Sigley and Cullen (No 4)

[2015] FamCA 1045

FAMILY COURT OF AUSTRALIA

SIGLEY & CULLEN (NO 4) [2015] FamCA 1045

FAMILY LAW – COSTS

Family Law Act 1975 (Cth)

APPLICANT: Mr Sigley

RESPONDENT: Ms Cullen

FILE NUMBER: MLC 11196 of 2013

DATE DELIVERED: 26 November 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: By way of Written Submissions

SUBMISSIONS RECEIVED FROM

THE APPLICANT: Coulter Roache Lawyers

THE RESPONDENT: In Person

Orders

1. That the wife pay the husband’s costs on a party and party basis for the proceedings before Registrar Field.

2. That the wife pay 50 per cent of the husband’s costs of the two days of trial in September 2015 and specifically the costs of briefing counsel, attendance of counsel and solicitor and the preparation of any summary of argument but not affidavit material.

3. In default of agreement as to the costs, they should be assessed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym  Sigley & Cullen (No 4) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 11196  of 2013

Mr Sigley

Applicant

And

Ms Cullen

Respondent

REASONS FOR COSTS JUDGMENT

1. Section 119 of the Family Law Act 1975 (Cth) (“the Act”) provides that in proceedings under the Act, each party shall bear their own costs. Section 117(2) however provides that if the Court is of opinion that there are circumstances that justify it so doing, the Court may make such order as to costs as it considers just. Before making any such order however, the Court has to take into account a number of matters and in particular in this case, the provisions of s 117(2A).

2. It is to the exception rather than the rule that attention is directed in this particular case.  Because the respondent to the application is without legal representation, albeit that she prepared a very comprehensive submission, it is important to explain why an order for costs in this particular case is just.

3. On 5 October 2015 after a two day contested financial dispute, the Court made orders dividing the interests in property held by Mr Sigley (“the husband” and Ms Cullen (“the wife”).  The contested issues were limited.  They included:

   (a)What is a fair division of their property; the major emphasis and focus is on their economic disparity;

   (b)What should be the spousal maintenance amount paid by the husband and for what duration? and

   (c)Should there be orders made against the husband restraining him from attending at the former matrimonial home?

4. Within that description, the judgment spoke for itself.  I said:

   [53].As the applicant, the husband sought orders that the wife retain the home and he remove all encumbrances from it and that she assign to him the property next door.  He sought orders that he retain the relevant corporate entity and that in respect of the self-managed superannuation fund, there be a splitting order so that he retain 100 per cent of the fund.  He also sought the return of two kayaks from the home and a cricket bat.  There was no dispute that he was to retain a camper van and a ski club membership.

   [54].As earlier indicated, the controversial issue was the paintings. The husband sought a declaration under s 78 of the Family Law Act 1975 (Cth) (“the Act”) that his mother was the owner of seven paintings. Both parties knew exactly which paintings were in dispute. He then sought consequential orders for the disposal of the paintings. There was some discussion about whether they were to be delivered or retained and in what capacity but in final discussion, I indicated that I would be only prepared to make orders where there was a clean break.

   [55].In addition to those orders, the husband sought two other significant orders.  They were:

   (a)That he pay to the wife the sum of $10,000 less $1396 which had been paid to satisfy a debt relating to the home; and

   (b)That he provide spousal maintenance for the wife in the sum of $800 per week until 31 December 2018 along with private health cover “at the current rate” until 25 February 2017 and that he make some charity payments.

5. I went on to describe the wife’s position as:

   [57].The wife’s position was more fluid.  Her case outline set out a proposed order which began by saying that within 60 days, the husband pay her “a lump sum of 67 per cent of the total assets”.  She did not really mean that.  What she intended was that she have a share of the assets which in dollar value, totalled 67 per cent of the “pool” of net assets. 

6. Despite those somewhat nebulous descriptions, I set out the real problem in this case as follows:

   [5].At the January hearing when both parties were represented by lawyers, they reached a compromise which resulted in them signing a handwritten document called “Heads of Agreement”.  The lawyers then requested an adjournment of the trial proceedings to formalise the agreement; it was not long before all of that fell apart. 

   Later I said :

   [77].When the parties were before the Court in February 2015 for the final hearing, they asked for time to negotiate and took the day when both were assisted by solicitors and counsel.  A document was not only prepared in handwriting but signed by both parties at the end of that day.  As I have indicated, the parties then asked for time to implement in writing what they had agreed was a settlement and the final hearing was adjourned..

   To conclude that issue, I said:

   [87].The wife’s actions remain largely unexplained.  The financial case had been said to be ready in the Federal Circuit Court in the middle of 2014.  The proceedings in this Court were to be finalized in January 2015.  On that pathway, there had been no indication of problems about discovery and the parties said they were ready for trial.

7. All of that led to the orders which were close to what the parties had agreed upon and signed up to, in February 2015.  It is because of the resiling from her position in February that the husband seeks a costs order.  However he also seeks costs associated with failed mediation.

