Wood and Muller (No 2)
[2020] FamCA 388
•21 May 2020
FAMILY COURT OF AUSTRALIA
| WOOD & MULLER (NO. 2) | [2020] FamCA 388 |
| FAMILY LAW – COSTS – where the wife seeks costs on an indemnity basis – where final orders were made over 14 years prior to the husband’s application – where the husband was wholly unsuccessful in his application – where the husband’s application had no reasonable prospect of success – where the husband was on notice as to the potential cost consequences of pursuing his application – where the husband’s conduct justifies an order as sought by the wife – order that the husband pay the wife’s costs on an indemnity basis. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) rr 19.08, 19.18 |
| Brito & Jalaba [2012] FamCAFC 188 Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 I and I (1995) FLC 92-625 Kohan & Kohan (1993) FLC 92-340 Munday v Bowman (1997) FLC 92-784 Nada & Nettle (Costs) (2014) FLC 93-612 Prantage & Prantage [2013] FamCAFC 105 |
| APPLICANT: | Mr Wood |
| RESPONDENT: | Ms Muller |
| FILE NUMBER: | MLC | 10449 | of | 2019 |
| DATE DELIVERED: | 21 May 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Johns J |
| HEARING DATE: | Written Submissions In Chambers |
REPRESENTATION
| THE RESPONDENT | In person |
| SOLICITOR FOR THE APPLICANT | Southern Family Law |
Orders
That within 30 days the husband pay the wife’s costs of and incidental to the proceedings, calculated on an indemnity basis and fixed in the sum of $18,285.64.
That all extant applications be otherwise dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Wood & Muller has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 10449 of 2019
| Mr Wood |
Applicant
And
| Ms Muller |
Respondent
REASONS FOR JUDGMENT
Introduction
On 9 December 2005 final property orders were made by Dessau J in the Family Court of Australia at Melbourne (“Final Orders”). Those orders had the effect of ending the parties’ financial relationship.
Some 14 years later, on 10 March 2020 an amended Initiating Application filed by the husband on 23 January 2020 was listed for hearing in the Judicial Duty List. That application sought orders relating to the former matrimonial home, the status of the parties’ relationship and sought relief against multiple banking institutions as well as former and current law firms engaged by the wife.
The wife, in her Response filed 28 November 2019, sought that the husband’s application be summarily dismissed and that pursuant to section 102QB(2) of the Family Law Act 1975 (Cth) (“the Act”) the husband be restrained from making any further application to this Court without having obtained leave to do so. She also sought orders that the husband pay her costs of and incidental to the proceedings.
On 19 March 2020 I dismissed the husband’s amended Initiating Application and the wife’s Response, save for any issues as to costs. I made further orders providing for the filing of written submissions in relation to the wife’s application for costs.
The wife filed her costs submissions on 3 April 2020. The wife seeks an order for costs on an indemnity basis in the sum of $18,285.64. In the alternative, the wife seeks an order for costs on a party/party basis in the sum on $13,701.00.
The husband failed to file any material in response to the wife’s application for costs in accordance with orders made on 19 March 2020.
These are my Reasons for Judgment with respect to the wife’s costs application.
Background
The applicant husband is aged 62 years and is unemployed.
The wife is aged 58 years and is employed as an administrative officer.
The parties married in 1985 and were divorced in 2005.
The wife commenced proceedings for final property orders in the Family Court of Australia in July 2005. Final orders were made by Dessau J on an undefended basis on 9 December 2005. Those orders provided for, inter alia, the following:-
· The husband transfer his interest in the former matrimonial home (“C Town property”) to the wife;
· The husband discharge the business loan secured over the C Town property; and
· The wife transfer her shareholding in Wood Pty Ltd to the husband and resign as Director and Secretary of Wood Pty Ltd.
In May 2006 the wife commenced proceedings in this Court to enforce the Final Orders.
On 10 August 2006, Bennett J made orders with respect to that enforcement application as follows:-
1.That the parties and their legal practitioners attend a Conciliation Conference with a Registrar of the Family Court of Australia at the Melbourne Registry this day at 2:15pm.
2.That the wife’s amended application be removed from the acting pending cases list with a right of reinstatement.
3.That the wife’s right of reinstatement be exercised by arrangement with my Associate … to have the matter listed before me or if I am not reasonably available as directed by the List Registrar.
On 13 September 2019, over 14 years after the Final Orders were made, the husband filed an Initiating Application in the Family Court seeking orders relating to the same property pool and issues which had already been ventilated before Dessau J.
The wife filed a Response to Initiating Application on 28 November 2019 seeking that the husband’s application be summarily dismissed and that the husband be declared a vexatious litigant. The wife subsequently filed an Application in a Case on 29 November 2019 seeking orders in almost identical terms as her Response.
On 2 December 2019 the parties attended a Case Assessment Conference before Registrar Moser and orders were made as follows:-
1.All extant applications are adjourned to the Judicial Duty List on 10 March 2020 at 10.00 am for a Defended Interim Hearing.
2.The Applicant must file and serve by no later than 9 December 2019 a Notice of Address for Service, including an email address for service.
3.The Applicant must file and serve by no later than 31 January 2020:
a.A Response to the Application in a Case of the Respondent;
b.Any Amended Application for Final Orders he seeks to bring; and
c.Any relevant affidavits he seeks to rely on.
4.The costs of this day are reserved.
5.The Court to engross this Order and send a sealed copy to each party.
On 10 March 2020 the hearing was conducted on the papers. At the conclusion of the hearing, I reserved my judgment.
On 19 March 2020 I delivered reasons for judgment and made orders in the following terms:-
1.That the applicant husband’s amended Initiating Application filed 23 January 2020 be dismissed.
2.That save as to the issue of costs, the respondent wife’s Response to Initiating Application filed 28 November 2019 and Application in a Case filed 5 December 2019 be otherwise dismissed.
In addition, orders were made for the filing of written submissions in relation to the wife’s costs application, which provide as follows:-
3.That by 4.00 p.m. on 3 April 2020 the respondent wife file and serve any written submission relied upon in support of her application for costs arising out of or incidental to her Response to Initiating Application and Application in a Case.
4.That by 4.00 p.m. on 17 April 2020 the applicant husband file and serve any written submission in response to the submissions filed by the applicant wife in relation to her application for costs.
5.That any submissions as to costs be limited to 10 pages.
6.That any application for costs be reserved for determination in chambers.
Documents relied upon
The wife relies upon her costs submissions filed 3 April 2020. In addition, her submissions refer to and rely upon the following documents:-
· Executed Costs Agreement between the Respondent Wife from Southern Family Law Pty Ltd;
· Itemised invoice directed to the Respondent Wife from Southern Family Law Pty Ltd dated 3 April 2020;
· Itemised Party/Party Costs according to the Family Law Rules 2004 (Cth), Sch 3, Itemised Scale of Costs; and
· Letter from Southern Family Law to the husband dated 27 November 2019.
The husband has not filed a response to the wife’s costs submissions in accordance with orders made 19 March 2020.
Legal principles
The question of costs is governed by s 117(1) of the Act which provides:-
Subject to sub-section (2), subsection 70NF(b)(1) and sections 117AA, 117AC and 118, each party to proceedings under this act shall bear his or her own costs.
That is, the general rule in proceedings under the Act is that subject to the provisions of s 117(2), the parties to the proceedings shall bear their own costs of the proceedings.
Section 117(2) of the Act provides that if the Court is of the opinion that there are circumstances that justify it doing so, the Court may, subject to sub-sections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs as the Court considers just.
Section 117(2A) of the Act provides that in determining what order (if any) should be made under sub-section (2), the Court must have regard to the following:-
(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 any party to the 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.
Costs are not awarded as punishment of the unsuccessful party, but rather are compensatory in the sense that they are awarded to ameliorate the expense of the successful party as a result of having been required to participate in the legal proceedings.
