Slattery and Slattery

[2007] FamCA 23

FAMILY COURT OF AUSTRALIA

SLATTERY & SLATTERY [2007] FamCA 23

FAMILY LAW - COSTS – Circumstances justifying order
SECURITY FOR COSTS

APPLICANT: Mr Slattery

RESPONDENT: Mrs Slattery

FILE NUMBER: SYF 10204 of 1991

DATE DELIVERED: 31 January 2007

PLACE DELIVERED: SYDNEY

JUDGMENT OF: COHEN J

HEARING DATE: 18 December 2006

REPRESENTATION

APPLICANT: NO APPEARANCE

SOLICITOR FOR THE RESPONDENT: Michael PAUL of PAUL & PAUL LAWYERS

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 10204 of 1991

Mr Slattery
Applicant

And

Mrs Slattery

Respondent

ORDERS

On 18 December 2006 I made orders and reserved my reasons. The orders are:

1. That the husband shall pay the wife’s costs of and associated with the whole of the proceedings before me on an indemnity basis within one month of service upon the husband of a fully itemised bill of the wife’s costs in the proceedings.

2. It shall be sufficient service on the husband of the above mentioned itemised bill of costs if it is served at the husband’s email address and by letter sent to the husband by pre-paid, air-mail care of the husband’s brother in the United Kingdom.

3. That leave is granted to the wife to approach the listing co-ordinator to obtain a date for a two hour hearing during which all her outstanding applications can be heard.

4. I reserve my reasons for the above orders.

REASONS FOR JUDGMENT

These are my reasons.

1. In an interlocutory application the wife applied for an order against the husband that he lodge security for costs of his application to discharge, from January 2005, their child support agreement made on March 1993 and to discharge his liability for all arrears and interest which have accrued.

2. The husband opposed the wife’s application for security on the grounds that he has no assets, his only income being from a small pension and that, largely, he lives by reliance on the generosity of friends and relatives. He also claimed that, because of a Departure Prohibition Order obtained by the Child Support Agency, he would trapped in Australia, where the terms of his entry visa prohibit him from working, if he was required to provide security and could not do so. He ordinarily lives in the United Kingdom and wanted to return. He claimed he might be able to obtain paid work there. His case was that he would not be able to lodge any security so would not be able to proceed with his case and would not therefore be able to obtain a stay of the obligation to pay the outstanding child support and that which will continue to accrue. He said a stay is needed to obtain the lifting of the Departure Prohibition Order.

3. The wife claims that the husband owes her $193,865.00 pursuant to the Child Support Agreement. She also claims that he owes her a further $41,000.00 or thereabouts in respect of orders for costs of other proceedings she has taken against him. Much of those costs were costs of enforcement. It was the wife’s case that he has, by use of his expert knowledge from working in the finance and financial services industries, created a sham barrier between himself and what are in reality his substantial assets, some or most of which are located in tax havens and that he really has substantial funds available when he calls for them.

4. The wife also asserts that the husband has already made a similar application to discharge his child support arrears and exonerate himself from further child support obligations which was dismissed on 23 August 2002 by O’Ryan J. for the husband’s failure to prosecute it. The husband claimed he had, by leave of a deputy registrar, already withdrawn that application before O’Ryan J.’s order. I found against the husband on this issue and granted the wife’s application for security in the amount ($30,000.00) she sought. If she had asked for more I may have made a higher order. The facts seemed to me to warrant one.

5. Because, in the matter now before me, the relevant facts are much the same in a costs application as they are in a security for costs application much of what was said and the considerations referred to in the judgment on the security of costs application which was delivered on the 25 August are to be re-applied here. I refer to that judgment and incorporate it as part of my reasons for making the indemnity costs and related orders.

6. I have no doubt that this is a case where there are circumstances which justify the Court in departing from the usual rule that each party to proceedings under the Family Law Act should bear his or her own costs and that an order for indemnity costs is just despite the fact that indemnity costs orders are to some extent only to be made in exceptional circumstances. My reasons for these conclusions are to some extent based on findings in the judgement of 25 August.

