Keefe and Thacker

[2020] FamCA 158

FAMILY COURT OF AUSTRALIA

KEEFE & THACKER [2020] FamCA 158

FAMILY LAW – COSTS – Property – Where the applicant made offers of settlement to the respondent – Where the applicant’s offers would have had her receive less than awarded at trial – Order for respondent to pay applicant’s costs from date of first offer – Parenting - Order for parties to bear their own costs.

Hawkins and Roe (2012) 47 Fam LR 526
Prantage & Prantage (2013) FLC 93-544

Family Law Act 1975 (Cth) s 117

APPLICANT: Ms Keefe

RESPONDENT: Mr Thacker

FILE NUMBER: SYC 459 of 2017

DATE DELIVERED: 16 March 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

IN CHAMBERS: 16 March 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Weightman

SOLICITOR FOR THE APPLICANT: Southern Waters Legal

COUNSEL FOR THE RESPONDENT Mr Liedermann

THE RESPONDENT: In person

Orders

IT IS ORDERED

1. That the respondent pay the applicant’s costs of the property settlement proceedings from 12 January 2018 until the delivery of judgment as assessed or agreed.

2. That the application for costs is otherwise dismissed.

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 Keefe & Thacker 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 SYDNEY

FILE NUMBER: SYC 459 of 2017

Ms Keefe

Applicant

And

Mr Thacker

Respondent

REASONS FOR JUDGMENT

1. Ms Keefe (“the applicant”) and Mr Thacker (“the respondent”) conducted proceedings in relation to the parenting arrangements for their children and the division of their property.

2. Those proceedings were determined by orders made and reasons delivered on 20 December 2019.

THE LAW

1. Section 117 of the Act governs costs. Section 117(1), (2) and (2A) relevantly provide:

   Costs

   (1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.

   (2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

   (2A) 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.

2. There has long been a distinction drawn between the application of the law in children’s cases as opposed to property cases.

3. In Hawkins and Roe (2012) 47 Fam LR 526, dealing with an appeal against a costs order by the trial judge against the father, who had been unsuccessful in his application for shared parenting, The Full Court stated at 529:

   [13] In considering the law applicable to the determination of costs applications, it is important to recall the general principle under the Act as expressed in s 117(1), that each party to proceedings shall bear their own costs.

   [14] In proceedings involving children’s or parenting matters, the general rule is not often displaced. The rationale for this practice is that in such matters it is proper that parents are able to put their case in seeking orders which they believe to be in the best interests of their children. It hardly needs to be said that the nature of family court litigation in relation to children is quite different to a commercial dispute in the state or federal courts.

4. Their Honours further stated at 549:

   [146] While in this case the judge expressed adverse findings about the conduct and attitude of the father in his reasons, it is relevant to note that there was no allegation or finding of dishonesty. Nor did his Honour make any adverse findings about the father’s conduct of his case at the trial. Counsel for the mother conceded in oral submissions before us that at no point during the trial did his Honour direct the father to cease repetitive questioning, or to move his questioning more quickly, for example.

   [147] While the categories of occasions when costs may be ordered is not limited, the occasions on which such an order should be made in a parenting dispute should have some particular features. Where there is a complete absence of preparedness to compromise in the face of unambiguous expert evidence, where false allegations are made, or where one party is clearly motivated by self interest rather than the best interests of a child, then a judge may well conclude that there are circumstances justifying an order for costs.

   [148] On the evidence before the judge in this case an order for costs should not have been made.

5. The Full Court has also drawn a distinction between the conduct of a party as a litigant and the conduct of a party as a parent.

6. In Prantage & Prantage (2013) FLC 93-544 the Full Court stated at 104:

   We accept that it could be argued that a party’s conduct as a parent and their conduct as a litigant are intertwined. Nevertheless, we have difficulty in accepting his Honour’s statement, at [50], that a failure to foster a parent’s relationship with a child or a refusal to work with a “social scientist” to repair a relationship could themselves lead to an order for indemnity costs. These are matters that seem to us to relate to a party as a parent, not as a litigant.

PROPERTY

1. In relation to the costs of the property proceedings, the applicant seeks cascading orders in the alternate in the following terms:

   1.   That the respondent pay the costs of the proceedings before Judge Kemp on 17 August 2017 arising out of an application filed 19 July 2017.

   2.   That the respondent pay her costs of the proceedings, on a party and party basis, from 12 January 2018.

   3.  In the alternate, that the respondent pay:

   (a)      her costs from 4 September 2018; and

   (b)the costs of the application in a case filed 9 August 2018 and heard by Loughnan J on 7 November 2018; and

   (c)the costs of the application in a case filed 7 February 2019 and heard by Senior Registrar Campbell on 3 June 2019.

   4.The costs of this application.

2. Relevantly, for present purposes, the property of the parties consisted of:

   ·    Property at Suburb C agreed to be valued at $2,450,000 registered as tenants in common;

   ·    Property at Suburb L agreed to be valued at $425,000 registered in the wife’s name;

   ·    Joint account holding $85,279.

3. At the final hearing, the properties formerly registered in the name of the husband at M Town and R Town had been sold. What remained of the proceeds of sale had been placed in a joint account.

4. The orders which were made in the property proceedings provided for the respondent to have the opportunity to retain the former family home and for the applicant to receive the equivalent of 60 per cent of the net assets of the parties.

5. In order to achieve that division, the applicant retained assets of $424,819 and the respondent was required to pay her a further $838,025 and $51,167 from the joint account.

