DIAZ & WEEKES
[2019] FCCA 1053
•23 April 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DIAZ & WEEKES | [2019] FCCA 1053 |
| Catchwords: COSTS – Wife seeks costs against husband – relevant factors considered – costs order made on a party and party basis. |
| Legislation: Family Law Act 1975 (Cth), ss.90SM(4)(a), 90SM(4(b), 90SM(4(c), 90SF(3), 90SM(4)(e), 90SM(4)(d), 90SM(4)(f) and 90SM(4)(g) |
| Cases cited: Stanford v Stanford (2012) FLC 93-518 |
| Applicant: | MS DIAZ |
| Respondent: | MR WEEKES |
| File Number: | NCC 906 of 2018 |
| Judgment of: | Judge Betts |
| Hearing date: | 12 November 2018 |
| Date of Last Submission: | 15 March 2019 |
| Delivered at: | Newcastle |
| Delivered on: | 23 April 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Gorton |
| Solicitors for the Applicant: | Berryman Partners |
ORDERS
That pursuant to Section 90SM of the Family Law Act, the monies currently held in Berryman Partners Lawyers trust account ($249,181.07) be distributed as follows:
(a)the sum of $20,254.68 to be paid to Ms A;
(b)the sum of $194,587.43 to be paid to the Applicant Wife, plus the amount payable to her by the Respondent Husband on account of costs pursuant to order 6 herein;
(c)the sum of $34,338.96 to be paid to the Respondent Husband, less the amount payable by him to the Applicant Wife on account of costs pursuant to the order 6 herein.
That the Court allocate as required by Section 90XT(4) of the Family Law Act a base amount of $61,840.50 from the Respondent Husband’s superannuation benefits in Super Fund B (“the Fund”) to the Applicant Wife.
In accordance with Section 90XT(1)(a) of the Family Law Act 1975 that whenever a splittable payment becomes payable the trustee of the Fund (“the trustee”) shall:
(a)create an entitlement for the Applicant Wife or her legal personal representative to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount allocated in Order 2; and
(b)make a corresponding reduction in the entitlement the Respondent Husband would have had in the Fund but for this Order;
(c)That Orders 2 and 3 have effect from the operative time being 4 business days after a certified copy of these Orders have been served on the trustee;
(d)That having been accorded procedural fairness, Orders 2 and 3 bind the trustee to observe the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
That unless otherwise specified in these orders:
(a)Each party be solely entitled to the exclusion of the other to all property, including choses-in-action, in the possession of such party as at the date of orders being made;
(b)Any money standing to the credit of the parties in a bank account are to be retained by the party in whose name the account appears;
(c)Each party hereby forgoes any claim they may have to any superannuation benefit that is belonging to or owned by the other party save as provided for in these orders;
(d)All insurance policies are to become the sole property of the owner named thereon;
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to this Order, then a Registrar or a Deputy Registrar of the Federal Circuit Court of Australia is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
That the Respondent Husband pay the Applicant Wife’s costs of and incidental to the proceedings fixed in the amount of $15,639.00.
That the matter be otherwise removed from the list of active pending cases.
IT IS NOTED that publication of this judgment under the pseudonym Diaz & Weekes is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 906 of 2018
| MS DIAZ |
Applicant
And
| MR WEEKES |
Respondent
REASONS FOR JUDGMENT
Background:
I am asked to determine the respective property entitlements of the parties following the breakdown of their sixteen (16) year de facto relationship on 25 April 2016.
The Applicant in the proceedings is Ms Diaz (“the Wife”). The Respondent is Mr Weekes (“the Husband”).
The Husband has failed to properly participate in the proceedings. Most notably, he has failed to file material at any time - contrary to the rules of court and contrary to orders, including orders which gave him generous extension[ns of time.
In the result the Wife’s application is being finally determined on an undefended basis.
Procedural history:
The Wife commenced these proceedings on 23 March 2018. At that time she was seeking interim orders that the Husband vacate the former matrimonial home at Property C so that the property could be sold expeditiously.
