Bond and Pearcy (Costs)

[2010] FamCA 1217

FAMILY COURT OF AUSTRALIA

BOND & PEARCY (COSTS) [2010] FamCA 1217

FAMILY LAW – COSTS – where the mother failed to participate early in mediation – serious offers of settlement should be seriously considered – where the mother made a serious offer of settlement – where the father failed to give proper consideration to the mother’s offer – where the parties’ financial circumstances are modest – on balance of factors orders are made in favour of the mother – father to pay one quarter of the mother’s costs

Family Law Act 1975 (Cth) s 117

Penfold v Penfold (1980) 144 CLR 311
Robinson & Higginbotham (1991) FLC 92-209

APPLICANT: Ms Pearcy

RESPONDENT: Mr Bond

FILE NUMBER: (P)NCC 3453 of 2007

DATE DELIVERED: 20 December 2010

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Ryan J

HEARING DATE: 13 December 2010

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

Jarratt & Webb

Mr Jarratt

RESPONDENT: In person

Orders

1. That the father pay the mother’s costs in the sum of EIGHT THOUSAND DOLLARS ($8,000).

2. The costs payable by the father are reduced by the amount payable to him by the mother pursuant to the costs order made by Collier J on 2 October 2009.

3. The balance of the costs which remain payable by the father pursuant to order 1 shall be paid within 18 months.

4. All outstanding costs applications are dismissed.

5. In the event a party seeks costs of the mother’s application for costs, they shall file and serve written submissions within 14 days.

6. Any submissions in response shall be filed and served within a further 14 days.

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

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: (P)NCC3453 of 2007

MS PEARCY

Applicant

And

MR BOND

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 22 September 2010 I made parenting orders in relation to the parties’ daughter M.  An application was brought by Mr Bond, who is the child’s father, to vary orders made on 6 March 2006 so that she would spend equal time with him and her mother, Ms Pearcy.  Equal time was not ordered.  The orders were largely in accordance with recommendations made by the family consultant and almost identical to settlement offers the mother made in early July 2009 and late September 2009.

2. Summarised, the mother seeks costs of the entire proceedings calculated on a party/party basis, including costs of her application for costs.  Although the mother’s application would suggest differently, she does not seek to disturb a costs order made against her by Collier J on 2 October 2009.  Collier J dismissed the mother’s application which sought to dismiss the father’s application for parenting orders.  At the mother’s request, her application for a Rice and Asplund (1979) FLC 90-725 dismissal was listed for a discreet threshold hearing and, having been unsuccessful, an adverse costs order was made against her. This costs order required the mother to pay $4,000 to the father by 2 October 2010. The mother has not complied with this costs order.

BACKGROUND FACTS

1. It is useful to set out a brief overview of the facts from the substantive judgment.

2. The parties separated in August 2005. 

3. After separation the child remained with the mother who offered the father contact supervised by her or her parents.  In order to see the child, the father reluctantly agreed to supervision. 

4. On 18 October 2005 the parties attended mediation where agreement was reached in relation to parenting matters.

5. In mid November 2005 the parties signed parenting orders, which were made by this Court on 6 March 2006.  Both parties were represented.

6. The 2006 orders provided a structured regime for the child to spend time with the father, which time increased incrementally in accordance with her age and stage of development.  It will be recalled the child was not quite two when these orders were made.  No orders for parental responsibility were made and thus each parent had parental responsibility (s 61C). 

7. Relevantly, the orders also provided:

   ·During week four of the four week cycle the father would have contact with the child at the mother’s discretion.

   ·The father’s time would incrementally increase from 10 July 2007 and again when she started school.

8. By 2007 the father was dissatisfied with the 2006 orders and asked the mother to attend mediation to discuss how the orders could be amended.  The mother refused, it being her opinion the recently obtained orders were working well and change was unwarranted. 

9. On six to ten occasions the father requested time with the child during week four.  In relation to this matter I found: 

   Although the order was unenforceable, the spirit of it was clear, and it was reasonable for the father to anticipate reasonable requests by him would be acknowledged appropriately by the mother.  The mother said she was generally opposed to additional time during the fourth week unless it was a special occasion.  Additional time merely for the sake of additional time she considered too disruptive for the child and thus she refused the father’s requests.  Her failure to facilitate this additional time demonstrated poor judgment on her part.

