S and S
[2003] FMCAfam 185
•13 May 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| S & S | [2003] FMCAfam 185 |
| FAMILY LAW – Costs – notice of discontinuance filed four days prior to hearing of spousal maintenance claim – discrepancy in financial circumstances – conduct of parties. Family Law Act, ss.117, 118 |
| Applicant: | D G S |
| Respondent: | R J S |
| File No: | ADM 2573 of 2001 |
| Delivered on: | 13 May 2003 |
| Delivered at: | Adelaide |
| Hearing Date: | 2 May 2003 |
| Judgment of: | Brown FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Morcombe |
| Solicitors for the Applicant: | Hume Taylor & Co |
| Counsel for the Respondent: | Ms Pyke |
| Solicitors for the Respondent: | Wendy R Botting |
ORDERS
Dismiss the husband's application for costs filed on 28 March 2003.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADM 2573 of 2001
| D G S |
Applicant
And
| R J S |
Respondent
REASONS FOR JUDGMENT
These proceedings relate to an application for costs. The applicant in the proceedings is D G S, hereinafter referred to as “the husband”. The respondent is R J S, hereinafter referred to as “the wife”.
The application for costs relates to an application for urgent spousal maintenance that was brought by the wife on 19 December 2002. In her application filed that day she sought that the husband should pay her the sum of $300 per week by way of spousal maintenance. The wife subsequently discontinued these proceedings on 10 March 2003, this at least being when the formal notice was filed in the court.
The husband seeks his costs as a result of what he says was the unreasonable and inadequate notice he was given of this decision on the part of the wife, after he had taken steps to defend the proceedings. He also seeks to be reimbursed his own personal expenses incurred by him on 3 February 2003, when the matter had previously been listed. All in all, the husband seeks a total of about $3500 in costs.
It is the wife's position that it is neither reasonable nor just for her to pay any costs, given the background circumstances of her application, and what she says is the large discrepancy between the incomes of the parties.
The parties were married on 13 December 1980. The marriage between the parties has been dissolved, with the decree becoming absolute on 5 July 2001. The wife commenced proceedings in this court on 3 July 2002, seeking orders for settlement of property. The husband has responded to these proceedings. As required, each has filed a statement of their financial circumstances. There has been a conciliation conference, which failed to resolve the matter. Both parties have made discovery. The competing applications have been fixed for final hearing on 15 and 16 October 2003.
The application for spousal maintenance for the wife was initially made by way of an amendment to her initiating application. In orders 2 and 3 of her amended application filed on 19 December 2002, she sought these orders:
(2)That until further order the husband pay direct to the wife for her maintenance the sum of $300 per week by way of fortnightly payments of $600 per fortnight, such payment to be made into the wife's Commonwealth Bank account number ****, branch number ***, the first such payment to be made upon the making of these orders;
(3) That order 8 rule 9(3) be dispensed with and this matter be heard urgently.
Because of her request for an urgent hearing, the matter was listed on 23 December 2002. The matter, it seems, had been earlier listed for directions on this date in respect of the competing property applications. On 23 December 2002 the matter came on for hearing before Federal Magistrate Mead. Bearing in mind the provisions of the Federal Magistrates Court Rules, no doubt it was thought more appropriate for the wife's application to be made in form 12.
As a result on 23 December 2002, Federal Magistrate Mead made these orders:
(1)That paragraph 2 of the interim orders sought in the said amended application and directions generally be adjourned to 3 pm on 3 February 2003;
(2)That the wife file and serve a form 12 on or before 17 January 2003, with the husband to file a form 12B on or before 29 January 2003.
On 21 January 2003, the wife filed a form 12 application as had been directed. Her application sought the same orders as her amended application. This form 12 application was given a return date of 24 February 2003. On 29 January 2003 the husband filed a response in form 12B to her application, in which he sought these orders:
(1)That the interim application for spouse maintenance filed on 20 December 2002 be struck out or, in the alternative, that the court refuse to consider the application in the absence of an application for an extension of time, pursuant to section 44(3) of the Family Law Act;
(2)That the interim application for spouse maintenance filed on 20 December 2002 be dismissed.
The husband is a self-employed medical practitioner, who practises in M. The wife is a part-time student support officer at M North Primary School. There are four children of the marriage: J, born 30 May 1982, aged 20; C, born 2 June 1984, aged 18; D, born 23 March 1987, aged 16; and G, born 29 April 1990, aged 13.
The parties separated in early 2000. The wife's form 12 application indicates that she receives $566 per week from the S Family Trust and income from her employment of $133 per week. The husband's form 12B response indicates that he received a gross weekly income from his medical practice of $2424.
No doubt because of the response filed by the husband to her form 12 application, on 30 January 2003 the wife filed an application in which she sought this order:
That pursuant to section 44(3)(a) of the Family Law Act 1975 the wife be granted leave by this honourable court to file an application for spousal maintenance.
