Balfe and Moody (No 2)

[2019] FamCA 711

FAMILY COURT OF AUSTRALIA

BALFE & MOODY (NO. 2) [2019] FamCA 711

FAMILY LAW – COSTS – Consideration of applicable principles – Where father in custody – Where father’s conduct unnecessarily protracted proceedings – Where father ordered to pay contribution to the mother’s costs in the sum of $40,000.

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 19.18

Balfe & Moody [2019] FamCA 474
Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160
Collins & Collins (1985) FLC 91-603
Greedy & Greedy (1982) FLC 91-250
Hawkins & Roe [2012] FamCAFC 77
Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Luadaka & Luadaka (1998) FLC 92-830
Parke & the Estate of the Late A Parke (2016) FLC 93-748
Penfold v Penfold (1980) 144 CLR 311

APPLICANT: Ms Balfe

RESPONDENT: Mr Moody

FILE NUMBER: PAC 2239 of 2017

DATE DELIVERED: 4 October 2019

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: By way of written submissions last received on 4 September 2019

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Watson Law Pty Ltd

RESPONDENT – SELF-REPRESENTED LITIGANT: Mr Moody

Orders

1. That the father Mr Moody pay to the mother Ms Balfe, or as she may otherwise direct the father in writing, the sum of $40,000 by way of contribution to the mother’s costs.

2. That the sum provided for in Order 1 be paid to the mother from the balance of proceeds of sale of properties the subject of sale orders made 17 July 2019.

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 Balfe & Moody 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).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 2239 of 2017

Ms Balfe

Applicant

And

Mr Moody

Respondent

REASONS FOR JUDGMENT

1. The application for determination is the mother’s application for costs arising from interim proceedings determined by Reasons for Judgment delivered 17 July 2019. The interim proceedings arise in the context of pending final property proceedings between the parties.

2. On 17 July 2019 the Court made the following orders:

   (1)That for the purposes of Orders made 19 November 2018 Karen Watson, Solicitor be appointed Trustee for sale of the of the real estate properties situate at C Street, Town A in the State of New South Wales being Folio ID … and Folio ID … and D Street, Town B in the State of New South Wales being Folio ID … for the purpose of selling those properties at the best price reasonably obtainable and for this purpose the said properties shall vest in the said Trustee for sale.

   (2)That Order 5(d) made on 19 November 2018 be discharged.

   (3)That the balance of sale proceeds to be paid by the Trustee, firstly, to the mother or as she may otherwise direct in writing as to the sum of $250,000.00 and, secondly, as to the balance then remaining into a controlled monies interest bearing account operated by the mother’s solicitors pending further order of the Court.

   (4)That the characterisation of the sum payable to the mother be reserved to final trial or agreement between the parties.

   (5)That any application for costs be made by way of written submissions filed and served within 28 days from this date with any submissions in response to be filed and served within a further 14 days and on completion of submissions judgment will then be reserved to chambers.

3. Previously on 19 November 2018 the Court made the following orders:

   (1)The proceedings are adjourned for further judicial case management and/or further interim hearing to 9.30 am on Friday, 1 February 2019.

   UPON NOTING THAT THE HUSBAND CONSENTS TO THE APPOINTMENT OF A TRUSTEE FOR SALE OF THE REAL ESTATE PROPERTY SITUATE AT TOWN A AND TOWN B AND FURTHER CONSENTS TO A SUITABLY QUALIFIED SOLICITOR FROM CC GROUP AT SUBURB H TO BE APPOINTED AS TRUSTEE, IT IS ORDERED THAT

   (2)The wife file and serve a consent to act as trustee for sale of the Town A and Town B properties by a solicitor holding an unrestricting practicing certificate from CC Group at Suburb H.

   (3)Upon receipt of that consent, that named solicitor will be appointed by order in chambers as trustee for sale of the real estate property situate at C Street, Town A and D Street, Town B NSW for the purpose of selling those properties at the best price reasonably obtainable and for this purpose the said properties shall vest in the trustee for sale.

   (4)The husband do all necessary things and sign all necessary documents to authorise and direct that the certificate of title for the property in Town A be made available to the trustee at his request.

   (5)Upon sale of the properties, the proceeds of sale be paid as follows:

   (a)In payment of agents commission, advertising expenses, legal expenses and trustees fees;

   (b)Payment of any contract adjustments as to outgoings;

   (c)In discharge of any mortgage encumbrance secured over the said properties; and

   (d)With the balance of sale proceeds to be paid by the trustee into a controlled monies interest bearing account pending further order of the Court.

