C & C (No 2)
[2007] FMCAfam 54
•5 March 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| C & C (No.2) | [2007] FMCAfam 54 |
| FAMILY LAW – Application for costs under the Family Law Act1975 – section 117(2A) factors considered. |
| Federal Magistrates Court Rules 2001, Part 21, r.21.02 Family Law Act 1975 (Cth), ss.60CC(2)(b), 117(1), 117(2), 117(2A)(a), 117(2A)(b), 117(2A)(c), 117(2A)(d), 117(2A)(e), 117(2A)(f), 117(2A)(g) |
| RNL & RHB [2005] FMCAfam 520 Brown v Brown (1998) FLC 92-822 Cooper & Cooper [2006] FMCAfam 411 Rice v Asplund (1979) FLC 90-725 Kelly and Kelly (No 2) (1981) FLC 91-108 Telfer and Telfer (1996) FLC 92-688 |
| Applicant: | C |
| Respondent: | C |
| File number: | SYM 3281 of 2004 |
| Judgment of: | Pascoe CFM |
| Hearing dates: | 19 & 20 June; 10 & 11 August 2006 |
| Date of last submission: | 24 November 2006 |
| Delivered at: | Sydney |
| Delivered on: | 5 March 2007 |
REPRESENTATION
| Counsel for the Applicant: | Nil |
| Solicitors for the Applicant: | Nash Allen Williams & Wotton |
| Counsel for the Respondent: | Ms K Reynolds |
| Solicitors for the Respondent: | Vizzone Ruggero & Associates |
ORDERS
That the Respondent mother’s application for costs be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYM 3281 of 2004
| C |
Applicant
And
| C |
Respondent
REASONS FOR JUDGMENT
The proceedings
This case concerns an application to the Court by the Respondent mother, that the Applicant father pay her costs to the proceedings heard on 19 & 20 June and 10 & 11 August 2006. The substantive proceedings were commenced by the father on 8 December 2005 and concerned the welfare of the parties’ two children, C born 1992 and J born 1998 (the children).
On 20 September 2006, I handed down written Reasons for Judgment.
Short background
The parties married on 10 April 1993 and remained living under the same roof until 20 September 2003. A Decree Nisi was pronounced on 20 May 2004.
Final parenting and property orders were made by consent in the Family Court of Australia on 26 November 2003. Those orders provided for the children to live with the mother and to spend regular time with the father.
On 12 January 2005, the father commenced proceedings in this Court seeking an order that C live with him.
On 20 July 2005, there was a consent order change to the living arrangements of C (for him to live with the father).
On 8 December 2005 there was a commencement of the proceedings in relation to J’s living arrangements.
At the time of Judgment, in the current proceedings, no application for costs was made. On 26 October 2006, I was made aware of the mother’s application and I directed my Associate to call for written submissions addressing the issue of costs. The mother relies on her written submissions received by facsimile on 10 November 2006.
The father relies on his written submissions received by facsimile on 24 November 2006.
The law as to costs
A party to proceedings is entitled to make an application for costs under rule 21.02 of the Federal Magistrates Court Rules 2001 (the Rules).
The starting point for any application for costs in family law proceedings is that each party should bear his or her own costs pursuant to section 117(1) of the Family Law Act 1975 (Cth) (the Act). That general rule is expressed to be subject to section 117(2), and must yield whenever the Court finds that there are circumstances justifying the making of a costs order (RNL & RHB [2005] FMCAfam 520 at [169]-[170]).
If the Court finds that there are circumstances justifying an order for costs, the Court is obligated to exercise its discretion having regard to the various matters that are listed under subsection 2A. A costs order can be made on the basis of one or a combination of factors (Brown v Brown (1998) FLC 92-822).