For reasons that are not apparent to me, this application was listed for directions on 7 February 2003, four days after the amended application had been listed, following Federal Magistrate Mead's directions of 23 December 2003. It seems to have been yet another in an unfortunate series of miscongruances in the registry regarding this matter and perhaps misapprehension between those advising the parties in the matter, as to what was to occur on each of the various dates.
The wife did not attend court on 3 February 2003; the husband did. He took time off from his medical practice in M, a bone of contention between the parties.
Regardless of the wife's application filed 30 January 2003, the extension of time argument in respect of the spousal maintenance application was dealt with by Federal Magistrate Mead on 3 February 2003. She also had to deal with the wayward form 12 applications. She made these orders:
(1)That pursuant to section 44 subsection (3)(a) of the Family Law Act 1975 the wife be granted leave by this Honourable Court to file an application for spousal maintenance and that the said application do otherwise stand dismissed and the return date of 7 February 2003 be vacated;
(2)That the interim spousal maintenance issues be listed for trial before Federal Magistrate Driver on 3 March 2003 - at 2 pm, noting half a day allowed and that the return date of the form 12 being 24 February 2003 at 9.30 am be vacated;
(3)That the wife be at liberty to file and serve an amended application to include spousal maintenance on or before 28 February 2003;
(4)That the substantive applications be listed for trial at 10 am on 15 October 2003, noting two days allowed.
The situation on 3 February 2003 is, when I come to reconstruct it from the file, a little confusing. The wife's form 12 had one return date; her application for an extension of time another. The husband's position seems to have been prefaced on the basis that before the substantive application of the wife for spousal maintenance could be heard, the extension of time application had to be dealt with, and he, it seems, was not disposed to consent to such an extension.
The orders of 23 December 2002 do not speak of a hearing date for the hearing of the application for interim spousal maintenance. It is the wife's position that she thought that the extension of time application had to be dealt with prior to her application for interim spousal maintenance. Accordingly, she did not attend court on 3 February 2003. I can understand why she would not do so.
In any event, counsel for both parties and the husband himself were present at court on 3 February 2003. Federal Magistrate Mead dealt with the extension of time argument. Whether there was extensive argument about the issue is unclear to me. In my view, in all the circumstances to date, particularly that there were property proceedings on foot between the parties, it is not surprising that the extension of time was granted.
The husband and his solicitor have a different view as to what was to occur on 3 February 2003. It was their understanding that this was the time scheduled for the interim or urgent spousal maintenance claim. All the necessary documents had been filed. The husband was ready to be cross-examined. Unfortunately, it seems that the parties were at cross-purposes. The husband was annoyed, no doubt. He had cancelled his clinic for the day and travelled from M to Adelaide. The application, which he considered misconceived, was still on foot.
On 25 February 2003 the wife decided to discontinue her application for spousal maintenance. She told her solicitor of her decision. On 27 February 2003 the wife's solicitor forwarded a notice of discontinuance to the husband's solicitor by fax. The notice of discontinuance was sent by post to the court. It had not been filed by the time the matter came on before Federal Magistrate Driver on 3 March 2003. The file had apparently been sent to Sydney.
Mr Byrne, the husband's solicitor, attended at court on 3 March 2003. Neither Ms Botting, the wife's solicitor, nor Ms Pyke, the wife's counsel, appeared. Mr Byrne sought an order for costs. Federal Magistrate Driver made these orders:
(1)That leave be granted to the applicant to file a notice of discontinuance pursuant to rule 13.01 of the Federal Magistrates Court Rules 2001 in court this day;
(2)That the respondent be given liberty to apply for a costs order pursuant to rule 13.02 of the Federal Magistrates Rules 2001 within 28 days of today's date.
Rule 13 of the Federal Magistrates Court Rules deals with discontinuance. Subrule 1 reads as follows:
(1)A party may discontinue an application or response by filing a notice of discontinuance in accordance with the notice set out in Part I of schedule 2;
(2)A notice of discontinuance may be filed
(a) at least 14 days before the date fixed for the final hearing of the application
(b) or with the leave of the court or a registrar at a later time.
Pursuant to subrule 2:
(1)If a party discontinues an application, or part of an application, another party in the proceedings may apply for costs.
The issue of costs is dealt with by rule 21.10, which provides that a party entitled to costs is entitled to costs in accordance with schedule 1 of the Federal Magistrates Court Rules and disbursements properly incurred.
Pursuant to the schedule, as I understand matters, the husband seeks orders as follows: $1135, being costs as applicable under the scale for an interim application or a summary-type proceeding; $190, being the costs for Mr Byrne's attendance at court on 3 March 2003; $770, being the disbursement for counsel's fees, and a sum of $1421, being Dr S's expenses for 3 March 2003; being a total of $3516.
Generally, the question of costs in family law proceedings is governed by section 117 subsection (1) of the Family Law Act, which provides that:
Subject to subsection (2) in section 117AA and 118, each party to proceedings under the Family Law Act shall bear his or her own costs.
