MACLIN & MACLIN
[2014] FamCAFC 148
FAMILY COURT OF AUSTRALIA
| MACLIN & MACLIN | [2014] FamCAFC 148 |
| FAMILY LAW – APPEAL FROM A DECISION OF A FEDERAL CIRCUIT COURT JUDGE HEARD BY A SINGLE JUDGE OF THE APPEAL DIVISION – COSTS – Where the trial judge dismissed the husband’s application for costs and ordered that the husband pay the wife’s costs of the substantive parenting and property proceedings and three applications – Where the husband relied upon an offer to settle which would have seen the wife receive a greater sum of property division – Where the judge was correct in dismissing the husband’s costs application as the final orders made were vastly different to the husband’s offer – Where the husband argued that the judge wrongly exercised his discretion in making the costs orders in favour of the wife – Where although is it unusual to order costs in first instance parenting proceedings, the judge’s decision was not amenable to appellate intervention – Where costs were ordered for an application contained as an interim property order sought by the wife within her response to the husband’s initiating application – Where the reasons suggest that the judge believed the application and hearing to be a discrete court event – Where costs were ordered for an application that was not heard and the husband’s explanations regarding his conduct subsequently were never tested – Consideration of the appellate principles contained in House v The King (1936) 55 CLR 499 and De Winter v De Winter (1979) 4 Fam LR 583 - Appeal allowed in part – Two costs orders set aside – Matter not remitted. FAMILY LAW – APPLICATION TO ADDUCE FURTHER EVIDENCE – Where the husband sought to rely upon transcripts of proceedings not included in the draft index, evidence of the sale price of certain property and material not before the trial judge by way of presumed administrative error – Where it is appropriate that the transcripts of the proceedings be adduced – Where the evidence of sale price was not relevant – Where the material not considered by the trial judge may have altered the decision of the judge and should be adduced – Application allowed in part. |
| Family Law Act 1975 (Cth) CDJ v VAJ (1998) 197 CLR 172 |
In the marriage of Robinson (1991) FLC 92-209
| APPELLANT: | Mr Maclin |
| RESPONDENT: | Ms Maclin |
| FILE NUMBER: | BRC | 2466 | of | 2012 |
| APPEAL NUMBER: | NA | 19 | of | 2014 |
| DATE DELIVERED: | 15 August 2014 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | May J |
| HEARING DATE: | 22 July 2014 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 14 March 2014 |
| LOWER COURT MNC: | [2014] FCCA 469 |
REPRESENTATION
| SOLICITOR FOR THE APPELLANT: | Appeared in person |
| COUNSEL FOR THE RESPONDENT: | Mr George |
| SOLICITOR FOR THE RESPONDENT: | Baker O'Brien Toll Solicitors |
Orders
The appeal be allowed, in part.
The husband’s application to adduce further evidence filed 7 July 2014 be allowed, in part.
The orders of Judge Coates made 14 March 2014 contained in paragraphs 3 and 4 be set aside.
There be no order as to the costs of the appeal.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Maclin & Maclin has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 19 of 2014
File Number: BRC 2466 of 2012
| Mr Maclin |
Appellant
And
| Ms Maclin |
Respondent
REASONS FOR JUDGMENT
By way of a notice of appeal filed 9 April 2014 and amended on 30 June 2014, Mr Maclin (“the husband”) appeals from costs orders made by Judge Coates on 14 March 2014 arising from parenting and property proceedings.
Those orders were, in summary, as follows:
·The husband’s application for costs be dismissed;
·The husband pay the wife’s costs fixed at $12,664 relating to the substantive property and parenting proceedings (“the substantive costs order”);
·The husband pay the wife’s costs fixed at $3,219 for her application to remove a caveat the husband had lodged over a property (“the caveat costs order”);
·The husband pay the wife’s costs fixed at $2,658 for her application to have the rental income of certain residential properties paid into an account controlled by the wife and applied to the service of the relevant mortgages (“the rental income costs order”); and
·The husband pay the wife’s costs fixed at $2,401.50 in resisting his application to stay the final property orders (“the stay costs order”).
The husband asks that those orders be set aside.
I heard the appeal as a single judge pursuant to a direction issued by the Chief Justice on 12 June 2014 under s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”).
