Colville and Colville

[2019] FamCA 796

FAMILY COURT OF AUSTRALIA

COLVILLE & COLVILLE [2019] FamCA 796

FAMILY LAW – ENFORCEMENT OF ORDERS – Where determination of sum payable – Where order made for payment – Where costs of and incidental to application to be as agreed or as assessed.

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) rr 19.18, 20.07

Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160
Collins & Collins (1985) FLC 91-603
Greedy & Greedy (1982) FLC 91-250
Hawkins & Roe [2012] FamCAFC 77
Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Luadaka & Luadaka (1998) FLC 92-830
Parke & the Estate of the Late A Parke (2016) FLC 93-748
Penfold v Penfold (1980) 144 CLR 311

APPLICANT: Ms Colville

RESPONDENT: Mr Colville

FILE NUMBER: PAC 5181 of 2013

DATE DELIVERED: 31 October 2019

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 30 September 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Kennedy

SOLICITOR FOR THE APPLICANT: LCI Legal

COUNSEL FOR THE RESPONDENT: Mr Cook

SOLICITOR FOR THE RESPONDENT: Adams Patners Lawyers

Orders

1. That it is declared that the sum payable to the wife by the husband pursuant to orders made 1 March 2017 is $66,704.11.

2. That the sum provided for in Order 1 be paid by the husband to the wife within 14 days from this date.

3. Upon noting that the wife is entitled to her costs of and incidental to the present application pursuant to Orders made 1 March 2017, it is ordered that such costs be in the sum as agreed within one month from this date or as assessed on a party/party basis with such costs payable within one month of agreement or assessment.

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 Colville & Colville 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 5181  of 2013

Ms Colville

Applicant

And

Mr Colville

Respondent

REASONS FOR JUDGMENT

Introduction

1. The application for determination is an application for enforcement arising from section 79 orders made as between the husband and wife on 1 March 2017.

2. Relevantly the orders, in summary, provided:

   a)that within seven days of the date of orders the husband and wife do all things necessary to authorise certain solicitors to pay the sum of $394,424.13 to the wife;

   b)(Order 4) that within 12 months from the date of orders the husband pay to the wife the sum of $658,000 and provided payment is made within such period no interest shall apply; and

   c)(Order 7) that in default of the husband paying the amount provided for within 12 months then in addition to such sum interest shall accrue at six per cent per annum from the date of orders until payment of the sum in full.

3. Otherwise, orders provided for various enforcement provisions in the event of default by the husband in his obligations.

4. The Family Law Rules 2004 (Cth) (“the Rules”) provide:

   RULE 20.07

   20.07  General enforcement powers of court

   The court may make an order:

   (a)      declaring the total amount owing under an obligation;

   (b)that the total amount owing must be paid in full or by instalments and when the amount must be paid;

   (c)for enforcement (see rule 20.05);

   (d)in aid of the enforcement of an obligation;

   (e)to prevent the dissipation or wasting of property;

   (f)for costs;

   (g)staying the enforcement of an obligation (including an enforcement order);

   (h)requiring the payer to attend an enforcement hearing;

   (i)requiring a party to give further information or evidence;

   (j)that a payer must file a Financial Statement;

   (k)that a payer must produce documents for inspection by the court;

   (l)dismissing an application; or

   (m)varying, suspending or discharging an enforcement order.

5. The wife commenced the present enforcement application by filing an Application in a Case on 14 May 2019. That application was amended by reason of an Amended Application in a Case filed 23 August 2019.  In the Amended Application in a Case the wife, in summary, sought the following orders:

   a)that orders 4 and 7 of the orders dated 1 March 2017 be enforced;

   b)that the husband pay to the wife:

   i)the balance of $64,000 that remains outstanding pursuant to Order 4 of orders made 1 March 2017;

   ii)interest of $9,085.81 payable for the period 1 June 2019 to 23 August 2019 and continuing at a daily rate of $108.16 pursuant to Order 7 of the orders made on 1 March, 2017; and

   iii)costs of the enforcement application as agreed or assessed.

6. In support of her application for enforcement, the wife relied upon her affidavit filed 23 August 2019 and the documents exhibited thereto.

