Farrell and Farrell

[2016] FamCA 744

FAMILY COURT OF AUSTRALIA

FARRELL & FARRELL [2016] FamCA 744

FAMILY LAW – COSTS – Where the wife seeks that the husband pays her costs in relation to an application to enforce the husband’s obligations under a binding child support agreement – Where the parties ultimately entered into consent orders settling the outstanding amounts to be paid by the husband – Where the wife had failed to adequately particularise her claim – Application dismissed.

Family Law Act 1975 (Cth) s 117

APPLICANT: Ms Farrell

RESPONDENT: Mr Farrell

FILE NUMBER: SYC 1996 of 2010

DATE DELIVERED: 5 September 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: Dealt with by written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Mr Othen
SOLICITOR FOR THE APPLICANT:	Milevski Family Lawyers
SOLICITOR FOR THE RESPONDENT:	Ms Swifte of Swifte Law

Orders

1. The application of the wife that the husband pay her costs of and incidental to her Application in a Case filed on 18 August 2015 is dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Farrell & Farrell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1996  of 2010

Ms Farrell

Applicant

And

Mr Farrell

Respondent

REASONS FOR JUDGMENT

The proceedings

1. The parties to these proceedings, Mr Farrell and Ms Farrell, entered into a Binding Child Support Agreement (“the Agreement”) on 6 May 2011.  In summary, the Agreement provided that the husband pay educational and medical costs in respect of the parties’ four children and that he make no periodic contribution to their financial support.

2. Clause 4.2 of the agreement provided as follows:

   4.2[Mr Farrell] and [Ms Farrell] agree that [Mr Farrell] will provide child support to [Ms Farrell] for the children by:

   4.2.1.paying the education costs (as herein defined) for each of the said children from the date of this agreement coming into effect until the occurrence of a child support terminating event as provided for by this agreement; and,

   4.2.2paying the children’s medical costs (as herein defined) and:

   4.2.2.1[Mr Farrell] shall do all things necessary to permit [Ms Farrell] to claim directly upon the said health insurance policy in respect of any claimable expense incurred by her; and,

   4.2.2.2otherwise, [Mr Farrell] shall submit by way of claim on the said health insurance policy any expense met by [Ms Farrell] in respect of the children forthwith upon receipt from [Ms Farrell] of any invoice and/or receipt for such expense and shall pay to [Ms Farrell] forthwith upon receipt the proceeds of any claim made upon the said health insurance policy in respect of any claimable expense the costs of which has been met in the first instance by [Ms Farrell].

1. The term “Education costs” was defined as follows in the Agreement:

   3.1.5education costs means the costs of and incidental to the attendance of each of the children at [G School] or such other private schools as may be mutually agreed in writing by the parties or ordered by a court as and when due and shall include all reasonable fees that are included on all accounts issued by the school and the costs of school uniforms and text books, the acquisition of which shall be the responsibility of the husband.

2. The term “Medical costs” was defined as follows in the Agreement:

   3.1.6Medical costs mean all premiums due under the children’s current health insurance police [sic] and any “gap” medical expenses payable that are not covered under the said policy.

3. On 18 August 2015 the wife filed an Application in a Case by which she sought the following orders:

   1.That within seven (7) days of the date of these Orders the Respondent pay to the Applicant by way of bank cheque the sum of sixty thousand two hundred and fifty two dollars and 65 cents ($60,252.64) being outstanding child support amounts payable to the Applicant in accordance with the Binding Child Support Agreement dated 6 May 2011 (“the Agreement”).

   2.That the Respondent attend at this Court at Lionel Bowen Building, 97-99 Goulburn Street, Sydney NSW 2000 to be orally examined on all matters relating to his refusal or failure to comply with his obligations under the Agreement.

   3.That pursuant to Rule 20.10 of the Family Law Rules the Respondent Husband complete and file a Financial Statement within fourteen (14) days of the date of these Orders.

