Garner and Hunt
[2013] FamCAFC 179
•15 November 2013
FAMILY COURT OF AUSTRALIA
| GARNER & HUNT | [2013] FamCAFC 179 |
| FAMILY LAW – APPEAL – COSTS – where the appellant wife appeals an order that the respondent husband pay her costs in a sum fixed by the trial judge – where the primary challenge on appeal is one of weight – where the appellant contends the trial judge failed to attach sufficient weight to conduct on the part of the respondent – where the appellant also claims the trial judge’s reasons were inadequate – whether the trial judge erred in the manner alleged – where the trial judge placed sufficient weight on the factors identified by the appellant – where the trial judge’s reasons illuminate the path to the ultimate orders – no error demonstrated – no order as to costs. |
| Family Law Act 1975 (Cth) Federal Circuit Court Rules 2001 (Cth) |
| Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621 |
| APPELLANT: | Ms Garner |
| RESPONDENT: | Mr Hunt |
| FILE NUMBER: | BRC | 2063 | of | 2009 |
| APPEAL NUMBER: | NA | 24 | of | 2013 |
| DATE DELIVERED: | 15 November 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Murphy J |
| HEARING DATE: | 9 October 2013 |
| LOWER COURT JURISDICTION: | Federal Circuit Court |
| LOWER COURT JUDGMENT DATE: | 15 April 2013 |
| LOWER COURT MNC: | [2013] FCCA 26 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr McGregor |
| SOLICITOR FOR THE APPELLANT: | Mitchell Lawyers |
| THE RESPONDENT: | In person |
Orders
That the appeal be dismissed.
That each party shall bear their own costs of and incidental to this appeal.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Garner & Hunt has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 24 of 2013
File Number: BRC 2063 of 2009
| Ms Garner |
Appellant
And
| Mr Hunt |
Respondent
REASONS FOR JUDGMENT
On 15 April 2013, Demack FM (as her Honour then was) ordered that “…the husband pay the wife’s costs fixed in the sum of forty three thousand and four dollars ($43,004) within six (6) months from the date of these Orders and thereafter interest shall accrue at the applicable Family Law rate.”
Those orders were made upon the appellant wife’s application consequent upon earlier orders and reasons (the “trial reasons”) made by her Honour after a trial relating to settlement of property. That trial was the culmination of a lengthy process of litigation. The history of litigation between these parties spanned some three years prior to the hearing of the costs application by her Honour; seven boxes of files containing over 400 separate documents have informed that litigation.
The wife appeals her Honour’s order awarding her costs. In short, she asserts that the trial judge erred in failing to award a greater amount. The self-represented respondent husband resists the appeal.
The Appeal as Pleaded and Ultimately Argued
The grounds of appeal as they appear in the Notice of Appeal filed 10 May 2013 are as follows:
1.Failed to take into account all the material relied upon by the Appellant and Respondent.
2.Failed to give proper consideration to the Respondent’s admitted untruths, obfuscation, and failure to provide proper disclosure.
3.Failed to properly apply Section 117AB of the Family Law Act to aspects of the evidence in which the Respondent admitted he had told untruths, obfuscation.
4.Failed to give proper weight to interlocutory applications in which the Appellant was wholly successful.
5.Failed to give proper weight to the actions of the Respondent that led to [the] Appellant incurring costs that were otherwise avoidable or wasted.
6.Reduced the award of costs in favour of the Appellant without giving any, or any proper reasons for that decision.
7.Failed to award the Appellant proper costs for the application for costs.
8.Failed to take proper account of offers of settlement made by the Appellant to the Respondent.
9.Failed to give proper consideration to the Appellants [sic] application for costs after the 2 December 2012 including the costs of the Application in a case of the Respondent filed 2 April 2013 [sic].
10.Failed to give proper consideration to the Appellants [sic] application for costs after the 2 December 2012 including the costs of the Application in a case of the Respondent filed 2 April 2013 [sic].
