Jamine & Jamine (No.2)
[2012] FamCAFC 104
•19 July 2012
FAMILY COURT OF AUSTRALIA
| JAMINE & JAMINE (NO. 2) | [2012] FamCAFC 104 |
| FAMILY LAW – APPEAL – Appeal against orders for property settlement – Where a 5 per cent adjustment was made pursuant to s 75(2) on account of the husband’s non-disclosure – The adjustment of 5 per cent was within the range of the trial Judge’s discretion – Where an order was made that the husband resign as trustee of a trust over a one-half interest in a property held for the benefit of an adult disabled child – Where the trial Judge held that in exercising his power under Part VIII he could remove one of the trustees – The husband and wife’s interest in the property provided a relevant connection between the exercise of power under Part VIII and the exercise of the power to remove a trustee – The trial Judge’s decision to remove the husband as trustee was within his discretion – Appeal dismissed. FAMILY LAW – APPEAL – Appeal against a costs order made following a two day delay in the commencement of the trial – Where the husband provided a medical report as to why he could not attend the trial – Where the trial Judge held the wife should not be financially inconvenienced by the husband’s inability to attend the trial – The trial Judge’s decision to order costs was within his discretion – Appeal dismissed. FAMILY LAW – COSTS – Where the husband submitted there is a financial disparity between the husband and wife and the appeal against his removal as trustee was not frivolous or vexatious – No merit in the appeals – Husband ordered to pay wife’s costs of appeal. |
| Family Law Act 1975 (Cth), s 80(1)(e) |
| Browne v Green (2002) FLC 93-115 Davidson and Davidson (No 2) (1994) FLC 92-469 Gould and Gould (2007) FLC 93-333 Harris and Harris (1991) FLC 92-254 Kannis and Kannis [2002] FamCA 1150 |
| APPELLANT: | Mr Jamine |
| RESPONDENT: | Ms Jamine |
| FILE NUMBER: | MLC | 3286 | of | 2008 |
| FIRST APPEAL NUMBER: | SOA | 73 | of | 2011 |
| SECOND APPEAL NUMBER: | SOA | 84 | of | 2011 |
| DATE DELIVERED: | 19 July 2012 |
| PLACE DELIVERED: | Perth |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Thackray, Strickland and Ainslie-Wallace JJ |
| HEARING DATE: | 9 July 2012 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 19 September 2011 3 November 2011 |
| LOWER COURT MNC: | [2011] FamCA 792 [2011] FamCA 843 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Moisidis |
| SOLICITOR FOR THE APPELLANT: | Bowlen Dunstan & Associates Pty |
| COUNSEL FOR THE RESPONDENT: | Ms Johns |
| SOLICITOR FOR THE RESPONDENT: | Slater & Gordon |
Orders
The appeal against the orders of the Honourable Justice Cronin made on 19 September 2011 be dismissed.
The appeal against the orders of the Honourable Justice Cronin made on 3 November 2011 be dismissed.
The husband pay the wife’s costs of, and incidental to, the appeals as agreed and in default of agreement, as assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Jamine & Jamine 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 MELBOURNE |
Appeal Number: SOA 73 of 2011 & SOA 84 of 2011
File Number: MLC 3286 of 2008
| Mr Jamine |
Appellant
And
| Ms Jamine |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr Jamine (“the husband”) has appealed against:
· orders for property settlement made by Cronin J on 3 November 2011; and
· a costs order made by Cronin J on 19 September 2011 arising out of a two day delay in the commencement of the trial in September 2011.
Ms Jamine (“the wife”) opposes both appeals.
Background
The husband and wife were married in 1977.
There are three children of the marriage, all of whom are now adults. The youngest, Ms E, has Down syndrome.
The husband is a lawyer in Southeast Asia, where the family lived until 1991 when the wife and children moved to Australia. Since then the husband has from time to time lived in Australia, but primarily lives and works in Southeast Asia.
The husband and wife purchased a home at suburb B in Melbourne in 1991. They executed a declaration of trust as to a one-half interest in the property in favour of Ms E. The wife and Ms E were still living in this home at the time of the trial before Cronin J.
