Duffle and Gregory (Costs)

[2020] FCWA 153

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY COURT ACT 1997

LOCATION: PERTH

CITATION: DUFFLE and GREGORY (COSTS) [2020] FCWA 153

CORAM: SUTHERLAND CJ

HEARD: WRITTEN SUBMISSIONS

DELIVERED : 3 SEPTEMBER 2020

FILE NO/S: PTW 2538 of 2018

BETWEEN: MS DUFFLE

Applicant

AND

MR GREGORY

Respondent

Catchwords:

COSTS - Between parties - Circumstances justifying order - Case turns on its own facts

Legislation:

Family Court Act 1997 (WA)

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Not applicable
Respondent	:	Not applicable

Solicitors:

Applicant	:	Not applicable
Respondent	:	Not applicable

Case(s) referred to in decision(s):

B & B [2015] FCWA 65

Collins & Collins (1985) FLC 91-603

Duffle and Gregory [2020] FCWA 89

Fitzgerald v Fish (2005) 33 Fam LR 123

Greedy and Greedy (1982) FLC 91-250

I and I (No 2) (1995) FLC 92-625

Luadaka v Luadaka (1998) FLC 92-830

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

IT IS NOTED that publication of this judgment by this Court under the pseudonym Duffle and Gregory has been approved by the Family Court of Western Australia pursuant to s 243(8)(g) of the Family Court Act 1997 (WA).

Introduction

1[Mr Gregory] sought costs against [Ms Duffle], fixed in the amount of $39,010.93. Ms Duffle opposed the costs order sought by Mr Gregory and sought that there be no order for costs.

2The trial as to whether the parties were in a de facto relationship (and, accordingly, whether the court had jurisdiction to deal with Ms Duffle’s application for property settlement) took place before me over two days in May 2020 ("the trial"). On 4 June 2020, I published my reasons for decision (“Reasons”) from Chambers and re-listed the matter on 19 June 2020 to make orders pursuant to the Reasons. In short, I found on the balance of probabilities that the parties were not at any time in a de facto relationship, as defined by s 13A of the Interpretation Act 1984 (WA). Rather, the parties were in a fractious on again/off again, boyfriend/girlfriend type relationship between 2008 and 2014, and thereafter remained friends (who had sex occasionally) until 2017.[1]

[1] Duffle and Gregory [2020] FCWA 89, [44].

3At the re-listed hearing on 19 June 2020, I made final orders pursuant to my Reasons. I also made the following procedural orders to facilitate the determination of Mr Gregory’s application for costs:

a)By no later than 5pm on 17 July 2020, [Mr Gregory] have leave to make an application for costs by way of filing written submissions of no more than five pages in length, excluding annexures, together with a detailed costs schedule.

b)If [Ms Duffle] opposes the order for costs, then no later than 5pm on 14 August 2020, she do file and serve written costs submissions in response.

c)In the event that either party seek a relisting to make further oral submissions, then they do so in writing to the Court by no later than 5pm on 28 August 2020, failing which, I do proceed to issue reasons and orders from Chambers, without the necessity for any further attendance by either party.

4Mr Gregory filed his costs submissions and detailed costs schedule on 16 July 2020. Ms Duffle filed her responsive submissions on 14 August 2020. Neither party sought the opportunity to make further, oral submissions.

Legal Principles

5Section 237(1) of the Family Court Act 1997 (WA) (“the Act”) provides that, subject to s 237(2) and s 205SB and s 242, each party to proceedings under the Act is to bear that party’s own costs. Section 237(2) provides that if the court is of the opinion there are circumstances that justify so doing, the court may, subject to subsections (3), (5), (6A) and (6) and in accordance with any relevant rules, make such order as to costs as it considers just. I am satisfied that in this particular case, subsections (5), (6A) and (6) are not relevant.

6Section 237(3) provides that in considering what order (if any) should be made, the court must have regard to:

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

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; and

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 answer questions, admissions of facts, production of documents and similar matters; and

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

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

f)whether a party to the proceedings has made an offer in writing to another 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.

7I now turn to a consideration of the relevant factors pursuant to s 237(3). In his written submissions, Mr Gregory relied upon the factors set out in s 237(3)(a),(c),(e),(f) and (g). In her written submissions, Ms Duffle only responded to the factors set out in s 237(3)(a) and (b). I am satisfied that the factor set out in s 237(3)(d) is not relevant in this case.

The financial circumstances of each of the parties to the proceedings

8Both parties filed financial statements in 2018.[2]

[2] Refer to Ms Duffle’s financial statement filed on 20 March 2018 and Mr Gregory’s financial statement filed on 7 June 2018.

9Ms Duffle deposed in her 2018 financial statement that she owned her home in [Suburb B], which had an estimated value of $750,000. The Suburb B property was subject to a mortgage (“the Suburb B mortgage”) totalling approximately $290,000 and in relation to which she and Mr Gregory are jointly liable as co-borrowers. She also had savings, superannuation entitlements, a motor vehicle and household contents with a total estimated value of about $20,000. Aside from the Suburb B mortgage, Ms Duffle maintained that she had no other liabilities. Ms Duffle did not file an updated financial statement for the purposes of the trial. It did not appear to be in dispute that as at the time of the trial: (1) Ms Duffle still owned the Suburb B property, subject to the Suburb B mortgage balance which had reduced slightly; and (2) Ms Duffle had ceased employment and was in receipt of a disability pension.

10In her written submissions, Ms Duffle set out further information about her current financial circumstances, including but not limited to the following matters: (1) the current Suburb B mortgage balance was approximately $268,000; (2) she continued to receive a disability pension; (3) she continued to incur expenses in relation to private medical insurance, medical and pharmaceutical costs; (4) she had received some financial assistance from her daughter, including to meet the mortgage payments, which she will be required to repay at some stage; and (5) she had a Higher Education Loan debt to the Australian Government of approximately $44,000 (which debt was not disclosed by Ms Duffle in her 2018 financial statement).

11Mr Gregory deposed in his 2018 financial statement that he owned his unencumbered home in [Suburb A] which had an estimated value of $900,000. He also had savings, superannuation entitlements a motor vehicle and household contents with a total estimated value of $1,774,208. Apart from being a co-borrower in relation to the Suburb B mortgage, he did not have any other significant liabilities. Mr Gregory did not file an updated financial statement for the purposes of the trial. However, again, it did not appear to be in dispute that at the time of the trial: (1) Mr Gregory still owned the Suburb A property; and (2) Mr Gregory was still retired and financially supported himself from his retirement savings/superannuation entitlements.

12Although it was not a matter raised at the trial before me, it became apparent from Mr Gregory’s submissions that since 2018 the parties have also been engaged in proceedings [in] [another jurisdiction] in relation to Mr Gregory’s claim that Ms Duffle owed him the sum of $94,000 plus interest (the “civil proceedings”). In summary Mr Gregory claimed that Ms Duffle was indebted to him in relation to payments made by him to and/or on her behalf in relation to her family law litigation costs relating to her first husband, various payments towards the Suburb B mortgage and for the purchase of a motor vehicle. Ms Duffle did not address the issue in her submissions and there was no evidence before me as to the current status of those proceedings.

13Notwithstanding that Mr Gregory is clearly in a stronger financial position than is Ms Duffle, Mr Gregory submitted that Ms Duffle does have the capacity to pay a costs order, including because she has significant equity in the Suburb B property. I am satisfied that this is the case, if necessary by selling the Suburb B property, and even in the circumstances of Ms Duffle also having to pay the following additional liabilities from the proceeds: (1) her Higher Education Loan debt; (2) monies owed to her daughter; and (3) any further payment to Mr Gregory if he is ultimately successful in the civil proceedings.

