Conway and Clivery

[2007] FamCA 1306

FAMILY COURT OF AUSTRALIA

CONWAY & CLIVERY [2007] FamCA 1306

FAMILY LAW – COSTS – Costs Application by husband that wife pay his costs following a hearing for residence

Family Law Act 1975 (Cth)

APPLICANT: Mr Conway

RESPONDENT: Ms Clivery

FILE NUMBER: CAF 551 of 2002

DATE DELIVERED: 26 March 2007

PLACE DELIVERED: Canberra

JUDGMENT OF: Waddy J

HEARING DATE: 26 March 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Cooper

SOLICITOR FOR THE APPLICANT: Messrs Barry & Nilsson

COUNSEL FOR THE RESPONDENT: Mr Foster

SOLICITOR FOR THE RESPONDENT: Anne Marie Proctor & Associates

Orders

1. The mother is to pay the father's costs as assessed at $7,500.

2. The mother is to be at liberty to set off orders in her favour (for costs, repayment of travel expenses and interest thereon) which I assess at $5,600.

3. The balance of $1,900 is to be paid by the mother to the father within seven days.

4. Liberty to apply on seven days notice on all orders made by me on application to my associate.   

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

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAF 551 of 2002

MR CONWAY  

Applicant

And

MS CLIVERY

Respondent

REASONS FOR JUDGMENT

1. In this matter Mr Foster of counsel appears for the respondent mother,

   
   

   Mr Cooper, solicitor, appears for the applicant father.

2. The application with which I am dealing is one for costs and is brought following the conclusion, if there ever can be a conclusion in this matter, of a ten day hearing before me prior to orders made by me on 1 September 2005 and for the reasons given.

3. (The chronology filed on behalf of the respondent mother contains many entries after 1 September 2005). 

THE BACKGROUND

1. Whilst I have been greatly assisted by both Mr Foster and Mr Cooper in distilling the orders, I only wish to say that the application is brought in the context of a most unusual matter.  In the principal matter I read the correspondence by email between the parties, and I can remember thinking at the time it was nothing of which either could or should be proud.

2. The major issues in the matter concerned the wellbeing of the child of the parties, who had exhibited troubled conduct, both in her father's household and her mother's household.  She has played up at school.  She has played up a lot.  She is clearly, on occasions, a disturbed little girl.

3. On the other hand, she is also apparently intelligent, charming, likeable.  Her parents both adore her, and she loves her mum and she loves her dad.

4. The issue of bruising was most unusual.  The mother denied it, or denied seeing it.  One expert from Melbourne found some 25 bruises on the child at one time.

5. The general evidence of the professionals in Canberra, however, was overall in the mother's favour.  But it was based upon their belief in what the mother had told them.  The ten day trial was extremely long and the evidence flowed generally, very much in the mother's favour for approximately the first eight days or so.  I cannot now recount the exact time.

6. The mother strenuously denied on oath striking the child, following an order from my brother Faulks DCJ, that neither party should physically chastise the child.  Towards the end of the trial the mother’s counsel called the mother's sister.  She described the recent misconduct of the child, and the smacking of the child by both herself and the mother, and so on.  She cogently contradicted her sister’s evidence.  At this point the mother's credibility was shredded.  I gave a long and detailed judgment, going over many allegations the child had made, some of which were somewhat bizarre in their nature. 

7. For instance, the mother had a partner, (whom I think she has since married and there is a child due in July).  The child had alleged that the partner had hit her with a hammer.  In an ordinary case I would have thought that might have been a jest during fun time, but the mother denied it had ever happened.  So, too, it was denied by the partner, against whom I made no findings at all.  It seemed to me that the other allegations, about a pet rabbit and so on, and being hit, with bruises on her back, some of an extensive nature, led to findings in the end that the child's best interests would be served, in my opinion, (and I have no doubt many others may possibly disagree, probably including the mother, and I suspect by some of the professionals in Canberra), by the child being best placed with the father and living with him in Queensland, whilst visiting the mother frequently.

8. Due to what had occurred, supervision was ordered.  That was organised by the Office of the Chief Executive.  Only this morning I have discharged the Office of the Chief Executive and removed the provision for supervision.

THE EVIDENCE

1. In this application for costs the mother has put on an extensive affidavit, to most of which I was not referred.  But in part I was referred to the report of Psychologist Dr D.  And Dr D, in accordance with the orders of the Court, which I think were consented to, certainly saw the mother for some treatment goals set out in that report.  They were to assist the mother in working through her distress regarding the Court’s order, that the child live with the father; debriefing regarding the Court process and its outcome; attending to adjustment concerns regarding coping with the loss of her daughter; exploring and adjusting maladaptive coping styles relating specifically to managing conflict and contact with the father; managing emotionally charged situations involving the daughter; using deceit as a means of avoiding conflict or perceived negative consequences; and finally anger and parental management.

