Yorke and Kyte (No 2)

[2016] FamCA 671

FAMILY COURT OF AUSTRALIA

YORKE & KYTE (NO 2) [2016] FamCA 671

FAMILY LAW – COSTS – Where the husband was ordered to pay the wife’s costs of the substantive proceedings – Where the wife sought indemnity costs – Where the husband’s conduct did not constitute ‘exceptional circumstances’ to award indemnity costs – Where the husband was ordered to pay costs on a party and party basis as assessed by the Court – Where the Court determined to certify for Senior Counsel.

Family Law Act 1975 (Cth), s 117(2A)

Prantage & Prantage (2013) FLC ¶93-544

APPLICANT: Ms Yorke

RESPONDENT: Mr Kyte

FILE NUMBER: SYC 1097 of 2010

DATE DELIVERED: 11 August 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: In Chambers

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Gayle Meredith & Associates

THE RESPONDENT: In Person

Orders

IT IS ORDERED

1. That by 30 July 2017, the husband pay to the wife by way of costs the sum of $100,000.

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 Yorke & Kyte 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 SYDNEY

FILE NUMBER: SYC 1097 of 2010

Ms Yorke

Applicant

And

Mr Kyte

Respondent

REASONS FOR JUDGMENT

1. Proceedings for property settlement between Ms Yorke (“the wife”) and Mr Kyte (“the husband”) were completed and Judgment handed down on 18 March 2016.

2. The effect of the order made was that the husband was required to pay to the wife the sum of $1,231,481.

3. The wife now seeks an order that the husband pay her costs of the proceedings on an indemnity basis or, in the alternate, on a party and party basis.

4. The wife relies on an affidavit sworn by her on 13 April 2016 and written submissions.

5. The husband who opposes the application seeks an order that the wife’s application be dismissed.

6. The husband relies on written submissions filed on 11 July 2016.

7. Both parties agreed that the matter be dealt with on the papers without the need for further argument.

8. The application falls to be determined according to the provisions of s 117(2A) of the Family Law Act 1975 (Cth) (“the Act”) which are set out below:

   (2A)  In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   (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.

9. The financial circumstances of the parties were determined by the Orders made on 18 March 2016. The wife will receive approximately $1.3 million and retain her superannuation entitlement of approximately $719,000. The husband will retain assets valued at approximately $1.25 million. However, the majority of that amount is not available to the husband until July 2017 because of an arrangement he made, without notice to the wife, to enter into a delayed settlement of the sale of assets.

10. Whilst it may be the case that the husband is responsible for his current financial position being less favourable than that of the wife, that is the position.

11. However, it must also be remembered that the husband had the benefit of $1,270,000 that he has already spent.

12. Neither party was in receipt of legal aid.

13. The conduct of the husband in relation to the proceedings has been addressed in the wife’s written submissions. There were numerous mentions occasioned by the husband’s failure to provide proper disclosure or his disposition of assets without notice to the wife. The Judgment of 18 March 2016 refers to the fact that the husband gave evidence which was knowingly false so as to influence the outcome of the proceedings. However, because of the decision that I have made in relation to other matters, it is not necessary to fully set out the nature of the husband’s conduct and the manner in which it increased the costs of the proceedings.

14. Whilst the husband’s failure to comply with orders did not necessitate the proceedings, it exacerbated them.

15. The husband’s response to the wife’s application for costs sought only the dismissal of the wife’s application. In that respect, he was wholly unsuccessful.

16. The only offer of settlement made by the husband in relation to the substantive proceedings which were finalised on 18 March 2015 was an offer on 26 November 2014 to pay the wife $20.

17. The wife made an offer of settlement on 4 August 2015 in the following terms:

    That the husband pay to the wife the sum of $664,463, at his election from his own funds or those held by [C]Investment;

    That there be no further adjustment between the parties, such that each otherwise retain that which they then respective owned; and

    That the husband discontinue proceedings then pending before the NSW District Court on behalf of [B] Pty Ltd against the wife. 

18. The husband did not respond to that offer. At trial the husband agreed to discontinue the District Court proceedings.

19. At trial, the wife was awarded an amount approximately double that for which she offered to settle.

20. The wife’s offer was made at an early stage in the proceedings. It was clear and capable of acceptance.

21. A consideration of the relevant matters in s 117(2A) favours the making of an order for the husband to pay the wife’s costs of the proceedings.

22. The wife should have her costs from 4 August 2015, the date of her offer of settlement.

INDEMNITY COSTS

1. The law in relation to indemnity costs has been exhaustively stated in recent decisions of the Full Court of the Family Court of Australia.

2. It is sufficient to say for present purposes that there must be circumstances within the factors set out in s 117(2A) of the Act which enliven the discretion to depart from the general rule that each party pay his or her own costs; and there must be exceptional circumstances to justify the award on indemnity costs or solicitor and client costs (see, for example, Prantage & Prantage (2013) FLC ¶93-544).

3. The conduct of the husband in these proceedings, although unsatisfactory, does not constitute “exceptional circumstances”.

4. Indemnity costs will not be ordered.

QUANTUM

1. The wife seeks costs on a party and party basis and asks the Court to fix the amount of costs payable. In aid of this submission there is an assessment of costs at scale attached to her affidavit.

2. The submissions relied upon by the husband do not address that assessment.

3. In so far as the wife asks the Court to certify for senior counsel, I note that the husband was also represented by senior counsel. This was a complex matter and the appearance of senior counsel was appropriate.

4. The costs incurred by the wife from the date of her offer of settlement to the conclusion of the proceedings are assessed by her solicitors at $54,449.72, and the disbursements are $79,948.43, giving a total of $134,398.15. No doubt, if the matter went to assessment, there would be some adjustment to that figure.

5. In order to save the parties the time and expense of an assessment, I fix the amount to be paid by the husband at $100,000.

6. The wife asks that the amount be paid within 28 days. There is no reasonable possibility that the husband will have such a sum within that time. However, he will receive a substantial sum in July 2017.

7. The amount will be required to be paid by 30 July 2017.  

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 11 August 2016.

Associate: 

Date:  11/8/2016