11.Failed to give proper consideration to the Appellants [sic] application for costs for the following events/applications:
Mediation on 6 August 2009
22 February 2010
4 May 2010
20 May 2010
16 July 2010
6 September 2010
12 October 2010
24 November 2010
25 January 2011
27 January 2011
3 May 2011
Final hearing Costs 1-3 June 2011
19 January 2012
Application filed 2 April 2012 by Respondent
Many of the grounds are, in my view, not proper grounds of appeal at all; in terms, absent particularisation, it is not evident what appealable error is asserted. A ground which alleges, as does Ground 1, that the trial judge failed to take into account “…all the material relied upon by the Appellant and Respondent” is, without more, so vague as to not illuminate any appealable error (although, pleaded with particularised precision, it might be intended to assert a failure to take account of relevant considerations). Ground 7 is, with respect, both meaningless and not indicative of any appealable error.
The grounds upon which the exercise of a trial court’s discretion can properly be challenged are well traversed in the authorities and start from the “strong presumption” that the trial court’s decision is correct (see, Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621 at 627, per Kitto J; Mallet v Mallet (1984) 156 CLR 605 at 634, per Wilson J).
The authorities in which the accepted categories of appealable error are set out are of long standing and bear careful consideration by those drawing grounds of appeal. (See, as examples, the decisions of the High Court in House v The King (1936) 55 CLR 499; Australian Coal and Shale Employees’ Federation; and, CDJ v VAJ (1998) 197 CLR 172, per Kirby J at [186], especially point 1 within that paragraph).
It is not in the interests of justice – particularly in the light of the litigation history of this matter – to adjourn these proceedings as a consequence of requiring the grounds to be re-pleaded. I permitted counsel for the wife, Mr McGregor (who did not draw the grounds of appeal) to clarify, or reframe, them. The husband represented himself on this appeal. He was asked on at least two occasions whether he had any questions or needed me to clarify in any respect any of the matters that had been raised by counsel (or indeed me) in seeking to reframe the grounds. He did not. Independent of the husband’s expressed attitude, I consider that the grounds as “reframed” embrace only matters contained within the existing grounds and written outline of argument, each of which the husband had in good time. I consider that the husband suffers no disadvantage as a result of adopting this approach.
Contrary to that which appears, in terms, to arise from the various grounds, Mr McGregor quite properly conceded at the hearing of the appeal that her Honour:
§Did “take account of” all the material relied upon (Ground 1). So much is in my view self-evident from her Honour’s reasons (the “costs reasons”);
§Did give “proper consideration” to the “…Respondent’s admitted untruths, obfuscation, and failure to provide proper disclosure” (Ground 2). As will be seen later in these reasons, it is clear that her Honour clearly considered the husband’s dishonesty in some detail. It is properly conceded that her Honour did not fail to take account of relevant considerations. A challenge based on the weight attached to those matters is a different issue and forms, in truth, the gravamen of the appeal;
§Did “take proper account of” offers of settlement (Ground 8). Again, it is plainly evident from her Honour’s reasons that to the extent that the ground as pleaded is intended to assert a failure to take account of relevant considerations (or, for that matter, the taking account of irrelevant considerations), it cannot be sustained. Again, the wife’s challenge based on the weight attached to offers of settlement is a different issue and is addressed below;
§Did give “proper consideration to” the wife’s “…application for costs after … 2 December 2012” (Ground 9). Again, to the extent that the ground is, in terms, comprehensible at all, the same considerations as just outlined apply.
As framed, Ground 11 appears to suggest that an application by the wife for separate decisions in respect of costs earlier reserved was not dealt with by her Honour. Mr McGregor was unable (with one exception) to reconcile the specific dates mentioned in that ground with submissions to that effect made to her Honour within the 73 pages of written submissions in respect of costs filed by the wife. Ultimately, Mr McGregor accepted that the challenge embraced by Ground 11 was also a challenge to weight
As ultimately reframed by Mr McGregor, the wife contends that:
(a)Her Honour failed to give sufficient weight to the dishonesty of the husband and the ramifications of it for the wife in terms of the conduct of the proceedings (including an unchallenged finding that s 117AB applied).
(b)Her Honour failed to accord sufficient weight to written offers of settlement made by the parties and, in particular, to a comparison of those made by the wife with those made by the husband (s 117(2A)(f)).
(c)The reasons given by the trial judge were inadequate and in particular, the reasons for awarding “50 per cent of the costs”.
