Ruskin and Bonner (No 2)

[2018] FamCA 869

FAMILY COURT OF AUSTRALIA

RUSKIN & BONNER (NO 2) [2018] FamCA 869

FAMILY LAW – COSTS – where the parties’ proceedings concerned parenting, property settlement, child support and spousal maintenance – where the parenting proceedings focused on allegations of sexual and physical impropriety against the husband which the wife said were not pursued – where the husband pursued the allegations because, supported by a single expert psychiatrist, he believed they would be made again – where the trial was extended accordingly – where the court found the wife was malevolent – where the wife was unsuccessful in the quantum of spousal maintenance pursued – where 2 days of costs were wasted as a result of the way the wife conducted her case and should be paid by her.  

Family Law Act 1975 (Cth)
Family Law Rules (2004) (Cth)

Ruskin & Bonner [2018] FamCA 459

APPLICANT: Mr Ruskin

RESPONDENT: Ms Bonner

FILE NUMBER: MLC 2646 of 2016

DATE DELIVERED: 29 October 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: By way of Written Submissions

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Gadens Lawyers

SOLICITOR FOR THE RESPONDENT: Adrian Abrahams Lawyers

Orders

1. That the wife pay $22,000 toward the husband’s costs of the proceedings.

2. That otherwise, the husband’s application for costs as set out in the written submission filed 24 August 2018 is dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Ruskin & Bonner (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 2646  of 2016

Mr Ruskin

Applicant

And

Ms Bonner

Respondent

REASONS FOR JUDGMENT

1. After an eight day contested parenting and financial trial, final orders were made on 19 June 2018 and reasons published. The wife now seeks an order for costs “of an incidental to these proceedings…on a party/party basis”. In my view, the complexity of the proceedings complicates the question of whether, and if so what, costs should be ordered but having regard to the way the wife approached the hearing, it would be reasonable to say that two extra days of legal costs were incurred by the husband. The wife should pay those, but rather than require the parties to either calculate what that means or to go to an assessment, it is just to work out such costs on the scale under the Family Law Rules (2004) (Cth).

2. The written submission drawn by senior counsel for the husband seeks costs for the whole of the proceedings, but acknowledges that under the rules of the Court, an order may also be made for part of the proceedings. The wife opposes any order for costs being made. In my view, the reasonable, proper and just amount is $22,000 being senior and junior counsels’ fees on the scale and two days of the attendances of their instructing solicitor also calculated on the scale. My reasons follow.

3. The husband is a health professional and earns substantially more than the wife who is a full-time student. She receives spousal maintenance and child support but as the property proceedings have left her with substantial assets, she is not impecunious. That said, according to the written submission drawn by her senior counsel, she had incurred almost $1.4 million in legal fees. That will no doubt reduce her financial position but as a result of the way these proceedings were conducted, her actions also cost the husband and he had incurred almost $1.1 million.  Each of these parties was represented by lawyers who, it would seem, charged more than the Court’s scale but costs were sought on a party and party basis. In the case of the wife, a number of lawyers had been engaged and no doubt, changing lawyers exacerbated her costs. Even allowing for those horrendous amounts being so spent, each party is still financially strong and comfortable with the husband being the stronger because of his earning capacity.

4. As indicated earlier, the proceedings were multi-faceted although the major focus was on the parenting issue. The husband’s time with the children had been interrupted on a number of occasions without warrant and that added to his costs in re-establishing his relationship with his two very young children. Such was the relationship between the husband and the children that the ultimate orders were that the parents share their time equally. Whilst that had not been the husband’s position, the whole of his argument revolved around some appalling conduct as a parent by the wife which was carefully scrutinised by the single expert psychiatrist in two reports which ultimately supported the husband’s view. In the end result, I found that it was impossible to make a finding about the state of the wife’s mental health.

5. The wife’s approach to the proceedings had been varied as the trial approached and there was no justification explained why that was so. It was the husband’s view that the ever-changing position of the wife meant that, as a litigant, he had to prepare for a number of eventualities. In the hearing, the wife endeavoured to maintain that she had put all of these problems behind her and she wanted to share the responsibilities with the husband of parenting the children. The husband’s position was that whether mentally ill or malevolent, there was a probability that there would be a repeat of the allegations by the wife. The Independent Children’s Lawyer argued that the sharing arrangement should be ordered because there had been a relative calm for a year.

