Jenkins and Jenkins

[2018] FamCA 224

FAMILY COURT OF AUSTRALIA

JENKINS & JENKINS [2018] FamCA 224

FAMILY LAW – COSTS – Where the Applicant Wife seeks orders that the Respondent Husband  pay her costs of and incidental to an Application in a Case filed in July 2017 seeking interim spousal maintenance and other orders relating to financial matters – Where the Respondent sought to have the Application in Case dismissed – Where the parties reached an agreement by consent on the day of the hearing – Where the consent orders meant that neither party was wholly successful or unsuccessful – Where the proceedings could have been resolved prior to the hearing but for the Respondent’s insistence on conditions that were totally unreasonable – Where the Respondent had greater earning capacity than the Applicant and is found to have known of the Applicant’s need and his own capacity to contribute to her financial support – Where the court found that a costs order is justified in the circumstances.

Family Law Act 1975 (Cth)

Family Law Rules 2004 (Cth)

APPLICANT: Ms Jenkins

RESPONDENT: Mr Jenkins

FILE NUMBER: BRC 4669 of 2014

DATE DELIVERED: 12 April 2018

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 26 March 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Minnery

SOLICITOR FOR THE APPLICANT: Wallace Perkins Family Law

SOLICITOR FOR THE RESPONDENT: Ms Feeney
Feeney Family Law

Orders

1. That the husband shall pay to the wife the sum of $6,000 towards her costs of and incidental to her Application in a Case filed 18 July 2017.

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 Jenkins & Jenkins 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 BRISBANE

FILE NUMBER: BRC 4669 of 2014

Ms Jenkins

Applicant

And

Mr Jenkins

Respondent

REASONS FOR JUDGMENT

1. For determination now in these proceedings is an application by the wife for the husband to pay her costs of and incidental to an Application in a Case that she filed on 18 July 2017 for interim spousal maintenance and certain other orders relating to financial matters, including as to the interim administration of the discretionary family trust.

2. The wife sought interim spousal maintenance from the husband in the sum of $689.14 per week from which she said she would pay $130 per week in total for the mortgage repayments, rates and insurances relating to the former matrimonial home in which she is still living.

3. The husband, in his Response filed 27 October 2017, sought to have the wife’s application for spousal maintenance dismissed. He did not seek an order for the payment to her of any amount for spousal maintenance.

4. Further, the wife sought orders for the husband to take all necessary steps to have the tax returns for the family trust for the financial years 2015, 2016 and 2017 completed and lodged, as well as to cause the trust to pay the wife monies owed by the trust to her. She asserted she was owed half of the trust’s income earned in those three financial years. She also sought orders requiring the husband to cause family trust income to be paid into the family trust’s bank account rather than a personal bank account of the husband and restraining him from dealing with the trust’s income without her written consent. She sought a further or alternative order that she be appointed sole trustee and sole appointor of the family trust.

5. The husband also sought to have the wife’s application for those orders in respect of the trust dismissed. He did not seek any orders in alternative form in relation to trust administration matters.

6. On the day of the hearing of the wife’s application, 27 November 2017, after negotiations, the parties reached an agreement about the disputed matters and asked the Court to make orders providing for the husband to pay the wife interim spousal maintenance and to deal with the administration of the family trust. The Court made those orders by consent. They did not include any orders as to costs.

7. On 22 December 2017, the wife filed a fresh application for the husband to pay her costs of and incidental to that previous Application in a Case. I heard that in a Judicial Duty List on 26 March 2018.

The Outcome of the previous application

1. Relevantly, the consent orders of 27 November 2017 provided for the husband to pay the wife the sum of $1,700 per month by way of interim spousal maintenance and for them to share equally the $130 per week costs relating to the former matrimonial home. That spousal maintenance payment is equal to $392 per week. As the husband agreed to pay half of the $130 weekly expenses as well, the wife obtained the equivalent of $457 per week from the husband by the orders they agreed to have made. She had, as I have already observed, applied for $689.14 per week.