(d)Her Honour erred in law in the manner in which she applied s 117AB of the Act (although, as ultimately argued, it appears that this challenge, too, is essentially one as to weight).
(e)Ground 11 is reframed in a manner along these lines: A number of separate orders had been made on the application of the wife relating to the husband’s recalcitrance in giving proper disclosure, participation in the valuation by the single expert accountant, the husband’s dishonesty and the need to investigate same. The amount of costs awarded ultimately gave insufficient weight to those applications and the reserved costs associated with them.
Although not pleaded in these terms, it was also argued that the trial judge’s decision was “plainly wrong”. That is, the decision was no proper exercise of the discretion (House v The King (1936) 55 CLR 499; Gronowv Gronow (1979) 144 CLR 513). Again, that submission can be seen to be centred upon the husband’s dishonesty as found by her Honour and his persistent recalcitrance in making proper disclosure and the asserted increased burden of costs incurred by the wife which resulted from each.
Mr McGregor properly acknowledged that, framed in the manner just outlined, the appeal confronts the significant difficulties plainly established by binding authority of long-standing. (See, as examples, Gronow at 519, per Stephen J; Norbis v Norbis (1986) 161 CLR 513 at 540, per Brennan J; CDJ v VAJ at [186], per Kirby J. More recently in this jurisdiction, and specifically in respect of orders for costs, see Hitch & Hitch [2012] FamCAFC 124, per Thackray J).
In circumstances where, as here, it is not asserted that the trial judge took account of irrelevant considerations or failed to take account of relevant considerations, the assertion is that error is established by pointing to a failure to attach greater weight, or attaching too little weight, to specified circumstances than was attributed by the trial judge. In an exquisitely discretionary decision, that presents considerable difficulties for an appellant.
Did s 117AB Apply to the Proceedings?
Section 117AB of the Family Law Act 1975 (Cth) (“the Act”) was repealed by Act No. 189 of 2011. Her Honour makes reference to that fact in a footnote in her reasons which provides:
The section was omitted from the Act through the Family Law Legislation Amendment (Family Violence and Other Measures) Act 2011, Act 189 of 2011, which relevantly came into effect on 7 June 2011 (sic; 2012).
The reference to 7 June 2011 is plainly a typographical error and should read 2012. No issue was raised on appeal as to whether or not the proceedings were affected by that repeal. The repeal of s 117AB is effective from 7 June 2012. Her Honour “heard” the application for costs on that date, albeit that the “hearing” on that date consisted of only a very brief discussion with substantive written submissions having been filed by the wife in April 2012 and further written submissions being filed by each of the parties following the hearing. However, the application and the amended application were each filed well prior to 7 June 2012. The law to be applied by her Honour is that which existed as at the date of filing of the application (see, Prantage & Prantage [2013] FamCAFC 105 at [55] and [67]). At that time, s 117AB was operative and her Honour was correct in applying it.
The Judge’s Reasons
(a) What Costs Were Sought by the Wife?
Her Honour’s reasons summarise the orders sought by the wife as follows:
…
2. The applicant seeks the following costs:
a)Pursuant to section 117AB of the Family Law Act 1975 (“the Act”) being costs which flow from the husband having made a false statement in the proceedings;
b)Pursuant to section 117(2) of the Act, having submitted that there are circumstances that justify the making of a costs order and seeks such costs, and disbursements, on an indemnity basis to be assessed;
c)The reserved costs of 6 October 2010 and 29 September 2010;
d)A specific sum ($5,876.00) plus accrued interest referrable to an order made 4 November 2010 for indemnity costs on that day;
e) The costs of the application for costs;
f)The costs of her applications filed on 11 January 2012 and 10 April 2012, and the husband’s application filed 2 April 2012, which were determined by me on 7 June 2012 wherein costs were reserved.
…
(Footnotes omitted).
That summary does not reflect with precision the orders sought in the wife’s application, or in her amended application filed on 10 April 2012. Her Honour’s summary does, however, accurately summarise the orders sought in the application and the written outline of argument filed on the wife’s behalf. I am content that it is the latter that has informed the husband’s responses – so much is evident from his filed responsive outline of argument.
