ATTARD & PRYDE

[2015] FCCA 659

FEDERAL CIRCUIT COURT OF AUSTRALIA

ATTARD & PRYDE [2015] FCCA 659

Catchwords:
FAMILY LAW – Costs – failure to provide disclosure in a timely manner necessitating further appearances – delay only partly explained – application for indemnity costs refused – costs order made.

Legislation:

Family Law Act 1975, s.117

Federal Circuit Court Rules 2001, Schedule 1

Colgate Palmolive v Cussons (1993) 118 ALR 248
Preston v Preston [1982] 1 All ER 41

Applicant: MR ATTARD

Respondent: MS PRYDE

File Number: BRC 7846 of 2013

Judgment of: Judge Lapthorn

Hearing date: 19 December 2014

Date of Last Submission: 19 December 2014

Delivered at: Brisbane

Delivered on: 23 March 2015

REPRESENTATION

Solicitors for the Applicant: Dean Kath Kohler

Solicitors for the Respondent: Rees Law

ORDERS

1. That the Respondent pay the Applicant’s costs fixed in the sum of $750 within six (6) months of today’s date.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 7846 of 2013

MR ATTARD

Applicant

And

MS PRYDE

Respondent

REASONS FOR JUDGMENT

Introduction

1. The substantive matter before the court is an application for property adjustment orders following the breakdown of the applicant’s marriage to the respondent.  The respondent seeks that that application be dismissed.  It is yet to be finalised.  In this judgment I am asked to make an order that the respondent pay the applicant’s costs to date on an indemnity basis fixed in the sum of $11,757.38.  The basis of the costs application is that the applicant alleges the respondent has failed to make full and frank disclosure in order to progress the application and that disclosure that has been made has not been done in a timely manner.  The costs order is opposed by the respondent on the basis that disclosure has largely been made and any delay in doing so has been satisfactorily explained.

Material Relied on

1. The applicant relied on the following material:

   a)His affidavit filed12 September 2013 (Paragraphs 6 and 22);

   b)His financial statement filed 12 September 2013;

   c)The affidavit of Ms L filed 17 July 2014;

   d)Orders of the Court dated:

   i)11 December 2013;

   ii)13 March 2014;

   iii)23 June 2014;

   iv)18 July 2014; and

   v)24 October 2014;

   e)Written submissions.

2. The respondent relied on the following material:

   a)Her affidavits filed:

   i)22 January 2014; and

   ii)13 November 2014;

   b)Her financial statement filed 22 January 2014; and

   c)Written submissions.

Background

1. The applicant is 31 years of age and lives in New South Wales.  He works as a (omitted) on a casual basis and has his income supplemented by social security.  The respondent is 42 years of age, lives in (omitted) and receives the Disability Support Pension.  The parties met over the internet and commenced to live together in March 2006.  They married on (omitted) 2007 and separated in early 2011.  They are not yet divorced.

2. The parties dispute many relevant factual matters.  I am not in a position to determine these disputes, given the evidence is untested.  I am however satisfied that it is not necessary to do so in order to deliver judgment on the limited issue before me.

Legal Approach 

1. Ordinarily each party to proceedings under the Family Law Act would bear his or her own costs.[1]  However if the court is of the opinion that there are circumstances justifying a costs order the court may make such order as it considers just.[2]

   [1] S 117(1)

   [2] S 117(2)

2. In determining whether to make such an order the court is required to have regard to a number of the factors set out in section 117(2A). I will address the relevant factors.

Financial circumstances of each of the parties

1. The evidence suggests both parties have very modest financial circumstances. 

2. The applicant has given evidence that he has property to the value of $18,000 with liabilities totalling $3,500.  He has an income from paid employment and a part pension totalling $825 per week with average weekly expenses of $625.  Part of his case for a property adjustment order is that when the parties separated they negotiated an agreement that provided for him to receive from the respondent $60,000.  This agreement, although prepared by a solicitor, signed by the parties and witnessed, was not a binding financial agreement.  The respondent has not paid the applicant this sum of money.