8. By written submission filed on 16 October 2015, the husband put his argument as follows:

   The Court would take into account:

   (a)the financial circumstances of the parties;

   (b)the conduct of the parties in relation to the proceedings; and

   (c)By the February agreement, the wife got “substantially” what she asked for .  That being a reference to the fact that the terms of the ultimate order were $20,000 more in a lump sum out of a total “pool” of about $2.8 million.

9. In respect of “conduct”, reference was made to various attendances of the parties and it was submitted that the only conclusion to be drawn was that the wife had wilfully failed to make a bona fide attempt to engage in mediation.

10. No order required the parties to engage in the mediation process.  Indeed, it was not submitted that it was part of the proceedings at all as distinct from part of the sensible negotiations that should have taken place. 

11. The husband’s submission went on to say that his solicitor had unsuccessfully endeavoured for four months after February 2015 to obtain details of what the wife’s position was.  Her position became clear only immediately prior to the trial which began in September 2015. 

12. Although it is commendable that the husband should persist with trying to have the wife clarify her position, in hindsight, the husband well knew from his dealings with her that settlement was not going to be easy because there were emotional forces at play.  There was an added complication that the wife became ill.

13. Matters were not made easier by the fact that subsequent to the February negotiation at which a Heads of Agreement was signed, the wife terminated the retainer of her legal advisors.  In my view, this case was always going to have to be determined by court intervention.

14. The husband’s submission was that there was a relatively small area of dispute and that it was open for the Court to conclude that what the wife ultimately sought did not justify her having abandoned the written agreement.  He accused her of either malice or at best being misguided.  Thus it was submitted, he had incurred addition legal costs.

15. One of the costs issues concerned an adjournment in July 2015 when the wife was undoubtedly ill.  That caused the matter to be adjourned but the evidence to support the wife’s medical difficulties was clearly lacking.  The wife was then unrepresented and would not have been aware even if well enough, of the standard required of the necessary evidence.  I have no doubt she was ill even if there was some doubt as to the extent of her debilitation.  The husband seeks the costs thrown away as a result of that hearing.

16. The problems did not stop with the wife’s illness.  Having endured delays in getting the trial concluded, the husband sought to update real property values .  There was justification for that course because the previous values were undoubtedly stale.  The wife opposed the revaluation and Registrar Field made an order that that occur.  There is some argument about whether the wife left the Court early that day but in my view it does not make any different.  The husband now seeks the costs of that hearing as well as half of the costs of the valuation itself. 

17. The husband’s costs application is for an order on a party and party basis including for the mediation conference.

18. The wife’s response to this submission was filed on 20 November 2015. She referred to s 117 of the Act as earlier described noting that each party should bear their own costs. She addressed the issue of the mediation but as I am not prepared to find that it was part of the proceedings, it is not necessary for me to deal with that submission further.

19. In the aftermath of the hearing and negotiation in February 2015, the wife acknowledged that she had adopted a position under which she said she took advice about negotiations on issues around security of payment.  Curiously, the wife submitted that the husband’s solicitor “strongly opposed” any discussion or negotiation.  That is hardly surprising having regard to the fact that the parties had been ready to start the trial in February, asked for it to be stood down and then reached agreement which was with the assistance of lawyers on both sides.  The agreement was converted to writing.  The purposes of the adjournment were mainly to implement the written agreement. 

20. The wife’s advice from her lawyers was not detailed in the submission but it must be obvious from the judgment that I had difficulty understanding why she had resiled form the agreement.  I said:

    [90].It was not suggested at any time by the husband that the wife was bound by the heads of agreement.  Counsel in a sensible outline pointed to the various authorities to that effect.  The issue of the heads of agreement does nothing to assist me in working out what is a just and equitable outcome in this particular case.  Its relevance therefore can only lie in the fact that enormous amounts of financial and emotional energy were wasted and the wife’s complaints that the husband was not honouring his obligations in respect of expenses associated with the home has no merit. 

21. The wife’s submission went further and said she had written numerous times asking for a minute of proposed orders to be made.  This, like the husband’s futile approaches at negotiation, is equally odd when, having accused the husband of being unreliable and she demanding security, asking for a “minute”.  The wife said she concluded when the minute did not arrive that the husband wanted the Court to hear the case.  In my view that is disingenuous.

22. I reject the suggestion that the necessity for the Court to determine the litigation was the husband’s doing.  That can be seen in the following at paragraph 59 of the judgment

    [59]Critically, the wife in seeking 67 per cent of the assets, understood that what she was seeking in cash terms over and above the house and her car was about $250,000.  Acknowledging that it would be difficult if not impossible, for the husband to raise that in a lump sum (because the land that he was to keep was fully encumbered) she said she would accept that amount by periodic payments. 

