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Case Study
FamCA Coversheet and Orders Page 1
FAMILY COURT OF AUSTRALIA
ZAGOREOS & ZAGOREOS [2018] FamCA 4
FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband contends
that it is not just and equitable for a property adjustment order to be made – Where the
husband asserts the parties did not combine their respective finances – Where the
husband seeks for a discrete hearing on the issue of whether a property adjustment
order should be made pursuant to s 79(2) – Where it is found that a discrete hearing
would not be convenient or appropriate in the circumstances – Where the husband’s
application is dismissed.
FAMILY LAW – COSTS – Where the wife seeks costs on an indemnity basis – Where
an application for indemnity costs is not granted in the circumstances – Where costs
are ordered against the husband on a party and party basis.
Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)
Bevan & Bevan (2013) FLC 93-545
Chapman & Chapman (2014) FLC 93-592
Colgate-Palmolive Co v Cussons Pty Limited (1993) 118 ALR 248
Fielding and Nichol [2014] FCWA 77
Kohan and Kohan (1993) FLC 92-340
Prantage & Prantage (2013) FLC 93-544
Port of Melbourne Authority v Anshun (1981) 147 CLR 589
Southwell v Bennett [2010] NSWSC 1372
Stanford v Stanford (2012) 293 ALR 70
APPLICANT: Mr Zagoreos
RESPONDENT: Ms Zagoreos
FILE NUMBER: SYC 1519 of 2017
DATE DELIVERED: 10 January 2018
PLACE DELIVERED: Brisbane
PLACE HEARD: Brisbane
JUDGMENT OF: Forrest J
HEARING DATE: 18 December 2017
REPRESENTATION
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FamCA Coversheet and Orders Page 2
COUNSEL FOR THE APPLICANT: Mr Williams
SOLICITOR FOR THE APPLICANT: Hirst & Co
Family Lawyers
COUNSEL FOR THE RESPONDENT: Mr Galloway
SOLICITOR FOR THE RESPONDENT: Michael Conley Lawyers
ORDERS
UPON THE UNDERTAKING given by the husband to the Court not to sell, dispose
of, or further encumber his interest in the real property situated at C Street, Suburb D
in the State of New South Wales until further order
IT IS ORDERED
(1) That the husband’s Application in a Case filed 9 November 2017 is dismissed.
(2) That the application of the wife contained in paragraph 2 of her Response to an
Application in a Case filed 13 December 2017 is dismissed.
(3) That the husband shall pay the wife’s costs incurred in opposing his
Application in a Case filed 9 November 2017 to be agreed or assessed in
accordance with the Family Law Rules 2004 on a party and party basis.
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
Zagoreos & Zagoreos 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).
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FamCA Reasons Page 1
FAMILY COURT OF AUSTRALIA AT BRISBANE
FILE NUMBER: SYC 1519 of 2017
Mr Zagoreos
Applicant
And
Ms Zagoreos
Respondent
REASONS FOR JUDGMENT
1. Property adjustment proceedings were commenced in the Sydney Registry of
this Court by the wife in March of this year. On the application of the husband,
on 7 July 2017, Stevenson J ordered the proceedings transferred to this registry.
Now, by Application in a Case filed on 9 November 2017, the husband seeks to
have the matter set down for a discrete hearing on the issue of whether it is
“just and equitable” to make a property adjustment order pursuant to s 79(2) of
the Family Law Act 1975 (Cth). The wife opposes the application.
2. Counsel for the husband correctly points out that Rule 10.13 of the Family Law
Rules 2004 permits a party to apply for a “decision on any issue”, if the
decision may:
(a) dispose of all or part of the case;
(b) make a trial unnecessary;
(c) make a trial substantially shorter; or
(d) save substantial costs.
3. In determining any such application, Rule 10.14 gives the Court the discretion
to:
(a) dismiss any part of the case;
(b) decide an issue;
(c) make a final order on any issue;
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FamCA Reasons Page 2
(d) order a hearing about an issue or fact; or
(e) with the consent of the parties, order arbitration about the case or
part of the case.