The mother submits that the father should pay her costs of defending the proceedings on four main grounds: firstly, pursuant to section 117(2A)(a), she refers to the financial circumstances of the parties; secondly, pursuant to section 117(2A)(c), she refers to the father’s conduct in relation to the proceedings; thirdly, pursuant to section 117(2A)(d) she submits that the proceedings were not necessary because of any failure by the mother to comply with previous court orders; and fourthly, pursuant to s.117 (2A)(e), she refers the court to the father’s lack of success in relation to the proceedings, that is, his submission that J live with him, and his allegation that the mother had sexually abused J.
The father submits that costs should not be awarded against him on five main grounds. Firstly, the father refers to his financial circumstances, and the fact that he was not legally represented. Secondly, he refers to the mother’s conduct in relation to the proceedings, and the failure of the mother to file material on time. On this point, he submits that he has complied with all Court Directions in relation to the filing and production of material, and complied with all other Court directions. Thirdly, the father submitted that neither party had been wholly unsuccessful in the proceedings. Fourthly, the father submits that his application was partly necessitated by the mother’s contravention of previous orders. Fifthly, the father sought to rely on section 117(2A)(g); that is, “such other matters as the Court considers relevant”, and drew the Court’s attention to the important public policy reasons as to why orders for costs should not be made in this category of case. He submitted that it is “adverse to public policy for costs orders to be made in relation to children’s proceedings, except in the most exceptional circumstances.”
The section 117(2A) criteria:
I now propose to turn to the relevant matters under section 117(2A):
The first matter is the parties’ financial circumstances. Evidence of disparity in the financial circumstances of the parties may justify an order for costs (Kelly and Kelly (No 2) (1981) FLC 91-108).
I note that both parties refer to the financial circumstances of S, the father’s present wife. There is, however, no evidence before the Court as to her financial circumstances or their relevance, and I decline to have regard to them.
The father is a self employed window tinter. He has worked in this industry for about 15 years. At present the father is contracted with a company and has been contracted with them since about August 2005. He conceded in cross examination that he earns approximately $1,000 gross per week. However, this is dependent on the hours he works. In his written submissions the father states that his income over the past two months has varied between $550 and $750 per week.
As the father is a contractor, he does not receive superannuation benefits nor is he entitled to worker’s compensation should he be unfit for work. He must make his own provision for income tax. He pays compulsory business insurance in the amount of $50 to $70 per month. He travels to Sydney to work and is responsible for meeting his own petrol expenses in the amount of $100 per week.
The father purchased his current home in late 2004. He is the sole registered proprietor. It is subject to a mortgage. The father’s household consists of C and his present wife, S, whom he met in late 2003 and married on 22 August 2004.
According to the father’s submissions his liabilities include:
Credit card debt to Westpac
$3000
Debt to G
$7800
Loan to Westpac
$8000
Debt to M
$55,000
Mortgage
$216,000
Total
$289, 800
The father states that his weekly expenses include:
Medical/Hospital Fund
$15
Gas
$20
Chemist/pharmaceutical
$20
Car Maintenance
$30
Electricity
$30
Household supplies
$40
Clothing & Shoes
$40
Telephone
$60
Child support
$126
Petrol
$140
Visa/Bank card payments
$140
Hire purchase payments
$189
Food
$200
Mortgage
$330
Total
$1380
The father’s weekly expenses appear to be exaggerated, especially as he is not paying child support. I find that the father has a variable income of approximately $1,000 per week, with expenses of approximately $1,100 per week. He faces substantial debt repayment on his mortgage.
Since the date of Judgment, the father has placed his home on the market, with a value of $380,000 to $420,000. I am not aware of the value of any other assets of the father apart from the plasma television, which at the time of purchase was valued at $4,000.
The father states in his written submissions that by way of property settlement the mother received assets of about $322,105.43 and the father received about $190,052.56.
In late 2004, the father’s brother, M, loaned the father $55,000 for home renovations. He also borrowed about $7,500 from his father, G for legal costs. At the hearing, the father said that although he had a complete falling out with his brother he was obligated to repay the money within 2 years. In doing so, he told the Court that he may have to re-finance his affairs.