   (6)The wife file and serve any Amended Application in a Case and any further affidavit material to be relied upon by her in support of any application for interim distribution of property by no later than Wednesday, 19 December 2018.

   (7)The husband file and serve any affidavit material in response thereto by no later than Wednesday, 16 January 2019.

   (8)The parties have liberty to relist on short notice in appropriate circumstances by application to the Court in chambers.

4. These Reasons assume familiarity with Reasons for Judgment delivered 17 July 2019: Balfe & Moody [2019] FamCA 474.

5. Otherwise, on 17 July 2019 ongoing parenting proceedings were resolved by way of final consent orders that provided for the mother to have sole parental responsibility for the children: Y born in 2018 and Z born in 2010, and for the said children to live with the mother.

6. It is common ground that the father is presently incarcerated serving a sentence of full-time imprisonment imposed on 31 May 2019 for a period of four years and five months dating from 4 March 2017 expiring on 3 August 2021 with a non-parole period of three years expiring 3 March 2020.  The father was sentenced as a consequence of serious violence perpetrated by him on the mother.

7. The mother in her present application seeks orders that the father pay her costs of and incidental to the finalised parenting proceedings and her costs in respect to various Applications in a Case seeking orders in relation to the matrimonial property of the parties, those applications being:

   a)the mother’s Application in a Case filed 20 July 2018;

   b)the father’s Application a Case filed 19 February 2019;

   c)the father’s Application in a Case filed 28 February 2019; and

   d)the father’s Application a Case filed 20 May 2019.

Parenting

1. As to parenting issues, the mother commenced proceedings on 8 May 2017 approximately two months after the father was remanded in custody as a consequence of violence perpetrated on the mother.  The mother’s application for final parenting orders sought orders that the children live with her and that she have sole parental responsibility for the said children.

2. The father in his Response to the mother’s Initiating Application proposed orders that there be equal shared parental responsibility for the children, that the children live with the mother and that the children spend time with him on alternate weekends from Friday afternoons until Monday mornings following his release from custody. The father further proposed that the children have telephone time with him on a weekly basis during the period of his incarceration.

3. Between 8 May 2017 and 25 July 2018 proceedings were adjourned on nine occasions in particular relating to DNA testing of the child Z. DNA testing resolved the question of parentage in relation to the child Z and the father consented to final orders in relation to both children.

Other Applications

1. On 20 July 2018, the mother by way of Application in a Case sought orders that she be appointed trustee for sale of a property at E Street, Suburb F Queensland (“the Suburb F property”) and D Street, Town B NSW (“the Town B property”) and that on sale the proceeds of sale be applied in discharge of secured mortgage encumbrances with the balance of proceeds of sale being paid to her solicitor’s trust account and that she be entitled with the proceeds of sale to purchase a property for the accommodation of herself and the children.

2. It was subsequently ascertained that the father had sold the Suburb F property without notice.  The mother amended her Application in a Case seeking a sale of the Town B property and a sale of a property at C Street, Town A (“the Town A property”).

3. On 17 October 2018 the father filed an Amended Response to the mother’s Application in a Case seeking orders appointing the mother as his attorney for the purposes of the sale of the Town B and Town A properties together with certain orders as to personalty within those properties and that the proceeds of sale be paid to the mother’s solicitors trust account with the father able to access up to $100,000 from those funds for the purposes of his legal costs in relation to his ongoing criminal proceedings.  He, otherwise, sought orders as to the sum of $100,000 held in his solicitor’s trust account such as to enable those funds to be applied for his ongoing legal fees relating to his criminal charges.

4. On 19 November 2018 orders were made by consent (with the father appearing by telephone link from custody) as set out above.

5. On 1 February 2019 interim issues were again before the Court and by that date the father had failed to file any affidavit material relied upon by him.  On that day further orders were made by consent (with the father appearing by telephone link from custody) as follows:

   In respect to the Application in a Case filed by the wife on 23 July 2018 as amended:

   1.The Respondent husband file and serve a Response to that Application in a Case together with one consolidated affidavit of his evidence relied upon in respect of any orders sought by him in that Response no later than 22 February 2019.

   2.The Applicant wife file and serve an updated financial statement by no later than 15 February 2019.

   3.Interim application filed 25 July 2018 as amended be adjourned for judicial case management, interim hearing or undefended hearing to 9.30am on Friday, 1 March 2019.

   4.The Respondent wife file and serve a consent to act as trustee for the purposes of orders made 19 November 2018 by a suitably qualified solicitor holding an unrestricted practicing certificate and having a trust account.