4. The Court’s power is not, however, limited to the options set out in Rule 10.14.
(See Rule 1.10)
The Submissions for the Husband
5. In short, the husband’s principal contention is that it is not just and equitable
for a property adjustment order to be made in this case. In making that
submission, he refers to the High Court’s decision in Stanford v Stanford
(2012) 293 ALR 70 and submits that the High Court held that the “first step” in
the process of determining applications for orders pursuant to s 79 of the
Family Law Act is an assessment of “the existing legal and equitable interests
of the parties in their property” and that the “second step” involves
“ascertaining whether it is just and equitable to make an order altering the
interests of the parties in their property”. Effectively, he submits that the said
“second step” of the process can and should be dealt with by the Court in this
case by means of the holding of a discrete hearing on that issue.
6. For the husband it is submitted then, with reference to Rule 10.13, that the
benefit for the Court and the parties, if he is successful with the contention that
it is not just and equitable for a property adjustment order to be made, lies in
the proceedings being thereby disposed of completely, there being no need for
any further trial.
7. The Court was told that the determination of that issue as a discrete issue would
only require two days of Court time as opposed to five days of Court time for
the hearing of “the entirety of the wife’s claim”. It was said that would result in
costs savings for the parties and the Court, as well as a likelihood that the Court
could accommodate such a hearing much earlier.
8. Significantly, the evidence of the husband and the submissions made on his
behalf were prefaced on an assumption that if a discrete hearing as to whether
there is any principled reason for interfering with the existing legal and
equitable interest of the parties is held, there will be no need for valuations of
the husband’s extensive property interests to be provided to the wife and
adduced into evidence.
Some background
9. The husband is 52 years of age and the wife is 45 years of age.
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FamCA Reasons Page 3
10. They disagree as to when they started living together. The wife asserts it was in
2006. The husband asserts it was in 2008. They married in 2009. They
separated in April 2016. Though they wanted to have children and repeatedly
tried to do so with medical assistance, they did not have any.
11. When they met, the wife worked in a professional capacity and the husband
was a businessman. The husband had extensive property interests, but the wife
had little in the way of assets.
12. The husband said in evidence that he and the wife had “discussions” at “around
the time [they] commenced [their] relationship”. The husband was in the midst
of resolving a division of property with his former wife at the time and he said
the wife in this case said to him:
I would not ever want to have those sorts of issues with you. I think we
should agree on how we are going to conduct our financial arrangements. I
understand that people can enter into a pre-nuptial agreement which
protects their assets from claim. If you want me to sign a pre-nup, I’ll sign
anything you want.
13. The husband said that he responded with words to the effect of:
Good. That’s great. How about, you just do whatever you want with your
money and I’ll do whatever I want with mine and we’ll leave it at that.
14. The husband said that the wife’s simple response was:
Ok
15. He said that they then subsequently conducted their financial arrangements in
accordance with that agreement. He said that they:
(a) Did not ever inter-mingle their respective finances;
(b) Did not acquire any property jointly until the purchase of an apartment
in Suburb D in Sydney “in the context of the deterioration of [their]
marriage”;
(c) Did not combine their finances into joint bank accounts;
(d) Were each individually responsible for their own debts;
(e) Each used their own income as each chose without explanation or
accountability to the other;
(f) Were never involved in any “joint financial decision making”;
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FamCA Reasons Page 4
(g) Did not share information with each other as to their own financial
situation and made financial decisions about their own circumstances
without reference to each other;
(h) Both contributed to expenses for discretionary spending and food;
(i) Shared domestic responsibilities;
(j) Left it open to each of them to accumulate his or her own income,
acquire property or spend it as each saw fit.