In late 2005, M asked the father to repay the money. The money was not repaid. In December 2005, M commenced legal action against the father. That action resulted in separate Court proceedings in July 2006, where M was unsuccessful in recovering any money from the father. In his submissions, the father states that M was only unsuccessful in seeking an early repayment and it was not put in evidence that M was not entitled to that repayment.
In the absence of evidence to the contrary, I find that the father has no enforceable obligation to repay this money.
The mother is a single parent and works part time as an Accounts Manager in a family business. She earns approximately $27,000 per annum, which equates to $451 gross per week. She and J reside in a three bedroom unit at C. I have before me no information as to the value of the mother’s unit and only very limited information as to her circumstances.
On 22 November 2006, the Court, by facsimile, received an affidavit sworn by the mother which gave more detail as to her earnings. I note that the affidavit was filed out of time and that leave was not sought. Given that the father filed his material in accordance with the timetable, it would be unfair to him to admit the further affidavit of the mother. I decline to do so.
I accept that the father is primarily responsible for C’s day to day financial needs. I also accept that the mother, since October 2005, has been solely responsible for meeting J’s day to day financial needs. She has been without child support from the father.
It would appear that both parties do not enjoy comfortable financial circumstances. The father’s income would appear to be greater than the mother’s but he has a significant debt burden.
On the limited evidence put to the Court, I am not satisfied that there is sufficient disparity in the financial circumstances of the parties to justify an order for costs on this basis.
The second matter the Court must consider is section 117(2A)(b), which requires the Court to have regard to whether any party to the proceeding is in receipt of legal aid.
As neither party was, or is, in receipt of legal aid, this is not a matter open for consideration.
I shall now turn to section 117 (2A)(c), which requires the Court to have regard to the conduct of the parties 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, admissions of facts, production of documents and similar matters.
On 20 July 2005, when this matter came before the Court for final determination, final parenting orders were made by consent. Agreement was reached largely on the basis of the expert report of Dr Carolyn Quadrio[1]. The parties, with the assistance of their legal representatives and the Independent Children’s Lawyer, agreed that it was in C’s interests to live with the father and for J to remain in the mother’s primary care.
[1] See family report dated 18 July 2005. Dr Quadrio prepared a further report dated 30 May 2006.
The father’s application of 8 December 2005 came before the Court within 4½ months of the consent orders being made. The father sought to change where J lives on the basis that J had been sexually abused by the mother.
The mother submits that the Court ought to have regard to the fact that the father pursued the proceedings less than 5 months after consent orders were made. She submits that the “bringing of proceedings so soon after consent orders were made may be seen as vexatious in itself.” The mother also submits that the Court should have regard to the father’s handling of the alleged abuse, his attitude to the mother, and the serious allegations he has made against the mother. In there totality, these submissions go to the question of whether or not the father had bona fide grounds for bringing the proceedings, which I shall deal with pursuant to section 117 (2A) (g); “such other matters as the Court considers relevant.”
I note, for present purposes, that allegations of sexual abuse are not the only allegations that the father has made against the mother. The father abandoned any claim that the mother had forged his signature to issue passports to each of the children after being referred to the affidavit evidence of Ms J, filed 10 August 2006. Whilst I am sympathetic to the mother’s frustration as to the father’s conduct in relation to this issue, it did not cause the mother significant cost, undue delay, and was in no way central to the proceedings. The matter was eventually dropped by the father. Had he made the deliberate decision to pursue the matter further at trial, knowing that there were no grounds to substantiate his allegation, then my view on this issue would be different for it would be evidence of conduct that showed a stark disregard for the court and of the potential impact on the mother and his children.
The father submits that the Court ought to have regard to the mother’s failure to file material on time, and her filing of new material during the course of the hearing. The parties were ordered on 3 February 2006 to file any material by 26 May 2006. The mother’s material was filed out of time. I also note that the mother served new material on the father during the course of the proceedings. However, I do not consider that this affected the course of the trial.
