Wotton and Wotton

[2009] FamCA 932

FAMILY COURT OF AUSTRALIA

WOTTON & WOTTON [2009] FamCA 932

FAMILY LAW – PRACTICE AND PROCEDURE – Application for adjournment – COSTS

Family Law Act 1975 (Cth)

APPLICANT: Mr Wotton

RESPONDENT: Ms Wotton

FILE NUMBER: SYC 3621 of 2008

DATE DELIVERED: 17 AUGUST 2009

PLACE DELIVERED: SYDNEY

PLACE HEARD: SYDNEY

JUDGMENT OF: LOUGHNAN JR

HEARING DATE: 17 AUGUST 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Schonell

SOLICITOR FOR THE APPLICANT: Armstrong Legal

COUNSEL FOR THE RESPONDENT: Mr Lloyd

SOLICITOR FOR THE RESPONDENT: Fox & Staniland

Orders

1. The proceedings today are vacated.

2. The Husband pay to the solicitors for the Wife the costs of the Wife thrown away from 6 June 2009 to date on a solicitor/client basis as agreed or as assessed by a taxing officer.

3. The proceedings be listed for hearing for three days on a date to be allocated by the Registry.

4. The Docket Registrar cause the matter to be listed before him or her two months prior to the allocated date in relation to the readiness of the proceedings.

IT IS NOTED that publication of this judgment under the pseudonym Wotton & Wotton is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3621 of 2008

MR WOTTON

Applicant

And

MS WOTTON

Respondent

REASONS FOR JUDGMENT

1. There is an application for an adjournment of the proceedings and in aid of that an application for costs.  In relation to the adjournment, the application is made on the basis that, in short, the wife was put to making an application very late and the respondent to that application cannot take meaningful part. It is argued that that application is integral to the proceedings under section 79 and therefore the hearing must be abandoned.  The only thing said in opposition to that is that there is nothing inherent in the orders sought on behalf of the wife that require the determination or depend on the determination of the new application under 106B.

2. This is a case where there are substantial assets and substantial debts. There is real estate in New South Wales and in the United Kingdom, each property being encumbered to a level greater than the value of the properties.  In that context, a controversy in relation to the fate of £100,000 disposed of at the instance of the husband is obviously a relevant matter.  I am told that the first notice given to the wife’s solicitors of the orders sought by the husband was a document handed to me today. That demonstrates the problem with the submission on behalf of the husband. 

3. We have got to a situation in property proceedings where the bench is pathetically grateful to have the detail of the orders sought within 10 hours after the final submissions, let alone prior to the trial. Sometimes that happens for good reason and sometimes bad.  It is usually not fatal and it is not fatal here, so there is no cogent case made against an adjournment and the hearing is abandoned.

4. In relation to costs, generally parties bear their own costs.  The Court can make an order and in doing so is required to consider:  the financial circumstances of the parties, whether either is in receipt of legal aid and if so, the terms of the grant; the conduct of the parties, which is relevant here; whether the proceedings results from a breach of court orders and to some extent that is relevant here; any offers of settlement under section 117C in writing or otherwise, that is not relevant here; any other matter that the court would think relevant to costs; and whether either party was wholly unsuccessful, that is relevant here.

5. The situation is, the husband made a disposition to his sister in May 2008 of £100,000 of joint funds.  The parties say they separated about that time or a bit later.  The husband does not assert that the wife knew of the transaction, let alone that she was given prior notice of it or an opportunity to be heard about it.  What he says is that his sister’s practice was in trouble. “My sister required financial assistance from me and I gifted to her funds in the amount of £100,000 in order to help her through a difficult cash flow situation.  I informed [the wife] of the fact that [E’s]”, that is his sister, “business was in trouble in approximately April 2008.  [The wife] was aware that I held money back for the UK litigation with [L]”, that is a reference to a previous partner of his, “by remortgaging the [United Kingdom] property.  I said to [Mrs Wotton]”, that is the wife, “I’m desperate to help [E] as I don’t want to her to go under”.  He then says, “Instead of applying those moneys to the UK litigation, I gifted those moneys to [E]”, and he annexes a copy of two transfers.

6. Thus there is no suggestion that he told the wife that he was going to send one pound, let alone £100,000 to his sister and there is no suggestion that he had her agreement to do it. Property proceedings only work if there is complete disclosure.  We have a wonderful system which applies a discretion guided by legislation to a pool which is identified by various mechanisms, either agreement or evidence on a contested basis as to the identity of assets and as to their value.  And, as has been said on a number of occasions in a number of cases, if there is not complete disclosure and things that are left to the day of the trial in a state that they cannot be determined, it destroys the integrity of the process we have.

7. The parties are not here because they have broken a law. They want the assistance of the court to make a decision about how their property should be divided because they cannot agree about that. They approach the court and say, “We would like you to resolve this problem” and as soon as that happens, each party has obligations and their lawyers have obligations and the court has obligations. In this case all of the relevant obligations rested with the husband.  He was the only one who was going to be able to give useful detail about what happened and why.  He does not purport to say in his affidavit, which is his entire evidence at this stage, that his wife agreed, that she acquiesced, that she knew about it, nothing, just that they had a conversation about the topic at some point.

8. His evidence was filed last week, on the 12th day of August 2009, long after the time it was to be filed in accordance with orders made originally to prepare the case for hearing and after the extension of time I was asked to give on 6 July. If only because there is a fresh hearing available on a review of my decisions, I usually try and facilitate a case being heard. That is why, over the wife’s objections, I extended the time. That is why over objections, I allowed witnesses to be taken by telephone from the United Kingdom. In my view it is better to get on with the case and to give the parties an outcome. That has not been possible in this case.

9. There has been breach of court orders in the preparation of the case. The husband was the only party in a position to give the evidence about the disposition to his sister. It was submitted on his behalf today that the wife should have made more endeavours to dig the facts out. That is not her responsibility. It is the husband’s job.

10. The late evidence necessitated a claim against the husband’s sister to set aside the disposition to her. She could not be properly served in time, let alone meet that claim. Thus the hearing was abandoned.

11. This is a clear case where the wife should have a costs order.  There is an application that it be indemnity costs.  All costs orders are an indemnity but costs can be assessed on various bases. 

12. A party and party order is a partial indemnity. Depending on what somebody has actually been charged, it might represent something like half or two-thirds of the costs they have actually incurred. Costs can be assessed on other bases including a lawyer and own client basis whereby a party would receive back the money they have actually paid. There can also be a full indemnity order. That is unusual and it reverses the onus of responsibility from lawyer and own client, so the payer must demonstrate that some amount was not properly and actually incurred.

13. There are some authorities from the general law, which are not terribly helpful because in civil cases, usually costs follow the event. That is why, from the authority of Colgate -Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 (1993) 46 FCR 225, there is reference to the imprudent refusal of an offer of settlement. Being a specified criterion under section 117(2A), that would not be something that would normally warrant an indemnity order in this jurisdiction. The other example from Colgate -Palmolive Company v Cussons Pty Ltd – albeit not relevant here – is a false allegation of fraud. To some extent it is a matter of semantics but it seems to me that the wife should be indemnified on a lawyer and own client basis. She should not be out of pocket.  There is no way of making an assessment today.  I will leave that figure to be calculated by the parties and failing that, by an assessment by a registrar.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Loughnan.

Associate: 

Date: 29 September 2009