Kavanagh and Kavanagh (No.2)
[2015] FCCA 3296
•18 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KAVANAGH & KAVANAGH (No.2) | [2015] FCCA 3296 |
| Catchwords: FAMILY LAW – Ruling on costs application. |
| Legislation: Child Support (Assessment) Act 1989, ss.80C, 136, 136(2)(d), 141, 141(1)(n) Family Law Act 1975, s.117 |
| Cases cited: Lilley v CSR (SSAT Appeal) [2010] FMCAfam 378 Aspen v Selby [2010] FMCAfam 1130 |
| Applicant: | MR KAVANAGH |
| Respondent: | MS KAVANAGH |
| File Number: | MLC 1961 of 2010 |
| Judgment of: | Judge Burchardt |
| Hearing date: | 29 September 2015 |
| Date of Last Submission: | 26 October 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 18 December 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Bacon |
| Solicitors for the Applicant: | Manby & Scott Lawyers |
| Counsel for the Respondent: | Mr Smith |
| Solicitors for the Respondent: | Ken Smith & Associates |
ORDERS
The applicant father is to pay the respondent mother’s costs fixed at $17,664.
IT IS NOTED that publication of this judgment under the pseudonym Kavanagh & Kavanagh (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 1961 of 2010
| MR KAVANAGH |
Applicant
And
| MS KAVANAGH |
Respondent
REASONS FOR JUDGMENT
Introduction
On 29 September 2015, I gave judgment in this proceeding. I ordered that the Initiating Application filed by the father on 12 March 2014 be dismissed. The respondent sought costs but was not in a position to proceed with costs submissions on the day. I set a timetable for written submissions which have now been received.
The course of the proceeding
In order to understand the parties’ submissions, it is appropriate to give a brief recitation of the relevant parts of the history of the application. The Initiating Application filed on 12 March 2014 sought to set aside a Binding Child Support Agreement made between the parties dated 15 July 2010. The Initiating Application also sought final orders relating to certain parenting issues (see Final Order 3 sought in the application).
That order was the subject of a Response and Affidavit filed on 13 May 2014 by the respondent mother. Of the 21 relevant paragraphs of the Affidavit, paragraphs 13 to 21 dealt with children’s issues.
Thereafter, the applicant father abandoned paragraph 3 of the Final Orders sought in his Initiating Application at the first return date on 19 May 2014.
At that hearing, by consent, orders were made for each party to provide financial disclosure of matters set out in Annexure A, and Annexure A set out a substantial series of matters relating to financial records.
The next Court date was on 31 October 2014 when, by consent, a final hearing listed to commence on 6 November 2014 was vacated to a directions hearing on 26 February 2015 because “the parties have reached an agreement in principle to finalise matters between them, and are in the process of finalising those terms and/or a Minute of Consent Order”.
From correspondence passing between the solicitors for the parties annexed to the respondent mother’s application for costs, it is clear that the parties had instructed their solicitors to settle the matter on the basis that a Notice of Discontinuance would be filed, the Binding Child Support Agreement would continue, and that the CPI increases in the sum payable from time to time by the applicant father to the respondent mother were accepted. It would appear from the correspondence that the proposed settlement broke down because of a dispute as to the amount of costs it was appropriate for the applicant father to pay the respondent mother.
Thereafter, the applicant father sacked his lawyers and engaged the solicitors who now act for him. On 27 February 2015, by consent, Judge Newbrun made orders for the applicant father to provide the respondent mother’s solicitors copies of certain itemised documents. These included matters to do with the operation of his business (and the trust associated with it) and mortgage statements on the matrimonial home.
On 4 May 2015, Judge Bender, not by consent, made orders for more substantial disclosure on the part of the applicant father, some of which however had previously been ordered by Judge Newbrun.
Thereafter, the matter was heard by me in July 2015 and this gave rise to the order on 29 September 2015 to which I have referred.
The costs submissions of the respondent mother
The respondent mother’s costs submissions filed on 12 October 2015 point to a failure on the applicant father’s part to provide a letter before action. This is irrelevant. The parties would never have agreed in any event.
The respondent mother then points to the abandonment of the parenting application. This is a relevant matter although it would not have given rise to a gigantic amount of costs given the relative brevity of the Affidavit material filed.
The Affidavit go on to make substantial complaint about the alleged financial non-disclosure and points to the fact that the respondent mother was accepted by the Court to be an excellent witness whereas the applicant father was described as an extremely poor witness and generally unbelievable.
The Court’s assessment of the two witnesses is not, in my view, a relevant consideration. The reality is that each party, no doubt, believed their own case and my findings as to credit simply determined that aspect of the dispute.
