Rittman and Rittman (No 3)
[2011] FamCA 228
•1 April 2011
FAMILY COURT OF AUSTRALIA
| RITTMAN & RITTMAN (NO 3) | [2011] FamCA 228 | |
| FAMILY LAW – COSTS – Application for indemnity costs – Where the husband seeks the wife pay two thirds of his total costs at a fixed amount – Where wife opposes such an order – Husband asserts sections 117AB and 117(2) apply – The wife seeks any such costs order be limited to costs causally connected to adverse findings against the wife – Where wife’s credibility was seriously diminished at trial –Where the case is an exceptional one – Indemnity costs are appropriate but in a lesser amount than sought by the father. FAMILY LAW – COSTS – Section 117AB – Section 117AB requires a mental element whereby the maker knew the statement to be false – The Briginshaw standard of proof applies – False allegation or statement must be particularised – False allegation or statement must go to a relevant issue – One false allegation or statement is sufficient to enliven the jurisdiction of section 117AB – Three false statements found to be established to the Briginshaw standard. FAMILY LAW – EVIDENCE – Whether a judge may revisit findings previously made for purposes of findings pursuant to section 117AB – In the event previous findings are not specified as meeting a higher standard of proof, a judge is not precluded from revisiting the findings to establish that standard of proof. FAMILY LAW – COSTS – Section 117(2) – A judge is to have regard to all relevant factors set out in section 117(2A) the provision, but costs may be awarded based on one or more factors – Where the true financial circumstances of the mother remain unknown – Where the mother’s legal costs have not been wholly disclosed – Where an order of indemnity costs would leave the mother’s property settlement significantly depleted – While the financial circumstances of the parties is a relevant consideration, it is not an overwhelming one – Where the credibility of the mother has been impugned by adverse findings – Where the mother’s conduct has permeated the entirety of proceedings – Costs reduced to 60 per cent of indemnity costs – Lump sum ordered to include reserved costs. | ||
APPLICATION FOR COSTS
| APPLICANT: | Mr Rittman |
| RESPONDENT: | Ms Rittman |
| FILE NUMBER: | BRC | 2571 | of | 2009 |
| DATE DELIVERED: | 1 April 2011 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Barry J |
| HEARING DATE: | 25 February 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Waterman of Counsel appearing for the Applicant Father |
| SOLICITORS FOR THE APPLICANT: | Harrington Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Galloway of Counsel appearing for the Respondent Mother |
| SOLICITORS FOR THE RESPONDENT: | Pippa Colman & Associates |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mr McGregor of Counsel appearing for the Independent Children’s Lawyer |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Carter Farquar Lawyers |
Orders
1. In full and final settlement of costs of and incidental to the hearing of this matter, the Respondent Mother, Ms Rittman is to pay the costs including reserved costs of the Applicant Father, Mr Rittman fixed at $225,000.
IT IS NOTED that publication of this judgment under the pseudonym Rittman & Rittman (No 3) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC2571/2009
| Mr Rittman |
Applicant
And
| Ms Rittman |
Respondent
REASONS FOR JUDGMENT
This matter proceeded to a contested hearing over nine days in the Family Court in Brisbane – five days in November 2010 and four days in mid-January 2011. Evidence in one form or another was received from 35 witnesses. A total of 44 exhibits were tendered, a number consisting of government department files or hospital files.
Both child related and property settlement issues were litigated. There was little agreement on basic issues.
On the 17 February this year I delivered reasons and subsequently orders issued in accordance with those reasons.
The Applicant (the father) now seeks that the Respondent (the mother) pay two thirds of his total costs fixed at $250,000 (refer paragraph 1.2 of written submissions of the father). The costs are sought both in terms of s 117(2) and
s 117AB of the Family Law Act 1975 (Cth).
The mother opposes an order for indemnity costs. It was submitted (7(c) of Counsel’s written submissions):
“7(c)If costs are to be awarded, they should be limited to those costs causally connected to the adverse findings against the Respondent Wife.”
At paragraphs 34, 35 and 36 of the mother’s submissions the following points are made:
“34. The function of a costs order is to compensate, not to punish.
35.Accordingly, costs should only be awarded in respect of those costs causally connected to the impugned conduct of the Respondent Wife. Anything beyond this would exceed the Court’s costs jurisdiction.
36.In other words, costs should be limited to those costs incurred in refuting the allegations of the Respondent Wife that were ultimately found to be fabricated. This constituted a minor component of the trial and was put in issue quite late in the proceedings.”
Section 117AB of the Act is in the following terms:
“117AB Costs where false allegation or statement made
(1) This section applies if:
(a) proceedings under this Act are brought before a court; and
(b) the court is satisfied that a party to the proceedings knowingly made a false allegation or statement in the proceedings.