6. The full reasoning about the wife’s conduct and why the orders were ultimately made can be found in Ruskin & Bonner [2018] FamCA 459.

7. The proceedings had initially been listed for final hearing before Cleary J in October 2017 and were not commenced.  Her Honour undertook what was described as a “judicial mediation” but that did not resolve the matter.  The issue of when the wife’s position was clear was controversial. The parties’ dispute as to whether or not at this “mediation”, the wife had made an offer to the husband for equal sharing of time of the children.  The husband denies any such offer was made and counsel for the Independent Children’s Lawyer who was present understood that the wife’s position was not that there be equal time but that there be an extension of the status quo.

8. This issue of the offer was raised at an interlocutory hearing on 4 September 2018. Both senior counsel acknowledged the dilemma in making any finding as to exactly what happened where the court was deprived of the opportunity to test the evidence. That evidence could only have come from the various lawyers.  I am not able to make any finding as to certainty but it seems more likely than not that the husband’s version is correct.  I draw that conclusion from the following paragraphs of the published reasons:

   [30]Since May 2017, calm appears to have descended.  The wife, and indeed counsel for the independent children’s lawyer, pointed to that to indicate that whatever the problems were of the past, this was a new beginning.  The husband rejects that.  I find there is substance to the husband’s concerns and do not accept that the calm means there will be no further upheaval.

   …

   [68]As the trial of the proceedings loomed before Cleary J in October 2017, the wife filed an Outline of Case document indicating that her proposal was that the husband have four nights per fortnight.

   [69]In December 2017 before me, when pressed as to what the wife’s position was, she repeated what had been said in her October outline. 

   [70]The parties attended [Ms S] in April 2018 for the purposes of this trial and [Ms S] noted:

   (The wife) proposes primary care be granted to her and the children spend each alternate weekend from Friday after school until Sunday evening with their father.  She opposes overnight time during the school week but is open to the children seeing their father for a short time after school.

   [71]That attendance on [Ms S] was only two weeks prior to the commencement of the trial yet two weeks later the mother proposed the equal sharing arrangement. 

9. When the wife was cross-examined, her mantra was that she wanted to cooperate with the husband and hence she had offered equal time.  Even if some form of offer of that nature was made at the mediation, the paragraphs of the reasoning just mentioned would indicate that it was not raised again until the very last moment before the trial began. For reasons to which I turn below, there are so many complex issues in this case that the only way I can assess whether there are circumstances to justify a costs order is to look at what it was that took up so much time and whether that was necessary in the circumstances.  

10. In December 2017, the parties anticipated they needed ten days of hearing time.  It ultimately took eight days. Of that time, much was spent in cross-examination of the wife on the facts that gave rise to concerns not just of the husband about her mental health but also of the psychiatrist Dr T. 

11. Dr T had prepared two reports and had no doubt that the wife had a mental illness. The wife relied upon a psychiatrist who disagreed. That dispute required the court to hear from both. I was not able to find the husband’s position to be correct which added to the intrigue because little else explained the wife’s behaviour. That behaviour was destructive of the husband’s relationship with the two children. 

12. The critical question which ultimately affected the determination of the parenting orders was the likelihood or otherwise of a repeat of the wife’s behaviour.  Suffice to say as will be evident from reading the reasons, all has been calm since May 2017 and the parties now share the responsibility.

13. I find that the husband would have incurred significant legal fees as a result of the wife’s constant changes of position and law firms. Having regard to the dismissive approach of the wife to what could only be described as the most serious of allegations of impropriety against not only against him but also his family and where those allegations were in some respects untenable if not fanciful, I accept that the husband had to pursue the wife’s reasoning in cross-examination.

14. There was also the constellation of time that was in dispute. The husband’s position was that even at the final hearing, the wife proposed equal time on a rotating basis such that neither party would have seven uninterrupted nights.  That too meant that the wife’s proposal was in dispute even allowing for her waving aside any previous allegations she had made.

