Bromwich & Bromwich

[2007] FamCA 157

FAMILY COURT OF AUSTRALIA

BROMWICH & BROMWICH [2007] FamCA 157

CHILD SUPPORT – Appeal from decision of Federal Magistrate – Father refused to participate in hearing in the court below after he was denied an adjournment –father’s capacity to contribute – Finding that father had significantly understated his income to the Child Support Agency based on his own admissions at an earlier interim hearing – Open to the Federal Magistrate to conclude that the husband had understated his income in certain amounts over a period of years – However for one period of time for which the Federal Magistrate made orders, a copy of assessment was not available – Absent the notice could not say that  there was a ground for departure made out for that period only.

CHILD MAINTENANCE – Child over 18 years – The Federal Magistrate made orders for the father to pay adult child maintenance for his son who was undertaking a course of training as a professional tennis player or coach – Evidence of the son’s coach after the hearing but before judgment that the son was no longer training with him – Had this material been available to her, the Federal Magistrate would not have found it appropriate to make the orders she did – Obligation to pay adult child maintenance after the date the son ceased training discharged.

COSTS – Appeal against costs order – Within discretion to make an order for costs – Problem with quantum – No reasons given as to why costs exceed party – party scale – Costs ought to be assessed by Registrar on a party-party basis.

Child Support (Assessment) Act 1989 (Cth) ss 111 and 112, which were enacted by the Child Support Legislation Amendment (Reform of the Child Support Scheme - New Formula and Other Measures) Act 2006 (Cth).
Family Law Act 1975 (Cth)
Federal Proceedings (Costs) Act 1981 (Cth)

Gilmour v Gilmour (1995) FLC 92-591

APPELLANT: MR BROMWICH

RESPONDENT: MS BROMWICH

FILE NUMBER: MLM 8995 of 2003

APPEAL NUMBER: SA 53 of 2006

DATE DELIVERED: 19 February 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Kay J

HEARING DATE: 19 February 2007

LOWER COURT JURISDICTION: Federal Magistrates Court

LOWER COURT JUDGMENT DATE: 7 August 2006

LOWER COURT MNC: [2006] FMCAfam 241

REPRESENTATION

COUNSEL FOR THE APPELLANT: In person

SOLICITOR FOR THE APPELLANT:

COUNSEL FOR THE RESPONDENT: Mr M. Wilson

SOLICITOR FOR THE RESPONDENT: Pearsons

Orders

1. The applicant husband have leave to appeal from the Child Support orders made by Hughes FM on 7 August 2006.

2. That the appeal be allowed.

3. That Order 2(b) of the said orders be varied by substituting the date 30 September 2000 for the date 31 October 2001 therein appearing.

4. The appeal relating to the child support orders be otherwise dismissed.

5. That the appeal against the provision of adult child maintenance for the child B be allowed and that Order 4 of the said orders be varied by deleting all words after 8 January 2006 and substituting therefore the words “until 31 July 2006”.

6. That the appeal against the costs orders made on 28 August 2006 by Hughes FM be allowed in part.

7. That Order 1 be set aside and in lieu thereof it is ordered:

   “That the husband pay the wife’s costs of and incidental to her application filed 27 October 2005 other than as disallowed in paragraph 17 of the judgment of Hughes FM delivered 23 August 2006.”

8. That the Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

9. That the Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Kay delivered this day will for all publication and reporting purposes be referred to as Bromwich v Bromwich

FAMILY COURT OF AUSTRALIA AT MELBOURNE

Appeal Number: SA 53  of 2006
File Number: MLM 8995  of 2003

MR BROMWICH

Appellant

And

MS BROMWICH

Respondent

REASONS FOR JUDGMENT

1. This is

   ·    an application for leave to appeal and, if leave is granted, an appeal against child support departure orders made by Hughes FM on 7 August 2006,

   ·    an appeal against orders for payment of maintenance in respect of a child who had attained the age of 18 years, also pronounced on 7 August 2006, and

   ·    an appeal against a cost order made in relation to those proceedings on 23 August 2006.

