N and D
[2003] FMCAfam 5
•16 January 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| N & D | [2003] FMCAfam 5 |
| CHILD SUPPORT – Departure from administrative assessment pursuant to the Child Support (Assessment) Act – whether a lump sum should be ordered. Child Support Assessment) Act 1989, ss.3, 114, 117, 117(1)(c), 117(2)(c)(i), 117(4), 117(5), 121, 124 Gyselman & Gyselman (1992) FLC 92-279 |
| Applicant: | W J N |
| Respondent: | P V K D |
| File No: | MLM 5981 of 2002 |
| Delivered on: | 16 January 2003 |
| Delivered at: | Melbourne |
| Hearing Date: | 14 January 2003 |
| Judgment of: | Bryant CFM |
REPRESENTATION
| Counsel for the Applicant: | Ms L. Colla |
| Solicitors for the Applicant: | Springvale Monash Legal Centre |
| Counsel for the Respondent: | Mr P. Cronin |
| Solicitors for the Respondent: | Portelli and Co |
ORDERS
The existing child support assessments in relation to C E D, born
16 March 1984, be departed from.For the period 1 December 2002 to 17 December 2004 child support payable by the husband for the said child be fixed at $200 per week ($10,400 per annum or $28.50 per day).
The husband pay the child support in paragraph 2 hereof by quarterly payments in advance as follows:
(a)on 19 January 2003 for the period from 1 December to 2002 to 31 March 2003 of $3448.50, less amounts paid by the husband to the wife between 1 December 2002 and 19 January 2003;
(b)on 1 April 2003 the sum of $2593.50 for the period 1 April 2003 to 30 June 2003;
(c)on 1 July 2003 the sum of $2622 for the period 1 July 2003 to 30 September 2003;
(d)on 1 October 2003 the sum of $2622 for the period 1 October 2003 to 31 December 2003;
(e)on 1 January 2004 the sum of $2593.50 for the period 1 January 2004 to 31 March 2004;
(f)on 1 April 2004 the sum of $2593.50 for the period 1 April 2004 to 30 June 20004;
(g)on 1 July 2004 the sum of $2622 for the period 1 July 2004 to 30 September 2004;
(h)on 1 October 2004 the sum of $2223 for the period 1 October 2004 to 17 December 2004.
The husband's child support liability cease if C ceases to be a full‑time student prior to 17 December 2004.
The wife pay the costs of the husband's solicitors, Portelli and Co, in relation to production of documents pursuant to the subpoena issued by her fixed at $50 within seven days of receipt by her of the first child support payment, due on 19 January 2003.
The application filed 16 October 2002 otherwise be dismissed.
That A S from O S and T have liberty to apply by application to my associate for a listing in the event that he wishes to seek costs in relation to the documents provided to the court by subpoena issued by the wife. The liberty to apply will be permitted to 30 days of receipt of a copy of these orders.
The wife cause a copy of these orders to be sent to Mr S as soon as practicable.
All subpoenaed documents be returned to the parties from whom they were subpoenaed.
The tendered documents be returned to the parties at the expiration of 30 days from the date of these orders.
The wife's application for costs be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLM 5981 of 2002
| W J N |
Applicant
And
| P V K D |
Respondent
REASONS FOR JUDGMENT
This application was brought by the wife pursuant to the Child Support Assessment Act, filed on 16 October 2002 and seeks a departure from administrative assessment in relation to the child C E D, born 16 March 1986.
The orders as sought in the application were amended slightly at the commencement of the hearing. The wife is seeking a departure covering the period 1 December 2002 until the completion of C's year 12 education in December 2004. The application itself sought the sum of $200 per week by way of child support for that period but at the hearing, in light of C's increased expenditure the wife sought an order for $242 per week.
The wife also sought that the child support, as assessed, then be capitalised and paid to her in a lump sum, a capitalised amount to incorporate the CPI adjustments. She also sought at the commencement of the hearing an order for costs thrown away in relation to an appearance on 8 November 2002.
The husband's initial position on the material was to oppose the application of the wife, although ultimately he made a proposal that he pay child support at no more than $135 per week and opposed any order for capitalisation.
Background
The wife is 47 years of age and the husband is 54. The parties were married on 29 March 1975 and separated on 14 July 1996. They have two children, M, who is 20, and C, who is 16 and a half. In July 1996 the parties began their involvement with the Child Support Agency. Both children initially lived with the wife. In March 1997 M moved to his father's care.
