Boston and Boston (No 4) - [2016] FamCA 1150

FAMILY COURT OF AUSTRALIA

BOSTON & BOSTON (NO 4)

[2016] FamCA 1150

FAMILY LAW – COSTS – determination of costs – where consideration is given to whether the circumstances justify the making of an order for costs – where consideration is given to s 117(2A) factors – where no order is made for costs.

Family Law Act 1975 (Cth) s 117

Boston & Boston (No 3) [2013] FamCA 923

APPLICANT:

Ms Boston

RESPONDENT:

Mr Boston

FILE NUMBER:

ADC

1946

2016

DATE DELIVERED:

16 December 2016

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Dawe J

HEARING DATE:

16 December 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT:

n/a

SOLICITOR FOR THE APPLICANT:

In person

COUNSEL FOR THE RESPONDENT:

Mr Birchall

SOLICITOR FOR THE RESPONDENT:

Norman Waterhouse Lawyers

Orders

There be no order as to costs.
All matters are removed from the active pending list.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Boston & Boston (No 4) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 1946 of 2012

Ms Boston

Applicant

And

Mr Boston

Respondent

EX TEMPORE REASONS FOR JUDGMENT

I am now dealing with the issues in relation to the costs sought by the husband. He is seeking costs of the trial that was before me commencing on 5 October 2016 and concluding on 9 November 2016 for which I have delivered judgment on 12 December 2016. He is seeking costs of that trial on an indemnity basis. The husband is also seeking costs in relation to two interim applications brought in relation to the obtaining of an authority to ANZ and then a further application brought necessarily as a result of the wife’s withdrawal of that authority and the need for the variation of the previous orders that I have made. He is seeking costs in relation to those two interim matters on the scale basis.
The wife is also seeking costs against the husband in relation to costs which she has incurred in these proceedings being the costs of various lawyers. She was also seeking costs in relation to fees incurred as a result of litigation in relation to the company R Pty Ltd.
When dealing with these matters, I have to take into account the background to these proceedings. The proceedings originally commenced in May 2012 and therefore there have been substantial costs incurred when the parties have from time to time been represented by solicitors and counsel.
Orders in relation to the child, RR, were made in March 2015 and July 2015. The orders which were made by consent on 20 March 2015 include at paragraph 20:
The question of the costs of the children’s proceedings are reserved to the final determination of the property settlement proceedings.
The final orders in relation to the child, RR, were resolved by consent orders being made dealing with matters save and except those matters the subject of my orders made in July 2015 which related to the child travelling overseas.
The children’s matter went for five days and resolved on most issues on the fifth day. The Court then made attempts to list the financial matters for trial. As I have referred in my earlier judgment of 12 December 2016, some of the proceedings and attempts to list the trial were not successful because of the failure to comply with orders of this Court. That is a factor that has to be taken into account when assessing the current applications before me now for costs.
It is also relevant to note that at trial both parties sought to rely on documents and evidence which had not been provided to the other party in accordance with the rules.
I now consider the necessary provisions of s 117 of the Family Law Act 1975 (“the Act”) but also take into account for the purposes of these proceedings the relevant authorities which deal with the costs. For that purpose I have been referred to and, indeed, rely upon the authorities mentioned in my judgment in this matter known as Boston & Boston (No 3) [2013] FamCA 923 in which I made orders for costs in relation to what were then the interim proceedings in relation to an application in a case.
It is crucial in these proceedings and in all proceedings to note that s 117 of the Act provides that subject to ss (2) and other relevant sections (such as s 70NFB(1), s 117AA, s 117AC and s 118) each party to proceedings under this Act shall bear his or her own costs. For the purposes of these proceedings the reference to paragraphs (4), (4A) and (5) deal with the issue concerning Independent Children’s Lawyer’s costs. The orders that I made on 12 December 2016 provided for the Independent Children’s Lawyer’s costs to be shared equally between the parties.
The wife is now submitting that the husband should paid all of the costs of the Independent Children’s Lawyer due to what she alleges to be his conduct in these proceedings. I will take into account the orders which I have already made when assessing the overall costs which are now being sought. The Court is required, subject to ss (2), to consider that the law provides that each party to proceedings under this Act shall bear his or her own costs. Subsection (2) of s 117 provides:
If, in proceedings under this Act, the court is of the opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) 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.
I am required to consider if there are circumstances that justify me doing so, whether I should exercise that discretion and whether if I make such an order that such order is a just order. The provisions of s 117(2A) require the Court:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
It then sets out the factors (a) through to (f) and ss (g):
such other matters as the Court considers relevant.
I will deal with each of those subsections of 117(2A) individually.
First of all, ss (a) provides for the Court to consider and have regard to the financial circumstances of each of the parties to the proceedings. The financial circumstances of each of the parties of the proceedings are and will be as set out in the judgment I have delivered this week, 12 December 2016. It sets out the findings that I was able to make in relation to the contested assets and liabilities and financial resources of the parties and their current incomes and liabilities.
It also makes specific orders providing for the division of those known assets and liabilities on an equal basis between the parties. Those factors, therefore, are taken into account. It is alleged by the husband on that basis that, therefore, the wife will have the ability to make a payment to the husband on account of the husband’s costs. In relation to that, it is clear that if the wife is able to raise the funds to pay out the husband and retain the former matrimonial home, she would have considerable debts and very limited assets and very small income.
If, however, as is more likely, the former matrimonial home has to be sold because the wife cannot raise the necessary funds to pay out the husband, then both parties would have funds available to them for the payment of costs but that does not mean that simply because the funds are available to pay the costs that those funds would be best used by the parties in the payment of another’s costs. I take into account, therefore, that my judgment indicates what the financial resources of the parties are and will be and that both parties could probably, if the former matrimonial home is sold, have funds available to meet any order for costs made by this Court in relation to these proceedings.
In particular, in relation to the costs sought by the husband on an indemnity basis of the amount set out in the exhibit which I have received is approximately $118,000 in total. That would be a significant reduction in the monies available to the wife were the order to provide for her to pay the husband’s costs.
Similarly, the husband’s amount available to him for his use would be significantly reduced if the wife were to be successful in her application for costs.
Subsection (b) is not relevant as it relates to legal aid availability and the grant of assistance and the conditions of that.
Subsection (c) therefore is the next matter to be considered. It refers to 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, admission of facts, production of documents and similar matters. In relation to these proceedings, the husband is asserting that the wife’s case was “fanciful and entirely unrealistic” and that she was seeking orders which were not appropriate.
I accept that the orders which the wife was seeking in relation to the retention of the former matrimonial home and the payment of her share of 50 per cent of the value of shares which did not exist in the husband’s name, namely, GF Street property, were based upon the wife’s definite belief that the husband had and has retained significant assets which he has not disclosed and upon which I have made findings that I am unable to make findings that support the wife’s assertions and belief in that regard. I also take into account the objections taken to the documents which were filed.
There was a large amount of time taken up at the commencement of the trial in relation to objections to the documents filed by the wife and the wife’s objections to documents filed by the husband. As I have already referred to these sort of matters in my earlier judgments, these are factors which need to be taken into account but, as I have emphasised, there are also, on the husband’s case, a lot of material which was produced and put to the wife in cross-examination and provided to the Court at a very late stage of these proceedings. In particular, the wife’s behaviour as an unrepresented litigant needs to be seen in the context of the history of this matter, including the husband’s failure to comply with orders of this Court.
I will deal with those matters in more detail when I am dealing with the husband seeking costs of the interim applications concerning the wife’s production of the ANZ authority and her withdrawal of that and further proceedings. That needs to be seen in the context of the husband’s history of dealing with these matters, including the failure of the husband to comply with orders of this Court for the preparation of the matter for the original trial listing, which then brought about the adjournment of the actual trial, removal of the matter from the trial list and further concessions made to the husband to give him, notwithstanding his past behaviour, an opportunity to be heard in this Court.