10. Twice in 2006 the child was admitted to Hospital by the mother.  On the first occasion the child had pneumonia and on the second occasion she required surgery for a broken arm.  The mother only informed the father about the child’s hospitalisation after the child was discharged.  In relation to this issue, I found: 

    If I was satisfied the parties were able to communicate at that time without conflict, the mother’s actions would warrant adverse comment.  However, given the very tense, conflicted parental relationship and, at that time, recent difficult separation, the actions taken by the mother do not warrant overly critical comment nor weight.

11. On 20 November 2007, the father commenced these proceedings.  This was less than two years after the parties had entered into detailed and comprehensive orders.

12. The proceedings came before a Judicial Registrar on 30 January 2008.  On this occasion, orders were made by consent, which provided the parties have equal shared parental responsibility, addressed how they were to consult and problem solve matters relating to the child and specified the time she would have with the father during the fourth week.

13. The proceedings came before me for the first day of a Div 12A hearing on 20 April 2009.  Before me the mother pressed an application to have determined as a threshold issue, whether the father demonstrated a sufficient change in circumstances to warrant his application being permitted to proceed.

14. Collier J determined the threshold issue on 20 May 2009 in favour of the father.

15. On 2 July 2009 the mother filed an amended response in which she sought orders very similar to those I made.

16. The same day I ordered a family report. 

17. In her report dated 16 September 2009, the family consultant made the following recommendations:

    50.It is recommended that the parties have shared parental responsibility for decisions regarding the subject child.

    51.It is recommended that the child live with the mother.

    52.It is recommended that the child spend time with the father on each alternate weekend from Friday until Monday and one night in the other week. It is recommended that when [the child] commences school that all changeovers occur to and from school.

    53.It is recommended that [the child] commence spending school holiday time with the father for three days in the October 2009 school holidays, and for three blocks of four days in the December 2009 school holidays.

    54.It is recommended that when [the child] commences school that she spend half of all school holidays with the father.

    55.It is recommended that [the child] spend a block period of at least three days with the father when her unborn sibling is born or returns home from hospital.

    56.Additional time is recommended on special occasions.

    57.It is recommended that the mother attend therapeutic counselling to assist her with the treatment and management of the anxiety that she is suffering.

18. On 29 September 2009 the mother made a written offer to settle upon orders “consistent with the recommendations of the family law counsellor” and that each party pays their own costs.

19. Curiously on 2 October 2009, the father’s solicitors wrote to the mother’s solicitors and proposed the child be with him from 8 October 2009 to 13 October 2009.  I say curiously because this coincided with the school holidays and it was the mother’s position, and had been since 2 July 2009, that the father have this time with the child.  However, the mother was unaware of this correspondence and indeed there is an issue about whether it was received by her solicitors.  Although the parties sought the same outcome for the school holidays, even with legal representation, they failed to appreciate this.

20. The hearing continued on 14 and 15 December 2009 during which the parties were represented by counsel.  Many matters were agreed.  One pivotal issue remained, which was the father’s equal time application. 

Considerations – section 117

1. An application for costs is governed by s 117 of the Family Law Act 1975 (Cth). Section 117(1) sets out the general rule that subject to s 117(2), s 117AA and s 118, each party to proceedings shall bear his or her own costs. Neither party submitted that s 117AA or s 118 was relevant. Section 117(2) requires a finding of justifying circumstances as an essential preliminary to the making of an order for costs (Penfold v Penfold (1980) 144 CLR 311).

2. There are two matters which, when considered either individually or cumulatively, establish circumstances that justify the making of a costs order in favour of the mother.  Firstly, the mother twice made offers to settle which were very similar to the orders made.  Secondly, after consent orders were made by the Judicial Registrar in early 2009, the father pursued an application to vary relatively recently made parenting orders with a weak factual substratum for change.

3. To determine what order, if any, should be made as a consequence of my findings pursuant to s 117(2), I am required to consider those matters set out in s 117(2A)(a)-(g) in so far as they are relevant.

4. Subsection (a) is concerned with the parties’ financial circumstances.  The mother resides with her partner in premises owned by her parents.  That property will shortly be sold.  She and her partner’s financial circumstances are separately maintained.  The mother earns approximately $500 per week and her only other income is about $20 per week child support.  Her weekly expenses are modest but absorb her income.  The mother has a car, household furniture and a small sum at the bank.  Her parents paid her legal fees.  Although she is not required to repay them, this will diminish her inheritance.  The mother has not paid the costs ordered against the father.