   5.The Respondent husband has leave to attend the next Court date by electronic means.

   6.Pursuant to section 77 of the Crimes (Administration of Sentences) Act 1999 (NSW), the NSW Commission of Corrective Services shall cause the prisoner, MR [MOODY] MIN …, and who is held at J Correctional Centre, to be made available to attend by way of AAPT telelink at the Family Court Parramatta at 9.30 am on Friday, 1 March 2019.

6. On 19 February 2019 the father filed an Application in a Case seeking an order that the sum of $100,000 in his solicitor’s trust account be released for the purposes of his legal expenses relating to criminal proceedings. 

7. That Application in a Case was before the Court on 1 March 2019 and on that date orders were made as follows:

   BY CONSENT

   1.That the Applicant wife’s Amended Application in a Case and the Respondent husband’s Application in a Case filed 19 February 2019 be stood over to 9.30am on Monday, 17 June 2019.

   2.That the sum of $100,000.00 held in the trust account of Mr H, solicitor, be released for use by Mr H in conducting a defence of criminal proceedings in which the Respondent husband is the defendant.

   The Court Notes:  The Respondent husband’s aunt, Ms G will on or before 8 March 2019 pay the sum of $15,000.00 to the mortgagee of the property at D Street, Town B to cover arrears and payments up to approximately 30 May 2019.

   IT IS FURTHER ORDERED THAT

   3.Leave is granted to the parties or either of them to re-list the matter on short notice by application to the Court in Chambers in appropriate circumstances.

   4.The parties attend for the purposes of child and parents intake assessment interviews at 9.00am on Thursday, 4 April 2019 and obey all reasonable directions from the consultant as to such other people who may be relevant for the purposes of the interviews, noting that the father is presently in custody and arrangements will need to be made for engagement at interviews by telephone.

   5.The parties are granted leave to issue such subpoena as they consider relevant to the issues before the Court with such subpoena to be returnable by no later than 29 March 2019.

   6.Leave is granted to the parties to have such access to such documents produced on subpoenas in these proceedings as relate to the financial issues between the parties.

   THE COURT NOTES THAT

   7.The father, presently in custody, has pending criminal charges for hearing by jury trial commencing late April 2019 and the adjourned date is to facilitate the completion of those proceedings prior to further case management directions.

8. The proposed payment by the father’s aunt to address mortgage arrears in relation to the property at Town B did not take place and proceedings were again before the Court on 18 March 2019.

9. On 18 March 2019 there was no appearance by or on behalf of the father and orders were made as follows:

   (1)Leave is granted to the mother to file an Amended Application in a Case and any further supporting affidavit and that that Amended Application in a Case be listed for determination by this Court at 9.30am on Friday, 22 March 2019.

   (2)The Respondent father be served by way of facsimile transmission by no later than 4.00pm on Wednesday, 20 March 2019.

   (3)The Respondent father have leave to appear by telephone at 9.30am on Friday, 22 March 2019.

   (4)Pursuant to section 77 of the Crimes (Administration of Sentences) Act 1999 (NSW), the NSW Commission of Corrective Services shall cause the prisoner, MR [MOODY] MIN …, and who is held at J Correctional Centre, to be made available to attend by way of AAPT telelink at the Family Court Parramatta at 9.30 am on Friday, 22 March 2019.

10. On 22 March 2019 the father was represented by Mr Nyman solicitor and the outstanding interim applications proceeded to hearing.  The father was ordered to file and serve any written submissions by no later than 5 April 2019.  He did not do so. Judgment was reserved on 13 May 2019.

11. On 20 May 2019 the father filed a further Application in a Case seeking that trust account funds be paid into the mortgage account.  The mother filed her Response to that Application in a Case on 7 June 2019.  This further Application in a Case was listed before a registrar on 13 June 2019 and adjourned for judicial case management to 4 July 2019.

12. On 4 July 2019 there was no appearance by or on behalf of the father and the Application in a Case was adjourned for hearing to 17 July 2019 and an order was made facilitating the father attending by telephone from custody.

13. On 17 July 2019 proceedings were again before the Court.  The father appeared by telephone from custody and Reasons for Judgment were delivered and orders made in respect to the reserved judgment.  Those orders are set out above.

14. On 17 July 2019 the father was granted leave to withdraw his further Application in a Case filed by him on 28 May 2019.  That application was accordingly dismissed.