The Grounds of Appeal
The grounds apart from asserting error in the exercise of discretion (grounds 1, 4 and 7) complain about the following matters:
·Factual errors in the number of days provided in the orders that the children spend with the husband;
·The weight given to offers of settlement; in particular the improper consideration of the husband’s conduct in failing to settle the matter and giving insufficient weight to the husband’s offer to settle dated 1 November 2012;
·Inadequate consideration of the husband’s financial circumstances;
·The weight given to the husband abandoning his appeal in relation to property matters;
·That a costs order should have been made in favour of the husband against the wife.
Background
On 22 March 2012 the husband filed an initiating application relating to parenting matters. The wife, by way of response, filed 10 May 2012, sought final parenting and property orders together with interim property orders including that the husband do all things necessary to withdraw a caveat he had lodged over a residential property which was subject to a contract of sale.
Orders were made by consent on 21 May 2012 in relation to interim parenting orders and property orders including for the withdrawal of that caveat. The husband, during the hearing of the appeal indicated that he had only agreed to the removal of the caveat on the morning of 21 May 2012, before court, despite the solicitors for the wife seeking the withdrawal at an earlier time.
The hearing of the substantive proceedings took place on 20 and 21 November 2012. After the hearing, but prior to the delivery of judgment on 14 February 2013, the wife filed an application on 30 January 2013 seeking that the husband cause the tenants of three investment properties to pay their rent into a bank account controlled by the wife. It appears that the wife had been applying the rental income to service the mortgages of those properties (and meeting the shortfall). The husband, however, had directed two tenants to pay their rent into an account that he controlled. That application was not pursued after the judge indicated to the parties at the hearing on 5 February 2013 that judgment in the substantive proceedings was to be delivered the following week. The judge then made orders relating to the delivery of the substantive judgment and reserved the wife’s costs of that day.
On 14 February 2013 the judge made final orders relating to parenting. Those orders provided, in summary, that:
·The children shall live with the wife;
·The wife shall have sole parental responsibility for the children; and
·The children shall spend time with the husband from 8:30 am Thursday morning to 5pm Saturday evening in one week (extended to 3pm Wednesday to 5pm Saturday after June 2013), and the following week from 3pm Thursday to 5pm Saturday.
Orders were also made for telephone contact and school holidays. A curious notation appeared at the end of the orders:
As the children mature and the parent’s approach to health, welfare and development becomes more harmonised, then the time with the father might increase to include overnights on alternative Tuesdays.
On 14 February 2013 the judge also gave reasons in the property proceedings distributing the property in a proportion of 75 per cent to the wife. The judge ordered that the parties file draft orders reflecting those reasons.
On 8 April 2013 the judge made final orders, being the draft orders handed up by the wife, relating to the property of the parties, which provided in summary that:
·The husband transfer to the wife three residential properties;
·The husband pay to the wife $353,649;
·The wife transfer to the husband a farm property and effect the husband’s release from certain mortgages relating to the residential properties; and
·In default of the husband’s payment to the wife, for the husband to transfer to the wife the farm property and for one of the residential properties to be listed for sale and the proceeds to be divided 75 per cent to the wife and 25 per cent to the husband.
On that day the judge also made orders, upon application made to the court in chambers, reserving judgment in relation to costs. Both parties sought costs, filed their written submissions on 22 April 2013 and their response on 6 May 2013. On 9 May 2013 the wife filed submissions seeking costs in the stay application. The husband filed a reply on 13 May 2013 regarding the substantive costs application and on 16 May 2013 filed a response to the wife’s submissions for costs in the stay application.
The wife sought the following costs:
· $12,664 for the parenting and property matter;
· $3,219 for her application to remove the caveat;
· $2,658 for her application to have the rental income of three residential properties paid into an account controlled by the wife;
· $2,401.50 for opposing the husband’s stay application; and
· $23,126.74 in disbursements.
It was only the last costs order sought by the wife that was not made by the judge. I also note for completeness that the sum claimed for disbursements amounted to almost twice the amount of the quantum of the wife’s costs application for the substantive proceedings.
As previously noted, the last written submission was filed on 16 May 2013. The judge delivered the costs judgment on 14 March 2014, some 10 months later. There was no oral hearing.