The husband and wife also acquired other property in Victoria. The division of their assets became contentious following their separation in December 2006. Since then the parties have been engaged in litigation in the Magistrates Court of Victoria, the Federal Magistrates Court of Australia, the Family Court of Australia and the High Court of Australia.
Applications for property settlement and maintenance were listed for trial before Cronin J to commence on 19 September 2011. On the first day of the trial counsel for the husband sought an adjournment on the basis that the husband’s health had prevented him from travelling from Southeast Asia to attend the trial. A medical report was produced in support of the application.
The adjournment application was successful to the extent that Cronin J stood the matter over until 21 September 2011. The husband was ordered to pay the wife’s costs thrown away fixed at $7,500 (subject to a contingency that has no bearing on this appeal).
The trial resumed on 21 September 2011, by which time the husband was present. The trial was completed over three days, and judgment was delivered on 3 November 2011 when the orders the subject of this appeal were made.
The reasons for judgment
After setting out relevant background, Cronin J discussed two contentious issues, namely the disclosure made by each party and their credibility.
The trial Judge made damning findings about the husband’s lack of disclosure, which his Honour accepted amounted to “active concealment”. He concluded:
38.The difficulty in this case is that I am satisfied that the pool of assets is greater than the evidence has demonstrated but I have no clear understanding of its extent. I am satisfied that the husband’s financial circumstances relating to his earning capacity and income is not as he would have the Court accept but rather significantly greater. The difficulty is in quantifying the extent of that. Similarly, the extent of the disadvantage to the wife is hard to quantify but I propose to err in her favour because I reject the husband’s evidence as to his capacity to work in the future. I also find that he has the ability to make himself financially comfortable despite not having access to a significant portion of the known pool of assets.
His Honour found the husband to be “an entirely unsatisfactory witness [who] was evasive and obfuscatory”, whereas the wife’s evidence was “measured and candid”. His Honour did acknowledge there was “a question” concerning the wife’s disclosure of certain documents of a business that was no longer operating. However, his Honour concluded:
40.…Even if I was to take the view that she had not been entirely forthcoming, at her age, stage of life and business background, I comfortably consider that there would not be anything in that material that would have altered my perception about her as a witness.
The trial Judge therefore concluded that wherever there was a conflict in the evidence he would accept the wife’s version. He completed his discussion of the parties’ credibility by saying:
55.In summary, the husband’s evidence was entirely unsatisfactory and deliberately misleading at times. I have no doubt that he concealed documents for purposes which are not at all clear. The only inference I can draw is that his financial position is much better than that which he portrays.
His Honour next dealt with a contentious issue relating to a very large amount said to be owed by the husband to a business associate in Southeast Asia. Although the husband’s appeal originally challenged his Honour’s findings on this issue, that part of the complaint was abandoned at the outset of the appeal hearing.
The trial Judge went on to note that there was no serious dispute about the extent and value of assets owned by the parties (save for issues arising out of the husband’s failure to make full disclosure). His Honour found that the net assets were worth $1,289,615, of which $500,000 represented the parties’ half interest in the home at suburb B. All of the assets identified were in Australia.
His Honour then discussed the parties’ respective contributions to the assets, and concluded that they had been made in proportions 52.5% by the wife and 47.5% by the husband. That finding was not challenged.
His Honour then turned to consider the factors in s 75(2) of the Family Law Act1975 (Cth) (“the Act”). As a result of a concession made by counsel for the husband in oral submissions it is unnecessary to record his Honour’s discussion of the s 75(2) factors, save for what he said about the husband’s non-disclosure.
His Honour found that an adjustment of 15% for the s 75(2) factors would be appropriate, of which 5% was expressly related to his finding that the husband had failed to disclose the full extent of his assets. His Honour pointed out that s 75(2)(o) allows a court to take into account any fact or circumstance which the justice of the case requires. He further observed that the Full Court in Gould and Gould (2007) FLC 93-333 had determined that a failure to disclose assets was a matter to be taken into account in considering the s 75(2) adjustment.
Earlier in his reasons, his Honour had referred to Kannis and Kannis [2002] FamCA 1150, where the Full Court had said:
51. …Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances, it may be appropriate to err on the side of generosity to the party who might otherwise be seen to be disadvantaged by the lack of complete candour.
