Duncan and Dynowicz (Costs)
[2023] FCWA 85
•1 MAY 2023
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: DUNCAN and DYNOWICZ (COSTS) [2023] FCWA 85
CORAM: O'BRIEN J
HEARD: WRITTEN SUBMISSIONS
DELIVERED : 1 MAY 2023
FILE NO/S: 3817 of 2009
BETWEEN: MR DUNCAN
Applicant
AND
MS DYNOWICZ
Respondent
Catchwords:
COSTS - parenting proceedings – where the wife seeks an order for costs after a five-day trial – where neither party was wholly unsuccessful in the relevant sense, and offers made or not such as to justify an order for costs – where the conduct of both parties as litigants contributed to delay and length of trial – where an order for costs is not justified – turns on its own facts
Legislation:
Family Law Act 1975 (Cth)
Category: Reportable
Representation:
Counsel:
| Applicant | : | Self-Represented Litigant |
| Respondent | : | Mr D Squires |
Solicitors:
| Applicant | : | Self-Represented Litigant |
| Respondent | : | DSA Legal |
Case(s) referred to in decision(s):
Anison v Anison (2019) FLC 93-908
Beach Petroleum NL and Anor v Johnson and Ors (1995) 57 FCR 119
Braithwaite & Braithwaite [2007] FamCA 468
Browne v Green (2002) FLC 93-115
Duncan and Dynowicz [2023] FCWA 16
Farmer & Panshin (2014) FLC 93-587
Harris and Harris (1987) FLC 91-822
Idoport Pty Ltd v National Australia Bank Ltd & Ors [2007] NSWSC 23
Parke v The Estate of the Late A Parke (2016) FLC 93-748
Prantage & Prantage (2013) 49 Fam LR 197
Wrenstead & Eades (2016) FLC 93-697
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 Duncan and Dynowicz has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 312(b) Family Court Rules 2021 (WA)), or to record a variation to the orders pursuant to r 311 Family Court Rules 2021 (WA).
1The parenting proceedings between [Mr Duncan] ("the husband") and [Ms Dynowicz] ("the wife") proceeded to trial over five days concluding on 4 November 2022. I made orders on 1 February 2023 for reasons published that day ("the primary judgment").[1] I incorporate the primary judgment in these reasons.
[1] Duncan and Dynowicz [2023] FCWA 16 (“the primary judgment”).
2The matter now requiring determination is the application of the wife for costs. She seeks a payment in the sum of $200,000, or that in the alternative her costs be assessed. The application is opposed. Both parties have filed written submissions,[2] and neither has sought a relisting for the making of oral submissions within the timeframe specified by the relevant orders. The application therefore falls to be determined in Chambers and on the papers.
[2] The wife filed her Written Submissions on 1 March 2023, and the husband filed his on 31 March 2023.
3As the relevant background is of course familiar to the parties, and the primary judgment is incorporated into these reasons, I propose to summarise the background only to the extent necessary to give context to what follows.
Brief background
4The husband is a lawyer who lives in the United States of America ("USA"). The wife is a [professional] who was born in the USA but moved to Perth with her family in 1983. The parties met in Perth, were married in September 2004, and separated in October 2007. When they separated, the husband returned to live in the USA, where he has remained, and the parties were divorced in October 2009.
5Subsequently, the wife approached the husband to be her known donor so she could have a child. The husband agreed subject to certain stringent conditions; in short, he was to have no financial responsibility for the child and no involvement in the child's life. Those conditions were reflected in a financial agreement executed by the parties and described in more detail in the primary judgment.
6The parties acted on their agreement and their child [Child A] was born on 20 September 2010. The husband left Western Australia shortly after Child A's conception and has not returned, other than for an earlier scheduled trial in the proceedings. He last spent time with Child A in early 2011 when the wife visited the USA with her, and last had any form of Skype or similar communication with her in April 2014.
7At trial, the husband sought equal shared parental responsibility and orders for video, telephone and email communication. He proposed that after an initial introductory visit, Child A spend equal time with each parent during the three to four months each summer in which he would propose to visit Perth, and substantial and significant time with him should she travel to the USA. He sought a raft of other orders which need not be detailed for present purposes.