   4.That within twenty eight (28) days of the date of these Orders and pursuant to Rule 20.10 of the Family Law Rules the Respondent Husband produce to the Applicant Wife’s solicitors copies of the following documents:

   4.1The Respondent’s Income Tax Return and Notice of Assessment for the financial years ended 30 June 2013, 30 June 2014 and 30 June 2015 and in the event any Income Tax Return has not been finalised, any draft which has been prepared;

   4.2Income Tax Return and Financial Statements for the financial years ended 30 June 2013, 30 June 2014 and 30 June 2015 in respect of:

   4.2.1any entity of which the Respondent is a director; and

   4.2.2any Trust in which the Respondent is a beneficiary

   and in the event any Income Tax Return and/or Financial Statement has not been finalised, any draft thereof;

   4.3All statements of account in relation to any cheque, savings, trading, loan, investment, deposit, credit card or other style of account whatsoever kind and whatsoever nature conducted by the Respondent for the period from 1 January 2013 to the present date whether held solely by the Respondent or jointly with any person or persons or as Trustee or joint Trustee for any person or persons.

   4.4The Respondent’s most recent Superannuation Statement for any interest in any superannuation fund; and

   4.5Any application for finance made by the Respondent solely or with any other person or entity with any Bank or financial institution together with all documentation in support of any such application for the period 1 January 2013 to the present date.

   5.That the Respondent pay the Applicant’s costs of and incidental to these proceedings.

   This Application in a Case had a first return date of 7 December 2015.

4. The husband filed a Response to an Application in a Case on 4 December 2015.  He sought orders to the effect that he pay to the wife a sum of $8,416.95 on account of amounts unpaid pursuant to the agreement.  Otherwise, the husband sought a dismissal of the wife’s Application in a Case.

5. The wife filed an affidavit sworn on 18 August 2015 in support of her Application in a Case.  She annexed a purported schedule of unpaid amounts, over a period ranging from 24 May 2013 to 2 May 2015.  The wife also annexed to her affidavit copies of various receipts, some of which could be read only with difficulty and others not at all.

6. In his affidavit of 4 December 2015 the husband disputed that he was liable to pay all of the amounts claimed by the wife.  The husband deposed as follows inter alia:

   11.I have not received a copy of any invoice or receipt from the applicant at all from the date of the agreement until I received a letter from the Applicant’s solicitors, Paltos Milevski, dated 11 June 2015, enclosing a schedule of costs prepared by the applicant...

   12.I do not accept the Applicant’s schedule of costs as an accurate summary of either the costs that the applicant has incurred or the costs that I am obliged to pay pursuant to the Binding Child Support Agreement.  The Applicant has not disclosed to me the majority of source material in the form of receipts and invoices to support the schedule.  It appears that approximately 88% of the Applicant’s claims are unsubstantiated and not supported by any attached invoices or receipts.  In addition, the majority of the items fall outside of the agreed parameters of the Binding Child Support Agreement.  The Applicant’s schedule of costs include items relating to extracurricular activities such as ballet, horse riding, musical and surfing expenses including wetsuits and sunglasses.

   13.I am further concerned that the Applicant has replicated a number of the invoices and receipts in the annexures to her Affidavit filed on 18 August 2015.  An example of this is the multiple copies of the invoice no … for [D] for a “Comprehensive Dermatological Consultation” with [Dr W] on 28 May 2015 in the sum of $230...

1. On 7 December 2015 the parties consented to orders which provided that the husband pay to the wife a sum of $8,416.95 in relation to outstanding child support amounts within 14 days.  The proceedings were adjourned to 11 March 2016 before a Registrar for directions.  On 7 December 2015 the Court noted that there was no issue as to the husband’s capacity to pay whatever amount may be determined by the Court on account of unpaid amounts for which he is liable pursuant to the Agreement.  The Court noted further that the issue for determination was whether the amounts claimed by the wife were properly payable by the husband pursuant to the Agreement.

2. On 11 March 2016 a Registrar ordered that the wife provide to the husband “details of her amended claim” within 28 days.  This direction followed an indication on behalf of the wife that she “now withdraws her claim in relation to some items and is in the process of reviewing her claim.”  The Registrar directed that the husband provide his Response within a further 14 days and the proceedings were adjourned for further mention to 5 May 2016.

3. The wife filed no further material between 11 March 2016 and 5 May 2016.  On 5 May 2016 the Registrar made the following directions:

   1.This matter was listed before me today for telephone mention in relation to an Enforcement Application.  The enforcement is in relation to amounts of child support claimed by the wife to be covered by a binding child support agreement entered into by the parties and claimed by the husband not to be covered by that agreement.  The wife withdrew her claim in relation to some items.