The father was unrepresented but was given every opportunity to present his case. He did not delay the trial in any way.
I find that the conduct of neither party lengthened the proceedings, or caused undue delay to the inconvenience of the other. Accordingly, I find that there are no grounds for me to make an order for costs under section 117(2A)(c).
I now turn to section 117(2A)(d), which requires the Court to have regard to whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court.
The father submits, in relation to the issue of costs, that his application was also necessitated by the mother’s failure to comply with orders. At the commencement of the hearing, both parties agreed to proceed only with the substantive application and accordingly withdrew their contravention applications.
At paragraph 135, I found that it was appropriate for the mother to not make J available for contact after the allegations given the intentions of the father to have his sister interview J about the allegations. In relation to the mother’s interstate trip in June of 2006, I found that whilst in normal circumstances that would be taken to be evidence of a parent failing to fulfil his or her obligations to facilitate and encourage contact between a child and a parent, it would not have occurred had the father been willing to negotiate alternative contact arrangements.
The father has failed to comply with orders to pay child support. He states that he is waiting for the Child Support Agency to audit the mother. Whilst the mother refers to this fact in her submissions dealing with the financial circumstances of the parties, she does not touch upon it pursuant to section 117(2A)(d), and accordingly, it would not appear that her application was necessitated by this factor.
On balance, I am not satisfied that either party’s application was necessitated by the failure to comply with orders.
I next turn to section 117(2A)(e), which requires the Court to have regard to whether any party to the proceedings has been wholly unsuccessful in the proceedings.
It is submitted by the father that neither party was unsuccessful in relation to J on the basis that the Court preferred the proposals of the Independent Children’s Lawyer. I reject this submission. Whilst the Court preferred the proposals of the Independent Children’s Lawyer, the Court notes that the mother did not oppose those orders, other than the proposal for C to remain with the father. The father proposed that J live with him on the basis that J had been sexually abused by the mother.
The Court found against the father in his application. I found that there was no cogent reason to change the time J spent with the mother.
In relation to C, I am of the view that neither party has been unsuccessful as the question of where C lives is conditional upon the father fulfilling certain obligations. That will be a matter the Court will have regard to in March. It should be noted, however, that the Court is not critical of either party for entering into the consent orders of 20 July.
Dr Quadrio’s new evidence, which suggested that C was in fact ambivalent about living with the father, only emerged at the trial. The Court is not critical of the mother for seeking to re-instate the original order given the manner in which Dr Quadrio’s new evidence came to light. I note that I did consider changing C’s residence in view of the new evidence and the father’s conduct, however, in the end I was guided by the recommendations of the Independent Children’s Lawyer.
Whist the father was unsuccessful in satisfying the court that J had been sexually abused, I am satisfied that J did make certain statements to the father, I am not sure what motived J, and certainly the manner in which the allegations were pursued by the father was, at times, inappropriate and lacked insight as to the possible effect on J.
The allegations were, however, potentially very serious and as I have previously stated, the father had some basis upon which to base his claims. Given this, the fact that the father was unsuccessful at trial is therefore not in itself enough for me make a costs judgment against him.
I now turn section 117(2A)(f); that is, 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.
I am not aware of any formal written offer to settle the proceedings or any such terms of any offer.
The Court may also have regard to other matters it considers relevant under section 117(2A)(g). In Telfer and Telfer (1996) FLC 92-688, Lindenmayer J at (83,139) described paragraph (g) as an “all encompassing paragraph which was an independent source of discretion and its effect is not limited by the particular matters set out in the previous paragraphs.”
The father submits that there should be no order for costs as the proceedings involved children’s issues, and to do so would be contrary to public policy, unless there are exceptional circumstances, as the fear of a costs order is likely to adversely influence persons in bringing an application in the best interests of the children.