In discussing the impact of the husband’s non-disclosure on the s 75(2) adjustment, his Honour said:
155.It is also instructive to recall the observation of the Full Court in Kannis and Kannis (supra)…that this robust approach is not confined to deliberate non-disclosure. Where a court is satisfied that the pool may be greater than is clearly demonstrated, the court can “err on the side of generosity” to the party who might otherwise have been seen to be disadvantaged by that disclosure. Here, the issue is all the more perplexing because the husband is a practicing lawyer. I reject the suggestion that his non-disclosure is as a result of some health issue.
156. In the husband’s submissions, his counsel argued that the difficulty arose in determining what order to make. It was submitted that on any view, the evidence about what the wife thought existed pointed to the relevant sums being modest to the point of insignificance by comparison to the Australian assets. The difficulty with that submission is that I have no idea of just what assets the husband has elsewhere. There are three reasons for that. First, the husband was evasive about the financial records that would have possibly established his point about the modesty of such extra resources. He has made arrangements in the partnership to share the profits with a partner whose revenue does not meet all of his dedicated expenses. Albeit modest, the husband conceded that there was a bank account in England that he had forgotten about. Secondly, the husband has continued his lifestyle including the various travels earlier mentioned. Thirdly, the husband is a lawyer and does, or should, understand the litigation process and in particular, the disclosure obligation.
157.For the reasons set out above concerning non-disclosure, a robust approach should be taken but it still must be just and equitable. To be so, there must be some quantifiable benchmark rather than just intuitive synthesis. The husband has at least the interest in his legal practice and failed to provide any indication as to its value. That was contrary to a court order. The wife at least gave some explanation about her inability to provide that valuation. In this case, 5 per cent of the known pool of assets is about $60,000. If 5 per cent was adjusted in favour of the wife, it amounts to a 10 per cent variation between the parties. Whilst that may be a significant difference in dollar terms, it is conceivable that that sort of figure might represent what the husband has and has failed to disclose. Whilst there is a measure of imprecision about this exercise, it is the only benchmark that I can see assists. Accordingly, I propose to make a further adjustment in favour of the wife of 15 per cent having regard to the disparity of earning capacity, the commitments of the wife other than of a financial nature to support [Ms E] and the responsibilities that go with that, her reliance upon taxpayer funded benefits, the terms of what is otherwise a modest pool of assets in the orders that I propose to make and ultimately my uncertainty about what financial circumstances the husband has.
158. Accordingly, of the known assets, there should be an adjustment of the net pool as to 67½ per cent to the wife and 32½ per cent to the husband.
159.It is important to see how the percentages convert into dollars even where the true financial position of the husband is unknown. The percentages, after adjustments for the add-backs, payment of outstanding orders by the husband and a distribution of assets in specie means that the two investment properties have to be sold to meet the entitlements of the parties and the capital payment I propose to order for [Ms E’s] maintenance. The real value of the percentages means that the wife will retain half of the home and receive the [suburb C] proceeds, her cash and an amount from the sales of about $290,000. The husband retains his superannuation, the modest shares, [town F] property and receives about $280,000 in cash. Having regard to his undisclosed interests, that is a just and equitable outcome.
Having decided it was not appropriate to require the husband to continue to pay spousal maintenance, the trial Judge then considered the wife’s application for maintenance for Ms E. He concluded that the husband and wife should both maintain Ms E, and determined that the appropriate way to ensure this was to require each to pay $73,500 from the proceeds of sale of the investment properties into a trust account, of which the wife would be trustee, and from which the wife could draw up to $16,334 per annum for Ms E’s benefit. There was no appeal against that part of his Honour’s order.
The trial Judge concluded his reasons by dealing with the wife’s application that the husband “resign” as trustee of the trust established by the declaration made in 1991 concerning the suburb B property. His Honour noted that the husband had “remained silent about the matter in his evidence” although in closing submissions his counsel had addressed the setting aside of the trust, which his Honour properly determined was an issue he did not need to address.