(b) The Context for the Wife’s Costs Application
Her Honour’s reasons record that the wife relied upon eleven documents in support of her application for costs, including five affidavits – four by herself and one by her solicitor. The husband relied upon ten documents including six affidavits – four by himself, one by his father and one by an accountant.
Her Honour records in the costs reasons, presumably as relevant to a consideration of the conduct of the parties (s 117(2A)(c)), that the wife had sought disclosure on 27 occasions during the property proceedings, that approximately seven court attendances raised the issue of disclosure and that “…many subpoenas were issued with a resulting cost of some $2970 and that the adjournment of the March 2010 trial dates arose as business valuations could not be conducted until disclosure had been done.”
Those findings, unchallenged on this appeal, ought be seen in the broader litigation context which includes, up to the hearing of the costs application by her Honour, over 40 applications or responses by either of the parties (at least 25 by the wife and 18 by the husband); 21 earlier orders made by her Honour and an additional seven orders made by other judicial officers and Registrars.
Her Honour’s trial reasons were relied upon in the appeal. As those reasons reveal, her Honour found that the wife’s material was “almost obsessively prolix” with many schedules and “a commitment to precision and detail”, having “…trawled through masses of documents [which she has] cross-referenced and investigated.” The voluminous documentation relied upon by each of the parties in respect of the application for costs was, then, repetitive of a pattern that had occurred in the litigation history between the parties. (As to the undesirability of voluminous material in applications for costs and the nature of those proceedings more generally, see Marello & Marello (Costs) [2013] FamCA 868, at [5]-[14]).
(c) The Husband’s Dishonesty
As ultimately argued, the wife’s central contention became that her Honour failed to give sufficient weight, in particular, to the husband’s dishonesty. That dishonesty provided the pivotal point upon which the central weight challenges (however variously expressed) were argued.
Her Honour referred to her trial reasons in which she had granted the husband a certificate pursuant to s 128 of the Evidence Act 1995 (Cth). In those reasons, her Honour had found that the husband had been dishonest in swearing that he was not receiving rent when in fact he was (see, for example, [59], [73] and [75]).
Her Honour listed a number of matters which, her Honour said, she “[took] into account” in respect of that dishonesty. Those matters should be repeated:
28.I take into account that:
a) the untruth was repeated;
b)the husband did not correct the untruth of his own volition, that is, he maintained his untruthful position until caught out;
c)the husband’s behaviour included failing to met [sic] the necessary mortgage payments: necessary because:
i)the parties had obligations to the bank to met [sic] their contractual obligations;
ii)the parties had obligations to each other to maintain the pool whilst it was clear that they were in negotiations and (indeed) litigation over the adjustment of their matrimonial assets; and
iii)there was a court order obliging the husband to pay.
d) the issue took up time for the wife in terms of:
i)understanding the parties’ respective and joint financial positions;
ii)her preparation of material and then consequent attendances for court appearances for mentions, directions, and further applications, with respect to the non-payment of the factory mortgage.
e) The issue took up some of the court time within the trial:
i)The tenant had to be subpoenaed, and once at court, a statement taken from him;
ii)It was proper for the husband to be cross-examined about the untruths.
f)The wife had long complained of problems with disclosure by the husband, and for the wife to find that he had repeatedly told a bald untruth about a matter fundamental to their financial position and contrary to the wife’s financial interests and using the untruth to support his non-compliance with a court order, supports the wife in her view that the husband’s lack of disclosure was linked to his alleged general untruthfulness. This may link in with my comments about the wife’s evidence in paragraph 76 of my [trial reasons] [thereafter quoted by her Honour] … She was plainly right to be suspicious of the husband’s evidence.
g)[Her Honour then quoted paragraphs 72 through 75 of her trial reasons].
Equally, it is important to record that her Honour put those findings into a broader context in finding in the same paragraph of the costs reasons:
h)For all of these issues, the end result was a modest add-back in the order of $8668, and a finding of credit against the husband, such that in the event that it was necessary for me to decide certain facts, I determined that I would prefer the wife’s evidence.