2. The consent orders made also obliged the husband to pay $2,169.50 for the repair of a boundary fence at the former matrimonial home. Neither party had applied for such an order.

3. The balance of the consent orders made on 27 November 2017 related to the family trust. The orders made reflect agreement having been reached for the outstanding tax returns to be done, for the 2015 trust income to be distributed equally between the parties, and for the 2016 and 2017 trust income to be distributed totally to the husband with some limitation as to his ability to draw that income put in place for the 2017 financial year and any future years pending finalisation of their property settlement. The orders also required family trust income to be paid into the bank account of the family trust.

4. Clearly, the wife was not wholly successful in her application in that she did not succeed in obtaining orders from the Court totally in line with the orders she had applied for. Neither was she wholly unsuccessful though, given that the husband simply sought to have her application completely dismissed. Nevertheless, the wife filed and pressed her application for costs.

The Law in relation to Costs

1. It is well known that s 117 of the Family Law Act states a general principle that in proceedings under the Act each party shall bear his or her own costs, whilst at the same time declaring that principle to be subject to exceptions determined in the discretion of the Court where the Court is “of opinion that there are circumstances that justify” the Court making costs orders it “considers just”.

2. In considering what, if any, such costs order should be made if circumstances justify doing so, the Court must have regard to all of the matters set out in s 117(2A) of the Act. The breadth of the discretionary exercise is obvious when one acknowledges that s 117(2A)(g) is “such other matters at the court considers relevant”. Other things to be considered relevantly include:

   ·The financial circumstances of each of the parties;

   ·The conduct of the parties in relation to the proceedings;

   ·Whether any party to the proceedings has been wholly unsuccessful in the proceedings; and

   ·Whether either party to the proceedings has made an offer in writing to the other party to settle the proceedings and the terms of any such offer.

The Submissions of the Parties in this Case

1. Although the wife acknowledges that she did not achieve the level of interim spousal maintenance that she had actually applied for in her Application in a Case, it was submitted on her behalf that the circumstances still justify an order for costs being made against the husband. I consider there is merit in that submission.

2. The wife had set out in her evidence filed in July 2017 her weekly income of $151 and her expenses (including the whole of the $130 per week for the home) of $840.14, disclosing her asserted shortfall of $689.14. She said that save for half of the $130 that the husband had been paying prior to her application being filed, he was not paying her spousal maintenance when he could afford to. She was studying at university towards a degree that would better enable her to find a job so as to be able to earn a greater income to support herself. She had made out a sound case in support of her application, being apparently unable to support herself.

3. The solicitor who appeared at the hearing for the husband pointed to the fact that the husband had been paying expenses of the wife at the home including the costs of internet connection and telephone after separation in 2015 through to late 2016. However, there was no dispute that he had then withdrawn that support and only continued to pay for half of the $130 weekly mortgage, rates and insurance expenses associated with the home occupied by the wife.

4. There was evidence that the wife had, over time since separation, asked for spousal maintenance support from the husband, but that it had not been forthcoming, save for the expenses already mentioned.

5. It was submitted for the wife that where the husband did not respond to repeated requests for spousal maintenance support and only made his first offer to pay her periodic spousal maintenance on 10 November 2017 (four months after she had filed her application), a costs order is justified although the wife agreed to accept less than she had actually applied for. Furthermore, it was submitted that it was also very relevant to consider that when the husband did make his first offer to pay the wife periodic spousal maintenance (which was $1,400 per month, still $300 per month less than the amount ultimately agreed upon), he made it conditional upon certain things that were totally unreasonable and truly impossible for the wife to accept.

6. Included in such conditions sought to be imposed by the husband were the following:

   ·That the wife makes genuine efforts to work toward a financial settlement on or before June 30, 2018;

   ·That the wife withdraws her application for interim spousal maintenance.