    I went further and said:

    [62]When she gave thought to the problems associated with a lump sum by instalments, (such as the husband going bankrupt or ceasing work) she said that she wanted spousal maintenance until 31 December 2018 at the rate of $70,000 per annum but still a property division up to 65 per cent which she later reduced to 62 per cent.  Sixty two per cent of the assets and liabilities to which I shall turn below meant that the husband had to pay her $108,635.  When I did the calculations in final address, the wife accepted that that was the figure she was ultimately pursuing.

23. The wife’s submission then dealt with the issues which should not bear on any issue here because they did not result in findings of the Court.  I am determining this matter on the evidence that was presented to me rather than the unsupported assertions in the submission.

24. In respect of the hearing before Registrar Field, the wife had little to say other than that she did not know what to do.  I reject that, the wife had the opportunity to canvass the issue before Registrar Field and time and money was wasted.

25. In relation to the July hearing which had to be adjourned, the wife said she was unwell but the husband continued to accuse her of delaying the trial.  In the September hearing, the wife cross-examined the husband about her condition (he being a medical practitioner) and it was clear that he did not accept the state of her incapacity.  The wife said her specialist endocrinologist was “difficult in the legal sense” believing (so he said) his report should be sufficient for the Court.  The wife submitted that there was little more that she could do.  I agree.

26. The wife’s submission included further accusations of the husband.  In my view, the basis upon which this should be determined is the evidence about which I made findings.  Further accusations by the wife of impropriety on the part of the husband do not assist her. 

27. Finally, the wife denied any malice.  She maintained she did not understand “the value of the asset pool”.  Much of this is outside of the determination as set out in my reasons for judgment.  I do not intend to take those matters into account.

28. As for the respective financial circumstances of the parties, the wife pointed to the husband’s income but that too was a matter dealt with under both the s 79 and s 74 determinations.  There is little doubt in my mind that the wife has a significant and unencumbered real property and if she chooses to live there a stream of income, she has every right to do so but she cannot then complain about the husband’s income stream (I think there is something missing in this sentence).  All of those matters were taken into account in the ultimate quest for what I found to be just and equitable. 

29. In my view, this is a case in which the provisions of s117(2) apply. The wife wasted time not so much for the hearing in February but for what happened thereafter. The issues were always discrete and as I have already indicated, I do not accept that she was genuinely endeavouring to resolve them. There was clearly anger directed towards the husband and whilst I accept that is a natural emotion, it certainly is a factor that should be taken into account when it becomes clear that obstinance is causing the other party to run up costs unnecessarily.

30. I also do not accept that the wife’s assertion that there were matters to be clarified.  The agreement was comprehensive.  Both parties were represented by not only their solicitors but very experienced counsel.

31. In my view, the wife did not act responsibly after the February hearing.  That can be seen in relation to her argument with the self-managed superannuation fund managers.  She had not sought to be provided with any portion of that fund and had accessed through her lawyers in February 2015 to the respective values.  This case had a reasonable gestation period during which discovery should have been completed.

32. I do not accept that the wife was malicious. It is certainly true that the assertion by the husband that she was misguided is open on the evidence. In my view it does not matter. A combination of all of those matters justifies a departure from the principle in s 117(1) of the Act.

33. However, before making an order, the Court has to consider the matters set out in s 117(2A). I have already dealt with the financial position and I do not accept that there is a significant difference between the parties.

34. The husband relied on the question of the wife’s conduct. Conduct must be examined in the context of the actions of the litigant rather than the individual. It must be directed towards affecting the process and the outcome. In my view, the wife was uncooperative and that is a matter more relevant to s 117(2A)(g) because it unnecessarily ran up the costs of the husband.

35. The other matters in s 117(2A) were not addressed by either party and indeed, are not particularly of assistance. They have been taken into account.

36. In conclusion therefore, I do not propose to make an order for costs in relation to the mediation issue nor should the wife be responsible for all of the costs after 26 February.  The husband clearly needed the outcome and would have had to have proceeded anyway.

37. The wife should pay the costs of the hearing before Registrar Field because they were unnecessarily wasted. I do not propose to make an order in respect of the costs for the hearing on 7 July 2015 being satisfied that the wife was ill and being unrepresented, not aware of the requirements even if she had been told that the evidence presented in relation to her endocrinologist was not sufficient. I accept without any hesitation that the husband incurred costs as a result of that attendance but I am also conscious that s 117 of the Act begins with the starting principle that each party should bear their own costs. The husband could conceivably have avoided that hearing albeit reluctantly.

38. In relation to the trial itself, there is no doubt that the husband was almost entirely successful and the wife the opposite.  Again however, the husband had to proceed to court to obtain the orders because the wife would never have otherwise resolved the matter.  In my view the wife should pay half of his costs thrown away in respect of that hearing. 

39. Orders will be made at the start of these reasons accordingly.

I certify that the preceding thirty nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 26 November 2015.

Associate: 

Date: