Goggin and Goggin

[2012] FamCA 441

FAMILY COURT OF AUSTRALIA

GOGGIN & GOGGIN [2012] FamCA 441

FAMILY LAW – COSTS – Husband to pay half of wife’s costs after sale of former matrimonial home

Family Law Act 1975 (Cth)

APPLICANT: Ms Goggin

RESPONDENT: Mr Goggin

FILE NUMBER: SYC 5993 of 2007

DATE DELIVERED: 8 June 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Fowler J

HEARING DATE: Dealt with by written submissions

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Kelly

SOLICITOR FOR THE RESPONDENT: Mr Wahhab

Orders

1. The respondent is to pay one half of the wife’s costs of and incidental to the proceedings as agreed or assessed.  Such amount to be paid 28 days after the settlement of the sale of the parties’ former matrimonial home at B Street, Sydney Suburb 1.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Goggin and Goggin 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 SYDNEY

FILE NUMBER: SYC 5993  of 2007

Ms Goggin

Applicant

And

Mr Goggin

Respondent

REASONS FOR JUDGMENT

Introduction

1. The application before the Court is one made by the wife for an order for costs following a judgment of this Court given on 29 June 2011.  That judgment should be read as part of this judgment.

2. The application was contained within a Minute of Orders Sought which became Exhibit 3 in the proceedings.

3. The application came before the Court on 7 September 2011 and both parties were represented.  The Court directed in the following terms:

   1.The wife’s application for costs will be subject to the following orders:

   a.the wife is to file any additional material she wishes to file in support of her application for an order for costs together with written submissions in support of her application on or before 30 October 2011.

   b.the husband is to file any material in response on or before
   28 January 2012.

   c.in the absence of a request from any party within 14 days thereafter that the matter proceed by way of oral submissions in addition to the written submissions already received, the matter will be determined in chambers on the written submissions.

1. No response was filed by the husband within the time limited.  A new solicitor was retained by the husband who requested additional time to make such a response.  The husband’s solicitor was allowed until 15 May 2012 to do so.  The Court received his submission on 24 May 2012.  It has nevertheless been considered.

2. In support of the wife’s application she has filed an affidavit sworn on
   21 December 2011.

Background facts

1. The wife was born in August 1962 and is now 49 years of age.

2. The husband was born in February 1962 and is 50 years of age.

3. The parties married in January 1989 and separated in June 2007.

4. There are three children of the marriage, namely, J born in June 1990; B born in July 1992; and M born in December 1996.  The children B and M continue to reside with the mother.

5. In May 2007 the husband was arrested and charged with criminal offences.  The Court is informed that the husband was released from gaol in November 2011 and is on parole for two years and four months from this date.

6. On 23 August 2007 the wife filed an Initiating Application seeking parenting orders.  On 17 December 2007 the husband filed an Amended Response by which he sought property orders.

7. By the determination of 11 June 2011 this Court made orders by which the wife was to receive 70% of the parties’ assets and the husband 30%.

Section 117 considerations

1. The provisions of the Family Law Act 1975 (Cth) (“the Act”) direct that unless the Court otherwise orders, the parties are to pay and bear their own costs.

2. The Court has a broad discretion as to the orders that it makes for costs and that discretion is set out in section 117(2) of the Act. In the consideration of the exercise of that discretion I am obliged to consider the matters set out in section 117(2A) of the Act. Those matters are set out in the following

   
   

   sub-sections of that section namely:

(a)    the financial circumstances of each of the parties to the proceedings

1. The wife opened in the proceedings that she be paid 75% of the net assets and the husband sought an order that she receive 50%.

2. The Court’s determination is set out in its judgment referred to.  In that judgment the wife is to receive 70% of the then found assets.

3. It is submitted by the husband that his financial situation is inferior to that of the wife. What the submission does not acknowledge is that the Court found that the husband had assets which had not been revealed to the Court.  The Court in the circumstances cannot accept that necessarily the husband’s position is inferior to that of the wife as to assets.

4. The husband had operated successfully a motor vehicle industry business and it was the company which the Court found he had a continuing interest in which was not disclosed, which operated that business.  The husband informed the Court that he would have no difficulty being fully employed on his release from gaol.  The income available within the business had been provided to the husband in significant measure in the past and, given his continuing interest in it, it is observed that he will have the opportunity to derive further income from that source.

5. The wife’s income presently consists of family assistance payments in the sum of $221 per week.  The wife deposes in her affidavit that that is her only source of income.  The wife has credits in bank accounts to the extent of $31,900.  The wife deposes that the corporation of which she is a shareholder and director, namely Business 1, holds an amount of $4,026 which is to be applied to the costs of the winding up of the company and the unit trust.  It is understood that that company owes to its accountant the sum of $20,150.

6. The wife deposes as to the following debts, namely:  Mastercard - $1,240;  David Jones - $630;  GE Capital Finance - $970;  Mr LL (costs of preparation of the former matrimonial home for sale) - $49,500.

7. The wife deposes that she owes her solicitors in excess of $69,234.86 and money for as yet unbilled work in progress.

8. She has superannuation benefits of approximately $45,000.

9. The former matrimonial home is listed for sale.  The wife deposes that no offer has been received which she has been advised to accept by the real estate agent.  She continues to meet the outgoings on the property and continues to meet the expenses for the children, M aged 15 and B aged 19.

10. The wife continues to contribute to the support of M and B.  The husband makes some contribution as well as deposed in his affidavit lodged with his submissions.

11. Whilst the present financial circumstances of the husband are set out in part in his affidavit lodged with his submissions it appears that, on completion of the implementation of the terms of the Order made by the Court, he will be entitled to the benefits of the judgment which on the evidence would enable him to meet an order for costs at that time.  In addition he will retain his interest in the business described in the judgment.