16. The husband said that after their relationship commenced the wife continued
with her career and he continued his “business operations and interests”. He
said they maintained separate bank accounts. He said he was “unaware how the
wife applied her income”. He said he did not account to her for his income and
did not consult with her with respect to any of the projects he became involved
in.
17. He said that the wife never became a shareholder or director in any of his
companies and he did not “specifically nominate her as a beneficiary on any
trust [he] established”. He said he made no distributions of income or capital to
the wife from any of his entities at any time during their relationship.
18. He said that the marriage was unhappy for about 4 years prior to their final
separation in April, 2016. He said that the wife told him in 2013 that she
wanted to work from Sydney rather than Brisbane and she asked him to “buy
her a residence in Sydney to live in”. He said he agreed to purchase a property
and after inspecting a number of properties together they agreed to purchase
one in Suburb D in joint names “in the context of [their] relationship
difficulties”.
19. The husband said that he made all of the financial contribution to the purchase
price and costs of acquiring the property with some of the purchase price being
borrowed and secured by the granting of a mortgage to the financier. The
property was registered in the names of the husband and the wife as joint
tenants.
20. The husband said the wife relocated to live in the Suburb D property in July
2014 and has lived in it ever since. He said that he met the cost of “fully
furnishing” that property and paid the mortgage repayments until a few months
after the separation. The wife has paid them since. The husband said that after
the separation, he gave the wife $500,000 “by way of transfer to [their] joint …
account … to ensure that she could meet her expenses”.
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FamCA Reasons Page 5
21. The wife continues to hold her half interest in the Suburb D property and is
also jointly liable for the mortgage. She otherwise has “interests in property
and superannuation of approximately $180,000”.
22. The husband also said “I am taking steps to sever the joint tenancy”.
23. The wife does not want him to sever the joint tenancy. In her evidence, she said
that she feared he might further mortgage his half interest if he severs the joint
tenancy. At the hearing, the husband agreed to give the Court an undertaking
that if he severs the joint tenancy, he would take no steps to further encumber,
sell or otherwise deal with or dispose of his half interest in the property.
24. Counsel for the wife still sought an injunction restraining the husband from
severing the joint tenancy, and submitted that severance of the joint tenancy
might “frighten the mortgagee”.
25. I am not satisfied, given the undertaking the husband gave the Court, that he
should be restrained from severing the joint tenancy. Without any evidence that
the mortgagee might take an adverse view of such a move, I am not prepared to
simply accept that the mere possibility of that supports the necessity for an
injunction. Although the actual benefit to the husband of severing the joint
tenancy is not clear to me, I also fail to see the prejudice to the wife that would
be caused by a severance of the joint tenancy at this point in the proceedings.
26. The wife said that after she and the husband began living together she
underwent breast enlargement surgery at the husband’s request. Afterwards, she
suffered severe complications and underwent emergency procedure to deal with
the complications, some months after the initial surgery.
27. In her evidence, the wife went into some detail about things that would be
considered to be contributions by her, normally taken into account in
determining property adjustment orders pursuant to s 79(4) of the Act. She said
in evidence that she “organised a complete facelift” to a house into which she
and the husband moved in B Town in 2009. The house was bought by the
husband and registered in his name. She lists in her affidavit “a non-exhaustive
summary of the kind of work [she] undertook and/or organised to improve the
aesthetics” of that property. There follows a list of non-financial contributions
to the improvement of that property.
28. The wife does not agree with the husband’s evidence as to the exact
circumstances surrounding the purchase of the Suburb D property. She asserted
that it was an investment decision they both agreed upon. She said they both
agreed to renovate the property before taking up occupation of it. Again, she
has deposed to what could be described as non-financial contributions to the
improvement of the property.
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FamCA Reasons Page 6
29. The wife said that she started living in the Suburb D apartment as she was
working in Sydney, but would stay at the B Town home with the husband if she
had overnight stays in Brisbane or B Town.
30. The wife has also given evidence about their attempts to have a child early in
their relationship. After a few years of trying to conceive naturally, they sought
out medical assistance. That assistance included working with fertility
specialists in Australia and the USA with a view to actually conceiving a male
child. The wife said that they underwent four rounds of in vitro fertilisation up
to 2010, with some further associated procedures in 2014. The wife asserted
that the husband was “emotionally unsupportive” during the process, but
acknowledges he paid $30,000 for the first cycle of treatment whilst she paid
about $6,000 for each of the three cycles after that.
31. The wife said that during each round of IVF treatment she was unable to work.
She said that she had difficulties with her employer at the time as a
consequence.
32. She said that since 2011, she has experienced “bouts of anxiety and depression”
for which she began taking medication in 2014. She said that she had a
breakdown at work in April 2014 on the discovery that the husband was having
“an extra-marital affair”.
33. In 2015, the wife began undertaking command training to obtain a promotion.
At the end of 2015, she was, she said, “deemed unfit to hold a Class 1 medical
clearance to enable [her] to continue operating [in her profession]”. She took
12 months leave without pay.
34. She said that she is currently being treated in Sydney by a psychiatrist for
depression and anxiety and sees him once per month. Although she has not said
it, I infer that the wife has not returned to work with her former employer.
35. The wife said in her evidence that the husband did provide her with financial
support during their marriage, particularly when she was earning less as a result
of the IVF treatment she was undergoing for them. She said that he also made
repayments on a car she purchased early in the relationship and on another one
she purchased later in the marriage. She said that he provided her with a fuel
card which she used to pay for petrol and he paid the rent on an apartment they
lived in for a while that was leased.
36. She said that she paid for private health insurance for both of them, obtaining a
corporate discount for them. She paid for toll passes for them both, the utility
costs in one of the residences they lived in, their groceries and household
supplies, the internet connection at another property they lived in, all the costs
of caring for their pets, framing costs for artworks that hung in their home, the
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FamCA Reasons Page 7
purchase of kitchen ware, bedding and soft furnishings and plants, many travel
costs around the extensive overseas travel they undertook (relying on her
employment related benefits) and the purchase of a dog for her former mother –
in-law.
37. She said that they actually did have three joint bank accounts, all opened since
they bought the Suburb D property in 2014. One of those appears to be the
account for the loan they jointly borrowed to complete the purchase of the
Suburb D property.
38. Clearly, there are some differences between the parties as to the facts alleged
around their financial relationship.
The Wife’s Anshun Estoppel point
39. In his submissions, counsel for the wife referred to the High Court’s decision in
Port of Melbourne Authority v Anshun (1981) 147 CLR 589 and submitted that
in any event the Husband’s application should fail as it was “unreasonable” for
him not to have raised the issue for determination when he was before
Stevenson J in this Court in Sydney on his application to transfer the
proceedings to this registry.
40. With respect to counsel for the wife, I do not accept the submission that the
facts and circumstances of this case give rise to an estoppel such as that
confirmed by the High Court in Anshun. The application determined by
Stevenson J in Sydney was merely an application to transfer the proceedings
within this Court from one registry to another. It did not finally determine or
dispose of substantive rights for relief pursuant to Part VIII of the Act . It did
not, in my judgment, “declare rights” in a way which could potentially now be
viewed as inconsistent with a final determination that it would not be just and
equitable to make any property adjustment orders as between the parties in the
proceedings. It was the existence of that inconsistency between a prior
judgment and a subsequent one sought in respect of “the same transaction” that
I consider the learned Judges of the High Court in Anshun found to be an
essential element giving rise to the estoppel, in addition to the “unreasonable”
failure by the Port Authority to have raised in the first proceedings the point it
relied upon in seeking relief in the second proceedings.
41. Whilst I accept that unexplained failure to bring an application such as the one
the husband now brings at an appropriate, earlier point in time in the history of
the litigation could well be relevant to the exercise of the discretion the Court
has in determining it, that is far from considering that an estoppel such as was
confirmed in Anshun applies. I am satisfied that it does not in this case.
FamCA Reasons Page 8
Is a discrete determination of whether it is just and equitabl e to make an order
altering the interests of the parties in their property justified in this case?
42. Counsel for the wife referred to a decision of Hallen AsJ of the New South
Wales Supreme Court in Southwell v Bennett [2010] NSWSC 1372, particularly
at [15]-[17] where the learned Judge discussed principles applicable to the
discretionary exercise involved in deciding an application such as this. I accept
that those principles are indeed applicable.
43. One of those was that as a general rule the discretionary power to order
separate determination of a question should be approached with caution.
Another was that the party seeking the separate determination of a question
must satisfy the Court that it would be ‘just and convenient’ for that order to be
made. I will not list the many others, but have considered them.
44. In seeking to satisfy the Court that the discrete hearing should be held, counsel
for the husband placed substantial emphasis on what he described as the
“unchallenged evidence” of the husband that the former couple had, in essence,
an unwritten agreement that they would keep their property interests separate.
As I understood his submissions, it was the fact that the parties had agreed at
the start of their relationship to keep their financial affairs separate and had
lived their married lives according to that agreement that can and should
support a finding that it would not be just and equitable to make any order
altering their property interests. Pointing out that the husband’s evidence about
that alleged agreement had not been challenged or contradicted by the wife in
any of her affidavit evidence filed in opposing the husband’s application was
done in apparent support of a submission, as I understood it, that his evidence
must therefore be accepted as an accurate account of the factual position, or at
the very least, should be considered as more likely to be correct than not .
45. I further understood that submission to be made to give weight to the argument
that there is substantial merit in the husband’s claim that justice and equity does
not require property adjustment between the parties in this case and that as the
High Court in Stanford had determined that this Court’s obligation to be
satisfied, in all the circumstances, that it is just and equitable to make a
property adjustment order is not to be conflated with consideration of the
matters set out in s 79(4) of the Act in determining what order, if any, should be
made, the determination of whether any order should be made at all could
comfortably be set down for a discrete, abridged hearing conducted in a setting
where the husband does not have to go to the trouble of providing full valuation
evidence and where consideration of all of the contributions made by the
parties should not be relevant.
FamCA Reasons Page 9
46. The husband’s application was not one seeking summary dismissal of the
wife’s application for property adjustment orders but rather a discrete hearing
of the question as to whether it is just and equitable at all to make property
adjustment orders. As counsel for the wife pointed out, trial affidavits are yet to
be filed, so in that respect the Court is not in a position of being able to be
satisfied that the husband’s evidence about an agreement between the parties at
the outset of their relationship conveys the essential factual reality. The Court
was told that, I consider, in order to cast doubt on the asserted strength of the
husband’s argument about the alleged initial agreement, and, consequently, the
merit of his argument that the case can be dealt with simply by discretely
determining the “just and equitable” point.
47. It seems to me that having found a few cases where trial judges have, after final
hearings, determined that the parties lived their lives together and arranged
their financial affairs in such a way that it would not be just and equitable to
make property adjustment orders as between them, the husband and his legal
representatives have optimistically formed a view that the Court can be
persuaded of the same thing in this case even after an abridged trial where the
full financial circumstances of the parties are not even before the Court.
48. Whilst I am quick to acknowledge that it is indeed possible that the outcome in
this case at the end of the proceedings could be a determination that making no
property adjustment order is the just and equitable outcome, I am extremely
mindful at this point in the proceedings of other things said by the plurality in
the High Court’s decision Stanford. In particular, at [36], their Honours said:
The expression “just and equitable” is a qualitative description of a
conclusion reached after examination of a range of potentially competing
considerations. It does not admit of exhaustive definition. It is not possible
to chart its metes and bounds.
Also, at [42], their Honours said:
In many cases where an application is made for a property settlement order,
the just and equitable requirement is readily satisfied by observing that, as
the result of a choice made by one or both of the parties, the husband and
wife are no longer living in a marital relationship. It will be just and
equitable to make a property settlement order in such a case because there
is not and will not thereafter be the common use of property by the husband
and wife. No less importantly, the express and implicit assumptions that
underpinned the existing property arrangements have been brought to an
end by the voluntary severance of the mutuality of the marital relationship.
That is, any express or implicit assumption that the parties may have made
to the effect that existing arrangements of marital property interests were
FamCA Reasons Page 10
sufficient or appropriate during the continuance of their marital relationship
is brought to an end with the ending of the marital relationship. And the
assumption that any adjustment to those interests could be effected
consensually as needed or desired is also brought to an end. Hence it will
be just and equitable that the court make a property settlement order. What
order, if any, should then be made is determined by applying s 79(4).
49. I am also extremely mindful of the following passage from the judgment of
Strickland and Murphy JJ of the Full Court of this Court in Chapman &
Chapman (2014) FLC 93-592:
18. As to inference, the plurality in Bevan said (at [89]) “[u]ltimately,
however, appellate error will not be demonstrated if it is possible to
ascertain, either by reference to an express finding or by necessary
inference, that the trial judge has given separate consideration to the
two issues” (emphasis added). Similarly, the plurality firmly
rejected (at [86]) the notion that s 79(2) forms a “threshold issue” –
which their Honours described as a “misleading” description – or
that error is demonstrated by a failure to deal with s 79’s separate
requirements in a particular order.
19. Section 79 demands a consideration, separately, of all of its
requirements without conflation. Provided a trial judge has done so,
and the reasons demonstrate that this has been done, no error is
demonstrated by a failure to follow a particular order in doing so.
Further, the breadth and depth of the consideration of the s 79(2)
issue, and the extent of an adequate exposition of it in the reasons,
will vary from case to case. …
20. Each of those conclusions conforms entirely with what was said
about those issues by the High Court in Stanford v Stanford (2012)
247 CLR 108.
50. As was pointed out in the passage just cited, in Bevan & Bevan (2013) FLC 93-
545 at [86], the Full Court had also said:
We do not consider it helpful, and indeed it is misleading, to describe this
separate enquiry as a “threshold” issue. … The just and equitable
requirement is therefore not a threshold issue, but rather one permeating the
entire process.
51. In his judgment in Fielding and Nichol [2014] FCWA 77, Thackray CJ said at
[33], after a thoughtful discussion of Stanford and the subsequent decisions of
the Full Court of this Court that considered and applied Stanford (including
Bevan and Chapman):
FamCA Reasons Page 11
… it is open to a trial judge, in addressing the s 79(2) question, to consider
matters that may be seen as arising under s 79(4), but consideration of
those matters is by no means conclusive in determining whether the “just
and equitable” test has been meet (sic).
52. I respectfully agree with his Honour and I consider that these decisions make it
clear that matters arising under s 79(4) may relevantly be considered in
determining the s 79(2) question, though they are not mandatorily to be
considered and, if they are considered, they are not necessarily determinative of
the s 79(2) question. I am also satisfied that these decisions support the pos ition
that the s 79(2) question should not readily be treated as an issue conveniently
dealt with in a discrete, “threshold” hearing.
53. Accordingly, having regard to the matters of evidence raised by the wife in the
affidavit she filed, particularly the factual matters going to questions of
contribution and matters of health, and having regard to the decisions I have
referred to above, I do not consider it appropriate to set this matter down for a
discrete hearing on the “just and equitable” question in circumstances where
there has not been full disclosure (in the sense of the identification and
valuation of all the parties’ property interests). The factual circumstances of the
matter, as already revealed in the affidavit evidence that has been filed, do not
clearly dictate to me that the wife’s case that justice and equity require s the
parties’ existing property interests to be adjusted be tween them is likely to fail.
Prima facie, she has a right, in the absence of a “financial agr eement” (as
defined in the Act) that ousts the jurisdiction of the Court to make orders
pursuant to Part VIII of the Act, to a proper hearing of her application. I am not
persuaded that discretely hearing only one of the questions to be considered in
determining her application pursuant to s 79 of the Act is the best way to go
about finalising these proceedings. I do not consider that it is a just and
convenient method of managing these particular proceedings to list them for a
discrete, two day hearing on the “just and equitable ” question alone prior to full
disclosure having occurred.
54. I am also fortified in arriving at my determination on this application by my
satisfaction, stated during the hearing of the application, that a final trial on all
issues (once single expert valuation evidence is adduced) will not require five
days of this Court’s time as apparently is the current view of the legal
representatives of the husband. I do not consider that a two day discrete
hearing, if it was appropriate at all, would result in such savings and
advantages for the parties and the Court in terms of resource management such
as to justify it being managed in this way.
55. I will dismiss the husband’s application.
FamCA Reasons Page 12
56. Before I move to the question of costs though, I consider it appropriate to deal
with one other aspect of the wife’s opposition to the husband’s application that
I have not mentioned yet.
57. After the wife was served with the husband’s application in a case, her
solicitors wrote to the husband’s solicitors inviting the husband to withdraw his
application, asserting that it was an abuse of process. The wife’s solicitors
referred to a paragraph in an affidavit filed by the husband earlier in the year in
support of his application to transfer the proceedings to Queensland. In that
paragraph the husband said:
In April 2016, the wife requested (and I agreed) to transfer to her as part of
her entitlement to a property settlement the amount of $500,000, to assist
her to meet the costs of the [Suburb D] property and costs of these
proceedings.
58. The wife’s solicitors contended in the letter that this was an admission by the
husband that the wife was entitled to “a property settlement” and that the
payment he made to her constituted only part of what she was entitled to. In
essence, the solicitors for the wife contended that such “admissions”
constituted evidence that would doom the husband’s application to failure .
59. Clearly, the husband did not withdraw his application.
60. In his affidavit filed in support of the application for a discrete hearing the
husband said of the same factual matter:
Shortly following our separation, I agreed to gift the Wife the amount of
$500,000 by way of transfer to our joint Westpac account on 21 April
2016, to ensure that she could meet her expenses.
He said nothing of the earlier deposition.
61. Although I have had this evidence in mind when determining to dismiss the
husband’s application for a discrete hearing, I have not decided it on the basis
of a finding that the husband is bound by his earlier deposition and estopped
from changing his position. I did not understand counsel for the wife to make
that argument, in any event. I consider that notwithstanding having sworn to
that assertion earlier in 2016, the husband is still entitled to argue in the
proceedings, should he so decide, that it would not be just and equitable to
make a property adjustment order as between them. Of course, he may
eventually be asked some questions about his state of mind when he swore the
earlier affidavit, but a change of mind is not unknown amongst litigants before
this Court and the relevance of his earlier state of mind will be a matter for later
consideration.
FamCA Reasons Page 13
Costs
62. At the conclusion of the hearing, I invited submissions from the parties in
respect of costs having regard to the potential outcomes in the matter. The wife
had an application for the husband to pay her costs on an indemnity basis
before the Court.
63. For the wife, it was submitted that if the husband was unsuccessful in his
application the wife should have her costs on an indemnity basis. The letter
written to the husband’s solicitors by her solicitors on 22 November 2017, that
I have just referred to, put the husband on notice that if he did not withdraw his
application the wife would seek her costs on an indemnity basis. That letter was
referred to in support of the costs application.
64. One party putting the opposing party on notice that costs would be sought on
an indemnity basis is something this Court sees frequently. In fact, I consider it
is done far too frequently and unnecessarily. However, simply telling the other
party that costs will be sought on an indemnity basis does not justify an order
being made on an indemnity basis if the application is unsuccessful.