His Honour recorded the husband’s submission that “the property to which the trust related was not property referable to the parties and therefore not property to which Part VIII and therefore s 80 could be applied”. He then recorded that s 80(1)(e) of the Act provided that when exercising its powers under Part VIII, the Court may “appoint or remove trustees”. His Honour emphasised that the power existed only when a court was exercising powers under Part VIII. His Honour further recorded that the Full Court, in Davidson and Davidson (No 2) (1994) FLC 92-469 (“Davidson”), albeit in different circumstances had observed that “s 80(1) was limited by its introductory words meaning that it was activated by the exercise of some other of the powers in Part VIII”.
His Honour concluded his reasons on this issue by saying:
214.The husband and the wife are not only the trustees pursuant to the declaration of trust, they are also the legal title holders of the property to which the declaration applies. They are currently the persons entitled in possession to the land. They are obliged by the terms of the trust to vest the property in [Ms E] when it is in her best interests to do so. The definition of property in s 4 of the Act means that the “half interest” of [Ms E] (as it has consistently been described by the husband and wife) is property to which Part VIII of the Act applies.
215.Thus, the Court is exercising its powers under Part VIII and s 80(1)(e) can be used to remove a trustee. The question is whether it should be so exercised.
216.There are statutory powers available in all states to enable the removal of a trustee (see s 48 Trustee Act 1958 (Vic)).It is also traditionally said that the power of courts to remove a trustee is one to be exercised cautiously and only in exceptional circumstances (see Quinton v Proctor [1998] 4 VR 469). The issue is about what best protects the interests of the trust beneficiaries but also the efficient and satisfactory execution of the trust (see Miller v Cameron (1936) 54 CLR 572 at 580 per Dixon J).
217.As between the husband and the wife, there is a family violence order until January 2012. Contact is limited between them. The parties are now divorced. The property proceedings will conclude with a division of their property. The wife has consistently complained about the husband’s disclosure of his financial circumstances and these reasons indicate my concerns about that lack of transparency on his part. The wife is entitled to be cynical about his co-operation.
218.There may be future decisions required about the property and the administration of the trust. The wife is already the person recognised by VCAT as [Ms E’s] administrator.
219.The husband seems to have the interests of [Ms E] at heart but it is the obligation between husband and wife to act in her best interests that raises concerns.
220.I find it is likely that the administration of the trust will be difficult in the future because of the relationship between the husband and the wife. I consider that decisions that may have to be made for [Ms E] about housing and renovations are likely to be problematic between the parties. Because the VCAT has sufficient confidence in the wife to appoint her in respect of [Ms E] and no criticism of the wife was made by the husband in that regard, I consider it appropriate to remove the husband from position as trustee. Consequential orders are therefore necessary.
The grounds of appeal against the property settlement orders
At the outset of the hearing before us, counsel for the husband abandoned Grounds 4, 5 and 6. Significantly Ground 6 had sought to impugn his Honour’s adverse credit findings in relation to the husband.
This then left for consideration Grounds 1, 2 and 3 but Ground 2 was abandoned during the course of argument. Following amendments that we allowed, the remaining grounds were expressed as follows:
1.There was no sufficient evidence for the Court to provide an adjustment to the wife of 15% of the net asset pool for factors pursuant to s.75(2) of the Family Law Act 1975.
...
3.His Honour erred in ordering that the husband resign as a trustee of the trust pertaining to a one half interest in the property at [D street, suburb B] in which the declared beneficiary is [Ms E].
Ground 1 – the adjustment made for non-disclosure
In seeking to advance this ground, counsel for the husband, after initially submitting that the orders were not just and equitable, relied on two matters.
First, he submitted that an adjustment of 5% on account of the husband’s non-disclosure could not be justified because the wife too had failed to disclose documents relating to the company in which she had previously been involved. Secondly, it was submitted that his Honour ought to have, “at least notionally”, quantified the value of the assets that may not have been disclosed and that this should have been done by a dollar figure rather than as a percentage.
Both of these propositions demonstrably lack merit. His Honour expressly discussed the wife’s failure to disclose documents pertaining to the defunct business but concluded that there would not have been anything in that material that would have altered his perception of the wife as a reliable witness.