(2) The court must order that party to pay some or all of the costs of another party, or other parties, to the proceedings.”This provision came into operation on 1 July 2006.
Case Law Under Section 17AB
To date there appear to be only single Judge decisions on the interpretation of this section, although one of the decisions (Child Support Registrar v Kanavos) is a decision of Boland J sitting alone as an Appeal Court from a decision of a Federal Magistrate.
Dealing with the available cases chronologically I make the following observations:
·Sharma v Sharma (No. 2) BC 2007 50605 (unreported):
This was a decision of Ryan J dealing with an application by the Husband that his former wife pay his indemnity costs of and incidental to parenting proceedings. In the course of her Honour’s reasons the following observations were made:
“13.My findings of some of the Wife’s allegations of fabrications introduces the mental element which turns a wrong statement into a deliberate falsehood. This means I am satisfied she knowingly made a false allegation or statement. Again, this was a central issue.
14.Section 117(AB) thus applies and the Court must make a costs order in the Wife’s favour.
15.There is no statutory guideline concerning the matter in which the Court determines the quantum of costs payable pursuant to s 117(AB). The factors which ordinarily influence the Court’s discretion about whether an order will be made at all (s 117(2A)) purport to relate only to the exercise of that discretion and not to the separate issue of the quantum of a costs order which s 117(AB) mandates. Nonetheless s 117(2A) contains a useful structure of relevant considerations when determining the quantum of an s 117(AB) order.
20. Section 117(AB) considerations overlap with
s 117(2A(c)) conduct considerations. Other than the matters already referred to there are no additional conduct issues which require consideration. Conduct issues significantly favour the Husband.”
I respectfully agree with her Honour’s observations.
·Charles v Charles 2007 FamCA 276
In this matter Cronin J was dealing with an application by the Wife seeking to rely upon the terms of s 117AB in a costs application. In the course of his reasons his Honour noted:
“24.“Knowingly” imports a serious objective element into the question. In respect of many findings of fact as in this case, a trial Judge determines which of two versions, sometimes diametrically opposed to one another, he or she believes on the balance of probabilities. Such a finding is not necessarily a statement that one version is patently untrue or that a person is lying; it may simply be that one version is more probable than another. For a Court to be satisfied that a person knowingly made a false allegation or statement in the proceedings must mean that a Court could be comfortable in finding that the person lied. It would not simply be a balancing act between two versions. To be satisfied that a lie has been told and to so find requires a careful analysis of two things. The first is that the proffered version of fact is untrue but the second is that it is put knowing it to be untrue. A Court must then be cautious about such a finding because of the mandatory consequence. The finding must be elevated above the probable levels set out in s 140(1) of the Evidence Act 1995 to consider the matters contemplated in s 140(2) of that Act. That is, the Briginshaw test applies.”
At paragraph 26 his Honour observed:
“26.“Knowingly” is unequivocal. There could be no room for misunderstanding or doubt; objectively, the person making the statement cannot believe the statement to be true.”
At paragraph 31 his Honour observed:
“31.Having regard to the comment that it is a “high” test that must be satisfied and the potential for criminal penalties to be applied, a Court must be very careful in making a judgment in an application for costs subsequent to the determination of proceedings that a person who made the false statement did it knowingly. In my case, I do not think that I can go outside the findings that I made in my judgment and draw any other conclusion than that which I set out in my reasons for judgment. In each case, I have found on the balance of probabilities that I prefer the Wife’s version of events. - - -
I have not made any finding other than on the balance of probabilities about all of those matters.”
I propose to review the findings I made on the mother’s credibility in the course of my reasons for judgment. In doing so it will be obvious that in certain instances I was satisfied to the Briginshaw standard. On my interpretation of s 117AB it takes only one false allegation or statement to enliven the jurisdiction of s 117AB. I take it from the passage in paragraph 31 of Cronin J’s judgment to which reference has been made:
“- - - I do not think that I can go outside the findings that I made in my judgment and draw any other conclusion than that which I set out in my reasons for judgment. - - -”
that Cronin J was of the view that he could not revisit the issue of the degree of proof in that particular instance.
In Child Support Registrar v Kanavos BC 20105 1248 (unreported)Boland J in determining an appeal from a Federal Magistrate found (paragraph 87):
“87.I am comfortably satisfied that his Honour’s detailed and careful findings meant that he found the Father had both lied to the Court by knowingly giving false evidence about the operations of W Pty Ltd and his income. Having made these findings it was mandatory for his Honour to apply s 117AB. Thus his Honour was in error in his explanation that s 117AB “provides some further guidance about when a costs order should be made” without considering the requirements of that section in light of his findings. Accordingly I am satisfied that the Registrar has established appealable error and that his Honour’s order dismissing the application for costs must be set aside.”
I accept once findings are made in terms of the section an order for payment of some or all of the costs is mandatory.