12. In the husband’s affidavit filed with his submissions he deposes that after his release from gaol he commenced working for Business 3.  He is employed as a general hand and earns $979 per week gross. The husband has a mobile telephone and motor vehicle which he uses for work purposes.  The husband states that he deposits $50 per week in his son M’s bank account, and gives him $50 on each weekend he spends with him, which is usually fortnightly.

13. Business 3 is the business which the husband failed to disclose his interest in.

14. Whilst the wife may be in a superior position as to capital, the failure of the husband to disclose makes such a finding impossible on the present state of the evidence and the lack of disclosure by the husband as described in the judgment.  Those who fail to disclose cannot in the Court’s view take refuge in that non-disclosure when seeking to make the assertion made by the husband that his financial position is inferior to that of the wife.

(b)    whether any party to the proceedings is in receipt of legal aid and, if so, the terms of the grant of that assistance to that party

1. The Court has no evidence that either party is presently in receipt of legal aid.

(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

1. The Court has already found that the husband’s evidence was largely unreliable.  The husband’s affidavit evidence was reckless and the husband put forward false versions of events which favoured him.  Details of those matters are set forth in the judgment referred to.

2. It was constantly asserted, and the Court accepts as correct on the balance of probabilities, that the husband’s approach to this litigation was one of obstruction and non-disclosure.  He obstructed the sale of the H Street property to enable compliance with certain Supreme Court orders and opposed applications filed seeking orders to bring about an orderly realisation of assets to meet liabilities.  The husband was guilty of non-disclosure of relevant matters.

3. The husband’s non-disclosure, the Court found, was serious.

4. It is submitted by the husband that the Court, having made an Order for the alteration of the parties’ interests in property taking into account the husband’s non-disclosure, cannot again take that into account in determining the issue of costs.

5. The Court is required to consider under the section in the general sense the conduct of the husband in providing information which he is obliged to provide under the rules.  The husband was outstanding in his failure to provide full and frank disclosure and it seems to the Court that such conduct is taken into account in a different way in relation to the making of a financial adjustment between the parties and when considering costs.

6. In this case much of the case and therefore the costs of the case were involved in seeking to procure an accurate picture of the husband’s position.  That is a matter which can be taken into account when considering some compensation for costs, and is taken into account in a different way than when considering it in the task of making a just and equitable alteration of property interests.

(d)    whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. The husband from time to time failed to comply with Orders made but said that much of his failure was due to his incarceration.  This may have been so as to some of those orders.

(e)    whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. The husband has not been wholly unsuccessful, but the degree to which he has succeeded is a significant departure from the orders that he sought.

2. In contrast, the wife’s position at the end of the litigation is far closer to the orders she initially sought and superior to some of her offers of settlement.  She could not however be described as being wholly successful.

(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

1. The wife in her affidavit material deposes as to a number of offers made by her in which settlement of the proceedings was proposed.

2. The first was on 17 October 2008 in which she proposed a settlement of 75% to her and 25% to the husband.  The wife deposes that a draft balance sheet was submitted to the Court for a conciliation conference on 18 February 2009 at which time she understood the net assets to be $6,054,800.

3. She subsequently proposed a settlement on the basis of 67% to the wife and 43% to the husband.  It was not accepted.  No counter offer was proposed.

4. Negotiations took place between solicitors then acting for the husband and those acting for the wife in March and April 2009 and an agreement was reached which was to be formalised in a deed forwarded by the wife’s solicitors to the husband’s solicitors, whereupon the husband’s solicitors informed the wife’s solicitors that they were no longer instructed.

5. A further offer of settlement was made by the wife in December 2009 through her then solicitors in which she proposed a division of the then known property as to 65% to the wife and as to the husband 35%.  No response was received from the husband.  No counter offer was made.

6. On 19 May 2011 a further offer was made in which the wife sought a settlement that she says, having regard to the deteriorating nature of the assets, the division would have represented a division of 72% to her and 28% to the husband.

7. The husband submits that the offers made ought not to be taken into account in the making of a decision.  His view of them is that, at least the offers made in October 2008 and March 2009, took over 100 per cent of the assets.  He asserts that he made to the wife directly offers to settle the matter on a division of the assets in favour of the wife as to 55% after the payment of the debt due to the Government Agency.  The husband says that in making offers the wife overvalued property.  The value of the property on sale is called in aid by him as evidence of that fact.  The assertions made by the husband from time to time in the course of the litigation when compared with the sale proceeds did not agree with them either and, it seems to the Court inappropriate to consider valuations on one market and its inconsistency with the sale price of property on a different market.

8. The wife deposes that her total costs to date are $263,827.46 of which $69,234.86 and work in progress remains outstanding.

(g)    such other matters as the Court considers relevant

1. The Court is satisfied on the evidence presented by the husband that he knowingly made false statements in the proceedings particularly as to his interests in the companies and businesses referred to and that this incurred extra costs in the proceedings.

2. The husband submits that in determining the net assets of the parties the Court did not include the wife’s paid legal costs.  It is not obligatory for the Court to add back legal fees when determining the assets and liabilities of the parties available for division.

3. The assertion made by the husband with regard to the legal fees relates to the just and equitable alteration of property interests.  The decision in costs matters is whether or not there are justifying circumstances to make orders as to costs.  The Court does not consider that there are justifying circumstances to consider the wife’s paid legal fees.

4. Taking into account the matters referred to above the Court finds it just and proper that the respondent pay one half of the wife’s costs of and incidental to the proceedings as agreed or assessed.

I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 8 June 2012.

Associate:  M. Rankin

Date:  8 June 2012