Her Honour considered each of the sub-paragraphs of s 117(2A) and made findings in respect of each (costs reasons at [31] to [41]). Having considered the relevant principles, her Honour rejected the wife’s claim that costs should be assessed on an indemnity basis. No specific ground of appeal challenges that finding.
Ultimately, her Honour awarded 50 per cent of the scale costs in respect of the applications referred to in paragraphs 2(c), (e) and (f) of the costs reasons quoted earlier, but did not include any costs of the final hearing itself.
Although it was entirely open to her Honour to “set the amount of the costs” or to “refer the costs for taxation…” (see, Federal Circuit Court Rules 2001 (Cth), r 21.02) her Honour, in effect, conducted an assessment. No reason is given for doing so, but it seems that it may have been done in an attempt to prevent yet further litigation between these parties. In any event, nothing turns on the adoption of the process per se. The manner in which her Honour gave quantitative expression to her ultimate findings earlier outlined was set out in a table which it is appropriate to reproduce here:
Initiating Application Stage 1: Initiating or opposing application up to completion of first court day Lump sum $1,760.00 Plus: Court attendance – daily hearing fee (short mention) $240.00 Stage 3: Up to and including conciliation conference Lump sum $1,465.00 Stage 4: Dispute resolution litigation intervention Lump sum $1,465.00 $4,930.00 29 September 2010 Stage 2: Interim or summary hearing – as a discrete issue Lump sum $1,465.00 Plus: Court attendance – daily hearing fee (half-day hearing) $880.00 $2,345.00 Less discount of 50% ($1,172.50) $1,172.50 6 October 2010 Stage 2: Interim or summary hearing – as a discrete issue Lump sum $1,465.00 Plus: Court attendance – daily hearing fee (half-day hearing) $880.00 $2,345.00 Less discount of 50% ($1,172.50) $1,172.50 8 December 2010 Wife’s share of valuation by Herron Todd White which was not filed, nor replied upon, by the Husband $220.00 4 November 2010 Indemnity costs, fixed $5,876.00 Costs thrown away by adjournment of final hearing on 16,17 & 18 February 2011 Counsel’s fees for three days (3 x $1,760.00) $5,280.00 Plus Advocacy loading of 50% $2,640.00 Attendance at final hearing by solicitor (3 x $1,760.00) $5,280.00 $13,200.00 Issues regarding interlocutories and disclosure - allow three lots of Stage 7 Stage 7 Lump sum (3 x $745.00) $2,235.00 Plus: Court attendance – daily hearing fee (short mention)
(3 x $240.00)$720.00 $2,955.00 Travelling costs Generally – allow five lots of two hours max (5 x $495.00) $2,475.00 Taking judgment delivered on 2 December 2011 Stage 6 To take judgment & explain Orders $240.00 Application filed by wife on 11 January 2012 Stage 7 Lump sum $793.00 Plus: Court attendance – daily hearing fee (half-day hearing) $936.00 $1,729.00 Less discount of 50% ($864.50) $864.50 Application filed by wife on 10 April 2012 Stage 7 Lump sum $793.00 Plus: Court attendance – daily hearing fee (half-day hearing) $936.00 $1,729.00 Less discount of 50% ($864.50) $864.50 Disbursements In respect to subpoenas, allow $2,970.00 To expert forensic accountants Vincent’s, allow $5,000.00 $7,970.00 Present application for costs (on papers) Stage 6: Final hearing costs for solicitor Full day hearing fee $1,873.00 To take judgment and explain Orders $255.00 $2,128.00 Less discount of 50% ($1,064.00) $1,064.00 Total Costs $43,004.00
The Asserted Errors as Reframed
As earlier mentioned, the s 117AB ground, as reframed, is essentially a weight challenge and, again, has the husband’s dishonesty at its centre. Similarly, Ground 6, which seeks to challenge the adequacy of her Honour’s reasons, can also be related to that central issue; it is argued that when consideration is given to matters attendant upon the central dishonesty of the husband, there is a failure by her Honour to reveal the process of reasoning whereby those matters did not sound in an order for costs in an amount greater than that ordered by her Honour. Secondly, and more specifically, it is contended that her Honour gave no reasons, or inadequate reasons, for reducing a significant proportion of the costs in the manner earlier referred to.