Summary of Principles to be Applied When Considering Application of s 117AB
I accept that for the terms of s 117AB to be invoked there has to be a mental element whereby the statement or allegation is advanced by the maker knowing it to be false.
There is no authority for the following proposition but I would be of the view it is self obvious that the particular allegation or statement has to be a relevant issue in the proceedings. By analogy with perjury cases in the criminal law the falsely sworn statement or allegation must relate to a material issue.
It is necessary for the Judge to be able to particularise the intentionally false allegations or statements and not simply make findings in a global manner.
When ascertaining whether an allegation or statement has been advanced knowing such statement to be false, the Briginshaw standard of proof applies.
It is not necessary to consider whether the Briginshaw standard of proof has been met until the Court is asked to consider the terms of s 117AB. That is to say a Judge may revisit findings made in the reasons delivered on the substantive issues (refer paragraphs 27 to 32 post).
It is not necessary to make findings of a specific amount under s 117AB although a Judge would have the discretion to do so. The terms of s 117AB are subsumed by the overall terms of s 117(2)A provided the Judge is minded to make an order for costs having regard to the various factors in that section.
Section 117AB – Findings on the mother’s Credibility (Refer Reasons For Judgment Delivered 17 February 2011 – Paragraphs 200 to 235)
I propose to focus on three particular findings made:
(i)Authorship and/or knowledge of a handwritten letter to Hospital 2 dated 19 April 2009.
At paragraph 202 I found the mother’s account that the letter had been penned by her friend Mr DD, “without reference to her”, as, “inherently implausible”.
In the final sentence of paragraph 202 I described the mother’s denial of knowledge of the letter as, “untenable”.
I was satisfied then and am satisfied now to the Briginshaw standard that the mother knowingly made a false statement to the Court that she had no knowledge of the letter sent to Hospital 2 and such evidence was a relevant issue in the proceedings.
(ii)The evidence of the mother that the father had signed a cheque to Mr C for $600,000.
In paragraph 203 (second dot point) I find the claim that the father had signed a cheque for $600,000, “highly unlikely”. I expressed my reasons for arriving at this conclusion.
I was satisfied then and am still satisfied to the Briginshaw standard that the mother knowingly made a false statement to the Court when she claimed the cheque the father signed was made out to Mr C for $600,000 at the time that he signed it. Such evidence I find was a relevant issue in the proceedings.
(iii)Exhibit 2 – the letter of 26 July 2010 (refer paragraphs 114 to 167).
At paragraph 158 of the reasons I concluded:
“158.The document, exhibit 2, is a digitally fabricated document. The evidence indicates to me in an overwhelming fashion that the only person who could be responsible for the fabrication is [the mother] or someone acting on her behalf.”
The finding made in paragraph 158 speaks for itself.
At paragraph 205 I observed:
“205I have already made findings as to the validity of exhibits 1 and 2. These are serious findings as they involve fabrication of evidence coupled with, in my view, blatant perjury.”
I was satisfied then and am satisfied now to the Briginshaw standard that the mother fabricated this document or had somebody on her behalf fabricate the document and then deliberately and knowingly misled the Court by swearing to the fact that she had received a letter in such terms from the father.
At paragraph 228 I observed:
“228.This is not a case of a litigant engaging in a degree of hyperbole. It is not a case of a litigant mistakenly putting her own interpretation on a remembered event. As [the father’s] Counsel notes in his final submissions, it represents “a concerted campaign of lies and deceit”. - - -”
I am prepared to find that in each of the three instances quoted above at (i), (ii) and (iii) the mother being a party to the proceedings knowingly made a false statement in the proceedings and that such statement was of a relevant nature. I do not propose to make any further findings for the purpose of s 117AB. As I observed earlier it is unnecessary for me to do so as the mandatory impact of
s 117AB is invoked once findings under the section have been made.
May a Judge Revisit Findings Previously Made When Considering an Application Pursuant to S 117AB
It is really not necessary for me to consider this aspect in view of the findings that I have made. However, in light of the observations made by Cronin J, I place on record that I respectfully disagree with the approach taken by his Honour.
A Judge only has to make findings in any given matter to the standard of proof applicable to that determination. I find it difficult to accept that it was the legislature’s intent in enacting s 117AB that a Judge should be required to write a judgment on the trial issues at all times with one eye on s 117AB. It is my view if a Judge has not specified findings as meeting a certain standard of proof in the reasons for judgment he or she is not precluded from revisiting the findings to consider whether a higher standard of proof is established.
Section 140 of the Uniform Evidence Act is in the following terms:
“140. Civil proceedings: standard of proof
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b)the nature of the subject-matter of the proceeding; and
(c) the gravity of the matters alleged.”
In Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170, four members of the High Court (Mason CJ, Brennan, Dean and Gaudron JJ observed):
“The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have been made to the effect that clear or cogent or strict proof if necessary “where so serious a matter as fraud is to be found”. Statements to that effect should not, however, be understood as directed to the standard of proof rather they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and that a judicial approach that a court should not lightly make a finding that, on a balance of probabilities a party to civil litigation has been guilty of such conduct.”
In the text Uniform Evidence Law Ninth Edition by Stephen Odgers the learned author observes (at pages 793 to 794):
“The Full Court of the Family Court has emphasised that the gravity of allegations of sexual abuse of children mean that, in applying the test in this provision, the evidence must be “very carefully evaluated” and “[i]nexact proofs, indefinite testimony, or indirect inferences are insufficient to ground a finding of abuse (Re: K & R 1997 22 Fam LR 592 at 599).
Similar observations have been made in respect of other kinds of “grave” allegations. The standard of proof remains the same but the court should not be satisfied that the allegation has been proved on the balance of probabilities until it has exercised the caution appropriate to the issue in the particular circumstances by a careful examination of the whole of the evidence.
- - -
Similarly, in Qantas Airways v Gama (2008) 167 FCR 537, Branson J (with whom French and Jacobson JJ agreed at [110]) observed at [13] that the correct approach to the standard of proof in a civil proceeding under s 140 is, “adopting the language of the High Court in Neat Holdings”, one that recognises that “the strength of the evidence necessary to establish a fact in issue on the balance of probabilities will vary according to the nature of what is sought to be proved”.”
Analogy with Terms of S 70NAF(3) – Court can only impose certain sentences if satisfied beyond a reasonable doubt that the grounds for making the order exist
A Judge may make findings on the balance of probabilities that a contravention has taken place. It is only at that stage of the proceedings that submissions, as to what further consequential orders as to penalty may be imposed, are received. If the Judge is minded to impose a sentence of imprisonment, a community service order, a bond or a fine the Judge has to then, at that stage, consider whether he or she is satisfied beyond a reasonable doubt that the grounds for making such an order exist. It is in my view not necessary for a Judge to make such findings when arriving at an initial determination whether a contravention has or has not taken place.
Observations as to the written submissions on Costs on behalf of the Respondent Wife
The submissions on behalf of the Wife were not authored by Counsel who appeared at the hearing though Counsel specifically adopted the terms of the written submissions.
At paragraphs 3 and 4 of these written submissions it is submitted
“3. The application is predicated on the trial judge’s adverse findings as to the credibility of the respondent wife.
4. These findings, while significant, do not (as a matter of law) enliven the court’s discretion in the manner urged.”
Having made the findings I have made to enliven the operation of s 117AB I do not accept paragraph 4 is an accurate summary. In paragraph 5 it was submitted:
“5.More particularly, the adverse findings are only one relevant factor that must be weighed in the exercising of the court’s discretion. All relevant factors must be taken into account”.
Counsel for the father referred to the decision of the Full Court in the matter of
Z (A Solicitor) and Limousin [2010] FamCA 59 where the Full Court (May, Boland and O’Ryan JJ) in a judgment delivered on 29 March 2010 observed at paragraph 198:
“We observe that s 117(2) does not mandate that more than one or all of the matters in s 117(2A) must be found to warrant a departure from s 117(1)”. This was explained by the Full Court in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish & Anor (2005) 33 Fam LR 123 at paragraph 41 as follows:
…Nowhere in subsection (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made, nor of comparative weight of the factors set out in subs (2A). As a consequence there is nothing to prevent any factor being the sole foundation for an order for costs.””
The father’s Counsel also drew the Court’s attention to the decision of Bennett J in Krach & Krach (No 2) (2009) FamCA 886 where at paragraph 15 her Honour noted:
“The weight to be attached to any of the considerations in s 117(2A) is wholly discretionary. Whilst no single factor outranks any other, there is nothing to prevent one or other of them from being the sole foundation for a costs order (as Kay observed in Brown & Brown (1998) FLC 92-822 at 85,347:
In many cases there will be an outstanding feature - - that makes an order for costs appropriate, a feature which so dominates the scene that it can outweigh any of the other s 117(2A) considerations.””
The argument as to whether one or all factors need to be considered was not particularly helpful. A Judge is required to have regard to all relevant factors set out in s 117(2)A but may decide to award costs based on one or more of those factors.
In the particular circumstances of this matter I find relevant factors under
s 117(2A) include:
·The financial circumstances of the parties.
·The conduct of the parties.
·Whether any party to proceedings has been wholly unsuccessful in the proceedings.
I note as a matter of record that neither party was legally aided and there was no evidence of any offers filed pursuant to sub paragraph (f). I also accept that there were no compliance issues.
At paragraph 24 of the written submissions the mother’s Counsel has noted:
“24.“None of the interlocutory steps resulted in an adverse costs order against the wife.”
Whilst in one sense this may be so, it overlooks the fact that the father sought an order for costs after the interlocutory hearing heard on 20 July and determined on 30 July 2009. At that time an order reserving costs to the trial Judge was made.
I turn to firstly consider the evidence of the financial circumstances of parties.
Financial Circumstances of the Parties – Significance of Exhibit 31
As with the whole of her evidence I am unable to make accurate findings as to the mother’s financial circumstances. This is in part as a result of her legal representatives not disclosing in the course of submissions on costs, what her final liability for legal costs will be.
In the course of submissions the father’s Counsel made the telling point that after the parties exchanged their cost details pursuant to the Family Law Rules, it was evident that a significant sum of money had been paid by the mother with no obvious source being disclosed.
At paragraph 5.8 of the written submissions on the father’s behalf it is noted that between the 19 February 2009 and the 6 September 2010 Exhibit 31 reveals a sum of $80,764 was paid by the mother towards her legal fees at a time when she was subsisting on Centrelink benefits. There is no corresponding liability revealed in financial statements or affidavit form to show that she borrowed such funds from one or more sources.
I note that in Exhibit 31 there does not appear to have been any compliance with Rule 19.04(5), namely disclosure of the source of the funds. It may be that the various payments specified as summarised in paragraph 5.8 of the father’s Counsel’s written submissions quoted above, all came via the mother’s account, in which case she has access to income which she has not otherwise disclosed. If however the funds were being deposited on her behalf by others, then sub rule (5) should have applied and disclosure made.
Financial Circumstances Generally
As a result of the orders made, the mother is to receive the sum of $432,884 and the father $393,446.
If the mother is ordered to pay the indemnity costs fixed at $250,000 this would leave her with an entitlement of $182,884. At paragraph 28 of the mother’s submissions it is noted:
“28.Both parties are put in a comparable financial position by the section 79 orders. The wife’s legal fees are significantly greater than the husband’s fees and she will already be substantially worse off even without an adverse costs order”.
Paragraph 30:
“30.An adverse costs order of the kind urged by the applicant would leave the respondent wife with a net liability. This would be disproportionate and unduly punitive given that:
(a)both parties contributed to the costs incurred in the proceedings; - -
(f)the respondent wife has no capacity to pay her legitimately incurred legal bills except for the property settlement and any costs order should make allowance for her legal fees to be paid in any event.”
If the father were to be awarded $250,000 in costs he would receive $643,446 but his overall liability for costs is $375,691 of which he has paid a significant sum in part through borrowing from his father.
The specifics of the mother’s final costings were not produced but I infer that she has an outstanding account to her solicitors in excess of $182,884.
Exhibit 31 evidences an amount of $184,686 had been paid by a litigation funder towards the mother’s costs. After the sale of the N Street in N property $320,000 was released from the settlement funds to the mother. Presumably a considerable amount of these funds was used to repay the costs and interest accrued to the litigation funder
Adding the amount of $182,884 to the amount shown in Exhibit 31 of $287,921, means she has a total liability of some $470,805. The father’s total costs of $375,691 are almost $100,000 less than the mother has incurred.
It is not clear to what extent, if at all, the total liability in excess of $470,805 includes interest charges imposed by the litigation funder. As the litigation funder presumably has been repaid from the amounts released by Court Order from the trust account, I can only infer at this point in time that the sum in excess of $470,000 represents actual costs but the matter is not at all clear.
Summary of Financial Circumstances of the Parties
The fact that a costs order will leave the mother destitute is a most unfortunate outcome but it is a matter for which she must accept full responsibility. She is the one who has litigated in a win at all costs fashion. It is most unfortunate that L will be unable to attend the school she has previously attended, but I would be of the view it is likely she would be unable to attend this school regardless of whether the Court elected to make an order for costs (indemnity costs or otherwise).
The full extent of the mother’s overall liability has not been disclosed, but that is a matter for which her legal representatives and the mother must take responsibility. Whilst I consider the financial circumstances of the parties to be a relevant consideration in considering the costs issue, it is not an overwhelming consideration notwithstanding the effect of any order would be to leave the mother with little or no assets. A litigant must always be conscious of the possible consequences of an adverse costs order. It has oft been observed an impecunious litigant cannot litigate with impunity. A similar observation may be made about a person who will become impecunious if the Court were to make an adverse costs order.
Conduct
At paragraph 7(a) of the mother’s written submissions it is noted:
“7(a)The findings of the trial judge do not constitute an adverse finding to the requisite standard.”
I beg to differ for the reasons previously expressed.
At paragraph 7(b) it is submitted:
“7(b)The applicant husband impugns the conduct of the respondent wife by reference to the adverse findings as to credibility and miscellaneous criticisms of the conduct of the trial. These criticisms are insufficient to justify a costs order when weighed against other relevant considerations such as the shortcomings in the applicant husband’s case, the financial hardship that a costs order would cause and the emotionally charged subject matter of the proceedings.”