The husband filed a notice of appeal against the property orders on 24 April 2013 (NA 22 of 2013). The husband also brought an application to stay the final orders on 26 April 2013, which was dismissed by the judge on 3 May 2013. The husband subsequently filed a notice of discontinuance in appeal NA 22 of 2013 on 13 September 2013.
Relevant Law
Section 117 of the Act governs costs. Subsections 117(1), (2) and (2A) relevantly provide:
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 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) 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. (emphasis added)
It was established in House v The King (1936) 55 CLR 499 at page 504 - 505 that:
It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.
It is well established that an appellate court should be reluctant to interfere with the exercise of discretion in respect of costs. However, it can and should interfere when the result is “plainly unjust or if the discretion was exercised on wrong principles” (see In the marriage of Robinson (1991) FLC 92-209).
It is also accepted that, an appellate court will uphold an exercise of discretion to order costs if it is apparent that there are appropriate reasons on which the judge could rely (see In the marriage of Greedy (1982) FLC 91-250). The Full Court in Greedy also made the following comments of relevance to this matter:
…There may be situations where refusal to negotiate, to make an offer or to put forward an alternative order may be a factor justifying an order for costs. The failure of a party to take part in negotiations in a genuine manner may contribute to delay and cost and obstruct the proper resolution of the matter.
Application to adduce further evidence
The husband filed an application in an appeal on 7 July 2014 in which he seeks to adduce further evidence. Some of that evidence can be admitted by consent and other parts were said (in submissions by counsel for the wife) to be irrelevant.
The principles in relation to applications to adduce further evidence are well known. In CDJ v VAJ (1998) 197 CLR 172, the plurality held at [109]:
One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
This application will be considered together with the appeal.
The husband’s costs application
On 22 April 2013 the husband filed submissions and an affidavit in support of his application for indemnity costs relating to the property proceedings from 1 November 2012 to 14 February 2012. Alternatively, the husband sought that the wife pay his costs of the property proceedings on a solicitor and own client basis. The husband asked that no order for costs be made relating to the parenting proceedings.
Reliance was placed upon correspondence to the wife dated 1 November 2012 which enclosed an offer to settle in the form of a draft consent order. This document in annexure DIM1 to the husband’s affidavit filed 22 April 2013. It was argued that the offer would have seen a division of 79 per cent in favour of the wife, being a sum 4 per cent greater than what the wife received in the final property orders.
The judge gave the following reasons for dismissing the husband’s costs application:
22.In relation to the final orders I made I do not consider the husband has identified circumstances which would justify the making of a costs order in his favour.
23.He based his costs application on his offer to settle made on 1 November 2012 and what he provides is a copy of a draft consent order.
24.I have no explanation from him as to the analyses of the offer compared with the orders I made, but he states that he based his offer on his view of the values of various properties as against the values which the court accepted on the evidence provided by the joint expert.
25.His argument is weak and in fact seeks to re-litigate, or at least re-emphasise, that he attempted at trial to bring in his own valuation evidence, a tactic I would not allow.
26.Because I do not consider that there are circumstances which justify a costs order in favour of the husband, I intend dismissing his costs application.
The judge’s criticism at [25] that the husband had attempted to re-litigate the valuation evidence appears unfounded. There appears to have been some misunderstanding, as the husband’s offer was not based on his own views of the values of the properties.
The husband’s offer to settle, which was made about 19 days prior to the hearing of the substantive proceedings, provided in summary that:
·The wife would transfer the husband her interest in three residential properties and a farm property;
·The husband would transfer to the wife a boat;
·The husband would pay to the wife $580,000; and
·The court would order the trustee to allocate a superannuation split of $27,666 in favour of the wife from the husband’s interest in three superannuation funds.
By reference to the values as found by the trial judge, the husband’s offer would have seen the husband retain the following property:
Description
Value
Property A1
$440,000
Property A2
$480,000
Property C
$165,000
The farm property
$470,000
Plant and Equipment
$10,500
Motor Vehicle A
$9,000
Motor Vehicle B
$18,500
Mortgage A (farm property)
($163,204)
Mortgage B
($642,234)
Payment to wife
($580,000)
Total
$207,562
The husband’s offer would have seen the wife retain the following property:
Description
Value
Payment from husband
$580,000
Wife’s bank account
$85,786
Boat
$30,000
Motor Vehicle C
$20,000
Shares (noting that this was excluded from the table of assets in the husband’s offer)
$4,560
Wife’s superannuation
$76,613
The husband’s superannuation (split)
$27,666
Total
$824,625
Approximately, this equates to a division of 79 per cent in favour of the wife, as opposed to the apportionment of 75 per cent by the trial judge. Although the husband’s offer may have seen the wife receive a higher dollar value than the final orders, the costs application cannot be considered solely by reference to a comparison of the the monetary or percentage values of the offer and what was ordered by the court.