Since separation the Husband had been living in the Property C property but had failed to meet its various outgoings, including mortgage repayments and utility bills.
The Husband did not appear on the first return date, 7 May 2018. The proceedings were adjourned to 29 May 2018.
On 29 May 2018, the Husband appeared in person. By then his response material was overdue.
On that day interim orders were made that the Husband meet all mortgage repayments as and when they fall due; that he keep the Property C property insured; that he maintain it in a neat, fit and proper state of repair; and that he pay all council rates, water rates and other services and utilities connected to the Property C property as and when they fall due.
The court ordered that the Husband file and serve his response material by close of business on 2 August 2018 and the proceedings were otherwise adjourned to 23 August 2018.
The Husband was thus able to remain in the Property C property, and was given a significant extension of time in which to file his response material.
On 23 August 2018 the proceedings came back on before the court. The Husband appeared in person and the Court heard argument as to what should happen with respect to the Property C property given the Husband’s non-filing of response material, and the Wife’s evidence that the Property C property outgoings were outstanding and the Property C property being neglected/run down by the Husband - contrary to the previous orders.
In the circumstances, the court ordered that the Husband vacate the property within fourteen (14) days. The Husband was to be liable for making the mortgage repayments, council and water rates up to the date of vacating; thereafter the Wife was to meet those expenses.
The court ordered that the property be sold. To facilitate the sale, the Wife was entitled to attend the property and make improvements to it as suggested in writing by a marketing agent. Her solicitors were to have the conduct of the sale. Pending sale, the Husband was restrained from attending the Property C property.
The Husband was given a further extension until 4 October 2018 to file and serve his response material. The proceedings were otherwise adjourned to 9:30am on 12 November 2018 for a Directions Hearing.
A chambers order of 9 October 2018 later extended the Husband’s time for filing response material to 4:00pm on 12 October 2018. In that order, the court specifically noted that this was a further extension of time and that the Court may consider making a costs order on the next occasion if the Husband did not file his material in accordance with the order.
When the proceedings came back on before the court on 12 November 2018, the Husband again appeared in person. In the absence of response material from him, the proceedings were set down for undefended final hearing at 9:30am on 16 April 2019 with the Wife to file and serve a Trial Affidavit and updated Financial Statement by 15 March 2019. The Wife was also appointed trustee for sale of the Property C property. Her costs were reserved.
The Husband did not appear at the undefended hearing. I heard submissions from the Wife’s counsel both as to the substantive property settlement issues, and also as to the question of costs.
Evidence and documents relied upon at the undefended hearing:
In arriving at its decision the court has had regard to the following documents:
a)Outline of Case document of the Wife;
b)Amended Initiating Application of the Wife filed 15 March 2019;
c)Trial Affidavit of the Wife filed 15 March 2019, together with a Bundle of Exhibits;
d)Financial Statement of the Wife filed 15 March 2019;
e)All previous orders made in these proceedings;
f)Four (4) documentary exhibits tendered by the Wife consisting of:
i)Letter from the Wife’s solicitors to the husband of 18 March 2019 enclosing by way of service the documents set out in (b), (c), and (d) above;[1]
ii)Schedule of the Wife’s costs of the proceedings calculated on a party and party basis in accordance with the court scale;[2]
iii)Schedule of the Wife’s costs of the proceedings calculated on a Solicitor and Client basis;[3]
iv)Costs Disclosure Agreement as between the Wife and her Solicitors.[4]
[1] Exhibit “W1”
[2] Exhibit “W2”
[3] Exhibit “W3”
[4] Exhibit “W4”
Additionally, I received some short further oral evidence of the Wife which updated the court in relation to her current work circumstances. Her unchallenged oral evidence is that she very recently took up work as a customer service officer at Employer, earning much the same income as set out in her Financial Statement - i.e. $658.00 gross per week on a part-time/casual basis. She changed to this employment because she hopes that it will offer her better long-term financial prospects than her previous job as a factory worker.
The Law:
These proceedings are governed by the provisions of Part VIIIAB of the Family Law Act (“the Act”).
