Iverson and Iverson (No.2)
[2007] FMCAfam 390
•14 June 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| IVERSON & IVERSON (No.2) | [2007] FMCAfam 390 |
| FAMILY LAW – Costs application – contravention proceedings – contravention proven – whether costs should follow the event –order to ensure compliance with original orders – garnishment. |
| Family Law Act 1975 (Cth), ss.112AD(4), 117(1), 117(2), 117(2A) Federal Magistrates Court Rules 2001 |
| Brown & Brown [1998] FamCA 115 Iverson & Iverson [2007] FMCAfam 270 |
| Applicant: | MS IVERSON |
| Respondent: | MR IVERSON |
| File Number: | MLM 6095 of 2006 |
| Judgment of: | O'Sullivan FM |
| Hearing date: | By written submissions |
| Date of Last Submission: | 21 May 2007 |
| Delivered at: | Melbourne |
| Delivered on: | 14 June 2007 |
REPRESENTATION
| Solicitors for the Applicant: | Pearsons |
| Solicitors for the Respondent: | GPZ Legal |
ORDERS
The husband pay the wife’s costs of the proceedings on 11 April 2007 fixed in the amount of $3,955.00 within 21 days of the date of these orders.
The wife provide to the husband within 21 days two quotations from two separate authorized repairers to restore the car back to ‘good order’ as required in the Orders of 1 November 2006.
The husband pay the wife’s reasonable costs as set out in order 2 above less the value of the car as delivered within a further 21 days or as agreed.
Failing the husband’s compliance with order 3 herein the wife have liberty to apply on 14 days notice for an order to garnishee the husband’s wages for the amount determined in accordance with Order 3 above.
The parties have liberty to apply within 14 days of the date of this order in the event that there is a dispute as to the meaning of ‘good order’ in relation to the quotations as referred to in Order 2.
IT IS NOTED that publication of this judgment under the pseudonym Iverson & Iverson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLM 6095 of 2006
| MS IVERSON |
Applicant
And
| MR IVERSON |
Respondent
REASONS FOR JUDGMENT
These reasons concern a costs application and any necessary orders consequential upon contravention and other associated proceedings brought by the applicant Ms Iverson (“the wife”) against the respondent Mr Iverson (“the husband”).
The wife’s applications were heard on 11 April 2007 and judgment was delivered on 4 May 2007 in Iverson & Iverson [2007] FMCAfam 257.
Background
The wife’s applications filed 3 November 2006 and 20 December 2006 concerned Orders made on 1 November 2006 (“the Orders”).
The Orders and the background to the proceedings were set out in the reasons for judgement delivered on 4 May 2007.
By agreement, the contravention application filed 20 December 2006 along with an application regarding property filed 3 November 2006 were heard together on 11 April 2007.
It is sufficient for present purposes to note that the wife’s contravention application succeeded as the Court was satisfied that the husband had contravened the Orders. The husband was ordered to return any items in his possession that he had removed from the former matrimonial home.
The orders made on 4 May 2007 arising from the wife’s applications were:
“1.That the husband, without reasonable excuse, contravened order 3(a) of the Orders of 1 November 2006.
2.That the husband be fined $3,300.00.
3.That the husband immediately return all other items in his possession that he removed from the former matrimonial home.
4.That order 2 be stayed for 30 days pending full compliance by the husband with order 3(a) of the orders of 1 November 2006.
5.…”
On 4 May 2007 having heard from solicitors for both parties, directions were made for the filing of submissions as follows:
“5.The applicant have until 11 May 2007 to file and serve any submissions in writing on:
(a)the necessary orders to garnishee the Respondent’s wages to ensure compliance with the orders of
1 November 2006;
(b)costs.
6.The Respondent have until 18 May 2007 to file and serve any submissions in writing on issues in Order 5(a) and (b).
7.The Applicant have until 25 May 2005 to file and serve any submissions in reply.”
Submissions were received on behalf of both the wife and the husband in accordance with those directions. However, no submissions in reply were received from the wife.
Application for costs
The normal rule in proceedings under the Family Law Act 1975
(“the Act”) is that each party pay their own costs pursuant to section 117(1). However, the Court may make an order for costs if it is satisfied that in the particular circumstances of the case it should do so.
Section 117(2) of the Act provides that in an appropriate case the Court may make an order for costs against one or other parties notwithstanding the general rule in s.117(1). Section 117(2A) of the Act sets out the factors to which the Court shall have regard when considering an order for costs.
“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 of the wife’s costs application
I now turn to deal with those factors and the submissions made by each of the parties in respect of those factors.