2. Dr D then gives a section on treatment, process, and outcome.  Eventually the mother was able to accept the Court orders, supportive and constructive guidance of addressing areas of concern, monitoring and understanding the maladaptive coping styles, and it is said at page 3 of the report counselling focused on the following areas:

   The mother displayed a tendency to use deceit, avoid confronting perceived negative consequences of her actions.  She understood this to be wrong and was remorseful regarding her behaviour in Court.  She was able to understand and accept that her behaviour had had serious consequences, making use of reflection and reasoning to better guide her behaviour against others.  This was due to feeling overwhelmed in certain situations where she felt helpless.  She tended to adopt ways of coping, but did not make use of available supports.  

3. The good doctor gave an assessment that the mother and father had a history of relating that is largely reactive, self-interested and antagonistic, with no apparent ability to put their daughter's concerns above their own. 

4. That is a sad circumstance for these two parties, who individually are charming, able, and to outsiders, no doubt, highly attractive partners.  Both have re-partnered, one has had a child, I think, and with the other one the child is coming.  It just seems to be that their own relationship descended to a level of toxicity which is rare even in this Court, and as I say, the emails I read that passed between them, did credit to neither.

5. In such a circumstance, I am really quite relieved to see Dr D's report, because I found it hard to understand the mother's conduct, both before me and otherwise.  In conclusion Dr D says that:

   [The mother] has accepted the consequence of her actions, as well as trying to deal with the difficulties involved in having very limited contact with her daughter.  She has managed to change belief, attitude and behaviours related to areas of concern.

6. Well, that is very good news for her happiness in life, for care of the child and no doubt for her partner. 

7. In terms of an application for costs whilst not wishing to underestimate the amount of deceit involved, it seemed to me that this goes some way to explaining why the mother pursued the course of conduct she did.  And whereas someone else might have been able to say, "Look, this child is extremely difficult to deal with.  Yes, I have broken the orders.  Yes, I have hit her.  Yes, I do need help.  Yes, please help me", in the antagonistic situation in which she found herself, with a former partner who was on occasion ready to take advantage of her weakness, (but not early on - I remember early on nothing happened for a year after the first incidents), she was not.  It seems to me that goes some way to explaining her conduct before me and an alternative to outright deliberate lies, adopted and calculated to deceive the Court.  It is no excuse, but it is a possible explanation.   

8. Now, the relevance of all that is that reliance has been placed in this application on s.117AB of the Family Law Act. This provision became operational on 1 July 2006, and it is conceded by counsel for the mother that it applies.

THE LAW

1. Section 117AB of the Act is headed:

   Costs where false allegation or statement made.

2. It reads:

   117AB(1). 

   This section applies if :-

   (a)Proceedings under this Act are brought before a Court; and

   (b)The Court is satisfied that a party to the proceedings knowingly made a false allegation or statement in the proceedings.

   (2) The Court must order that party to pay some or all of the costs of another party, or other parties to the proceedings. 

3. It seems to me that here there was a persistent course of deceit and false statements by the mother, the most gross and the most worrying being that the child was being physically chastised, and complaining of being hit to the father, while the mother denied it.  And then one of her witnesses corroborated the child's story in general.  So I do find that that section applies.

4. That being so, when one comes to apply s.117 itself, it seems to me that one moves beyond section 117(1), which provides as follows:

   Subject to (2), et cetera, each party to the proceedings under this Act shall bear his or her own costs.

5. However, 117 is followed by 117(2):

   If in proceedings under this Act the Court is of opinion that there are circumstances that justify it in doing so, the Court may, subject to sub-section 2(A), 4 and 5, and the applicable rules of Court make such order as to cost and security for costs, whether by way of interlocutory order or otherwise as a Court considers just. 

6. Here I intend to consider making orders for costs.  And when I do proceed under s.117(2) in light of s.117(2A), I must consider the provisions of s.117(2A).   Now that provides:

   In considering what order, if any, should be made under sub-s 2, the Court shall have regard to:

   (a)The financial circumstances of each of the parties of the proceedings.

7. I have received considerable submissions about this. 

8. The father applied a week ago to give evidence by video or telephone and not to attend.  He did that on the basis of an affidavit then filed and not now relied on.  I was informed by Mr Cooper at the beginning of these proceedings that he is not here today from Queensland because his brother-in-law has died. 

9. I make no condemnation of or adverse finding against the father, as it meant that no evidence was then put on by him, and he is not here for cross-examination.

10. So such evidence as there is as to the financial position of the father was that tendered by the mother in her case. 

11. The mother's circumstances are as disclosed in her financial statement.  In her most recent financial statement she discloses that she has the total of assets of $9360.  She has superannuation, which, of course, she cannot access, of over $100,000.  She owes $116,820, mainly by way of loan from her parents, and her mother, who has placed, I am informed, a mortgage over her house.  And the mother is seeking to repay that debt from her total average weekly income, which was disclosed to be $1,872 per week.

12. The mother’s household expenditure of $1,280 is met in great part by her partner to the extent of $987 per week. 

13. It is clear that while these parties may have had assets (mainly of the former matrimonial home, which itself was mortgaged), when they commenced their litigation, they have very little left.  And that of itself is a tragedy.

14. The mother pays tax of nearly $600 a week; rent and mortgage of $235; some small expenses for a motor vehicle; repayments of loans over $400 a week; and maintenance for the daughter.  She said she is paying $279 per week, but there is an assessment of $222.  So all in all, the mother is spending more than she is receiving.  And I am convinced, she having been cross-examined on her evidence, that it is safe to find that those are the financial circumstances in which she finds herself.

15. The father did not file a fresh financial statement for this hearing on the matter of costs.  He has elected not to give evidence.  He has elected not to put on any evidence of his current situation. 

16. It was then left to the counsel for the mother to actually tender evidence to show that the father was a beneficiary under a trust from his late father's will.  A copy of his late mother's will was produced, she having received the balance of the father's estate.  The father's father and mother are both now unfortunately deceased, and there is a new entity which has advanced moneys to the father and perhaps to his partner.

17. This relates to a company called F Pty Limited, in which various people have various classes of shares.  The A-class shares are still in the name, apparently, of the father's father.  The B, C, and D and ordinary shares and so on are held as follows:  the B class, by his late mother; the C class by the father; the D class by the father’s brother, and the ordinary shares were held by his late father and late mother.

18. So all in all it is not surprising that in the financial statement which the counsel for the mother tendered as being admissions by him against the father's interest, debts were shown owing by him to related companies. 

19. I am not prepared, on the evidence, to find that he is the ultimate owner of them.  I am, however, prepared to find, as against interest, that he had borrowed an estimated $300,000 from F Limited, and from the Conway Estate Trust. 

20. And in light of the father’s failure to give evidence, or put any other evidence on, I am prepared to find that he has substantial financial resources available to him, at least in so far as he can obtain unsecured loans without interest from related family entities. 

21. The father’s financial statement dated 26 March 2007 was tendered by counsel for the mother as admissions against interest by the father.  It showed an average weekly income of $213, being maintenance paid to him for the benefit of the child.  He said it was under review.  The statement shows no government benefits.  It shows no other income at all. 

22. It does show, however, a total personal expenditure of $2321 per week, and that the loans from F Pty Limited and the Conway Estate Trust had by then blown out to $447,000. 

23. Also disclosed was a small debt to the Commonwealth Bank Visa card.

24. So, all in all, it is a very sad picture that is painted on both sides.  But whilst I feel I have the full financial picture from the mother's side, I cannot say that I have any confidence that I have the full financial picture from the father's side.

25. The father indicates possessions of a 1998 motor vehicle, valued at $4000, and household contents valued at $40,000.  Apart from that, his major asset is superannuation of $154,000.  And he, as I say, discloses liabilities of $455,000. 

    (b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party.

26. I am then bound under s.117(2A)(b) to find whether any part of the proceedings has received assistance by way of Legal Aid, and if so, the terms of the grant of that assistance to that party.  Neither party had Legal Aid. 

27. I then must look at sub-s 2A(c): 

    The conduct of the parties of 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, direction to answer questions, admission of facts, production of documents, and similar matters. 

28. In light of the foregoing and in light of the minor nature of the order which I am minded to make, I do not see any point in trying to analyse all those matters.  I have in mind primarily the prolongation of the trial by the deceit of the mother, since repented of, as founding the order. 

29. But I noted the mother's counsel's submission that the father had had orders made against him previously by the Court: on 27 November 2004 an order to pay costs assessed at $1000; on 25 August 2004 an order to pay costs to the mother assessed at $3000; and that on 1 September 2005, an order to pay $350 to reimburse the mother for travel expenses for the child.  This amounted in all to a total sum which counsel for the mother indicated was $4350 plus interest, say $4600 to $4700.

30. 2A(d):

    Whether the proceedings were necessitated due to the failure of a party to comply with previous orders of the Court.

31. Strangely enough, they were not so necessitated.  But the proceedings were prolonged in a relevant way by the mother denying that she had disobeyed a previous order of the Court, not to physically chastise the child.  However, the proceedings were not brought about by that.  That issue arose after the matter had been commenced by way of application.