In particular, I refer to the application that the husband made that I disqualify myself from further hearing the trial but at the same time choosing not to comply with the orders of this Court for filing and serving material to be relied upon in this Court. That is a significant factor which needs to be taken into account in the overall balancing of the factors in relation to s 117(2A). The husband’s conduct of his proceedings and failure to comply with orders of the Court is a significant factor which needs to be taken into account.
The wife has also not complied with the rules and has, from time to time, made assertions which have not been supported and applications which have been rejected. They all need to be balanced.
Subsection (d) of s 117(2A) refers to whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court. The actual proceedings, namely, the trial, was not brought about by the factors contained in ss (d); however, some of the interim proceedings were brought about by that necessity due to the parties’ failure to comply with orders of the Court.
The husband also relies ss (e) of s 117(2A), but in an unusual way. Section (e) provides:
Whether any party to the proceedings has been wholly unsuccessful in the proceedings.
Counsel conceded that the wife was not wholly unsuccessful, but maintained that this could be considered on the basis that much of her claim was not successful. I do take into account the provisions of ss (e) on the basis that neither party has, on the face of it, been wholly unsuccessful. The husband did not receive what he was claiming, namely, at the commencement of the trial, that he be allotted 75 per cent of the net assets and liabilities, including superannuation for parties, nor was the wife wholly unsuccessful in that I made orders that gave her an opportunity to retain the former matrimonial home, but that was with a significant payment to the husband.
That is not a significant factor in dealing with the issue of the costs that the husband is seeking nor the costs which the wife is seeking.
Subsection (f) refers to 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. It was initially proposed by counsel for the husband that I should take into account the offer that was allegedly put to the wife in an informal conference or mediation, but then conceded that this was not an offer in writing, so it was not one that should be brought into account under ss (f).
It was, therefore received as a submission in relation to ss (g), “such other matters as the Court considers relevant”. The difficulty in relation, however, to the offer which is put to the Court to be considered is that exhibit 2, which is an email from counsel to the solicitor for the husband, was not agreed by the wife and was clearly not asserted by husband’s counsel as a document which the wife had received. Husband’s counsel said there was no document which the wife received or her agent received, but what is set out in exhibit 2 is a summary by counsel of the verbal offer made to the woman who became the McKenzie Friend to the wife at the mediation or conference process in late February 2016.
That detailed email is not accepted by the wife that she was informed of any offer and, therefore, I can give little weight to the material contained in exhibit 2.
I was asked by counsel for the husband to also consider the material set out in exhibit 1, which is an email, 16 February 2015, from the husband to the wife. That is a very generalised document which, at the end, refers to trying to save a lot of time, money and grief by sitting down at a table and sensibly arriving at a win/win position. I am not quoting the entire letter, but I have read all of the letter and taken it into account. It is a statement by the husband suggesting that the parties negotiate an outcome. It does not include sufficient information to say whether any reasonable offer was being made by the husband that would bring about an order for the relevant consideration of costs of the trial or the other interim applications for which the husband is seeking costs.
In relation to exhibit 2, I have dealt with that as the email setting out what was alleged to have been a verbal offer made to the wife’s friend who became a McKenzie Friend.
Exhibit 3 is a letter from Norman Waterhouse Lawyers to the husband, dated 3 August 2016, referring to the costs agreement. This is a letter dated 3 August 2016 which is relied upon by the husband as setting out the terms of the agreement between him and his current solicitors for payment of costs other than being payment on the scale and to justify the request for the costs to be on an indemnity basis.
The wife raises the issue that the letter is dated 3 August 2016 yet the husband claims to have only been represented by them from early October. That may be easily explained by an offer being made on 3 August 2016 and we do not have any information as to when the husband agreed to that offer. If indemnity costs were to be ordered, that could be brought into consideration.
Exhibit 4 is a summary of the costs incurred by the husband for Norman Waterhouse and counsel’s fees limited to the period 5 October to 7 November 2016, and as previously indicated, totalling approximately $118,000, but this does not include the further indemnity costs of the other days of the trial which concluded on 9 November 2016. Again, relevant if the question of indemnity costs is necessary to be considered.
