O and O

[2006] FCWA 109

JURISDICTION:

FAMILY COURT OF WESTERN AUSTRALIA

ACT:	FAMILY LAW ACT 1975
LOCATION:	PERTH
CITATION:	O and O [2006] FCWA 109
CORAM:	THACKRAY J
HEARD:	WRITTEN SUBMISSIONS
DELIVERED:	2 NOVEMBER 2006
FILE NO/S:	PT 2334 of 2004
BETWEEN:	O

Applicant/Wife

AND

O

Respondent/Husband

(Page 2)

Catchwords:

Costs - children's issues - inappropriate conduct by father leading mother to
incur huge legal costs - global approach to assessment of costs

Practice and procedure - "person with a disability"

Legislation:

Family Law Act 1975, s 117(1), s 117(2), s 117(2A)

Category: Not Reportable

Representation:

Counsel:

Applicant:	Mr P Dowding SC
Respondent:	Self Represented Litigant
Child Representative	Ms J Taylor

Solicitors:

Applicant:	DCH Legal Group
Respondent:
Child Representative:	Legal Aid WA

Case(s) referred to in judgment(s):

Collins & Collins (1985) FLC 91-603
Fitzgerald v Fish (2005) 33 Fam LR 123
I and I (No 2) (1995) FLC 92-625
L v Human Rights and Equal Opportunity Commission [2006] FCAFC 114
Masterman-Lister v Brutton & Co (Nos 1 and 2) [2003] 1 WLR 1511
(Page 3)

1 Nearly two years ago, I heard a dispute between [Mrs O] (“the wife”) and [Mr O] (“the husband”) relating to their three [children]. I made orders in November 2004 immediately after the trial concluded. I delivered my reasons in February 2005.

2 The parties also had a dispute at the time relating to financial issues; however, this was not ready for hearing in November 2004. The property matters were finally resolved by Penny J in April 2006.

3 In June 2006, I granted leave to the wife to make an application for costs out of time (as she had been awaiting the outcome of the financial proceedings before pursuing her claim for costs). I also gave her leave to rely upon submissions provided by her solicitors in May 2006 as being the substantive submissions in support of her application for costs. I ordered the husband to file and serve any submissions on which he intended to rely within 28 days.

4 On 29 June 2006, the Court received correspondence from [a Consultant Psychiatrist] with [a mental health service provider]. She drew attention to an earlier letter dated 6 June 2006 in which she advised that [Mr O] was “attending [a mental health service] for treatment of depression and currently is therefore unable to be involved in Family Law Court Matters”. Upon receipt of the correspondence from [the Consultant Psychiatrist] the Principal Registrar wrote to her advising inter alia:

“The Court is only able to deal with formal applications made to it in the appropriate form. If [Mr O] or members of his family or his medical advisors consider that he is unable to attend to his legal matters at present, it will be necessary for him to file a formal application seeking a postponement of the hearing. By this means, the other party to the proceedings will have an opportunity to respond to the proposal for the proceedings to be delayed.”

5 No application has been made by [Mr O] or by anyone acting on his behalf to postpone the proceedings and no costs submissions have been received from him. This is consistent with the approach he

(Page 4)

adopted over an extended period of time in the latter part of the proceedings. It is unfair to the wife to delay finalisation of the matter any longer.

6 Whilst I accept the husband is probably suffering from depression, I am not satisfied he is “a person with a disability” within the meaning of Rule 6.08. As was said by Kennedy LJ in Masterman- Lister v Brutton & Co (Nos 1 and 2) [2003] 1 WLR 1511 at p 1520:

“It is common ground that all adults must be presumed to be competent to manage their property and affairs until the contrary is proved, and that the burden of proof rests on those asserting incapacity.”

See also the discussion by the Full Court of the Federal Court in L v Human Rights and Equal Opportunity Commission [2006] FCAFC 114 at [23] to [26].

Costs orders sought

7 The wife’s submissions indicated she was seeking:

(a)	the costs reserved to the trial Judge by order of the Court of Petty Sessions made on 14 September 2004;
(b)	the costs of the trial heard in November 2004.

8 It was sufficiently clear that in asking for the “costs of the trial”, the wife was actually asking for payment of all of her costs in relation to the proceedings concerning the children, not just the costs of the trial itself. I have formed this view since:

(a)	the heading of the wife’s submissions was “Submissions in support of Wife’s Application for Costs against the Husband relating to Child Welfare proceedings”;
(b)	the first paragraph of the submissions indicated that they related to “the wife’s costs of her application for residence of the children …”;
(c)	paragraph 21 of the submissions referred to “the grounds upon which the wife relies to seek an order for costs in child welfare matters …”; and
(d)	the detailed chronology of events provided in support of the application for costs (containing as it did a notation of

(Page 5)

costs incurred during the course of the proceedings) would have been superfluous if only the costs of the trial itself were being sought.