The issues (and the parties submissions) concerned:
·the costs reserved on 15 January 2007 and 21 February 2007 (“the reserved costs”); and
·the cost of the applications before the Court on 11 April 2007.
Before turning to consider this application and the considerations set out above it is necessary to put the issue of the reserved costs in context.
In December 2006 the husband had open heart surgery.
The wife (and solicitors on her behalf) filed several applications between November 2006 and January 2007.
It appears common ground that following service of the wife’s applications there was correspondence between the parties as early as December 2006. Each party exhibited correspondence as annexures to their written submissions.
On 12 January 2007 it appears the husband’s solicitors put the wife’s solicitors on notice that the husband’s health would restrict his ability to attend Court. The wife’s solicitors were provided with a letter from Mr S that said the husband was not “fit enough, either physically or physiologically, to attend court until early March 2007”.
On 15 January 2007 the matter was adjourned and costs were reserved.
It appears there was no correspondence between the parties following the 15 January 2007 regarding whether the husband would attend on the adjourned date.
On 21 February 2007, both of the wife’s applications came on for hearing in the Court’s duty list. Mr James of Counsel appeared on behalf of the wife and Mr Galatas, appeared amicus curae. Mr Galatas advised the Court he had no instructions from the husband but that the wife’s solicitors were aware of the husband’s medical restrictions.
The wife gave evidence and was briefly cross examined. The wife’s evidence was that she had that morning telephoned an automotive business, F Pty Ltd. which specialises in car body kits.
The wife’s evidence was that she believed the husband was working there and earlier that day had telephoned the business and the husband had answered the telephone.
The husband submitted that on 21 February 2007 the Court was advised by Mr Galatas that the husband was unfit to attend at Court.
It was submitted that there was no evidence or finding that the husband was able to appear at Court that day.
It was not disputed that when the husband did attend in person on
7 March 2007the matter progressed to hearing within a short space of time.
Turning then to consider the application for costs and considerations in s.117(2A).
The financial circumstances of each of the parties
The financial circumstances of the wife and the husband were set out in their Form 13 Financial Statements filed July and August 2006 respectively. On the basis of those statements neither appears to be in a strong financial position however the husband earns more than the wife.
In submissions made on his behalf the husband was said to earn $490.00 per week (net) with housing and transport costs of approximately around $300.00 per week.
However, it does seem that in all of the circumstances the husband is in a stronger financial position and earning more than the wife.
Whether either party is in receipt of legal aid
In this case on the basis of the parties’ submissions it would appear neither party is legally aided so I do not take this factor into consideration.
Conduct of parties to proceedings
This matter came before the Court by way of a contravention and enforcement application made by the wife in respect of the Orders.
The wife submitted that the proceedings were necessitated by the husband’s failure to comply with the Orders.
The wife submitted that the husband had consistently failed to comply with all Court orders made.
As set out at paragraphs 7 to 11 of the decision in Iverson & Iverson [2007] FMCAfam 257 the wife’s applications were brought following the husband’s failure to discharge his responsibilities pursuant to consent orders of 7 August 2006. The wife’s view was that he had also failed to comply with the Orders and did not deliver the [Limited Edition] VL Holden Commodore in good order for sale. On this issue the wife’s view was vindicated.
On the issue of the reserved costs the husband submitted that he:
“ought not be liable to pay costs in circumstances where his health prevented him from attending Court and having regard to the fact that the wife had been put on notice that the husband would be unfit until early March 2007…”
It appears there was no correspondence between the parties between
15 January and 21 February 2007. It also appears that the husband’s solicitors had previously indicated the second date be retained “pending an update” on the husband’s health.
However, it was clear on the basis of the correspondence exchanged between the parties and their respective solicitors and (in particular the letter from Mr Shillington dated 8 December 2006) that there was medical opinion indicating the husband was not fit to attend Court until early March 2007.
I am satisfied that at least until early March 2007 it was clear there was a reason for the husband’s inability to attend Court. Moreover, this was made clear to the wife’s solicitors through correspondence. As the husband submitted there was no finding on 21 February 2007 that the husband was able to attend Court that day.
I note for completeness that the orders that were made that day secured the husband’s attendance on 7 March 2007.
Nonetheless it was the husband’s conduct which led to the proceedings. On balance given the proceedings were brought because of the husband’s failure to comply with the Orders I find that this factor favours the wife’s application.
Whether proceedings necessitated by failure to comply with Court Orders
The matters that arise for consideration under this factor are necessarily related to those considered above.
For the reasons set out earlier I am satisfied these proceedings were necessitated by the husband’s failure to comply with the Orders.