For present purposes, those provisions are the same as those applicable to married couples in Part VIII of the Act. The relevant case law in respect of Part VIII is equally applicable to Part VIIIAB.
In considering what property settlement order (if any) to make in the present case, I intend to follow a structured approach. In particular, these reasons for judgment will:
a)Firstly, identify and value the assets, liabilities and financial resources of the parties;
b)Secondly, consider whether it is “just and equitable” to make a property settlement order;[5]
c)If so, then the third step will be to identify and assess the respective contributions made by each of the parties towards the net assets pursuant to s.90SM(4)(a), s.90SM(4)(b) and s.90SM(4)(c). For convenience, each party’s respective contributions-based entitlement will be expressed in percentage terms;
d)The fourth step will be to identify and assess what might be called the “future factors” (as relevant) contained in s.90SF(3), which are brought into consideration by operation of s.90SM(4)(e). I will also identify and assess the relevant matters set out in s.90SM(4)(d), s.90SM(4)(f) and s.90SM(4)(g) as relevant. Having done so, I will then determine what (if any) adjustment ought to be made to each party’s respective contributions-based entitlement. In carrying out this step I will be mindful not only of percentages (which are often convenient to the court) but also the underlying dollar figures that are involved (which are the practical consequence to the parties);
e)Finally, I will consider the effect of my findings and proposed orders so as to satisfy myself that my proposed property settlement order is “just and equitable”.[6]
[5] Stanford & Stanford (2012) FLC 93-518
[6] The pathway I am adopting is primarily based upon that endorsed by the Full Court in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, adapted by me to take into account the High Court’s decision in Stanford (supra).
Before proceeding further, I record that the Husband has failed to make any proper disclosure as to his financial circumstances. The Full Court has made it clear in a line of cases that, once it has been established that there has been a deliberate non-disclosure on the part of a party to property settlement proceedings, then the court should not be unduly cautious about making findings in favour of the “innocent” party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature: see particularly the Full Court’s decision in Black v Kellner (1992) FLC 92-287.
In these Reasons, I therefore propose not to be unduly cautious about making findings in favour of the Wife.
I also record here that the Wife’s evidence in these proceedings is of course unchallenged. Save where otherwise stated, I accept her evidence.
Step 1 – Identifying and valuing the assets, liabilities and financial resources:
Non-superannuation assets and liabilities:
The major non-superannuation asset is the net sale proceeds of the Property C property in the amount of $249,181.07. These moneys are presently held in the trust account of the Wife’s solicitor.
The Wife has very modest bank account balances and some modest chattels and I propose to disregard these for present purposes.
The Husband has bank accounts of unknown value. He also owns a motor vehicle which is not formally valued. Doing the best she can by reference to “Red Book” figures, the Wife estimates the Husband’s vehicle to be worth thirty-five thousand dollars ($35,000.00).
In terms of liabilities, the Wife borrowed twenty thousand, two hundred and fifty-four dollars, sixty-eight cents ($20,254.68) from her Mother after the Husband vacated the Property C property. These moneys were used by her to undertake improvements to the Property C property prior to its sale – as permitted by the orders of 23 August 2018.
Though the presumption of advancement applies to such an advance, the Wife’s unchallenged evidence is that these moneys were loaned to her on the basis that they would be repaid from the sale proceeds of the home. I accept that evidence and therefore take this loan into account as a liability.
Superannuation:
The Wife holds superannuation of forty-four thousand, three hundred and ninety-four dollars ($44,394.00) with Super Fund D.
In the absence of disclosure by the Husband, the Wife has subpoenaed information from his fund – Super Fund B. Their subpoenaed documents disclose that the Husband holds a current superannuation balance of one hundred and sixty-eight thousand, and seventy-five dollars ($168,075.00).
Financial resources:
I have no evidence as to any financial resources of the parties.
Summary of assets, liabilities and financial resources:
In these Reasons, I proceed on the basis that the known net non-superannuation property of the parties is in the amount of two hundred and twenty-eight thousand, nine hundred and twenty-six dollars, thirty-nine cents ($228,926.39), being the sale proceeds of the Property C property.
The combined superannuation of the parties is two hundred and twelve thousand, four hundred and sixty-nine dollars ($212,469.00).
The Husband also holds undisclosed property of unknown value, including bank accounts and a motor vehicle. I will not add these assets into the divisible property as I do not have admissible evidence as to their value. However, I intend to make appropriate allowances to the Wife in this respect so that she is not disadvantaged in the end result.
Step 2 – Considering whether it is “just and equitable” to make a property settlement order:
In its decision of Stanford & Stanford (2012) FLC 93-518, the High Court of Australia elaborated upon and clarified the statutory requirement that the court must not make any property settlement order pursuant to Part VIII (and by analogy, Part VIIIAB), unless it is “just and equitable” to do so.[7]
[7] The High Court was referring to s.79(2) in Part VIII but by analogy the decision also applies to s.90SM(3) in Part VIIIAB.
In their plurality judgment, French CJ, Hayne, Kiefel and Bell JJ held that:
a)In every case in which a property settlement order is sought it is necessary to satisfy the court that in all of the circumstances it is “just and equitable” to make such a property settlement order [s.90SM(3)];
b)The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations and does not admit of exhaustive definition. It is not possible to chart its metes and bounds. There are three (3) fundamental propositions however which must not be obscured:
i)First, the court must begin a consideration of whether it is “just and equitable” to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. The question posed by [s.90SM(3)] is thus whether, having regard to those existing interests the court is satisfied that it is “just and equitable” to make a property settlement order;
ii)The power to make a property settlement order must be exercised in a principled fashion, and it cannot be answered by assuming that the parties rights to, or interests in, matrimonial property are or should be different from those that then exist;
iii)Whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them by reference to the matters set out in [s.90SM(4)]. To conclude that making an order is “just and equitable” only because of, and by reference to the [s.90SM(4)] considerations, without a separate consideration of [s.90SM(3)] would be to conflate the statutory requirements and ignore the principles laid down by the Act.
In the present case, the parties were in a de facto relationship for some sixteen (16) years. They had two (2) children together. Their assets and finances were intertwined throughout. When their relationship broke down, the Wife left the Property C home due to what had become an unstable home environment. She took the children with her.
The parties attempted to negotiate a resolution of their property issues but this was unsuccessful. The Wife has since brought proceedings, taken possession of the Property C property, renovated and ultimately sold it. The Wife has the ongoing primary care of the parties’ children.
In my view, this case comfortably falls into the category of cases identified in the plurality judgment where the “just and equitable” requirement is readily satisfied. It is sufficient for me to observe that, as the result of a choice made by one or both of the parties, the Husband and Wife are no longer living in a marital relationship. There will no longer be any common sharing and use of their property.
I am comfortably satisfied that it is just and equitable to make a property settlement order in the circumstances of this case.
Step 3 – Identifying & assessing the respective contributions of the parties:
Given the length of this relationship I propose to assess contributions in a broad-brush manner, consistent with the authorities.
In the exercise of my discretion, I propose to divide the property into two (2) separate categories for the purpose of the contribution assessment: Norbis v Norbis (1986) FLC 91-712. The first category will be the non-superannuation property and the second category will be the superannuation.
Some of my findings as between the two (2) categories of property may overlap.
Contributions towards the non-superannuation property:
The parties commenced cohabitation in 2000, when they were each around twenty (20) years of age. Neither of them had any significant assets or liabilities.
Throughout the relationship, the Husband was the primary breadwinner. He primarily worked as a tradesman. The Wife worked in customer service.
The Wife was the primary parent in relation to the parties’ two (2) children, [X] born in … 2003 and [Y] born in … 2008.
The parties purchased the Property C home in 2006 for the sum of one hundred and eighty thousand dollars ($180,000.00). To secure the purchase they took out a mortgage with Bank West. They subsequently undertook some renovations to the home, and in 2008 they refinanced the mortgage with the … Building Society in order to fund a bathroom renovation and the purchase of a motor vehicle.