2. Throughout the proceedings, the applicant father has appeared in person, although an outline of submissions and list of authorities was prepared by a solicitor on his behalf.  The mother has been represented by Mr Wilson of counsel at all relevant times. 

Background

1. The parties are the parents of two children relevant to these proceedings; B born in January 1988, and S born in August 1994.  The parties separated in 1997, and thereafter the mother sought child support assessments in respect of payments due for the children.

2. The child support assessments issued.  The father applied for an administrative departure, seeking to reduce his child support liability to nil.  That application was declined.  The mother applied for change in the assessment in 1999, and the father cross-applied and sought a reduction of the amount then due.  The senior case officer at the Child Support Agency increased the sum to $130 a week for a period from 16 September 1999 to 30 September 2000.

3. Further assessments issued over the ensuing years, and nothing occurred in relation to seeking to alter those assessments until May 2005 when the mother applied for a change of assessment based on the child B's special needs, and on the basis that the administrative assessment did not adequately take into account the financial circumstances of the father.

4. That application was determined to be too complex to be dealt with and recommended the application be made to the court.  The wife objected to the refusal to make the decision, and the rejection was partly allowed by the reviewing officer.  The father’s child support Income was fixed in the sum of $42,000 for one period from 11 May 2005 until 28 February 2007.

5. The mother then brought her application to the Federal Magistrates Court in Melbourne, filed on 27 October 2005, which application sought a departure from administrative assessment of child support from 5 January 1998 until each child attained the age of 18 years, at a rate to be determined as just and equitable.  The application sought a lump sum payment for arrears, and it sought ongoing child maintenance for B from a date in January 2006, which would coincide with his 18th birthday, until such time as B completed his course of education and/or training as a tennis professional.

6. The matter came on for hearing initially on 15 November 2005 before Bennett FM.  Her Honour determined to adjourn the application to a hearing to be held in 2006 at a date convenient to the court and to the parties, then proceeded to make some interim orders.  Those interim orders were the subject matter of an appeal to the Full Court of the Family Court of Australia who allowed the appeal and remitted the issue of interim orders back to the Federal Magistrates Court.

The trial

1. In the meantime the matter had come on for final hearing before Hughes FM on 5 April 2006, so that in a sense the remittal by the Full Court back to the Federal Magistrates Court became a non-issue because Hughes FM was in a position to deal with the entirety of the application without the necessity for a further interim hearing to take place.

2. At the commencement of that process, the father appeared in person and indicated to the Federal Magistrate that he was wanting a further adjournment of the proceedings.  The Federal Magistrate declined his application and indicated that she would proceed to hear the mother's application for departure orders, and her application for adult child maintenance.  That led to the father simply leaving the proceedings, notwithstanding that the Federal Magistrate warned him of the consequences that would flow if that was the stance that he took.

3. At the commencement of the hearing before Hughes FM, the father said that there had been a change in the mother's financial circumstances since her last statement of financial circumstances had been filed, and that he was insisting that a fresh statement of financial circumstances be filed, and that he be given an adjournment so that he can consider what was in the fresh application. 

4. Her Honour inquired of counsel for the wife what was involved in any changes of her financial circumstances, and was informed that there were some changes, but they would be quite capable of being dealt with in viva voce evidence, and that the changes were that she had downsized her house which had freed up some capital and helped her pay some debts, but that otherwise in fact her pension had changed because of the lack of child support that was being paid.

5. Her Honour explained to Mr Bromwich that she proposed to proceed on with the hearing, but if it became apparent in the course of the hearing that Mr Bromwich was in any way disadvantaged unfairly by reason of the evidence that arose, she would then reconsider the proposition of allowing him a further adjournment.  That is what ultimately proceeded to happen, but by that stage Mr Bromwich had indicated that he was not going to partake in the proceedings any further, and he left.

6. The proceedings went on in his absence which caused a significant degree of difficulty for the Federal Magistrate who had to decide the case, which was basically about the father's capacity to contribute towards child support over a period of some seven or eight years, when the father was not going to assist the court with evidence as to his financial circumstances. 