I find this factor favours the wife’s application for her costs associated with the hearing before the Court on 11 April 2007.
Whether any party has been wholly unsuccessful
The wife submits the husband was unsuccessful in his opposition to her application.
The husband submits the wife was not wholly successful in her contravention proceedings. The husband’s submissions appeared to make a virtue out of the Court finding that he had contravened the Orders. The husband submitted that the wife’s contravention application had set out several alleged contraventions.
The wife succeeded in relation to her application. I find this factor favours the wife’s application for costs.
Were there any parties to the proceedings who made an offer in writing to settle the proceedings
On the basis of the parties’ submissions and material before the Court there was no offer of settlement made by either party in these proceedings. There does not appear to have been any formal offer that
I can consider in this case so I do not take this factor into account.
Any other matters as the Court may consider relevant
The wife submitted that by reason of the husband’s conduct and these proceedings she had been left with considerable debts. The wife submitted her financial position was strained and she had to rely on her parents to fund legal proceedings to enforce the Orders.
The husband submitted the wife had contributed to her own financial difficulties and had failed to apply the proceeds (or potential proceeds) of the sale of those items of the matrimonial property which she had pursuant to the Orders in discharging debt or meeting her costs.
Be that as it may, the Orders were clear and the Court found the husband had contravened the Orders without reasonable excuse.
The decision of the Full Court in Brown [1998] FamCA 115 held that a Court, whilst obliged to have regard to the relevant matters set out in s.117(2A) said:
“In many cases there will be an outstanding feature of the case that makes an order for costs appropriate, a feature which so dominates the scene that it can outweigh any of the other s.117(2A) considerations. In those cases the Court may readily infer that the trial Judge has given appropriate consideration to the aspects of s.117(2A) but in the shadow of each of the required aspects has appropriately determined that overwhelmingly the case demands an order for costs to be made…”
In this case it was the husband’s conduct that necessitated the proceedings. The proceedings were brought as a result of the husband’s failure to comply with the Orders. I find that the husband’s conduct “dominates” the other considerations in s.117(2A).
What orders for costs should be made?
I am satisfied that the Court should make an order as to costs. I accept the wife’s submissions that the husband’s conduct necessitated legal proceedings.
However, for the reasons set out at paragraph [16] – [22] and [33] – [36] above there are not sufficient circumstances to justify an order in favour of the wife for the reserved costs.
Nonetheless it seems that given the wife was successful costs should follow the event in relation to the hearing of 11 April 2007. I reach this conclusion because of the husband’s conduct and failure to comply with the Orders and that the proceedings were necessary because of this.
The wife seeks a costs order that compensates her pursuant to the scale set out in Federal Magistrates Court Rules 2001 (“the Rules”).
Schedule 1 of the Rules provides an event based costs scale and governs proceedings in this Court. In this matter having had regard to the matters raised in the parties’ submissions, I can see no reason to depart from it.
In relation to the calculation of costs in accordance with Schedule 1 of the Rules each of the parties submitted the costs of the hearing on
11 April 2007ought be calculated at a different stage in that scale.
The wife sought that it be at stage 5 for the contravention and stage
7 for the property matter.
The husband submitted that the costs sought be calculated at stage 1. The hearing on 11 April 2007 dealt with both applications by agreement. The husband has disputed the wife’s claim for her costs in relation to the return of property heard the same day. The husband submitted given it appeared the wife brought that application without her solicitors and that the items he had in his possession were returned by agreement each party should bear their own costs in relation to that application.
In the circumstances it is not appropriate to adopt either submission.
I do not believe it is appropriate to award costs for both applications. Given the above, it appears to me that the costs if calculated in accordance with the scale in Schedule 1 of the Rules would be less than the figure claimed by the wife.
The husband submitted that any award of costs should be discounted having regard to inter alia his health, earning potential and that the wife had alleged four contraventions of the Orders. I have already considered the relevant factors for the purposes of s.117(2A) and am satisfied that it is appropriate there be an award of costs in the wife’s favour.
On one view, the hearing on 11 April 2007 was a discrete event at Stage 2 of Schedule 1 of the Rules. That stage attracts a fee of $1,250.00 plus a daily hearing fee.
However, the husband did not oppose an amount calculated at Stage 1 at $1,500.00 plus a daily hearing fee of $1,500.00. The husband did however submit an advocacy loading was “inappropriate”.
At the hearing on 11 April 2007 both parties were represented by Counsel, gave evidence and were cross-examined. At the conclusion of the hearing submissions were made on behalf of both parties. I am not satisfied that an advocacy loading was “inappropriate”.