Around 2014 the relationship began to break down. Around this time the Wife discovered that their household accounts were falling behind and that the Husband was spending large amounts of his wages on gambling and drugs.
Their mortgage fell into arrears and they began to experience financial hardship.
In 2015 the Wife confronted the Husband about his behaviour, asking him to vacate the Property C property. The Husband did so, but returned a few months later. Things did not change. In March 2016, the Husband failed a drug test at work and ended up losing his job as a result.
The Wife found drug paraphernalia in the Husband’s car.
On 25 April 2016, the Wife and children moved out of the Property C property, initially moving to Town E some forty (40) minutes away.
As at separation, I would assess the respective contributions of the parties towards the non-superannuation property as being fifty-two and a half percent (52.5%) to the Wife and forty-seven and a half percent (47.5%) to the Husband.
Post-separation, the Wife’s contributions significantly outweigh those of the Husband.
Despite initially remaining in the Property C property, the Husband failed to keep the mortgage repayments up to date. Although he did make some payments, the mortgage nonetheless fell into arrears.
The Husband also failed to pay the council rates and the utility expenses. The electricity and water to the Property C property in fact ended up being disconnected at one stage as a result of his non-payment.
The Husband allowed the home insurance policy to lapse with the result that the Wife had to take out a fresh policy - which her mother paid for.
Nor was the Husband paying the Wife any child support. This was despite the Wife having to be the overwhelming primary carer for the children as a result of the Husband’s ongoing behaviours and difficulties.
The Husband’s mental health was one such difficulty; he was continually harassing the Wife with text messages, emails and phone calls and often sounded desperate and spoke of suicide. In 2016 the Husband was hospitalised for three (3) days in the mental health ward as a result of his volatile and self-harming behaviour. In August 2017, the police ended up taking out an Apprehended Domestic Violence Order against the Husband due to his ongoing harassment of the Wife. The Husband later breached that order; its operation was later extended to 23 August 2019.
Despite having had to obtain rental accommodation for herself and the children, the Wife also continued to contribute towards the Property C mortgage repayments. She also paid some arrears of land rates and water rates, with the assistance of her mother.
When the Husband finally vacated the property in early September 2018, the Wife found it to be in a poor and run-down condition.
The Wife had her marketing agent inspect the property, who reported to her that it had poor street appeal to prospective buyers; it was cluttered with car parts, discarded items and rubbish. The timber was flaking, the yard was cluttered with discarded items, and there was a pronounced unpleasant odour inside the home. There were numerous other signs of neglect and disrepair. The property appeared generally to be quite unkempt. The relevant inspection report is contained in annexure “B” of the Wife’s exhibit bundle (pages 8 & 9).
The marketing agent advised that in its present state the likely sale price of the Property C property would be in the range of $370,000.00 to $375,000.00. The marketing agent recommended that various specific renovation and cleaning-up work be carried out, following which the likely sale price would likely be in the range of $450,000.00 - $470,000.00.[8]
[8] See Wife’s exhibit bundle, annexure “B”, pages 7 - 10
The Wife subsequently borrowed the $20,254.68 from her mother referred to earlier and set about undertaking the renovations and cleaning-up work.
Contained as part of the Wife’s exhibit bundle (pages 40 to 64) are numerous photographs which show the “before” and “after” state of the property. These photographs are a testament to the significant renovation and cleaning-up efforts that were undertaken by the Wife, arising at least in part as a result of the property falling into disrepair and general neglect during the Husband’s occupation.
The Property C property was subsequently sold for four hundred and sixty-five thousand dollars ($465,000.00) which fell squarely within the marketing agent’s estimated range.