The focus on the specific matters raised by the wife on this appeal, and in particular the husband’s established dishonesty, is understandable. Plainly, it was a very important matter in the exercise of the discretion. However, a careful reading of her Honour’s reasons makes it abundantly plain that her Honour considered it as such.
It is important, however, to emphasise that the exercise of her Honour’s wide discretion was informed by the balancing of a number of different findings also relevant to the exercise of that discretion, of which those at the centre of the wife’s argument are but a part (albeit an important part):
§ Her Honour’s findings in respect of each of the enumerated s 117(2A) matters and the findings made under those respective headings are not the subject of any challenge in this appeal;
§ Her Honour found that the husband’s untruth “…was an untruth on a material fact, but only one of a number of material facts and [it] took up only a small portion of the evidence.”
§ While her Honour found that the conduct of the parties (s 117(2A)(c)) was “…an issue of note in this matter”, her Honour caveated her acceptance of the wife’s written submissions in that respect (at [35] of the costs reasons):
…save for the fact that my findings about the husband’s failure to make proper disclosure were not at all clear cut and include at paragraph 75 [of the trial reasons, the finding that]:
It is hard to know whether his inability to comply with the rigours of disclosure in a timely way (or at all, in some cases) is as a result of dishonesty, inefficiency, or a genuine perplexity of what was required of him.
(Italics in original).
§ “The husband’s non-disclosure caused real and ongoing expense to the wife, particularly in the preparation and interlocutory phases of the litigation” (at [37] of the costs reasons). But, the payment of the whole of the wife’s costs was not “…proportionate to the untruth and the place that it had in the subject matter and the litigation” (at [29] of the costs reasons).
Her Honour also referred (at [28(g)] of the costs reasons) to “the view that I formed about the husband … at paragraphs 72 to 75 [of the trial reasons]…” The findings in those paragraphs referred clearly to the husband’s honesty and to the issue of his failure to disclose documents in the proceedings, but embraced other relevant findings, including, for example:
§ “In terms of the long gone around and around issue of the husband’s disclosure of financial data to the wife and whether that has a bearing on credit issues, the husband does not present as a man who is ordered, fastidious or methodical in his book keeping.”
§ “He has not made good business decisions in the past…”
§ “He doesn’t seem to know where most of his paperwork is, or where it should be and doesn’t seem to know what he should have in his possession which should be provided to the wife.”
§ “Other than matters arising from the business, the husband’s personality appears to have some other features relevant to his attendance to the litigation and his dispute with the wife. He has had an unstable primary interpersonal relationship for the bulk of his adult life and has (once) responded to the stressors arising from its breakdown, by overdosing on sleeping tablets.”
§ The husband, and later the wife, installed surveillance cameras to monitor the other’s movements in respect of matters they asserted were relevant to the proceedings.
§ “It is hard to know whether [the husband’s] inability to comply with the rigours of disclosure in a timely way (or at all, in some cases) is as a result of dishonesty, inefficiency, or a genuine perplexity of what was required of him.”
In addition, reference has already been made to [28(h)] of the costs reasons: “[f]or all of these issues, the end result was a modest add-back in the order of $8668...” Reference has also earlier been made to her Honour’s findings about the “almost obsessively prolix” material filed by the wife. In a similar vein, her Honour had recorded in the trial reasons (at [76]) that “[t]he forensic accountant who valued the entities was not always inclined to agree with the wife that the differences, or discrepancies, were significant or meaningful.” So, too, in those reasons (at [78]), her Honour found that “…it must be noted that as time has gone on, the wife has wanted more and more of the pool adjusted in her favour. She has found more and more ways of setting out all of the faults of the husband and has created a pool larger than its reality.”