15. The husband’s complaint was that the litigation meant not only did her have to deal with significant false allegations of abuse not only of the children but also of her. He also had the constantly shifting response as to what time he should spend with the children. 

16. As will be evident from the reasons, it was not just a case where the wife waved these things all aside and said that the parties should work co-operatively, It was only in testing the wife’ evidence that it became clear that the allegations of sexual abuse and physical abuse by the husband and his family were unfounded. I found them to be malevolent.

17. The husband submitted that he had spent considerable amounts of time and money attempting to disprove the wife’s lies but the difficulty here insofar as it relates to a costs application is whether the wife’s conduct was as a litigant or as a parent. In my view, it was as a parent.

18. Indicative of the nature of the litigation, the husband submitted that he had to issue proceedings to enforce orders on three occasions. In respect of a number of matters, the wife did not provide documents requiring the husband to issue subpoenae and attend hearings.

19. The distinction between the positions adopted by the parents even with the wife’s proposal of equal time was not enormous.  The husband proposed that the children live most of their time with him but by the same token, his position was that the wife should spend time with the children despite his fears about her conduct.  The hearing was therefore largely about time and the damage that could have been done to the children but also what of the proposals was best for the future needs of the children. It is this fact that militates against an order that the wife pay all of the husband’s costs but it also sheds light on why she should contribute to some of his costs where the actions she took as a litigant were untenable and unnecessary.

20. The husband ultimately submitted that the protracted proceedings were a result of the wife’s “problematic behaviour” and even though he was not successful in obtaining the orders he sought, he submitted that the findings about that behaviour meant that the proceedings would not have been necessary in the first place.  Whilst there is some substance to that, the husband’s own position at trial was that there was no alternative other than to adopt what he wanted.  In respect of that position, he was unsuccessful bearing in mind the focus and responsibility of the court was to make an order which was in the best interests of both children.

21. I find in the circumstances that there was still a genuine parenting dispute over the sharing of time regardless of the positions each party adopted and either position could have been within the range of outcomes having regard to the young ages of the children. The feature which undoubtedly stands out here is the wife’s unreasonable position of maintaining the impropriety of the husband was the cause of what the children were saying to her and the dismissive approach at trial meant that the husband had little choice other than to cross-examine her to establish what I accept her believed namely that she would repeat the allegations once the litigation pressure was concluded.

22. In respect of property matters, the husband pointed to the fact that the wife continued to seek discovery despite the fact that his financial position seemed (at least at trial) modestly straightforward and as indicated by the hearing itself, little attention and time was spent on those financial matters.  However, as the husband submitted, he had been put to the time and expense for no material reason.  Much of that dispute also evolved around spousal maintenance issues about which the wife’s position was unsuccessful. Having said that, little time was spent on the financial issues.

23. To the extent necessary to say so, both parties ultimately received significant financial assets from the proceedings and in the case of the wife, an unencumbered $3.6 million home and a payment of $900,000 plus spousal maintenance for a limited period of time.  There was also a child support departure application about which she was unsuccessful.

24. Ultimately, the husband’s submission was that he had faced over two years of litigation “in defending himself against the malevolent and harmful behaviour of the wife”.  In my view, the Court has to be very careful in respect of that to look at the evidence and time relating to the wife’s role as a parent rather than as a litigant. Costs cannot be a punishment nor a form of compensation for frustration, hurt and anger. I have no doubt that is justifiably how the husband viewed things but those are not matters that justify a departure from the principle that this is a jurisdiction in which each party should normally pay their own costs.

25. The husband submitted that he had offered the wife “considerably more than she was ultimately awarded in terms of the property and spousal maintenance matters” which is evident from the material provided to the court in the hearing in September to which I have just referred but that too did not take up a considerable amount of the court’s time or the husband’s resources.

26. Senior counsel for the wife submitted that the husband had filed a trial affidavit spanning 751 paragraphs covering many of the issues prior to the allegations and with a focus on his assertion that she suffered from a borderline personality disorder with paranoid features.