Whether any party to the proceedings is in receipt of assistance by way of legal aid

14It was common ground that neither Mr Gregory nor Ms Duffle were in receipt of legal aid (albeit during the trial, Ms Duffle was given the opportunity to seek the advice of the duty lawyer service in relation to a specific issue).

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

15Mr Gregory submitted that Ms Duffle’s conduct in relation to the proceedings weighed heavily in favour of the making of a costs orders for the reasons set out below.

16Firstly, Mr Gregory submitted and I accept that during the proceedings, the process of obtaining proper disclosure from Ms Duffle was protracted and that his solicitor was required to write to Ms Duffle and/or her solicitor numerous times regarding disclosure. Ms Duffle filed her initiating application in March 2018 and it was first listed for hearing on 17 May 2018. There was no evidence before me as to whether Ms Duffle complied with the pre-action procedures prior to commencing proceedings, including providing Mr Gregory with a list of documents that were relevant to the dispute. However, on 3 July 2018, Mr Gregory’s solicitor wrote to Ms Duffle, formally requesting that she comply with her disclosure obligations pursuant to Rules 12.02 and 13.04 of the Family Law Rules 2004 (“the Rules”). Between 5 July 2018 and 13 December 2018, Mr Gregory’s solicitor then wrote a number of further letters to Ms Duffle and/or her solicitors seeking specific further disclosure, including but not limited to her dealings with Centrelink, bank accounts, her income tax returns, and documentation in relation to Ms Duffle’s involvement in online dating websites. I am satisfied that the documents sought by Mr Gregory were relevant to the issues in dispute and that Mr Gregory was put to additional expense in his solicitor having to chase up those matters with Ms Duffle and/or her solicitors.

17Secondly, Mr Gregory submitted that Ms Duffle caused delay in the proceedings, including by: (1) successfully applying for the original trial date in June 2019 to be vacated; and (2) unsuccessfully objecting to the further trial date being listed in May 2020 during the Callover held in January 2020. However, I am not persuaded by Mr Gregory’s submission in this regard for the following reasons: Firstly, the trial in June 2019 was vacated, upon Ms Duffle’s affidavit evidence that she had travelled to [the Eastern States] for a short holiday prior to the trial, had been injured in an accident in [City A] and had been certified as medically unfit to fly back to Perth in time for the trial. When the trial eventually proceeded before me in May 2020, there was no exploration of the issue and Ms Duffle’s evidence was unchallenged. Whilst I accept that Mr Gregory undoubtedly incurred costs that were thrown away as a consequence of the trial being vacated in June 2019, I am not persuaded that Ms Duffle deliberately delayed the trial. Secondly, although Ms Duffle requested a later date at the Callover, she was unsuccessful and the trial was listed for May 2020. Accordingly, there was no delay.

18Thirdly, Mr Gregory submitted and I accept that Ms Duffle’s conduct during the trial in May 2020 was concerning and unnecessarily added to his litigation costs. In particular, in my Reasons, I was not satisfied that Ms Duffle was always prepared to be honest in giving her evidence. For example, it became evident from Ms Duffle’s cross-examination that: (1) her evidence in relation to when the de facto relationship commenced continually shifted;[3] and (2) her evidence was littered with examples of half-truths and untruths, which were intended to create the perception of a de facto relationship, but which were ultimately misleading.[4]

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

[3] Duffle and Gregory [2020] FCWA 89, [7] – [9] and [11].

[4] Duffle and Gregory [2020] FCWA 89, [10].

19I accept Mr Gregory’s submission that Ms Duffle was wholly unsuccessful in the proceedings.

Whether a party to the proceedings has made an offer in writing to another party to the proceedings to settle the proceedings and the terms of any such offer

20On 13 January 2020, the parties attended a full day Pre-Trial Conference with [a Family Court of WA] Registrar. The parties were unable to reach agreement, but the Registrar noted that Mr Gregory would put the offer he made to Ms Duffle during the conference formally in writing to her, so that she could consider the offer and take legal advice, if possible, as soon as possible.

