Burns and Sellers (No 2)

[2019] FamCA 528

FAMILY COURT OF AUSTRALIA

BURNS & SELLERS (NO. 2) [2019] FamCA 528

FAMILY LAW – COSTS – Where the wife seeks that the husband pay her costs with respect to two interim applications – Where the husband seeks that the applications be dismissed – Where the wife was wholly successful in her interim application for a communication injunction – Where there is a financial imbalance between the parties – Where circumstances justify departing from the usual rule as to costs in relation to the communication injunction – Where circumstances do not justify departing from the usual rule as to costs in respect of the interim parenting application – Where costs order made in favour of the wife in respect of the communication injunction only.

Family Law Act 1975 (Cth) ss 117
Family Law Rules 2004 (Cth) r 19.18(1)

Burns & Sellers [2019] FamCA 322
D & D (Costs) (No. 2) (2010) FLC 93-435
Penfold v Penfold (1980) 144 CLR 311
PBF as Child Representative for AF (Legal Aid Commissioner of Tasmania) & TRF & LKL (2005) 33 Fam LR 123
Sellers & Burns (No.2) [2018] FamCA 1093

APPLICANT: Ms Burns

RESPONDENT: Mr Sellers

FILE NUMBER: PAC 5854 of 2016

DATE DELIVERED: 9 August 2019

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Hannam J

HEARING DATE: 16 April 2019

REPRESENTATION

SOLICITOR FOR THE APPLICANT: KARRAS PARTNERS LAWYERS

SOLICITOR FOR THE RESPONDENT: TAPERELL RUTLEDGE LAWYERS

Orders

1. That the husband pay the wife’s costs of and incidental to the communication injunction proceedings on a party/party basis as agreed within one month from this date or otherwise as assessed.

2. That the Application in a Case filed 25 January 2019 be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Burns & Sellers has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 5854  of 2016

Ms Burns

Applicant

And

Mr Sellers

Respondent

REASONS FOR JUDGMENT

Introduction

1. This judgment concerns two separate applications for costs made on behalf of the wife engaged in parenting and property proceedings with her former husband. The first application relates to the wife’s costs related to the husband’s application for various interim parenting orders (“the interim parenting application”). The second is an application for costs associated with an application made by the wife seeking a restraint on the frequency and content of the husband’s communication with her lawyer (“the communication injunction”).

2. The question for me to determine is whether there are circumstances that justify departing from the usual rule that each party shall bear his or her own costs with respect to either or both applications.

Background

1. The parties have been involved in highly acrimonious property and parenting proceedings involving their two young children since December 2016.

2. On 18 December 2018 I delivered judgment[1] determining the interim parenting application initiated by the husband. In summary the husband sought to restrain the wife from leaving the children in the sole or unsupervised care of her sister, for the wife to submit to urinalysis and hair follicle testing and orders regarding the party’s time with their two young children (“the children”) over Christmas. The wife responded to this application seeking orders in relation to the children’s Christmas school holiday time with the husband and that she be permitted to travel with the children to the Country LL for a skiing holiday. Orders were made largely in the terms sought by the wife.

   [1]Sellers & Burns (No.2) [2018] FamCA 1093.

3. On 18 January 2019 I delivered judgment[2] in relation to the wife’s application seeking the communication injunction which had been opposed by the husband. The application was determined by the making of orders as sought by the wife.

   [2]Burns & Sellers [2019] FamCA 322.

4. The wife’s applications for costs are made in two Applications in a Case filed on 23 and 25 January 2019. In his response the husband seeks that both applications for costs be dismissed.

5. The wife relied on her written submissions, the two judgments, a Financial Statement filed by the husband on 24 October 2018 and her Financial Statement filed 15 April 2019. She also filed submissions in relation to the costs applications in accordance with directions.

6. The husband did not file written submissions and instead relied on oral submissions at hearing.

The law

1. Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) sets out the general rule as being that each party is to bear his or her own costs. That principle is however subject to subsection (2) which gives a Court a discretion to make an order for costs if there are circumstances that it in the opinion of the court justify it in doing so. Any such order for costs pursuant to section 117(2) is “as the Court considers just”.

2. The High Court in Penfold v Penfold[3] indicated that the circumstances justifying an order for costs need not be exceptional, but they must, of themselves, be sufficient to justify making the order.  Therefore, there is no additional or special onus on an applicant seeking an order for costs other than the Court finding justifiable circumstances to make such an order.

   [3] (1980) 144 CLR 311.

3. Section 117(2A) sets out the relevant matters, if any are applicable, to which the Court is to have regard in considering an order for costs.The matters relevant in this case are considered as follows. 

The financial position of each of the parties to the proceedings

1. The wife is currently unemployed and states her occupation as homemaker. According to her Financial Statement she receives government benefits and maintenance/ child support from the husband to the amount of $785 per week.

2. The wife discloses weekly expenditure of $4,882 consisting of, amongst other things, $1,700 in rent, $140 in health insurance and $484 in food.