6. The respondent’s earnings at the time of the hearing significantly exceeded those of the applicant. He was working at 75 percent of a full time commitment earning $172,484 per annum.

7. The applicant was earning $62,400 per annum.

8. The applicant makes significant claims about the conduct of the respondent in the proceedings, including, but not limited to, failure to provide proper financial disclosure. Having regard to the evidence about offers of settlement, I am not required to examine those allegations.

9. The respondent deposed that he made an offer of settlement on 15 November 2016, in a conversation with the applicant. The respondent asserts that the offer was the equivalent of an equal division but that is not clear on the face of the document which is alleged to contain the offer to which the respondent refers.

10. On 3 August 2017, the respondent made an offer of settlement in the following terms:

    ·    The parties agree that Suburb C is valued at $2,350,000;

    ·    The husband retain the R Town and M Town properties;

    ·    The wife be paid 30 per cent of the net equity in Suburb C and retain Suburb L.

11. The applicant’s first offer of settlement was made by letter dated 12 January 2018. The applicant offered to settle on the basis that she transfer the home to the respondent and that he pay her $614,555 and half of the joint account and that she retain Suburb L.

12. On 4 September 2018, the applicant made a further offer, framed in two ways. Firstly, she offered to settle on the basis that she would receive $797,779, Suburb L and 54 per cent of the joint account and that the applicant would withdraw a relocation application which was then on foot. The second iteration of the offer was that the applicant would accept $669,205, Suburb L and 49 per cent of the joint account and proceed with the relocation application.

13. On 5 September 2018, the respondent made a counter offer to pay the applicant $15,000. The joint account was not then in existence but the property whose sale was to provide the funds later held in the joint account was to be retained by the respondent. The applicant would retain Suburb L.

14. On 27 June 2019 the applicant made an offer to settle on the basis that she receive $600,000, half of the joint account and retain Suburb L.

15. That offer was made again on 28 August 2019.

16. The applicant’s last settlement offer would have resulted in her receiving some $250,000 less than she ultimately was awarded at trial. The respondent’s offer of 5 September 2018 would have resulted in her receiving some $850,000 less than she ultimately was awarded at trial.

17. The respondent must bear the consequences of his failure to consider the applicant’s offers of settlement.

18. The respondent should pay the applicant’s costs of the property proceedings from the date of her first settlement offer on 12 January 2018. Those costs will be as assessed or agreed.

19. Having regard to that determination, I am not required to consider the discrete applications at paragraph 3 of the application.

PARENTING

1. Dealing with the relevant factors, I accept that the respondent has a superior income.

2. The contentions upon which the applicant relies as to the respondent’s conduct in the course of the litigation are set out in the written submissions filed on her behalf as follows:

   ·    On 14 February 2017, the respondent was order to file a Response, Notice of Risk and affidavits by 14 March 2017. He did not do so. The applicant’s solicitor wrote to the respondent’s solicitors on 4 April 2017 raising that, and other matters. The respondent’s material was filed on 7 July 2017.

   ·    The applicant asserts that, in February 2017, the parties agreed to undergo chain of custody urinalysis testing, inter alia, to include the respondent testing for synthetic marijuana.  The respondent underwent testing but not for synthetic marijuana. There was no order in February 2017 for such testing and such orders were not made until 25 October 2017.

   ·    The respondent failed to attend a Child Dispute Conference on 11 April 2017.

   ·    The respondent failed to provide disclosure and was required to issue subpoenas.

   ·    The respondent refused to communicate directly with the applicant in relation to day to day arrangements for the children but insisted on communicating through her solicitors.

   ·    The respondent made allegations in relation to the applicant’s fitness to parent including that she;

   (a) suffered from depression and anxiety;

   (b) required psychiatric care;

   (c) was self-medicating;

   (d) was an alcoholic;

   (e) used recreational drugs;

   (f)  stole medications from her employer;

   (g) distributed prescription medication without authorisation;

   (h) had tubs of prescription medications in her home;

   (i)  was a danger to the children;

   (j)  was responsible for antisocial behaviour displayed by one of the children;

   (k) did not know how to raise children

   (l)  was unable to socially integrate the children

   (m) was unstable and neglected the children

   The applicant was required to refute those allegations.

   ·    That the father knowingly and falsely denied using illicit drugs. In this regard, at Paragraph 170 of the reasons for judgment I stated:

   I accept that the father used drugs as the mother alleged and that his denial of his drug use was knowingly false.

3. The applicant relies on offers of settlement which are set out below. I do not take account of any offer which is predicated on the children’s being permitted to relocate to D Town which application was unsuccessful.

4. On 27 June 2019 the applicant offered to settle on the basis that the children live with the respondent from Thursday after school until Tuesday morning each alternate week. That offer was impracticable in that it paid no account to the respondent’s work roster. The offer was repeated on 28 August 2019.

5. Whilst I accept, as was recounted in the reasons for judgment, that the respondent’s behaviour was difficult, I do not consider that even the accumulation of the matters upon which the applicant relies places his conduct in the narrow band of conduct to which the Full Court referred in Hawkins and Roe.

6. There will be no order in relation to the costs of the parenting proceedings.

COSTS OF THIS APPLICATION

1. Neither party has been wholly successful.

2. I have not been made aware of any offer of settlement, by either party, in any specific amount.

3. I do not propose to make any order in relation to the costs of this application.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 16 March 2020.

Associate: 

Date:  16/03/2020