Boxall and Boxall (No. 2)

[2008] FamCA 587

FAMILY COURT OF AUSTRALIA

BOXALL & BOXALL (NO. 2) [2008] FamCA 587

FAMILY LAW – COSTS – Conduct of a party in relation to property proceedings – Husband failed to honour his obligations to make a full and frank disclosure; failed to pursue settlement negotiations after the wife made a settlement proposal; gave false evidence – ordered to pay wife’s costs on solicitor/client basis.
FAMILY LAW – COSTS – Conduct of party in parenting proceedings – participation in mediation – Main purpose of rules and mediation is to facilitate resolution of proceedings by the parties – HELD:  Husband’s refusal to participate in further mediation was contrary to his obligation under the rules and unreasonable – Husband denied the parties the opportunity to resolve all or some of the parenting issues by mediation in a timely and inexpensive way – By his conduct he insisted the wife be subjected to the expense, delay, inconvenience and stress of having the court determine the parenting issues – Because of his conduct and stronger financial position he should pay the wife’s costs.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth) Rules 1.04, 1.05, 1.06, 1.07 and 1.08

APPLICANT: Ms Boxall

RESPONDENT:	Mr Boxall
FILE NUMBER:	NCC	625	of		2007

DATE DELIVERED: 11  July 2008

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: JUSTICE MULLANE

HEARING DATE: 4 July 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr C Boyd

SOLICITOR FOR THE APPLICANT: Boyd Olsen Lawyers

COUNSEL FOR THE RESPONDENT: Ms D Burns

SOLICITOR FOR THE RESPONDENT: Mandy Hull & Associates

Orders

1. The husband must pay the wife’s reasonable costs on a solicitor/client basis incurred in the property and children’s proceedings after 7 November 2005 as agreed by the parties, or in default of agreement as determined under the Family Law Rules or ordered by the Court.

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

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCC625 of 2007

MS BOXALL

Applicant Mother

And

MR BOXALL  

Respondent Father

REASONS FOR JUDGMENT

INTRODUCTION

1. This was a hearing of the wife’s application for the husband to pay her costs after 7 November 2005 in proceedings concerning alteration of property interests of the parties and issues concerning the time spent by the parties’ children with the father.

BACKGROUND

1. The proceedings were commenced in the Local Court at Nowra in December 2003.  In July 2004 they were transferred to the Family Court of Australia at Wollongong.  They were subsequently transferred to the Federal Magistrates Court and prepared for hearing.  On 19 December 2006 they were transferred to the Family Court at Newcastle.  The hearing occurred on 29 and 30 January 2008 and Judgment was delivered and Orders made on 7 May 2007

2. The outcome was a division of the parties’ property in the ratio of $164,226:$138,399 in the husband’s favour.  Taken into account in those figures were the husband’s liability for legal costs of $8,195 in the proceedings and the wife’s debt for legal costs in the proceedings of $3,500.  The husband’s credit card debt of $1,215 was also taken into account and the wife’s mortgage liability of $190,000.

a)FINANCIAL CIRCUMSTANCES OF THE PARTIES

1. In his affidavit in connection with the costs proceedings, the husband says that he borrowed $9,000 and about $6,000 from his parents to pay his legal costs.  Accordingly, in addition to the costs debt taken into account in the proceedings, he has paid another $7,000 using borrowed funds. 

2. At the time of the hearing his savings taken into account were $6,000 but his savings now are only $1,352.51, so his position regarding savings is now $4,647.49 worse than it was at the time of the hearing.

3. At the time of the hearing his credit card debts amounted to $1,215, but have since been reduced to $483.46.  So his situation has improved in that regard by $731.54. 

4. It appears then that overall his position as to property and liabilities (including superannuation) is now a net figure of approximately $153,310, whereas there appears to have been no deterioration in the wife’s position ($138,399).  The husband also has a substantial financial resource by way of accrued long service leave.  Despite the finding at the hearing that he did not disclose the amount involved, he has not disclosed the extent or value of this.  Accordingly, the husband is in a much stronger position than the wife as to property, liabilities and financial resources.