3. It is submitted on behalf of the wife that the husband has been reticent in providing adequate disclosure as to his current financial circumstances. His most recent Financial Statement filed 24 October 2018 discloses a total average weekly income of $2,328. The husband deposes to having an unpaid present entitlement from a family trust to the value of $182,500. The husband also discloses that he has an interest in a piece of real estate, several companies and trusts but in relation to most of his interests he indicates that the value of his share is not known.

4. The husband discloses weekly liabilities of $4,821 which includes, amongst other things, $1,600 in rent, $129 in health insurance, $250 in loan repayments, $175 in credit card repayments, $335 in child support and $400 for food.

5. The wife submits that it is relevant that the husband has historically failed to disclose sufficient financial information to enable a court appointed forensic accountant to investigate and value his commercial interests. Further, the wife submits that the husband failed to comply with directions from a Registrar of the court to issue subpoenas to assist the court appointed expert. This resulted in the wife subsequently issuing subpoenas at her own expense, the husband then filing objections, and at a subpoena hearing such objections were dismissed. The wife submits that in these circumstances, the court should be open to find that the husband’s financial circumstances are superior to that of the wife.

6. Despite the very high level of claimed liabilities and uncertainties associated with the husband’s current assets and financial resources, I am satisfied (placing weight in particular on the husband’s income and access to other financial resources) that he is in a superior financial position to that of the wife.

7. Even though the husband maintains that the applications for costs should be dismissed as insufficient information is known about the parties’ financial circumstances, financial impecuniosity is, in any event, no bar to the making of an order for costs.[4]

   [4]D & D (Costs) (No. 2) (2010) FLC 93-435.

The conduct of the parties to the proceedings in relation to the proceedings

1. It is quite extraordinary that the wife’s solicitor received such a high volume of offensive and scandalous communication from the husband regarding the proceedings that the wife was compelled to seek an order to restrain the husband in order to prevent her incurring unnecessary solicitor costs in responding to this communication.

2. The husband’s conduct throughout the proceedings for the communication injunction is in my view a weighty factor in relation to costs in respect of the communication injunction. That application was given a first return date on the same date that an appeal in relation to other orders in these proceedings was listed before the Full Court. Accordingly the wife’s solicitor appropriately attempted to communicate with the husband to seek his consent to adjourn the first court event in the injunction application. The husband did not consent to such an adjournment, and then as anticipated failed to attend at the first return date of the application. Despite being served with the application and being ordered on the first return date to file a Response, the husband failed to do so and then sought to further delay the proceedings by seeking an adjournment of the date fixed for hearing of the wife’s application.  For this reason I attach some weight to the husband’s conduct in relation to the injunction application in determining that costs application.

3. There are some aspects of the husband’s conduct in respect to his interim parenting application which are also of concern. In particular, he initially sought an order requiring the wife to submit to screening for drug use but at the hearing of that application did not press for that order.

4. However, I am not satisfied that the husband lacked bona fides in relation to his interim parenting application or that his conduct should attract criticism. The parties were unable to agree about the arrangements for the children over the Christmas school holiday period and this matter was a genuine live issue requiring resolution by the court at the time the husband filed his interim parenting application. For this reason, I do not attach particular weight to the husband’s conduct in relation to his interim parenting application.

Whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. The wife was wholly successful in her application for a communication injunction as orders were made exactly in the terms sought by her.

Conclusion

1. Attaching weight to the husband’s conduct in relation to the injunction proceedings and as he was wholly unsuccessful in that application and appears to be in a superior financial position, I am satisfied that the usual rule as to costs should be displaced in relation that application. A costs order will accordingly be made in favour of the wife.

2. Rule 19.18(1) of the Family Law Rules 2004 (Cth) (“the Rules”) states that the court may order that a party is entitled to costs:

   (a)of a specific amount;

   (b)as assessed on a particular basis (e.g. lawyer and client, party/party or indemnity);

   (c)to be calculated in accordance with the method stated in the order; or

   (d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.

3. The wife seeks that her costs be paid on a party/ party basis or in the alternative as quantified in accordance with the costs estimate annexed to her written submissions. Rather than make a determination in relation to the costs estimate, I am satisfied that it is appropriate to order that the costs be paid on a party/ party basis in accordance with the method stated in the order.

4. I am not satisfied that the usual rule for costs should be displaced in relation to the interim parenting application. As discussed, that application came about in circumstances where the parties had not agreed for arrangements for the children for the Christmas school holiday period which was looming and the court’s intervention was necessary to determine this issue. Further, neither party was wholly successful in relation to that application. Although I am satisfied that there is a financial imbalance between the parties and there is nothing to prevent any one factor being the sole determinant for an order for costs[5], I am not satisfied that this factor alone should displace the general rule. For this reason, the wife’s application for costs in relation to the interim parenting application is dismissed.

   [5]PBF as Child Representative for AF (Legal Aid Commissioner of Tasmania) & TRF & LKL (2005) 33 Fam LR 123.

5. The orders that I make are set out at the forefront of these Reasons for Judgment.

I certify that the preceding twenty eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hannam delivered on 9 August 2019.

Associate: 

Date:  9 August 2019