The daily hearing fee in the present case would be a full day hearing of $1,500.00 plus an advocacy loading of 50% ($750.00).
Given the husband’s submissions and having considered the schedule of costs attached to the wife’s submissions, I am satisfied that the husband should pay the wife’s costs of these proceedings in accordance with Schedule 1 of the Rules as follows:
Daily hearing fee – full day 11 April 2007 $1,500.00 plus 50% advocacy loading
$2,250.00
Stage 1
$1500.00
Judgment hearing – 4 May 2007
$205.00
Total:
$3,955.00
Garnishment order
On 4 May 2007 the Court sought submissions on what orders were necessary to garnish the husband’s wages to ensure compliance with the Orders of 1 November 2006.
Under s.112AD(4) the Court is empowered to make any other necessary order to ensure compliance with the order that was contravened.
The wife in submissions referred to Order 33 of the old Family Law Rules. Those provisions are included in Part 1 of Schedule 3 of the Rules which gives the Court a wide variety of powers to enforce payment of a debt once proved. This includes by way of a garnishment order.
The wife submitted that:
·unless a garnishment order is made the husband is unlikely to pay any “outstanding costs given his previous conduct;”
·the husband is still a cleaner at the E Hospital which should be made garnishee;
·there is sufficient evidence to show that the husband is also or otherwise employed by F Pty Ltd.. (“F Pty Ltd”); and
·there should be two garnishee orders made with a deduction rate of $100.00 per week and a protected earnings rate of $250.00 per week.
The husband’s submissions were that:
·any order for the garnishment of wages of more than $40.00 per week would be harsh;
·he is neither employed or receiving any remuneration from F Pty Ltd and there is no evidence to the contrary; and
·any garnishment order should be contingent upon the wife’s return of the [Limited Edition] VL Commodore (“the car”) pending the husband’s payment to the wife of monies equivalent to the value of the car.
The contravention application was filed in circumstances where the husband had failed to comply with the Orders.
In this case there is a finding that the husband’s contravention of the Orders was due to his failure to deliver the car in good order to the wife.
In addition to the provisions set out in s.112AD(4) of the Act, the Rules also provide the means for enforcing obligations by a garnishment order.
There was sufficient evidence to indicate the husband evaded his obligations under the Orders. As a result the wife has not had the benefit of the Orders and has had to bring proceedings to get the husband to do what he should have done in November 2006.
Whilst there was evidence the husband was working at F Pty Ltd. there was no evidence he was employed by or receiving remuneration from F Pty Ltd.
As was made clear at paragraph [78] of the decision of 4 May 2007 there was differing evidence regarding the value of the car.
The wife made no specific written submissions regarding the value of the car and the terms of any garnishment order necessary to ensure compliance with the Orders.
As set out above the husband submitted that the wife should be required to return the car to him so he could then compensate the wife for her inability to sell the car for its value.
However, s.112AD(4) provides that the Court make such orders as it considers necessary to ensure compliance with the order that was contravened.
In this case the husband was found to have contravened the Orders. The husband failed to deliver the car in good order. In those circumstances I am not satisfied that it would be appropriate to order that the car be returned to him so he could pay the wife the value of the car in good order. In coming to that conclusion I have had regard to the wife’s evidence that the husband said he would kill himself before he gave her the car.
However, as the husband pointed out in submissions the only evidence regarding the value of the car was $15,000.00 figure he gave in evidence. There was no evidence regarding the value of the car when it was delivered to the wife in November 2006 and there were no written submissions from the wife on this issue.
As there are no valuations of the car in its current condition before me, at this stage, I am not prepared to make an order garnishing the husband’s wages when the sum owing to the wife by virtue of the husband’s contravention has not been satisfactorily determined.
Such an outcome in this case would clearly be unsatisfactory given the husband’s conduct. The contravention was found in circumstances where the husband’s conduct rendered nugatory the order requiring the car to be delivered to the wife.
On what is before me it seems the practical solution would be to place the wife in the position she should have been in had the Orders been complied with.
Accordingly, I will order that the husband pay the wife’s reasonable costs of returning the car to her in good order which it should have been as per the Orders (less the value of the car as delivered).
I will order that the wife provide the details of these costs to the husband within 21 days and that the husband have a further 21 days to pay those costs to the wife.
In the event the parties are unable to agree on the amount or the method of payment of those costs the wife will have liberty to apply on 14 days notice.
Finally, I note had the Orders been complied with these proceedings would not have been necessary.
Conclusion
For these reasons I make the orders as set out at the beginning of this judgment.
I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of O'Sullivan FM
Deputy Associate: R. Lombardo
Date: 14 June 2007