7. He had given a certain amount of evidence at the interim hearing before Bennett FM and had been cross‑examined in relation to some nondisclosures of income to the Child Support Agency, and had made admissions about those.  No doubt the mother was keen to extend the cross‑examination to deal with a broader historical period that was encompassed by this rather wide searching inquiry into his financial affairs that involved the period from the first of the assessments in July 1998 right up to the hearing which was then taking place in April 2006.

8. Fortunately it appears that the legislature have now seen the wisdom in the folly of that exercise, and that as and from January 2007, an inquiry into a departure from administrative assessment of child support is prima facie limited to 18 months without leave of the court first had and obtained, and in any event is limited to seven years. (See ss 111 and 112 of the Child Support (Assessment) Act as it now stands, which were enacted by the Child Support Legislation Amendment (Reform of the Child Support Scheme - New Formula and Other Measures) Act 2006.)

9. Be that as it may, in this case the Federal Magistrate was left with a difficult task.  She had before her evidence of Notices of Child Support Assessment for most of the period that was under consideration, but peculiarly no child support assessment at all for the period from 1 October 2000 to 30 September 2001.  No comment appears to have been made either by herself or Mr Wilson relating to that oversight in the course of the hearing.

10. Ultimately Hughes FM made findings that the husband had understated his income by significant amounts on his own admission before Bennett FM for a period that covered 2 September 2004 to 10 October 2005.  That was an understatement of gross income of $64,300 for that period of time, much of which covered a period for which he had told the Agency about only $5000 of that income.

11. Her Honour commented that, based on those admissions, she had no difficulty in attributing to the husband by way of income amounts that counsel had asked her to attribute for the whole period involved in the various child support assessments that she was being asked to consider.  She set out in her reasons for judgment the passages concerning the quality of the evidence saying particularly that:

    81.It is clear on the evidence that the husband received a total of $64,300.00 from one customer in his furniture removal business between 2 September 2004 and 10 October 2005, a period of 13 months.  During the financial year ended 30 June 2005 the respondent husband received from that same customer the sum of $38,140.00.  The respondent, therefore, understated his income from that one customer alone by $33,000.00 when he stated his gross income from the business for the year ending 30 June 2005 was $5,000.00.

    82.This information was never likely to come to light without the wife engaging a private investigator and legal representatives to investigate the husband’s financial affairs. I find that, in order to avoid his responsibility to financially support his children, the husband deliberately lied to the Child Support Agency and engaged in a campaign of deception to prevent the applicant or the Agency discovering his true financial position.  The wife should not have been put to the expense of having to prove the respondent’s financial position.  The respondent was required by law to disclose it.  He comprehensively failed to do so. 

12. This left the magistrate in the difficult position of having to know the extent to which the father had underestimated in other years when the underestimation was ultimately based upon admissions that he made in the witness box, which admissions were for a very limited in the period because of the nature of the inquiry then being undertaken, namely whether it was appropriate for Bennett FM to make an interim order.  To that extent the father was being shown very recent figures for him to comment upon to demonstrate that at the time the matter was before Bennett FM in November 2005, he clearly had the capacity to meet orders for the short period of time pending a likely trial in some four or five months.  There was no attempt, quite properly so, before Bennett FM to have the husband explain what his position had been in previous years.

13. It seems it was common ground that, apart from working as a process worker or on a salary, the husband was throughout the relevant years conducting a business as a furniture removalist.  The mother’s assertion was that income from that source was not being disclosed to her or to the Child Support Agency. 

14. For the purposes of determining what would be appropriate adjustment to the child support assessments, counsel for the wife drew up a spreadsheet in which he effectively altered the child support income for each of the relevant periods.  It is not abundantly clear what mathematical approach was adopted for the ultimate submissions that were made, but I will set out the years and try to summarise the effect. 

15. For the period July 1998 to June 1999, the husband's child support income amount was said to be $29,028.  Her Honour was invited and accepted to substitute a figure of $50,000. 

