Pitte and Pitte (No 2)

[2009] FamCA 845

FAMILY COURT OF AUSTRALIA

PITTE & PITTE (NO. 2) [2009] FamCA 845

FAMILY LAW – COSTS

Family Law Act 1975 (Cth)

Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143

APPLICANT: Mr Pitte

RESPONDENT: Ms Pitte

FILE NUMBER: MLF 1141 of 2006

DATE DELIVERED: 4 AUGUST 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: BY WAY OF WRITTEN SUBMISSIONS

REPRESENTATION

COUNSEL FOR THE APPLICANT:

SOLICITOR FOR THE APPLICANT: MARK SHENKEN

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT: IN PERSON

Orders

1. That the wife pay towards the husband’s costs the sum of $20,080.

2. That the said costs be paid from the entitlement of the wife to the husband.

3. That the application in a case filed by the husband on 1april 2009 be otherwise dismissed.

4. That all proceedings be removed from the list of cases awaiting a hearing.

IT IS NOTED that publication of this judgment under the pseudonym Pitte & Pitte is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1141  of 2006

MR PITTE

Applicant

And

MS PITTE

Respondent

REASONS FOR COSTS JUDGMENT

1. On 5 March 2009 I made orders and published my reasons for judgment.  As I understand the outcome of those orders, the husband will receive about $360,000.

2. I also made orders that from the wife’s entitlement to the property, she had to pay costs and fulfil some other obligations. 

3. On 1 April 2009, the husband filed an application seeking that the wife pay the husband’s costs as assessed on a “party/party” basis.  That application was supported by an affidavit filed the same day by the husband’s legal practitioner.

4. On 10 June 2009, the wife filed an affidavit purporting to be her response to the application for costs.  She also filed an affidavit by her son. 

5. Section 117 of the Family Law Act 1975 (Cth) (the Act”) provides that in proceedings under the Act, each party shall pay their own costs. The exception to that is in circumstances where the Court finds there are circumstances justifying a departure from that rule. If the Court feels there are such circumstances, in determining whether and if so what costs ought to be paid, the Court must examine the matters set out in s 117(2A) of the Act. That provision reads:

   (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.

6. The affidavit filed on behalf of the husband deals with many of the matters set out in s 117(2A).

7. The husband says that his costs are between $195,000 and $200,000.  He points to the fact that he has a family in Indonesia to support and as a result of the orders, it is the wife who has retained the income stream.  The husband’s submission is that he has occasioned “additional” costs by the wife failing to make proper information available and her obstructiveness in the collection of relevant material.  According to the husband, the wife ignored requests for discovery and even after proceedings were issued, she failed to provide financial records in relation to the company which the parties had incorporated for the purposes of conducting the family business.  The husband’s position was that as a result of her failure to provide these records, he had to issue the proceedings.  Even subsequent to the issuing of the proceedings, the wife did not respond to repeated requests on behalf of the husband for disclosure which in turn necessitated him turning to other sources to obtain that information.

8. Throughout the proceedings, the wife was represented by a number of legal practitioners so the husband’s submission was that the wife was always at risk in relation to costs for not assisting in the provision of information on the assumption that the lawyers had no doubt warned her of her legal obligations under the Family Law Rules 2004.

9. The affidavit went on to say that the wife was found to have lied in relation to the ownership of jewellery and failed to disclose in her financial statements income she had received from her son being rental from a property that he owned.  He said she lied about the frequency of her overseas travel.

10. In my reasons for judgment, I generally found the wife’s evidence unreliable preferring that of the husband.  I said that she was uncooperative in respect of her obligation to be frank and candid in respect of financial matters having adopted an autocratic position about rental monies from the business.  At paragraph 12 of my reasons, I found that she did lie in respect of the jewellery because I was satisfied that she knew exactly what the issue was about.  However, in relation to the overseas travel issues, I made no finding other than that she gave imprecise answers and was not able to tell me how often she travelled overseas.

11. Generally in relation to her financial affairs, the wife had adopted a position that she wanted to retain the business premises at all costs and that what she was offering the husband was ample for his needs.  That created the dilemma of trying to have her focus on the four step process rather than her subjective judgment as to what was an appropriate outcome based upon her determination of what she could afford. 

12. The two affidavits filed on behalf of the wife to which I have referred add little to the issue about the justification for an order for costs.  The wife adopted the attitude that the husband could afford to pay his own costs.  It needs to be pointed out that this affidavit was drawn by the wife herself.

13. Much of the affidavit was taken up with a diatribe of the wife’s view that the husband and/or his lawyer had played a “dirty game and lied” and that he had participated in “dirty filthy tactics” presumably because he would not negotiate or deal with her.  Throughout her material which is hard to follow, the wife denied any lack of disclosure by her.  She denied the issue about making offers and said that it was not appropriate for the business to be sold. 

14. Notwithstanding the affidavit is long and handwritten, including that of her son which bears remarkable resemblance to the wife’s material, there is little to help me in respect of the matters that I have to determine in this application.