7. Indeed, the husband told the wife’s solicitors in his first offer of 10 November 2017, (when he was acting without legal representation) that should the wife not “meet the terms … outlined ... and not make meaningful steps towards settlement on or before June 30^th, 2018” he would “cease to provide these monthly payments, and treat any payments to date as a personal loan to [the wife] which will be recovered at settlement.” Then, in each subsequent offer he made in writing up until the day of the hearing on 27 November 2017, he still sought to include the condition that the wife “make meaningful steps towards settlement” otherwise he would simply cease payment.

8. I accept the submission of counsel for the wife that the wife simply could not accept those conditions being attached to all of the offers being made by the husband such that the matter could not be compromised and resolved before the hearing date.

9. I am also satisfied that despite the husband’s assertions that the offer to pay the wife $1,700 per month was “without admission of capacity or need” that his repeated offers in the month prior to the hearing to pay her a reasonably substantial amount per month did amount to an acceptance by him of both her need and his capacity to pay it (provided the wife accepted that the family trust income all be distributed to the husband, which she did in her solicitors’ letters of 17 and 21 November).

10. Although the husband was successful to the extent of obtaining the wife’s agreement to accept payment of $1,700 per month plus half of the $130 weekly outgoings on the property (which was less than she applied for), and in getting the wife to agree to him effectively receiving all of the trust income going forward (when she had applied for half of it to be distributed to her), he had himself applied for her application simply to be dismissed, and she had already offered in writing to accept $1,700 per month spousal maintenance and let him have all of the trust’s income. In my judgment, the husband had most definitely not been wholly successful himself, though I hasten to acknowledge that he could not be considered to have been “wholly unsuccessful” in the words of s 117(2A)(e). That itself is not solely determinative in the discretionary exercise.

11. The solicitor who appeared for the husband at the hearing of this costs application submitted that compromise had happened on 27 November 2017 and that, therefore, each party should bear his or her own costs with these circumstances not justifying a costs order. She submitted that the fact that her client had not been “wholly unsuccessful” supported such a position. With respect, in my consideration of the matter, particularly having regard to the letters of offer and counter-offer that went between the parties over time, and particularly in the month before the hearing, the proceedings could have been resolved prior to the hearing but for the husband’s insistence on the conditions that I have referred to which I have accepted were totally unreasonable. The fact that the settlement was reached and orders made without any mention of conditions such as those the husband had previously consistently been requiring supports such a view, I am satisfied.

12. I am satisfied that although the husband knew of the wife’s need and his own capacity to contribute to her financial support, the wife had to bring an application to this Court in order to obtain the outcome that she ultimately did obtain. She has been put to considerable expense by paying for her solicitor to prepare and file the application, and to retain and instruct counsel to appear on the hearing. Then, she incurred more costs paying for her solicitor to prepare and file this application for costs and to retain and instruct counsel to appear on the hearing.

13. The evidence satisfied me that the husband was earning around $184,000 before tax per year and had approximately $51,000 in bank accounts in his name at the time of the hearing in November last year. That is in stark contrast to the wife’s $7,800 per year income and approximate sum of $1,700 in the bank in her name. As I observed at the hearing of this application, if the wife is left to meet the costs of her own applications, it would be many months before she gets any of the benefit of the monthly spousal maintenance payments the husband agreed to start paying in November last year.

My Determination

1. I am satisfied that the circumstances justify an order for costs being made. I am not persuaded that an order that requires more negotiations, more legal expense and, potentially, more time in the Court, is a just order. I have the power under Rule 19.18 of the Family Law Rules 2004 to make an order that a party is entitled to costs of a specific amount.

2. In this case, I consider that an order obliging the husband to pay the wife the sum of $6,000 towards her costs of and incidental to the Application in a Case filed 18 July 2017 is a just order and that is what I will order.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 12 April 2018.

Associate: 

Date:  12 April 2018