7. My reasons for regarding the circumstances as justifying an order for costs which imposes part or all the wife’s costs on the husband are:

   a)the husband was unrepresented and incurred little cost associated with his application, whereas the wife was represented and incurred significant cost;

   b)the husband has had costs orders in favour of the wife against him in other litigation. A significant part of those costs has not been paid and the wife has had to incur very substantial costs in her attempts to obtain payment from the husband of a number of costs orders made in her favour;

   c)the husband, although he claims to have no funds, has failed to file an up to date and proper statement of financial circumstances. The wife will probably have to go to great expense to try to discover his financial position; it is the lynchpin of his case and, if he has resorted to tax havens, she may not be able to do so. His latest financial statement was signed on 8 July 2005 and filed on 2 August 2005. On filing, it became immediately out of date and misleading;

   d)the husband was employed and earnt $8,200.00 per month at least from August 2005 to May 2006,  yet made no child support payments while earning at that rate;

   e)the husband admits having transferred about $60,000.00 out of Australia in mid 2006 to pay what he claims as other debts in preference to his debts to the wife;

   f)the husband’s application to be excused from his child support obligations has a greatly reduced prospect of success because of dismissal of a previous application on the same cause which was dismissed because the husband, after putting the wife to expense in defending it, failed to prosecute it. It is arguably a case of res judicata.

8. The above reasons are also some of the reasons why an indemnity costs order should be made against the husband. These all come within one or other of the paragraphs of s117(2A). Such of the above which do not come within paragraphs (a) and (c) of s117(2A) come within paragraph (g). In addition, other matters must be considered pursuant to s117(2A) which requires the Court to take into account certain facts and circumstances in deciding what order in relation to costs is just. These other matters are:

   a)The parties financial circumstances: As I have said, I do not know the husband’s true situation. He says he is virtually penniless, but I do not accept that to be the case. I am in no position to determine a disputed claim of this nature. I do not know his real situation and should act on that basis. The wife’s is not in a relative sense, poor. I have stated what I know of her finances at page 8 of my judgment of 25 August 2006. She does not regard herself as other than straitened in the light the expectations created by her position in life. I shall not regard her as being able to afford, without suffering some hardship, the costs she has incurred in bringing the application for security. She has no immediate source of the funds needed to meet those costs.

   b)Legal Aid: Neither party received assistance from this source.

   c)The conduct of the parties in relation to the proceedings: The only conduct of relevance is the husband’s failure to disclose his financial circumstances in the manner required by the rules and his alleged failure to disclose his true situation. This is significant and adverse to the husband because of his claim of penury, his residence overseas, his alleged use of tax havens, his recent high income, his background and relevant business experience, his transfer of funds from Australia and his failure to pay child support when he was earning a high income.

   d)Any failure to comply with orders of this Court: There is no relevant failure. However, it is relevant that he has failed to comply with prior costs orders of other courts in favour of the wife and that the wife has incurred further cost in attempting to enforce them.

   e)The parties respective failure in these proceedings: In my opinion the husband has been completely unsuccessful and the wife completely successful.

   f)Written offers of settlement: I have not been informed that there have been any and shall assume there have been none.

   g)Other relevant matters: I have canvassed most matters of relevance, the most important of which are the husband’s failure to properly disclose his financial situation, the fact that he is a resident of the United Kingdom, his failure to pay any child support when he was earning a good income, his transfer of $60,000.00 overseas by which it is implied that he had $60,000.00 in Australia at the time when he owed a large amount of child support and other sums to the wife, that he had brought and not prosecuted other proceedings like these at significant cost to the wife and that in the principal proceedings now on foot his chances are greatly diminished because his virtually identical claim based on the same cause of action has already been decided against him in this Court. One matter which is of relevance because it is germane to the husband’s prospects of success in the principal application is that the debt for child support has accrued since 1994 without any payments being made. Either he has been indigent since then and has failed to make a timely application or he has failed in his duty to make child support payments when he could afford to do so.  

9. It is noteworthy that the husband did not appear to contest the wife’s application for costs. I am satisfied he has proper notice of it. It is therefore appropriate and just for the husband to meet the wife’s costs of and incidental to her application for security and of this costs application on an indemnity basis.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen.

Associate: 

Date: 

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as Slattery & Slattery