The discretion in s 117 of the Act is broad and the relevant factors in s 117(2A) are not to be read in a restrictive way; any one of those factors may found an order for costs but all factors must be taken into account and balanced (I and I (1995) FLC 92-625).
The Family Law Rules (2004) (Cth) (“the Rules”) provide that the Court may make an order for costs on a number of different bases and r 19.18 sets out the method of calculation of costs, providing that:-
(3)In making an order under subrule (1), the court may consider:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the case;
(c)the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with pre-action procedures; and
(f)expenses properly paid or payable.
The wife’s application for costs
In support of her application for costs, the wife principally relies upon the following considerations:-
· The financial circumstances of the parties;
· The conduct of the parties in relation to the proceedings;
· Whether any party to the proceedings has been wholly unsuccessful; and
· Any other matters the Court considers relevant.
Section 117(2A)(a) The financial circumstances of the parties
The wife is engaged in full-time employment as an administrative officer and earns approximately $78,000 per annum, inclusive of superannuation.
The wife submits that following the parties’ separation, she supported the three children of the marriage for a significant time without child support from the husband. Although the parties’ children are now adults, the wife submits that she continues to provide them financial support when required.
The husband has failed to file submissions as to costs. As a result, the husband’s current financial position is not known.
In his financial statement filed 13 September 2019, the husband deposes that he is unemployed, that he receives $10 per week in interest income and that he holds property valued at $52,433.
The wife submits that she has no independent knowledge of the husband’s financial position, noting that throughout the entirety of the parties’ litigation the husband refused to provide financial disclosure.
The wife further submits that although the husband’s financial statement reflects a nominal income, this does not bar an order as to costs against him. In support of that proposition the wife refers to and relies upon Brito & Jalaba [2012] FamCAFC 188.
That position was confirmed by the Full Court in the decision of Nada & Nettle (Costs) (2014) FLC 93-612 at paragraph [11], which states:-
That a party is impecunious, even indigent, is not a bar to the making of a costs order if the Court is otherwise of the opinion that such an order ought to be made.
In determining the question of costs, I have taken into account the parties’ financial circumstances generally.
Section 117(2A)(b) Whether either party is in receipt of legal aid
Neither of the parties are in receipt of legal aid.
Section 117(2A)(c) The conduct of the parties in relation to the proceedings
The wife submits that the husband commenced proceedings that were doomed to fail, having regard to the Final Orders made some 14 years earlier which had the effect of ending the parties’ financial relationship. I accept that submission.
The husband was self-represented throughout the proceedings. The wife submits that on the day of the hearing, the husband was offered an opportunity to consult with the duty lawyer prior to the commencement of the hearing but declined that opportunity, opting to proceed without the benefit of legal advice.
The husband’s application was subsequently dismissed.
Section 117(2A)(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
This factor is not relevant to the current application.
Section 117(2A)(e) Whether a party to the proceedings was wholly unsuccessful
On 19 March 2020 I made orders summarily dismissing the husband’s application.
Accordingly, I am satisfied that the husband was wholly unsuccessful in relation to his application before me on 10 March 2020.
Section 117(2A)(f) Whether either party to the proceedings has made an offer in writing to the other party to the proceedings and the terms of that offer
By letter dated 27 November 2019, the wife’s lawyer gave notice to the husband that the wife would seek an order for costs against him in the event that he did not withdraw his application. That correspondence was annexed to the wife’s costs submissions, and provides as follows:-
…
We hereby put you on notice, given that your application relates to matters already dealt with by virtue of orders of Her Honour Justice Dessau on 9 December 2005 and otherwise seeks orders which are beyond both the power and jurisdiction of the Family Court, that your matter ought be [sic] summarily dismissed.
We hereby provide you with an opportunity to withdraw your application, noting that if you fail to do so, our client will have no option but to seek costs against you.
…
Notwithstanding that notice, the husband pressed his application before the Court. The wife relies upon that letter in support of her application for costs.