   2.The matter was listed before me on 11 March 2016 an [sic] directions were made that:

   2.1The wife was to advise the husband of the details of her amended claim within 28 days.

   2.2The husband was to respond within a further 14 days.

   3.I note that the wife has not complied with the direction made that she provide details of her amended claim and that her solicitor is ceasing to act.

   4.The wife is to advise the husband of the details of her amended claim by 17 May 2016 and the husband is to respond by
   31 May 2016.

   5.The matter is listed in the call-over for the judicial duty list at 9:30am on 4 July 2016.

4. The wife filed an affidavit on 14 June 2016, to which she annexed invoices and receipts.  Several of these documents post-dated her Application in a Case of 18 August 2015.  The wife indicated in this affidavit that she sought payment in a total amount of $41,330.60.

5. On 4 July 2016 the proceedings came before me in a duty list.  By consent, I ordered that the husband pay within 14 days a sum of $38,000 “in full and final satisfaction of all enforcement proceedings contained in the Application in a Case filed on 18 August 2015 and all outstanding child support amounts payable to the applicant in accordance with the binding child support agreement dated 6 May 2011 up to and including 4 July 2016.”  The husband made this payment on 5 July 2016.

Approach to these proceedings

1. Applications for costs are to be determined within the framework of section 117 of the Family Law Act 1975 (Cth), which provides as follows:

   (1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.

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

   (2A)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.

Consideration

1. There was no evidence of the financial circumstances of the parties, neither of whom filed a Financial Statement.  As noted, the husband acknowledged on 7 December 2015 that there was no issue as to his capacity to pay whatever amount was ultimately determined by the Court.  In his written submissions, counsel for the wife wrote:

   The applicant accepts that her circumstances are sufficiently comfortable that the Court may treat this factor as neutral in the assessment as to whether or not special circumstances exist.

2. Legal aid is not a relevant consideration in these proceedings.  Neither party was in receipt of a grant of legal aid.

3. The wife’s initial claim was for a total amount of $60,252.65.  She was on notice from 4 December 2015 that the husband disputed a considerable number of her claims.  It is apparent from a perusal of the annexures to the affidavit of the wife of 18 April 2015 that there was substance to the husband’s complaints of duplication of claims and inadequate substantiation of various items in her schedule.

4. Unsurprisingly, therefore, orders were made on two occasions which obliged the wife to particularise her claim.  She failed to comply with orders to that effect made on 7 December 2015 and 11 March 2016.  When the wife finally swore an affidavit which attempted to clarify her claims on 10 June 2016, she included amounts which post-dated her Application in a Case of 18 August 2015.

5. Nonetheless, the parties then negotiated a settlement of the whole issue of outstanding amounts payable by the husband pursuant to the agreement for the period 6 May 2011 to 4 July 2016.  The husband paid the agreed sum of $38,000 on 4 July 2016.

6. It seems to me that the wife would be hard pressed to complain that the husband agreed to pay the sum of $38,000 only on or shortly before 4 July 2016, in light of her failure to comply with directions and provision of her affidavit only a short time before the hearing date.  Realistically, the husband was entitled to a reasonable period to consider and assess the validity of her claims.

7. It is true that the wife commenced the proceedings only because the husband failed to comply with the provisions of the agreement.  On the other hand the wife took no action to enforce payment for over four years from the time of execution of the agreement.  When the wife did take enforcement proceedings, her evidence was presented in a deficient and unsatisfactory manner.

8. In my view, it is not the case that one party was wholly unsuccessful in the proceedings.  The wife initially sought that the husband pay a total sum of $60,252.65, which she later amended to $41,330.60.  The husband paid a total sum of $46,416.95 by way of two instalments in December 2015 and July 2016.

9. Neither party made a relevant offer in writing to settle the whole of the proceedings.  The husband pointed to an offer contained in a letter from his solicitor dated 23 October 2015, by which he proposed a final resolution with a payment of $8,416.95.  Obviously, the ultimate settlement sum far exceeded that offer.

10. For these reasons, I am not satisfied that there are circumstances which justify the making of an order for costs in favour of the wife.  I will dismiss that application.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 5 September 2016.

Associate: 

Date:  5 September 2016