Exhibit 5 is headed “Trial Schedule” setting out what counsel asserts to be delays and difficulties incurred in a trial which was set for eight days but went for 19. Again, the wife does not accept the calculations or the times involved in the schedule provided by the husband.
What I need to consider, however, is clearly the issues, as I have referred to them, in s 117 and the material before the Court. The wife’s submissions in relation to her seeking orders for costs were that she had incurred costs and, as I have already indicated, she would not be able to recover costs in this Court for those courts in relation to husband and wife and other entities involved. Weighing all of the factors involved I would not challenge the fact that the wife has incurred solicitor’s costs of at least $50,000.
The question is whether there is any basis upon which such an order should be made against the husband for him to pay the wife’s costs incurred. What I need to consider is the balancing factors involved, and the significant factors are some of which I have referred to in my judgment. I referred in the early part of the judgment to the background to the matter, including the detailed orders I made for the preparation of the trial.
When I am dealing with the interim applications and the husband seeking the costs incurred as a result of the ANZ authority for the husband’s solicitors to communicate with the ANZ and the withdrawal of that authority, and the further proceedings which were required because of the wife’s withdrawal of that authority, that has to be seen in the context of the husband’s failure to comply with the orders which were made to prepare the matter for trial and the delay which that then brought about, and further applications made at a late stage of the proceedings for the ANZ authority. I take into account the husband having been represented on and off over the period of years that this matter has been proceeding but that the signed authority proceedings were brought very much at a time very late in the proceedings and just before the proceedings were due to be heard in a final sense.
It also has to be taken into account that the delay in the final hearing of the matter was brought about to a large extent by the husband’s failure to comply with orders of this Court for the filing and serving of documents upon which he was seeking to rely. In relation, therefore, to the interim applications, I am not satisfied that the husband has established that the Court should make any order under s 117 because I do not consider that such an order would be just in relation to those interim proceedings.
In relation to the trial of this matter, whilst I accept that the delays in the trial and the length of the trial was in part due to the wife’s attitude towards objections to her documents and the objections which she was making to the husband’s material, I also have to take into account that a lot of the evidence upon which the husband sought to rely was evidence and documents produced which had not been prior disclosed or put to the wife or any of the solicitors then, at one time, acting for her. Overall the conduct of the matter, as far as the final trial is concerned, and the results of that final determination, are such that I do not consider it just, balancing all the factors under s 117(2A), that any order for costs to be paid by the wife to the husband in these proceedings would be just, particularly bearing in mind the financial circumstances in which both parties will be left.

For similar reasons, in relation to the wife’s application for costs against the husband, I have taken into account the orders that I have made of 12 December 2016 and their financial circumstances. I also take into account the late production of documents by both parties and consider that the balancing factors, therefore, are that no order for costs is just in these proceedings and, therefore, the provisions of s 117(1) prevail, namely, that each party to the proceedings shall bear his or her own costs.
In relation to the costs order that I have already made in relation to the Independent Children’s Lawyer, I take into account the factors set out in s 117(4) and (4A) and have already considered those when making the orders which provide for each of the parties to pay one-half of the Independent Children’s Lawyer’s costs. Taking those matters into account, I also still consider that it is not appropriate or otherwise just for that order to be varied.
Considering again the factors under s 117(2) and (2A), I consider that s 117(1) should prevail and that the orders which I have already made in relation to the Independent Children’s Lawyer should remain in effect.
The orders will be therefore dealing with all of the proceedings between the parties in this Court, which takes into account the earlier proceedings in the Federal Magistrates Court (as it then was) and that there will be no order for costs and each party should bear their own costs in these proceedings.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 16 December 2016.

Associate:

Date: 24 January 2017