In August 1998 there were proceedings in the Family Court of Australia regarding property and parenting issues. In the course of those proceedings there was a departure application dealt with by Brown J, who ordered that the husband pay child support in relation to C in the sum of $165 per week. That amount has been varied from time to time as a result of assessments and reviews, which I will describe in more detail in these reasons.
The current proceedings were commenced by the wife originally on an ex parte basis seeking an injunction in relation to the proceeds of sale of the husband's home, which he was then in the process of selling. As a result of those proceedings there was an injunction made for a short period which was subsequently discharged on the basis that the husband pay arrears, which were then outstanding, and pay a further sum on account of child support in advance. The matter was listed for hearing in November 2002.
When the matter did not proceed in November last year the assessment was due to expire and the parties agreed that the husband would pay $135 per week in relation to C's support until judgment. It is conceded that the assessment which was in place prior which was about to take effect prior to that agreement, provided for the husband to pay $283.33 per month. That is really the amount from which the wife seeks to depart, as the current assessment is based upon the agreed sum of $135 per week which is to expire on judgment being given.
The basis for the exercise of jurisdiction in this matter is that the wife is asking for orders of a lump sum nature under section 124 of the act, which can only be dealt with by a court exercising jurisdiction under the provisions of the Child Support (Assessment) Act.
Issues
There is a palpable hostility and distrust from the wife to the husband in these proceedings. It is long-standing and has many causes. Findings about the husband's credit were made by Brown J in her reasons for judgment dated 3 September 1998. The wife quotes two particular passages regarding the husband from those reasons. In paragraph 12 of reasons for judgment Her Honour found that the husband:
“Presented a false picture to the court of his financial position and the violence during the marriage and is prepared to continue to lie about issues of violence and money unless forced by cross-examination or documentary proof into a concession.”
She also noted:
“I am satisfied the husband failed to tell the truth about his financial situation and that up to the date of trial he continued to receive income from two business activities.”
As a result of this and other matters which occurred during the marriage and after separation the wife is convinced, perhaps understandably from her past dealings with the husband, that the husband is not presenting an accurate picture of his financial affairs to the court and that he has deliberately and consistently tried to reduce his child support obligations. She believes that he is doing so maliciously to punish C for refusing to lie about the abuse during the marriage.
Understandably her views about him and his present financial position are coloured by this view. However, I must assess the evidence and make findings based upon the evidence, not merely the beliefs of the parties. In support of her contention that the husband has consistently failed to meet child support obligations the wife's affidavit has canvassed periods back to 1996. Sensibly in my view the husband's counsel did not attempt to cross-examine the wife about what occurred nine years ago but focused on the period from 1999, which is a more relevant period in which to consider the husband's financial behaviour.
In each year since the decision made by Brown J in 1998 there has been a review by a child support case officer of the husband's obligations. I accept that on each occasion this has come about by the filing of tax returns by the husband which have resulted in a particular assessment and an application by the wife to have that assessment reviewed which on each occasion has been successful. I accept that on each of those occasions the husband has opposed the application for review being made by the wife.
The effect of this process has meant that on each year since Brown J's order was made the parties have found themselves in conflict with each other before the Child Support Agency, arguing about the amount of child support. The provisions of the Child Support (Assessment) Act which enable an assessment to be made each year on the basis of a filed tax return envisaged an annual review but did not envisage that parties would continue to argue about these matters on a regular basis.
The history from 1998 is as follows:
a)Brown J fixed child support at $165 per week and fixed $65,000, as the husband's child support income, into the formula.
b)As a result of matters which I have described there was a review in 1999 which effectively left $165 in place until M turned 18.
c)In 2000 after review, the child support was fixed at $526 per month from 1 May to 30 November and $686.75 from 1 September 2000 to 31 August 2001.
d)
In 2001 the review fixed child support at $708.41 for the period
1 September 2001 to 30 November 2002.
e)In May 2002 there was an application by the husband to vary the assessment on the basis that he had ceased his previous employment and was at that point unemployed.
f)In June 2002 the wife commenced her proceedings for an injunction and filed an application for departure, to which I have referred. This led to the granting of the injunction, the discharge of the injunction and ultimately to the agreed amount being paid by the husband.
g)As the existing child support obligation concluded on 30 November 2002 prior to that the agency reassessed the husband at $283.33 per month, or $55 per week. This assessment never actually came into effect because of the agreement that the husband would pay $135 per week towards the child support until judgment.