8The wife sought sole parental responsibility and that after an initial introductory visit Child A communicate with the husband and spend time with him in accordance with her wishes. The details of the incremental progressions she proposed need not be summarised for present purposes.
The legal principles
9There are two primary matters for determination: whether there are circumstances that justify an order for costs, and if so, what order for costs is just.
10Subsection 117(1) of the Family Law Act 1975 (Cth) ("the Act") provides that, subject to s 117(2), each party to the proceedings shall bear his or her own costs.
11Subsection 117(2) provides that if the Court is of the opinion that there are circumstances that justify doing so, the Court may, subject to s 117(2A), make such orders as to costs as it considers just. Subsection 117(2A) provides as follows:
In considering what order (if any) should be made under subsection (2), the Court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(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;
(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;
(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.
12The discretion conferred by s 117(2) is broad. The factors set out in s 117(2A) are not to be read in a restrictive way and any one of those factors may in appropriate circumstances be the sole basis for an order for costs. That said, the relevant matters in the subsection must be considered and balanced to determine whether an order for costs is justified. The legislative provisions in relation to costs do not draw any distinction between parenting cases and financial cases, nor is the breadth of the Court's discretion subject to any such distinction.[3] An order for costs is compensatory, not punitive.[4]
[3] Wrenstead & Eades (2016) FLC 93-697, [103].
[4] Braithwaite & Braithwaite [2007] FamCA 468, [8].
13The purpose in all courts of rules enabling an order for costs in a specific amount, without formal assessment or taxation is to "avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation".[5] If the Court is to fix a sum it should be fixed broadly having regard to the available information, without a process similar to a traditional taxation or assessment of costs.[6] 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".[7]
Legislative considerations
[5] Beach Petroleum NL and Anor v Johnson and Ors (1995) 57 FCR 119, 120.
[6] Parke v The Estate of the Late A Parke (2016) FLC 93-748, [130].
[7] Idoport Pty Ltd v National Australia Bank Ltd & Ors [2007] NSWSC 23, [10].
14Neither party was in receipt of legal aid. While the husband contends that the wife failed to comply with various orders made by Duncanson J in December 2019, the proceedings were not necessitated by the failure of either party to comply with previous orders in the relevant sense.
15Accordingly, the matters requiring consideration are:
a)the financial circumstances of the parties;
b)the conduct of the parties in relation to the proceedings;
c)whether either party was wholly unsuccessful in the proceedings;
d)relevant written offers; and
e)such other matters as the Court considers relevant.
The financial circumstances of the parties
16The most recent evidence as to the financial circumstances of the wife is contained in her financial statement filed on 18 July 2022. She said that she was in full-time permanent employment with an average weekly income of $4,330 AUD and average weekly expenses of $3,072 AUD. She had property to a value of $856,400 AUD, superannuation to a value of $597,000 AUD, and no liabilities or financial resources. Pursuant to the agreement between the parties, she was not in receipt of any form of child support.
17The most recent evidence as to the financial circumstances of the husband is contained in his financial statement filed on 5 April 2022. He said that he had no income, describing himself as a "semi-retired attorney" employed on a part-time basis. He said that he had average weekly expenditure of $515 USD, owned property to the value of $1,302,000 USD, and had the US equivalent of superannuation to a gross value of $1,100,100 USD plus "$2,000 annuity", clarified elsewhere in the document as being anticipated monthly Social Security payments once he reaches the age of 67. Of the property owned by him, some $830,000 USD by value was in the form of stocks, and mutual funds as distinct from real estate.
18A comparison of the respective financial circumstances of the parties does not of itself justify an order for costs. That said, the wife has clearly had the capacity to meet her significant legal costs of some $322,000 AUD inclusive of GST and the husband has the capacity to pay the costs sought against him should that be proper.
Conduct
19It is important to bear in mind that the terms of s 117(2A) (c) refer to the conduct of the parties as litigants, rather than their personal conduct more broadly.[8] Both parties placed significant emphasis on that subsection, and their submissions may be briefly summarised.
[8] Prantage & Prantage (2013) 49 Fam LR 197, [104], [109], [143].