First, although the husband asserted during the appeal hearing that the pool on which his offer was based was “exactly the same” as the pool determined by the trial judge, it is apparent that the husband’s pool did not include the bank account “Husband’s [Business Account]” which was valued at $27,747 and further the “Husband’s cash on hand” valued at $16,500. The husband had also attributed a value of $85,786 to the wife’s “[Bank Account]”, when the judge found the value to be $35,814 after refusing to “add back” alleged notional property. The result of these differences is that the husband’s offer attributed approximately $50,000 more in the control of the wife and approximately $44,000 less in the control of the husband than the pool found by the trial judge. The disparity is relevant when contemplating a net pool of approximately $1,000,000.
Most significantly, the property proceedings concerned competing applications about which party would retain the properties. The husband’s offer contemplated the transfer of three residential properties to the husband, whilst the final property orders saw the wife retain those properties. This is the outcome that the wife had sought in her case outline.
Finally, the order would have required the husband to pay $580,000 to the wife and refinance the mortgage facilities of some $800,000. Written submissions filed on behalf on the wife expressed scepticism as to the husband’s capacity to raise those funds, and further noted that the husband’s offer contained no default provisions should he fail to make payment to the wife.
Although the judge gave limited reasons, it is difficult to see how the judge made an error in dismissing the application. The offer contemplates a vastly different scenario to what the wife achieved in the final orders and could not justify an order for costs in the husband’s favour. That is not to say that it was not a relevant consideration in the wife’s application for costs against the husband.
Grounds 10, 11 and 12 must fail.
The substantive costs order in favour of the wife
In assessing the wife’s costs application, his Honour first referred to s 117 of the Act and set out the relevant principles contained there. They included:
·The financial circumstances of the parties, in particular that neither was in receipt of legal aid;
·The position of the parties after the property settlement orders were made; and
·The income of the husband being $1255 per week whereas the wife’s was $932 per week.
It is appropriate to consider the costs application of the wife in relation to parenting and property separately.
Parenting
His Honour referred to the written submissions of the wife and said he agreed with the circumstances there identified which would lead to an order for costs. In particular his Honour referred to the substantive reasons delivered 14 February 2013. The reasons identified by the judge which justified an order for costs in relation to the children’s proceedings were as follows at [29]:
They include but are not necessarily limited to communications from the father which I considered to be denigrating and abusive (paragraph 34 of the reasons), accusations that the wife’s solicitor was using bullying tactics when there was no evidence of such (paragraph 35 of the reasons), inappropriate conversations conducted by the father in front of the children (paragraph 40 of the reasons), and that the father’s crude messages being sent to the mother only ceased before trial but he persisted with crude allegations at trial (see paragraph 54 of the reasons).
To appreciate this paragraph it is necessary to refer to the parts of the substantive reasons identified by his Honour:
34.The communication concern was also manifested in a series of written communications between the parents, but particularly from the father, where such communications have to be regarded as being denigrating and abusive of the mother.
35.Pages of text messages are attached to the mother’s material, calling her a liar, accusing her of infidelity, that she is mentally disturbed and other things. They accuse her solicitor of acting improperly and engaging in bullying tactics – of which there was no evidence. They make vulgar references about her sex life. The father expressed some of these things to [the family report writer].
…
40.Communications were not only privately abusive, but there have been some conversations, conducted by the father to the mother, in front of the children which she determined were inappropriate, such as whether she had partners or whether the children could go with the father, causing her to end conversations.
…
54.Despite submissions that in effect the orders should be made to allow the parties to change their dispositions, I cannot make orders on that basis, given that there was no evidence that their positions would change with such orders. That can be seen in the father’s act of only stopping the sending of crude messages just prior to the trial, but then pursuing associated allegations at trial.
Apart from the earlier reference to the husband’s offer to settle the property matter, his Honour also said:
53.The wife made a parenting offer which would allow for equal shared parental responsibility and for the children to spend four nights a fortnight with the father, extending later by agreement.
54.He could have taken advantage of that offer.
55.At trial the wife changed her application in accordance with the recommendations of the family consultant, and I made orders in those terms; that she have sole parental responsibility and that the children spend four nights a fortnight with the father.
The husband argues that he achieved a better result from the litigation than the wife’s offer, the final orders providing that he spend five nights a fortnight with the children (8:30 am Thursday morning to 5 pm Saturday evening in one week, with an extension to the Wednesday night after June 2013, and 3 pm Thursday to 5 pm Saturday in the following week). The notation to those orders suggested the possibility of an additional night.
The husband asserts that the judge’s reference to the wife’s parenting offer “extending later by agreement” was unlikely to be achieved due to the lack of communication between the parties as found by the judge. He also submitted that although the final orders provided that the wife have sole parental responsibility, this was subject to the proviso that she make a genuine effort to make joint decisions with the husband.
The husband seeks to adduce a portion of the transcript of the trial on 21 November 2012, exhibit 3 in the appeal, in support of his assertion that the judge was incorrect at [55] of the reasons (quoted above) when considering that the final orders accorded with the recommendations of the family report writer. The primary contention is that the family report writer gave oral evidence recommending that the children spend overnight time with the husband every second Tuesday.
In the substantive reasons the judge made the following findings regarding the Tuesday night:
61.While the father seeks more time, and although [the family report writer] conceded that another night may be within range, he also stated that he does not agree with “chequerboard” children, a reference to children constantly moving between houses. I took his statement on chequerboard children applicable in this case to mean that these children may not benefit from going between houses regularly. He said plans for these children ought to be taken slowly and there was no magic in making a plan for the next two years, as advocated by the mother, as the disputes may settle before that time. Although he was not asked to expand on the comment, I take it to mean that there is an issue of stability for young children, or the provision for their needs under s.60CC(3)(f), especially but not limited to their emotional needs and so whether such a decision is within the best interests of the children is a fact-in-issue.
62.[The family report writer] only went as far as stating that an extra night may be alright. He was not asked to change his written recommendations, so I must consider whether the evidence of the effects of changes is before the court, a s.60CC(3)(d) factor. Further, he was adamant, and not shaken from his professional view, that the mother’s straight up-and-down manner was well suited to the care of four children under the age of seven. My conclusion is that the effect of a change as advocated by the father at this time is unknown.
63.In weighing all of the relevant additional considerations, I cannot come to the conclusion that such an order, now, is a best interests necessity and I keep in mind [the family report writer’s] comment about chequerboard children.
64.On that basis, I prefer [the family report writer’s] written recommendations in the form of orders as sought by the mother.
It can be seen that that the trial judge expressly preferred the written recommendations of the family report writer over the oral evidence regarding Tuesday night. The judge carefully explained the reasons for the orders. In this context, the husband’s complaint regarding the judge making an error of fact cannot be sustained. It should also be recalled that the husband would have enjoyed equal shared parental responsibility had he accepted the wife’s parenting offer.
The question of whether the judge appreciated that his orders provided an extra night, i.e. more than four nights, is of little moment overall.
Although it is unusual for a costs order to be made in parenting proceedings, it cannot be said in this case that the exercise of discretion to order costs is susceptible to appellate intervention within the principles of House v The King. It is quite apparent that the costs order was largely based on the husband’s conduct. There was no challenge to those findings by way of an appeal from the substantive children’s orders.
Grounds 2 and 3 must fail.
Property
As to the property proceedings, his Honour said:
30.In relation to property I had made orders for single expert valuation evidence and the husband attempted to introduce new evidence of values he perceived were part of his case, which consequently wasted court time. He also raised such issues such as an add-back component in relation to alleged losses on a marital property at [Town H], which I did not find and he also refused to enter meaningful negotiations to preserve and manage assets (see paragraphs 87 and 92 of the reasons).
31.There are other reasons, but those in particular reflected quite substantially the manner in which the father / husband conducted the trial and but for that type of conduct, a costs application would now not be considered.
It is not necessary to repeat here those parts of the reasons from the substantive judgment to which his Honour referred.
If the reasons had depended on offers made by the wife then a costs order may not have been justified. However, again it can be seen to have been based on the husband’s conduct. This aspect of the appeal should not be allowed.