9 I therefore intend to proceed on the basis that I am being asked to make an order for the husband to pay all of the wife’s costs of the child welfare proceedings.

The law

10 Subsection 117(1) of the Family Law Act 1975 provides that, subject to subsection 117(2), each party to proceedings shall bear his or her own costs. Subsection 117(2) provides that if the Court is of the opinion there are circumstances that justify doing so, the Court may, subject to subsection 117(2A), make such orders as to costs as it considers just. Subsection 117(2A) provides as follows:

“In considering what order (if any) should be made under sub-

section (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.”
(Page 6)

11 The Full Court in Collins & Collins (1985) FLC 91-603 referred to the discretion conferred by s 117 as being a “broad” one, and noted that the s 117(2A) factors are not to be read in a restrictive way. The Full Court in Fitzgerald v Fish (2005) 33 Fam LR 123 also made clear (at page 130) that any one of the factors referred to in s 117(2A) may be the sole foundation for an order for costs. Nevertheless, as an earlier Full Court said in I and I (No 2) (1995) FLC 92-625 at 82,277, the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”.

Grounds for seeking costs

12 The wife relied on two grounds for seeking an order for costs,

namely:

(a)	she was wholly successful;
(b)	the husband’s conduct during the proceedings “increased the wife’s costs beyond any normal legal expenses associated with a child welfare matter”.

Discussion

13 I am quite satisfied there are strong grounds for the husband to pay the wife’s costs relating to the proceedings before the Court on 14 September 2004. Those proceedings were necessitated by what I regard as being quite inappropriate conduct on the part of the husband. The wife was entirely successful in the application.

14 I am also quite satisfied there are strong grounds for requiring the husband to make a very substantial contribution to the wife’s costs associated with the balance of the proceedings relating to the children. I outlined in my substantive judgment my many concerns in relation to the way in which the husband behaved during the course of the proceedings. His conduct undoubtedly caused the wife to incur legal costs completely outside the range of what would ordinarily be required. Furthermore, the wife made a reasonable proposal to settle at an early stage in the proceedings. It is nothing short of a tragedy that, thereafter, the parties incurred hundreds of thousands of dollars in legal costs in resolving the outstanding issues.

(Page 7)
15	Penny J found that the parties’ assets were worth in excess of $750,000 and determined that they should be divided in proportions 75:25 in favour of the wife. The wife’s settlement was therefore worth in the region of $560,000. Regrettably, much more than half of this settlement will be needed to pay the wife’s legal costs, which amounted to roughly $327,000, including the costs associated with the financial proceedings. I should say that, even given the conduct of the husband and the complexity of the financial proceedings, this seems to be a surprisingly large amount for litigation in this Court.
16	The husband received a settlement worth in the region of $187,000, of which $67,000 was in the form of “legal costs paid” and $4,200 was made up by furniture and chattels. He will receive an amount in the region of $120,000 from the proceeds of sale of the parties’ home. I have been given no information to indicate to what extent the husband has legal costs over and above those already paid. Nor is there any evidence indicating whether or not the husband is currently earning any income at all. From what I have been able to glean over my long involvement in this matter, it would probably be fair to assume that the husband’s legal costs are much more than the $67,000 mentioned above. It would also be surprising if the husband was earning much, if anything, in the way of income. Nevertheless, these are matters the husband could have told the Court about had he taken up the opportunity afforded to him to make submissions in response to the wife’s application.
17	The wife’s counsel indicated that she would limit her application for costs to the amount that the husband is due to receive from the proceeds of sale of the matrimonial home. Whilst there would be justification for making such an order, it would leave the husband completely destitute. Taking into account the comparatively small amount the husband received from the settlement, and taking into account the fact that he has no other financial resources to my knowledge, I propose to order the husband to contribute to the wife’s costs in an amount of $50,000. I would estimate that this would be, very roughly, one half of what would have been a reasonable amount of costs for the wife to incur (at scale) in relation to the protracted and complicated child welfare proceedings. I appreciate that this does not go very far in compensating the wife for the expense the husband has actually caused her, but I do not consider it would be an appropriate
(Page 8)
exercise of my discretion to order the husband to pay more, given his financial circumstances.
Order
The husband shall contribute to the wife’s costs of the child welfare proceedings in the sum of $50,000.

I certify that the preceding [17] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate