Macey & Macey (No 2)

[2013] FamCA 557

FAMILY COURT OF AUSTRALIA

MACEY & MACEY (NO 2) [2013] FamCA 557

FAMILY LAW – COSTS – Application by wife for husband to pay party-party costs in respect of property proceedings – Whether the husband’s conduct throughout the proceedings is such that a costs order should be made against him – The financial circumstances of the parties – Whether there were any offers of settlement - Where the husband was ordered to pay a percentage of the wife’s costs from the time he filed an application to review a Registrar’s decision up until conclusion of costs proceedings

Family Law Act 1975 (Cth)

Penfold v Penfold (1980) 144 CLR 311

APPLICANT: Mr Macey

RESPONDENT: Mr Macey

FILE NUMBER: PAC 4602 of 2011

DATE DELIVERED: 11 July 2013

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Collier J

HEARING DATE: 11 July 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Heazlewood

SOLICITOR FOR THE APPLICANT:

Mr McGookin

Caldwell Martin & Cox

SOLICITOR FOR THE RESPONDENT: Self-represented Litigant

Orders (as amended pursuant to rule 17.02):

1. That the husband shall pay to the wife sixty (60) per cent of the wife’s costs of and incidental to these proceedings from the date upon which the husband filed his application for review of the Registrar’s Orders until this day.

1. That amount shall be as agreed between the parties, or failing agreement, as assessed by an appropriate assessing officer.

1. That amount agreed or assessed, as the case may be, shall be paid within a time agreed between the parties, or failing agreement, within nine (9) months of the date of issue of the certificate of assessment.

1. That pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth), I certify for counsel for the hearing and for today.

1. That I note that an application was made for security. I decline to make that order that any amount be secured against the husband’s property.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Macey & Macey (No 2) 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 PARRAMATTA

FILE NUMBER: PAC 4602 of 2011

Ms Macey

Applicant Wife

And

Mr Macey

Respondent Husband

REASONS FOR JUDGMENT

1. Before me today is an application on behalf of the wife in these proceedings that the husband pay her costs of and incidental to the property proceedings that have taken place in this Court.

2. Those matters came to a head when I delivered judgment on 17 May 2013.  As a result of that judgment I ordered that the wife was to pay the husband the sum of $83,452.50 and there was to be a splitting order in respect of the husband’s superannuation whereby that superannuation was to be divided equally on the happening of an appropriate event between the parties.

3. The wife’s application is for the husband to pay the whole of her costs arising out of these proceedings.  To that end, a brief history of the matter would be of assistance. 

4. The matter, so far as I am aware, was first significantly before the Court on 7 December 2011 when the solicitors for the parties were in a conference before a Registrar of this Court.  On 16 January 2012, there were terms of settlement produced to the Registrar and orders were then made in accordance with that document.  I will return to those terms shortly.

5. The husband then filed, as was his absolute entitlement, a review of the Registrar’s Order.  That had the effect of negativing the Orders previously made and the matter then had to continue on to be determined.  On 9 March 2012, the matter was before a Registrar and was listed for a directions hearing on 29 March 2012.  Somehow that date appears to have been changed and the matter was adjourned by consent to 14 May 2012.

6. On 14 May 2012, the husband, who was unrepresented, and a solicitor for the wife attended when orders were made for the appointment of a valuer and for the parties to attend a further conference with a Registrar on 3 July 2012. 

7. On 3 July 2012, the matter was before a Registrar, when it was understood by the wife that the matter had resolved.  A document was prepared and handed to the Registrar.  As I understand the situation, the wife says an agreement had been reached whereby she had accepted the husband’s offer.  The husband’s case, as I understand it, is that no agreement was reached and he left the Registry because there had been, according to him, some form of altercation in the precincts of the Court with the wife’s present partner.  Be that as it may, he says he was not able to be contacted because his mobile telephone was not functioning and nothing further was done from his part.  Accordingly, the matter was then returned to the list.

