MACNAB & MACNAB (No.2)
[2015] FCCA 1713
•19 June 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MACNAB & MACNAB (No.2) | [2015] FCCA 1713 |
| Catchwords: FAMILY LAW – Costs – application for costs of property proceedings – where respondent had failed to file any affidavit or any financial statement – where respondent failed to attend conciliation conference – where respondent failed to attend final hearing of property application – where the court is of the opinion that an order for costs is justified – conduct of the parties to the litigation – financial circumstances of the parties. |
| Legislation: Family Law Act 1975 (Cth), s.117 |
| Cases cited: Bixby & Bixby (No.2) [2015] FCCA 816 Colan Products Pty Ltd v Luxon (No.2) [2002] FMCA 90 Colgate Palmolive v Cussons Pty Limited [1993] FCA 536; (1993) 46 FCR 225; 118 ALR 248 |
| Applicant: | MS MACNAB |
| Respondent: | MR MACNAB |
| File Number: | MLC 7374 of 2014 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 19 June 2015 |
| Date of Last Submission: | 19 June 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 19 June 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Williams |
| Solicitors for the Applicant: | Adrian Abrahams Family Lawyers |
| Respondent: | In person |
ORDERS
The respondent is to pay the Applicant’s costs of this proceeding fixed in the sum of $29,377.
The costs referred to in the immediately preceding order are to be paid out of the sum of US$22,000 currently standing to the credit of the respondent in the parties’ joint (omitted) Bank Foreign Exchange (Account Number (omitted)) and for the purposes of this order, the Applicant and the respondent are to do all such acts and things and execute all such deed to documents necessary to withdraw from that account an amount equivalent to $29,377 and pay such sum to the Applicant.
In the event that either of the parties refuses, neglects or fails to comply with the direction to execute any deed or document within 14 days of being requested to do so, then in accordance with section 106A of the Family Law Act1975, the Registrar or a Deputy Registrar of this Court at Melbourne is hereby appointed, empowered and directed to sign or execute any such deed or document on behalf of that party upon presentation of such deed or document and an affidavit of the legal practitioner acting on behalf of the Applicant as to the respondent’s failure, refuse or neglect.
The parties are to pay their own costs of the day.
I remove the application from the list of cases awaiting finalisation.
IT IS NOTED that publication of this judgment under the pseudonym MacNab & MacNab (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT AT MELBOURNE |
MLC 7374 of 2014
| MS MACNAB |
Applicant
And
| MR MACNAB |
Respondent
REASONS FOR JUDGMENT
The Application before the Court today is an application for costs. The Application is brought by the Applicant. The matter of costs has already been considered by the Court on the last occasion, namely 21 May 2015. On that date I dealt with two issues:
a)an application for adult child maintenance in respect of two daughters of the parties who are now adults; and
b)an application for costs.
Fortunately, to the credit of the parties, the application for adult child maintenance has been resolved by means of consent orders, which I made earlier this afternoon. The application for costs has been the subject of submissions by Counsel for the Applicant and by the Respondent husband in person.
On the last occasion I made two orders of a procedural nature in respect the application for costs. The Orders stated:
19. The respondent husband is to show cause why he should not be ordered to pay the wife’s costs of these proceedings by filing and serving an affidavit setting out the facts upon which he seeks to rely by Friday 12 June 2015.
20. The application for costs is adjourned to Friday 19 June 2015 at the Melbourne registry of this Court for further mention at 2.15 pm.
Since then, the Applicant’s solicitors have filed an affidavit by the Applicant’s solicitor, Deanna Louise Elsner, sworn on 12 June 2015. That affidavit, in compliance with the Court’s orders, was filed electronically at 2.33 pm on the afternoon of 12 June. The Respondent has not filed any material. In Ms Elsner’s affidavit she sets out a copy of the account provided by her office to the Applicant on 29 May 2015. She also notes further figures by way of Counsel’s fees. There has been tendered to the Court an itemised account prepared on a party and party basis in which the various amounts are set out in detail. The total of costs claimed including GST comes to $19,580, and the total of the disbursements claimed, including Counsel’s fees, comes to $9,797. The total amount, therefore, representing the amount claimed is $29,377.
The Respondent’s Submission
The Respondent has attended Court today. I might comment this is the first time, to my knowledge, that he has done so. He did not attend Court on the occasion of the Conciliation Conference on Thursday 12 February this year. He did not attend Court when the matter was listed for hearing before me on Thursday 21 May this year. He made an oral submission in which he set out why it was he opposed the application for costs and gave an explanation or explanations for his failures to appear. I might point out these explanations varied significantly from what had been before the Court before, and, in particular, his explanation varied from the report by Registrar Mestrovic to the Court about the husband’s failure to attend the Conciliation Conference on Thursday 12 February this year.
It is the Respondent’s position that the legal costs have been caused by the fact that it is the Applicant wife who was the one who created this problem when the parties separated. He said that he advised the Applicant not to go to solicitors and offered to settle the matter privately. However, he said that the Applicant insisted on obtaining legal advice and insisted on bringing these proceedings and thereby incurring a significant debt by way of legal expenses.
Indeed, on looking at the itemised account which was tendered and admitted into evidence, I note that the first eight items relating to events between 21 February and 15 April 2014 relate to attendance on the Applicant, including discussing the Respondent’s offer of settlement, correspondence with the Respondent, which included putting what appears to have been a counteroffer and spending a significant amount of time in what appears to me to be an attempt to resolve the matter by way of a settlement rather than through the Court.
It is noteworthy that the Applicant did not commence proceedings until she filed her Initiating Application and supporting documents on 21 August 2014. Bearing in mind the considerable negotiations that took place between late February and mid-April of 2014, it can hardly be said that the Applicant wife did not make any effort or any reasonable effort to resolve the matter without resorting to litigation.
When dealing with applications for costs the Court must have regard to the provisions of section 117 of the Family Law Act 1975. Subsection (1) contains the general principle that parties to proceedings should pay their own costs, but subsection (2) of 117 of the Act provides that where the Court is of opinion that there are circumstances that justify it in making an order for costs or an order for security for costs, the Court may then make an order for costs having regard to various subsections of section 117, the relevant one for the purpose of these proceedings being subsection (2A).
Subsection 117(2A) states that when considering the question of costs, the Court shall have regard to a number of considerations. These include the financial circumstances of parties, whether either of the parties is in receipt of legal aid, the conduct of the parties generally in relation to the litigation, including attending to all the procedural steps, whether the proceedings have been necessitated by the failure of a party to comply with previous court order, whether there has been a written offer of settlement conveyed to the other party, and any other relevant matters.
There is evidence before the Court as to the parties’ financial circumstances contained in the Applicant’s affidavit sworn on 5 June 2015 in which at paragraph 5 she sets out her weekly income and an estimate of the husband’s weekly income. She deposes that she earns approximately $1170 gross per week and that the weekly expenses of her daughter X amount to approximately $670 per week and her expenses in respect to Y amount to approximately $400 per week. She asserts that she is struggling financially and the Respondent is not assisting her at all with the children’s’ day-to-day living and household expenses.
In the affidavit she sets out that the husband earns in excess of $1900 per week gross. Whilst that affidavit was penned for the purposes of the application for adult child maintenance, which has now been resolved, it is still of significance in these proceedings. Mr Williams of Counsel, who appears for the Applicant, has referred the Court to material produced on subpoena, including in particular exhibit 3 from 21 May, being documents subpoenaed from the Respondent’s employer, (employer omitted), setting out his income.
As Mr Williams submitted, it can be seen that his income derived from his employment as set out in the subpoenaed material is significantly greater than the Applicant’s estimate of $1900. The husband said that his income is largely dependent upon the amount of overtime that he receives and it follows that without overtime – particularly if overtime is not available – then his income is significantly less. Nevertheless, it appears that his income is greater than that of the Applicant, and whilst he now, as of 22 June, has a legal obligation to pay adult child maintenance in respect of his two adult daughters, he does not have any other person living with him for whom he has the responsibility to provide care.
It is important to consider the conduct of the parties to the proceedings. The Applicant has clearly followed the advice of her legal advisors and has filed her documents on time and has attended Court on every occasion that she has been required to do so. She has attended Court today. Today, however, is the first time that the Respondent has attended Court. His explanations as to his failures to appear at a Conciliation Conference before the Registrar and at the hearing before me do not sit well with the Court file, particularly the report of 12 February from the learned Registrar to the Court.
The Respondent has not filed any documentation. He has not filed a Response or an affidavit or a Financial Statement. All that we know about his income and assets from him comes from his oral submissions to the Court. As I indicated in the decision that was handed down on 27 May at paragraph 44:
It seems to me that the husband’s failure to participate has made the wife’s task more difficult.
I am of that view. I note that there is reference to discussions of an offer of settlement made by the Respondent before the proceedings started and an apparent counter offer made by the Applicant’s solicitors again before the proceedings started, and there is evidence of negotiation generally. Clearly, that negotiation eventually proved not to be fruitful as an application was filed on 21 August 2014. Bearing in mind the fact that negotiations had been going on at least from 21 February to about the end of April, it can hardly be said that the Applicant did not attempt to resolve this matter outside Court or at an early stage.
Perhaps if the Respondent had attended the Conciliation Conference on 12 February this year the matter may well have resolved. However, he did not. I am not of a view that there are any other matters that the Court needs to consider in respect of making its decision about whether an order for costs should be made. I am of a view that the conduct of the parties to the proceedings, comparing the Applicant’s consistent compliance with the requirements that the Court imposed upon her both in the preparation of documents and attending at Court, compares favourably to the Respondent’s actions, which involve a failure to attend Court and a continuing failure to file a Response or an affidavit or a Financial Statement.
To this day the Respondent has filed no documents. Today is the first day that the Respondent has appeared and taken part in the proceedings. He would have been well served to have attended on an earlier occasion and sought to take part in the proceedings then, whether or not he was legally represented. All of these matters persuade me that an order for costs is appropriate in the circumstances. I am of the opinion that it is proper to make an order for costs against the Respondent in favour of the Applicant.
The amount sought is a significant one, but that is, unfortunately, the inevitable cost of litigation. So often the Courts see matters proceed to a final hearing when it would seem clear to anyone except the parties themselves that the matter cries out for settlement. So often do Judges go into Court and commence a hearing after having read the material and think to themselves, “Why am I hearing this case?”. One issue arises in respect of the application for counsel’s fees to be claimed as a disbursement.
There is an early authority from this Court, or this Court as it then was – in respect of Colan Products v Luxon (No.2)[1] where Federal Magistrate Raphael, as His Honour then was, held that it was not appropriate to claim Counsel’s fees as a disbursement in circumstances where the advocacy loading under the rules was being claimed. However, there are circumstances that can justify a departure from that proceeding, and I set those out in a recent decision of Bixby v Bixby(No.2)[2].
[1] [2002] FMCA 90
[2] [2015] FCCA 816
Whilst the circumstances there are different in that costs were sought on the basis that not only had there been a written offer of settlement made and an imprudent offer and an imprudent refusal of that offer of settlement, as has been mentioned in the well known decision of Colgate-Palmolive v Cussons Pty Limited[3], the circumstances were that from the date of the imprudent refusal of the offer of settlement, which was right at the start of all the legal work that was done, the necessity for counsel to be briefed became obvious.
[3] [1993] FCA 536; (1993) 46 FCR 225; 118 ALR 248
In this matter I have previously set out at paragraph 46:
It has not been put to the Court that those costs should be paid on anything other than a party and party basis, and I would not see a ground for making any such order, in any event. I am of the view that the costs should be assessed according to schedule 1 of the Court’s rules with the exception of the fact that I am satisfied that for the hearing before me it was appropriate and necessary for counsel to be briefed. Insofar as it may be required, I would certify for counsel under the rules.
I adhere to that view that it was appropriate and necessary for Counsel to be briefed. It is for those reasons that I propose to make an order that the Respondent is to pay the Applicant’s costs of this proceeding, which are fixed in the sum of $29,377. I inquired as to the way in which those costs could be paid, and Mr Williams of Counsel drew the Court’s attention to the fact that as a result of the orders made on 27 May, the Respondent was to retain the sum of US$22,000 which were held to the credit of the parties in the joint (omitted) Bank foreign exchange account.
His estimate – and I stress it is only an estimate and was not put to the Court to be anything else but – was that when translated into Australian dollars, that would be more than adequate to provide for the sum which I have ordered of $29,377.
It appears to me that that is the appropriate fund from which the costs may be drawn and I propose to order accordingly.
I have taken the view that the parties should pay their own costs today under the provisions of subsection (1) of section 117 noting the fact that the Respondent did, in fact, attend court and, indeed, involve himself in a speedy resolution of the claim for adult-child maintenance in respect of his two adult daughters which removed a considerable amount of strain not only from the Applicant herself but particularly from the parties’ two daughters. In all the circumstances, I am of the opinion that those reasons justify the parties paying their own costs of the day.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 22 June 2015
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