Early in her Honour’s costs reasons (at [11]), her Honour had flagged the importance of placing the issue of the husband’s dishonesty (important though her Honour plainly considered it to be) into a broader context referable to s 117(2A)(c) and (g):
The percentage adjustment differences do not properly reflect the parties’ diverse positions. The pool contended for by both parties was significantly different as was the manner of dividing the pool or adjusting the property once the preliminary steps were undertaken. The husband wanted all assets realised and the resulting cash split. The wife sought adjustment in specie. The orders were for, in the main, an adjustment in specie, with a cash payment to the wife. The parties disagreed about the valuation of the business, and the wife sought add-backs (expended by the husband) in the order of $143,474 plus $156,569 (totalling $300,043). This is an issue of significance given that I found the pool to be $590,128 and within that, included a total of three amounts for add-backs: some $8,668 of ‘trousered’ factory rent, lawyer’s fees of $45,000 and $6,200 from shares sold and used to pay part of valuation costs, totalling $52,066.
Her Honour also flagged early in those reasons (at [12]), the importance that her Honour attached to s 117(2A)(e):
Neither party, then, was successful in their application or wholly successful in having their position preferred over the other. I adopted the wife’s position for the valuation of the business. The wife was predominantly unsuccessful in her add-backs argument. I did not cause the business assets to be sold as the husband sought. And I made a percentage adjustment that neither of the parties sought.
In respect of the specific issue of the respective offers made by the parties (s 117(2A)(f)), her Honour found, at [41]:
Offers were made, none of which are so on point for them to have a bearing on the outcome. The litigation had a number of twists and turns, including the late revelation of the husband’s untruths about the factory rent money.
No challenge was made on this appeal to the factual premises upon which this finding was based and it needs to be seen in conjunction with the finding referred to above in respect to the differing contentions as to the nature and value of the property interests of the parties.
In Penfold v Penfold (1980) 144 CLR 311, the plurality said (at 315-316):
Sub-section [117](2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent [(1970) 92 W.N. (N.S.W.) 503, at p.505]). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
(Emphasis added).
In Hitch, Thackray J said, at [116] – [117]:
It is also essential to appreciate the breadth of the language employed in s 117(2), which provides that the Court may make such order as to costs as it considers “just”. There is arguably no more imprecise word in the legal lexicon…
For better or for worse, the legislature has determined that decisions about costs in the family law jurisdiction are to be made on the basis of the judicial officer’s sense of what is “just”, albeit guided by reference to prescribed factors. Regrettably this means that, having resolved the substantive issue, the trial judge is then often faced with a second dispute about who should bear the costs. The judges of the Appeal Division are saddled with the same burden, albeit protected to a much greater extent by the limited avenue of appeal. In my view, it is important that judges are able to deal with costs disputes knowing that their exercise of discretion will be respected, save in those cases where they have demonstrably erred or where, to adopt Stephen J’s expression in Gronow, there has been no proper exercise of judicial discretion.
I am not persuaded that her Honour erred in the weight that her Honour attached, or did not attach, to the evidence before her. The fact that I, or another judicial officer, may or may not have given different weight to the same factors, or different factors, does not indicate error; such is the nature of judicial discretion and all the more so in relation to the wide discretion inherent in determining orders for costs.
Inadequate Reasons?
The obligation to give adequate reasons and the failure to do so as founding an appeal is also the subject of long-standing authority (see, for example, Bennett and Bennett (1990) FLC 92-191). Adequate reasons illuminate the path to the ultimate orders, but it is not necessary for a court to deal with all of the arguments raised in support of an application (see, for example, Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247).
Contrary to that which, in terms, appears to be implied by the grounds of appeal as drafted, and in particular Grounds 1 and 11, her Honour did in fact deal with all of the matters to which she was directed at the hearing of the application for costs and in particular within the total of 73 pages of submissions (initial submissions plus submissions in reply) filed by the wife and the 12 pages of written submissions filed by the husband.
As argued, however, the central challenge appears to be that, having considered each and all of those matters and discussed matters relevant to the exercise of the discretion, her Honour gave inadequate reasons for ordering that the husband pay 50 per cent of the assessed quantum in the manner specified in the reasons.
At [44] of the reasons, her Honour gives her reasons for allowing the wife’s costs “on a 50 percent apportionment” in respect of the reserved costs of 6 October 2010 and 29 September 2010, which applications involved an unsuccessful attempt by the husband to restrain the sale of the matrimonial home which was then threatened with mortgagee sale. In respect of those applications, her Honour referred to the husband being wholly unsuccessful in “allow[ing] 50 percent of the scale costs”.
