Rudman and Rudman (Costs)

[2011] FamCA 150

FAMILY COURT OF AUSTRALIA

RUDMAN & RUDMAN (COSTS) [2011] FamCA 150

FAMILY LAW – COSTS

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

Marsden & Winch [2009] FamCAFC 152
Rice & Asplund (1979) FLC 90-725
Rudman & Rudman [2010] FamCA 962

APPLICANT: Ms Rudman

RESPONDENT: Mr Rudman

FILE NUMBER: CAC 1034 of 2007

DATE DELIVERED: 23 February 2011

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Faulks DCJ

HEARING DATE: 23 February 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Self-represented litigant

COUNSEL FOR THE RESPONDENT: Self-represented litigant

Orders

IT IS ORDERED THAT:

1. Mr Rudman will pay the sum of $12,000.00 to Ms Rudman in respect of costs of the proceedings about the children.  Such sum to be paid by an offset in relation to $7,500.00 Ms Rudman is due to pay to him, together with the sum of $4,500.00 within three months of this date or if the sum has already been paid the whole amount within three months of the date of these Orders.

2. The other Applications made by Mr Rudman in his response are dismissed, and all extant Applications are dismissed. 

3. The matter is removed from the pending cases list and concluded before this Court.

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

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 1034 of 2007

Ms Rudman

Applicant

And

Mr Rudman

Respondent

EX-TEMPORE

REASONS FOR JUDGMENT

1. In this matter, I have to some extent indicated during the course of the proceedings my reasons for taking the decisions I do.  I now outline in a formal way my reasons for my decision.

2. The application by Ms Rudman is made with my leave out of time under s 117(2) of the Family Law Act 1975 (Cth) (“the Act”). The application is made on the basis that she seeks that there should be indemnity costs, in effect, from the date on which she was notified of the change in the circumstances relating to Mr Rudman, from 9 April 2010. Those costs she identifies substantially – and I say that because it is not entirely clear from her affidavit – in the sum of about $59,971.70, these being what she says were her bills from 17 March 2010 until 31 August 2010.

Relevant Law

1. Section 117(1) of the Act relevantly provides:

   Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.

2. Section 117(2) of the Act relevantly provides:

   If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory orders or otherwise, as the court considers just.

3. Section 117(2A) of the Act relevantly provides:

   (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.

Discussion

1. The reason for the primary position set out in s 117(1) of the Act is said to be that, particularly in relation to children, parties should not be deterred from bringing proceedings which they regard as being in the best interests of their children by the fact that if they were to be unsuccessful for whatever reason that they would then be faced with a large bill for costs for the other party. That is broadly the philosophy behind the original provision.

2. The Act was amended in 1983 and has been amended several times since to provide the Court can nevertheless make an order for costs or as to costs “…in circumstances where the Court considers that it is just to do so”. However, in coming to that conclusion, the Court is obliged to take account of the matters under s 117(2A).

3. Those matters I have dealt with before the parties and invited their further submissions and evidence in relation to those matters.  Each of the parties took the opportunity to say several things to me but have not substantially wavered from their original affidavit material to which I have had regard.

4. In the case of Ms Rudman, she deposed to the fact that she will get some $200,000 dollars plus which she proposes to apply in the purchase of a modest dwelling through the ACT Government at some point in the next year or so. That will effectively take away all of that surplus cash. She deposes to the fact that she has little income apart from pension income and some child support income and that her expenses in large measure overtake that expense and exceed it. The circumstances she therefore says she faces are that she will have for the foreseeable future at least a pension income, some dwelling with a modest mortgage on it which she maintains she is able to repay and little capacity for doing much more.

5. There are no other sources of income that she is likely to be able to tap into in the immediate future. There is no specific agreement between the parties about the employability or otherwise of Ms Rudman. But bearing in mind, as I do from the final hearing proceedings, the demands that the boys are likely to place on her in the short term, it would seem to me that while it may be necessary for her to return to work at some point, to meet her commitments, that point may not be right now. She has indicated that, in the interests of the boys, she does not wish to do that at the moment. This is a factor I could properly take into account under s 72 of the Act if there were ever a claim for spouse maintenance.

6. On the other hand, Mr Rudman has a situation where his income is relatively modest as well.  In fact, he received less from his personal exertion than the sums received by Ms Rudman for her pension.  However, he does have the advantage of a new wife who is earning some money which enables them to maintain their existence in the house that they bought in B, Victoria on the basis that this would be a more affordable proposition for them from continuing to live in Canberra, ACT. 

7. Accordingly, at the end of the next little period, both Mr Rudman and Ms Rudman will have houses in which they have a commitment for mortgages.  The housing will be adequate for their respective purposes but will be modest and certainly there is no profligacy or luxury associated with either purchase.

8. The larger mortgage which undoubtedly will be required by Mr Rudman is probably more effectively met by the joint incomes of Mr Rudman and his wife.  Mr Rudman, on present arrangement, also probably has a better capacity to earn money than does Ms Rudman. 

9. Broadly speaking, there is nothing in the financial circumstances of either of the parties which should give rise, in my opinion, of itself, as to a basis for an order for costs. 

10. Mr Rudman has been the recipient of legal aid and to the extent that it is relevant in my consideration in this application before me, that application appears to be more of a burden than of assistance. As he is presently advised, he is likely to have to repay the money that has been paid out on his behalf for legal aid. He therefore may face a debt soon of some $12,000. To the extent that it is relevant under s 117(2A)(b) of the Act, I take it into account and also to the extent that there are unusual circumstances associated with it under s 117(2A)(g) (being the “catch-all” provision – “such other matters as the court considers relevant”).

11. I do not regard the conduct of either of the parties to the proceedings as such in itself in this matter to constitute a basis for an order for costs.  Mr Rudman’s failure to disclose his move until a late part of the proceedings undoubtedly generated some additional work.  There is no suggestion that he did necessarily fail deliberately to disclose matters as would ordinarily be the case with a failure to discover documents that were relevant or something of that sort which would in itself generate a basis for an order for costs.  Nevertheless, it does seem to me that at least in part I could properly and should properly take account of the significant change in the way in which the proceedings were ultimately dealt with by the Court and to recognise that this was largely because of Mr Rudman’s decision at a late point to substantially alter the nature of the proceedings.  To that extent, it is a matter I could properly take into account under s 117(2A)(c), but also properly under s 117(2A)(g). 

12. I do not consider that s 117(2A)(d) or s 117(2A)(e) applies in the circumstances of this matter. Neither party made a particular offer in writing which, in my opinion, would promptly invoke s 117(2A)(f) of the Act.

Conclusion

1. Accordingly, in summarising all of these matters, it seems to me that there is some basis upon which an order for costs might be made, but certainly not an order of the sort that is contemplated by Ms Rudman. 

2. I do not accept that this is a matter in which automatically an order for indemnity costs should be made.  In fact, I do not believe there are any grounds established for an order for indemnity costs.  I do not accept that the circumstances were exceptional or that the father behaved in a way which would necessarily invoke such a provision.  Equally, the parties’ circumstances are such that an adjustment between them for costs might well be a matter of some significance in either direction.

3. I note that a failure to have an order for costs on the part of Ms Rudman will affect her ability properly to house herself and the children and that is the matter that I must logically take into account. I also take account of the fact that it seems likely that Mr Rudman will not have much spare cash either in present circumstances except for a small or relatively small amount that he is about to receive or has received from Ms Rudman as a result of the settlement of proceedings before the ACT Supreme Court relating to the estate of Ms Rudman’s father. In this regard, Mr Rudman has some capacity to meet costs, although it is only really by comparison with Ms Rudman that this should be said to be so. I take account of those factors and I also take account of the way in which the proceedings were conducted.

4. For the reasons I have said, it seems to me I should make an order as to costs but not for costs.  In that connexion, I order that Mr Rudman pay to Ms Rudman the sum of $12,000 as to her costs.  That would finalise those proceedings between the parties. 

5. That sum will be paid either by an offsetting against $7,500 that is due to Mr Rudman as a result of the proceedings in the ACT Supreme Court, with the additional sum of $4,500 to be paid on or before three months from the date of this order.

Further application by Mr Rudman

1. I turn then to the last matter that is before me on Mr Rudman’s application which is that there should be a variation to the orders that were made in my judgment in October 2010. 

2. The application seeks that the younger child, P should now spend time with his father for two days a month in his house in Victoria. 

3. The relevant orders of 29 October 2010 that I made about this were as follows:

   (6)    [P] will live with primarily with his mother.

   (7) [P] will spend time with his father initially in Canberra not less than once a month and if the parties are unable otherwise to agree on the first weekend in each month and such other additional times as the parents may agree upon. 

   a.In relation to each period that [P] spends with his father in Canberra, the parents will consult with each other and agree upon a collection and return time, but ordinarily, without taking account of the specific circumstances of each visit, would involve [P’s] being collected on the Friday night and being returned on either the Sunday night or on the Monday morning.  If the parties are unable to agree, the time that [P] spends with his father will commence at 5.00 pm on the Friday evening and conclude at 5.00 pm on the Sunday evening.

   b.Nothing in these orders will be taken to preclude the parties moving towards additional time for [P] to spend with his father either in Canberra or in [B] or some other place of the parties’ agreement, provided that such development is in accordance with [P’s] needs and the concurrence of the parents, with such advice as they may deem to be appropriate.

   (8) Each of the parents will facilitate [P’s] communication by telephone with the other parent when [P] is with him or her. 

   (9)If Father’s Day should fall on a weekend when [P] is not spending time with his father, then unless the parties otherwise agree, the weekend in which Father’ Day falls will be substituted for the next closest weekend on which [P’s] time with his father would ordinarily occur.   Similarly, if Mother’s Day should fall on a weekend when [P] is not spending with his mother, then unless the parties otherwise agree, the next closest weekend will be substituted for the weekend in which Mother’s Day falls. 

4. I made an order which allowed the parties to vary these things if they felt it was appropriate to do so, and I indicated, as I suggested previously, that the time [P] would spend with his father is something which I expected would expand over time. 

5. Mr Rudman’s application is singularly lacking in evidentiary support in that he is obviously spending more time in Canberra than he originally contemplated and that accordingly, compliance with the existing order should be able to be carried out without any particular discomfort or inconvenience.

6. To suddenly increase the time from the two days a month, as it presently is, to substantial holiday time to his home in Victoria is not justified on the material before me.  In any event, in accordance with the “rule” in Rice & Asplund (1979) FLC 90-725, 78,905 per Evatt CJ; recently affirmed and explained by the Full Court of the Family Court of Australia (Bryant CJ, Finn & Cronin JJ) Marsden & Winch [2009] FamCAFC 152, at [50]), no sufficient change has been demonstrated.

7. I consider that there should not be a change so soon after the proceedings have been concluded before the Court, bearing in mind that was what Mr Rudman was asking for at the relevant time. 

8. In addition, as I pointed out earlier in the day, in my judgment (Rudman & Rudman [2010] FamCA 962, 29 October 2010) in paragraph 81:

   81.I recognise that the arrangements, particularly about [P’s] time with his father, are not likely to pertain permanently.  I hope that they will advance to [P’s] spending time with his father in [B] or on other holidays away from [B], as time goes by.  If it has not happened by normal progression and co‑operation through the parties at the end of two years, then notwithstanding that [P] will then be nearly fifteen years old, the matter may require further litigation.  That would be in the nature of a fresh application, but I am indicate that, in my opinion, a failure for the parties to reach agreement and to co-operate enough to enable [P] to have a good time with his father to the extent that he would want to travel to spend time with his father in his father’s home by that time will constitute a basis for further litigation – if either of the parents have any stomach for it.  I would certainly not blame them if they did not.

9. I indicated clearly that, in my opinion, if there had not been progression within the next two years, then that was the time when a further application might properly be made. 

10. Accordingly, in my opinion, there is no justification for the application to be made and that application is summarily dismissed. 

11. That concludes all matters before this Court.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks delivered on 23 February 2011.

Senior Legal Associate:

Date: 8 March 2011