The answer to the second part of the complaint is that his Honour did precisely what counsel for the husband submitted he should have done, namely to attempt to quantify in dollar terms the possible extent of the husband’s non-disclosure. See paragraph 157 of the reasons as set out earlier.
When we pointed out to counsel for the husband the obvious lack of merit in his two propositions he endeavoured to fall back on the initial general complaint that in such a long marriage it was not just and equitable for the husband to have been left with so few assets, bearing in mind that, out of his smaller share of the assets, the husband would be required to make his equal contribution to the maintenance trust fund for Ms E. This complaint cannot be sustained when it is recognised that:
· There was no appeal against the order for adult child maintenance;
· The contribution finding was not challenged; and
· The complaint about the 10% adjustment for s 75(2) factors other than the non-disclosure was abandoned in the course of argument.
This left for consideration only the issue of the proper adjustment for non-disclosure. In our view it is not open to the husband to assert that such a modest adjustment as 5% has led to an outcome that is not just and equitable when it is the husband’s own conduct that has prevented the trial Judge, and this Court, from determining whether the result was indeed just and equitable.
This ground therefore fails.
Ground 3 – removal of the husband as trustee
It was common ground that the Court’s power to remove the husband as a trustee of the trust relating to the half interest in the suburb B property could only be exercised if it was truly ancillary to property settlement or maintenance orders (see Davidson).
The issues we were asked to determine were whether the order for removal of the husband as trustee was ancillary to the other orders made, and if so whether his Honour’s discretion miscarried in making the order.
It was submitted on behalf of the husband that:
4.At paragraph 214 the learned Trial Judge erroneously put weight on a right of possession as attributing a beneficial interest in the particular property to the parties. The right of possession was in no way derived from the property under consideration. Such possessory rights as did exist derived from the remaining interest as tenant in common in respect of the property, not that held on trust for [Ms E].
5.Furthermore even if it could be said that a right to possess as [sic] in some way connected to [Ms E’s] interest in the land, that right would not be enforceable and could exist only at will. An independent trustee for [Ms E] could at any time seek orders for partition or sale of that interest in the property.
6.The claim of the wife for the removal of the husband as trustee was not directed towards the division of matrimonial assets or maintenance as between the husband and the wife. It is clear that the purpose of the orders explained at paragraph 220 was to aid the internal workings of the trust. Neither party receiveed [sic] any different beneficial interest matrimonial property [sic]. As such, the orders were not properly made for the purpose of Part VIII of the Act.
It was further submitted his Honour erred in placing “great reliance” on an order made by Victorian Civil and Administrative Tribunal (“VCAT”) appointing the wife as guardian and administrator of [Ms E’s] affairs. It was submitted that the order had been made without the husband’s knowledge or consent or, alternatively, that it was an irrelevant consideration.
In considering whether the power to make an order for the removal of a trustee under s 80(1) of the Act has been enlivened we respectfully agree with Ellis J in Davidson (at 80,875) that it is not sufficient that the court is exercising, or has exercised, one or more of the other powers in Part VIII of the Act, but that instead “a relevant connection or relationship is required between a primary power within Part VIII and the exercise of any of the powers in s. 80(1)”.
The submission made on behalf of the husband that “the learned Trial Judge erroneously put weight on a right of possession as attributing a beneficial interest in the particular property to the parties” demonstrates a fundamental misunderstanding of his Honour’s reasons. The trial Judge did indeed find that the husband and wife had a right to possession of the property, but that had nothing to do with their position as trustees of the trust, but instead arose from their legal ownership of the other half interest in the property.
The parties’ ownership (both legal and beneficial) of a half interest in the property which was the subject of the trust in our view clearly establishes a “relevant connection or relationship” between the making of an order for the wife to acquire the husband’s interest in the property and the removal of the husband as trustee of the trust pertaining to that very property. The appointment of the wife as sole trustee of Ms E’s interest in the land clearly would permit the wife to enjoy her own interest in the property free from interference by the husband.