5. The father works fulltime as a sales consultant.  From this he earns $700 per week.  He resides with his wife, who works part-time and earns $470 per week.  They receive $25.62 weekly family allowance.  Thus, the father’s total family weekly income is approximately $1,200.  The father and his wife reside in a home owned by them.  He estimates the home is worth about $270,000 in relation to which there is a mortgage of about $261,000.  The father owns a car worth about $2,000 and his wife owns a Holden Astra.  The father’s wife’s assets are hers and, in the context of this case, irrelevant.  The father’s father paid his legal costs in relation to which he owes his father approximately $32,000.  His father also advanced funds in relation to loans that existed when the parties separated.  The father owes approximately $7,600 on credit cards, council rates of approximately $1,000 are due and he and his wife borrowed from her parents $6,000 for the deposit on his and his wife’s home. 

6. Both parties’ financial circumstances are modest and the application of the subsection is moot.

7. Neither party is in receipt of a grant of legal aid.

8. In relation to subsection (c) prior to instituting proceedings the father asked the mother to participate in mediation.  She declined and repeatedly requested details of what he alleged comprised a relevant change in circumstances.  Erroneously, the father’s solicitors responded it was unnecessary for there to be a change of circumstances. Thus, the mother refused to participate.  Notwithstanding the erroneous contention by the father’s solicitors, the mother ought to have considered mediation.  By then she had refused all requests by the father to spend time with the child during the fourth week and issues had developed in relation to parenting responsibility.  Although mediation would not have resolved the father’s determination to have equal time with the child, it would have assisted resolution of the other matters.  The application of subsection (c) favours the father.

9. Subsection (d) relates to whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court.  The mother’s failure to comply with the father’s requests to spend time with the child during the fourth week attracts the application of the subsection.  This finding favours the father.

10. Subsection (e) requires the Court to consider whether any party to the proceedings has been wholly unsuccessful.  Both parties secured a degree of success, albeit at different times.  The application of the subsection is moot.

11. Subsection (f) is concerned with offers to settle the proceedings and the terms of any such offer.  From when the mother made her September 2009 offer, the father had a genuine and unconditional offer to settle almost identical to the orders made.  In Robinson & Higginbotham (1991) FLC 92-209, at 78,417, Nygh J said: “…. it is quite clear that the purpose of that provision is to ensure that offers to settle, if made seriously, are considered seriously,….”. I agree.

12. While the father may have considered this offer, the point is he rejected a serious offer to settle which was similar to the orders made.  No doubt he thought he had good reason for so doing however, nonetheless, the subsection favours the mother.  In the context of relatively recent parenting orders and a family report which was consistent with the offer to settle, it is appropriate to give this matter significant weight. 

13. There are no other matters which the Court considers relevant.

Conclusion

1. Both parties have incurred legal costs, probably unnecessarily.  The mother is subject to an adverse costs order which she has failed to honour.  She also failed to participate in mediation early, which resulted in the parties incurring costs before matters, which were amenable to sensible discussion, were addressed in the January 2009 consent orders.  However, her offer to settle is a significant matter, particularly in the context in which it was made.  This warrants an adverse costs order against the father.  However, his modest financial circumstances weigh against costs being ordered for the full period following when the mother’s offer to settle was made.  Balancing all of these factors, the Court’s order will be that the father pays the mother’s costs in the amount of $8,000, which is about 25% of the mother’s costs.  This leaves each of the parties responsible for costs, which through their own actions were incurred by them, and compensates the mother for costs she incurred because of the father’s failure to give proper attention to her offers to settle, the weak nature of his case and recently made orders. 

2. The costs order, together with interest, which has accrued, payable by the mother, will be offset against the father’s liability to her.  Because of his financial circumstances he will have 18 months in which to pay her the balance remaining.

3. If she was successful, I understood the mother sought her costs of the application for costs. On the information presently available to me I would discourage any such application from her.  If she does seek to press her application she must do so in writing and the matter will be determined upon submissions. 

4. For these reasons I make the orders identified at the start of this judgment.

I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 20 December 2010.

Associate: 

Date:  20 December 2010