Section 117(2) provides that:
If the court is of the opinion that there are circumstances that justify the making of a costs order, such an order may be made subject to subsection (2)(a) as the court considers just.
Sections 117AA and 118 are not presently relevant. Section 117(2)(a) sets out the matters that the court is required to have regard to in determining whether it is appropriate to make a costs order. The court is required to 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 fact, production of documents and similar matters.
d)Whether the proceedings were necessitated by a 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, in accordance with section 117C or otherwise, made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer.
g)Such other matters as the court considers relevant.
The wife's position in respect of the application to costs is set out in her affidavit filed on 1 May 2003. She deposes that she was under some financial pressure in the last months of 2002. C had been ill in Brazil; there were expenses associated with that. Her paid work stopped while she herself was engaged in tertiary study. The wife had expenses associated with the two younger children's education. On C's return to Australia, she was worried about how C's tertiary education expenses would be met.
In her affidavit she deposed as follows - this is at paragraph 15:
“As I have been doing a 14-week unpaid student social work placement, a requirement of the Deakin University degree course since February 17 2003, I have not been in a position to earn any other income. I've also been studying extra units during the summer semester. During this time I became very concerned about financial support for my second daughter C who was due to start university at the end of February 2003. I realised I was no longer in a position to financially assist her.
C had approached the husband for assistance. She reported to me that he would not be able to support her because of my claim for spousal maintenance. I now know that the husband earns in the vicinity of $950 per day. On or about 20 February 2003 the husband had a further telephone conversation with me, in which he stated that he could not possibly pay anything for C on a permanent basis such as he was now doing for our eldest daughter J, because of my application for spousal maintenance.
Under pressure, I then decided to withdraw my claim because C was very upset and worried about her means of financial support when at university. The husband had indicated he would support C if I withdrew my claim.”
None of those statements, of course, has been subject to any cross-examination. It is, however, the wife's position that she was under some duress when she instructed her solicitor to discontinue the proceedings for spousal maintenance. She points to the husband's superior financial position and her allegations regarding the husband's conduct in this matter as factors that militate against an order for costs in his favour.
The husband points to the notice of discontinuance, the effect of which brought the wife's application for spousal maintenance to a close. The consequence is obviously that she has been totally unsuccessful in the proceedings. The husband is critical that the notice was filed late. He has been put to expense in defending proceedings that have been aborted.
The purpose of an order for costs is to provide partial indemnity for legal costs. Accordingly, the costs that may be awarded are limited to the professional work of legal practitioners and outlays such as witnesses' expenses. In my view, it is not appropriate to make an order to compensate Dr S for his lost income.
The question, therefore, is what costs, if any, should be awarded in respect of the hearing of 3 February 2003, which seems to have been taken up with the extension of time issue, and in respect of the preparation for a half-day interim or summary hearing on 3 March 2003.
The husband raised, as he was entitled to do, the extension of time issue. He retained counsel for this event. He was unsuccessful. Overall the property matters between the parties are somewhat complicated. The issue of maintenance for two adult children has been raised in the affidavit material. The husband has a liability to pay child support for the two younger children.
At this stage, at least, there is a marked discrepancy between the two weekly incomes of the parties. The husband receives a vastly superior wage to that of the wife. The parties have substantial assets, including the husband's interest in his medical practice. In her affidavit material the wife deposed as to why she brought her application for urgent spousal maintenance. Although it is not said that the husband had failed to provide her with financial support for herself and the children, there is nothing to indicate her application was spurious or motivated by ulterior or improper motives.
Following the hearing on 3 February 2003, the husband was disappointed that the matter had not progressed further. He had travelled from M. I do not think that the delay can be sheeted home to the wife or her legal advisers. Thereafter, as the wife deposes, the parties had a number of telephone conversations with one another. They do not seem to have been happy ones. At any event, from the wife's perspective, they seem to have been instrumental in her decision not to proceed with her application for spousal maintenance.
The husband's solicitors were informed of the wife's decision that she was not proceeding with her application relatively soon after the decision was made. It was, however, only four days prior to the listing of the matter for hearing. The solicitor for the husband was able to cancel counsel who had been briefed, and advise the husband not to attend. It seems that the husband's major cost would have been incurred in respect of the extension of time argument, which he initiated, and the preparation of the form 12B filed on 29 January 2003.
I do not believe that it can be said that the husband was put to either considerable or additional cost because of the lateness of the notice of discontinuance itself. I also accept that the wife elected to discontinue her application because of representations made to her by the husband, particularly in respect of issues to do with the payment of C's educational expense. The cessation of the maintenance application was clearly the outcome that the husband wanted.
In those circumstances, it does not seem reasonable that there should be an award of costs as well. In all the circumstances of this case, but particularly the large discrepancy in the income between the parties and the fact that there are involved proceedings well advanced between them concerning property applications, which no doubt will involve consideration of the payment of maintenance for the children, it does not seem to me to be just to depart from the general rule set out in section 117(1) that each party should bear their own costs in these proceedings.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: Lynnette Chin
Date: 3 June 2003
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