One example of this should suffice to explain why the order for the husband’s removal as a trustee was clearly ancillary to the order for transfer to the wife of his interest in the property. It was common ground that the home would continue to be occupied by both the wife and Ms E, since Ms E requires ongoing care. The wife had also asserted that the house was dilapidated and needed substantial renovation, if not demolition. In the event the husband had been left as a joint trustee he would have been able to interfere with decisions the wife wished to make in order to ensure her own place of residence was habitable. The elimination of this prospect clearly made the order for removal of the husband as trustee of Ms E’s beneficial interest ancillary to the transfer to the wife of the husband’s interest in the property.
As the trial Judge clearly had power to make the order for removal of the husband as trustee, the remaining issue is whether his Honour erred in so ordering. His Honour set out ample reasons why such an order was appropriate. Included in those was the fact that the relevant tribunal had seen fit to appoint the wife as guardian of Ms E’s affairs. Even if the husband had not consented to, or been notified about, this decision, we nevertheless consider it was an entirely proper matter for the trial Judge to take into account, especially as we were not taken to any evidence to suggest the husband was proposing to challenge the VCAT ruling.
In his oral submissions counsel for the husband argued that his Honour should not have speculated about the likely future level of cooperation between the parties in the administration of the trust, and should have taken note of the fact that the trust had been in existence since 1991 without any apparent difficulty and that the husband had already made clear he wanted Ms E to remain in the property, which was a desire shared by the wife.
These submissions failed to take adequate account of the fact that the parties are no longer married, and that since their separation they have been involved in what appears to have been protracted and acrimonious court proceedings in relation to a variety of issues, including the husband’s application for special leave to the High Court contesting their divorce. In our view the order for removal of the husband as trustee was not only within his discretion, but the only order properly available on the evidence.
This ground also fails.
The costs appeal
The trial was originally listed to start on 19 September 2011. At the commencement of the hearing, counsel for the husband handed up a medical report, which was dated 14 September 2011 (i.e. five days before the trial was due to commence) and which read in full as follows:
This letter is to certify that [the husband] is a patient of mine. He has an acute attack of gouty arthritis with considerable amount of swelling of his right foot and leg. His mobility is substantially restricted and he is limping badly. I have put him on medications and I feel that he will not be able to travel locally as well as internationally for at least a duration of seven (7) days.
In opposing the adjournment, counsel for the wife submitted that the medical certificate was “weak”, and noted there was no suggestion in the certificate that the husband could not travel business class, which he pointed out would be cheaper than the costs associated with the proposed adjournment.
When the trial Judge asked counsel for the husband to state his position in relation to costs associated with the adjournment, he responded:
Your Honour, they’re in the discretion of the Court. My client says he is ill through no fault of his own. In terms of section 117, we would argue that that’s one of the matters that your Honour would consider…
(Transcript, 19 September 2011, page 17).A little later in the hearing, his Honour said to counsel for the husband, “I’m not sufficiently familiar with gouty arthritis to know how painful it is in a pressurised cabin, but I think [counsel for the wife] has got a point, that a business class air fare probably enables him to put his feet up, because [Southeast Asia] is – what? A six hour flight?” – to which counsel for the husband responded “perhaps eight, your Honour, but – yes, something of that nature”.
It was following this exchange that the trial Judge said he was proposing to adjourn the matter for two days. His Honour then went on to say to counsel for the husband:
…your client might need to put his hand in his pocket, because even if I factor in that this trial isn’t being aborted – it’s being delayed – I think the wife is going to be out of pocket in circumstances which, whilst I accept your point about the fact that conduct is one of the matters in section 117(2A), so is any other factor, and I see no reason why – having regard to [counsel for the wife’s] point about the fact that there’s nothing in this material that says that he couldn’t have got him here by a wheelchair or any other method, having just flown internationally a few weeks ago; it was amazing the traffic in wheelchairs and people on medication, and all sorts of things, so I’ve got no doubt that can be done. (Transcript, 19 September 2011, page 18).
Adopting an expression his Honour had employed earlier, counsel for the husband responded, “I won’t take on an open door, your Honour”.
