HODAK & HODAK

[2020] FamCA 839

FAMILY COURT OF AUSTRALIA

HODAK & HODAK [2020] FamCA 839

FAMILY LAW – COSTS – application in a case filed by the wife for enforcement orders – where final orders were made in January 2020 and the parties executed a Binding Child Support agreement and financial agreement – where the husband has failed to make payments to the wife pursuant to the final orders and executed agreements – where the wife seeks the husband pay her costs of the application in a case – where the Court determined the husband should pay the wife’s costs – consideration as to quantum of costs – orders made.

Family Law Act 1975 (Cth) ss 79, 90D, 117
Family Law Rules 2004 (Cth) r 19.08

APPLICANT: Ms Hodak

RESPONDENT: Mr Hodak

FILE NUMBER: MLC 14738 of 2018

DATE DELIVERED: 30 September 2020

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Hartnett J

HEARING DATE: 1 September 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms McCreadie

SOLICITOR FOR THE APPLICANT: Lander and Rogers

THE RESPONDENT: In person

Order

1. The husband pay the wife’s costs of the Amended Application in a Case filed 27 August 2020 in the sum of $9,500.  

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 Hodak & Hodak 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 MELBOURNE

FILE NUMBER: MLC 14738 of 2018

Ms Hodak

Applicant

And

Mr Hodak

Respondent

REASONS FOR JUDGMENT     

Preliminary

1. This matter was before the Court on 1 September 2020 in a judicial duty list by video hearing from the Court via Microsoft Teams. The wife was represented by counsel at the hearing and the husband appeared in person. Both parties appeared by video link.

2. The application before the Court was an Amended Application in a Case filed on 27 August 2020 by the Applicant wife (‘the wife’) wherein the wife sought enforcement orders as follows:-

   1. That within forty eight hours of the date of these Orders the Husband pay, or cause to be paid, the following:

   1.1 The sum of $3,826.64 pursuant to Paragraphs 5.7 of the Orders of the 12th March 2019 and Paragraph 22 of the Orders of the 15th January 2020;

   1.2 The sum of $22,500 to the Wife pursuant to Paragraph 8(a) of the Financial Agreement dated 13 January 2020 on account of the spousal maintenance payments which were due and payable on 1 June 2020, 1 July 2020 and 1 August 2020;

   1.3 The sum of $1,952 to the Wife pursuant to Paragraph 3(c) of the Binding Child Support Agreement dated 13 January 2020;

   1.4 All arrears in respect of the mortgage with the Commonwealth Bank of Australia encumbering the property situate at D Street Suburb C;

   1.5 The sum of $2,502.50 to the Wife pursuant to Paragraph 8(b)(ii) of the Financial Agreement dated 13 January 2020 on account of the body corporate fees.

   2. That the Husband pay the Wife's costs of and incidental to this application.

   3. Such further and other order or orders as this Honourable Court deems appropriate.

3. The Respondent husband (‘the husband’) re-filed his Response to an Application in a Case on 1 September 2020 (the previous Response being rejected by the Registry due to deficiencies in form). In that Response the husband agreed to orders 1.2, 1.3 and 1.4 as contained in the wife’s Amended Application in a Case. Additionally, the husband sought orders as follows:-

   1. Ms Hodak is to remove herself from the J Company Account as requested and as per the Orders.

   2. Ms Hodak is to refund Mr Hodak the amount of $1000 that she held him ransom on the 15th of May 2020 to allow J Company employees wage payments.

   3. Ms Hodak is to follow Orders on all future company requirements; I cannot foresee what those.

   4. Ms Hodak is to follow the Orders and not share information with anyone about the companies.

   5. Ms Hodak is to assist Mr Hodak to close off all jointly held accounts, as per the Orders.

   6. Ms Hodak is to refund 60K tax payment to Mr Hodak.

   7. Ms Hodak is to refund $1128 taken from the joint account when she transferred the mortgage repayments to a joint account that should be closed and moneys on it belong to me, as per the Orders.