15. In my findings, I said that I attributed many of the problems relating to the evidence stemmed from the wife’s lack of cooperation in respect of the provision of information and although the marriage was a long one which ended in unhappy circumstances, the wife’s explanations for the financial position were less than satisfactory.  I made no criticism of the husband’s approach generally to the evidence saying that he did his best to be helpful and candid.  After wading through all of the evidence and making adjustments for liabilities which had arisen entirely as a result of the post-separation behaviour of the wife, I found I could not see any distinction of any substance between the parties in terms of their contributions and I assessed that accordingly.  That was not the husband’s position.  When I traversed all of the factors in s 75(2) of the Act, I have said that there was no justification for any adjustment for those matters.  That too was not the husband’s position.

16. Having said that, it was certainly very close to what the husband offered in terms of an overall settlement on 26 November 2007.

17. Because of the matters to which I have just referred, this is a case in which the Court is justified from departing from the principle set out in s 117 that each party should pay their own costs.

18. Turning to the matters set out in s 117(2A), I find that the financial circumstances of the parties are in real terms similar. Notwithstanding the husband’s argument about the wife’s future, my understanding is that the business is to be sold therefore there will be little difference between the parties in terms of outcome.

19. I am not aware of any legally aided funds available to either party.

20. In terms of the conduct of the parties, I have already indicated how I set out the respective positions of the parties as I found them when I delivered judgment.  The wife has certainly not assisted her own cause and that in turn exacerbated delays and made the outcome of the proceedings much more difficult for the parties themselves to negotiate.

21. The wife failed to achieve what she wanted namely to keep the business and pay the husband $175,000 which was well below what I found to be a just and equitable outcome.

22. An order for costs is not intended as a punishment.  It is intended to compensate the person who is obliged to litigate having regard to the approach taken by the other party.  In this case, the husband had to pursue his remedies under the law having regard to the fact that the wife had not been cooperative in respect of the provision of information subsequent to his separation from her.  I say that particularly in relation to the corporate entity and its financial circumstances.  In addition, the wife’s refusal to negotiate along the lines that the Full Court said was appropriate to determine a matter in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 meant that the husband had no choice but to continue the proceedings and it is evident by his offer in November 2007 that he was adopting a realistic approach at that time. The wife was not.

23. Costs as to both quantum and an order generally are a matter for discretion.  In this case, the husband seeks party/party costs but to make an order requiring an assessment creates a problem because it would mean that the parties would have to go back into litigation in circumstances where there has been constant complaint about the cooperativeness of the wife.  In addition, a registrar would have to determine what was reasonable and what was not in the circumstances.

24. It is more appropriate in the circumstances that the costs be actually determined. 

25. The initial interaction between the parties would have taken place regardless of their respective positions.  Problems only arose when the proceedings were actually issued notwithstanding the fact that the wife had not been cooperative prior to that time.  Her lack of cooperation however would have made little difference to the costs involved.  The wife adopted an unreasonable position necessitating the hearings but they were covered by specific orders.  Those costs have already been dealt with in terms of the matters that I included in my final orders.

26. It is not unusual to see parties disagreeing about outcomes but they do so at the risk of paying costs if they cannot reasonably justify their concluded proposals.  That is particularly so where the evidence as to the pool of assets is clear and the circumstances of the relationship as to contribution and future needs is not difficult.  It is made more risky for a litigant who is represented by lawyers who would hopefully be giving objective legal advice.

27. In this case, the wife took that risk.  She caused the husband to have to litigate to achieve what was ultimately found to be a just and equitable outcome.  However, the husband needed orders to achieve that outcome as well.  In the circumstances, I propose to allow costs for the trial other than for the preparation of the documents themselves.  I propose to allow counsel’s fees for the various mentions on the assumption that those fees are within the parameters of the scale set out in the Rules.  Whilst attendances other than in respect of documents are clearly necessary particularly in this case having regard to some of the valuation disputes, the justification for costs is really only in relation to the matters required where concessions or admissions were not made by the wife at any time let alone an appropriate time.  Many things undertaken in this case would appear to have been necessarily undertaken by a prudent lawyer in any event because that person would have been conscious of the need to gather information to establish the husband’s case. 

28. I propose to allow the solicitor instructions for trial, some of the investigative work undertaken as well as the preparation for documents for trial after the conclusion of a conciliation conference stage. 

29. I have been able to glean some of those details having regard to the narrative bill of costs attached to the affidavit filed on behalf of the husband by his solicitor.  I propose to exercise the discretion under the Rules accordingly.

30. I propose to allow counsel’s fees at $8580.  I propose to allow disbursements but not valuations in the sum of $3000.  I propose to allow solicitor’s costs fixed in the sum of $8500.  Accordingly, the total amount of costs will be $20,080.  I propose to order that the wife pay those sums and to the extent that the settlement of any sale has not occurred, those funds can be paid out of the wife’s entitlement.

I certify that the preceding Thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  4 August 2009