The caveat costs order
The judge gave the following reasons for awarding the wife costs relating to the removal of the caveat:
58.As to the application filed 10 May 2012 for the removal of the caveat, again in my view the husband has not demonstrated anything other than an oppositional attitude to anything that the wife was doing.
59.The caveat was removed by a consent order made on 21 May 2012, but again, had the husband not been so completely oppositional he should have considered the effects of his actions well before going to court.
60.He has merely put the wife to expense.
61.The wife should be awarded those costs in the sum of $3,219.
At the hearing of the appeal, the husband referred to the transcript of 21 May 2012 (which was included in the list of documents before me) which records that the caveat was not discussed before his Honour. The removal of the caveat was one of many interim orders sought in the wife’s response filed 10 May 2012. The affidavit of the wife filed 10 May 2012 in support of the response deposes to the circumstances surrounding the caveat and other parenting and property issues. The orders made by consent on 21 May 2012 concern interim arrangements for the children and procedural orders relating to the property dispute. It was not an independent application, as his Honour’s reasons would tend to suggest.
A document titled “Schedule A – Federal Circuit Court Scale” was attached to the written submissions filed on behalf of the wife on 22 April 2013 in the costs application before the judge. I reproduce a table from page 9 of that document:
The Wife’s interim application filed 10 May 2012 for the removal of the caveat
Professional Costs
Stage 1A
Interim hearing as a discrete event
$1,661.00
Travelling fees to [Town H]
$561.00
Hearing fee (half day hearing)
$997.00
Subtotal
$3,219.00
At page 5 of those written submissions, it was said that “[a]t the hearing of the Wife’s application for the removal of the caveat on the 21st May 2012, the husband ultimately consented to the removal of the caveat at his expense”.
It is readily apparent how the wife’s written submissions could have been misunderstood by the judge - that the wife had brought a discrete interim application to remove the caveat which had required attendance at court. The husband had attempted to clarify in his written response at [32] that there “was no discrete event dealing with the removal of the caveat”.
It is useful to recall what was said by Gibbs and Aickin JJ in De Winter v De Winter (1979) 4 Fam LR 583 where a finding was as Aickin J described is “not merely erroneous but not supported by any evidence” (at p 597). Gibbs J said at p 588 after referring to House v The King that:-
It is apparent from this statement, and is clear law, that a discretionary judgment which is based on a mistake of fact will not be upheld merely because the result reached in itself does not appear unreasonable or unjust. In Storie v Storie (1945) 80 CLR 597, both Latham CJ, at p 600, and Rich J, at p 604, cited from the judgment of Viscount Simon LC in Blunt v Blunt [1943] AC 517 at 526 ; [1943] 2 All ER 76 at 79: “If it can be shown that the court acted under a misapprehension of fact in that it either gave weight to irrelevant or unproved matters or omitted to take into account matters that are relevant, there would, in my opinion, be ground for an appeal. In such a case the exercise of discretion might be impeached, because the court's discretion will have been exercised on wrong or inadequate materials. …” There are many other authorities, from Young v Thomas [1892] 2 Ch 134 at 137 to Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621 at 627, that recognize that a mistake of fact is a ground for overruling a decision involving discretionary judgment. It may, in some cases, appear that the mistake of fact has not affected the final result, or that its effect has been negligible, or that in any case the conclusion reached was correct, notwithstanding the error. But it is not right to say, as the majority of the Full Court appear to have said in the present case, that a discretionary judgment which has proceeded upon a mistake of fact should be upheld simply because the order was well within the range of the discretion of the primary judge.
Although the application to remove the caveat would have involved some expense to the wife, the legal expenses of that day were incurred by the necessity to appear on the other matters. Had his Honour fully appreciated this, such costs order could not have been justified. Having ordered that the husband pay the costs of the substantive parenting and property proceedings, primarily because of the husband’s conduct, a further order could not be justified. The appeal in this respect should succeed. Ground 7 is made out.
The rental income costs order
His Honour gave the following reasons for ordering that the husband pay the wife’s costs of her rental income costs application:
41.As to conduct, apart from conduct on the part of the husband which I have referred to and which caused me to determine that there were circumstances justifying a costs order here, that conduct is also relevant to the making of a costs order.
