Woodham & Woodham

[2018] FamCA 721

FAMILY COURT OF AUSTRALIA

WOODHAM & WOODHAM AND ORS [2018] FamCA 721

FAMILY LAW – COSTS

Family Law Act 1975 (Cth)

APPLICANT: Ms Woodham

1^ST RESPONDENT: Mr Woodham

2^nd RESPONDENT:

Ms Gleeson (in her capacity as Executrix of the Estate of the late Ms P Woodham

and

3^rd To 14^th Named Respondents

FILE NUMBER: MLC 11101 of 2016

DATE DELIVERED: 11 Septemer 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: By way of Written Submissions

SUBMISSIONS RECEIVED FROM:

SOLICITIOR FOR THE APPLICANT: Lander & Rogers

SOLICITOR FOR THE 3^RD TO 14^TH NAMED RESPONDENTS: KCL Law

Orders

1. That the application of the various third parties to these proceedings as set out in the submission filed on 31 July 2018 is 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 Woodham & Woodham and Anor 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 11101 of 2016

Ms Woodham

Applicant

And

Mr Woodham

Respondent

Ms Gleeson (in her capacity as Executrix of the Estate of the late Ms P Woodham

2^nd Respondent

And

3rd To 14th Named Respondents

REASONS FOR JUDGMENT

1. On 20 June 2018 I made orders arising out of an interlocutory application in which a number of third parties who had been joined to proceedings between the husband and the wife had primarily sought summary dismissal of the wife’s claim as against them.  The moving applicants were unsuccessful in the summary dismissal application but then sought (in the alternative) that the wife’s claim as against them be further amended.  That order was made.

2. The third parties now seek costs of $50,282.  That order is opposed by the wife.

3. It is also pertinent to observe that one of the third parties was removed on the basis that there was no claim evident against that company but as it was all part of a conglomerate group, its removal was hardly surprising nor inconvenient.

4. In the reasons for judgment I observed:

   17.As the litigation is in its early stages, I am very mindful that if there is a serious legal question to be determined, it should ordinarily be determined at a trial (see Beck) but so too, where there are “defects” in the nature of the procedural claims (in some courts, pleadings) and where there is still evidence of the possibility of a reasonable cause of action, the Court will ordinarily allow redrawing of the application. In the absence of cross-examination, the court normally proceeds on the basis that the respondent's version will ultimately be accepted at the trial and in this case, it is made more difficult because of the submission put by the wife.

5. My reference to the wife’s position can be seen where I said as follows:

   7.In 8.2, the provisions of s 90AE are relied on by the wife to seek an order that the executrix in her capacity as the trustee of the Estate of Ms P Woodham Trust No 2 do all that is required to transfer the husband’s interest in that trust to the wife. That order could only be made if the husband had a legal or equitable interest in the property of the trust. If he did, the trustee could be ordered to disgorge it. It is unclear why the trustee would need to be a party for that purpose after a consideration of s 90AE(3)(c). To blur the picture a little, the wife suggests that she may seek to rely on s 85A of the Act

   …

   21.In the submission on behalf of the wife in the present proceeding, her counsel began by referring to the fact that the wife was “limited in her ability to set out with precision the parties’ interests due to the lack of relevant financial disclosure to date.” That is different from being limited in her ability to define the parties with precision but on the basis that summary dismissal is a high bar and only cautiously granted and in circumstances where the procedural steps can be rectified, that should be permitted rather than have the proceedings dismissed. I am very conscious that this proceeding has been on foot since 2016 and there have been delays in dealing with this interlocutory application due to court resources.

   …

   25.A further complaint of the entities about having been joined and facing one broad proposed order for relief and the insufficiency of the pleading can also be seen in 8.5 . I do not know whether each trust faces one and the same claim or a different claim and if so, on what basis.  That too faces the problem raised by Re: B Pty Ltd but in my view, it is not normally a basis to summarily dismiss the wife’s claim but rather, to permit rectification of the formal application.

   …

   36.In this interlocutory hearing, I am not in a position to make findings about many of these matters and do not need to do so but the submissions on behalf of the entities and the executrix are powerful where the wife’s own senior counsel submits that the wife is unsure what steps she is going to take. In my view, despite her dilemma, the wife has to plead with particularity and join only those parties who have the requisite connection with the husband and wife if she relies on s 90AE because otherwise, as was submitted by senior counsel for the executrix, all of these people are being brought along for a ride at large expense.

6. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that in proceedings under the Act, each party shall bear their own costs. The exception to that is where there are justifying circumstances to depart from that principle but even in the event that an order for costs is contemplated, the court is obliged to take into account matters set out in s 117(2A).

7. The first question therefore is whether there are circumstances to justify a departure from the principle mandated in the Act.

8. In February 2018 at the first hearing following the wife’s joinder of the third parties, the wife was invited to amend her application because of a looming argument about its deficiency.  That did not occur.  As has now transpired, the wife has amended her position in writing on a number of occasions and the third parties’ position is that costs have been unnecessarily incurred.

9. The wife’s position is that the focus of the particular hearing was on the summary dismissal application upon which the third parties were unsuccessful.  It is submitted by the wife that costs ought not follow where a party is unsuccessful because the hearing necessitated the attendance of counsel and the preparation of written submissions. 

10. It will be self-evident that the focus of much of the dispute here is about the fact that the wife has put various positions before the court by amending her applications after being effectively forced to do so. It was submitted by the wife that it was not uncommon for amendments to be made because that was contemplated by Division 11.2.2 of the Family Law Rules 2004. Whilst that is so, this was (as the third parties argued) the fifth time changes of this nature had occurred and the third parties continued to assert uncertainty as to what they were obliged to meet. To some extent that can be rectified by a costs order at trial (and it is not suggested that the wife is impecunious) but the rules of court militate against that approach. That can be seen in the following rules:

    1.04    Main purpose of Rules

    The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.

    …

    1.06    Promoting the main purpose

    The court must apply these Rules to promote the main purpose, and actively manage each case by:

    (a)encouraging and helping parties to consider and use a dispute resolution method rather than having the case resolved by trial;

    (b)having regard to unresolved risks or other concerns about the welfare of a child involved;

    (c)identifying the issues in dispute early in the case and separating and disposing of any issues that do not need full investigation and trial;

    (d)at an early stage, identifying and matching types of cases to the most appropriate case management procedure;

    (e)setting realistic timetables, and monitoring and controlling the progress of each case;

    (f)ensuring that parties and their lawyers comply with these Rules, any practice directions and procedural orders;

    (g)considering whether the likely benefits of taking a step justify the cost of that step;

    (h)dealing with as many aspects of the case as possible on the same occasion;

    (i)minimising the need for parties and their lawyers to attend court by, if appropriate, relying on documents; and

    (j)having regard to any barriers to a party’s understanding of anything relevant to the case.

    1.07    Achieving the main purpose

    To achieve the main purpose, the court applies these Rules in a way that:

    (a)     deals with each case fairly, justly and in a timely manner;

    (b)      encourages parties to negotiate a settlement, if appropriate;

    (c)is proportionate to the issues in a case and their complexity, and the likely costs of the case;

    (d)     promotes the saving of costs;

    (e)gives an appropriate share of the court’s resources to a case, taking into account the needs of other cases; and

    (f)promotes family relationships after resolution of the dispute, where possible.

11. This costs application is specifically focussed on the discrete hearing where the third parties were not wholly unsuccessful but rather achieved their fall-back position which was to force the wife to set out with precision what she was pursuing (as required by the rules).  In some cases, I accept it is difficult to plead with particularity during the infancy of the litigation but this case has been extant since 2016.

12. On balance, very little was achieved by either party on this occasion save that the third parties will now receive another form of claim by the wife.

13. In a jurisdiction where costs follow the cause, it would be accepted that repleading or altering the nature of the claim, would justify an order for costs. That is not so in this court where each party paying their own costs is not just the norm but also the mandated starting position. There has to be a justified position to depart from that principle and the court has to examine the matters set out in s 117(2A).

14. In respect of the s 117(2A) matters, I am not able to make a finding about the financial positions of the parties absent not only financial statements but also those being tested.

15. Whilst there has been criticism of the wife by the third parties, her argument (albeit rejected) has been that it has been difficult to access information about the husband’s financial position because of the attitude adopted by the trust. The wife alone cannot be responsible for that consequential dilemma of pleading her case. As already mentioned, whilst the wife was not wholly unsuccessful, she has been largely so. However, she has also been (again) given an opportunity to fix the problem largely of her own doing and to give the third parties the clear understanding of what she is seeking. That was what the third parties wanted and they achieved that. All of these matters point to the philosophical basis behind s 117 which is that parties should bear their own costs.

16. On balance, I consider it would not be just arising from this particular application to make an order for costs against the wife.

17. The third parties’ application is therefore dismissed.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 11 September 2018.

Associate: 

Date:  11 September 2018