5. As to income, the husband’s current income according to Annexure F to his Affidavit is $3,246.70 per fortnight before tax and after tax of $808 is approximately $2,439 per fortnight, which is $1,219 per week.  From 14 July 2008, he will be doing different duties and his income will be reduced by $307.52 per week gross.  After the reduction in taxation it appears that this will result in a deduction of his net pay to approximately $1,000 per week.

6. The husband also pays compulsory payments of Child Support for the children.  Documents annexed to his Affidavit indicate that from 4 May 2008 is $248 per week.  (The figure for Child Support from 1 July 2008 is $1,078.50 per month; not $1,304 per month as was suggested in the husband’s affidavit.)  After payment of his income tax and Child Support he therefore has approximately $750 per week.

7. In comparison, the wife in addition to the Child Support from the husband has only the following income:  a tax free wage $300, interest on savings $5, Social Welfare Benefits $66 making a total of $371.  The wife has the care and financial support of the parties’ two children under 18.  The husband will be contributing $248 per week by way of child support.

8. It is clear that the husband is also in a stronger position than the wife as to income and earning capacity.

b)LEGAL AID

1. So far as I am aware neither party had legal aid in respect of the proceedings.

c)CONDUCT OF THE PARTIES TO THE PROCEEDINGS IN RELATION TO THE PROCEEDINGS

1. The incidents of false evidence by the husband referred to in the findings as to the credit of the parties were more numerous than those in respect of the wife’s evidence.  Of particular concern was that the husband did not disclose in the property proceedings the value of his long service leave, which appears to be substantial. At the hearing he gave evidence that he proposed to support himself with his long service leave while he studies at University.  He also continued that non-disclosure in the swearing of his affidavit in support of his opposition to the costs order.

2. Another issue is the husband’s refusal to participate in further mediation between the parties in the proceedings when ordered by the Court.  His solicitors were notified by a letter dated 29 November of a mediation appointment made for the parties to have further assistance by way of mediation to assist with attempts to resolve the issues concerning the children.  The husband, although he was in Western Australia, could have participated by telephone in such mediation.  He refused to participate in further mediation.  He instructed his solicitors accordingly, and they wrote to the Registrar and said:

   “Our client complains that his ex-wife is having the matter listed in various courts for unmeritorious reasons. He instructs that mediation with her does not bring about a successful outcome as she does her level best to ensure that any arrangements made become unworkable.  Under the circumstances he has instructed us to write to you and make it known in the clearest terms that he is not prepared to attend on another mediation conference between himself and his ex-wife.”

3. The hearing did not occur until more than 3 years later.  In that period the husband did not withdraw from his position of refusing to participate in mediation regarding the issues concerning the children. 

4. There was another issue concerning the husband’s failure to honour his obligations to make full and frank disclosure in the financial proceedings.  He did not provide a proper valuation in relation to his superannuation entitlements as at a date proximate to the date of hearing.  The Registrar wrote to the parties on 18 September 2007 raising matters that were outstanding and said in the course of that letter:  “The parties will also need to address the issue of the value of their respective current superannuation entitlements.  Failure to do so will be at the peril of the party.  I will also address this issue at the directions hearing on 8 October 2007.”

5. The husband did not provide a valuation of his superannuation entitlements at the hearing that was proximate to the time of the hearing.  It was necessary for the wife to arrange to obtain such a valuation at the hearing.  The valuation was substantially greater than the figure the husband had relied upon.

e) WHETHER ANY PARTY TO THE PROCEEDINGS HAS BEEN WHOLLY UNSUCCESSFUL

1. It is noted that the issues the husband raised regarding the children which subsequently went to trial were issues that he raised originally in his Amended Response filed 30 August 2006.  Because of his refusal to attend any further mediations after November 2004 the parties did not have the benefit of mediation in respect of those issues. 

2. The husband filed no application that sought orders with respect to property until he filed an Amended Response on 23 November 2007, two months before trial.  In that he sought an order that would have resulted in the funds held by Lees Solicitors on behalf of the parties being paid to him and he sought no other orders for adjustment of property between them.  The result at the hearing was that the Court ordered that the funds held by Lees solicitors (about $23,000) be paid to the wife and that there also be a splitting order which favoured the wife and resulted in her obtaining a superannuation interest of about $48,500 from his superannuation.  The result was substantially less favourable to the husband than the orders he sought.

3. In relation to property, relative to his application the husband was wholly unsuccessful.

4. In November 2004 the wife’s Amended Application sought a superannuation splitting order to obtain superannuation entitlements to a base value of $50,000 from the husband’s superannuation.  She also sought that she receive 70% of the net proceeds of sale of the former matrimonial home after discharge of the mortgage and payment of sale expenses.

5. The net proceeds of the sale of the home have been distributed as follows:

   December 2006 interim payment to wife              $120,000

   Interim payment to husband  $30,000

   Final payment to wife from Lees Solicitors    $3,000       

   Total$153,000

6. Relative to those orders sought by the wife, she received superannuation split of $48,500 instead of the $50,000 sought, and 83% ($143,00) from the net proceeds of sale of the home instead of 70% ($121,000) that she had sought.  She received more than she sought and the husband’s opposition to her Amended Application of 2 November 2004 was therefore wholly unsuccessful.

7. The wife filed an Amended Application on 25 September 2007 in which she sought the balance of the net proceeds of sale of the home plus 20% of the husband’s superannuation entitlements.  At the time of the trial 20% of the husband’s superannuation entitlements would have been a base amount of approximately $40,000.  At the hearing the wife succeeded in obtaining the whole of the funds held by Lees Solicitors and also $48,500 of the value of his superannuation.  The husband’s opposition to her Amended Application filed 25 September 2007 was also wholly unsuccessful.

f)SETTLEMENT OFFERS

1. On 7 November 2005 the wife’s solicitors served on the husband’s then solicitors an offer to settle on the basis that the wife received $130,000 from the net proceeds of sale of the home and no other orders for alteration of property interests.  The husband did not respond to that offer during the 26 months between the offer and the hearing.  The result the wife obtained at the hearing was that she received a total of $143,000 from the proceeds of sale of the home and a superannuation adjustment of $48,500.  The result of the trial was about $61,500 less favourable to the husband than the offer of settlement she made in November 2005.

g)SUCH OTHER MATTERS AS THE COURT CONSIDERS RELEVANT

1. Whilst neither party was wholly unsuccessful in relation to the children’s proceedings, the Court takes into account the results in relation to the five issues that had to be resolved by the Court: 

   1)Parental Responsibility

   The husband sought equal shared parental responsibility on long term issues.  He was wholly unsuccessful on that issue and the mother was given sole parental responsibility in that area.

   2)       Newcastle Contact

   The husband sought to be able to have up to 14 days of contact with the children in Newcastle during each school term.  The wife proposed 4 days.  Neither party was successful on that issue and the Court determined the period should be up to 7 days in each school term.

   3)       Unaccompanied Travel

   The wife wanted the children to be accompanied during plane flights until such time as the older child H is 12.  The husband opposed that order.  The Court decided that they should not be unaccompanied until the summer vacation at the end of 2008.  Neither party was wholly unsuccessful.

   4)       The wife proposed that there be an order to ensure that the husband is on leave during periods when he is expected to have the care of the children.  The husband opposed that order.  Neither party was wholly unsuccessful on the issue.  The Court ordered that he not undertake paid work on more than 2 days in any 7 day period either child was with him.  Neither party was wholly unsuccessful on that issue.

   5)       Air Fares

   The husband proposed that each party pay half the fares.  The wife proposed that the husband pay all of them.  He was wholly unsuccessful on this issue.

2. It is noted that these issues regarding the children were issues that might have been resolved by mediation.  The husband refused to attend mediation after November 2004.  He in effect refused to participate in any mediation on the issues that ultimately had to be determined by the Court.  

3. It is not the case that the purpose of the proceedings and procedures of this Court, including mediation, are intended to facilitate decision making by the Court.  The main purpose of most of the procedures is to assist parties to resolve parenting cases instead of the Court having to make a decision for them. 

4. This is made clear in the Rules.  Rule 1.04 provides:

   Main purpose of Rules

          The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.

1. Rule 1.05 sets out pre-action procedures requiring parties to attempt to resolve issues by negotiation before commencing proceedings.