3. The respondent relies on Centrelink payments for her income and receives assistance from her family.  She is on a disability support pension.  The respondent said in her financial statement that her weekly income is $364, not including the support from her family, and expenses amount to $1,189.  Her evidence, like that of the applicant is yet to be tested.  She said she owns property to the value of $474,643 but has liabilities of $492,100.  Should the court ultimately accept the respondent’s evidence as to her financial circumstances she would not be in a position to pay any costs order that may be ordered.  That in and of itself however does not prevent the court from making a costs order.

The conduct of the parties to the proceedings

Whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court

1. I will address these two issues together.

2. The applicant complains that the progression of his application has been delayed by the conduct of the respondent in failing to provide appropriate disclosure in a timely way.  His Initiating Application was filed on 12 September 2013 and was made returnable on 22 November 2013 in Toowoomba.  The court was not able to sit in Toowoomba on that day and the matter was adjourned to 11 December 2013.  On that day the applicant was legally represented and the respondent appeared by telephone.  She was not legally represented.  Orders were made for the respondent to file and serve her response, affidavit and financial statement by 20 January 2014 and for the parties to provide disclosure.  The matter was adjourned to 13 March 2014.  The response and supporting material was prepared by the respondent’s then legal representatives and filed on 22 January.  When the matter came before the court on 13 March an order was made for the parties to attend a conciliation conference on a date to be fixed after a compliance check with a Registrar to be conducted on 23 June 2014.

3. The Registrar did not allocate a conciliation conference in light of non-compliance when the matter was mentioned by telephone before her on 23 June 2014.  The matter was listed for directions before me on 18 July 2014 in Toowoomba and the parties and their legal representatives were ordered to attend personally for that directions hearing.  When the matter came before me on 18 July the respondent was represented by a new solicitor and consent orders were made for discovery.  These orders also required the parties to exchange settlement offers within 28 days and that the applicant’s costs be reserved.  The matter was given a new listing in Toowoomba on 24 October 2014.  On that day I ordered the respondent to file and serve an affidavit within 21 days addressing the reasons for non-compliance with the orders dated 18 July and adjourned the matter to 19 December 2014 in Toowoomba.  The respondent did not attend court on 24 October but was legally represented.  She had not been excused from personal attendance.  I ordered that she be personally present on the adjourned date unless she was legally represented and her personal attendance had been excused prior to that date.  I also indicated that I would consider an application for the respondent to pay the applicant’s costs on an indemnity basis if there was further non-compliance and indicated that the matter may proceed undefended if the respondent did not attend court.

4. On 19 December 2014 the lawyers for the parties tended written submissions in relation to the question of costs and I reserved this decision.  I also listed the matter for a conciliation conference to be held in Brisbane on 12 June 2015 with directions before me on 3 July 2015 in Toowoomba if the matter has not resolved by way of final orders.

5. There have been six court events to date including the telephone appearance with the Registrar.  The applicant submitted that he has had to incur legal costs for appearances that would not have been necessary if the respondent had complied with the orders for discovery.  The respondent argued that she has now substantially complied with the requirement for disclosure. 

6. In her affidavit filed 13 November 2014 the respondent addressed her attention to compliance with the requirement for disclosure.  In doing so she did not address why she had not complied with the orders made 11 December 2013 and 13 March 2014.  In relation to the orders made 18 July 2014 the respondent gave evidence of ongoing health difficulties compromising her ability to comply with her obligations under those orders.  Although the evidence has not been tested I am satisfied that the respondent has explained the reasons for delay.  In making that finding I am not placing any weight on her assertions as to past family violence between herself and the applicant nor taking up any inference to be drawn from her evidence as to rocks being thrown on her roof.  I am satisfied that in light of her ongoing medical condition warranting a disability support pension and her evidence of having resorted to self-harm and being hospitalised, timely compliance was unlikely to be achieved.  I accept her evidence that her previous solicitors have acted on a lien over her file with that firm given their fees remained unpaid.  Her affidavit set out the actions taken by her and her lawyers to comply with the orders including having to make written requests of her bank.  I am satisfied that there has now been substantial compliance with the orders albeit way outside the 14 day time frame.  I am satisfied that the delay has been explained.

7. The applicant argued that the disclosure made raised a new issue as to the respondent’s interest in a bank account held jointly with her mother.  That appears to be the only significant issue left outstanding.  I was assured it was being addressed.