   (as per original)

4. On 1 September 2020 the Court made orders partly by consent and in the running of the proceeding and partly by order of the Court, as follows:-

   (1)Within 48 hours hereof the husband pay or cause to be paid to the wife:- 

   (a)by consent, the sum of $24,290 in repayment of mortgage arrears due to the Commonwealth Bank of Australia in respect of the mortgage encumbering the real property known as and situate at D Street, Suburb C in the State of Victoria; 

   (b)by consent, the sum of $30,000 pursuant to paragraph 8(a) of the Financial Agreement dated 13 January 2020 on account of the spousal maintenance payments which were due and payable on 1 June 2020, 1 July 2020 and 1 August 2020; 

   (c)by consent, the sum of $1,952 pursuant to paragraph 3(c) of the binding child support agreement dated 13 January 2020; 

   (d)by consent, the sum of $2,502.50 pursuant to paragraph 8(b)(ii) of the Financial Agreement dated 13 January 2020 on account of the body corporate fees; and 

   (e)by order of the Court, the sum of $2,000 pursuant to order 5.7 of the orders made by Registrar Lethbridge on 12 March 2019 and order 22 of the orders made by Registrar Mestrovic on 15 January 2020. 

   (2)Otherwise, the wife’s amended application in a case filed 27 August 2020 is dismissed, save as to the question of costs. 

   (3)The husband’s extant application as contained in his response to an application in a case re-filed 1 September 2020 is adjourned for hearing in the judicial duty list on 12 October 2020 at 10.00am before Justice Johns.

   (4)The husband make, file and serve an affidavit in support of his response to an application in a case re-filed 1 September 2020 within 14 days hereof.

   AND THE COURT NOTES THAT:

   A.The husband’s affidavit attempted to be filed by him on 30 July 2020 was not in proper form and rejected by the Registry. 

   B.The Court determines, in the exercise of its discretion, that the husband should pay the wife’s costs in respect of her application as determined by the Court. 

   C.The quantum of costs for the purposes of notation B herein is reserved for an order to be made in Chambers following receipt of:-

   a.the husband’s response to an application in a case which the Court shall re-file on this date being 1 September 2020; and 

   b.the wife’s calculation of costs, as tendered by the wife, which shall be accepted into evidence and marked as exhibit ‘1’ by the Court.  

5. These reasons address the quantum of costs to be paid by the husband to the wife.

Material Relied Upon

1. The wife relied upon the following:-

   a)an Amended Application in a Case filed 27 August 2020;

   b)affidavits sworn on 11 June 2020 and 27 August 2020; and

   c)an affidavit of service filed 13 August 2020.

2. The husband relied upon the following:-

   a)a Response to an Application in a Case filed 1 September 2020; and

   b)an affidavit sworn or affirmed on 10 August 2020.

Background

1. The husband was born in 1981 in Country G and is aged 38 years. He is an Australian citizen having moved to Australia in 2007. The husband is a professional and operates a business known as F Pty Ltd.

2. The wife was born in 1983 in Country G and is aged 36 years. She is an Australian citizen having moved to Australia in 1996. The wife has been engaged in home duties on a full-time basis following the birth of the parties’ daughter.

3. The parties married in 2007. They did not cohabitate prior to the marriage.

4. There is one child of the relationship, X born in 2016 who is aged 3 years. The child resides with the wife in the former matrimonial home and spends time with the husband by agreement between the parties.

5. Separation on a final basis occurred on 10 February 2018 when the husband vacated the former matrimonial home.

6. On 20 December 2018 the wife commenced proceedings in the Court. In her Initiating Application the wife sought orders pursuant to s 79 of the Family Law Act 1975 (Cth) (‘the Act’) and to be excused from particularising the final orders sought by her pending the valuation of all relevant assets and disclosure on the part of the husband. No interim orders were sought.

7. On 11 February 2019 an Application for Divorce was filed by the wife. The divorce was granted in 2019 and took effect the next month.

8. On 13 January 2020 the parties executed a Financial Agreement pursuant to s 90D of the Act in relation to spousal maintenance and a Binding Child Support Agreement.