7. In response to the wife’s application the husband filed a Response to an Application in a Case on 24 June 2019 seeking an order that the wife’s Application in a Case be dismissed and that each party pay their own costs.

8. In support of his Response the husband relied upon his affidavit filed 20 September 2019.

9. The nub of the issue between the parties is a dispute as to the amount outstanding pursuant to order 4 of the orders made 1 March 2017.

The wife’s evidence

1. The wife asserts that the husband failed to pay the principal sum payable to her under order 4 of the orders dated 1 March 2017 by the due date, 1 March 2018.  She acknowledges receipt of various payments from the husband after the due date as follows:

   19 September 2018            $    10,000

   31 December 2018             $    10,000

   8 June 2019  $    50,000

   9 June 2019  $    50,000

2. Otherwise, the wife’s solicitors pursuant to orders made 25 June 2019 by consent have received further funds totalling $562,907.52.

3. The wife thus asserts that she has received funds totalling $682,907.52. Such sum represents the initial capital sum of $658,000 plus a part payment of interest in the sum of $24,907.52.

4. The wife asserts that interest has accumulated on the capital sum in the period from 1 March 2017 to 31 May 2019 in the sum of $88,907.52. Thus as at 31 May 2019 there was $64,000 in accrued interest unpaid.

5. For the period from 1 June 2019 to 23 August 2019 further interest had accrued at the rate provided for in the sum of $9,085.81 with interest thereafter accruing at the rate of $108.16 per day.

6. There has been significant correspondence as between the parties’ solicitors in relation to the husband’s default in his obligations under the primary orders.

7. The husband’s solicitors by letter dated 17 December 2018 asserted that as at that date the husband had made partial payments totalling $30,000 to the wife.  For her part the wife acknowledges the first payment of $10,000 referred to above but asserts that a further payment of $20,000 was paid by the husband to her on account of child support arrears at that time and not in reduction of the capital sum due and owing under the primary orders.

8. The $20,000 direct deposit into the wife’s account on 15 October 2018 is curiously described as “deposit [Mr Colville] 600000 less 20000”. Yet Exh “F” in the proceedings reveals that the sum has been credited against the husband’s child support liability as a non-agency payment. In that event it cannot be regarded as a reduction of the capital sum interest outstanding.

9. Otherwise, the wife denies the husband’s asserted cash payments to her of $11,000 on 16 October 2018, $5,000 on 9 January 2019 and $8,000 on 22 May 2019 totalling $24,000 in cash. Such sums were clearly withdrawn from the husband’s account: Exh “E”. The wife for her part strongly denies the receipt by her of any cash monies from the husband.

The husband’s evidence

1. The husband acknowledges his primary liability to pay to the wife the further sum of $658,000 by 1 March 2018.

2. He asserts that he commenced making payments to the wife in September 2018 such payments being as follows:

   18 September 2018            $    10,000

   13 October 2018                 $    20,000

   16 October 2018                $     11,000

   30 December 2018             $    10,000

   9 January 2019                  $      5,000

   22 May 2019  $      8,000

   8 June 2019  $    50,000

   9 June 2019  $    50,000

   25 June 2019  $  562,907.52

3. The sums above italicised are said by the husband to be cash payments made to the wife in circumstances where she sought from him urgent financial assistance in relation to her business. Otherwise, the remaining payments are acknowledged by the wife but the payment of $20,000 on 13 October 2018 is asserted by her to be a payment in reduction of the husband’s child support liability.

4. The husband asserts that on or about 22 July 2019 his solicitors received correspondence from the wife’s solicitors. That letter comprises Exhibit “K” to the husband’s affidavit. The letter asserts that “subject to a reconciliation our client acknowledges that interest has been paid”. The correspondence then proceeds to raise the issue of the wife’s costs of pursuing outstanding monies and seeks a payment in respect of costs of $39,140.38 by 26 July 2019.

5. The husband acknowledges in his oral evidence long running property proceedings since 2013. He further acknowledges that he has been pressed in relation to monies outstanding to the wife since March 2018.

6. Notwithstanding his assertion that the payment of $20,000 in October 2018 was a payment in reduction of capital monies owing he acknowledges that such sum has been credited as against his child support liability.