As far as arrears are concerned, which were a significant issue in this case, since the hearing in November the husband has met his commitments, although the wife's case was opened on the basis that there were arrears and that payments were unmade, and late.
To some extent in this period the wife relied upon phone conversations with the Child Support Agency (“the Agency”) and was misled by them. The evidence, which is now accepted by the wife, is that in fact the payments had been made by the husband and on time. It is also the case that only one payment of arrears was actually taken from the husband's tax return, and that was following the creation of arrears which flowed from one of the reviews and caused a backdating of an increased sum. The sum collected was $2123.58.
For the period from November 1999 to March 2000 the husband regularly paid his obligation of $715 per month. For the 12 months from August-September 2000 to 2002 he regularly paid his obligation of $682.75 per month. The payer transaction account from the Agency, which was tendered in evidence and cross-examined upon, does not indicate any significant problem with payments until the adjustment of child support, which was backdated following various assessments and created a liability and arrears.
The husband was regularly making payments but when he was reassessed as a result of the review by the child support case officer he was not then regularly paying off the amount of arrears, although he continued to meet his child support obligations, albeit at an amended rate, on a regular basis. On 20 March 2002, for example, the arrears, which were then in the amount of $2122.58, were taken from a tax refund of the husband and at that point the arrears reduced to $23.15.
On 1 January 2002 there were arrears of $1023.84. $1000 was paid and by 24 January the arrears were down to $23. In 2002 the husband, as a result of having left his employment, was not paying the regular amounts and the arrears went up $3799. The Child Support Agency issued a section 72A notice under the provisions of the Child Support (Registration and Collection) Act and as a result of the orders made in the Federal Magistrates Court, to which I have referred, the husband was required and did pay off those arrears. He was also required to pay an amount which put him in credit.
Findings
Ultimately the wife conceded that she had been consistently receiving, for most of the period referred to, the amount of the child support assessed from time to time but not the arrears. I accept that the wife has had difficulties over a longish period receiving child support in a regular fashion. Those difficulties largely relate to the need for her to have challenged the husband's taxable income as a basis for assessing the appropriate child support. This has led to adjustments which have created arrears. The husband has not reliably, or, in one case at least, willingly, repaid the arrears. I accept that the wife's income is such that every dollar not received into the household effects the standard of living and that she has pursued the question of arrears assiduously.
I accept that although the husband has been paying the assessed amounts on time generally there have been periods when the agency have not passed on those payments to the wife in a timely fashion. This may be because of the precise dates on which they are received and the regular dates upon which the agency makes payments. I accept that these administrative arrangements create hardship in the wife’s household.
For his part I am satisfied the husband has not been reliable as far as the arrears are concerned and the agency have had to pursue him for the arrears. However, I do not find that the arrears arose from a failure to pay child support regularly as assessed, but rather from a reluctance to pay arrears which came about when the husband's liability was increased and backdated, which occurred in 2000 and 2001.
I am not satisfied that the wife has established that the husband is such a wilful and obdurate nonpayer that I should take the serious step of requiring him to pay all future support in a lump sum as sought. Indeed, she ultimately conceded that he had regularly paid the assessed sums. This concession was properly made in the context of robust assertions that the husband had a long history of noncompliance and that he is unreliable. I do not find that to be the case and the wife, in this respect, has clearly exaggerated her claims. Her distrust of the husband has meant that she has persistently taken a view on various matters from which she has had to resile later in the face of evidence.
There are two things that emerge from a consideration of the history of this litigation. The first is that there should be a fixed amount of child support payable so that the parties do not have to argue each year about the husband's income. Secondly, because the wife's household income is so low there should, in my view, be some payment made in advance so that she will not be waiting on monthly payments which might not be received in a timely manner. However, I will need to balance the husband's capacity to pay in advance with the desirability of ensuring that for a fixed period at least the child support is received.
Given the husband's reliable history of assessment payments and the fact that the child support figure will be fixed, the issue of the arrears, on which the wife contends the husband is unreliable, becomes largely irrelevant.
