Boman & Boman (No 2)
[2022] FedCFamC1F 363
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Boman & Boman (No 2) [2022] FedCFamC1F 363
File number(s): DGC 1412 of 2019 Judgment of: STRUM J Date of judgment: 23 May 2022 Catchwords: FAMILY LAW – COSTS – costs arising from a final application – where the respondent wife seeks the applicant husband pay her costs on an indemnity basis from a particular date – where the considerations set out in s 117(2A) do not warrant an order for costs – no costs ordered. Legislation: Family Law Act 1975 (Cth) ss 4(1), 117;
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Cases cited: Prantage v Prantage (2013) FLC 93-544; [2013] FamCAFC 105 Division: Division 1 First Instance Number of paragraphs: 41 Date of last submission/s: 4 April 2022 Date of hearing: Written Submissions Place: Melbourne Counsel for the Applicant: Mr O’Grady Solicitor for the Applicant: Hosking Lawyers The Respondent: Litigant in person ORDERS
DGC 1412 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR BOMAN
Applicant
AND: MS BOMAN
Respondent
ORDER MADE BY:
STRUM J
DATE OF ORDER:
23 MAY 2022
THE COURT ORDERS THAT:
1.The wife’s Application in a Proceeding filed 28 March 2022 be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Boman & Boman has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
STRUM J:
INTRODUCTION
This is my judgment in respect of the Respondent Wife’s application for costs in relation to the final parenting and property proceedings heard in December 2021. My substantive judgment in the proceedings was delivered on 1 March 2022. The wife filed an Application in a Proceeding seeking an order for costs on 28 March 2022, together with written submissions in support thereof.
The wife seeks that the husband pay her costs of the proceedings on an indemnity basis from 18 November 2021 and that such payment be deducted from the payment of $106,000 required to be made by her to him pursuant to order 17(c) of the Orders made by me on 1 March 2022. Those orders are opposed by the husband.
BACKGROUND
I have set out the background of this matter in the reasons delivered on 1 March 2022; however, some background is of relevance to the question of what costs, if any, the court should order.
I heard the trial of these proceedings on 6 and 10 December 2021. Both parenting and property matters were before the Court. On the second day of the trial, the husband was represented by different counsel than on the first day. After the luncheon adjournment that day, the husband dismissed his legal representatives and withdrew from the proceedings. He was the applicant and under cross-examination at that time. Thereafter, the matter proceeded undefended and concluded later that afternoon.
I delivered judgment on 1 March 2022. I made parenting orders substantially in the terms proposed by the Independent Children’s Lawyer and supported by the wife. In relation to property, I found the value of the asset pool to be $424,000, which I divided in proportions of 75 per cent to the wife and 25 per cent to the husband, requiring her to make a payment to him of $106,000.
On 18 March 2022, I ordered (inter alia) that:
(a)any party seeking a costs order in the proceedings file and serve any written submissions in support thereof within 7 days;
(b)any party opposing a costs orders file and serve any written submissions in opposition thereto within a further 7 days thereafter; and
(c)any issues of costs be determined by me on the papers.
On 25 March 2022, the wife filed an affidavit of her solicitor, Justin Hosking, of Hosking Lawyers, sworn that day, and emailed to my chambers written submissions, accompanied by a number of documents, including a schedule of counsel’s costs and what was said to be a Calderbank letter dated 18 November 2021. On 28 March 2022 the wife filed an Application in a Proceeding seeking costs.
On 26 March 2022, the husband emailed to my chambers written submissions in response to the wife’s written submissions for costs. On 4 April 2022, he then filed a Response to the wife’s Application in a Proceeding and an affidavit sworn by him that day.
RELEVANT LEGISLATION AND PRINCIPLES
The wife’s application for costs fall to be determined within the framework of section 117 of the Family Law Act 1975 (Cth) (‘the Act’), in particular, subsections (1), (2) and (2A) thereof, which provide as follows:
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(2)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), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(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.