65. Of course, a costs order departing from the general statutory provision that
each party shall bear his or her own costs in proceedings under the Act may be
made if the Court is of the opinion that there are circumstances that justify it in
doing so. If so, the Court may make a costs order that it considers just.
(s 117(1) and s 117(2))
66. Matters to have regard to in considering what order, if any, should be made for
costs under s 117(2) are set out in s 117(2A) of the Act. Pursuant to Rule 19.18
of the Rules the Court may order that a party is entitled to costs, inter alia, as
assessed on a particular basis (eg lawyer and client, party/party or indemnity).
67. Even if the Court is satisfied that the circumstances justify a costs order being
made, generally they are to be ordered on a party and party basis unless the
circumstances of the case warrant the Court in departing from that usual
course. To order costs be paid on an indemnity basis, the question must be
whether the particular facts and circumstances warrant the making of such an
order. (See Kohan and Kohan (1993) FLC 92-340, Colgate-Palmolive Co v
Cussons Pty Limited (1993) 118 ALR 248 and Prantage & Prantage (2013)
FLC 93-544. As I have said, a party is not entitled to costs on an indemnity
basis simply because they write to the other party and say “I will seek costs
against you on an indemnity basis if you proceed and are unsuccessful”.
68. In Colgate-Palmolive, Sheppard J listed some of the types of circumstances
that have been held to justify costs being awarded on an indemnity basis in the
past. They include:
FamCA Reasons Page 14
The making of allegations of fraud knowing them to be false;
The making of irrelevant allegations of fraud;
Particular misconduct that causes loss of time to the Court and the parties;
The fact that the proceedings were commenced or continued for some
ulterior motive or in wilful disregard of known facts or clearly established
law;
The making of allegations that should never have been made;
The undue prolongation of a case by groundless contentions; and
An imprudent refusal of an offer to compromise.
69. In the first instance, having regard to the matters that I am required to consider
pursuant to s 117(2A), I am satisfied that a costs order against the husband in
the circumstances of his unsuccessful application is justified. In particular, I
consider the apparent disparity between the parties’ comparative financial
positions one of the factors justifying departure from the position that each
party bears his or her own costs. I also consider the fact that the husband has
been wholly unsuccessful in respect of his application in a case to be a
particularly weighty fact, along with the fact that a letter was written to his
solicitors before he filed the application informing them that the application for
a discrete hearing was opposed and another letter was written to them again
after the application and supporting affidavit were filed and served, inviting
him to withdraw the application. That the application was not decided precisely
on the grounds asserted by the wife’s solicitors that it would be does not
derogate significantly, in my judgement, from the weight of this fact in the
determination of this costs application.
70. That the wife did not succeed in obtaining the injunction she sought, restraining
the husband from severing the joint tenancy in respect of their Suburb D
property, does not persuade me that a costs order against the husband is not
justified or that one in his favour in respect of that part of the proceedings is
justified, particularly in the light of the fact that the husband did give the Court
an undertaking not to sell, dispose of, or further encumber his interest in the
Suburb D without apparent hesitation when his counsel was asked in Court
whether he proffered one.
71. I am not persuaded that costs should be ordered to be paid on an indemnity
basis. Whilst the application for a discrete hearing on the “just and equitable”
question in the factual circumstances of this case could be regarded as
“adventurous”, it has to be acknowledged that the High Court’s decision in
FamCA Reasons Page 15
Stanford has raised many questions about the way in which property
adjustment proceedings in this Court are determined and that not all of those
questions have necessarily been definitively answered at this point in time. I
would not go as far as finding that the application was brought for some
ulterior motive or in wilful disregard of clearly established law, such that costs
on an indemnity basis are justified.
72. I will order that the husband pay the wife’s costs of opposing his application for
a discrete hearing on the “just and equitable” question as agreed or assessed
pursuant to the Rules on a party and party basis. I am satisfied such an order is
both justified and just.
