Pompidou & Pompidou (No. 2)

[2007] FamCA 1357

FAMILY COURT OF AUSTRALIA

POMPIDOU & POMPIDOU (NO. 2) [2007] FamCA 1357

FAMILY LAW – COSTS – Assessment – Between parties  

Family Law Act 1975 (Cth)

APPLICANT: Mr Pompidou

RESPONDENT: Mrs Pompidou

FILE NUMBER: MLF 2509 of 2005

DATE DELIVERED: 19 November 2007

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Brown J.

HEARING DATE: 19 November 2007

REPRESENTATION

SOLICITOR FOR THE APPLICANT: In person

SOLICITOR FOR THE RESPONDENT: J.A. Middlemis

Orders

1. That the husband pay the wife’s costs of and incidental to the application filed by her on 16 August, 2005, including costs relating to the filing of a costs submission on 14 October, 2007, and such costs be paid on a solicitor/client basis. 

2. That the itemised accounts set out in Schedules A and B to the wife’s submission on costs filed herein on 14 September, 2007 be deemed an itemised costs account for the purpose of the Family Law Rules2004. 

3. That if the husband objects to any aspects of the itemised costs account, he :

   (a)give written notice of the objection to the registrar and to the solicitors for the wife;  and

   (b)pay into court a sum equal to 5% of the total amount claimed in the itemised costs account as security for the costs of any assessment of the account;

   within 21 days of service of this order on him. 

4. That service of this order on the husband be effected by sending it by ordinary prepaid post addressed to the address for the husband contained in the notice of ceasing to act filed by his former solicitors on 20 September, 2007, and be deemed to be served on him two working days after posting. 

5. That if the husband does not give written notice of objection pursuant to paragraph (3) hereof, the costs to be paid by him pursuant to this order are fixed at $28,125.90 and are to be paid on or before 1 February, 2008. 

6. That if the husband gives written notice of objection pursuant to paragraph (3) hereof, then the registrar shall fix an assessment hearing and give such other directions as he or she considers appropriate and thereafter conduct an assessment hearing for a disputed itemised costs account pursuant to the Family Law Rules 2004.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 2509  of 2005

MR POMPIDOU  

Applicant

And

MRS POMPIDOU  

Respondent

REASONS FOR JUDGMENT

1. On 24 August, 2007 I made final orders, having determined an application brought by the wife pursuant to s.79A of the Family Law Act1975.  Paragraph 6 of those orders provided for the filing of submissions in support of any application for costs on or before 14 September, 2007.  Any submission in response was to be filed on or before 28 September, 2007 and any submission in reply on or before 12 October, 2007.

2. On 14 September the solicitors for the wife filed a submission in which she sought costs on a solicitor/client basis in accordance with schedules annexed to the submission.  That a copy had been served earlier on the husband was confirmed by a letter from the solicitors for the husband, dated 13 September, 2007.  In it the solicitors advised the court that they still acted on behalf of the husband and confirmed receipt of a copy of the costs submissions of the wife.  They advised that copies of the orders and reasons for judgment of 24 August, 2007 were forwarded to their client on 27 August, 2007 but they had had no communication whatsoever from their client until approximately 11:00 am. that day, and were without instructions in relation to his attitude concerning the costs submissions.  This, coupled with the fact the solicitor who had the conduct of the matter was absent on leave, and that counsel briefed in the matter was unwell, resulted in them seeking an extension of time to file submissions to 15 October, 2007.  They were advised to contact the solicitors for the wife and seek their consent.  The court heard nothing further.

3. On 20 September, 2007 the solicitors for the husband filed a notice of ceasing to act.  No submissions in response have been received from the husband.  As a courtesy, the wife’s application was not considered for a period after 15 October, in case an application to extend time was made, or the husband himself made contact with the court.  Neither having occurred, I propose to determine the matter.

4. Section 117(1) contains the general rule that parties to proceedings under the Family Law Act 1975 bear their own costs. Pursuant to s.117(2), the court may make such order as to costs as it considers just, if it is of the opinion that there are circumstances that justify it in doing so. In considering what order (if any) should be made under sub-section (2), the court shall have regard to the matters set out in s.117(2A). I will deal with the relevant factors.