15. The mother’s interim application as to financial issues was precipitated by her discovering the father had sold properties at Suburb F and Town W subsequent to separation and had received something in the order of $220,000 from the net proceeds of sale.  Of these funds $100,000 were paid to the solicitor retained by him in relation to his criminal proceedings.  That sum is referred to above.  Of the remaining funds he asserts that he paid $100,000 to his mother in repayment of an asserted loan from her.  Otherwise, mortgages in respect to the remaining properties were falling into arrears as a consequence of his inability and/or unwillingness to make arrangements for ongoing payments.

16. The orders made on 17 July 2019 facilitate the sale of the remaining two properties in an orderly fashion with the mother to receive an interim payment by way of property adjustment.

Costs

1. The mother now seeks an order that the father pay her costs of and incidental to the finalised parenting proceedings and the various interim applications outlined above. 

2. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to the proceedings shall bear his or her own costs.

3. That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.

4. Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: Penfold v Penfold (1980) 144 CLR 311.

5. The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They are as follows:

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

   (b)whether any party has legal aid and 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, directions 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 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.

6. In Collins & Collins (1985) FLC 91-603 (at 79,877), the Full Court described the discretion conferred by s 117 as being a “broad” one and held that the factors set out in s 117(2A) are not to be read in a restrictive way.

7. The Full Court in Hawkins & Roe [2012] FamCAFC 77 said:

   17.With respect to the application of the section, in Penfold v Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:

   1.Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".

   2.Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v Kent). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.

   (footnotes omitted)

   18.The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:

   … A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.

1. In Greedy & Greedy (1982) FLC 91-250 and Luadaka & Luadaka (1998) FLC 92-830, the Full Court made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters.

2. The provision relating to the calculation of costs is set out in r 19.18(1) of the Family Law Rules 2004 (Cth) (“the Rules”) which states:

   Method of calculation of costs

   (1)The court may order that a party is entitled to costs:

   (a)of a specific amount;

   (b)as assessed on a particular basis (e.g. lawyer and client, party/party or indemnity);

   (c)to be calculated in accordance with the method stated in the order; or

   (d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.

3. It was said in Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 at 162 that the purpose of the rule enabling an order for costs in a specific amount, without formal assessment or taxation is, commonly with other courts, to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”.

4. In Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 the Court said at [10] that the Court must act judicially, but that does not mean that it must exercise the power to award a lump sum in any “scientific or formulaic manner”.

5. Murphy J observed in Parke & the Estate of the Late A Parke (2016) FLC 93-748 at [130]:

   If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court”… The process does not “by its very nature … envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”…

6. Neither party is in receipt of assistance by way of a grant of legal aid.

7. The mother has sole parental responsibility for the two children of the relationship and works part-time on a limited income.  She receives no support for the children in her care and will be residing in temporary premises until such time as a property settlement is finalised.

8. The father’s financial circumstances are as set out in the previous reasons for judgment referred to above.  The net property pool of the parties as best as can be determined is approximately $1.16 million. Clearly, notwithstanding his aberrant behaviour, the father will have some entitlement in that fund and thus the capacity to meet any order for costs that may be made. There, of course, may be unknown liabilities in terms of capital gains tax arising from the sale of various properties to be considered.

9. It is contended on behalf of the mother that the father’s conduct in relation to the proceedings has resulted in the proceedings being unnecessarily prolonged by raising the issue of paternity in the context of parenting proceedings and, otherwise, requiring the mother to make application for financial orders that by any measure were practical and appropriate in the circumstances.

10. Neither party has been wholly unsuccessful in terms of various issues raised by them, there being an element of compromise in the ultimate outcomes.

11. However, in all the circumstances, it is appropriate that the father make some contribution to the costs of the mother as the circumstances outlined above justified departure from the general rule that each party pay their own costs.

12. The mother seeks an order that the father pay her costs in relation to parenting in the sum of $25,387 and as to the various interim financial applications in the sum of $59,864 together with a further $3,465 for preparation of submissions as to costs.  Such sums are a calculated on the basis of tax invoices for costs rendered to the mother by her solicitor and as such represent sums reflective of indemnity costs.

13. The circumstances of this matter are not such that the question of indemnity costs arises. Indeed, the mother makes no application for costs to be assessed on that basis.  Had she done so there would be no basis for such an order in any event.

14. Doing the best that can be done in the circumstances it is appropriate that there be an order that the father make contribution to the mother’s costs in relation to parenting in the sum of $15,000 and as to the various Applications in a Case the sum of $25,000 making a total of $40,000. Such sum shall be payable to the mother or as she may, otherwise, direct in writing from the remaining net proceeds of sale of the properties the subject of orders made 17 July 2019.

15. Orders will be made accordingly.

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 4 October 2019.

Associate: 

Date:  4 October 2019