The wife’s solicitor’s affidavit is directed to the issue of indemnity costs, if costs are ordered at all. Her written submissions address both the issue of costs and that of indemnity costs. In relation to the matters specified in section 117(2A), she submits as follows hereunder, albeit not by specific reference to the paragraphs in that sub-section, so that in some instances I am left to divine the specific statutory matter upon which she relies.
Unfortunately, the husband’s affidavit and written submissions are of little assistance to me and, in part, misconceived.
Section 117(2A)(a) - The financial circumstances of each of the parties to the proceedings.
The wife refers to the fact that she is the sole carer of the parties’ children and earned a modest income, as found by me. She asserts that the husband’s “conduct meant the wife unnecessarily incurred costs preparing for and appearing at trial. The loss of that money not only compromises the wife’s financial circumstances, it deprives her of what she would otherwise have to meet the children’s needs – needs which were conservatively pleaded …”. In so asserting, she conflates the matters in paragraph (a) with those in paragraph (c).
In her Financial Statement filed 29 November 2021, upon which she relied at trial, she disclosed a weekly income of $809, comprised of a salary or wages ($100), parenting payment and family tax benefit ($688) and child support ($21). By reason of the orders I made on 1 March 2022, she received 75 per cent of the net asset pool found by me to be valued in the sum of $424,000 (namely, $318,000). She makes no other submission and adduces no other evidence in relation to her financial circumstances.
In relation to the husband’s financial circumstances, the wife points to paragraph [181] of my Reasons for Judgement delivered on 1 March 2022, wherein I said (inter alia) “the husband did not file a Financial Statement for trial … I am unable to make any finding as to his current financial circumstances”. Accordingly, she submits that this factor cannot come to the husband’s aid in resisting an order for costs. In his affidavit filed on 4 April 2022, he deposed that he had recommenced working two weeks earlier and asserted that he was in severe financial hardship. Whilst there is no evidence or submission in reply by the wife (for which I am not critical), the husband’s limited evidence is of little assistance; I do not know the extent of his current income, nor that of his financial hardship. However, at trial, whilst there was criticism of the husband for his failure to make full and frank financial disclosure, including by a Financial Statement, there was no submission on behalf of the wife that he had any undisclosed assets. By reason of the orders I made, he is to receive $106,000, from which he is to pay a sum in the order of $35,000 to his former solicitors in order to convey clear title of the former matrimonial home to the wife, free of the caveat lodged by those solicitors over the title thereto. That will leave him with approximately only $70,000. In my mind, this weighs strongly against an order for costs against him.
In the circumstances, I find that there is nothing in the financial circumstances of either of the parties that would warrant an order for costs against the husband, in favour of the wife.
Section 117(2A)(c) – The conduct of the parties to the proceedings in relation to the proceedings.
The wife correctly refers to the fact that the husband abandoned his application for parenting orders mid-cross-examination. She submits:
“It is difficult to conceive of litigation conduct with a hearing more improper in the prosecution of one’s own application then this husband’s. In the result, the litigation of the parenting issues at trial was entirely unnecessary and wasteful. They ought not have been brought before the Court for trial in circumstances where the husband simply ‘walked away’ mid-hearing.
Further, she submits that as her application for property orders was, in the result, undefended, the costs incurred in preparation for and attending trial were wasted.
As I observed in my Reasons for Judgement, insofar as the husband suffered detriment from his abrupt and intemperate withdrawal from the trial, he was the sole author of his misfortune.
The trial was listed before me for five days but, by reason of the husband’s abandonment thereof, it proceeded over only two days. Ironically, by reason of the husband’s actions, the wife was not put to the expense of three further days of hearing.
The wife’s solicitor, Mr Hosking, deposes inter alia (at [7]) that he had to read in excess of 1,000 pages of documents from the Court, the husband and the Independent Children’s Lawyer after 18 November 2021 and, allowing for 500 words per page, calculates that, at 500 words per pages, this would equate to $51.65 per page (at scale) which, he asserts “equates to an astronomical figure”. However, in support of the wife’s application for indemnity costs, he deposes (at [4]) that she has been invoiced in units of five minutes. He refers to Exhibit JDH-1 to his affidavit, being his summary of costs from 18 November to 13 December 2021. I note that, in several instances, he has charged one unit (ie five minutes) for “receipt and perusal” of an email. I have no criticism at all of him for that; as he deposes, “we charge out on a time spent basis in accordance with our costs agreement”. However, that notwithstanding, I note that it may, in some instances, take considerably less than five minutes to peruse an email and yet it is charged at the rate of one unit.
