Ling and Derwen

[2016] FamCA 727

FAMILY COURT OF AUSTRALIA

LING & DERWEN [2016] FamCA 727

FAMILY LAW – COSTS — on scale — on terms

APPLICANT: Ms Ling

RESPONDENT: Mr Derwen

INTERVENOR:

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 1588 of 2010

DATE DELIVERED: 25 August 2016

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 25 August 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kiernan

SOLICITOR FOR THE APPLICANT: Berry Family Law

COUNSEL FOR THE RESPONDENT: In Person

SOLICITOR FOR THE RESPONDENT: Self-represented

Orders

IT IS ORDERED THAT:

1.There be leave to the husband to file and serve:

a)      his response;

b)      an affidavit affirmed on 23 August 2016; and

c)      a Financial Statement:-

in response to an Application in a Case of the wife filed 3 August 2016

2.The husband make a contribution to the wife’s costs of and incidental to the Child Support proceedings fixed in the sum of $15,250.

3.The costs be paid by the husband as follows:-

a)      Pending any sale of the property at B Street, Suburb A in the State of Victoria (“the Suburb A property”) the sum of $1,000 per month commencing on 1 November 2016;

b)      In the event that the husband sells the Suburb A property, which it is noted stands in the name of Derwen Pty Ltd, the costs be paid upon settlement of the sale of the Suburb A property.

4.Pending payment by the husband of costs in full, together with any interest which may accrue in relation to non-payment of costs, the wife be and is hereby entitled to lodge a caveat for registration over the Certificate of Title to the Suburb A property standing in the name of Derwen Pty Ltd and upon receipt of the costs and interest in full the wife, at her own expense, withdraw the caveat.

5.Otherwise, the Application in a Case of the wife filed on 3 August 2016 and the Response of the husband filed with leave this day be and is hereby dismissed.

6.My reasons for decision this day be transcribed and when settled a copy be placed on the Court file and provided to the parties.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Ling & Derwen 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 MELBOURNE

FILE NUMBER: MLC 1588 of 2010

Ms Ling

Applicant

And

Mr Derwen

Respondent

REASONS FOR JUDGMENT

Ex Tempore

1. This matter comes before me as the wife’s application for costs, filed on 3 August 2016, following the delivery of a decision by me on 22 June 2016 which had the effect of dismissing wholly an application brought by the husband (as amended) for various orders under the Child Support (Assessment) Act 1989 (Cth).

2. The wife seeks costs in the sum of $75,336.88, being costs from three sets of solicitors spanning, what is apparent from the Court file and my recollection of the events of the proceedings, quite a number of years.

3. As with any application for costs, the starting point under the legislation is that each party bears their own. However, in the event the Court is satisfied that there are circumstances justifying an order for costs, a costs order may be made. Those circumstances may appear in s 117(2A) of the Family Law Act 1975 (Cth) (“the Act”), or they may not. In this case, I am comfortably satisfied that the fact that the husband has been wholly unsuccessful with his application justifies an order for costs.

4. As to what if any order for costs ought be made, I am required to take into account the matters set out in s 117(2A) of the Act, and I do so. I have had the benefit of reading the wife’s affidavit, sworn on 20 July 2016. Today the husband has filed and served a response and a financial statement and an affidavit.

5. Turning to the affidavit, which is 34 paragraphs, I have now read it and I take it into account.

6. The husband sought two orders by way of an Application in a Case today. One was that he be able to issue subpoenas to medical practitioners in relation to his own health. I declined that application. The evidence, if he had wanted to bring it to Court, could be brought to Court without the need for a subpoena. In any event, I do not apprehend that his medical condition is significantly challenged.

7. The second application that he brought was an application for the appointment of an independent children’s lawyer. He submitted that, in the event that the relief sought by the wife was granted, he would lose the accommodation where he, and the oldest child of the marriage, reside. That is not, in my view, anything with which an independent children’s lawyer appointed pursuant to Part VII of the Act should be concerned and I do not allow that application, either.

8. I have also heard viva voce evidence from the husband and the wife was able to cross examine him through her counsel. The wife gave some evidence, not because the husband wanted to cross examine her, but because I had some questions to ask of her. Essentially, all of the oral evidence today relates to the financial circumstances of the parties.

9. The matters which I take into account in deciding whether there ought to be an order for costs are first of all, the financial circumstances of the parties to the proceedings. The financial circumstances are described in the Reasons for Judgment of 22 June 2016 and it appears that each party’s position has deteriorated somewhat since.