32. 2A(e)

    Whether any party of the proceedings has been wholly unsuccessful in the proceedings.

33. I do not think it is possible to talk about being “wholly unsuccessful” where the welfare of the child and orders of the child's best interests are the paramount concern of the Court.  However, I think, by analogy, one can say that there have been issues, major issues in this case, where the mother has been wholly unsuccessful.

34. 2A(f):

    Whether either party to the proceedings has made an offer in writing to the other party of the proceedings of settlement, the terms of any such offer. 

35. No evidence of any such offer was put before me. 

36. 2A(g):

    Such other matters as the Court considers relevant. 

37. Here I think I must say that where there is a case of such blatant deceit as here, it is very hard for the Court to restrain itself from making an order for costs which could go back well beyond the time of the hearing.  If that were so, it would, I imagine, be in, if not over a hundred thousand dollars, at least in tens of thousands of dollars.  And those costs would have been incurred and thrown away on both sides. 

38. Not for one moment do I think that the mother's lawyers were privy to the deceit.  Nor do I think the witnesses with professional opinions, who were called, were party to suppressing any such deceit.  I think they were all mislead. And had the mother been honest and up front, throughout the case may well have been over in a much shorter time and with a much happier result to the mother. 

39. However, that was not to be.  A great deal of the Court's time has been spent  - not wasted, spent - on exploring issues which were difficult of resolution and one possible cause is now, to some extent, explained by Dr D, as I have noted already.

40. Nevertheless, the Court, I feel, ought to do what justice it can between the parties.  One party, the mother, has a high income, but that is diverted mainly to paying off debt, maintaining herself and maintaining her child, and having very limited assets and a debt to her mother, which, if not paid off, could result in that party losing her house, according to Mr Foster.  On that hand one could hardly think of a more perilous financial circumstance. 

41. On the other hand, there is a litigant about whose financial circumstances, the only evidence I have is of him having no income, except the child maintenance paid by the mother, together with access to what appear to be very considerable financial resources.   But the resources are not his alone.  It would appear that his affairs have been structured in such a way that he has had the benefits of disclosed loans.  I can only go on the evidence.  I am not prepared to draw inferences beyond that, except to say that the father has managed up to now to borrow almost half a million dollars, which is a very substantial figure.  The more Mr Foster tendered admissions made by the father, the more parlous the situation of the father appeared.  Such evidence has convinced me that the father is a man of little present substance but of considerable resource and influence.

1. Each party has superannuation, against which the Court, of course, would make no order.

THE ULTIMATE QUESTION

1. So as both Mr Cooper and Mr Foster submitted in the ultimate, it comes to a question of quantum.  And when it comes to a question of quantum, I accept Mr Foster's submission, that “it is a difficult question”.

2. Each of these parties feels, I am sure, greatly wronged by the other.  Evidence I saw would make it appear that little has changed since the hearing, and I think that is an enormous shame for the child and for the parties.  But that does not affect the quantum of assets available for the satisfaction of any order for costs that I might make. 

3. Whatever order I might make has to be seen in terms of justice and equity, and in my view, be made having due regard to the financial circumstances and resources of each of the parties to the proceedings.

4. If, for instance, I were to make an order in favour to the father of, say, (to pick a figure from the air) $75,000, then it seems to me that the mother would have every inducement to proceed to bankruptcy.  That would not be good for her, would not be good for the child, and it would do the father no good.  And I am not, I hasten to say, inclined to do any such thing.  But it might have been justified in some circumstances - indeed, I imagine it might be assessed at that, or at some similar figure, if I ordered that the father’s costs were to be taxed.

5. It seems to me that I should make an order, and it should be an order that the mother will notice, but not be crippled by.  It should be an order that will not injure the child.  It seems to me it should be an order which, in the circumstances, upholds the intention of the parliament that in the circumstances such as have arisen in this case which involves deceit, has taken away the discretion of the Court, as to whether an order should be made, and left it merely to decide the quantum.

6. I think this was an extremely sad case.  It was also an extremely blatant case.  And the deceit persisted in has greatly increased the length of the trial and thus the costs.

7. Never-the-less it seems to me that I should make an order for costs which is in relation to the capital held by the mother.  It is, I think she said, the result of selling her jewellery.  The figure disclosed was some $9000-odd.  Of that the mother is to pay the father’s costs assessed at $7,500.  However the mother is to be at liberty to set off against such sum, the value of the orders already made in her favour, for costs, repayments of travel expenses and interest thereon.  Then the balance is to be paid to the father.

I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Waddy

Associate

Date:  26 March 2007