Although the marketing agent is not a qualified valuer, nonetheless it seems to me that the Wife’s renovation and cleaning-up works more likely than not resulted in an increased sale price and this is a relevant post-separation contribution.[9]
[9] On the Wife’s case the increased sale price may be in the order of ninety thousand dollars ($90,000.00) but my difficulty is that I do not have formal valuation evidence before me as to the pre-improvement value of the Property C property
In relation to her specific post-separation contributions towards the mortgage, land rates and water rates, the Wife takes the somewhat unusual – but understandable – position that the court should reimburse her dollar-for-dollar in terms of such payments. These have collectively been quantified in the total amount of twenty-five thousand, five hundred dollars, seventy cents ($20,500.70) by reference to bank statements which are in evidence before me.
While the Wife was herself obliged to meet the property outgoings as and from the time the Husband vacated the Property C property (on or about 6 September 2018), the reality is that at that time there were significant arrears owing as a result of the Husband’s non-payment. This resulted in the parties incurring various other default charges and related expenses.
In dollar terms, the wife’s post-separation mortgage, land rates and water rates payments of $20,500.70 equate to just over eight percent (8%) of the net sale proceeds of the Property C property. While it is superficially tempting to make orders reimbursing the Wife for those payments on a dollar-for-dollar basis, it seems to me that the safer and more consistent course is to simply factor those payments into account as relevant, weighty, post-separation contributions.
In conclusion, the Wife’s post-separation contributions warrant in my view an additional twenty-two and a half percent (22.5%) loading to the Wife. I assess the parties’ overall contributions towards the non-superannuation property as being seventy-five percent (75%) to the Wife and twenty-five percent (25%) to the Husband.
Contributions towards the superannuation:
The Husband’s higher superannuation balance at the date of the undefended hearing reflects the fact that the Husband was the primary breadwinner throughout the relationship.
In circumstances where the Wife was the primary homemaker and parent throughout the relationship, and where she continues to provide for the upkeep of the children post-separation, the court assesses the respective contributions of the parties as being one half of the combined value of their superannuation funds.
Step 4 – Identifying and assessing the relevant factors pursuant to s.90SF(3), s.90SF(4)(d), s.90SF(4)(f) and s.90SF(4)(g):
There is some overlap between these statutory considerations and I will deal with them collectively. I will try not to repeat my earlier findings.
The Wife is thirty-nine (39) years old, working in a casual/part-time job and earning modest income. Her seventy-five percent (75%) contributions-based entitlement in respect of the non-superannuation property amounts to one hundred and seventy-one thousand, six hundred and ninety-four dollars, seventy-nine cents ($171,694.79).
The Husband is thirty-eight (38) years of age. His employment status is presently unclear although historically he has been able to earn a greater income than the Wife. His contributions-based entitlement to the non-superannuation property is twenty-five percent (25%) which in dollar terms is fifty-seven thousand, two hundred and thirty-one dollars, sixty cents ($57,231.60).
Each party has a fifty percent (50%) contributions-based entitlement to their combined superannuation, ie. each party is entitled to one hundred and six thousand, two hundred and thirty-four dollars, fifty cents ($106,234.50) in superannuation.
It is a significant matter that the Wife has the ongoing primary care and support of the two (2) children aged fifteen (15) and ten (10). The children spend limited time with the Husband and the Wife supports them without the benefit of child support.
I have real doubts as to whether the Husband will ever pay meaningful child support to the Wife and I note the unhappy background of recent Apprehended Family Violence Orders and breaches thereof.
The Wife receives modest means-tested Commonwealth benefits.
Neither parent is cohabiting with any other person. The Husband is apparently living with his mother at this time and it may be that she is providing him with some financial assistance/support.
I do not propose to make orders that will impact on the earning capacity of either party.
The unfortunate reality of this case is that there is “not enough money to go around” in terms of making orders that can provide for each party to have a standard of living which is “reasonable”. The court can only do the best it can with the assets that are available.
Taking all of these matters into account, and noting particularly the Husband’s non-disclosure as to his true financial position, I consider a further uplift to the Wife is warranted pursuant to s.90SF(3). In my view the appropriate uplift is:
a)ten percent (10%) in respect of the non-superannuation property;
but
b)no further adjustment in respect of the superannuation property.