21On 17 January 2020, Mr Gregory’s solicitor wrote to Ms Duffle and enclosed: (1) a Deed of Settlement and Release; (2) a Minute of Consent Orders in relation to these proceedings; and (3) a Minute of Consent Orders in relation to the civil proceedings. In short, Mr Gregory proposed that:

a)The family law proceedings be dismissed with no order as to costs;

b)The civil proceedings be dismissed with no order as to costs;

c)Ms Duffle be liable for and indemnify Mr Gregory in relation to the Suburb B mortgage; and within a period of three years, cause Mr Gregory to be removed from the Suburb B mortgage, either by refinancing the said mortgage into her sole name or paying off the loan in full.

22By email dated 27 January 2020, Ms Duffle rejected Mr Gregory’s offer. There was no evidence before me that Ms Duffle ever made any offer to Mr Gregory.

23In my view, Mr Gregory’s offer was a reasonable one which should have been accepted by Ms Duffle. She did not, and as a consequence, Mr Gregory incurred further substantial legal fees in having to proceed with the trial.

Such other matters as the court considers relevant

24There are no other matters that I consider relevant.

Conclusions

25The discretion to award costs is a “broad” one, and the various enumerated factors are not to be read in any restrictive way.[5] Any one of the factors may be the sole foundation for an order for costs.[6] Nevertheless, the matters enumerated “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”.[7] It is unnecessary to spell out detailed reasons for decisions in costs matters. An exercise of discretion to order costs will be upheld if it appears to the appellate court that there are reasons upon which the trial judge or magistrate could rely.[8]

[5] Collins & Collins (1985) FLC 91-603.

[6] Fitzgerald v Fish (2005) 33 Fam LR 123.

[7] I and I (No 2) (1995) FLC 92-625, 82,277.

[8] B & B [2015] FCWA 65; Greedy and Greedy (1982) FLC 91-250; Luadaka v Luadaka (1998) FLC 92-830.

26On balance, and having regard to my earlier findings, I consider that the circumstances do justify the making of a costs order in favour of Mr Gregory. In particular, I consider that Ms Duffle’s conduct during the proceedings and at trial, her failure to accept Mr Gregory’s offer at the Pre-Trial Conference and her being entirely unsuccessful at trial in establishing that the parties were in a de facto relationship, unnecessarily added to Mr Gregory’s costs.

27Mr Gregory sought the costs of the proceedings, fixed in the amount of $39,010.93, payable on a party / party basis pursuant to Rule 19.19 of the Rules. Mr Gregory’s detailed costs schedule was purportedly calculated in accordance with Schedule 3 of the Rules. However, I observe that work done prior to 1 January 2019 was calculated at the rate applicable to work done on or after 1 January 2019, rather than in accordance with the prescribed applicable rates for the relevant period.

28I am not satisfied that that Ms Duffle should meet the entirety of Mr Gregory’s claimed costs. However, I am satisfied that Ms Duffle should make a significant contribution towards Mr Gregory’s costs, particularly as a consequence of the matters referred to in paragraph 26 above. Rule 19.18(1)(a) permits the court make an order that a party is entitled to costs of a specific amount. I intend to proceed on that basis, rather than putting the parties to the further expense of a taxation process. I consider that the amount of $27,500 is just. I am satisfied that Ms Duffle should be given a period of 90 days to make payment, particularly as it may be necessary for Ms Duffle to sell the Suburb B property, if she cannot refinance, or otherwise fund the payment of the costs order by other means.

Orders

29I intend to make the following orders:

1.Within 90 days of these orders being made, the applicant, [MS DUFFLE], pay costs to the respondent, [MR GREGORY], fixed in the sum of $27,500.

2.All outstanding applications otherwise be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

KV
Associate

3 SEPTEMBER 2020