I temper the father’s submission with the acknowledgment that it is important that orders in relation to family law proceedings be finalised, and not lightly re-visited (Rice v Asplund (1979) FLC 90-725).
In normal circumstances, the Court would not lightly re-visit the children’s parenting orders so soon after the making of consent orders in light of the principles espoused in Rice v Asplund. However, as the father alleged sexual abuse, it was appropriate to re-consider J’s living arrangements because such an allegation, if proven, would be a significant or substantial change in circumstance.
The mother submits that “the bringing of proceedings so soon after consent orders were made may be seen as vexatious in itself.” She further submits that the father was more concerned to “bully J into making an allegation against the mother than he was to care for J and his feelings.”
The allegation of abuse stems from J’s allegation on the 18th November 2005 that his mother had been sexually inappropriate to him. This was disclosed to his father and step-mother, S. Subsequent to this disclosure, the father contacted the Department of Community Services (DOCS). I also have on evidence before me, an email that he sent the mother in relation the abuse. It does not seem that J has been willing to repeat these allegations beyond speaking with his aunt, G.
The response from DOCS was that there was no information to substantiate the allegations, but that this did not mean that nothing ever happened.
The need to protect children from physical or psychological harm is a primary consideration under section 60CC(2)(b) of the Act. Allegations of abuse, whatever its manifestation, is taken very seriously by the Court. Sexual abuse, if proven, would be a changed circumstance, which would justify the court interfering to change original orders (Rice and Asplund).
Whilst DOCS did not have sufficient evidence to pursue the sexual abuse allegation further, and whilst the Court did not make a positive finding of sexual abuse, this should not in itself justify criticism of the father in bringing the proceedings. His grounds in bringing the abuse allegations were not completely without merit, and he had some evidence, primarily J’s comments, upon which to base them. Although there may have been other factors motivating his objective in bringing proceedings against the mother, his concern for J was clearly a strong and motivating ground. I am not satisfied that there is sufficient evidence to suggest otherwise.
The mother submits, “justice requires that the father have the penalty of costs imposed upon him.” I have much sympathy with the mother’s position. She has been put to considerable expense and emotional pain in defending the totality of allegations made against her. However, I can think of no more inappropriate situation in which to order costs as a punishment than litigation involving serious issues that go to the welfare of children.
Conclusion:
The basis for making or dismissing a costs order may be upon any one factor. I have balanced all the factors under section 117(2A) of the Act, and have attached particular significance to the fact that ultimately, these proceedings are not simply about children’s issues, but an issue of even graver significance; that is, the alleged sexual abuse of a child.
Having regard to all of the evidence, I am of the view that the father’s conduct was not such as to warrant an order for costs. Some of the mother’s behaviour, especially in having J sleep in her bed whilst on holiday with herself and C, may have further fuelled the father’s determination to make the allegations as to sexual abuse. At one level, he had no other remedy available to him other than to seek to change J’s living arrangements.
There is an important distinction between civil proceedings, where costs usually follow, and Family Law proceedings. The distinction recognises that parties should not be discouraged from pursuing a claim, where they believe that grounds justify the Court interfering; particularly where the best interests of a child is at stake. To do so would be contrary to objects of the Act.
Despite the mother’s occasional lack of judgment, I find that the mother is a good parent to both J and C, and that their time with her and with her family is positive. I also accept that the mother was put to considerable expense in defending the father’s applications and the serious allegations therein. I also acknowledge that she was not in a position to defend such serious allegations without legal representation. She has been put in an almost impossible position. I am not satisfied, though, that circumstances have been established, which would justify me departing from the general rule that parties bear their own costs in family law proceedings. However, I wish to put firmly on record that were any further application to be made by the father to change the living arrangements of either child, without cogent and reasonable grounds, it is highly likely that costs will be awarded against him.
I certify that the preceding seventy-one (71) paragraphs are a true copy of the reasons for judgment of Pascoe CFM
Associate: M. Azzopardi
Date: 2 March 2007
3