Babrow and Rackley (Costs)

[2010] FamCA 806

FAMILY COURT OF AUSTRALIA

BABROW & RACKLEY (COSTS) [2010] FamCA 806

FAMILY LAW – COSTS

Family Law Act 1975 (Cth) ss 117(1), 17(2), 17(2A)

Gallo v Dawson (1990) 93 ALR 479
Pennisi & Pennisi (1997) FLC 92-774

APPLICANT: Mr Babrow

RESPONDENT: Ms Rackley

FILE NUMBER: CAC 1164 of 2008

DATE DELIVERED: 9 September 2010

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Faulks DCJ

HEARING DATE: Determined on the papers in Chambers

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr G. Howard

SOLICITOR FOR THE APPLICANT: Farrar Gesini & Dunn

COUNSEL FOR THE RESPONDENT: Self-represented litigant

SOLICITOR FOR THE RESPONDENT: Self-represented litigant

Orders

1. Pursuant to s 117(2) of the Family Law Act 1975 (Cth), the respondent wife will pay to the applicant husband the sum of $15,000 on or before 16 October 2010.

2. All extant applications in relation to the question of costs are discharged.

3. The matter is removed from the pending cases inventory. 

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

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 1164 of 2008

MR BABROW

Applicant

And

MS RACKLEY

Respondent

REASONS FOR JUDGMENT

Introduction

1. In an application filed on 30 June 2010, the husband sought costs in relation to the property proceedings which were determined by my judgment and orders of 24 June 2010. 

2. In my orders of 24 June 2010, I directed that the parties were to file written submissions about the question of costs and that my judgment would be determined “on the papers”.

Procedural history

1. The final hearing was conducted over 11 and 12 June 2009, 22 October 2009 and 19 and 20 November 2009. 

2. On 6 May 2009, I directed that the parties file their affidavit material prior to the scheduled hearing on 11 and 12 June 2009.  It was expected that the final hearing would be completed on those two days.  The matter was adjourned to allow for the completion of the cross-examination of the wife by counsel for the husband to 22 October 2009.  On 12 October 2009, contrary to my directions of 6 May 2009, the wife filed an affidavit.  The matter was subsequently adjourned so as to enable the husband’s lawyers to have the opportunity to review the extensive affidavit material (I allowed this document to be admitted as a form of “re-examination” by the wife).  I ordered that “[t]he costs of [the proceedings on 22 October 2009] and of the adjournment caused by the late filing of [the wife’s] affidavit are reserved question of costs”.  The matter resumed on 19 November 2009 and was finalised on 20 November.

The husband’s application and submissions

1. The husband’s application seeks:

   3. That the Wife pay the husband’s costs of an incidental to the husband’s property application filed 9 October 2008.

   4. That the Wife pay the husband’s costs on indemnity basis in respect to the preparation for and hearing on 19 and 20 November 2009.

2. In support of that application, the husband filed written submissions on 30 June 2010.  The wife’s submissions in reply were filed on 8 July 2010.

3. The husband’s submissions are extensive but might be summarised as follows:

   a)The wife’s approach to the proceedings both as a self‑represented litigant and even when she was represented (at the commencement of the proceedings in the Federal Magistrates Court of Australia prior to the proceedings being transferred to this Court) was such as to avoid disclosure and to delay the course of the proceedings.  It was also asserted that the wife converted what should have been a two day trial into a four day trial as a result of her conduct during the course of the proceedings.

   b)It was further submitted that the wife’s approach to the litigation itself was evasive and discursive.  Consequently, this caused both delay in the proceedings and additional work on the part of the husband’s lawyers.  In particular, it was asserted that the earlier part of the proceedings which was not concluded within the allocated two days because (it is asserted) the wife was difficult in cross-examination were further delayed when the wife produced two lever arch folders containing additional evidence which was eventually allowed into the proceedings and which caused a further adjournment.  It was also submitted that there was significant work because of the nature of the volume and the (it is asserted) lack of care that went into the preparation of the documents and, the inadmissibility of some of the documents.

   c)There is also a reference to written offers of settlement some of which were made before the commencement of proceedings which it is submitted I should take into account under s 117(2A)(g) of the Family Law Act 1975 (Cth).

   d)The husband sought costs on an indemnity basis in respect of the second stage of the hearing on 19 and 20 November 2009 on the basis that:

   “the wife’s conduct in the proceedings caused the elongation of the proceedings, in circumstances where much of the material that she relied on with either inadmissible, or was shown to be misleading or irrelevant.”

The wife’s submissions in reply

1. In her submissions in reply the wife made a number of assertions, many of which were irrelevant to the issue of costs.  The submissions centred on the disadvantage she says she suffered from being a self‑represented litigant for a substantial part of the proceedings.  In particular, the wife complains (in paragraph 6 and following) that the delay in the proceedings (which I might add were significantly brought about by her actions or inactions) had a significant effect upon her business career and upon her personally. 

2. Finally, the wife sets out in paragraph 9 a number of matters which she says that my judgment failed to take into account.  These are not matters relevant to the question of costs. 

3. At the time of the delivery of this judgment on the question of costs it appears that the wife’s appeal may have been deemed to have been abandoned because of her failure to diligently prosecute the appeal.[1]

   [1] Letter dated 1 September 2010 from Appeals Registrar Halbert (Eastern Region Appeals Registry of the Family Court of Australia) to the wife.

Relevant Law

1. Section 117(1) of the Family Law Act 1975 (Cth) relevantly provides:

   Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.

2. Section 117(2) of the Family Law Act 1975 (Cth) relevantly provides:

   If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory orders or otherwise, as the court considers just.

3. Section 117(2A) of the Family Law Act 1975 (Cth) relevantly provides:

   (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.

Discussion

1. Some of the matters under s 117(2A) of the Family Law Act 1975 (Cth) are clearly not applicable in this matter. Neither party was wholly unsuccessful. Neither party was so far as I am aware and so far as it has been submitted to me the subject of a grant of Legal Aid.

2. The submissions of the husband were directed primarily at the conduct of the wife in the course of litigation.  These might be loosely collected under the following categories:

   i)Failure to properly fulfil her duty to make full and frank disclosure.  A subset of this is the wife’s failure to discover documents in either a timely or comprehensive fashion.

   ii)The wife’s conduct as a witness was evasive and discursive. This caused an extension of the time that would be required for the trial.

   iii)In filing an affidavit out of time which contained material that was in some measures inadmissible, the wife caused significant additional costs to the husband.  This is the justification for the application for (in part) indemnity costs for the proceedings on 19 and 20 November 2009.

3. The first of these submissions in my opinion has no substance.  It is true that the wife was a difficult witness and some of the assertions contained in the husband’s submissions about her comments during evidence are undoubtedly accurate.  Nevertheless, in my opinion, the conduct of the witness is a matter for the cross-examiner and the Judge during the course of proceedings.  It is not proper to make an order for costs based on the supposed difficulty of a witness.  One might ask rhetorically, if a witness is only a little bit difficult does that mean that there should be a smaller order for costs?

4. On the other hand, the failure of the wife to make full and frank disclosure was a constant source of delay and frustration during the proceedings.  There is no doubt that if all of the facts had been known and all of the relevant documents had been produced at an early point in the litigation, the trial would unlikely have run as long as it did.  The proceedings may well have been capable of resolution without judicial determination.  In my opinion, the wife’s failure to comply with court orders, directions and procedures, particularly in circumstances were she was receiving legal advice at the beginning of the proceedings, is a proper basis upon which an order for costs might be made, all other things being equal.

5. The particular allegation about the filing of the affidavit late which necessitated a further delay and extension of the proceedings also has substance.  The wife failed to comply with my directions.  Those directions were made to enable her to file considered evidence in the form of affidavits.  This would have been possible even as a self-represented litigant.  The wife did not properly avail herself of the benefit of this direction.  Her material produced late, in the binders, was finally accepted by me as a form of re‑examination.  However, in reality it was substantially a “re-visiting” of much of the evidence that she previously had given with new material produced in among the material allegedly in corroboration with the wife’s position.  The affidavit was admitted into evidence.  True, it did preclude the giving of long oral evidence in reply or by way of re-examination.  However, this did inevitably have the consequence that it required detailed consideration by the husband’s lawyers and an adjournment to enable that consideration to occur. 

6. It is not a valid criticism on the part of the wife (see paragraph 3 of her submission) that she was not provided with some form of “self‑representation package” to enable her to represent herself.  A “[l]ack of legal knowledge is a misfortune, not a privilege” as McHugh J said in Gallo v Dawson.[2] Being self‑represented is a disadvantage and does not generate in itself a requirement for special treatment.  The Court must of course do everything it can to ensure fairness in the proceedings before it but is not obliged to provide some form of legal training or a relevant catalogue of procedures which a self‑represented person may or may not be able to follow.

   [2] Gallo v Dawson (1990) 93 ALR 479, 481.

7. The wife’s late-filed affidavit contained substantial amounts of inadmissible material.  While my comments about it would not go so far as those contained in the submissions for the husband (see paragraphs 15 and 16 of his written submissions) much of the material was either inadmissible or unhelpful or argumentative.  Perhaps more telling is that such affidavit (so called) necessarily involved the husband’s lawyers in much time in considering it, trying to interpret it, dissecting it and determining whether or not it might contain material which may be relevant to the proceedings and then to determine what the husband’s position should be in relation to it.

Offers of settlement

1. The offers of settlement made in this matter are a relevant factor under s 117(2A)(f) of the Family Law Act 1975 (Cth), however, in this case, in my opinion, they carry little weight.

2. For reasons not entirely the wife’s fault, although substantially her lack of disclosure contributed to it, the full picture about the assets of the parties did not become clear until almost at the very end of the proceedings.  In such circumstances, it is difficult for either party effectively to evaluate offers of settlement made. 