2. Rule 1.06 is as follows:

   Promoting the main purpose

   The court must apply these Rules to promote the main purpose, and actively manage each case by:

         (a)         encouraging and helping parties to consider and use a dispute resolution method rather than having the case resolved by trial;

         (b)         having regard to unresolved risks or other concerns about the welfare of a child involved;

         (c)         identifying the issues in dispute early in the case and separating and disposing of any issues that do not need full investigation and trial;

         (d)         at an early stage, identifying and matching types of cases to the most appropriate case management procedure;

         (e)         setting realistic timetables, and monitoring and controlling the progress of each case;

         (f)         ensuring that parties and their lawyers comply with these Rules, any practice directions and procedural orders;

         (g)         considering whether the likely benefits of taking a step justify the cost of that step;

         (h)         dealing with as many aspects of the case as possible on the same occasion;

         (i)         minimising the need for parties and their lawyers to attend court by, if appropriate, relying on documents; and

         (j)         having regard to any barriers to a party’s understanding of anything relevant to the case.

3. Rule 1.08 provides:

   Responsibility of parties and lawyers in achieving the main purpose

   (1)         Each party has a responsibility to promote and achieve the main purpose, including:

         (a)         ensuring that any orders sought are reasonable in the circumstances of the case and that the court has the power to make those orders;

         (b)         complying with the duty of disclosure (see rule 13.01);
           (c)         ensuring readiness for court events;
           (d)         providing realistic estimates of the length of hearings or trials;
           (e)         complying with time limits;

         (f)         giving notice, as soon as practicable, of an intention to apply for an adjournment or cancellation of a court event;

         (g)         assisting the just, timely and cost-effective disposal of cases;
           (h)         identifying the issues genuinely in dispute in a case;

         (i)         being satisfied that there is a reasonable basis for alleging, denying or not admitting a fact;

         (j)         limiting evidence, including cross-examination, to that which is relevant and necessary;

         (k)         being aware of, and abiding by, the requirements of any practice direction or guideline published by the court; and

         (l)         complying with these Rules and any orders.

   (2)         A lawyer for a party has a responsibility to comply, as far as possible, with subrule (1).
   Note    The court recognises that a lawyer acts on a party’s instructions and may be unable to establish whether those instructions are correct.
   (3)         A lawyer attending a court event for a party must:
           (a)         be familiar with the case; and
           (b)         be authorised to deal with any issue likely to arise.
   Note    The court may take into account a failure to comply with this rule when considering costs (see subrule 19.10 (1) and subclause 6.10 (1) of Schedule 6).

4. The husband’s conduct in refusing to attend mediation in relation to the children’s issues after November 2004 and persisting in that stance until the hearing in January 2008 was wholly unreasonable conduct.  It was contrary to hiss obligations under the rules. 

5. The consequence is that in effect he denied the parties the opportunity to resolve the issues by mediation in a timely and inexpensive way.  He insisted by his conduct that the wife be subjected to the expense, delay, inconvenience and stress of having a court determine those issues, and on some of them when they were determined by the court he was wholly unsuccessful, although not on all of them.

6. Because of the husband’s conduct and his superior financial circumstances, he should pay the wife’s costs in relation to the children’s proceedings. 

7. In relation to the property proceedings, the husband was wholly unsuccessful relative to the Application he originally made and then the subsequent Amended Application.  In November 2005 he had the opportunity to settle the proceedings on a basis that was much more favourable to him than the final outcome at the hearing.  But it appears he did not respond and did not pursue settlement negotiations.

8. The husband, by his failure to resolve the proceedings on any of the bases proposed by the wife since the commencement of the property proceedings, forced the wife to incur the expense, inconvenience, delay and stress involved in having the matter determined by the Court.  In view of this conduct, his superior financial circumstances, and the fact that his opposition to her applications was wholly unsuccessful, the husband should pay the wife’s costs since he became aware of the orders she sought by her Amended Application filed in November 2004.

1. However, the wife seeks costs only since 7 November 2005 when she made the first settlement offer.

2. The husband’s conduct in relation to the proceedings in failing to honour his obligations to make full and frank disclosure, in his failure to pursue settlement negotiations after the wife’s settlement proposal of 7 November 2005, in giving false evidence, and in refusing to participate in mediation regarding the children’s issue is so serious and such an exceptional circumstance that the costs order should be on the basis that the costs he pays should be on a reasonable solicitor/client basis.

______________________

Justice Mullane

Date: 11 July 2008