20The wife submits that the husband failed to file his trial affidavit as ordered prior to the first scheduled Readiness Hearing in December 2018 and he first raised the question of setting aside the financial agreement only at that point, and after she had drafted her trial material. She says that the husband "raised numerous irrelevant issues" and sought to have various factual findings of no utility made about her and members of her family. She refers to documents filed by him in seeking to censure Child A's therapists as being unnecessary and irrelevant but having to be dealt with by her lawyer at some expense. She is critical of the husband filing multiple affidavits, requiring some attention to determine just what evidence was to be relied upon at trial.
21The husband submits that he relevantly made significant efforts prior to the commencement of proceedings to resolve matters by agreement, without appropriate response. He refers to having offered in January 2016 to participate in "arbitration (binding or otherwise, at [the wife's] option)"; of course, arbitration of parenting disputes is not available under the Act.
22He is critical of the wife's engagement in the therapy ordered by Duncanson J, and of the approach taken by her lawyer. He says that by late 2020 he perceived that the wife and her lawyer "had defeated Judge Duncanson's twin efforts to avoid trial (through the therapeutic diversion) and to progress reunification (through Father – [Child A] gifts)."
23The husband takes an adverse view of the conduct of the proceedings on behalf of the wife by her lawyer. The antipathy between the husband and the mother's lawyer at trial was palpable, and apparently mutual. It is unnecessary for the purpose of these reasons to describe further the criticisms each makes of the other.
24In response to the wife's submissions, the husband says that he "sincerely apologises" both to the Court and to the wife for his "misunderstandings of procedures, customs and related issues", while going on to candidly acknowledge that certain of his actions were "tactical". While the observations already made in the primary judgment need not be repeated in full, certain of them resonate in the required consideration of the conduct of the parties as litigants.
25I noted that notwithstanding the wife was represented, it could "fairly be observed that several of the orders sought by her [were] unusual in both form and content",[9] raising among other things issues as to the purported delegation of decision making to a therapist and unnamed persons at Child A's school. I also noted the prolix nature of the relief initially sought by the husband.
[9] The primary judgment, [32].
26At the Status Hearing prior to trial, I considered it necessary to draw to the attention of both parties "my preliminary view that the documents filed by each of them to that point revealed a singular lack of focus on the actual issues requiring determination",[10] going so far as to urge both to read the relevant parts of the Act prior to trial. Even then, I considered it necessary to stand the matter down on the first day of trial to permit both parties to consider their positions in relation to the relief they sought and the apparent inconsistencies in their cases. Again, my intent was to afford the parties the opportunity to properly focus on the singular issue in the case – what parenting orders would best serve Child A's interests.
[10] Ibid, [35].
27The positions taken by the parties in relation to the agreement they had executed prior to Child A's conception were confused and their focus on that issue had no utility. While considerable time, energy, and presumably cost, were directed to that issue prior to trial, in the end neither party sought any relief in relation to the agreement.
28Over the course of the trial, it became apparent that the best interests of Child A would not be served by the orders initially proposed by either party. After the evidence concluded, I made various preliminary observations and urged the parties to consider a more nuanced and sequential approach than either of them had proposed to that point. On the following day of trial, both parties tendered amended minutes of orders sought; neither proposed a sequential approach to reintroduction and neither approach was even remotely nuanced. The opportunity had to be given for the parties to file still further amended proposals.
29Eventually, the husband sought 50 separate orders. The wife also sought very detailed orders. It is sufficient for present purposes, against the background of the observations already made to simply note that I considered it necessary to take the unusual step of annexing both minutes to the primary judgment rather than attempting to completely paraphrase or summarise the positions of the parties.
30My findings as to the husband's strategic, transactional, and confrontational approach to the litigation are set out the primary judgment and need not be repeated. By the same token, I found that a somewhat confrontational approach has also been taken at times by the wife, and those representing her, and that the attention of both parties had been diverted at times from central issues in the case. Both parties engaged in pointless and arid disputes. Both struggled to focus on the issues actually requiring determination, and expended their own time and energy, and that of the Court, in retrospective analysis of the perceived failings and unreasonableness of the other.
31Bluntly, both parties can be justifiably criticised for their conduct as litigants. The required consideration of s 117(2A) (c) does not justify an order for costs.
