R and R
[2005] FCWA 36
•24 MARCH 2005
JURISDICTION:
FAMILY COURT OF WESTERN AUSTRALIA
| ACT: | FAMILY LAW ACT 1975 |
| LOCATION: | PERTH |
| CITATION: | R and R [2005] FCWA 36 |
| CORAM: | THACKRAY J |
| HEARD: | WRITTEN SUBMISSIONS |
| DELIVERED: | 24 MARCH 2005 |
| FILE NO/S: | PT 1832 of 2003 |
| BETWEEN: | R |
Applicant/Wife
AND
R
Respondent/Husband
Catchwords:
COSTS - failure to make full disclosure - oral offer of settlement taken
into account
- indemnity costs - costs fixed.
Legislation:
Family Law Act 1975, s 117 Category: Not Reportable
Representation:
Counsel:
| Applicant: | Calverley Johnston |
| Respondent: | Self Represented Litigant |
Solicitors:
| Applicant: | Calverley Johnston |
| Respondent: |
Case(s) referred to in judgment(s):
Collins & Collins (1985) FLC 91 - 603
Kilich & Wood (2003) FLC 93-169
1 I am required to determine the wife’s application for costs arising out of proceedings that were concluded on 10 December 2004. The proceedings involved both financial and parenting issues. The wife’s solicitors have advised that their costs were $7,782 and counsel’s fees were $6,000.
Background
2 At a conference held on 30 June 2004 the matter was listed for trial “not before 12 August 2004”, with an estimated hearing time of 1-2 days. At the time the wife, was represented by Calverley Johnston. The husband, was represented by Rodney Senanayke.
3 The matter came before the Chief Judge on 12 August 2004. At the commencement of the trial, Mr Senanayke advised the Chief Judge: -
“Your Worship, (sic) apologised to the Court that my client was emotional and he left the Court, your Worship. And I have looked for him, I phoned his mobile, I have telephoned his home, I have left messages. I went to the car park to find him. He’s not there, your Worship … while he was here he threatened to go away once … he threatened to go - - leave the Courts, and I told her - - his mother was there and I told the mother, your Honour, he’s not supposed to leave”.
4 An application was made on behalf of the husband to adjourn the proceedings, but this was refused. During a break in the proceedings, Mr Senanayke engaged counsel to represent the husband. After the luncheon adjournment, counsel advised the Chief Judge: -
“Mr Senanayke tells me he’s spoken to the husband over lunch. He has endeavoured to convince him to come to the Court. He has obviously been unsuccessful in persuading him to do so”.
5 The husband’s advisers were then given leave to withdraw and the trial continued. Ultimately, the Chief Judge determined it would be inappropriate to finalise the proceedings in light of the orders the wife was seeking. He made an interim order for the sale of the former matrimonial home and directed the filing and service of an amended application, setting out precisely the orders that would be sought upon the resumed hearing. The matter was adjourned to 27 August 2004. The wife’s costs were reserved.
6 On 17 August 2004, Mr Senanayke sent a facsimile message to the Court in the following terms:
“I have been able to contact Mr R and been able to take instructions from him. Let me first apologise on behalf of Mr R. He is badly hurt and also my personal opinion is that his confidence is shattered. However, I cannot judge him because I would not know how I would react if my family breaks down. The fact is his confidence is shattered in my opinion because for technical breaches he has been jailed. The fact that there was a police presence on the date of the trial did not help.
I have now spoken kindly to him and done my best to explain the situation. The agreed issues are many and there is only about three outstanding issues. Therefore this matter would be very short. I can see it going only for about half a day.
The problem is that I will not be in Australia on the 27 August 2004. I will be returning on the 30 August 2004. Therefore on behalf of my client I plead to the Court to adjourn this matter for a short date. However, I will be shortly contacting the lawyers for the wife and stating what the agreed issues are.”
7 There was no indication in the facsimile that Mr Senanayke had sent a copy to the wife’s solicitors (as required by the Court’s Case Management Guidelines and Directions) or to his client.
8 Examination of the Court file indicates that the Chief Judge’s Adminstrator telephoned Mr Senanayke on 18 August 2004 and gave him certain advice concerning the availability of the Chief Judge. The Administrator’s note on the file indicates, “I asked him to discuss with wife’s solicitors and come back to us”. There is nothing on the Court file to suggest any further communications between the Court and the parties or their advisers.
9 The trial resumed before the Chief Judge on 27 August 2004. On this occasion the husband attended, but Mr Senanayke did not. A full transcript of what was said at the hearing has not been obtained. The transcript that was ordered commences after the stage at which the Chief Judge had decided the matter would be adjourned for trial before me in October 2004. The Chief Judge said: -
“For the sake of the transcript I will say this, that I have advised Mr R that it may well be open to him to make an application that any costs thrown away today ought to be paid not by him but by his solicitor. He has indicated that he regards that as appropriate. That, in turn, in my view, would necessitate him seeking alternative representation at the trial as there may well be a conflict of interest between Mr R and his solicitor over the matter of costs.