8. On 4 July 2012, when Mr McGookin, the wife’s solicitor, attended upon a Registrar by telephone, there was a direction made that the matter be listed on the next occasion to dismiss the husband’s application for his failure to appear.

9. On 26 September 2012, the matter was before Registrar Tran.  The husband appeared on this occasion.  The matter was listed for a reserve hearing on 12 December 2012.  On 3 December 2012, the Registrar spoke with Mr McGookin, who indicated that he had not received material the husband was required to provide and that he (Mr McGookin) would continue to file the documents required of him.

10. The matter came before me on 12 December 2012 for reserve hearing.  It could not be reached, but in any event, there were still matters to be attended to that were the subject of significant Orders made on that date.  The matter was fixed for hearing on 12 March 2013 for one day.

11. On 22 February 2013, the matter was back before me when the husband attended by mobile telephone after he was contacted by the Court.  He said he did not know the matter was in Court that day and there was still argument concerning valuations of equipment.

12. On 1 March 2013, the matter was again before the Court.  The husband was again contacted on his mobile telephone and the matter was stood in the list until later in the day.  On that occasion, the hearing was confirmed for 12 March 2013 and I reserved the wife’s costs of that occasion.

13. On 12 March 2013, I heard the matter for one day.  At the end of the hearing, I refused an application by the husband for a further adjournment and indicated that I would deliver judgment.  On 17 May 2013, I delivered my reserved written Judgment. 

14. Applications for costs in this Court are the exception to the rule. Section 117(1) of the Family Law Act 1975 (Cth) says that the general rule is that each party pay their own costs. Section 117(2) provides that if there are circumstances that justify it then an order for costs may be made. The High Court of Australia in the matter of Penfold v Penfold[1] indicated that the circumstances justifying an order for costs need not be exceptional, but they must, of themselves, be sufficient to justify that an order for costs be made.

    [1] (1980) 144 CLR 311

15. In determining whether an order for costs should be made, I am required to have regard to section 117(2A) of the Act, which sets out in a number of matters that I should consider.  The first of those matters is the financial position of the parties (subparagraph (a)).  I do not have any specific material before me concerning the wife’s position.  I understand that she has paid the amount required by my Final Orders to the husband, and I am satisfied that she has the former matrimonial home, subject to mortgage.  I am also satisfied, as I found at the time of my Final Judgment, that she has an income in a business that she conducts for her own benefit.

16. The husband says that his position is not as it was at the time of the final hearing.  He says that he has lost his job and is now in receipt of unemployment benefits.  He tells me that despite me finding at the time of the hearing he was entitled to significant long service, not by means of a lump sum initially, but by means of him taking the time, he has lost any entitlement for long service leave as a result of leaving his employment.  I must say, in the circumstances that he has explained to me, I find that somewhat difficult to believe. 

17. However, it is clear from previous cases that the impecuniosity of a party does not, of itself, mean that there must automatically be no order for costs.  The poor financial position of a party can clearly, however, be taken into account in respect of quantum and in respect of time to pay.

18. Neither party is in receipt of legal aid (subparagraph (b)).

19. I turn then to the conduct of the parties (subparagraph (c)).  In this case, I am satisfied that the husband has prolonged the matter and made it more difficult for the other party to prepare this matter ready for hearing and bring it on for hearing.  He resiled from what were Consent Orders because he was dissatisfied.  He then took no real active part in progressing the matter towards a hearing.  When the matter was before the Court on the occasion in June 2012, his actions were, in my view, inexplicable in that he would leave the Court not knowing what the situation was and what had to be done to resolve the issue when it was he that had sought and obtained, as it were, a release from the Orders that had been entered into by consent in January 2012.

20. The matter then had to be listed on a number of occasions and was eventually listed before me.  I am satisfied that the husband, for whatever reason, did not do the things that he was required to do pursuant to Orders as the matter progressed.  I am satisfied that his conduct unduly prolonged the conduct of this matter and has occasioned the other party cost in attending to things and appearing on occasions that were not necessary to progress the matter in an orderly fashion, but were required because of the husband’s action or inaction. 

21. As to whether the proceedings were necessitated by a failure to comply with previous Court Orders (subparagraph (d)), to my mind, the husband was certainly less than forthcoming in compliance with Orders of the Court requiring him to do certain things.  He has always complained that it was actions of the other side that, in effect, caused him not to do the things he was required to do.

22. This is not a case where it can be seen that the father has been wholly unsuccessful (subparagraph (e)).

23. There is then an issue as to whether an offer in writing has been made as contemplated by subparagraph (f) of section 117(2A) of the Act.  Mr Heazlewood mounts an argument that I should certainly consider the document that was prepared in the June proceedings as an offer for settlement.  The wife’s offer, as he proposes it, was that she would sign terms for a cash payment of $80,000 and a superannuation split of $43,500 to her.  The husband says, as I understand it, that (a) there was certainly no agreement reached, but (b) he does not appear to contradict that it was he that suggested that the matter might be settled on that basis.

24. I am therefore left to ponder whether or not I can find that the husband really did better or worse than the two offers, and by that I mean the original Orders made in January 2012 and the subsequent document prepared in June 2012, which was never executed, when the figure of $80,000 was included, as against my Orders of 17 May 2013 this year. 

25. There is no doubt that under my Orders, on any construction, the husband received more by way of cash than was mentioned in either of the earlier situations.  Before the Registrar, he was to receive $70,000, and in the June document he was to receive $80,000.  Mr Heazlewood argues with force, however, that I must look at the overall effect by having regard to the superannuation.  To my mind, whilst there is something in that argument, I also take into account that the Orders as finally made, and would have had to have been made in any case, was that the superannuation payment was only to be made when an appropriate splittable action was taken by the husband.  In any event, the falling in of the superannuation is some little way off.  Indeed, I made some mention of this in my reasons for Judgment.

26. I am not satisfied that it can be found that the husband did slightly, not to mention substantially worse, in real terms as a result of my Orders.  Equally, I am certainly not satisfied that the husband did significantly better than either by the original offer, which became the Consent Orders made in January 2012, or in the subsequent proposal which he says was never the subject of an agreement.  I will return to this aspect at the conclusion of these reasons for Judgment.

27. In other words, it appears to me that neither party can really say that which I decided upon was significantly better or worse for either of them than they appeared to have obtained - on the husband’s case, on one previous occasion which he resiled from, and on the wife’s case, two previous occasions, both of which the husband resiled from.

28. The matters that I have taken into account present a balancing exercise.  I am satisfied that the wife is to be in some way compensated for the costs that have been effectively thrown away in this case.  I am not satisfied that it would be appropriate to endeavour to do that on an action by action or event by event basis.  Rather, what I propose to do is make an order that would have effect from the day upon which the husband filed his review of the decision of the Registrar, thereby striking down the original set of Consent Orders, up until the conclusion of today’s proceedings.  However, I do not believe that it would be appropriate for the entirety of those costs to be visited upon the husband.

29. In my view, the matter so far as the actual hearing was concerned, was conducted on a reasonably appropriate basis.  In fact it was conducted well.  However, the husband has brought much of this upon himself.  If one looks at the actual economics of the situation, it is clear that the husband would have been better off in real money terms, not to mention in a much more timely fashion, had he not challenged and struck down the terms of settlement entered into before the Registrar.  In my view, in those circumstances, it is appropriate that the husband should pay 60 percent of the wife’s costs of this action.  As I have already said, I will order that those costs run from the day of the husband filing his application for review of the Registrar’s decision up to and including the appearance here today on this question of costs.

30. The orders that I then make are as set out at the forefront of these reasons for Judgment.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Collier delivered on 11 July 2013.

Associate:     

Date:    29 July 2013