Her Honour also states, however, that she had accepted the husband’s submission in respect of those applications “…that the evidence about the lack of a relationship between the wife and the owner of the house was ‘a bit silly’.” Her Honour’s reasons clearly demonstrate that her Honour’s finding (not challenged on appeal) that “…the wife’s behaviour in this regard caused the husband to be and to remain suspicious about the bona fides of the sale” was the foundation for her “…allow[ing] the wife’s costs on a 50 percent apportionment.”
Further, her Honour refers to the wife being “partly successful” in her application for costs in allowing “50 percent of the scale costs…” (at [47]). The same reason is given (at [48]) for similarly allowing 50 per cent of the scale costs in respect of the applications filed by the wife on 11 January 2012 and 10 April 2012 and the husband’s application filed 2 April 2012.
Considered in isolation, the reasons accompanying the paragraphs just cited, as they apply to the individual applications referred to, may be arguably inadequate.
However, reference to her Honour’s reasons as a whole, indicates with tolerable clarity that the reasons given in those paragraphs cannot be seen as sitting separate and distinct from the broader findings which precede them. For example, and importantly, earlier in the reasons (at [29]), her Honour had said:
Taking all those matters into account, I do not consider that the end effect is that the husband should pay the wife’s entire costs of the action. I do not consider that to be proportionate to the untruth, and the place that it had in the subject matter and the litigation. It was an untruth on a material fact, but only one of a number of material facts and took up only a small portion of the evidence.
(Emphasis added).
At [50] of the reasons her Honour said:
I have included some, but not all of the costs associated with the early parts of the proceedings. I have not included the costs of the final hearing. The trial was listed for both parenting and property, and as I have noted, the wife was not wholly successful at trial.
(Emphasis added).
The added emphasis seeks to distinguish between what the trial might have been listed for and what her Honour records at [1] of the trial reasons:
…This decision is only with respect to property adjustment. Parenting was also the subject of litigation, but with the assistance of the Independent Children’s Lawyer, and a sensible family report, that part of the hearing was mainly resolved on the first day of trial. Some minor matters were decided by me after hearing submissions only. Notwithstanding final orders being made, the mother very quickly sought to re-open parenting matters.
It can be argued, then, that the case for an absence of adequate reasoning is stronger in the case of the exclusion of the costs of the final hearing.
Yet, on balance, I consider that the same considerations just referred to apply equally to her Honour’s specific finding in that respect. The specific finding can be seen to result from the culmination of all of the reasons which preceded it.
I am not persuaded that her Honour’s reasons are inadequate; I consider her Honour’s reasons adequately illuminate the path to the ultimate orders (see, Soulemezis).
Is the Decision Plainly Wrong?
There was evidence before her Honour that the wife had expended some $135,000 up to September 2011 and that the wife’s subsequent solicitor/client costs had not been quantified.
Her Honour was also alive to the property orders that she had herself made and the fact that the value of the parties’ interests in their property was very modest, amounting to about half a million dollars (excluding about $90,000 in superannuation interests). Her Honour made the unchallenged finding (at [33] of the costs reasons) that “[n]either party has much more than a modest earning capacity.” Her Honour was plainly alive that any award of costs would need to be made from the property the subject of the property orders and, in that regard, it might be observed that $40,000 in costs represents about eight per cent of the non-superannuation interests of the parties as found by her Honour.
As earlier referred to, the proceedings and the wife’s costs burden can be seen to have been exacerbated by the husband’s dishonesty. Yet, her Honour also found that the proceedings and the wife’s costs burden can be seen to have been exacerbated by the prolixity of the wife and her need for accounting or mathematical certainty about matters the subject of her inquiry.
I am not persuaded that an order that the husband should pay the wife the sum of $40,000 in costs is “plainly wrong” or that her Honour’s exercise of discretion was “unreasonable or plainly unjust” (see, House).
Conclusion
The appeal should be dismissed.
By reason of each of the matters earlier discussed, including in particular the financial circumstances of the parties and the modest assets available to them, I consider that there should be no order as to costs of the appeal.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 15 November 2013.
Associate:
Date: 15 November 2013
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