9. On 15 January 2020 Registrar Mestrovic made final orders by consent of the parties (‘the final orders’).  

10. On 11 June 2020 the wife filed an Application in a Case wherein she sought enforcement orders for payments owing to her pursuant to the final orders and the Financial and Binding Child Support agreements executed by the parties.

The Hearing on 1 September 2020

1. The wife submitted the husband was in default of certain provisions of each agreement as well as the final orders. The defaults were as follows:-

   a)the husband failed to make the mortgage repayments for the property known as and situate at D Street Suburb C in the State of Victoria (‘the Suburb C property’) pursuant to order 5 of the final orders. The wife’s evidence was that the mortgage payments were due on the 21^st day of each month and that the husband had failed to pay the instalment due on 21 May 2020 and the instalments due thereafter.[1] It was the wife’s evidence that the payments for February to April 2020 were also late.[2] As a result of the late payments by the husband, the wife was required to use her own funds to meet the obligation of the husband.[3] On 10 August 2020, the wife was informed by the Commonwealth Bank of Australia (‘CBA’) that the mortgage arrears for the Suburb C property were $17,603.47 and that the CBA may “proceed to take action to recover the money owed, including interest and legal costs”[4];

   b)the husband failed to make maintenance payments to the wife in the sum of $7,500 for the months of June 2020, July 2020 and August 2020 pursuant to paragraph 8(a) of the Financial Agreement executed by the parties.[5] This was not denied by the husband;[6]

   c)the husband failed to make payments for the child’s private health insurance policy in the sum of $244 per month pursuant to paragraph 3(c) of the Binding Child Support Agreement. The wife’s evidence was that the husband had not made any of the payments due pursuant to the above sub-paragraph since the Binding Child Support Agreement was executed in January 2020.[7] The husband’s evidence as to this was “correct – I have not been paying the health insurance for [the child] as no invoices or any statements have ever been sent across to me to pay”;[8]

   d)the husband failed to pay the amount of $2,502.50 for the body corporate fees pursuant to paragraph 8(b)(ii) of the Financial Agreement dated 13 January 2020.[9] A copy of the invoice for the body corporate fees was forwarded to the husband on 3 August 2020 for payment. The husband responded to this request in an email stating “…I will have to wait for the Court Orders to proceed with anything”[10];

   e)the husband failed to make payment to the wife in January 2020 in the amount of $2,000 pursuant to order 5.7 of the orders made by Registrar Lethbridge on 12 March 2019.[11] The Court is satisfied that is the case on the basis of the evidence before it and by reference to the relevant orders of the Court. The wife’s affidavit evidence was also that the husband “short paid” her an amount owing of $1,826.64 in August 2019,[12] and as a result the amount owing to the wife by the husband was $3,826.64.[13] There was insufficient evidence from the wife before the Court as to this claim the wife not being able to produce the necessary bank statements and/or other documentary evidence to support her claims. The matter was stood down for the wife to place such evidence before the Court but she was unable to do so. The Court could not be satisfied on the balance of probabilities that the monies were owing in accordance with earlier orders of the Court and thus the Court declined to make an order for payment in that additional amount of $1,826.64.

   [1] Affidavit of Ms Hodak filed 11 June 2020, [5].

   [2] Affidavit of Ms Hodak filed 11 June 2020, [6].

   [3] Affidavit of Ms Hodak filed 11 June 2020, [9].

   [4] Affidavit of Ms Hodak filed 27 August 2020, [6(j)].

   [5] Affidavit of Ms Hodak filed 27 August 2020, [8(a)].

   [6] Affidavit of Mr Hodak filed 10 August 2020, [8.5].

   [7] Affidavit of Ms Hodak filed 27 August 2020, [9(b)].

   [8] Affidavit of Mr Hodak filed 10 August 2020, [9.1].

   [9] Affidavit of Ms Hodak filed 27 August 2020, [8(b)]

   [10] Affidavit of Ms Hodak filed 27 August 2020, [8(b)].

   [11] Affidavit of Ms Hodak filed 11 June 2020, [10(b)].