8. The respondent raised as a significant issue the applicant’s determination to proceed with his application notwithstanding the disclosure to date suggests the financial circumstances of the respondent are such that she has more debts than assets.  This is a valid consideration but I make no criticism of the applicant for pursuing the question of disclosure in light of the financial circumstances of the parties during the relationship which on the evidence would suggest that the respondent purchased two homes and the applicant purchased one.  The applicant’s home was sold during the relationship and according to the respondent he received proceeds of $63,000 some of which he used towards a property the respondent had purchased the year before.  The applicant’s evidence was that he had used this money towards the deposit on the respondent’s property but the respondent’s evidence is that it was purchased prior to the sale of the applicant’s property. I am not able to determine this factual dispute but it is not surprising the applicant has sought discovery in light of the real estate holdings of the respondent during the relationship.  Now that the respondent has made substantial disclosure the applicant will have to think carefully about pursuing his application.

Conclusions as to whether a costs order should be made 

1. The respondent has not addressed why there was no compliance with the orders made 11 December 2013 or 13 March 2014.  I make no criticism of the respondent being two days late in filing her response, affidavit and financial statement as required by the orders of 11 December 2013 but she did not make disclosure as was required by those orders.  Nor did she do so pursuant to the orders of 13 March 2014.  This necessitated the registrar adjourning the matter back to my list when the parties appeared for the conciliation compliance conference on 23 June 2014.  Both parties would have had to attend the first return date on 11 December 2013, the adjourned date of 13 March 2014 and the telephone mention on 23 June 2014.  The appearance on 18 July 2014 however would not have been necessary if disclosure had have been made in accordance with the orders of 13 March 2014.  I am satisfied that a costs order is warranted for that appearance notwithstanding the financial circumstances of the respondent.  The delay in making disclosure has of course not just incurred extra costs associated with appearances but would have required the applicant’s solicitors to correspond more with the respondent’s solicitors incurring further costs for the applicant.  Although the orders of 18 July were not complied with in a timely way and a further appearance was necessary on 24 October 2014 I am satisfied that delay has been sufficiently explained and would not be minded to order costs in that regard.

2. The applicant appears to be suggesting in his written submissions that all of his costs to date should be borne by the respondent.  For reasons I have expressed I have found the costs should be limited to the appearance on 18 July 2014 and for some extra correspondence that would have been necessary as a result of the non-compliance.  There is no justification in my view for the respondent to pay all of the applicant’s costs.

Should and indemnity costs order be made 

1. In Colgate Palmolive v Cussons[3] Sheppard J considered the jurisprudence in relation to the question of costs and confirmed the long standing practice is that such orders are to be on a party and party basis.  His Honour held that the court must not make an order on another basis unless the circumstances of the case warrant it departing from the usual practice.  In exercising its discretion the court would look to the particular facts and circumstances of the case and consider whether there is “some special or unusual feature in the case to justify the court in departing from the ordinary practice.”[4]

   [3] (1993) 118 ALR 248

   [4] Preston v Preston [1982] 1 All ER 41

2. Whilst I can well understand the applicant’s frustration in the delay in receiving disclosure sufficient for him to make an offer to settle the matter, I am not satisfied he has established that there is some special or unusual feature that would warrant a departure from the usual rule and be paid on an indemnity basis.

Conclusion

1. For the reasons I have expressed I am satisfied that a costs order should be made in relation to the directions hearing on 18 July 2014 and with some allowance for correspondence. I have no evidence as to the extent of that correspondence but would not expect that it would have been necessary for lengthy and voluminous correspondence to have been exchanged. In order to limit further costs to the parties by having to have costs assessed I propose to make an order setting the amount of costs. In doing so I will use Schedule 1 of the Federal Circuit Court Rules 2001 as a guide.  The allowance for a short mention is $278.  A half day hearing attracts $1,024.  The parties managed to reach agreement on 18 July 2014 as to the nature of the orders to be made.  Although the actual appearance did not take up much court time the parties and their lawyers were engaged in discussion for some time negotiating the terms.  The matter returned to court after 12 noon on the day.  Taking that into account, along with making some allowance for correspondence I am of the view that an appropriate amount for costs would be $1,000 however I propose to reduce that amount to $750 in light of the applicant’s financial circumstances.  Those circumstances also warrant a period of six months for payment.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Judge Lapthorn

Associate: 

Date:  23 March 2015