Garrett and King (No 2)

[2015] FamCA 1042

FAMILY COURT OF AUSTRALIA

GARRETT & KING (NO 2) [2015] FamCA 1042

FAMILY LAW – PROCEDURAL – COSTS – application dismissed – discussion of section 117 provisions – where neither party can be said to be wholly unsuccessful – where the mother failed to appear at first return date – where it is not found the mother rejected a final offer to settle – where offers to settle found to be not admissible.

Family Law Act 1975 (Cth) ss 70NFB, 117, 117AA, 117AB (Repealed), 117AC, 118
Family Law Rules (Cth) r.19.18
Evidence Act 1995 (Cth) s 131

APPLICANT: Mr Garrett

RESPONDENT: Ms King

INDEPENDENT CHILDREN’S LAWYER: Ms Murray

FILE NUMBER: TVC 824 of 2007

DATE DELIVERED: 26 November 2015

PLACE DELIVERED: In Chambers

PLACE HEARD: In Chambers

JUDGMENT OF: Tree J

HEARING DATE: Last submission filed 28 October 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Collins

SOLICITORS FOR THE APPLICANT: Purcell Taylor

THE RESPONDENT: In person

Orders

1. The father’s Application in a Case filed 12 August 2015 is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Garrett & King (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT TOWNSVILLE

FILE NUMBER: TVC824/2007

Mr Garrett

Applicant

And

Ms King

Respondent

REASONS FOR JUDGMENT

INTRODUCTION  

1. On 16 July 2015 I gave judgment in the parenting proceedings between the parties to this application.  The orders which I then made provided for the parties’ three children to live with Mr Garrett (“the father”), but to spend time with Ms King (“the mother”) in a public place.

2. By Application in a Case filed 12 August 2015 the father seeks an order that the mother pay his costs of the proceedings, either on an indemnity basis, or alternatively on a party and party basis.  The mother by her Response seeks that the father’s application be dismissed, and that there be an order that each party bear their own costs of and incidental to the proceedings.

RELEVANT STATUTORY PROVISIONS

1. The starting point for a consideration of the father applications is s 117 of the Family Law Act which relevantly provides as follows:

   117(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.

   117(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.

   117(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.

   …

2. Rule 19.18 of the Family Law Rules deals with the method of calculation of costs in the following terms:

   19.18(1) The court may order that a party is entitled to costs:

   (a)of a specific amount;

   (b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);

   (c)to be calculated in accordance with the method stated in the order; or

   (d)for part of the case, or part of an amount assessed in accordance with Schedule 3.

   Example

   For paragraph (1)(c), the stated method may be in accordance with Schedule 3 but with an additional percentage for complexity.

   19.18(2) If costs are payable under the Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party/party basis.

   19.18(3) In making an order under subrule (1), the court may consider:

   (a)      the importance, complexity or difficulty of the issues;

   (b)      the reasonableness of each party’s behaviour in the case;

   (c)      the rates ordinarily payable to lawyers in comparable cases;

   (d)      whether a lawyer’s conduct has been improper or unreasonable;

   (e)the time properly spent on the  case, or in complying with pre-action procedures; and

   (f)expenses properly paid or payable.

RELEVANT S 117(2A) MATTERS

Financial circumstances of each of the parties

1. The father has an average weekly income before tax of a little over $2,100.00, and his wife earns a weekly income of $1,269.00.  However the father says that he funds expenditure said to amount to $3,453.00 per week.  Not only is the funding of the short-fall between that sum and his income not apparent, but some of the amounts which are claimed are difficult to accept at face value.  For instance, the father says that he pays $1,000.00 per week to the CBA for the mortgage on their home; however that mortgage (or at least the father’s share of it) is only $166,100.00.  If indeed the father is paying $1,000.00 per week towards the mortgage, that would be $52,000.00 per year.  Assuming that the interest rate is within usual ranges, that means that the mortgage is likely being repaid with some considerable haste.  Similar observations can be made in relation to the claimed mortgage payment in relation to a block of vacant land: the father says he pays $305.00 per week off the mortgage, the amount of which I note is said to be owing (his 50 per cent share) is only a little under $40,000.00.

2. The father’s 50 per cent interests in those two pieces of real estate are said to have a value of $235,000.00, and he has interests in chattels and cash such that the total value of property owned by him is a little under $250,000.00.  He also has superannuation of a little under $200,000.00.  On the other hand he has liabilities of just under $210,000.00.

3. It can therefore be seen that the father enjoys a good income, and has some equity in assets, but claims to have considerable outgoings.

4. The mother has a total weekly income of $320.00, sourced from Social Security benefits.  She has weekly expenditure of $147.00.  Further, she has an interest in real property which she values at “> $300,000.00” and some other assets which see a total value of her property at $323,108.00.  To this she has superannuation of a little less than $26,000.00.  She has liabilities said to total a little over $130,000.00, principally comprising a mortgage (about $72,000.00) a personal loan to what appear to be relatives of $30,000.00, and a credit card of a little under $23,000.00.  Therefore it appears as though the mother has very modest income but, in relative terms, a considerable equity in real estate.

Legal Aid

1. Neither party were in receipt of Legal Aid.

Conduct of the parties to the proceedings

1. The father commenced these proceedings by application filed 9 May 2013.  The respondent failed to appear on their first return date, being 3 June 2013.  On 2 June 2014 trial directions were made, and the matter was initially listed to come on in the Townsville sittings commencing 27 October 2014.  However on 28 October 2014 the proceedings adjourned consequent upon the mother’s partner’s illness.