   [12] Affidavit of Ms Hodak filed 11 June 2020, [10(a)].

   [13] Affidavit of Ms Hodak filed 11 June 2020, [11].

2. In response to the abovementioned defaults, the husband, in his affidavit sworn or affirmed on 10 August 2020, acknowledged that he “[had] stopped making payments due to continuous and blunt breach of the Orders from [the wife]/ Landers…”[14] and at the hearing, ultimately, conceded that he was liable for the payments as sought by the wife bar one of the orders for payment sought by the wife as described in paragraph four of these reasons.

   [14] Affidavit of Mr Hodak filed 10 August 2020, [6.2], [7.2], [8.5] and [9.2].

Consideration

1. Section 117 of the Family Law Act 1975 (Cth) (‘the Act’) provides the Court with power to make orders in relation to costs. Section 117(1) creates a statutory presumption that each party to proceedings under the Act “shall bear his or her own costs”.[15] This presumption is subject to s 117(2) of the Act, which empowers the Court to “make such order as to costs…as the court considers just”[16] if it is “of opinion that there are circumstances that justify it in doing so.”[17] Section 117(2A) provides that in “considering what order (if any) should be made” for the payment of costs, “the court shall have regard to” the matters identified in ss 117(2A)(a) to (g) of the Act. Rule 19.08 of the Family Law Rules 2004 (Cth) (‘the Rules’) similarly empowers the Court to make an order for costs.

   [15]Family Law Act 1975 (Cth), s 117(1).

   [16] Ibid s 117(2).

   [17] Ibid.

2. Counsel for the wife submitted that, as a result of the husband’s non-compliance with certain provisions of the Financial and Binding Child Support agreements and with the final orders made on 15 January 2020, the total fees incurred by the wife in pursuing enforcement orders was in the sum of $16,911.50.[18] This figure included appearance fees of counsel for the wife in the sum of $3,000 and the instructing solicitor in the sum of approximately $3,000.[19] Whilst counsel’s fee was reasonable the fee of the instructing solicitor in a matter of this type was not. It was further submitted by counsel for the wife that costs were incurred from around February 2020 when the solicitors for the wife “commenced chasing” the husband for arrears and outstanding payments. It was submitted that the wife’s solicitors spent considerable time corresponding with the husband in circumstances where the husband refused to make payments to the wife; provided aggressive responses to the solicitors in his emails; and was even aggressive towards the process server when being served with documents telling the process server to “[tell] Landers [that he] was nice to [the process server] but if they send someone again I will bash the f..k out of them.”[20] The monies claimed by the wife were solicitor-client costs and even appeared to be indemnity costs. The Court is of the view that costs need to be reasonable and proportionate. A sum of nearly $17,000 for this matter is not. There is no doubt, in the exercise of the Court’s discretion that an order should be made against the husband in respect of the wife’s reasonable costs.

   [18] Exhibit ‘1’ tendered in evidence on 1 September 2020. 

   [19] Exhibit ‘1’ tendered in evidence on 1 September 2020. 

   [20] Affidavit of Mr B filed 13 August 2020, Part D.

3. On 28 February 2020 the husband was put on notice by the wife’s solicitors that in the event that the arrears of the mortgage were not paid immediately, enforcement proceedings would be brought against the husband with no further notice to him.[21]

   [21] Affidavit of Ms Hodak filed 11 June 2020, [28].

4. In response to the wife’s submissions for costs, the husband submitted that he had lost money by having to take the time to respond to the correspondence he received from the wife and/or the wife’s solicitors; that there was abusive language from both parties; and that he refused to pay so that the parties would have to come to the Court to put in place orders of some sort (presumably those the husband sought in his Response). There is no issue before the Court as to the husband’s capacity to pay. The husband conceded the majority of the wife’s claim.

5. The Court will make an order for the payment of the wife’s costs in the amount of $9,500. The Court determines this amount to be reasonable and appropriate for this particular proceeding.  

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hartnett delivered on 30 September 2020.

Associate: 

Date:  30 September 2020