16. For the period 1 July 1999 to 30 September 2000, the child support income amount was $38,293.  Her Honour was invited to and did accept a figure of $52,500.  

17. She also accepted a figure of $52,500 for the period 1 October 2000 to 31 October 2001, even though there was no figure provided as to what the child support income amount was for that period of time or what the assessments have been.

18. For period 1 November 2001 to 30 November 2002, in lieu of a child support assessment income amount of $39,870, she was invited and accepted a figure of $55,000. 

19. For the period 1 December 2002 to 31 August 2003, the husband's child support income amount was $36,632, and her Honour was invited and accepted a figure of $57,500. 

20. For the period 1 September 2003 to 31 August 2004, the child support income amount was $38,006.  Her Honour was invited to and did accept a figure of $60,000. 

21. For the period 1 August 2004 to 30 November 2005, the figure was $36,921.  Her Honour accepted $62,500. 

22. For the period 1 September 2004 to the period 31 October 2005, whilst there were two periods for the child support income amount, the first one being $36,921 which was subsequently increase by the registrar to $42,000, her Honour was invited to and accepted the figure of $62,500. 

23. For the period 1 November 2005 to 7 January 2006, the child support income amount was $42,000 which was increased to $65,000 by her Honour, and also for the period 8 January 2006 to 5 April 2006, the figure was increased from $42,000 as assessed to $65,000 as accepted by the trial judge.

24. Finally there was an order for ongoing departure at the rate of $65,000 per annum with a 5 per cent increase on an annual basis.

25. In the course of my discussion with the applicant father, he sought to raise material as to his current financial position as a result of some injuries he said he sustained in December 2005.  I indicated to him that if he is of the view that he is no longer capable of sustaining an income of $65,000, he is free to apply to vary the orders.  Such a variation can be retrospective insofar as it deals with the period from the time of judgment onwards, but it can also be prospectively based on his current set of financial circumstances including the state of his health.  If he is to try to persuade a court of the issues relating to his state of his health he will need to have material in a proper form before the Court, namely an affidavit from the health provider indicating what the state of his health is and how it impacts upon his earning capacity.

Discussion

1. Returning then to the issue.  As I have indicated, the figures show that her Honour was invited to increase the husband's child support income amount by varying his figures from, say, $13,000 for the period July 1999 to September 2000 to other sums which vaguely resemble $20,000 per annum, but do not consistently do that.  Her Honour approached that task by simply saying that in the circumstances where the husband was clearly inaccurate and did not stay at the hearing to explain himself, she was not troubled by the range of figures that Mr Wilson has put forward, and I was prepared to work accordingly.

2. The position of a non-cooperative litigant in cases where full and frank disclosure is required leaves the court in an unenviable position.  It has to effectively grapple with figures being plucked out of the air without proper assistance.  It cannot be that, because the litigant refuses to cooperate, the court is stymied in its capacity to make any orders at all.  The authorities would seem to indicate the court can err on the side of being generous to the applicant - that is the applicant for relief at first instance - where the respondent is not meeting the obligation to make proper disclosure.

3. In Gilmour v Gilmour (1995) FLC 92-591 at 81,849 the Full Court said

   In any application for a departure order under the Assessment Act (including an order that would have the effect of decreasing the amount payable under an earlier departure order) the applicant, of course, carries the usual onus of making out his or her application to the court. Further, there can also be no doubt, in our view, that a party to proceedings under the Assessment Act has the same duty to make a full disclosure of his or her financial affairs as does a party to financial proceedings under the Family Law Act, and that where in such proceedings the court is satisfied that there has been a deliberate non-disclosure by one party, it is open to the court to make findings in favour of the other party (see Weir [ (1993 FLC 92-338)] particularly at FLC 79,593).

1. The task for me sitting as an appellate court is to ask myself the question of whether it was open to the Federal Magistrate to find an understatement of the husband in the various years somewhere in the vicinity of $20,000 per annum when the only glimpse into the affairs of the husband was for basically one of the seven years, and a glimpse in that one of the seven years showed a very significant understatement, at least in gross income terms, but perhaps as much as 50 or 60 thousand dollars in any one year.