The relevant law
The obligation to pay child support is created by the provisions of the Act. Section 3 contains the obligation that parents maintain their children. Sections 114 and 121 identify that the further objects of division 4 and 5 of the act include:
(a) that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents; and
(b) that parents share equitably in the support of their children.
When considering an application for departure pursuant to section 117 of the act the court must engage in the three-step process described in Gyselman & Gyselman (1992) FLC 92-279. Those three steps are as follows:
(a) The requirement by the court to be satisfied that in the special circumstances of the case one of the grounds for departure in section 117 has been established.
(b) In determining whether to make an order under this division the court is required to consider whether it will be just and equitable as regards to the child, the carer entitled to child support and the liable parent to make a particular order (see section 177(4)).
(c) In determining to make an order, whether it would be otherwise proper to make a particular order under this division (see section 117(5)).
In determining whether it would be otherwise proper to make a particular order the court must have regard to the fact that it is the primary duty of the parents to maintain their child and the effect that the making of an order would have upon any entitlement of the child or carer to an income tested pension, allowance or benefit.
In considering whether it is just and equitable to make an order the court must have regard to:
(a) the nature and duty of the parent to maintain a child;
(b) the proper needs of the child;
(c) the income, earning capacity, property and financial resources of each of the child and the parents;
(d) the commitments of each parent necessary to support themselves and any other person to whom they have a duty; and
(e) any hardship that would be caused to the child, the carer or the liable parent by the making or refusal to make the order.
In this case the wife relies upon the provisions of section 117(2)(c)(i), namely that in the special circumstances of the case the application of the existing administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the husband because of his income, earning capacity, property and financial resources.
C’s proper needs
Dealing with the matters which I must find I turn first to C's income and proper needs. C will be commencing year 11 in 2003 and will complete her secondary education in 2004. The school year will conclude on 17 December 2004. On the evidence I am satisfied that the likelihood is that she will complete year 11 and 12. She had a job at KFC during the 2001-2002 year, which she started in November 2001 and did throughout the holidays and early in term 1. But until the Christmas holidays this year she has not worked as it has otherwise interfered with her studies.
She now has a job in retail outlet and is earning about $27 per week. She would like to continue because she doesn't get pocket money and wants to have some money available to her. The expectation is that she may not be able to continue this job during the year if it interferes with her studies, but she would like to do so if she can.
There was really no challenge to the wife's evidence in relation to C's proper needs. I accept that her proper needs are in excess of $242 per week, which was the weekly amount shown in the wife's financial statement. These expenses were not challenged. The evidence was that these are the actual expenses of the household, but that there are other expenses which are reasonable for C which simply cannot be afforded. I accept that there are further expenses reasonable to her income and I was given some evidence of particular expenses and amounts. Although it was not calculated out over the year I find that her reasonable expenses are in the vicinity of $300 per week.
The wife’s financial position
As far as the wife's financial position is concerned the wife has recently returned to studies. She is doing a bachelor of social work course full-time. The completion of that course, if she continues it this year, will be either the conclusion of 2003 or 2004. Whether she will conclude the course this year or next year depends upon her obligations to C in the last two years of her secondary schooling. Assuming that she finished her course at the end of this year and could obtain employment she would not in all likelihood start earning an income until the early part of 2004 at the earliest. The starting salary would at best be $34,000, assuming she could get that sort of employment. That is the best position that she could hope for.
In any event, even if that occurred for the latter part of year 12 that amount would not, in the normal circumstances, bring her income above the threshold which, if administrative assessment were applied, would otherwise affect the husband's obligations. At the moment her income is $200 from Austudy and a youth allowance for C of $83. The weekly income of the household is accordingly $283.
There was no issue about the modesty of this sum and the difficulty of providing for the support of the wife and C from this weekly amount of income. It is not difficult to see why regular payment of child support are important to the wife.
She lives in an unencumbered home but has little else by way of assets. She has a degree but had difficulty in finding any employment arising from that degree and her present studies are vocationally focused for the future.
The husband’s financial position
I now turn to the husband's financial position. Until he was made redundant in December 2001 the husband was employed in the IT industry by A C Pty Ltd. He was paid after his redundancy up until February 2002. Prior to that his average taxable income from his employment was between $47,000 and $56,000, after deduction of expenses and any other losses he was entitled to deduct.
