MACEY & MACEY

[2015] FamCA 84

FAMILY COURT OF AUSTRALIA

MACEY & MACEY [2015] FamCA 84

FAMILY LAW – COSTS – Application for costs by the wife – where the husband, throughout the hearing, failed, or was reluctant, to produce documents as required – where this added to the length of the hearing – where the husband was substantially unsuccessful – where the wife made realistic offers of settlement – husband to pay wife’s costs

Family Law Act 1975 (Cth), ss 117

Macey & Macey [2014] FamCA 842

APPLICANT: Ms Macey

RESPONDENT: Mr Macey

FILE NUMBER: NCC 962 of 2008

DATE DELIVERED: 30 January 2015

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: 29 January 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT:

SOLICITOR FOR THE APPLICANT: Michael Vassili Lawyers

RESPONDENT: No appearance

Orders

1. Time for filing an application for costs of final hearing by the wife is extended to 21 November 2014.

2. The husband shall within 28 days of the date of these orders pay to the wife the sum of $55,311 by way of costs in the property hearing.

3. The order for costs made 9 May 2014 against the husband in the sum of $1800 is discharged.

4. The sum of $27,725 presently held by the legal representatives for the wife may be released to the wife by way of partial offset of costs payable pursuant to order 2, noting that the remaining balance of $27,586 will be payable by the husband in accordance with the time in order 2. 

5. Costs sought in relation to enforcement of orders are reserved to hearing after the final orders have been complied with or enforced.   

IT IS NOTED that publication of this judgment by this Court under the pseudonym Macey & Macey has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCC 962 of 2008

Ms Macey

Applicant

And

Mr Macey

Respondent

EX TEMPORE REASONS FOR JUDGMENT

Introduction

1. In this matter, there was a contested hearing over property for three days on

   
   

   3, 4 and 10 July 2014.  The wife was represented by a solicitor and counsel.  The husband represented himself.  Orders and Reasons for judgment were delivered on 2 October 2014.  Order 1 was that the husband pay to the wife the sum of $341,824 within 60 days of the date of the Orders, that is, by 1 December 2014.  The husband has not made any payment.  The Orders provided that in that event, a farm property, formerly the matrimonial home, would be sold and divided in a stated ratio.  The property, despite the wife taking all steps she can, has not yet been sold.  The husband, his partner and her three children live in the property.  That situation has also been the subject of applications to this Court.

2. On 21 November 2014, an Application in a Case was filed by the wife. Order 4 was in relation to costs on an indemnity basis. A costs agreement was disclosed in accordance with the Family Law Rules 2004 (Cth) (“the Rules”). The application also related to preservation of assets pending sale, as was anticipated to be likely if payment was not made within the next 10 days. The order for costs was out of time. Rule 19.08 of the Rules provides for 28 days from date of judgment to make an application for costs. The delay was for a period of three weeks.

3. An explanation by the wife was provided in her affidavit filed

   
   

   24 November 2014 in relation to her own health problems and concerns about the children’s distress on learning that the farm was going to be sold.  There was a lucid and angry email from the husband dated 5 November 2014 about the matter of child support, which is not presently being paid.[1]. 

   [1] Wife’s Affidavit filed 24/11/2014, pars 5-12

4. The matter came before me on 8 December 2014.  The husband was present in Court, although not for the whole of the Court event.  On that day, he disclaimed the ability to represent himself as he had previously done but merely wished to be present.  The stated reason by the husband for his inability to represent himself was, he asserted, medical evidence in respect of a brain injury which he had suffered.  The injury was incurred prior to his marriage to the wife. 

5. The issue of that injury, and the extent of medical evidence on the impact on the husband’s health and capacity to work and function in society, was raised in the hearing and referred to in the judgment.[2]  I accept the submission made on behalf of the wife that the husband had been able to cross‑examine and engage with witnesses and the Court throughout those three days, although he found the process itself difficult and frustrating.  It appeared that in respect of this application, he was affected by disturbance about the sale of the property and the difficulty of finding somewhere else to live.

   [2]Macey & Macey [2014] FamCA 842, pars 123-130

6. The husband advised that he had sought representation by the brain injury advocacy service in Newcastle and that his application for assistance would be dealt with within 24 hours.  On that basis, the costs aspect of the application was adjourned to 29 January 2015 over the opposition of the wife.  Other orders were made on that day. 