In making observations on this submission I simply note there was no satisfactory elaboration in the course of oral submissions as to what the shortcomings in the father’s case were. I have already made observations in the earlier reasons he was entitled to defend himself against false allegations of violence, inappropriate behaviour of a sexual nature toward his daughters and the host of other misleading allegations that have been made.
As to the observation that the proceedings were emotionally charged I simply note that many proceedings in this jurisdiction fall within that category.
This can never be any justification for a litigant to manufacture evidence to cast the other party in a poor light, nor to engage in a “concerted campaign of lies and deceit.” To suggest that such criticisms are, “insufficient to justify a costs order when weighed against other relevant considerations”, is an inappropriate submission which minimises the seriousness of such conduct.
At paragraph 17(g) of the submissions the submission is made:
“17(g)This court is not best placed to investigate and resolve the factual controversies regarding whether the wife gave knowingly false testimony and should not make such highly prejudicial findings in the absence of conclusive and incontrovertible evidence.”
I do not understand what is meant by this submission. The Court has an obligation to determine factual issues at the hearing which took place and has done so.
The fact that I was contemplating referral of the papers to the Federal Attorney-General for consideration of possible criminal charges is indicative of the fact I was of the view in various aspects the evidence was established to the criminal standard. I would not have contemplated such a referral were the position otherwise.
At paragraph 23 the submission is made:
“23.The findings in respect of the credibility of the respondent wife fall under section 117(2A)(c). However, this constitutes a very small component of the wife’s overall conduct in the proceedings.”
The inappropriate conduct of the mother throughout the litigation permeated this case from start to finish. It commenced with deliberately false allegations that she had been the victim of assault on the day of separation (1 January 2009). A short time later, although it was asserted it had occurred in late December 2008, the allegation was made the father had signed a cheque for $600,000 payable to Mr C. The misleading and deceptive conduct continued up to the annexing of the fabricated documents to her trial affidavit, a matter of only weeks prior to the hearing. The mother’s behaviour involved false complaints to the police and misleading, spurious complaints to the Department of Communities (Child Safety Services).
Whilst it is to be hoped that in most cases parties would conduct themselves as model litigants, I am realistic enough to accept that the model litigant is the exception rather than the rule. However, in the present instance the mother would fall into the category of “the litigant from hell”. Rarely have I seen a more dishonest, disreputable litigant. It was only as a result of the perseverance of the father and his legal team that sufficient proof was able to be placed before the Court to establish the facts as they have been found.
In the affidavit of Witness 1 filed 22 October 2010 (paragraph 39) she deposes to hearing the mother say shortly prior to separation:
“- - - If [the father] ever left me it would be the dirtiest divorce that [N] has ever seen.”
I am not in a position to make a definitive determination that she has made good on her threat, I can simply observe she has tried her utmost to do so.
Whether the Respondent has Been Wholly Unsuccessful in the Proceedings
At paragraph 22 of the mother’s written submission it is noted:
“22.The applicant husband contends that section 117(2A)(e) is relevant because the wife was wholly unsuccessful in the proceedings. This submission cannot be sustained. A perusal of the case summaries reveals that both parties have had mixed success.”
The mother sought an order for joint parental responsibility and that she be given sole responsibility for medical issues. The father sought an order for sole parental responsibility. The Court made an order for sole parental responsibility.
The mother sought the child reside primarily with her for 9 nights out of 14. The father sought that the child reside with him for 11 nights out of 14 and for half the holidays. The Court made an order in the terms sought by the father.
In relation to property settlement the father sought an order that the property be divided equally. The mother sought a division of 80/20 per cent in her favour. The Court made an order for an equal division of property.
The father did file a lengthy affidavit about which I made adverse comment (see paragraph 26 of reasons). However, in offering to reduce the indemnity fees to two-thirds the father implicitly acknowledges that such adverse comment has been made. The father raised the matter of Munchausen Syndrome by proxy on the basis that it had been referred to by Dr S. It was patently obvious the father is not an expert on the subject. His belief in the observations by Dr S were well-founded in the sense he was strongly of the view the mother engaged in over-servicing of medical treatment. Whilst the Court accepted the evidence of Dr M that the diagnosis of Munchausen Syndrome by proxy was not appropriate in this instance, the underlying conduct of the mother was ultimately held by the Court to be in accordance with the father’s concerns. At paragraph 26(c) the submission is made that:
“26(c)The husband called 17 witnesses (many of whom were unnecessary or of marginal relevance).”
If this submission be correct one may ask the rhetorical question why it was necessary to cross-examine so many of them. As I have noted in the reasons for judgment, the witnesses who gave oral evidence in the father’s case gave relevant evidence which was of assistance to the Court and their credibility was not impugned.