I will return to the question of disclosure in due course.
The respondent mother’s submissions go on to point to the alleged total lack of success on the applicant father’s part. It was submitted that the case pursuant to s.80C was wrong in law and fact and was dismissed and that there was no evidence provided of hardship to support the applicant father’s case pursuant to s.136(2)(d) of the Child Support (Assessment) Act 1989.
The submission went on to point to the failure of the negotiations to resolve the matter to which I have earlier referred. Finally, reference was made to the disparity of financial circumstances of the parties and the significant success, as it was submitted, of the applicant father’s business.
Finally, the respondent mother sought costs on scale of $19,236, although she had in total spent $25,792.90.
The applicant father’s costs submissions
The costs submissions filed on 26 October 2015 point to authorities which, it is submitted, support the proposition that the Child Support litigation is a category of litigation where careful regard needs to be had before the making of costs orders.
The submission goes on to assert that the applicant father was not wholly unsuccessful in the proceedings because the respondent mother has sought, inter alia, Child Support Enforcement Orders which were effectively abandoned (to be pursued administratively). It was therefore submitted that the respondent mother had not been wholly successful and, accordingly, a costs order was inappropriate.
It was further submitted that the case involved difficult and novel points. I can say briefly that I do not accept that. The allegation that the Binding Child Support Agreement was unenforceable because it was filed late was, in my view, wholly misconceived and should have been understood to be so from the start. The applicant father’s own evidence about his finances showed very substantial financial resources and major repayments of his mortgage which should have made it clear to him, if he were properly advised that his chances of success were minimal.
The applicant father’s submission goes on to take issue with the question of the applicant’s disclosure of documents and asserts, inter alia, that Judge Bender “took a different and unexpected view of the law and made orders requiring that the Applicant go to third parties, source and then produce various other documents, which he did”. This submission is made harder to evaluate given that I do not have the transcript of the proceeding before her Honour, but given the categories of document that Judge Bender ordered the applicant father to produce, this submission seems to me to be wildly misconceived. On their face, they were all documents to which the applicant father would reasonably be taken to have reasonably ready access, even if he did not have copies directly in his possession.
The written submissions of the applicant father go on to challenge the matters relating to the credit of the parties. To the extent that these submissions seek to go behind the judgment and produce different conclusions, they are obviously completely misconceived, but as I have earlier indicated, that is not a matter I regard with any significance.
The submission then goes on, under a heading “Other matters”, to make a number of highly contentious assertions as to the past conduct of the respondent mother. None of these matters have been tested in Court and it is entirely inappropriate that they should have been ventilated in this way. I do not propose to give any weight to these matters.
The law in relation to costs
The Child Support (Assessment) Act 1989 does not make any express reference to costs. The Court has general powers pursuant to s.141 which include the power pursuant to s.141(1)(n) to “make any other order … that the court considers appropriate”.
I note that one of the decisions referred to by the applicant father’s written submissions was an appeal from a decision of the Social Security Appeals Tribunal (“SSAT”) (Lilley v CSR (SSAT Appeal) [2010] FMCAfam 378). Riethmuller FM (as his Honour then was) approached the matter on the footing that s.117 of the Family Law Act 1975 applied, and although the applicant’s written submissions are correct to say that his Honour at [24] said:
“Litigation in child support seems to me to be in a category that
I should have careful regard to before making costs orders.”it is important to note that his Honour’s observations took place, quite clearly, in a context where his Honour had regard to the turmoil the parties had had with their involvement with the Child Support Agency itself.
I note further that it would appear that in Aspen v Selby [2010] FMCAfam 1130, Halligan FM took the view that an application made under the Child Support (Assessment) Act 1989 gave rise to a consideration of costs under s.117 with the Family Law Act 1975.
In this case, the application as originally filed, was for both parenting orders and for relief pursuant to s.136 of the Child Support (Assessment) Act 1989. It was therefore a proceeding commenced, at least in part, under the Family Law Act 1975. Whether the claim as ultimately presented still met that character in my view is neither here nor there. Given the Court’s generalised powers under s.141(1)(n) of the Child Support (Assessment) Act 1989, it is in all the circumstances, in my view, appropriate to proceed by reference to s.117 of the Family Law Act 1975. This is, of course, beneficent to the unsuccessful applicant father.
Consideration of the matters contained in s.117 of the Family Law Act 1975
The general rule in Family Law proceedings, including these proceedings, is that each party bears their own costs (s.117(1)).
The Court may, if it is of the opinion that there are circumstances that justify it in doing so, make such order as to costs as it considers just, subject to various matters including relevantly, s.117(2A).
The Court is first required to consider the financial circumstances of each of the parties to the proceedings (s.117(2A)(a)).
I have already made findings about the financial circumstances of the parties in my earlier judgment. Notwithstanding the inadmissible argumentative material referred to in the applicant father’s written submissions, it is clear that there is a very significant disparity between the parties’ financial positions in favour of the applicant father. It is not necessary to say more than that.
The next matter referred to is Legal Aid and that is not relevant in this case (s.117(2A)(b)).
The next matter is the conduct of the parties to the proceedings (see more particularly s.117(2A)(c).
The conduct of the applicant father in first seeking a parenting order, and then abandoning it, stands against him but as I have already indicated, is not a major matter.
The decision of the applicant father to resile from the negotiations as to the discontinuance of the proceeding, while misguided, does not call for consideration under this heading. Rather, it is a relevant matter when looking at the degree of success he has achieved overall.
Much is said in the respondent mother’s submissions about disclosure and much of that is put in issue by the applicant father’s written submissions. Drawing, however, on the orders the Court made, and noting the fact that the issue of discovery had to be ventilated both before Judge Newbrun and Judge Bender, it is reasonable to conclude that the provision of documentation by the applicant father was tardy and incomplete, at least at times.
I note that although he said in Court that his March 2015 BAS statement should have been available, it was not produced. This is a relevant matter for consideration but once again is perhaps lesser given the controversy that subsists between the parties’ legal representatives about the extent of compliance or otherwise.
This matter also requires to be considered pursuant to subsection 117(2A)(d). There must have been a failure to comply with the orders of the Court for the issue of discovery to have to be re-ventilated before Judge Bender. However, as indicted, I have already taken this into consideration.
The next matter is the success or otherwise of a party to the proceedings (s.117(2A)(e). The applicant father has been, in my view, in substance effectively entirely unsuccessful in the proceeding. The respondent mother abandoned her application for arrears of Child Support. This matter took up virtually no time whatever in the proceedings. The reason that the case was heard and took time to determine was the decision of the applicant father to prosecute his case and the necessity of the respondent mother to defend it.
As I have already indicated earlier, the argument about the binding force of the financial agreement arising from its tardy registration was always, in view of the statutory scheme, wholly misconceived and doomed to fail.
Likewise, given the evidence as to the applicant father’s financial circumstances, it should likewise always have been obvious that his application would not succeed. If he had wished to put in issue the respondent mother’s financial circumstances in the way perhaps indicated now by the inadmissible material in the applicant father’s written submissions, he should have run that case at trial. I note that he did not do so. The applicant father’s finances were always such as to make an order in his favour most improbable. His case failed because it was always likely to do so.
Finally, I am required to consider whether either party has made an offer to settle the proceedings (s.117(2A)(f). It is clear there were discussions about settlement but these broke down on the issue of costs. In the circumstances this is not a matter to which I can give weight because I am not in a position to evaluate, in any detail, the parties’ respective cost positions at the time.
Conclusion
The Court clearly has a power to order costs pursuant to s.141(1)(n) of the Child Support (Assessment) Act 1989 or s.117 of the Family Law Act 1975. I have approached the matter on the basis of s.117.
In my view, the respondent mother should never have been put to the trouble and expense of having to defend this case. It would seem that the applicant father’s previous lawyers had the wit to see this and endeavoured to get the applicant out of it. I am not in a position to comment, of course, as to why it was that he ultimately took a different view of the matter and proceeded to trial.
The absence of success on the applicant father’s part and the weakness of his case, as it should have been apparent, are powerful factors to which weight should be given.
There has been no suggestion by the applicant father that the scale costs itemised by the respondent mother are not accurate in themselves. I note that the orders made before Judge Connolly on the first return date and Judge Newbrun on the second return, were both made by consent. Although this must have taken some time in negotiation, it did not involve an extended hearing before the Court.
In the circumstances, the sums claimed on the basis of half day hearing plus 50 per cent advocacy loading are, in my view, excessive and I will allow $1,000 for each of those matters. That reduces the total claimed by some $1,072.
Additionally, I will reduce the sum to be ordered by $500 in respect of the ultimately abandoned claim for arrears of Child Support. These are not areas of precision but this aspect of the matter, on any view, occupied very little of the Court’s time.
Thus from the figure claimed of $19,236, I subtract $1,572, leaving a total of $17,664. I will order the applicant father to pay the respondent mother’s costs fixed in the sum of $17,664.
I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.
Date: 18 December 2015
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