that, during a critical part of the early 2007 period, he was travelling overseas outside of Thailand related to his employment.
That is not to say, however, that in the future the husband, on any other costs application, might so avoid an award of indemnity or lawyer and client costs on that basis, if by way of procedural fairness in the future he has been given appropriate notice of such a claim.
I am mindful of Mr Kent’s submission (par 9.6) that:
9.6Relevant to the discretion is that if the Wife does not recover costs on an indemnity basis, the Orders made for Spousal Maintenance and Hogan Costs will be diminished to the extent of any shortfall between costs recovered and the costs the Wife is liable to pay pursuant to the Costs Agreement. Given that these costs are entirely the result of the Husband’s conduct, that would render to the Wife an injustice.
However, as I have said, I am bound by the governing principle of procedural fairness and thus will order that the costs be on the standard basis.
The time in which the costs are to be paid
Rule 19.08(4) authorises the fixing of a time for the payment of costs ordered to be paid, which time may be before a case is finished.
In all of the circumstances, in particular the husband’s history of non compliance with Court orders, it is appropriate to fix a time for the payment of the costs, to enable enforcement proceedings to ensue if there should be default.
In my view, 30 days after the date of the costs assessment order or agreement as to costs is appropriate, and I will so order.
I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly
Associate
Date: 28 August 2007
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Remedies
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