LF v RA (No 2)[2006] QSC 72

SUPREME COURT OF QUEENSLAND

[1] The applicant seeks an order that the respondent pay her costs of and incidental to the principal application which was made for a property adjustment order pursuant to Part 19 of the Property Law Act 1974. 

[2] The evidence in chief at trial was given by affidavit and the hearing occupied one day on 24 November 2005.  The parties’ lawyers provided written submissions and judgment was delivered on 22 December 2005, [2005] QSC 375.  Leave was given to the parties to confer, through their lawyers, and propose different wording for the orders than the proposed orders set out at the conclusion of the reasons.

[3] The parties reached agreement on a different form of order consistent with the reasons and which I signed on 6 February 2006. 

[4] On 22 December 2005 the parties were given leave to make submissions about any costs orders within 28 days.  The applicant filed submissions seeking costs on 19 January 2006.  The respondent opposed those orders by written submissions filed 27 March 2006.  No point is taken about the delay in responding.  The applicant’s response was received in the Registry on 30 March 2006. 

[5] Section 341 of the Property Law Act 1974 contained in Part 19 (which concerns de facto relationships) provides for a different costs regime to that of the Uniform Civil Procedure Rules.  Rule 689 of the UCPR sets out the general rule that costs of a proceeding are in the discretion of the court but follow the event unless the court considers another order is more appropriate.  Rule 691 provides

“A party to a proceeding can not recover any costs of the proceeding from another party other than under these rules or an order of the court.”

An order of the court may be made pursuant to statute which provides otherwise than as set out in the UCPR. 

[6] Section 341 of the Property Law Act provides

“(1)A party to a proceeding under this part bears the party’s own costs.

(2)However, if the court is satisfied there are circumstances justifying it making an order, it may make any order for costs or security for costs it considers appropriate.

(3)The court may make an order at any stage of the proceeding or after the proceeding ends.

(4) In considering whether there are circumstances justifying it making an order, the court must consider the following matters—

(a) the income, property and financial resources of each of the parties;

(b) whether any party has legal aid and the terms of the legal aid;

(c)the conduct of each of the parties in relation to the proceeding, including, for example, conduct about pleadings, particulars, disclosure, inspection, interrogatories, admissions of facts and production of documents;

(d) whether the proceeding results from a party’s failure to comply with a previous order made under this part;

(e)whether any party has been wholly unsuccessful in the proceeding;

(f)whether any party made an offer to settle under the Uniform Civil Procedure Rules 1999 and the terms of the offer;

(g)any fact or circumstance the court considers the justice of the case requires to be taken into account.”

[7] I have not been referred to any decision of this court concerning the appropriate approach to s 341.  It seems to be generally accepted that because many of the provisions in Part 19 reflect provisions in the Family Law Act 1965 (Cth) this court may obtain assistance from the jurisprudence of the Family Court of Australia.  Some reference has been made to Family Court of Australia decisions in single judge decisions of this court, although not relating to s 341, E v S [2003] QSC 378;  S v B [2004] QSC 80.  In some circumstances decisions made under comparable de facto relationships legislation in other States and Territories will be of assistance to the court, Queensland Law Reform Commission Report No 44.  An example is in the principal judgment where I was assisted by a decision of the Supreme Court of the Northern Territory, Van Jole v Cole [2000] NTSC 18.  However, it is the words of the section which primarily govern the application.   

[8] In considering whether there are circumstances justifying making an order for costs I am required to consider each of the matters set out in subpara (4)(a)-(g) of s 341.

(a) income, property and financial resources of each of the parties

[9] The income, property and financial resources are set out in the reasons for judgment.  The applicant’s evidence at the hearing was that she worked as a casual perfume consultant at Myer between 15-20 hours per week.  Her taxable income was approximately $400 per week.  From that she needed to pay rent and living expenses.  She is a trained hairdresser and gave no explanation as to why she did not look for or was unable to find work as a hairdresser either part-time or full-time.  She, accordingly, has an under-utilised skill which could be productive of income.

[10] As the reasons reveal, there was scant evidence about the respondent’s income but it, too, is relatively modest.  He now has property assets as a consequence of these proceedings but he also has substantial repayment obligations in respect of those assets.  Any benefit would only accrue to him were they to be sold.  I am not persuaded that there is any factor under this head which would cause a costs order different from that set out in s 341(1) to be made.

(b) whether any party had legal aid and the terms of the legal aid

[11] There was no evidence that either party had received legal assistance in respect of the proceedings and the court is informed by Mr Cooper that no grant of aid had been obtained by either party.

(c) the conduct of each of the parties in relation to the proceedings

[12] It is this factor which might suggest that some different order than that set out in s 341(1) might be made. There are two discrete matters to be considered.  Prior to proceedings commencing the applicant’s solicitors sought the respondent’s cooperation in the release of the conveyancing file relating to the jointly owned property from their then solicitor, Mr Turnbull.  Mr Turnbull’s attitude was that he would not release the file except with the consent of both parties.  Mr Cooper requested the respondent’s solicitors to arrange for their client to give consent to the files being released.  Mr Cooper’s firm unsuccessfully sought cooperation over some months from the respondent’s solicitors.  It was not forthcoming and it was not until after proceedings were actually commenced that the documents were obtained.  The response that as a co-retainer of the solicitor the applicant could force the issue with Mr Turnbull is made only in these costs submissions.  The correspondence merely offered to seek instructions over several months.  

[13] On 7 October 2004 a Notice to Admit Facts was served on the respondent’s solicitors.  The respondent was asked to admit that he had signed certain documents purporting to be the applicant’s annexed to the Notice.  Those issues are discussed at paras 37 and 38 of the reasons for judgment.  By letter dated 22 December 2004 the applicant’s solicitors wrote that in the absence of admissions they were arranging for a consultant forensic handwriting specialist to inspect the documents.  There followed requests for the respondent’s consent to the expert accessing the disputed documents or withdrawal of the Notice Disputing Facts. 

[14] Further correspondence ensued on 1 February 2005 and 23 February 2005 and on 4 March 2005 in the face of failure to respond to admit the fact of the respondent’s authorship of a disputed signature the applicant’s solicitors engaged the handwriting expert.  On 7 March 2005 in a telephone conversation the respondent’s solicitors indicated that the respondent admitted that all of the documents annexed to the Notice to Admit Facts had been signed by him.  By that time the costs associated with retaining the handwriting expert had been incurred.

[15] The conduct of the respondent over the conveyancing file was uncooperative but the costs associated with including that item in the correspondence are not readily quantified. 

[16] The conduct in resisting the admission of facts relating to the signature was productive of loss to the applicant in a direct fashion and she ought to be recompensed for it. 

(d) whether the proceeding results from a party’s failure to comply with a previous order made under this part

[17] This is not applicable.

(e) whether any party has been wholly unsuccessful in the proceeding

[18] Mr Cooper contends on behalf of the applicant that whilst the applicant sought an equal division of the assets by her application for a property adjustment order and was, therein, unsuccessful, she was successful in as much as the recognised agreement on which the respondent had relied to defend the application was set aside.  Instead of receiving what Mr Cooper has calculated as approximately 6 per cent of the joint assets which she would have received under that agreement she is to receive approximately 37.1 per cent of those assets.  It is contended, therefore, that in light of the correspondence seeking to have the agreement set aside by consent and that the respondent has been wholly unsuccessful in that part of the proceeding the applicant should have her costs. 

[19] Those costs included costs paid to two medical practitioners who were witnesses in the proceeding attesting to the applicant’s state of health when she executed the agreement.

[20] The circumstances of the execution of the agreement and the law relating to setting it aside are discussed at paras 41 to 59 of the reasons.  The state of the applicant’s health was not determinative of that matter but the injustice of the property division insofar as it related to the jointly owned home.  An application for a property adjustment order was always necessary because of the legal ownership of the property.  I do not see the issue of the agreement as a true distinct issue which would suggest a separate costs order. 

[21] Mr Cooper sets out other out-of-pocket expenses incurred by the applicant relating to contested matters including costs paid to Professor John Wade who was the mediator.  That is not a fact which persuades me that a different costs order ought to be made.

(f) whether any party has made an offer to settle under the Uniform Civil Procedure Rules 1999  and the terms of the offer

[22] Both parties made several offers to settle but both agree that no offer to settle was one which would affect any order for costs.

(g) any fact or circumstance the court considers the justice of the case requires to be taken into account

[23] Mr Cooper submits that the applicant endeavoured to reach an agreement initially to set aside the agreement which was resisted to the end of the trial.  He submits that the respondent should have always conceded that the agreement should be set aside on the grounds of serious injustice. 

[24] Mr Cooper also includes in his submission that the applicant has had to engage with solicitors on a speculative basis and that her total costs and outlays to the date of the submissions are just under $65,000.

[25] I have dealt with the first matter.  The amount of the applicant’s costs is significant in comparison to what she will obtain by the property adjustment order.  No doubt the respondent also has a significant costs’ bill to meet.  Particularly in disputes of this kind, the parties sometimes find it difficult to accept a lesser sum in settlement than that which they seek not understanding that the additional costs of a trial may very well consume any “extra” award gained in the judgment.  This aspect of the submission is, to a large extent, subsumed by the offers of settlement which did not result in success for either.

Conclusion

[26] The submissions for the applicant seem to envisage an order for costs reflecting the issues upon which the applicant was successful and the pre-trial matters in which the respondent proved uncooperative.

[27] In Cinema Press Ltd v Pictures & Pleasures Ltd [1945] KB 356 at 363 the Court of Appeal in England observed

“These difficult and complicated taxations can be avoided by awarding to one side or the other what proportion of the costs the judge thinks fair.  There is no doubt as to his jurisdiction to do so and anything which works in favour of simplicity in these matters is desirable.”

[28] I am of the view that the only matter which clearly calls for a different order in respect of costs than the general order that each party is to bear the party’s own costs relates to the necessity of engaging a forensic handwriting expert.  There was ample opportunity for the respondent to admit the fact of his signature on the disputed document and he ought to have done so.  The amount of the expert account which has been paid was $748.  There were necessarily letters written concerning this matter although there were no letters exclusively devoted to it.  There were, no doubt, appointments to be made and the like.  In an attempt to resolve the matter without the parties engaging in further disputation or a costs assessment I set the amount of the applicant’s costs on this issue at $1,000. 

[29] If the proceeding is considered globally there are aspects of the respondent’s conduct which did not advance the resolution of the dispute and which have called for particular comment, however, apart from the expert unnecessarily retained I am not persuaded that there should be any other order as to costs. 

[30] The order is:

The respondent pay the applicant $1,000 in respect of the costs associated with the failure to admit a fact.