The reality is that in a lengthy judgment no adverse findings were made against the father. Adverse findings were made against the mother. The findings were probably the strongest I have made against any litigant in a lengthy judicial career. I do not accept that perusal of the reasons reveals that both parties have had mixed success.
I am prepared to find in relation to all the significant issues in dispute the mother has been wholly unsuccessful in the litigation.
As a generalisation I find I am not accepting of the written submissions lodged on behalf of the mother. Many assertions are not supported by the evidence; many propositions advanced are of doubtful accuracy. I make no criticism of the written submissions lodged on behalf of the father.
Indemnity Costs
I accept that the principles to be considered in such an application are as enunciated by the Full Court in Kohan v Kohan (1993) FLC 92-340. The principles were restated in Yunghanns 2000 FLC 93-029 by the majority of the Full Court Lindenmayer and Holden JJ.
I do not need to consider these cases other than to reiterate that in making the orders I am about to make, I am fully appreciative that indemnity costs are only made in exceptional circumstances and the Court should not depart lightly from the ordinary rules relating to costs between party and party.
I propose to find that this is an exceptional case and one which falls within the range where it is appropriate to make an award of indemnity costs.
The main factor which leads me to conclude that this case is of an exceptional nature is the conduct of the mother. Examples include:
· The considerable time spent challenging the evidence of lay witnesses whose account of events was ultimately accepted but was in direct conflict in most instances with the account given by the mother.
· By fabricating documents caused increased costs by the necessity to involve handwriting experts.
· Engaged in deceptive conduct which caused the father to adduce evidence from witnesses who would otherwise not be involved - one example is the evidence of the two medical receptionists, Witness 5 and Witness 6.
· Making a false complaint of assault outside the N Police Station necessitating the calling of evidence from Constable P.
· The mother’s confusing and in many instances conflicting testimony as to where she resided which necessitated the adducing of evidence from a range of witnesses on this aspect.
The quantum of costs
In paragraph 1.2 of the written submissions the father’s total costs are said to be $375,691.05. The father proposes that the mother pay two thirds of these costs, being an amount of $250,460 which is rounded off to $250,000.
Having incurred enormous costs, the father wishes to avoid the costs of engaging a costs consultant to provide an assessment of his costs and/or the additional costs of a hearing before a Registrar if the costs consultant’s assessment is not accepted. I would have no confidence that the parties would be able to negotiate a reasonable position on the quantum of costs. Having regard to the past history of this litigation in all likelihood the mother, whether legally represented or not, would contest tenaciously the validity of any assessment and any Registrar’s determination on such assessment.
In assessing costs there is provision in the rules (19.18) as to the method of calculation of costs:
“19.18 Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a) of a specific amount;
(b) as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
(c) to be calculated in accordance with the method stated in the order; or
(d) for part of the case, or part of an amount, assessed in accordance with Schedule 3.(3) In making an order under subrule (1), the court may consider:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness of each party’s behaviour in the case;
(c) the rates ordinarily payable to lawyers in comparable cases;
(d) whether a lawyer’s conduct has been improper or unreasonable;
(e) the time properly spent on the case, or in complying with pre-action procedures; and
(f) expenses properly paid or payable.”
It is not common practice for a Judge to set a specific sum where the amount involved is $250,000. However a Judge is entitled to take the following matters into account:
·Relying on his or her own experience of awarding and assessing costs in other matters.
·Accepting that costs in excess of $300,000 might well be expected in a trial lasting 9 days which involved a large number of witnesses and lengthy, complex exhibits.
·A Judge can quite properly assess whether costs are reasonable by comparing them with the costs incurred by the other party.
In comparing the costs of the other party it would have been reasonable to expect that the father’s costs would exceed the mother’s costs, in that it was the mother who made numerous false allegations and the father was the one put to the expense of gathering and presenting evidence to the Court to refute such allegations. Examples include the authorship of exhibits 1 and 2, the allegation of the father being responsible for forwarding the bundles of documents to L and Dr M, allegations of violence, inappropriate sexual conduct and other instances as set out in the reasons for judgment. Here it appears that the costs of the mother exceed those of the father and do so by a considerable margin.
I find that the mother’s behaviour, such as:
·falsely creating documents to portray the father in a bad light;
·knowingly making false allegations, such as the sending of documents to L and Dr M, making it appear as if the documents were from the father;
·making false complaints to the police, such as the false complaint of assault outside the N Police Station; and
·falsely denying allegations such as the occasion the mother exposed her breasts while at the same time abusing the father’s partner;
pervades every aspect of the case. Such behaviour is deserving of censure. I accept the award of costs is a compensatory exercise and not a punitive one but I find the mother’s behaviour was so extreme and so gross, it brings this case within the exceptional category to justify an award of costs on an indemnity basis.