2. I think the answer to that question is that I am not in a position to find that it was not open to the Federal Magistrate to find the understatement.  I am in no better position than she was to find what the true extent of the understatement was, and in light of the evidence that when the window was open as to what was happening inside, I cannot say that it was not open to her to assume that something of similar magnitude was happening in years when the window was closed.  The capacity to throw light on what was happening behind the shades was something peculiarly within the husband’s hands but he chose not to allow himself to be questioned about those matters.  In those circumstances, to the extent that this appeal complains of a lack of evidence of the Magistrate to make her findings, the appeal ought not succeed.

3. The assertion in the written submissions is that:

   The Federal Magistrate erred in making finding at paragraph 59 of the Judgement (sic) that the Appellant had understated his income over many years.

4. Having made reference to the manner in which the matter had proceeded before various case officers at the Child Support Agency and the evidence that was before them, and having made reference to a statement of the husband in his financial statement filed 14 February 2006 declaring his salary and wages of nil and the business income of $675 a week, she went on to make reference to an affidavit from a private investigator who had carried out surveillance between September and November 2005 showing that the husband had been actively engaged in the business of furniture removalists, employing four different men, doing deliveries for a company known as AJ, and had responded to a telephone request saying that he would take $150 to $180 for removal as a cash price.  In paragraph 59, the Federal Magistrate said:

   This evidence corroborates what the applicant had been telling the Child Support Agency for many years. I am satisfied that the respondent operates a thriving furniture removal business, that he employs other people in the business, that he is largely paid in cash for the work he does in that business and that he has significantly understated his income over many years.

5. As I have indicated, the segue from current evidence relating to his understatement over many years was something that the magistrate was left in the unfortunate position of having to make findings about in the absence of any assistance from the husband who could well have dissuaded her from forming such a view, but he chose not to continue his attendance.

6. In my view, insofar as it was suggested that it was not open to the magistrate to make that finding, given the surrounding circumstances of the husband's refusal to partake in the proceedings and his admission that he had actively misled the Child Support Agency in the course of the documents that he provided to them, the finding was an appropriate one for the Federal Magistrate.

7. However, at least in respect of one order that her Honour made, which is the order 2(b), namely that:

   For the period 1 July 1999 to 31 October 2001, the annual rate of child support be increased to $10,208 per annum

   absent a Notice of Assessment, there was no evidence as to what the rate was, and in those circumstances, whilst the Federal Magistrates Court Rules required her to be provided with a copy of any assessment relevant to an application for departure, in the absence of that assessment, I do not think that the Federal Magistrate could properly have been satisfied that a departure from assessment was merited for that period of time.

8. To that extent and that extent only do I think that there has been an error of principle relating to the departure orders and an error that would attract the necessity for leave for an appeal to be granted and for the appeal to succeed.  The appeal succeeds then to a very limited basis, namely to my setting aside order 2(b) of the orders made by the Federal Magistrate. 

Procedural irregularities

1. In looking at the argument that was prepared by way of an outline of submissions, much of it asserts a denial of natural justice and focuses particularly on asserted procedural irregularities.  I have read carefully through the transcript of events that occurred before Hughes FM on the morning of the hearing, and nothing to my mind indicates that she was anything other than abundantly fair to the applicant and making it clear to him of his options, the manner in which the case would be conducted, and the ramifications if he failed to continue in his attendance. 

2. Accordingly insofar as there is any suggestion in the material that there was procedural unfairness, in my view those suggestions are not merited, having regard to the manner in which the Federal Magistrate took him patiently and carefully through the procedures that were occurring, and indicated to him what would be likely to occur as the proceeding developed. 

3. Particularly she warned him of the problems that would be involved if he chose to leave and tried to dissuade him from that course, but it became apparent from his statements to the Federal Magistrate that these matters were falling upon deaf ears.  If he was not to be allowed to have his McKenzie friend, Mr N, assist him, if he was not allowed to be given an up-to-date statement of financial circumstances from the wife, then as far as he was concerned, his continued attendance at the proceedings was not appropriate and that he was going to leave the proceedings, which he then did, but not before leaving some evidence of what he said was his generosity towards his son in making some payments to him of some $2000 over recent times.  The matter then proceeded in his absence. 

Adult child maintenance

1. The orders relating to the elder child for ongoing adult child maintenance fall for consideration under a different piece of legislation.  They are determined under the provisions of the Family Law Act1975 (Cth) which oblige a parent to continue to pay maintenance for an adult child only in very limited circumstances as outlined in s 66L that provides the court may not make an order for child maintenance in relation to a child who is 18 years or over unless the court is satisfied that the provision of maintenance is necessary to enable the child to complete his or her education or because of a mental or physical disability of the child.

2. The evidence that was before the Federal Magistrate was that the child B was training to become a professional tennis player, and that over 2006 and 2007 he ought to be able to complete his training, with his coach saying:

   If [B] can be financially supported over the next two year period and participate in the world tennis scene to the level of his maximum capacity, he should be able to thereafter derive substantial income either from continuing to play in the professional tennis circuit or as a professional Tennis Coach like myself.

3. This evidence clearly influenced the Federal Magistrate who then did the necessary calculations, saying:

   I am prepared to accept that during 2006 [B] has the capacity to earn something in the order of $8,800.00 from coaching…and prize money in the order of $4,000.00, making a total of $12,800.00 or $246.00 per week.

   During 2007, on the basis of Mr [S]’s evidence, I find that [B] has the capacity to earn in the order of $10,000.00 from coaching and $10,000.00 from prize money, making a total of $20,000.00 or $384.00 per week.

   and she then compared those figures to the cost of keeping the child on the tennis circuit, and concluded that was in the range of $30,000 to $47,000 per year.  There was just a significant shortfall and she concluded that the sum sought of $180 per week could be met, and the husband had the capacity to meet the maintenance.

4. At the commencement of today's proceedings, I gave the husband leave to file a further affidavit from Mr S who was the child's coach.  I gave the leave to file the affidavit because it relates to a period that had already arisen before her Honour delivered her judgment.  Mr S deposed to the fact that B's tennis career appears to be no longer on the same track as it had been when he swore the affidavit that was relied upon by the wife in the proceedings before Hughes FM.

5. I should say before I turn to this that Mr Wilson correctly points out that the order the subject matter of the appeal has a built-in sunset clause.  The order, being number 4 of the orders made by Hughes FM on 7 August 2006, requires the payment of $180 per week by way of maintenance until the sooner of the following, (a) B ceasing his full-time training as a tennis player; or (b) 31 December 2007.

6. The evidence of Mr S is that B was training with him and was taken overseas in March-April 2006.  During that overseas tour, they played in various tournaments in Thailand and the US.  Mr S says as follows:

   During the tournaments played in Thailand, [B] couldn't play in 2 out of 4 due to poor rankings, whilst in the USA, where we played on 3 tournaments, he, to my surprise, beside poor performance, expressed total lack of discipline manifested thru (sic) misbehaviour such as: loss of motivation, outburst of anger resulting in him cracking racquets during the tournaments in Thai and the USA, buying brand-new mobile phones instead of racquets, and then consequently borrowing racquets from his colleagues and even from his opponents. 

   He also expressed inability to keep concentration on the game, discipline and self composure during the matches he has played.  He practically was regularly absent from team’s training sessions, and instead was more interested in pursuing private pursuits during those tournaments, rather than concentrating on improving his already poor form and rankings.

7. Mr S concludes:

   Since mid July 2006 [B] had ceased attending any training sessions at my Academy without any notice at all; ever since I have not been contacted by him.  As his coach up to that time, I can say that he does had (sic) an (sic) reasonable talent which was promising, but unfortunately it is my observation that he tended always for "easier ways", attitude which often tends to destroy the talent an (sic) sportsman may have.  I have also noted, during the duration of his training with me, that he can perform very well under pressure, e.g. in other words, his performance has to be extracted from him, that is he needs to be either "disciplined" -which is of course impossible at his now age, or having someone of "authority" perceivable to him in order to remind  him of the need to remain disciplined; this is however best achievable at the player's early stages of training in tennis -at their childhood, and thru (sic) parental control and guidance in achieving reasonable levels of self-motivation and self-discipline.

