EDWARDS & EDWARDS

[2010] FamCA 486

FAMILY COURT OF AUSTRALIA

EDWARDS & EDWARDS [2010] FamCA 486

FAMILY LAW – COSTS – Where the wife was wholly unsuccessful – Where the wife has limited financial resources – payment by instalments
FAMILY LAW – COURTS AND JUDGES – Application for Disqualification – Where the prospect of an adverse outcome is not the prospect of a biased outcome

Family Law Act 1975 (Cth)

Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Johnson v Johnson (2000) 201 CLR 488
Re JRL; Ex Parte CJL (1986) 161 CLR 342
O’Rourke v P & B Corporation Pty Ltd [2008] WASC 36

APPLICANT: Mr Edwards

RESPONDENT: Ms Edwards

FILE NUMBER: TVF 2766 of 2000

DATE DELIVERED: 17 June 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 30 April 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:

SOLICITOR FOR THE APPLICANT: Wilson Ryan & Grose

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT: Litigant in person

Orders

1. The wife pay the husband’s costs arising out of the proceedings commenced by the wife’s Application filed 30 July 2008 and this application for costs, by 156 weekly payments of $50 per week (total amount $7,800). 

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: TVF 2766 of 2000

MR EDWARDS

Applicant

And

MS EDWARDS

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. This case is about whether the wife should pay costs arising from the hearing which concluded when orders were made on 21 January 2010.  The hearing was conducted on 16 to 20 March 2009, 14 to 16 April 2009 and 12 August 2009.

2. The parties were separated in 2000 and consent orders in relation to children and property were made on 11 September 2001.

3. The hearing before me primarily related to the wife’s application under s 79A of the Family Law Act (“FLA”) to set aside in 2001 consent orders. It also dealt with spousal maintenance, adult child maintenance and child support. The wife also made an unsuccessful application to reopen her case, after submissions had concluded but before judgment.

4. The wife’s primary applications were dismissed.  An order for child support was made. 

APPLICATIONS

Husband

1. The husband sought the wife pay the costs arising out the proceedings relating to the wife’s application dated 30 July 2008 and eventuated in the orders of 21 January 2010. The husband’s application is that the costs should be assessed on a lawyer and client basis.

2. The husband also seeks costs for the current Application in a Case.

3. The husband is willing to receive the costs in instalments.

Wife

1. The wife sought that the costs application brought by the husband be dismissed and that all outstanding debts be paid to the wife.

2. The wife made an oral application at the opening of proceedings that the matter be adjourned pending a determination from Legal Aid. Considering the protracted nature of this matter, that application was dismissed.

3. The wife also made an oral application that I disqualify myself from hearing the husband’s costs application on the basis that I have made a finding against the wife in the substantive proceedings and that she is appealing my decision on the basis of bias. I also dismissed that application and I will provide my reasons for that decision below.

DOCUMENTS RELIED UPON

1. The husband relies on the following documents:

   11.1.Application in a Case filed 18 February 2010

   11.2.Husband’s Affidavit filed 18 February 2010

   11.3.Affidavit of Dale Graw filed 24 March 2010

2. The husband also sought to rely on paragraph 9 of his affidavit filed out of time on 22 April 2010. He later withdrew this request.

3. The wife relies on the following documents:

   13.1.Response filed 26 March 2010

   13.2.Wife’s affidavit filed 26 March 2010

FINDINGS AGAINST THE WIFE IN THE SUBSTANTIVE HEARING

1. A number of findings were made against the wife in my reasons for judgment dated 21 January 2010.  When dealing with the wife’s credibility, I discussed the wife’s evidence in respect of certain events which she remembered happening on 11 September 2001, I concluded that the wife was either being untruthful or had so reconstructed what had happened that her memory of those events was totally unreliable.  I found that the wife annexed a document, which she knew was unreliable, to an affidavit which the wife swore to be true.  I found that the wife’s memory of advice that she had been given by her lawyers was inherently unlikely to be accurate and I did not accept the wife’s evidence that her lawyers had told her that a meeting had taken place at Legal Aid.  Overall, I concluded that the wife was not a credible witness, that she had invested a large amount of her time and effort into the litigation and had retrospectively reached the conclusion that various injustices had been perpetrated upon her on 10 and 11 September 2001. There were a number of other assertions made by the wife in her evidence that I found were reconstruction by the wife.  Overall, where the wife’s evidence was in conflict with the versions and events given by the husband and witnesses called in his case, I did not prefer the wife’s evidence.  I also found that the wife had denied the extent of her gambling problem. 

APPLICATION FOR DISQUALIFICATION

1. The wife made an oral application that I disqualify myself from hearing the husband’s costs application on the basis of perceived or actual bias, given that I have made adverse findings against her in the substantive proceedings and that she is appealing my decision on the basis of bias. I made an order on 30 April 2010 dismissing that application, reserving my reasons which I now give.

2. The wife has not led any evidence to indicate that I am actually biased against her. 

3. The test relating to dismissal on the basis of perceived bias is clearly articulated in the High Court case of Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337. The High Court made the following remarks:

   Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge…a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide [emphasis added]. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial.

   …Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability.

4. Further explanation was provided by the High Court in Johnson v Johnson (2000) 201 CLR 488.

   Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice.

5. The High Court in Re JRL; Ex parte CJL (1986) 161 CLR 341 (per Mason J) made the following comments at 352:

   It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party. There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be “firmly established”: Reg. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group; Watson; Re Lusink; Ex parte Shaw.

6. It is suggested by the wife that the adverse findings I have made against the wife, outlined above, create a perception that I will be biased when hearing this cost application.  For this suggestion to be firmly established, it must be shown that there is the basis for a perception that I will not bring an impartial and unprejudiced mind to the hearing of the costs application.  A possible threat of a further adverse finding based on the merits of the husband’s cost application is not sufficient to ground a successful application for disqualification. 

7. The issue of disqualification on the basis of perceived bias must be taken seriously to promote its primary principle, that not only should justice be done, but it should be seen to be done. There is however another side to the policy considerations – litigants should not be encouraged to believe that by asserting bias they may essentially choose their Judge, and attempt to have their case re-tried more favourably.  In Ebner v Official Trustee in Bankruptcy, the court said:

   …Judges do not choose their cases; and litigants do not choose their judges. If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case.

   …if the mere making of an insubstantial objection were sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for practical purposes, individual parties could influence the composition of the bench. That would be intolerable.

8. This principle is also acknowledged in O’Rourke v P & B Corporation Pty Ltd [2008] WASC 36 where Martin CJ refers to costs submissions designed to allow a partial rehearing of the facts as ‘satellite litigation’ or more preferably ‘parasitic litigation’ due to the tendency of such submissions and applications to “sap the energy of the parties and their legal advisers and the court, and to distract legal advisors and the court from getting on with other more important issues including the resolution of substantive disputes”. A trial judge, who may have (as in this case) made unfavourable findings against a party is best placed to make findings relating to whether a party was wholly unsuccessful and as to how litigation was conducted. In a property case, he or she is familiar with both parties’ financial circumstances. It would undermine the efficiency of the administration of the court if regularly a new Judge had to spend time familiarising herself or himself with the case, which in this case was heard over nine days, to make a decision about costs in that case. Having presided over the proceedings and formulated the judgment in this case, I am the Judge in the best position to efficiently apply the law as it relates to costs applications relating to the substantive hearing. I find the basis advanced by the wife for me to disqualify myself is insufficient to require me to do so.

APPLICATION FOR COSTS

1. Section 117(1) FLA provides that subject to ss 2, each party to proceedings under the FLA shall bear his or her own costs. Section 117(2) FLA provides that if the court is of the opinion there are circumstances that justify it in doing so, the court may make such order as to costs as the court considers just.

2. In considering what cost order (if any) should be made, the court is to have regard to the matters set out in s 117(2A) FLA.

Financial circumstances of the parties

Wife

1. The wife says she does not have the capacity to pay costs. There are still two children of the marriage under the age of 18 years, and the child aged 21 has returned to live with the family for periods of time. The mother says she pays for all their expenses, although the eldest child receives Youth Allowance of $440 per fortnight. The second child also receives Youth Allowance of $200 per fortnight and has a part time job for 12 hours per week.

2. The wife’s sworn evidence is that her circumstances have changed since those that existed at the hearing. 

3. The wife says that as at 26 March 2010 she has not been on the work roster since 10 December 2009.  She says this was not her decision but that of her employer. 

4. The wife says she survives on a disability pension of $651.90 per fortnight which reduces with earned income, part-time work, child support of $574 per fortnight and family tax benefit of $288.22.

5. The mother says she has a debt of $2,400 to her landlady and other debts of $4,000.

6. The wife says the husband does not make significant payments for the children. The second child has finished school and therefore has no school expenses. The third child’s agreement with the husband regarding Rugby expenses is a private agreement of which she has no knowledge. She says the husband only pays for the eldest child’s university books.

7. The husband concedes that the wife is not in receipt of a high income. His case is rather that she is able to work more hours to earn more money but is refusing to do so.  I found in my primary judgment that the wife had demonstrated an ability to maintain regular employment. 

8. The wife refers to the family being in financial crisis due to her being put off the work roster.  Without giving any detail, the wife says she has applied for other advertised positions and has not been successful in gaining employment.

Husband

1. The husband’s previous legal costs are substantial. The husband puts his legal costs from 2001 to the 2004 hearing and the 2005 appeal at above $70,000. Part of that amount is made up by the following items:

   33.1.$10,583 invoice of November 2004 relating to the wife’s application of 21 January 2004 and 26 July 2004.

   33.2.$1,681 invoice of February 2005 relating to the husband’s application for costs and restraining the wife from further proceedings.

   33.3.$27,267 invoice of 25 February 2008 for work done between December 2006 and February 2008.

   33.4.$10,450 for Barrister’s fees for above, paid for by husband’s parents.

2. The husband says he has $55,000 in legal debts and a loan on the Townsville home, which is not covered by the rental income earned from it. The husband otherwise resides in rental accommodation in Brisbane. The husband also has debts owed to his parents with respect to the children’s school fees.

3. The husband earns a good and steady income of $1,340 per week gross (with tax of $354 per week). He has a property in Townsville which he is hoping to sell to pay debts. The husband however pays child support for the two children under 18 of $1,230 per month. He also financially assists the eldest child who, though over 18, still requires financial support. The husband’s weekly expenditure exceeds his income.

Comparison of the parties’ financial situation

1. The husband concedes that he is in a stronger financial position than the wife.

Legal Aid

1. Neither party have been in receipt of Legal Aid.  The wife, who is an intelligent woman, has represented herself throughout the proceedings.  The husband has expended money on legal representation as a result of the litigation that has been prosecuted by the wife. 

Conduct of the proceedings

1. In the affidavits the wife relies upon in support of her opposition to the costs order, she seeks to argue matters dealt with in the reasons for judgment.  This includes her continued denial that the 2001 Consent Orders were signed with informed consent. The wife challenges the findings made in the January 2010 judgment, including that the lawyers did not act appropriately, that she had gambled excessively and that she had reconstructed events surrounding the 2001 Consent Orders.

2. The wife alleges it is the husband that has had them ‘in the Court room for the past 10 years’. It seems from her oral evidence that she was referring to his decision to obtain Consent Orders in 2001 and his apparent refusal to negotiate out of Court since that time.  I do not accept the husband is the cause of the protracted litigation between the parties.  He has successfully resisted the wife’s attempts to set aside the original property orders. 

3. The Wife claimed that the husband’s conduct in the proceedings was inadequate, based on non-disclosure. The husband says he has made full disclosure, but the wife has not. The husband claims that the wife’s conduct has been questionable, with multiple applications over approximately nine years requiring the husband spend money on legal fees and attend court, in a situation where the arrangement for children and property was finalised soon after separation.

4. I find that the wife’s claims that the husband has inappropriately conducted proceedings, particularly in relation to the areas of discovery and production of documents, are without foundation.

Failure to comply with orders

1. The wife says that the husband has not complied with previous orders but gives no details of what orders she has in mind.