Section 117(2A)(g) Any other matters the court considers relevant
The wife submits that the husband was self-represented throughout the entirety of the proceedings. In her affidavit filed 29 November 2019, the wife deposes that in order for the husband’s Initiating Application to be served on the wife, the process server sought her residential or employment address.
In circumstances where on 17 September 2009 the Magistrates’ Court granted the wife an indefinite intervention order against the husband, the wife deposes that it was necessary for her to engage lawyers to accept service and act on her behalf in the proceedings.
Are there circumstances that justify an order for costs?
As a result, after consideration of the factors contained in s 117(2A) of the Act, I am satisfied that an order for costs against the husband is warranted in the circumstances of this matter.
I am satisfied that the husband was wholly unsuccessful in his application before the Court.
I am satisfied that since at least early December 2019, the husband was on notice as to the wife’s position, namely that the matters raised by him had already been dealt with by the Court and that the Court lacked jurisdiction to grant the relief sought by him. Further, he had notice that the wife would seek an order for costs against him if he proceeded with his application. The husband had almost three months to obtain advice with respect to the matters raised by the wife and to withdraw his application. He did not do so.
As noted in the judgment dated 19 March, 2020 I found that the property matters between the parties had been finalised by the orders made by Dessau J in 2005 and that the Court did not have jurisdiction to grant the relief sought by the husband against the financial institutions, the wife’s lawyers and conveyancer. As a consequence of those findings, I summarily dismissed the husband’s application.
In circumstances where I am satisfied that the husband has had ample notice of the wife’s challenge to his application and the consequences of him pursuing it, in my view an order for costs against him is warranted.
I am also satisfied that it was appropriate for the wife to engage legal representation in circumstances where the property proceedings were finalised 14 years ago and she has an indefinite intervention order against the husband.
Whilst I have considered the husband’s financial circumstances generally, he has failed to file costs submissions in response to the wife’s application. Accordingly, it is difficult to assess his current financial circumstances. However, as I have noted above, impecuniosity is not a bar to a costs order if other circumstances justify such an order.
Should costs be paid on an indemnity or party/party basis?
Rule 19.18(1) of the Rules provides that the Court may make an order for costs:-
(a)Of a specific amount;
(b)As assessed on a particular basis (eg Lawyer and client, party/party or indemnity);
(c)To be calculated in accordance with the methods stated in the order; or
(d)For part of the case, or part of an amount, assessed in accordance with Schedule 3.
The wife seeks an order that the costs payable by the husband be assessed on an indemnity basis. She seeks the sum of $18,285.64 in respect of the entirety of the proceedings initiated by the husband, including the hearing on 10 March 2020. Alternatively, she seeks an order for party/party costs fixed in the sum of $13,701.00.
In support of her application the wife refers to and relies upon the Executed Costs Agreement between the respondent and her lawyer dated 7 November 2019, which is annexed to the wife’s costs submissions. As a result the wife has satisfied the requirement that the Court be informed of such agreement pursuant to r 19.08(3) of the Rules.
The law with respect to indemnity costs is well settled; the Full Court observed in Kohan & Kohan (1993) FLC 92-340 that the Court should not depart lightly from the ordinary rules with respect to costs. In the decision of Prantage & Prantage [2013] FamCAFC 105, the Full Court confirmed that indemnity costs should only be awarded if the case has some special or unusual feature.
In Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 Sheppard J identified circumstances that might constitute special or unusual features so as to justify an award of indemnity costs. Usefully, Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660 drew from the decision of Sheppard J the following examples:-
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties.
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
(e)An imprudent refusal of an offer to compromise.
(Citations omitted)
The category of circumstances which enliven the discretion to award indemnity costs are not closed; the circumstances do not need to come precisely within the examples provided by Sheppard J.
The wife relies upon (a) above in support of her application, submitting that the husband pressed his application in circumstances where he knew or ought to have known that it had no chance of success.
In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Woodward J considered such circumstances and at page 401 stated:-
…I believe that it is appropriate to consider awarding “solicitor and client” or “indemnity” costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion.
The wife submits that the findings in the principal reasons for judgment delivered on 19 March 2020, warrant an order for indemnity costs. The wife submits that the husband filed an Initiating Application in circumstances where:-
· Final orders were made on an undefended basis in 2005;
· The Final Orders were not the subject of any appeal, nor did the Husband seek to have those orders set aside;
· The husband failed to comply with the Final Orders, which resulted in the wife bringing enforcement proceedings;
· In the current application the husband cited his own contempt of the Final Orders as a factor in support of his application;
· All orders sought by the husband in his application had either been judicially determined, were beyond the power of the Court or sought to bind third parties; and
· The husband’s application caused the wife significant distress, duress and financial hardship.
As a result of the above factors, the wife submits that the husband had no reasonable prospect of his application succeeding and that indemnity costs should be awarded. The wife submits that position is bolstered having regard to the notice provided to the husband in the letter from her lawyer in November 2019, which informed him that the issues raised in his application had been dealt with by the Final Orders and were beyond the Court’s jurisdiction.
As to the husband’s amended Initiating Application, in my reasons for judgment I stated that:-
[39]The application by the husband, to make orders to effectively restore the family unit, is an application for the Court to exercise powers it does not possess. There is no power within the Act to enable the Court to provide the relief sought by the husband so as to restore the wife and the family to the C Town property, or to bind the husband to care for her, to share his property with her or to prohibit him from separating from her. As a result, I am satisfied that that part of his application is bound to fail.
[40]Likewise, I am satisfied that the relief sought by the husband against Westpac Bank, National Australia Bank, the wife’s former lawyers, the former conveyancer and the wife’s current lawyers has no reasonable prospect of success and indeed is bound to fail. The husband seeks orders against each of those entities that they shall not “engage in malfeasance, usurpation or devastavit of persons land home, profession or business”. Again, there is no power within the Act to grant the relief sought by the husband against each of those entities.
[41]Whilst it is rare for the Court to make an order that an application be summarily dismissed, I am satisfied that in this matter such order is appropriate. Having regard to the Final Orders made in 2005 and the nature of the relief now sought by the husband some 15 years later, I am satisfied that the relief sought by him is beyond the Court’s jurisdiction and as such, is an application which does not have any reasonable prospect of success.
It is evident from those reasons that the weaknesses in the husband’s application were manifest, and properly advised, he should have known that he had no chance of success with respect to any of the orders sought. I am satisfied that the husband was given ample notice of the wife’s intention to seek to have his application summarily dismissed and apply for an order for costs.
Having regard to those matters, I am satisfied that in this case the circumstances are so special or unusual to warrant an order for indemnity costs.
The parties’ property proceedings were finalised approximately 14 years ago. Given that circumstance, the wife was well entitled to believe that the proceedings were at an end and that she was relieved of the burden of litigation. I am satisfied that the husband’s application was doomed to fail from the outset and the wife’s lawyers gave notice of that fact at the earliest opportunity in the proceedings. The husband elected to proceed with his application notwithstanding that notice. In doing so, I am satisfied that he has shown a wilful disregard of the facts and the law.
It is the wife’s contention that the husband has used the litigation as a means of harassing her. In support of that submission she relies upon the fact that she has obtained an indefinite intervention order against the husband as a result of his ongoing stalking and harassment of her. The husband’s refusal to seek advice either prior to the hearing or from the duty lawyer on the day of the hearing in the face of an invitation by the Court for him to do so, gives force to the wife’s submission.
Having regard to all of those matters, I am satisfied that they are circumstances so exceptional as to justify an order for indemnity costs as sought by the wife.
As to the quantification of costs, I am satisfied that the amount claimed on behalf of the wife is reasonable.
Accordingly, I make orders that the husband pay the wife’s costs on an indemnity basis fixed in the sum of $18,285.64.
I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 21 May 2020.
Associate:
Date: 21 May 2020
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