2. The trial ultimately took four days.

3. Although it is true that the mother failed to appear on the first mention of the matter before the court, there is otherwise little in her conduct of the proceedings which is susceptible to legitimate criticism.

Necessitated by failure to comply

1. These proceedings were commenced in consequence of the father’s legitimate concerns that the mother had not been properly attending to the supervision of the children whilst they were in her care.  Strictly speaking that is not a failure on her part to comply with orders. 

Party wholly unsuccessful

1. The father sought orders that the children should live with him and not spend time nor communicate with the mother.  Although initially at the commencement of the trial the mother pressed for orders for equal shared parental responsibility and equal time, ultimately she sought interim orders which would see the children live with the father, but spend weekends and all of the school holidays with her (except Christmas, when it would only be one half of the holidays).

2. Ultimately I acceded to neither party’s proposal, but rather made orders which saw the children live with the father, but continue to maintain a relationship with their mother.

3. It can therefore be seen that neither party was wholly unsuccessful.

Offers to settle

1. To the father’s affidavit filed 12 August 2015 there were annexed a number of offers which he had made to settle the proceedings from time to time.  Whilst some of those are headed “without prejudice save as to costs” others contained no such description, nor were they said to be open correspondence or not to be treated as confidential: Evidence Act s 131(2)(d). For instance, the letter dated 25 August 2014, which is annexure 3 to the father’s affidavit, falls into that latter category. Whilst the mother, who is self-represented, does not specifically object to that material, in my view that does not comprise consent: Evidence Act s 131(2)(a). Therefore I am not satisfied that, insofar as offers are not either expressed to be open or without prejudice save as to costs, that I should have regard to them, and decline to do so.

2. The only letter expressed to be without prejudice save as to costs is dated 29 August 2014.  In isolation, it is a little difficult to make sense of, because it refers back to the earlier letter of 25 August 2014.  Relevantly it reads as follows:

   Noting that the Family Report writer recommends that Interim Orders are made, as opposed to final Orders, our client is hopeful to settle this matter in a timely manner…

   Our client’s original proposal was that your contact with the children be supervised by either himself or his wife, however our client is now suggesting that your mother be present at McDonalds Family Restaurant to supervise your time with the children.

   Should this matter proceed to hearing and orders are made by the court in those terms proposed by our client herein, then our client will seek a costs order against you.

3. The father contends that this letter somehow dissolves the privilege which otherwise attached to the 25 August 2014. I am not so persuaded, nor am I satisfied that any of the exceptions in s 131(2) of the Evidence Act exist.

4. In evidence is the mother’s response, comprising an email of 5 September 2014. It is not expressed to be without prejudice save as to costs, and I am satisfied that it is a document prepared, or at least a communication, in connection with an attempt to negotiate a settlement of the proceedings. Such communications, unless a party expressly reserves the right to bring the offer to the attention of the court, or one of the other exceptions in s 131(2) of the Evidence Act applies, should remain confidential, and evidence of them is not to be adduced: Evidence Act s 131(1)

5. What is plain on the admissible material is, however, that the mother did not in fact take up the father’s offer.

6. Finally I should say that a further offer was made by the father on 23 March 2015 which is expressly headed “without prejudice”, which I decline to have regard to.

7. Therefore to the extent that there were offers to settle which are properly in evidence before me, it is only the letter of 29 August 2014, which plainly only offers to settle the proceedings by way of interim orders.

8. I am therefore not persuaded that the mother rejected an offer to settle these proceedings on terms equivalent to, or less disadvantageous than, the orders that ultimately prevailed.

9. To cover the eventuality that I have erred in refusing to consider the terms of the attempts to settle the litigation which were not “without prejudice save as to costs”, I should say that even if they were admissible, they still do not demonstrate an offer to settle that was more generous than the orders ultimately made.  That is because the offers variously put were all expressly to settle on the basis of interim, not final orders.  Further whilst it is true that the time offered was more generous than I ultimately ordered, it was still to be supervised.  The orders I made did not require supervision of the mother’s time.

Other matters

1. The father points to the fact that, as found by me in the reasons, the mother has not been entirely truthful with the court in relation to a numbers of matters, including the circumstances surrounding her criminal conduct, and being associated with the forging of a letter from a doctor. However in submissions handed up by counsel for the father in which those points were made, they were made in the context of a submission directed towards invoking s 117AB of the Family Law Act. That submission was in fact misdirected, as by the time of the commencement of these proceedings, s 117AB was repealed.

2. Nonetheless the mother’s conduct in the relevant respects remains a matter that I do take into account in determining whether to exercise the discretion to awards costs.

3. The father also points to the often prolix, voluminous and irrelevant material relied upon by the mother, both in this application and in the proceedings generally, which he says, having his solicitors consider has unnecessarily increased his own legal fees.  Again, whilst I take that into account, I do not give it much weight.

EVALUATION

1. Weighing those matters in the balance, I am not persuaded that there should be an order for costs in this case, as I am not satisfied that there are circumstances justifying such an order. Therefore pursuant to s 117(1) each party to the proceedings shall bear their own costs. There is no need for an order to that effect, as the absence of any order achieves that outcome.

I certify that the preceding twenty nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 26 November 2015.

Associate:

Date:  26 November 2015