7. The husband attended on the adjourned date of 29 January 2015 although, again, not for the whole event.  The Court was advised by the legal representative for the wife that he had been in contact with the brain injury service, who had advised that they would not be providing advocacy for the husband in these proceedings, although the service may be able to assist him in other ways.

8. The husband advised that a financial manager had been appointed by the

   
   

   New South Wales Trustee and Guardian on 16 December 2014.  The legal representative for the wife confirmed knowledge of the New South Wales Civil and Administrative Tribunal (“NCAT”) making the order on that date.  He further passed on from the bar table advice from the trustee that they may withdraw on the basis of there being insufficient funds to manage and, further, that there was no intention to become a case guardian for the husband in the proceedings.

9. The husband pressed on that day for a further adjournment, which was not granted.  The costs being incurred on the subject of costs, the disadvantage to the wife of a further adjournment, reference by the husband to an appeal against the October 2014 orders, but none having been filed, and there being no change in circumstances if the matter were to be adjourned, were the factors considered in making that decision. 

The Evidence

1. The documents relied on in respect of the application were as follows: 

   (a)An affidavit of the wife, filed 24 November 2014;

   (b)Two affidavits of the wife’s solicitor, Indu Satkunanathan, filed 21 November 2014 and 5 December 2014; 

   (c)An affidavit of Mr B, filed 28 January 2015; and

   (d)An affidavit of the husband, filed 3 December 2014. 

2. The wife has, in my view, sensibly, modified her position to seek costs in a lesser amount and no longer indemnity costs.  Although there are some circumstances in this case which are persuasive of a costs order being made, they are not of the exceptional character that is required for indemnity costs. 

3. The total legal costs of the wife to 8 December 2014 are apparently $147,881.  The amounts sought are (1) $55,311 for costs incurred between 25 June 2014 and 10 July 2014, that is, the days before and the course of the hearing, and

   
   

   (2) $11,165 in respect of costs incurred between 21 November 2014 and 29 January 2015.  The latter amount appears to be a combination of costs in relation to the costs application but also orders relating to preservation of assets.

The Law

1. In dealing with costs applications, the general principle, which is established in section 117 of the Family Law Act 1975 (Cth) (“the Act”), is that each party bears his or her own costs. If the court is of the opinion that there are circumstances that justify it in doing so, the court may make a costs order. In considering what order, if any, should be made, the court must have regard to the following circumstances.

The financial circumstances of each of the parties to the proceedings 

1. There are no updating financial statements before the Court.  None were ordered.  At the time of the hearing and to date, the husband is living and working on the farm property, which was the parties’ home.  He runs cattle, has hens, guinea fowl, turkeys, rabbits, pigeons, dogs and horses.[3] He was also breeding and selling pigs at the time of the hearing and may or may not still be doing so.  There is an order restraining the sale of assets at this time. 

   [3] Husband’s Affidavit filed 04/12/2014, par 8

2. The husband asserts that he is meeting the mortgage payments on the property and that they are up to date.  He is 53 years old and has worked on the property since its purchase 15 years ago.  He has a partner with three school‑aged children who may or may not be working and assisting him on the property. 

3. The wife has a capacity to work.  She is being financially assisted by her family with the provision of accommodation and has the care of the parties’ two children, with no current child support payments being made.

Whether either of the parties had a grant of legal aid

1. Neither party had a grant of legal aid.

The conduct of the parties to the proceedings

1. This is a relevant consideration.  Throughout the judgment, there are references to the husband’s failure or reluctance to produce documents as required, which was evident, really, from the time of the first Initiating Application being filed by the wife.  I referred in the judgment to the husband apparently having felt offended by the application being made and having difficulty coming to grips with the wife making such an application. 

2. There are references throughout the judgment[4], to some of the difficulties that were experienced by the wife’s legal representatives in obtaining documents and in having cooperation from the husband with disclosure.  There had been an application by the wife for the release of funds for herself and for the litigation.  An order was made for $100,000 to be released to the wife on 24 February 2014.  The order was not complied with.  There was an appeal by the husband to the Full Court.  The Full Court identified particular items which were to be transferred to the wife, and by the close of this hearing, those items had not been transferred, and no payment had been made. 