8. If that material had been made available to the Federal Magistrate, it is my view that the Federal Magistrate would have had to conclude that by mid-July 2006, it was no longer appropriate to make any order for the provision of adult child maintenance that was necessary for the child to complete his vocational training as a potential tennis coach.

9. Whilst there is some validity in Mr Wilson's argument that I should just leave the order stand and allow as a defence to any attempted enforcement of the order that it had ceased to have effect by the operation of an event foreseen by the order, I think it far easier to avoid such further proceedings by now making the order that should have been made by the Federal Magistrate at the time of the hearing, namely that the obligation to pay maintenance for the child B cease by the end of July 2006. 

Costs appeal

1. That then brings me to the appeal against the costs order that was made on 23 August 2006 that the husband pay costs in the sum of $19,301.75.  Her Honour made the order on the basis that the wife had been substantially successful in the proceedings before her, and that the conduct of the husband in failing to make proper disclosure had led the wife to conduct the proceedings in the manner in which they were conducted, and that there was evidence that came to light of a gross understatement of income.  It was that deceit that she said ultimately made it appropriate to make an order for costs.

2. Whilst the husband has indicated that he thinks it is unfair that he should pay the costs when he was not as unsuccessful as he might otherwise have been, it seems to me that it was quite within the discretion of the Federal Magistrate to make a costs order in the circumstances.  What troubles me is the quantum of the costs order that was made.  It seems to me that there is some misunderstanding of the effect of the rules.  The costs rules empower the Federal Magistrate to make an order for the costs that may be recovered on a party-party basis, and rule 21.02 of the Federal Magistrates Rules provides that:

   In making an order for costs in a proceeding, the Court may:

   (a)set the amount of the costs; or

   (b)set the method by which the costs are to be calculated; or

   (c)refer the costs for taxation under Order 62 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or

   (d)set a time for payment of the costs, which may be before the proceeding is concluded.

3. Rule 21.03 provides that:

   (1)      The Court may specify the maximum costs that may be recovered on a party and party basis:

   (a)by order at the first court date; and

   (b)of its own motion or on the application of a party.

4. Sub rule (3) provides that:

   (3)The Court may vary the maximum costs specified if, in the Court’s opinion, there are special reasons and it is in the interests of justice to do so.

5. My reading of that is that basically parties pay party-party costs up to the amount that is appropriate in accordance with the scale of costs prescribed by the Federal Magistrates Court Rules. The Federal Magistrate in these proceedings has not identified any special reason or why it is in the interests of justice that the costs exceed party-party costs per scale, and the bill which is annexed to the reasons for judgment does not appear on the face of it to be calculated in accordance with the scale for party-party costs.

6. There is for instance a suggestion that appropriate counsel's fees payable for a one day hearing in the Federal Magistrates Court should be assessed at $3000, and for an interim hearing at $1500.  These fees vastly exceed the appropriate sum that would be allowable on a party-party basis in the Family Court and whilst I cannot identify the appropriate fee for counsel at the Federal Magistrates level, the figures that were allowed seem to me to be entirely inappropriate in terms of a party-party basis.

7. Counsel tried to suggest that somehow I should read into the Federal Magistrates Court an advocacy loading basis to whatever fee is prescribed by the rules.  My understanding of the advocacy loading is that it is an amount allowed to the solicitor appearing as counsel for carrying out the advocacy tasks that would otherwise be met by counsel.  It is not something that counsel can add to counsel's fees to justify a higher fee.

8. I think, unfortunately as it may seem, the only proper way to have these costs dealt with is to have them assessed by the registrar on a party-party basis in accordance with the relevant rules, and to that extent the costs appeal should succeed.

I certify that the preceding sixty four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kay

Associate: 

Date:  6 March 2007