His Honour delivered reasons for granting the short adjournment and for ordering costs. The reasons, appropriately, were brief and read as follows:
4.For the reasons I have already outlined, I propose to grant the husband’s application simply to delay the matter for 48 hours, and I do so on the basis that there is a small, and it is a very small, amount of evidence to indicate that he was unable to travel. There is an inconvenience to the Court, but it is one that fortunately by virtue of things that I can shift around, I can overcome it. The problem seems to me to occur for the wife in that on any view, she will incur costs for today. [Counsel for the husband] quite properly says that it is a conduct matter that can be taken into account by the Court and the husband’s medical problem is a basis not to make an order for costs. In this case, I disagree.
5.Section 117 of the Family Law Act provides that each party pays their own costs unless there are circumstances that justify the Court departing from that principle, and if the Court is contemplating departing from the principle, it has got to take into account all of the matters that are set out in section 117(2A). One of those matters is any other reason. It seems to me that there are financial circumstances for both parties here. The wife should not be inconvenienced by the husband’s inability to be here. He could have possibly found some alternative basis to get here. He has not suggested that he could have come by business class airfares and so forth. It seems to me that the wife is out of pocket. She should not be out of pocket, and on that basis, the husband will be ordered to pay the wife’s costs of today thrown away…
We should record there was no serious objection to costs being fixed at $7,500 as sought by counsel for the wife.
Counsel for the husband made the same submission in support of the appeal as had been made at trial, namely that the husband ought not be visited with an order for costs in circumstances where his inability to attend at court on the first day of the trial was due to “a medical condition out of his control”.
The trial Judge properly recognised that a medical condition could be the basis for not ordering a party to pay costs associated with an adjournment. However, we accept the submission of counsel for the wife that his Honour was entitled to treat the medical report in the present case as being no more than “a very small…amount of evidence”.
In this regard it should be noted that the medical report was not sworn and was provided at the last minute, with no opportunity for the doctor to be cross-examined. The report did not say it would not be feasible for the husband to travel business class, nor did it specify precisely why the medical condition prevented the husband from travelling. Importantly, there is no indication in the report that the doctor was aware of the importance of, and the expense associated with, the event to which the husband was travelling, which may or may not have had some impact on his recommendation. As it turned out, the husband was able to be in court just 48 hours later.
Even if the husband’s reasons for not being in attendance at the start of the trial were entirely legitimate, the fact remained, as the trial Judge pointed out, that without an order for costs being made, the wife would be out of pocket. His Honour’s finding was that she ought not to be out of pocket.
The Full Court said in Harris and Harris (1991) FLC 92-254 at 78,711 that costs orders are “peculiarly a matter which are within the discretion of the trial judge” and that “only in the rarest of cases” should an appeal court interfere with such orders. Although, this may state the proposition “at its highest” (Browne v Green (2002) FLC 93-115), the authorities emphasise the extent to which costs orders are protected from appellate interference.
We see no basis for interfering with the order made by the trial Judge.
Conclusion and costs
There being no merit in either of the appeals, they will be dismissed.
The wife sought an order for costs if the appeals were dismissed. There is a clear basis for costs being ordered, as the husband has been entirely unsuccessful. However, counsel for the husband submitted that we should not make an order for costs because of the disparity in the capital available to the parties.
Although we accept that the wife’s assets are significantly greater than the husband’s disclosed assets, there remains the issue of whether or not the husband has, in fact, made full disclosure. Furthermore, the trial Judge found that the husband’s income earning capacity is significantly greater than that of the wife, and she has an ongoing responsibility as Ms E’s carer. The difference in the parties’ capital therefore does not provide a basis for denying the wife an order for costs.
Counsel for the husband also submitted that we should take into account the fact that the appeal in relation to the husband’s removal as trustee of a valuable trust was not frivolous and that the husband had acted appropriately in seeking to promote his disabled child’s interests. Whilst we can accept that the husband was concerned about losing control of the trust, and that he had properly sought not to challenge the order for lump sum child maintenance, the fact remains there was no substance in his complaints about this order.
These were appeals without merit and we consider the husband should pay the wife’s costs.
I certify that the preceding sixty-five (65) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Thackray, Strickland and Ainslie-Wallace JJ) delivered on 19 July 2012.
Associate:
Date: 19 July 2012
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