42.However, the analysis of conduct goes further than that type of behaviour.
43.The evidence was that a major contribution to the marriage by the wife was her management of various finances to ensure their substantial investment debt was serviced.
44.It was apparent that from separation in mid-2011 and since the hearing in November 2012, the wife had assumed the burden of the debt of about $800,000 and there was a short-fall between loan repayments as against income parties had been receiving.
45.Since the trial the wife has assumed the burden of the short fall and this was not assisted by the act of the husband in January 2013 where he unilateral directed rental income from two properties to himself, which necessitated the wife’s application of 30 January 2013.
46.While that is relevant to the consideration of conduct under s.117(2)(A), I was always concerned that the husband’s attitude to dealing with the marital debt was such that he allowed the wife to make all of the decisions, but refused to assist her when she wanted to refinance their large debt with interest only loans so as to reduce the amount of payment which the parties had to make.
47.There was no real explanation of that type of conduct and it is open to conclude that it was simply part of the manner in which he was prepared to treat the wife, even though it was her contribution to the relationship to ensure that the large debts that they had acquired in buying real estate together were managed.
48.When he redirected rents he was fully aware that there would be a large short fall between the debt and monies received by the wife which she would have to make up.
49.That was an act that simply prejudiced the wife’s ability to pay the mortgage repayments and potentially put at risk her financial approval to refinance the existing debt pursuant to the property orders which I made.
50.Although the application the wife made in January 2013 resolved, the fact is she still had to make the application.
51.Therefore the matter was not resolved before the wife had to employ her solicitors judiciously in order to have the matter determined.
The husband complains that he was not given the opportunity to explain his conduct and now seeks to adduce certain further evidence on appeal. The first item is a transcript of proceedings before the judge on 5 February 2013, where the husband places emphasis on the following exchange at page 3 and 4 of the transcript:
MR ROWE: On 16 January the husband wrote to the tenants of two properties and redirected the rent into his account.
HIS HONOUR: Is that true, Mr [Maclin]?
MR [MACLIN]: Yes. But I just didn’t do it for no reason.
…
HIS HONOUR: There’s a spirit of the conduct of this type of litigation, and that is, the parties do not take steps adverse to the other until final judgment…
MR [MACLIN]: No. Your Honour –
HIS HONOUR: --- don’t do it.
MR [MACLIN]: Your Honour, on 9 January [Ms Maclin] approached me and said ….
HIS HONOUR: Not interested. Not interested. There’s an amount of property which needs to be preserved. All right?
…
HIS HONOUR: I will reserve the costs.
…
MR [MACLIN]: What does that mean?
HIS HONOUR: There may well be a costs application against you is what that means.
MR [MACLIN]: Okay. Your Honour, all I would ask [is] that you read my affidavit, which was ---HIS HONOUR: Well, if – well, yes. Mr [Maclin], if there is a costs application, I will… If it comes to a consideration, then, naturally, I will read both of them.
The husband also sought to adduce a letter dated 4 February 2013 addressed to the judge. Annexed to that letter is what the husband describes as an affidavit, although it is not in the appropriate form. These documents became Exhibit 5 in the appeal. An inspection of the court file revels that the letter was received and placed on the file but not the enclosed “affidavit”.
In that material the husband alleges that on 9 January 2013 the wife indicated to him that she was not intending to service the mortgages as she had no money left. The husband then says that after speaking with the bank and seeking advice, he contacted the tenants of the two properties held in his sole name and redirected the rental proceeds for the purpose of meeting the repayments.
The principles in relation to applications to adduce further evidence as articulated in the decision of CDJ v VAJ are well known and previously set out at [23] of these reasons.
Is this instance it can be seen that the evidence was admissible and relevant to explain the husband’s actions. It may be that if the judge had appreciated this a different order would have been made.
As the application was never heard, because the judge indicated he would shortly deliver the substantive reasons, it is difficult to predict what the outcome of the wife’s application might have been and whether there was substance in the husband’s contentions. It cannot be seen that there were circumstances justifying such an order. It should be set aside. Ground 9 succeeds.
The stay costs order
The judge gave the following reasons for ordering that the husband pay the wife’s costs of responding to his stay application:
67.As to the stay application, in which the wife was successful and the husband wholly unsuccessful, the wife should receive her costs.