7. He was somewhat circumspect in his evidence as to why in terms of the various cash payments asserted by him he did not require the wife to sign receipts acknowledging such payments. In circumstances of this long running litigation, his explanations are somewhat ingenuous, in particular, having regard to the fact that all other payments have been made by way of direct transfer to the wife’s bank account ensuring a clear and accurate record of such transactions.

8. On balance, the Court is not satisfied that such cash payments were made by the husband to the wife.

The amount outstanding

1. It is common ground between the parties that the payment by the husband of $562,907.52 on 25 June 2019 included the final payment of the capital sum outstanding pursuant to Order 4 together with a further sum of $24,907.52 on account of interest accrued pursuant to Order 7.

2. Order 7 provides:

   In the circumstances that the [husband] is in default of order 4 in that the husband fails to pay the amount to the [wife] within 12 months from the date of these orders the [husband] shall pay in addition to the amount of $658,000 interest on that amount calculated at 6% per annum from the date of the orders until payment of that amount in full together with all costs incurred by the applicant wife to recover the amount including the interest.

3. It is readily apparent from the provisions of order 7 that interest on the amount of $658,000 will cease to accrue as and from the date that the final payment of that capital sum is made. That date was 25 June 2019. As and from that date interest ceased to accrue.

4. As at 31 May 2019 it is common ground that interest had accrued on the capital sum in the amount of $88,907.52. As at 25 June 2019 further interest had accrued at the rate of six per cent per annum for a further 25 days in the sum of $2,704.11.

5. Thus the total interest accrued to 25 June 2019 is in the sum of $91,611.63. The part payment of interest in the sum of $24,907.52 reduced the interest owing to $66,704.11. That is the amount outstanding to the wife pursuant to the primary orders. 

6. Accordingly, it is appropriate to certify that the sum outstanding to the wife is in the sum of $66,704.11. It is appropriate that such sum be paid by the husband to the wife promptly. Orders will be made accordingly.

Costs

1. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to the proceedings shall bear his or her own costs.

2. That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.

3. Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: Penfold v Penfold (1980) 144 CLR 311.

4. The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They are as follows:

   a)the financial circumstances of each of the parties to the proceedings;

   b)whether any party has legal aid and the terms of any grant of aid;

   c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answers, questions, admissions of facts, production of documents and similar matters;

   d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;

   e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   f)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; and

   g)such other matters as the Court considers relevant.

5. In Collins & Collins (1985) FLC 91-603 (at 79,877), the Full Court described the discretion conferred by s 117 as being a “broad” one and held that the factors set out in s 117(2A) are not to be read in a restrictive way.

6. The Full Court in Hawkins & Roe [2012] FamCAFC 77 said:

   17.With respect to the application of the section, in Penfold v Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:

   1.Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".

   2.Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v Kent). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.

   (footnotes omitted)

   18.The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:

   … A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.

7. In Greedy & Greedy (1982) FLC 91-250 and Luadaka & Luadaka (1998) FLC 92-830, the Full Court made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters.

8. The provision relating to the calculation of costs is set out in r 19.18(1) of the Rules which states:

   Method of calculation of costs

   (1)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.

9. It was said in Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 at 162 that the purpose of the rule enabling an order for costs in a specific amount, without formal assessment or taxation is, commonly with other courts, to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”.

10. In Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 the Court said at [10] that the Court must act judicially, but that does not mean that it must exercise the power to award a lump sum in any “scientific or formulaic manner”.

11. Murphy J observed in Parke & the Estate of the Late A Parke (2016) FLC 93-748 at [130]:

    If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court”… The process does not “by its very nature … envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”…

12. As can be seen from the provisions of Order 7 the wife is entitled to her costs of enforcement.  The only issue is on what basis should such costs be determined.

13. The wife seeks that costs of and incidental to the enforcement application be “as agreed or as assessed”. Such is a proper basis for an application such as the present.

14. The husband for his part seeks an order that each party pay their own costs or in the event that a costs order is to be made that such costs be assessed on the usual  party/party basis.

15. There is no issue as to the costs order, such order was provided for in the primary orders subject to this application.

16. In all the circumstances, it is appropriate that such costs be assessed on a party/party basis either with quantum as agreed within one month from the date of order or, otherwise, as assessed.  An order will be made accordingly. 

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 31 October 2019.

Associate:

Date:  31 October 2019