Step 5 – Considering whether my proposed order is “just and equitable”:
For the reasons set out herein, I consider that it is just and equitable to make a property settlement order whereby:
a)The net non-superannuation property is divided as to eighty-five percent (85%) to the Wife and fifteen percent (15%) to the Husband. In dollar terms the Wife will receive one hundred and ninety-four thousand, five hundred and eighty-seven dollars, forty-three cents ($194,587.43) and the Husband will receive thirty-four thousand, three hundred and thirty-eight dollars, ninety-six cents ($34,338.96);
b)There be a splitting order in respect of the Husband’s superannuation fund so that the value of the combined superannuation is equalised. That is, each party will be entitled to superannuation of one hundred and six thousand, two hundred and thirty-four dollars, fifty cents ($106,234.50).
Costs:
The Wife applies for costs against the Husband on a Solicitor and Client basis, or alternatively on a party and party basis.
Pursuant to s.117(1) of the Act each party is ordinarily to bear his or her own costs in family law proceedings.
However, s.117(2) provides that if a court is of opinion that there are circumstances that “justify” it in doing so, the court may make such order as to costs as it considers “just”. The mandatory statutory considerations for the court are prescribed in s.117(2A).
Using the same paragraph numbering as s.117(2A), I make the following findings:
a)The respective financial circumstances of the parties are as set out in these Reasons. Relevantly on my orders, he will have access to cash of thirty-four thousand, three hundred and thirty-eight dollars, ninety-six cents ($34,338.96), together with his motor vehicle (which the wife estimates is valued at thirty-five thousand dollars ($35,000.00)) and such other undisclosed assets as he has.
b)Neither party is legally aided.
c)The Husband failed to conduct these proceedings appropriately. The Husband failed to comply with orders. He failed to file material. He failed to make disclosure. His defaults resulted in delay and additional expense to the Wife; for instance she had to issue a subpoena to obtain the Husband’s up-to-date superannuation balance.
In the end, having been given a number of opportunities to properly participate in the proceedings the matter has been determined on an undefended basis.
The Husband’s conduct has fallen far short of what is expected of a litigant to these types of proceedings and his non-participation has rendered things more difficult for both the Wife and the court.
d)The Husband has failed to comply with previous orders.
e)In a practical sense, the Husband has been wholly unsuccessful in the proceedings. In the result, I am making a property settlement order that is more generous to the Wife than she was in fact proposing and which her counsel conceded was very conservative.
f)There is no relevant evidence in relation to this paragraph.
g)There is no relevant evidence in relation to this paragraph.
In the circumstances of this case it is open to the court to consider making an order for costs on an indemnity basis given the husband’s conduct of the proceedings.[10] In particular, his non-disclosure made it more difficult for the Wife to properly litigate the matter, and for this court to arrive at a just and equitable property division. Moreover, the Husband breached orders for filing of response material; court time was wasted and the Wife was put to additional costs.
[10] See Colgate Palmolive Co and Anor v Cussons Pty Ltd (1993) 46 FCR 225.
On balance the court considers that the circumstances “justify” the making of a costs order in the Wife’s favour. Though it is a close call, the Husband’s limited known cash resources lead the court to the view that an order for party and party costs is “just”.
The Wife’s costs in that respect are usefully set out in exhibit “W2” and the court adopts the figures therein, including certifying for counsel as appropriate. The only change to the figures therein are that the filing fee for the Initiating Application ($465.00) had accidentally been omitted. It should have been included. In the circumstances, allowing for that filing fee, the total party and party costs are fifteen thousand, six hundred and thirty-nine dollars ($15,639.00).
In the circumstances I will order that the Husband pay the Wife’s costs of and incidental to the proceedings fixed in that amount, with such payment to be made out of the Husband’s share of the moneys held in trust.
The court makes the orders which are set out at the commencement of these reasons.
I certify that the preceding ninety-seven (97) paragraphs are a true copy of the reasons for judgment of Judge Betts
Date: 23 April 2019
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Procedural Fairness
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Remedies
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Jurisdiction
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