68.She asks for $1,601 pursuant to item two in the schedule, plus $800.50 as an advocacy loading pursuant to item 5 in the schedule, totalling $2,401.50.
69.In refusing the stay application, I was not satisfied that the husband had demonstrated strong grounds of appeal and I also noted what I had stated in the trial judgment, that he was “quietly relentless” in his approach, and I questioned his bona fides.
70.As I stated, he subsequently abandoned the appeal.
The judge gave careful and detailed reasons for dismissing the stay application on 3 May 2013, considering each proposed ground of appeal before concluding that the appeal was unlikely to succeed.
The husband complains that the judge placed too much weight on the abandonment of the appeal in making the order. It must be seen however that this was a relevant consideration in the exercise of the judge’s discretion, the later abandonment of the appeal ultimately rendering the stay application nugatory. Even if the abandoned appeal was meritorious as the husband asserts, it cannot be said that a costs order would not follow in those circumstances. Section 117(2A)(e) provides that a party being wholly unsuccessful in proceedings is a relevant consideration in an application for costs. The husband’s stay application was wholly unsuccessful and the husband did not seek to appeal the dismissal of the application. Ground 6 must fail.
Evidence to be adduced on appeal
At the outset of the appeal the husband explained that there were several transcripts he wished to rely on to support the grounds of appeal. Mr George, counsel for the wife, took no issue with those of 5 February 2013 and 2 May 2014.
It was however submitted by Mr George that the transcript of 21 November 2012 where Mr Y, the Family Consultant, gave evidence was not relevant. As the husband explained, he wished to rely on this to demonstrate that the judge was in error.
It seems appropriate to allow all the transcripts to be made available.
It was then clarified that the husband’s offer to settle dated 1 November 2012 was available.
In essence the only document sought by the husband to be adduced not being a transcript or already part of the proceedings is the document marked Exhibit 6 being a printout from a website recording the sale of one of the A properties after judgment was delivered and orders made finally.
Leaving to one side the admissibility of such a document it does not fall into any of the categories as described by CDJv VAJ and should not be admitted.
Conclusion
The appeal in relation to the costs order by the husband for the substantive property and children's proceedings should not succeed. It is of some importance to note that the trial judge did not allow all of the costs in these proceedings nor was the order on an indemnity basis. Having regard to the list of costs placed before his Honour, which appear entirely reasonable, the husband has been required to meet about one half of those costs.
Grounds 1, 4, 6, 8 and 12 are general grounds in relation to the exercise of discretion and have not been established.
As to Ground 2, although there may be a factual error as to how his Honour referred to the time with the children, it cannot be seen to be material to the decision. The judge was motivated by the husband’s conduct prior to and during the trial.
Ground 3 complains that the trial judge gave undue weight to the offer to settle the parenting proceedings. The reference by the judge to the wife’s offer that the parties have shared parental responsibility was correct and relevant.
Ground 5 also cannot be established. While the trial judge may not have set out the whole of each party’s financial circumstances and had limited knowledge of their current circumstances, he clearly was aware of the essential facts. In any event, the financial circumstances of the husband would not have been a reason in this case to refuse an application for costs.
Ground 7 in relation to the caveat succeeds for the reasons given earlier.
Ground 9 is in aid of the husband’s appeal in relation to the rental income costs order. It appears correct that the judge either did not appreciate the husband’s arguments in this respect or did not allow him to make submissions. The issue could be remitted for re-hearing but such an expense could hardly be justified. In the circumstances of the trial judge making a general order for costs of the property proceedings fixed at $12,664 the most appropriate order is to set aside the rental income costs order.
In these reasons relevant to the property proceedings the issue of the husband’s property settlement offer is referred to. It can be seen that the trial judge failed to fully appreciate the offer but was correct in his conclusion about its value and effect. It needs also to be considered that the offer of the wife seeking $330,000 was a little less that the order of the judge in the sum of $353,649. It was not the offers which caused the judge to make the orders.
costs of the appeal
The husband has not entirely failed in the appeal – he has successfully argued that two orders be set aside albeit of modest sums.
In all the circumstances there should be no order as to costs of the appeal.
I certify that the preceding eighty-six (86) paragraphs are a true copy of the reasons for judgment of the Honourable Justice May delivered on 15 August 2014.
Associate:
Date: 15 August 2014
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