Wholly unsuccessful
32It is well settled that s 117(2A) (e) refers to a situation where proceedings as a whole have been unsuccessful. For example, where an application without merit has been dismissed.[11]
[11] Anison v Anison (2019) FLC 93-908, [37].
33The wife's submission that the husband's substantive application, including as amended in the manner described in the primary judgment, was wholly unsuccessful in the relevant sense is misconceived. As I observed, over the course of the trial it became clear that Child A's best interests would not be served by the orders initially proposed by either party.[12]
[12] The primary judgment, [61] and see also [63] – [64].
34Similarly, the husband's submissions as to the particular points in respect of which he would suggest he was "wholly successful" misapprehend the proper application of s 117(2A) (e).
35Neither party was wholly unsuccessful in the relevant sense.
Offers
36The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it a proper consideration, is something to which very significant weight ought normally be given.[13]
[13] Browne v Green (2002) FLC 93-115, [57].
37The wife does not suggest that she made any written offers relevant to be considered pursuant to s 117(2A) (f).
38The husband submits that he made more than 30 "written settlement offers and entreaties to settle" between November 2017 and September 2022. Extracts from various of those offers are annexed to his written submissions. Of course, the relevant consideration requires attention to the terms of offers, rather than the mere act of offers being made.[14] Offers should also be sufficiently precise and clear in their terms to be capable of acceptance.[15]
[14] See Farmer & Panshin (2014) FLC 93-587.
[15] Harris and Harris (1987) FLC 91-822, 76,189.
39It is unnecessary to repeat the observations already made as to the transactional approach taken by the husband, and the plainly unreasonable conditions attached to some of his proposals and offers[16]. It cannot sensibly be suggested that any of the husband's offers would, if accepted, have led to an outcome even approximating the final orders made. By way of one example only, in an email sent on 7 September 2022 the husband observed that both parties knew what the other "hated" about their respective proposals. In enquiring whether the wife was "open to a deal", he said:
However, I assess there is no way I can lose on the joint equal shared responsibility, given the presumption, and no way I can lose on at least one count of the family violence claims.
I am willing to consider dropping requests related to both those issues.
Can you tell me what you would offer in return?
[16] See in particular in the primary judgment, [92] – [99].
40It is sufficient to observe that the terms of the husband's various offers were not such as to mitigate against any order for costs against him, were such an order otherwise justified.
Such other matters as the court considers relevant
41In her written submissions referring to s 117(2A) (g), the wife recites a number of matters already appropriately considered under the more specific subsections.
42She also refers to the terms of the agreement executed by the parties before Child A's conception, and the husband's collateral agreement with her father, noting that both "remain live to the present day"; the relevance of those observations is not clear. To the extent it might be suggested that the husband's actions in commencing parenting proceedings in the face of those agreements of itself somehow justifies an order for costs, that suggestion must be rejected in the face of the common position correctly adopted by both parties – that their written agreement could not in any sense preclude such proceedings.
43In his written submissions, the husband takes issue with the wife's description of him as an "experienced" lawyer, saying that he practised law full-time for one year only over 35 years ago. Nothing turns on that for obvious reasons.
Disposition
44While the circumstances giving rise both to Child A's birth and the subsequent disputes and litigation are unusual, and the dynamics between the parties are complex, the issues requiring determination at trial were capable of simple description – how best to approach the issue of a possible relationship between a 12-year-old child and a father with whom she has no existing relationship, and who lives on the other side of the world.
45It was common ground that Child A was aware of the existence of her father and was cautiously curious about exploring the possibility of a relationship with him. The husband was keen to pursue a relationship and the wife, while apprehensive, expressed herself to be supportive of that if it accorded with Child A's wishes. Given that, an appropriately focused approach by both parties would have seen the litigation proceed in an entirely different manner.
46Instead, the litigation was protracted and unfocused. It took too long and cost too much. Apart from monetary expense, I have no doubt that it took a toll on both parties. It consumed a disproportionate amount of court resources, to the detriment of other litigants awaiting the determination of their disputes.
47For all the reasons outlined above and in the primary judgment, both parties must share the responsibility for that. Any attempt to arbitrarily apportion that responsibility would be both impossible and fruitless in any event.
48I am not persuaded that an order for costs is justified. The wife's application for costs will be dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.
RM
Associate
1 MAY 2023
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