In the circumstances, on balance, I find that the husband’s very poor conduct at trial does not warrant an order for costs against him.
Section 117(2A)(d) - Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court.
The wife correctly refers to the fact that I found that the husband failed to comply with important procedural orders. This was so in relation to both parenting and property matters. She submits that:
“His litigation misconduct in that regard was grossly deficient, even when latitude is afforded for him preparing these proceedings himself and when also forgiving his multiple trial affidavits.”
I agree with that submission. However, it cannot fairly be said that the trial proceedings were necessitated by his failure to comply with those orders.
In the circumstances, I do not find that section 117(2A)(d) is properly engaged.
Section 117(2A)(e) - Whether any party to the proceedings has been wholly unsuccessful in the proceedings.
The wife correctly submits that the husband was wholly unsuccessful in his application for parenting orders. However, section 117(2A)(e) refers to a party being “wholly unsuccessful in the proceedings” (emphasis added). The competing parenting applications were but one aspect of the proceedings, the other being the competing property applications; together, they comprised the proceedings. The term “proceedings” is defined in section 4(1) of the Act as meaning –
“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”.
In respect of the competing applications for property settlement, the husband cannot be said to have been wholly unsuccessful. As is apparent from my Reasons for Judgement, it transpired that there was little dispute that the net value of the asset pool was $424,000, of which the wife proposed the husband receive 15 per cent ($63,600) and he sought 45 per cent ($191,000). In the result, I assessed his entitlement to be 25 per cent and ordered the wife to make a payment to him of $106,000. Whilst he did not receive that which he sought, he received more than the wife proposed.
In the circumstances, it cannot be said that the husband was wholly unsuccessful in the proceedings.
Section 117(2A)(f) – Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings on the terms of any such offer.
Paragraph 13(d) of the wife’s written submissions states:
“On 18 November 2021 the wife made a Calderbank offer to the husband (appended) to compromise the property proceeding by a payment by her to the husband of $115,000. The wife succeeded in obtaining a more favourable judgement, the payment of $106,000.”
Whilst that letter was provided to the Court together with her written submissions, it is not in evidence. Remarkably, and inexplicably, there was no reference to it whatsoever in her solicitor’s affidavit.
In his written submissions, the husband states: “I never received any offer from the respondent, dated 18 November 2021”. That too is not evidence. It is unclear from the husband’s affidavit whether he denies or simply does not admit receiving the wife’s Calderbank offer. He deposes at paragraph [3] of his affidavit as follows:
“I did not receive any offer from the other party in November last year and there is no proof showing otherwise. I am not saying they didn’t email me an offer however, I can honestly say I did not receive one. There were a lot of emails being sent at that time and if they did send one, I did not see it. Any formal offer for a financial proposal should have been sent by registered post to ensure it was properly received.”
The difficulty for the wife, who is legally represented, is that, for whatever reason, her solicitor did not see fit to depose to the Calderbank offer in his affidavit and/or annex it thereto. There is no suggestion that the wife and her lawyers were not served with the husband’s affidavit and written submissions at or about the time they were filed. In the absence of any suggestion to the contrary, I must presume that the husband complied with my orders and the provisions of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and that those documents were duly served. The wife has not since sought leave to adduce the Calderbank offer into evidence. In the circumstances, I cannot rely upon it.
However, even if it were in evidence, given the modest amount by which the wife’s purported offer exceeded the amount ordered to be paid by her to the husband ($9,000), I would not be minded to give substantial weight to it.