   [4]Macey & Macey [2014] FamCA 842, pars 25, 40, 43, 52 to 60 and 108

3. Subsequently, some items were sold, and funds in the order of $27,000 are presently held by the solicitors for the wife.  However, it has to be said that a two-day matter became a three-day matter not simply because the husband had chosen to be self-representing and found that task difficult, but because there were still documents being produced during the course of the trial and the legal representatives for the wife had been obliged to subpoena documents from various sources to cross-examine the husband and prepare schedules during the course of the trial.  It is a matter that I take into account.

Whether the proceedings were necessitated by the failure of a party to comply with previous orders

1. I do not consider that relevant to these parties.

Whether any party to the proceedings has been wholly unsuccessful

1. The application of the husband was for the transfer of a number of chattels only to the wife, in full settlement of any claim she might have; namely, two horses, a motor vehicle, a bulldozer and a truck.[5]  The husband was substantially unsuccessful.  On the face of it, given the length of the marriage, the parties’ two children and other contributions made by the wife of a financial and non-financial kind, it was always an unrealistic proposal. 

Whether either party to the proceedings had made an offer in writing to the other party to settle the proceedings and the terms of such offer

[5]Macey & Macey [2014] FamCA 842, par 28

1. This too is a significant matter.  On 25 June 2014, the wife put an offer to accept $175,000 within 42 days of written acceptance by the husband of the offer, with the property and all other assets to be retained by the husband.[6]  On the following day, the solicitor for the husband filed a Notice of Ceasing to Act and the husband thereafter represented himself. 

   [6] Affidavit of Indu Satkunanathan filed 21/11/2014, Annexure A

2. On 27 June 2014, the legal representatives for the wife followed up their letter with an email making it clear that the offer would remain open until 5 pm that day, which was a Friday, after which significant costs would be incurred in preparing for the hearing, with particular reference to the need for further information to be extracted.  On Saturday, 28 June 2014, the husband sent an email to the legal representatives explicitly declining the offer to accept $175,000. He identified a list of chattels that he proposed should be transferred to the wife. There was no attempt to quantify their value.  With reference to the judgment, there were chattels of about $172,000, but it is only guesswork to know whether they are exactly what the husband was offering at that time.

3. There is also reference in the email to advice that the husband had had about a counteroffer.  It is not entirely clear to me whether the husband was being advised to make a counteroffer of $350,000, or whether the wife had made a further offer.  I think it is more likely it was the former.  In any event, the husband communicated that he had been unwilling to make such an offer.  It was remarkably close to sum that was ultimately ordered. 

4. There was a further email from the husband on 30 June 2014 where he again listed the chattels he was prepared to transfer to the wife, and some engagement with the analysis of what would likely happen in the proceedings and disagreement with it.  As late as 4 December 2014, the wife made one last offer about costs[7], where she agreed to accept $53,735 in costs, taking into account a costs order made against the husband in May 2014.  That offer was not accepted.  The costs that are being sought were incurred in an intense period approximately a week or 10 days prior to the hearing and every day of the hearing, including the gap between the allocated dates and the additional date on 10 July 2014.  I have no difficulty accepting that significant costs were incurred in that way given the course of the hearing. 

   [7] Exhibit 28

Any other matter the court considers relevant

1. I take into account that the wife left the property five years ago with the two children and minimal assets.  The parties subsequently reached parenting orders by consent which provide for the majority of care to be by the wife.  She has been unable to re-establish herself financially, although I have found she has a capacity to work, restricted by her commitments to the children.  She has no ability to pay the costs she has incurred with her own solicitor to date and, unfortunately, it is likely that there will be further costs of enforcement of the sale. 

Conclusion

1. The wife, through her legal advisors, has taken a conciliatory approach to the husband’s distress at the thought of selling the farm and moving away.  However, the husband, in his affidavit, has said that he needs to live on the farm until he can find somewhere else.  He has also said that he wishes to pursue an appeal, although he has not done so yet.  There is every indication that the sale of the property is not moving at the pace that it should. 

2. I therefore conclude that, for the reasons set out above, the general principle should be departed from and an order for costs in relation to the final hearing should be made in the amount sought with no further provision for the cost of attendance on 8 December 2014 and 29 January 2015.  I will also discharge the order of 9 May 2014 and provide for an offset of the funds held by the solicitors for the wife in relation to sale of some chattels, that sum being $27,725. 

3. Accordingly, orders are made as follows.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 30 January 2015.

Associate: 

Date:  18 February 2015