I will also direct that a letter be forwarded to … Mr Senanayke, indicating that it would be in his best interest to be in attendance at the commencement of the trial in this matter potentially to show cause why he ought not to pay the wife’s costs thrown away today personally”
10 The Chief Judge ordered that the wife’s costs and any costs thrown away occasioned by the adjournments on 12 August and 27 August 2004 be reserved to the trial Judge.
11 Notwithstanding the direction given by the Chief Judge, it appears no correspondence was sent by the Court to Mr Senanayke drawing attention to the necessity for him to appear at the commencement of the trial before me. However, a copy of the order of 27 August 2004 (which did not contain the relevant direction but did advise the date of the trial), was sent to Mr Senanayke on 2 September 2004.
12 The trial commenced on 21 October 2004 and was completed on the same day. The husband represented himself, although Mr Senanayke was still on the record. At the conclusion of the trial, I made some interim orders and otherwise reserved my decision.
13 On 10 December 2004 I delivered judgment. The husband did not succeed in his application for shared residence and I made an order that the one child living with him should return to live with the wife. I made an order that was part way between the competing property settlement proposals made by the parties.
14 The husband was not in attendance at the time judgment was delivered (on short notice) on 10 December 2004. The matter was therefore adjourned to 16 December 2004. On this occasion the husband did attend. The wife was directed to file and serve written submissions in support of her application for costs within 28 days. The husband was directed to file submissions in response within 28 days of receipt of the wife’s submissions. I also made an order in the following terms:
“In the event that an order for costs is sought against Mr Rodney Senanayke, a copy of the submissions is to be forwarded to his last known address, and Mr Rodney Senanayke has liberty to file and serve written submissions in respect to the application for costs within 28 days of the date of posting to him of the Applicant’s submissions.”
15 A copy of the substantive orders (including the directions relating to costs) was sent to the husband on 23 December 2004.
16 The Court received the wife’s submissions for costs on 14 January 2005 (the last day for filing of the submissions). They were not formally noted as having been filed until 17 January 2005, but I regard them as having been filed in time.
17 The time within which the husband had to comply with his obligation to file submissions in response expired some time ago. In the absence of any submissions from him, I intend to proceed on the basis of the submissions filed on behalf of the wife. In the absence of any claim for costs against Mr Senanayke, I do not intend to deal with that issue at this stage. There is no evidence to indicate what transpired between the husband and his solicitor prior to the hearing on 27 August 2004, which may have made it appropriate for Mr Senanayke not to appear at the hearing.
18 The wife’s submissions concerning costs were very brief. They commenced by indicating that she was seeking an order “for all or part of her costs at His Honours discretion in respect of the proceedings and that such costs be paid on an indemnity basis”.
19 Perusal of the submissions indicates that apart from costs thrown away as a result of the adjournments of the trial, the wife is relying upon matters relevant only to the application for settlement of property. No submissions were advanced to support an application for costs in relation to the parenting orders.
The law
20 S 117(1) of the Family Law Act 1975 provides that, subject to subsection (2), each party to proceedings shall bear his or her own costs. Subsection (2) provides that if the Court is of the opinion there are circumstances that justify doing so, the Court may, subject to subsection (2A), make such orders as to costs as it considers just.
| 21 | S 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; | |||||||
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(g) such other matters as the court considers relevant.”
22 The Full Court in Collins & Collins (1985) FLC 91-603 confirmed that the discretion conferred by s 117 is a broad one and that the factors contained in s 117(2A) are not to be read in a restrictive way.
23 I will now refer briefly to each of the factors.
Section 117(2A)(a)
24 The financial position of the parties is set out in my judgment. Neither of them are wealthy people. An order for costs against the husband (and failure to make an order for costs in favour of the wife) would be a heavy financial burden. Nevertheless, the husband does have the means to meet the wife’s costs, as a sum of $15,000 from his share of the proceeds of sale of the home has been set aside pursuant to an order made on 16 December 2004. The figure of $15,000 was selected on advice from the wife’s solicitor as being the maximum amount the husband could possibly be ordered to meet by way of payment of costs.
Section 117(2A)(b)
25 Neither party was in receipt of legal aid.
Section 117(2A)(c)
26 In the absence of any submissions from the husband in response to the wife’s submissions, I accept that the husband failed to provide adequate disclosure of documents. Indeed, this was apparent as the trial progressed.
27 In particular, the husband had divested himself of $20,000, which I found should be added back into the pool of assets. He did not disclose relevant documents relating to this transaction until during the trial. I accept the submissions made on behalf of the wife that the husband’s failure to give proper discovery made it exceedingly difficult for the wife to negotiate and to prepare for trial. I accept that the wife was left with little alternative than to take the matter to trial in order to obtain a full disclosure of the husband’s position and secure a just and equitable distribution of property.
28 The husband’s conduct (or that of his solicitor) resulted in two adjournments of the trial. The hearing on 12 August 2004 could not proceed in view of the husband’s unexplained departure from the Court. As I found in my reasons for decision, the husband appears to have great difficulty in controlling himself. His inability to remain at Court on 12 August 2004 necessitated the adjournment of the matter. Not only did this waste Court time and taxpayers’ money, but it also resulted in the wife incurring additional legal costs.
29 Similarly, the Court’s time and the wife’s costs were wasted as a result of the adjournment of the trial scheduled for 27 August 2004. The submissions filed on behalf of the wife indicate that her solicitors were not advised by Mr Senanayke of his intention not to appear at the hearing.
30 The final issue relating to the husband’s conduct relates to the wife’s application for appointment as trustee for sale of the former matrimonial home. I accept the submissions made on behalf of the wife concerning this issue. I find it was entirely unnecessary for her to be forced to make such an application.
Section 117(2A)(d)
31 Not relevant.
Section 117(2A)(e)
32 The husband was largely unsuccessful in relation to the parenting orders (although the wife does not rely on this as a factor to support her claim for costs). The husband had somewhat greater success in defending the wife’s application for property settlement. He could not be seen as having been entirely unsuccessful in relation to that aspect.
Section 117(2A)(f)
33 Although struck out for the purposes of the substantive hearing, the husband’s own affidavit confirms that the wife made oral offers for payment to the husband of an amount significantly greater than what he received pursuant to my judgment. If the husband had accepted those proposals, he would not only have been better off, but the wife would also have been saved the expense of the trial (at least in relation to financial proceedings). The Court can take account of oral offers of settlement – see Kilich & Wood (2003) FLC 93-169.
Conclusion
34 There can be no doubt the husband should be responsible for the costs thrown away relating to the aborted hearings on 12 August and 27 August 2004. The trial could have been completed on either of those dates if the husband and his counsel had appeared (and remained) at the hearing.
35 For the reasons outlined above, there is no basis for the husband to pay any of the wife’s costs in relation to the proceedings concerning parenting orders. However, there is a strong case for the husband to pay a significant proportion of the wife’s costs relating to the financial proceedings because of:
(a) his failure to give proper disclosure of documents; (b) his attempt to mislead the wife and the Court in relation to his financial position; (c) his conduct in relation to the sale of the property; and (d) his failure to accept a very reasonable offer of settlement.
36 However, even if the husband had been entirely reasonable from the outset, the wife would have incurred some expense in resolving financial issues. In particular, there was a complication relating to the children’s trust funds. That issue was never going to be an easy matter to resolve.
37 If I had been minded to order a taxation of the wife’s costs, I would have considered it appropriate to order the husband to pay the costs of the two aborted hearings (and all costs thrown away as a result of the adjournments) and the application relating to the sale of the home. I would also have ordered the husband to pay 75% of the balance of the wife’s costs relating to the financial issues. However, an order for costs to be taxed would have a number of consequences:
(a)
there would be further costs incurred in agreeing or taxing the costs;
(b)
there would be substantial delay (in view of the long wait for taxation of costs);
(c)
the parties would not know their financial position for a very long time and would be prevented from getting on with their lives; and
(d)
in the meantime, the bulk of the funds currently held on trust from the sale of the property would not be available for use by either party.
38 In these circumstances, I have elected to adopt a broad brush approach, rather than putting the parties to the expense and bother of a taxation of costs. I note that the wife’s costs totalled $13,782. In the exercise of my discretion, I have determined that the appropriate contribution to be made by the husband towards the wife’s costs is $8,500.
39 Although the wife sought costs on an indemnity basis, her submissions did not support the making of a costs order on this basis. Furthermore, no evidence was provided to indicate the extent to which costs ordered on an indemnity basis would differ from costs ordered on the usual party-party basis. In any event, I suspect from looking at the fairly modest costs incurred by the wife that there would not have been a substantial difference between costs calculated at scale and the costs the wife was actually charged.
Orders
1. The husband contribute to the wife’s costs in the sum of $8,500, which sum may be paid by deduction from the monies currently held on trust pursuant to the orders made on 16 December 2004.
2. The wife’s solicitors release to the husband the balance of the monies held pursuant to the orders made on 16 December 2004.
I certify that the preceding [39] paragraphs are a true copy of the reasons
for
judgment delivered by this Honourable Court
Associate
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