The husband worked for a few months in the first half of 2002 between 1 March and 23 April, doing some sales work with an IT firm. He was unable to find any positions which would provide him with long-term prospects due to his age and the current depressed state of the IT industry generally. He decided that the purchase of a business he could build up would provide him with long-term security and on 21 June 2002 he signed a contract for the purchase of a post office business at W which he has been operating since then.
The section 52 statements provided by the vendor of the business did not indicate a particularly profitable business, but he husband believes he will be able to build up the business to achieve an ultimate profit to himself of about $37,000. That has not yet happened. At present he is drawing between $400 and $500 per week. He has a four-wheel drive vehicle provided by the business and as his house his attached to the post office his utilities are largely tax deductable. He paid $260,000 for the business, funded from sale of his R property and borrowed $120,000 from B B in several loans over 10 years. He now owes approximately $110,000 on these loans.
M was working for him during 2002 and 2003, earning a modest wage and having his car payments met for him. He has now joined the army. In early 2000 the husband purchased an investment flat in F, borrowing more than the value against the security of the R home. The loan is now $90,000 and the husband estimates his equity is about $25,000. He receives rent of $150 per week, which goes directly to repay the mortgage. He estimates that the net cost to him of the property is between 50 and $100 per month. The loan is over four years.
The husband has a cheque account with an overdraft facility of $10,000. The current balance of the overdraft is about $5000. He has two Visa accounts, one for personal use and one for the business. One has a credit limit of $10,000 and there is $4,500 outstanding. The other has a limit of $26,000 and there is about $4,000 outstanding.
He has personal chattels which I find are worth somewhat more than the $1000 disclosed by him in his financial statement. He has some superannuation, which totals approximately $33,000 but otherwise has no other significant assets.
His drawings from the business are presently between $400 and $500 per week. He sets out his weekly expenses as $265. They are modest expenses, however, they include $20 for cleaning and utilities, which are largely tax deductible. For the second quarter of 2002-2003 the Business Activities Statement for the husband shows income of $6537.47, which includes what the husband says was a relatively busy Christmas period. If that amount is averaged out over the year, and I accept that the husband says it might be a slightly higher than normal period, that would produce an income of about $26,000.
Having regard to the amount the husband is drawing each week and if I allowed his weekly expenses at $250, rather than the $265 paid by him, it would leave with $200 per week. He has no personal fixed commitments, other than the investment property, in respect of which the shortfall is about 50 to $100 a month. I intend to disregard that for these purposes because although from the husband's position it was not unreasonable to invest for his future it is not necessary expenditure in the context of the child support obligations for C (see Sheahan v Sheahan (1993) FLC 92-375 and Gyselman & Gyselman (1992) FLC 92-279).
Has a ground been established?
The applicant relies on section 117(2)(c)(i). The current assessment is for $135, but this is only reflective of an agreement until the hearing. Were it not for that agreement the assessed amount would have been $55 per week. The fact that the husband, at the end of the case, was prepared to concede that he should make a payment in a substantially greater sum than $55 per week, and having regard to the matters to which I have referred I am satisfied that a ground has been established under section 117(1)(c).
As to the amount which the husband should pay the wife seeks $242 per week. The husband has offered a sum which is, I suppose, effectively close to $135. In my view the proper amount to pay per week is $200 per week.
Is it just and equitable?
I accept that if an administrative assessment for this sum were in place it would equate to an income of about $69,000. Nevertheless it is, in my view, a proper sum for the following reasons:
a)There is evidence that in the short term the husband may have been able to obtain salaried employment providing him with an income closer to that sum. In fact, he said he was looking for a job which might provide him with about $80,000 per annum. Here the critical child support period is two years and in that short-term period there is, in my view, some greater capacity in the husband to earn a higher income, although that capacity may not be one which last for any longer period.
b)At some point, whatever the position of the payer, it becomes appropriate for a reasonable contribution to be made because otherwise the carer will be responsible for finding support from an equally or even worse income of modest amounts. That would certainly be the case here unless there is an equitable sharing of C’s support. It should be borne in mind that it will inevitably fall to the carer to meet any extra, unexpected or unusual expenses for the child. In this case C is 16 and a half and at a notoriously expensive age.
c)Having regard to the husband's personal expenses as revealed in his credit card statements and drawings I am satisfied that he can pay the sum of $200 per week without undue hardship.
Is it otherwise proper, under section 117(5)?
I am satisfied that this sum is affordable by the husband and will have the effect of alleviating as far as possible the public responsibility.