CONCLUSION
In all the circumstances, I shall dismiss the wife’s application for costs simpliciter. Accordingly, it is unnecessary for me to consider the issue of indemnity costs. However, even if I were prepared to make an order for costs, it would not be on an indemnity basis. Similarly, I do not need to consider the wife’s submission that –
“If the court does not accept the principle of an order for indemnity costs or accept that the costs charged of the wife are in fact less than they would be at scale, then the wife would seek permission to undertake what the wife’s solicitor estimates will be 1 day to calculate costs at scale on Schedule 3”.
The wife’s Application in a Proceeding seeks “an order that the husband pay the wife’s costs following the making of final orders pronounced on 1 March 2022” [sic]. However, her solicitor’s affidavit and her written submissions make it clear that she seeks such an order in respect of her costs from 18 November 2021, whilst failing to adduce any evidence in relation to the relevance of that date (given that the purported Calderbank letter is not in evidence).
Further, in Prantage v Prantage (2013) FLC 93-544, the Full Court restated that, whilst there is nothing in the Act which inhibits the making of an order for indemnity costs and that there is a discretion, in an appropriate case, to make such an order, it is to be seen as a very great departure from the normal standard or the usual rule relating to the basis upon which costs are ordered in this jurisdiction, which the Full Court described as being “well entrenched” (at [96], per Thackray and Ryan JJ). Their Honours agreed (at [96] that there are “two seemingly irreconcilable objectives” at stake and said:
Placing great emphasis on the importance of one objective, namely “relieving a successful litigant from the burden of costs which that litigant should not have been required to incur” will inevitably lead to insufficient emphasis being placed on the importance of the other objective of “protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis”.
Their Honours continued (at [97]):
In our view, once it is recognised that ensuring access to justice is one of the key objectives of the “usual rule”, the claimed increasing disparity between scale costs and those being charged by lawyers becomes as much an argument against the awarding of indemnity costs as it is in favour of costs being ordered on that basis.
In that case, their Honours concluded (at [143]):
We are not persuaded that the costs we propose to order should be calculated on anything other than a party and party basis. It is true that, on the trial Judge’s findings, the husband’s behaviour was reprehensible, but his poor behaviour was primarily in his capacity as a parent rather than as a litigant. We also consider it relevant that the husband, albeit belatedly, consented to the children living with the wife after hearing the recommendation of an expert.
There are some analogies with the present case. The husband’s behaviour might similarly be described as reprehensible, both in his capacity as a parent, as well as a litigant. However, in that latter respect, that strong descriptor is more applicable to his behaviour towards and disrespect of the Court, for the reasons set out in my Reasons for Judgement dated 1 March 2022. Further, although the husband did not belatedly consent to the parenting orders proposed by the Independent Children’s Lawyer, and agreed to by the wife, the effect of his withdrawal from the proceedings in the afternoon of the second day of what was estimated to have been a five day trial, was not dissimilar.
In the circumstances, as I have stated above, even if I were prepared to make an order for costs, it would not be on an indemnity basis.
Lastly, I note that the wife’s written submissions, but not her Application in a Proceeding, seeks “permission … To deduct any costs awarded to the wife from the sum to be paid by her to the husband”. Orders 16 and 17 of the Orders made by me on 1 March 2022 required the husband, within 60 days, to transfer to the wife, all his right, title and interest in the property at C Street, Suburb A, and contemporaneously therewith (inter alia) for the her to pay to him the sum of $106,000. Subsequently, the husband sought a stay of my orders, pending an appeal, which the wife opposed. He withdrew his stay application and his appeal was summarily dismissed. However, the wife opposed the husband’s stay application and, although she had by then filed her Application in a Proceeding seeking costs, she did not seek any order staying the payment owing by her pending determination of that application. Orders are to be sought by application, rather than “permission” being sought in written submissions. In the absence of such an application, and subject to compliance by the husband with his obligations to transfer the property to the wife, and encumbered by his former solicitors’ caveat, the payment was due and payable by her within 60 days of 1 March 2022.
Accordingly, I dismiss the wife’s application for costs.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Strum. Associate:
Dated: 23 May 2022
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