10. As to the parties’ current financial position, the husband says he has not worked since 2014 when he lost his job. He has been managing, however, to pay expenses over and above any benefits which he receives. He lives in a house which is owned by a trust which he controls. In approximately mid-2015, the oldest child, W, who is nearly 18 years of age, went to live with the husband. The husband has additional expenses for W’s ongoing support and does not receive any child support from the wife. The husband’s family has paid for him to travel overseas within the last 12 months for a family wedding.

11. The wife retains care of the parties’ daughter, J, who is 10 years of age. J goes to a non-fee-paying school and W is going to a fee-paying school. In the proceedings before me, it was common ground that the wife’s parents previously paid the school fees for W at C School however, the husband now pays the fees. There has been a period of non-attendance at school by W, but happily that seems to have resolved somewhat.

12. The wife at the time of the hearing before me had some invested funds which were the proceeds of the final property orders. They have now been significantly reduced. She has, in fact, paid all of her legal costs to date, which were in the vicinity of $75,000. There remains some maybe $275,000 which she has invested. Her share portfolio, she says, has gone down in value, but that is attributable to market forces rather than a disposition of shares. The wife’s evidence was that she stopped getting any child support from the husband at the end of 2014, which was, of course, a period during which she had care of both W and J.

13. In essence, neither party can afford to pay legal costs that they do not have to incur. The wife is in a stronger financial position than the husband, but that does not provide any immunity from costs. Neither does impecuniosity provide immunity from a costs order where there are circumstances which otherwise justify it. Nonetheless, I am satisfied that the wife is in a better financial situation than the husband.

14. Neither party is in receipt of assistance from Legal Aid or like funding.

15. The conduct of the parties to the proceedings is not a factor that is pressed upon me for consideration and neither is whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court.

16. Section 117(2A)(e) of the Act requires me to take into account whether any party to the proceedings has been wholly unsuccessful. In this case, the husband has been wholly unsuccessful. He has been wholly unsuccessful on a jurisdictional point which I regard as being a technical and difficult point in a complicated case. Nonetheless, he has failed and the wife has been put to a very considerable expense in relation to the proceedings.

17. I am required to take into account under s 117(2A)(f) of the Act, and do so, as to 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.

18. The wife’s evidence is that prior to the final hearing, she had offered to walk away from the proceedings, provided that the husband paid the arrears then outstanding of child support (something in the vicinity of $5,600) and future child support payments would be assessed by the Child Support Agency (which is what happened) and each party would bear their own costs. The husband does not dispute the fact of the wife’s offer. The husband did not accept that offer. This is a factor which very strongly supports the wife’s application for costs.

19. There is a catchall provision (s 117(2A)(g)) where I can take into account any other matters that the Court considers are relevant. The husband now has care of the oldest child, W. It seems that W may continue to reside with him and the husband foresees that W will attend university. W will have to be going to school fairly regularly before he will get into a university, but I do wish him and the husband all the best in tertiary education, which would be for consideration in 2018, as W is in year 11 now.

20. Costs are a discretionary matter. I am satisfied that there should be an order for costs. There should not be an order for all of the costs sought by the wife, and that is because she is in a more comfortable financial situation than is the husband.

21. The wife seeks that the costs to which she is entitled be assessed on an indemnity basis rather than in accordance with the Family Law Rules.

22. An indemnity basis would see her recovering her costs of $75,000. The basis upon which costs may be ordered on an indemnity basis is set out in a number of cases, one of which is Colgate-Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248. There are various categories, the first of which is where it appears that an action has been commenced or continued in circumstances where a party, properly advised, should have known that he had no chance of success. The next is making allegations of fraud knowing them to be false. Another is evidence of misconduct causing loss of time to the Court and to the other parties, and an unnecessary or undue prolongation of proceedings. Finally, the imprudent refusal of an offer to compromise.

23. The husband refused an offer to compromise. It was imprudent at the time, but, I am not satisfied that the proceedings and the husband’s role in the proceedings justifies an order of indemnity costs.

24. I am satisfied that the husband should make a contribution to the wife’s cost of $15,000.

25. The husband seeks terms for payment of 12 months. That is too long. The wife is prepared to accept payment by instalment over 12 months. I will order monthly instalments of $1000 per month unless or until the home in which the husband lives is sold whereupon the balance will become due and payable. In the meantime, the wife should be able to lodge a caveat on the title to the husband’s home so I will allow a further $250 toward the wife’s costs of doing so.

I certify that the preceding twenty five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 25 August 2016.

Legal Associate:

Date: 30 August 2016