As far as the form of orders is concerned the wife seeks that the periodic child support be capitalised and paid as a lump sum pursuant to section 124 of the act. The Family Court has said in a number of cases, which include Bendetch & Bendetch (1993) FLC 92-355 and Pripick & Pripick (1995) FLC 92-574, that child support is generally to be paid out of regular income and there must be unusual circumstances before the court would order a lump sum.
The wife's case started out on the basis that the husband was an unreliable payer. In fact it was finally conceded that he has paid his assessed child support regularly and I have already commented on that in these reasons. In addition, the orders I will make will provide for a fixed sum of child support and there will be no need for any further assessments of the husband's income. Therefore, the question of arrears arising becomes irrelevant. In any event I am not satisfied that the husband could have met the lump sum sought by the wife, but this is a case in which, in my view, such a sum is not warranted.
I take into account, however, that the wife is very dependent upon the amount that she receives from the Child Support Agency and any delays which result from administrative arrangements can cause hardship in her household. I am also mindful of the fact that in relation to payments made by the husband recently she was misled by the agency as to whether those payments had been made. This led to problems for each of the parties. I canvassed with counsel the possibility of ordering a payment in advance on a six monthly basis.
I appreciate that any payment in advance would require the husband to raise money now.
I am satisfied, however, in this case that it would be appropriate to order some payments in advance because it will, in my view, to some extent, alleviate the wife's financial position. It will, in a sense, only be the first payment which might create any hardship to the husband, but weighed up against the wife's position in my view it is appropriate. However, I think that should be a quarterly payment, rather than a six monthly one. The husband has the capacity to draw on his overdraft, which I accept will require him to meet the interest rate, but I weigh that up against the security to the wife. The amount of the payments it will vary, depending on the days in each month – but will be in the region of $2600 per quarter.
Costs
I am also required to consider two issues in relation to costs. The first of those is an application for costs by the husband's solicitor, Mr M. This arises from a subpoena which was issued by the wife on
23 December and required him to produce his trust account records to the court on 13 January, which he did.
Prior to Christmas, on about 18 or 19 December Mr M received an email from M L S, who were assisting the wife, in relation to documents which the wife wanted produced, and the question of the cost of production was raised. Mr M indicated that the nature of the documents sought would be expensive to produce and ultimately the inquiry was narrowed to the production of his trust account information. He indicated that his costs would be in the region of $600 for the production of that information. He does not have his accounts computerised and uses an old fashion Kalamazoo system. He would accordingly have to go through files to compile that information.
The wife's advisers were informed of that. Subsequently the wife spoke with her barrister. Whether or not the information to which I have referred was passed onto her I do not know, but as a result of discussions with her barrister the wife again had the matter raised with Mr M and indicated that her advice was that it was simply a matter of obtaining the information from the computer and should cost no more than 15 or $20.
This was passed onto Mr M, who rejected, again, the fact that there would be a nominal fee and indicated that his fees would be considerably greater for the work he had to do. A subpoena was issued on 23 December, which was the day on which his office closed for Christmas. When he returned to work on 6 January he found the subpoena and a fax from the wife referring to the fact that his costs should only be 10 to $15.
On 7 January he prepared a letter and had it faxed to the number provided by the wife and a copy sent to the M L C. He explained in that document the costs that would be involved, said that he had not yet prepared the documents, nor incurred any expense and asked for confirmation about whether or not the documents were to be produced. He was contacted again by the wife's advisers, indicating that the wife was not happy with the costs. He then indicated that he had to know if he was to produce the documents or not and indicated at that point he still hadn't prepared the documents or incurred the cost.
On 9 January he received a message that the wife had telephoned and left a message that she didn't require the documents and that she simply wanted confirmation he would not charge for them. He telephoned her at about 5 past 5 to indicate that he was pleased that they did not have to be produced and confirmed that there would be no cost. He says that she then asked him again what the cost would be and sought to discuss it with him. He asked whether she had changed her mind and she again wanted to discuss the costs. He indicated that he had already set out in a letter what the costs were and why and he was not prepared to discuss the issue of costs with her and he simply wanted to know whether or not she wanted the documents produced. He says that at the end of the conversation she simply said that he could produce them and he subsequently did and his costs are sought.
The wife gave evidence in relation to this issue. There was very little departure from the version given by Mr M. The only real difference between the parties was that the wife did not indicate in her evidence that she said he would have to produce the documents at the end of the phone call. She said that she tried to discuss the issue with him but that he was rude and intimidating. Having regard to her attitude generally to the husband's disclosure during the proceedings and her fairly dogged determination to have these documents produced I accept the version of Mr M - that the wife did try again to raise the issue of costs with him and that in the end she asked him to produce the documents.
The husband's counsel indicated that the full amount would not be sought but there was some stand on principle being taken in the matter. If I consider the wife's financial position it would be extremely difficult and would create hardship for her to have to meet this payment. She offered, through her counsel, to pay $50. This is, in my view, an inadequate sum to compensate Mr M for the costs of producing the documents but in all the circumstances, having regard to the wife's circumstances and the fact that she has to support C, who lives with her, it is the only amount for which an order can reasonably be made. In the circumstances, in my view, Mr M is entitled to be compensated for his costs and I intend to order that the wife pay the sum of $50.
The other cost issue raised at the commencement of the proceedings, although it did not seem to be seriously pursued at the end, was that the wife should be compensated for costs thrown away on 8 November. That was put initially on the basis that the husband had failed to comply with orders of Federal Magistrate Connolly made on that day for production of documents.
Having heard the evidence I am satisfied that the husband did comply with those orders and I am satisfied not only did he comply by sending the documents, which the wife initially said had not even occurred, but that he produced all of the financial documents that he had. In addition I am not satisfied in any event that the matter could have been heard by the court on that date. Accordingly I do not propose to make an order for costs thrown away in favour of the wife relating to 8 November.
I have an application before me by the wife for costs or some of the costs which occurred in relation to the proceedings. The question of costs is governed by section 117 of the Family Law Act, which provides that unless the court otherwise orders, each of the parties will bear their own costs in relation to the proceedings. The High Court in Penfold v Penfold (1980) 144 CLR 311 has said that the wording of that section does not create an onus on either of the parties and that it is a matter for the court in each case to consider, having regard to the matters in section 117(2) of the act, whether in a particular case to exercise discretion to order costs or not to order costs.
In this case the wife was not on legal aid but had the assistance of the Springvale Legal Service, which, I understand, was at no cost to her and has had counsel appearing for her on a pro bono basis, although that is not itself a reason not to award cost if otherwise appropriate. The husband has had the expense of a solicitor and counsel.
The application for costs is really put on the basis that the wife has been partially successful. The success of the wife relates to the fact that the quantum of the weekly maintenance has been ordered at $200 and up until the date of the commencement of the hearing that was the weekly amount that was sought by the wife. The fact that the husband had not agreed that the child support should be payable to the end of the academic year does not seem to me to be an important issue because had everything else been otherwise agreed, I have little doubt that that would have followed. It is clear that that is what the Child Support (Assessment) Act provides for in any event.
To a large extent, that is, insofar as the lump sum payment is sought, the wife was unsuccessful and the question that I really have to consider is whether I should order a portion of her costs to be paid by the husband because she has been partly successful in relation to the quantum.
I have regard to the matters in section 117(a)(2) and to all of them. It is clear the wife has been partially successful, but on the other hand the lump sum application was integral to her case. It is all very well to pose the question at the end - what would have happened if the wife had simply sought $200 per week, or from the husband's point of view, there should have been something read into the agreement to pay $135 up until the hearing. The fact is that those positions were not put. The wife's application was brought seeking a lump sum and indeed most of the affidavit evidence and the subpoenaed evidence related to the payment of a lump sum payment equally, if not more as much as to the payment of regular weekly support.
The matter would have been much quicker to dispose of had the issue simply been the weekly quantum. I take into account as well the financial position of each of the parties, to which I have referred. To the extent that the husband is in a better financial position than the wife that is going to be offset to a large degree by the fact that he is going to have to meet his own legal costs for his solicitor and counsel. In effect the wife will not have to bear any costs because of the generosity of her counsel in accepting the pro bono brief and of the assistance she has from the Monash S L S. Having regard to the financial positions of the parties therefore and the husband's liabilities for legal costs and the obligations he will have under the orders for those reasons I am not prepared to make any order for costs in this matter.
I certify that the preceding seventy (71) paragraphs are a true copy of the reasons for judgment of Bryant CFM
Associate: Peter Smith
Date: 21 January 2003
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