2. The husband says he has complied with all orders of the court, as has the wife, although the protracted litigation is a result of the wife failing to accept the finality of the 2001 Consent Orders.

3. Nevertheless, neither party asserts that any significant costs have been generated as a result of the other party failing to comply with the court order. 

Whether a party has been wholly unsuccessful

1. The husband’s primary submission was that the wife was wholly unsuccessful. Her primary application was to set aside the original consent orders under section 79A, and this was dismissed as were her applications for adult child maintenance and spousal maintenance. Whilst an order for child support was made, it was generally in line with the Child Support Agency assessment. The husband was already paying the wife $1,230 per month. Her application to adduce further evidence was also unsuccessful in regards to “a large bulk” of the material, and the two letters which were allowed did not impact upon the result of the primary application.

Offers

1. No offers were made in writing by either side.

Other matters

1. As noted in my reasons for judgment, for the primary orders (at paragraph 9) the wife has had a prior application for relief under s 79A dismissed with costs on 11 February 2002. The cost order was in the sum of $3,365.

CONCLUSION ABOUT A COSTS ORDER

1. The determination of costs in this case is largely dependent on two factors: the financial circumstances of the parties and the lack of success by the wife in the applications she has brought.

2. The husband says that the general rule that parties pay for their own costs in family law property matters should be considered in light of the fact that the wife has sought to set aside consent orders for close to nine years, and this cause remains ongoing. This should be considered along with the results, which show the wife to be repeatedly unsuccessful. The husband is continually out of pocket as a result of the wife’s continuing pursuit of unmeritorious applications.  I conclude it would be just for some cost order to be made against the wife, notwithstanding what she says are her current financial circumstances. 

QUANTUM OF THE HUSBAND’S COSTS

1. The husband has not entered into a Costs Agreement with his solicitor, but his assessed costs relating to the 30 July 2008 application are $24,410.50 (including GST) for work done between 26 February 2008 to 6 August 2009. The assessment was undertaken by Dale Graw and is annexed to his affidavit of 24 March 2010. The assessment has been implemented by the husband’s invoice of legal fees, also annexed, which remains unpaid. The husband notes that this assessment covers a period 5 months prior to the relevant application, but costs not connected to the relevant application were ‘small’.

1. No invoice had been received for fees after 6 August 2009, though the husband has been advised they are in the sum is several thousand dollars.

2. In relation to the 30 July 2008 application the following additional costs have accrued:

   52.1.$900 for valuers fees, Court photocopy costs and conduct money for three subpoenas.

   52.2.$31,020 for barrister’s fees.

3. The husband’s legal debt seems to have been rounded down to $55,000. On the husband’s calculations he has accrued $56,330 in legal fees.  Were it not for the wife’s financial situation, I would have ordered costs for the full $55,000 claimed, on the basis that the wife was wholly unsuccessful.  That amount seems to me to be a reasonable sum given the nature and extent of the case the wife has prosecuted as a litigant in person.  However, the wife’s financial circumstance means an order to that extent cannot be made. 

4. The husband concedes that the wife is in a more precarious financial situation. I agree with that concession. The wife does have access to income however, including child support and pension. Two of the children are obtaining Youth Allowance which should go some way towards reducing their reliance on the wife.  She also has an earning capacity, which she should be able to exercise (notwithstanding she says she has currently been unsuccessful in obtaining employment).  I am mindful that in the past, the wife has reduced work hours with a view to maximising Centrelink benefits. 

5. I find that the wife has the capacity to pay some costs at a substantially reduced level on an instalment basis.  The husband has accepted the possibility of payments by instalments. 

6. Although I find had the wife the capacity to pay, a just order would be for the wife to pay the full $55,000, I will not order that she do so, based on the limitations of her capacity to pay. I will order that the wife pay an amount in instalments over a three year period. Based on her income I feel that a $50 weekly payment will be appropriate. This will require that 156 instalments of $50 will be paid over a period of 3 years, totalling $7,800.  This is a result which is just in the circumstances.  

I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts.

Associate: 

Date:  17 June 2010