I propose to order a lump sum. The further costs of engaging costs assessors and the expense and delay associated with the assessment process is not justified particularly where there has been a voluntary reduction in the amount of costs sought of one third of such costs.
The scale of fees to be charged
Annexed to the father’s outline of submissions on the issue of costs is the extract from the costs agreement setting out his lawyer’s schedule of fees.
I note that under Schedule 3 for drafting documents the charge is $16.50 per folio (100 words); the schedule of fees charged by the applicant solicitors is $25. For engrossing documents the solicitors charge is $7.00, the scale fee is $5.65. For drafting letters per 100 words the solicitors’ charge is $32 and the scale fee is $18.90. The hourly rate charged for partners is $330 and the scale fee is $192.90.
I am prepared to find that the charges made by the father’s solicitors are on the low side when I compare it to the terms of costs agreements of many other firms practicing in this jurisdiction.
Out of an excess of caution I propose to reduce the fees claimed by 40 per cent rather than 33⅓ per cent. I do so because of the large affidavits which have been prepared which contain many annexures of marginal relevance. I fully accept that it was appropriate to file affidavits from the numerous witnesses called in support of the father’s case and that the drafting of the affidavits of those witnesses was perfectly reasonable. I am unable to comment on the number of attendances by telephone or for consultations, but I expect they would have been numerous having regard to the various interim hearings and necessity for proper trial presentation.
60 per cent of the assessed costs of $375,691 is $225,414. This will be rounded off to $225,000. I make an order that the mother is to pay the costs of the father including reserved costs fixed at $225,000. It would be an interesting exercise to compare this amount with costs that might be assessed at 100 per cent of party and party costs. In my experience there would not be a great deal of difference. It is a matter where I would have been minded to order
100 per cent of party and party costs had it not been for the approach taken by the legal representatives for the father.
Reserved Costs
There was a hearing on 11 and 12 June 2009 when each of the parties was represented by Counsel. The mother at that time was proposing that the father have limited time of about 4 hours a week to be supervised.
For reasons I gave at the time I ordered the father spend time with O from 7.00 am to 7.00 pm each Saturday and Sunday, such time to be unsupervised. I do not have any record of costs being sought on that occasion. The matter was then adjourned to 20 July for further hearing. The hearing in July was a continuation of the June hearing but with more up to date evidence.
At the hearing on 20 July one of the mother’s preconditions before the father could spend any time with the child was that he attend with her on 16 specified medical specialists.
I did not make an order in such terms. The father, in the intervening period had been having regular weekend time with the child. There were also issues of sole use which I determined in the father’s favour.
Costs were sought by the father’s legal representatives when the decision was handed down on 30 July. I reserved costs to the trial. I am firmly of the view that the father would be entitled to his costs on a party and party basis for the hearings on the 11 June and 12 June 2009 and on the 20 July and 30 July 2009.
There are in the current system of case management, numerous occasions when parties attend Court for trial directions, trial compliance checks and such like. There were additional appearances in this matter when the parties could not agree on the terms of the release of additional funds once the N Street in N property had been sold.
I note that in reasons for judgment on the 24 August 2010, the matter was again before me when the mother made application that from the moneys held in the solicitor’s trust account, L’s school fees for the 2011-2012 school years should be paid in advance.
I dismissed this application. I note at paragraph 1of the reasons delivered on that occasion I observed:
“1.There is an air of unreality about this litigation. The parties are hell-bent on Rolls Royce legal service, hell-bent on Rolls Royce education for their older child, when neither has a reliable income stream, and what assets they do have - - could be described as relatively modest. Relatively modest after one deducts the legal fees, which currently are estimated at $200,000 each side. They are lining up today, by consent, for me to release a further $100,000 to keep the fires burning. It is your money, spend it how you like. If you want to spend it on lawyers, there will be a time for regret and recriminations later in your life when you will ponder back and say, “Why on earth did I allow that situation to develop”.”
Of the orders that issued on 24 August costs were reserved to the trial Judge.
Having regard to the issues for determination on that occasion and the orders sought by the mother, I would be minded to order the mother to pay the father’s costs on a party and party basis of and incidental to that application.
The reserved costs of July 2009 and August 2010 will not be itemised as they will be subsumed in the order that will be made for the mother to pay the father’s costs fixed at $225,000.
Having determined that s 117AB operates there is sufficient compliance with the legislative mandate if an order is made in general terms pursuant to
s 117(2A). I do not find it necessary for separate costs orders to be made under s 117(2A) as distinct from s 117AB. The only requirement is once s117AB becomes operative, a Judge is required to order at the very least that some of the costs of the other party be paid.
I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry delivered on 1 April 2011.
Associate:
Date: 1 April 2011
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