   (a)the financial circumstances of each of the parties to the proceedings;

5. The parties’ financial positions are referred to in the reasons for judgment.  The husband’s financial circumstances were better than disclosed in the various trial documents sworn by him and better than the figures provided by him to the Child Support Agency, upon which child support was assessed.  He was in a superior position to the wife.  In her submission the wife refers to a decision of a registrar of the Child Support Agency of 22 August, 2007, concluding a review of the husband’s financial situation.  It was put that the decision shows that the registrar initiated a change to the assessment on the basis that the husband’s child support income did not accurately reflect his capacity to provide child support for the children as a result of his current income/financial resources from employment/self employment, and that a change to the assessment was just and equitable.  I do not rely on that evidence;  the findings made by me at the conclusion of the trial are sufficient to satisfy me that the husband’s financial position was both significantly better than he asserted and better than that of the wife.

   (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;

6. There is force in the submission of the wife that the husband failed to make full financial disclosure throughout the proceedings.  Information contained in financial statements was found to be inaccurate and he was found not to have been frank with the court.   

7. I take into account the fact that the husband, while contesting the wife’s departure application, himself deposed that he should be paying $50 to $100 per week by way of child support, significantly more than that for which he had been assessed.  He failed to pay costs orders made against him earlier in the proceedings and his failure to truly engage with the litigation, and to make full financial disclosure, protracted the litigation and added to the wife’s costs. 

8. Further, the court cannot ignore the grounds on which it set the earlier final orders aside.  The court found that the husband had threatened to kill the wife and it was as a result of that duress that she consented to those earlier orders.  That is a factor on which weight should be placed.

9. It is well established that the giving of false evidence (orally or in writing) or fabricating evidence, which puts the other party to the expense of disproving the falsity, is a circumstance which can justify an order for costs;  see Penfold  &  Penfold (1980) FLC 90-800. In that case Murphy J. noted (at 75,055) that the courts should regard circumstances which tend to undermine the integrity of proceedings with great concern and should do everything in their power to determine who is responsible in order to maintain that integrity. That a threat to kill another person if he or she does not consent to the making of binding court orders undermines the integrity of the proceedings is obvious and the finding is of relevance to this application for costs.

   (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

10. The court was asked to determine three major issues.  The first was whether final property orders made on 21 July, 2004 had been obtained under duress, the alleged duress being threats to kill the wife, made by the husband.  The second, assuming success on the first, was whether there should be a further adjustment of property interests.  The third was whether the child support departure order sought by the wife should be granted.  The wife was wholly successful in respect of all three issues.  The husband conceded evidence referable to the first and third of the issues. 

11. I have no hesitation in finding that the husband should pay the wife’s costs of and incidental to the application.  The question then is whether these costs should be paid on a solicitor/client basis.  Party/party costs are limited to those necessarily and properly incurred in prosecuting or defending the proceedings.  Lawyer/client costs, on the other hand, are more extensive; they cover all costs reasonably incurred and of reasonable amount; see Stanistreet & Ridgeway Clements (1987) FLC 91-848.

12. I am satisfied the wife’s costs should be paid on a solicitor/client basis.  Even absent the finding of duress, other factors would justify solicitor/client costs, including the failure to provide proper financial disclosure and the prolongation of the proceedings relating to child support, in the face of admitted capacity to pay significantly more than the assessment.  The order should cover all the wife’s costs reasonably incurred by her.  

13. The question then arises as to whether the court should order costs in the amounts set out in the schedules to the wife’s submission, or require an assessment.  An order that one party pay the other party’s costs on a solicitor/client basis does not allow a claim for costs for work which was unnecessary, unless those apparently unnecessary costs were incurred only after express instructions from the client to incur them, the client had been warned that if he or she succeeded he or she may not be able to recover the costs of that unnecessary work from the other side and the further work was done in accordance with specific instructions from the client or necessary in the circumstances to carry out the instructions of the client.  However tempting it is to make the orders sought, and avoid further expense and delay, I am not satisfied I am in a position to give proper consideration to the issues which could arise on an assessment. 

14. I am satisfied the itemised cost accounts have been served on the husband.  They are attached to the wife’s submission, and his then solicitor confirmed receipt of that submission, in writing.  I propose to give the husband a period of 21 days in which to give notice that he seeks an assessment.  If he does, he must give written notice of objections to the registrar, accompanied by payment of a sum equal to 5% of the total amount claimed by the wife in the two schedules, as security for the costs of any assessment.  If the registrar does not receive written notice of objection and/or the amount of security is not paid, the registrar will make a costs assessment order for the sums set out in the two schedules.  The husband must realise that if he does object, and if the registrar does not reduce the amount in the schedules by at least 20%, he may be ordered to pay the costs of the assessment process.

I certify that the preceding 14 paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Brown AM.

Associate

19 November 2007