27. Bearing in mind the evidence of the single expert witness in the proceedings, it is hard to imagine what else the husband could do.  However, the wife made the concession in her trial affidavit filed 18 August 2017 that she no longer “agitated” that the children were sexually abused.  Whilst that may have given the husband some comfort, it did not mean that she did not have concerns about what had occurred and more importantly, what her child had said.  It was that lack of attention to reality-testing that accusation that added to the litigation if not the confusion between the parties. The wife’s approach therefore had to be tested.

28. The wife submitted that the husband’s pursuit in the litigation had to be seen in the light of his “almost obsessive pursuit” to establish that she had a mental illness rather than focussing on the 12 month period of harmonious co-parenting.  That position was supported by the Independent Children’s Lawyer.  The wife’s submission was that the husband had taken an unreasonable approach despite “numerous attempts made by the wife to try and resolve the litigation”.  I reject that on the basis that having regard to the nature of the allegations made against the husband and the concerns expressed to him by psychiatrist Dr T. I consider the husband had little alternative other than to test the assertions of the wife.

29. This case therefore revolved around claims and counterclaims.  The court’s focus in the proceedings still had to be what was in the children’s best interests and, despite the appalling allegations of the wife, each party had considerable evidence to support their respective positions albeit that the husband’s position was not successful.

30. In respect of the property matters, in my view, the wife’s position was unrealistic having regard to what was well known about the husband’s financial circumstances.  His contribution in a capital sense to the marriage was overwhelmingly greater than the wife and her approach to the spousal maintenance issue was untenable.

31. At paragraph 27 of the wife’s submissions, she said:

    The husband’s punitive attitude towards the wife in this submission is palpable.

    That reference was to a submission put by the husband that there was an issue with the wife and her “behaviour” had to be dealt with.  In my view, the husband was not adopting a punitive response but had little trust in the wife not to thwart his relationship with the children.  There was nothing in the husband’s evidence to indicate that he was unrealistic in what he was pursuing or unreasonable in his attitude as a litigant. The wife kept changing her position, her lawyers made demands for discovery and then sought unrealistic expectations in the financial sense. Against that, the husband had to pursue orders to resolve matters.

32. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that in proceedings under the Act, each party shall bear their own costs unless there are circumstances to depart from that principle and if the court decides that there are such circumstances, it must contemplate the matters set out in s 117(2A) of the Act.

33. Having found that the wife exacerbated the parenting dispute by adopting a dismissive approach to the serious allegations she made, I still acknowledge it is difficult to assess what portion of the husband’s costs arose out of the separate issues particularly as the majority of time concerned the parenting matter. 

1. A comprehensive assessment of costs in respect of the financial issues, changes of lawyers, demand for discovery and the like might be seen as relevantly modest by comparison to the amount of costs that were expended on the trial itself.  It is difficult therefore to assess how much extra time was wasted by the husband preparing his comprehensive affidavit.

2. I find there is a circumstance here to depart from the principle that each party pays there costs. The circumstance here is the wife’s approach to the history of allegations and the concern of the husband that it could be repeated. The wife’s approach caused extra time to be spent where rather than concede there was no foundation for the allegations which she had not reality-tested, she sought that they be ignored. That can be seen in the notice to admit served upon her where she was at best evasive.

3. Before any order can be made, the court must consider s 117(2A) of the Act. The parties are wealthy so there are no financial circumstances that affect any order for costs. The conduct of the wife as a litigant has been canvassed above. There are no public purse or legal aid considerations in this case. There are no other justifiable matters to be taken into account.

4. The litigation in this case has gone on for a long time and rather than make the parties spend more time, I consider I ca assess the extra costs incurred here are limited to the two days in court earlier mentioned. There ae many other issues in the interlocutory processes but they are not matters that I should allow to be seen as attributable to one party or the other. Each needed to litigate to get this case to trial.

5. There should be an order for $22,000 being counsels’ fees and a solicitor’s attendance for two days.

I certify that the preceding thirty eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 29 October 2018.

Acting Associate:

Date:  29 October 2018