3. In addition, it is important to evaluate the timing of the offers. Section 117(2A)(f) is specifically referable to parties to proceedings and the resolution of proceedings. “Proceedings” are defined under s 4(1) of the Family Law Act 1975 (Cth) as follows:

   "proceedings" means a proceeding in a court, whether between parties or not, and includes cross-proceedings or an incidental proceeding in the course of or in connexion with a proceeding.

4. The fact that offers were made before the commencement of the proceedings, in my opinion, would ordinarily preclude them from consideration as an issue about costs under s 117(2A)(f). The application of the maxim expressio unius est exclusio alterius, which means the expression of one means the exclusion of the other, would strongly suggest as a matter of statutory interpretation that if the legislature prescribes that offers of settlement made after the commencement of proceedings are to be taken into account, then offers of settlement made before the commencement of the proceedings should not be taken into account.  In any event, although I note that the husband was anxious to provide opportunities for settlement which appear to have been rejected by the wife without much consideration, I do not place reliance upon this particular subsection of the Act in determining whether or not costs should be paid by the wife.

5. While the issue as to whether to take into account offers made prior to the commencement of proceedings was not determined by the Full Court of the Family Court in Pennisi & Pennisi,[3] I derive support for my interpretation from the following statement of the Full Court (Nicholson CJ, Barblett DCJ & Faulks J):

   The plain words [of s 117(2A)(f)] do not limit a Court’s attention to offers which are greater than the amount awarded. Nor does [s 117(2A)(f)] state what consequences flow from whether the offer is greater or less than the amount awarded, or how much that is the case. Words of limitation should not be imported into the provision and nor should it be read as though offers in proceedings under the [Family Law Act 1975 (Cth)] carry the same consequences as payments into Court in common law matters.

   We do, however, consider that the closer the offer is to the award when the offer is under the amount awarded by the Court, the more weight that should be given to this factor in considering the question of costs.  This principle must not, however, be rigidly applied.  Offers must be seen in the context of the case and the extent of the offeree’s knowledge of the parties’ financial circumstances while the offer is live….There are also cases where the contents of the offer are in themselves the subject of disputed value and legitimate subject matter for determination.  These and other features of the context of offers must be taken into account when considering whether it was reasonable or not to accept an offer, no matter how close the ultimate result the offer may be.  (Emphasis added)

   [3] Pennisi & Pennisi (1997) FLC 92-774, 84,547.

6. If I am wrong about my approach to not taking into account the two offers that were made prior to the commencement of the proceedings, I consider that each of the offers made by the husband to the wife was not capable of having the effect and consequence of resolving the proceedings between the parties because of the uncertainty of the property pool. Further, at least one of those offers made by the husband was so vague as to be not readily capable of being understood. For these reasons, I decline to take these offers into account pursuant to s 117(2A)(f), or under the "catchall" provision in s 117(2A)(g).

Conclusion

1. I am not assisted by the submissions by the wife.  However, it seems to me in relation to the application by the husband that for the reasons I have set out above an order in relation to costs should be made whereby the wife pays to the husband costs relating to the additional expenses incurred because of her failure to file a primary affidavit until very late in the proceedings and contrary to my express directions.  I note that the filing of such affidavit at that time also brought about an adjournment of the proceedings and additional work on behalf of the husband. 

2. In his affidavit filed on 30 June 2010 the husband deposes (in paragraph 14) to the fact that he owes his solicitors approximately $20,298, primarily due to expenses incurred on 19 and 20 November 2009.

3. I do not believe that this is a matter in which there should be a blanket order for costs in relation to all of the proceedings.  It is true that the wife’s conduct was both frustrating and did not enable disclosure of all relevant information.  In the end, it is likely that the matter would have taken much less time to conclude than it did save only for the additional work and time associated with the late filing of her final affidavit.  The fact that she was self‑represented necessarily meant that the proceedings were more protracted than they might otherwise have been if she had been competently and reasonably advised.  It is likely that the wife was the victim rather than the beneficiary of her self‑representation as she failed to prove a number of the matters that she obviously thought were relevant.

4. Nevertheless it is proper and just to make an order in relation to the late material filed by the wife, the work occasioned by it and the delay and extension of the hearing as a result.

5. Indemnity costs are ordinarily only made in extraordinary circumstances.  The circumstances of this matter do not fall into that category.  In particular the affidavit that will be the subject of any order was ultimately accepted into evidence by me as measure of re-examination or evidence in reply.

6. I accept however that significant costs were incurred as a consequence of the affidavit and the continuation and elongation of the proceedings.  In my opinion, the wife should pay a sum in relation to the husband’s costs in the sum of $15,000 such sum to be paid (now that the appeal is deemed to have been abandoned) on or before 16 October 2010.

7. I make orders in accordance with my Judgment.  The matter is removed from the pending cases inventory.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks delivered on 9 September 2010.

Associate: 

Date:  9 September 2010