Bass and Bass (No 2)

[2012] FamCA 732

FAMILY COURT OF AUSTRALIA

BASS & BASS (NO 2) [2012] FamCA 732

FAMILY LAW – COSTS – Where the mother sought costs on an indemnity basis – Where the father will pay 65 per cent of the mother’s costs as agreed or assessed – Application for an order for costs of the father’s stay application for a stay of proceedings pending appeal is dismissed

Family Law Act 1975 (Cth)

APPLICANT: Ms Bass

RESPONDENT: Mr Bass

FILE NUMBER: SYC 2801 of 2006

DATE DELIVERED: 30 August 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Fowler J

HEARING DATE: Dealt with by written submissions and also heard on 14 August 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kearney

SOLICITORS FOR THE APPLICANT: Broun Abrahams Burreket

COUNSEL FOR THE RESPONDENT: Mr Givney

SOLICITORS FOR THE RESPONDENT: Maclarens Lawyers

Orders

1. The application for an order for costs of the father’s application for a stay of proceedings pending appeal is dismissed.

2. On the mother’s application for an order for costs in relation to the principal proceedings the father is to pay 65 per cent of the mother’s costs and disbursements as agreed or assessed.

3. The Court certifies for Counsel in the proceedings.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2801/2006

Ms Bass

Applicant

And

Mr Bass

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court is an application by the mother for orders that the father pay her costs of and incidental to certain parenting proceedings which were determined by a judgment of this Court on 26 April 2012 on an indemnity basis.  The primary judgment should be read as part of this judgment.

2. The applicant seeks by application filed on 23 May 2012 an order for costs of and incidental to an application for a stay of proceedings pending appeal filed by the father which application was dismissed.

3. The applicant mother seeks a number of orders for costs in the alternative.

4. In any case the Court is asked to certify for Counsel in the matter.

Short History

1. In 1947 the father was born and is now aged 65.

2. In 1961 the mother was born and is now aged 51.

3. In 1984 the parties were married.

4. In 1985 the child J was born and is now aged 27.

5. In 1989 the child U was born and is now aged 25.

6. In 1989 the child L was born and is now aged 22.

7. In 1992 the child A was born and is now aged 20.

8. In 1994 the child V Ball was born and is now aged 18.

9. In August 1997 the child B was born and is now aged 14.

10. According to the mother the parties separated on a final basis on 3 April 2004.

11. The father asserts separation occurred on 2 July 2004.

12. In April 2006 the first parenting proceedings commenced.

13. On 17 July 2008 final parenting orders were entered into concluding the first parenting proceedings.

14. On 15 March 2011 the mother commenced the second parenting proceedings, being those subject of this application.

15. The final hearing of the second parenting proceedings were heard from
    6–10 and 23–24 February 2012.

16. On 26 April 2012 the reasons for judgment and final parenting orders were delivered.

17. On 27 April 2012 an Application in a Case was filed by the mother seeking that B come into her care pursuant to Orders of 26 April 2012.

Background Facts

1. Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.

2. The Court refers to the judgment delivered in the matter which should be read in conjunction with this judgment as if fully incorporated in it.

Section 117 considerations

1. Section 117 of the Family Law Act 1975 (Cth) (“The Act”) provides that each party shall bear their own costs of proceedings under the Act subject to the express grant of power to make an order for costs.

2. The Court has a broad discretion as to the orders that it may make for costs and that discretion is set out in section 117(2) of the Act. In the consideration of the exercise of that discretion the Court is obliged to consider the matters set out in section 117(2A) of the Act. Those matters are set out in the following

   
   

   sub sections of that section namely:

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

1. Neither party to the proceedings is without means.  The mother has asserted that in considering her means the Court should take into account that a significant portion of her wealth is to be found in the home which she occupies with the six children of the family.  The mother has on the evidence before the Court had the primary care of the children of the marriage save for the child B since the date of separation.  She will as a result of the judgment have the primary care of B.  The older of the children have income of their own.  She has a capacity to earn income but her income-earning capacity is lower than that of the father.  It is asserted by the mother that the cost burden of these proceedings will deprive the children in her household of monies which would otherwise be available to them.

2. The mother is 51 years of age.

3. She is presently unemployed and derives income from the investment of her assets.  She asserts that she is unable to be employed by reason of her responsibilities to the children and says that as at the date of her separation from the father she had no employment experience or qualifications.  The mother’s passive income is returned in the 2011 tax year as $153,076 before tax.

4. She has she said applied much of her income to the benefit of the children of the marriage and now meets the living expenses of the children U, A, V and contributes to the living expenses of L.

5. The mother asserts that the father formerly gave evidence that his assets in Australia were in the order of $5,000,000.  He also has the benefit of assets in Asia.

6. In his affidavit lodged in support of this application the father sets out his financial position.  He submits that he has had to liquidate assets to meet legal costs as compared to the mother who he says has not been so obliged.  The father asserts that he will be obliged to sell assets to meet any order for costs.  He notes that the mother has re-partnered with a solicitor and there is no evidence before the Court as to the resources available to her by reason of the relationship.  The father asserts that the Court should take into account the benefits to the mother of cash flow available to her by reason of the fact that her taxable income is post a non cash outlay of depreciation.  The allowance the Court notes of depreciation against income is to meet a real need to replace which is recognised by the Taxation rules notwithstanding it may in the short term produce additional cash flow.

7. The father is 65 years of age and is older than the mother.

8. The father gave detailed evidence as to his financial position in his affidavit lodged in support of the orders he sought in these proceedings.  It appears that he has a taxable income for 2011 of $155,796 and his assets, including cash at a bank of $420,000, are valued in excess of $5,000,000.  The Court finds that each of the parties has resources available to them to meet costs but notes that the father is older and that the mother has the ongoing care of children of the marriage which the father does not.  The father has historically had an earning capacity greater than that of the mother.

(b)      whether any party to the proceedings is in receipt of legal aid and, if so, the terms of the grant of that assistance to that party

1. Neither party was in receipt of legal 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 answer questions, admissions of facts, production of documents and similar matters

1. The Court is asked by the mother to take into account the conduct of the father in the proceedings and more generally in relation to the child B and that child’s relationship with the mother and his siblings.

2. The Court takes the view that costs are not awarded as punishment for wrong behaviour but rather as compensation for the effect of such behaviour in increasing or causing the necessary incurring of costs by or in legal proceedings.

3. There is no doubt that much of the father’s conduct was criticised in the judgment and that conduct criticised in the evidence in many cases led to the prolongation of the trial and created new issues to be explored and dealt with.  The father’s conduct in relation to the hospitalisation of his son and his son’s limited contact with the mother and his siblings which was supported if not instigated by the father were but a couple of examples.  Another example was the production of a document said to be authored by the child which was found to be probably not his.

4. There appears to be little in terms of procedural compliance which could be complained of by the mother.

(d)      whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. The father perpetuated the conflict between the parties and serially refused to comply with Orders of the Court which left the mother little option but to complain to the Court and thus expand the length of the proceedings.

2. The father initially declined to comply with the Orders made by the Court on 26 April 2012.  As a consequence of this the mother filed an Application in a Case seeking that B come into her care pursuant to the Orders of 26 April 2012.

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

1. The father was and agrees that he was wholly unsuccessful in the proceedings.  There were issues of fact espoused by the father which were significantly determined against the father’s assertion.

(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

1. This is not a matter of relevance in this case.

   (g)such other matters as the Court considers relevant

2. Each party retained Counsel and properly so having regard to the complexity of the matter and the many issues which arose in the proceedings.  It is entirely a proper case for the certification of Counsel and the Court will so order.

3. The Court is asked to make an order for costs which it fixes as a lump sum.  This is not a case which in the Court’s view is one in which the Court would make an order for indemnity costs.

4. It is argued by Counsel for the father that the test for the Court to apply is whether or not the commencement or contest of litigation could be characterised as hopeless or that an order for cost ought necessarily follow failure in the proceedings.

5. The Court agrees that an order does not necessarily follow but that such failure is a matter to take into account in determining whether there should be an order for costs.

6. Equally the Court notes that reasonableness of a claim or defence is a matter to take into account in making a determination.  In this case the conflict between these parents and origin of the litigation is to be found in the conduct and attitude of the father which has been found by the Court to be unreasonable to a significant degree.

7. However, having said that the father did have a right to be heard on the matters before the Court and he was pursuing his perception of what was best in the interests of his child.  That perception and the conduct arising out it may have been skewed by his lack of insight, his hostility and his personality but nevertheless it had an element of, albeit inappropriately formulated and expressed, concern for the child amongst other motivations.

8. In the exercise of its discretion and by reason of the matters referred to above, the Court nevertheless finds it proper and just that the father make a contribution to the mother’s costs.

9. There will not, however, be an order for indemnity costs as the Court does not accept that this is a proper case for such costs.  However, the Court takes the view that the quantum of costs should not be assessed by it but rather an assessor if the parties cannot otherwise agree.

10. The Court finds it just that the father pay 65 per cent of the mother’s costs of and incidental to these proceedings as agreed or assessed.

Costs of the stay application

1. This application which was determined by the Court was partially successful and the Court does not intend to make an order for costs in relation to those proceedings.  The application for costs of the stay is therefore dismissed.

I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.

Associate:  M. Rankin

Date:  30 August 2012