Ayre and Ayre (No.2)

[2018] FCCA 1897

FEDERAL CIRCUIT COURT OF AUSTRALIA

AYRE & AYRE (No.2) [2018] FCCA 1897

Catchwords:
FAMILY LAW – COSTS – Consideration of S.117(1), (2) & (2A) of Family Law Act (1975) – husband’s conduct of the proceedings – where wife substantially successful.

Legislation:

Family Law Act 1975, ss.117 (1), (2) & (2A)

Cases cited:

Penfold v Penfold [1980] HCA 4

Applicant: MS AYRE

Respondent: MR AYRE

File Number: LNC 591 of 2016

Judgment of: Judge McGuire

Hearing date: 10 July 2018

Date of Last Submission: 10 July 2018

Delivered at: Burnie

Delivered on: 13 July 2018

REPRESENTATION

Counsel for the Applicant: Mr M Verney

Solicitors for the Applicant: Matthew Verney Lawyer

Counsel for the Respondent: Ms A Trezise

Solicitors for the Respondent: Dobson Mitchell Allport

ORDERS

1. That the husband pay the wife 75% of the wife's costs of the conduct and preparation of the trial in this matter on the basis of the scale set out in the Federal Circuit Court Rules 2001 such to be agreed or taxed.

IT IS NOTED that publication of this judgment under the pseudonym Ayre & Ayre (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BURNIE

LNC 591 of 2016

MS AYRE

Applicant

And

MR AYRE

Respondent

REASONS FOR JUDGMENT

1. I have before me an Application by the wife seeking costs on a party/party basis in respect of the substantive trial of her Section 79 Application. Counsel for the applicant wife pursues a quantum of costs at $19,786 “plus disbursements”. Although I am told that the quantum is calculated on the scale pursuant to the Family Law Rules, there are no particulars of the quantum sought or of the disbursements.

2. The Application is opposed.

Relevant Law

1. Matters of costs are provided for at Section 117 of the Family Law Act 1975 (“the Act”) where subsection (1) provides a general rule that each party to proceedings shall bear his or her own costs.

2. That general rule however, is subject to a discretion in trial judges at subparagraph (2) to make an award for costs if the Court is of the opinion that there are circumstances which justify it doing so.  That discretion is a broad one and with no incumbent special onus on an applicant seeking an order for costs[1].

   [1] Penfold v Penfold [1980] HCA 4

3. At subsection 2A, the Act mandates a number of considerations to be referenced for the Court to make an order for costs, if any. They are:

   (a)     The financial circumstances of each of the parties to the proceedings;

   (b)     Whether any party has Legal aid in the terms of any grant of aid;

   (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, corrections to answers, 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 order of the Court;

   (e)     Whether any party to proceedings has been wholly unsuccessful in the proceedings;

   (f) Whether any party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings in the terms of any such offer; and

   (g)     Such other matters as the Court considers relevant.

4. Whilst it seems that reference to the factors above are mandatory, it is a matter for discretion of the Judge to attribute weight to and to balance each of those factors in determining whether there are justifying circumstances for an order for costs and the form of any order.

Consideration

1. Both parties filed and relied on the affidavits in respect of this Application with the applicant wife’s affidavit being filed 3 August 2017 and the husband's affidavit sworn and filed on 6 July 2018. It is necessary to say that the delay in the bringing on of this application was due to an Appeal being lodged and heard in respect of the substantive Application, the orders to which were handed down on 11 July 2017.

2. The substantive proceedings involved a property settlement. Broadly, there were two major areas of dispute between the parties albeit with many other issues of more discreet argument. Firstly, the wife sought orders whereby she receives 60% of the property pool inclusive of superannuation. The husband’s position at the commencement of the trial was that he wife receive property to value of approximately $132,500 and that he retain property of value of $500,000 - $600,000 (estimated). That position and argument was abandoned by the time of final submissions when the husband argued that the wife receive 55% of the net tangible assets and 50% of his superannuation entitlements. Ultimately, an order was made for the wife to receive 57.5% of the property pool inclusive of superannuation on a “one-pool” basis.  Secondly, there was significant argument at the trial in respect of the contents of the property pool and their values.  In particular, the wife argued for the inclusion of an amount of $80,000 (“cash”) which she says was retained by the husband and which he denied. I found in favour of the wife in this respect and where the $80,000 constituted some 10.67% of the property pool. There were numerous other issues as to the existence and value of assets but not argument to the same magnitude or import as the $80,000.

3. The matter proceeded to Appeal on the husband's Application. Suffice to say that my finding as to the husband’s retention of the $80,000 was not disturbed on Appeal. Further, the Appeal effectively left the same net result for the parties as my findings being 57.5% of the property pool to the wife and 42.5% to the husband although the husband was partially successful on Appeal in respect of the distribution of particular assets.

4. The husband says that he is now employed as (occupation omitted). He discloses a gross income of $1,200 per week. My recollection from the trial is that the husband did not file his sworn financial statement until the last working day prior to the trial. He disclosed that he retained the previous partnership business of the parties being a (business omitted). He then disclosed in Court that he was relinquishing that business and taking up an occupation as (occupation omitted). He appears to have had another change of heart. He retains Property A with a value of $185,000. He has superannuation of $57,000 and a motor vehicle valued at $16,000. He says now that he has a liability of a personal loan of $40,000. That liability did not exist as at the date of the trial. His affidavit does not reference my finding as to him retaining $80,000 in cash.

5. The wife remains in essentially the same financial circumstances as at the date of the trial albeit with the benefit of the orders made pursuant to Section 79 of the Act.

6. The authorities make it clear that I am not required to undertake a minute examination of the parties’ particular financial circumstances in respect of the determination of a costs application. I am generally satisfied on the information above, in respect of the quantum of costs sought, that the husband has the ability to meet any costs order. I am generally satisfied that the husband remains in a superior financial position to the wife.

7. Neither party was in receipt of a grant of Legal Aid in respect of the substantive proceedings.

8. The wife relies, in a large part, in this application on the conduct of the husband.  She says that he did not provide full discovery/disclosure and that this impacted negatively on any opportunities for settlement and hence caused her cost and expense of a trial. She says such disclosure as there was was made late and immediately prior to a mediation and/or the trial. She says that other materials, not discovered by the husband, were ultimately exposed only by cross-examination at the trial. I accept each of these submissions.  In particular, the wife asserts, and I accept, that documents including the husband's personal tax returns for the immediate past three years, bank statements and partnership statements were at no time disclosed.  The wife says that she was required to obtain some materials by subpoena at expense to her because of the husband’s failure to make full disclosure.

9. The husband, in his affidavit, agrees that there were “delays” in the provision of some documents and “that a number findings of the Court were adverse to me.” He attempts to mitigate this situation by claiming poor literacy skills. He was represented at all material times and I am unable to accept the husband’s excuses in this respect and note, as raised with both Counsel during the submissions in this Application, that findings in the substantive proceedings asserted some sympathy to the husband's own legal practitioner because of the failure of the husband to be candid in his disclosure and his evidence generally and even apparently to his own lawyers.

10. Further in respect of this consideration, the wife says, and I accept, that a Notice to Admit Facts that was filed with the Court on 18 May 2017. A Notice Disputing Facts was filed by Mr Ayre on 24 May 2017 denying any of the facts to be true.  It is not disputed in this application that all those facts were found to be true at the hearing and not disturbed on Appeal.

11. Generally, I accept the assertions of the wife's Counsel in this application that the husband was dilatory in his compliance with Court ordered timetables for the filing of documents. Indeed, it is my recollection of the husband that he did not file his relevant trial material until the last working day prior to the commencement of the trial in this matter. The result, of course, was again that any opportunity for negotiated resolution was negated by the husband's failures in this respect.

12. Subparagraph (e) requires me to consider whether any party to the proceedings has been wholly unsuccessful in the proceedings. It is true that the wife sought 60% of the net property pool and achieved only 57.5% of that pool. The husband, however, came to the trial arguing that the wife receive only approximately 17-18% of the property pool.  Further, the husband maintained throughout the trial that the property pool was substantially less in both content and value than that asserted by the wife and where the Court found in favour of the wife.

13. This is not a matter where Calderbank offers of settlement are a relevant consideration.

Conclusion

1. In this matter the husband now concedes that he was at least dilatory in matters of discovery/disclosure. I am satisfied that a number of relevant documents were never disclosed by the husband. I am satisfied that his relevant non-disclosure was at times only exposed by cross-examination during the trial. I also satisfied that the husband did not comply with procedural orders for the filing of trial material. These matters combined, in my view, to negate any opportunity for proper negotiations towards settlement. Further, the husband was found to be dishonest in his evidence during the course of the trial and, as he says in his affidavit filed in respect of this Application, “I accept the findings of this Court in relation to my evidence and the consequences which have flowed from those findings”.  The facts asserted by the wife’s Notice to Admit Facts were disputed but ultimately proven. Nevertheless, the wife was not wholly successful in her Application seeking 60% of the property pool although she did achieve 57.5% and was, therefore, in my view, substantially successful as against the argument posed by the husband and the orders sought by him at least until the completion of the evidence. In all of those circumstances, I am of the view that the wife should have 75% of her costs on a party/party basis, such to be calculated on the scale in the Federal Circuit Court Rules 2001 and such to be agreed or taxed given the lack of particularising of the wife's costs in the hearing before me.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 13 July 2018