Sora and Mikan

[2013] FamCA 639

FAMILY COURT OF AUSTRALIA

SORA & MIKAN [2013] FamCA 639

FAMILY LAW – COSTS - Circumstances justifying order

Family Law Act 1975 (Cth)

APPLICANT: Ms Sora

RESPONDENT: Mr Mikan

FILE NUMBER: SYC 4856 of 2011

DATE DELIVERED: 26 July 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Fowler

HEARING DATE: 26 July 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hodgson

SOLICITOR FOR THE APPLICANT: Yamamoto Attorneys

RESPONDENT: Mr Mikan

Orders

1. The father is to pay the mother’s costs of and incidental to these proceedings fixed in the sum of $50,000.

2. The said sum is to be paid by instalments of $300 per week commencing one week from today for the first payment and thereafter weekly until paid in full.

3. Should the father fall in arrears to an extent greater than three months with respect to his payments then upon notice given by the mother through her solicitors to the father the balance of the amount then owing shall immediately fall due and payable.

4. The Court makes no further order for costs with respect to the proceedings for the order for costs.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Sora and Mikan 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 SYDNEY

FILE NUMBER: SYC 4856  of 2011

Ms Sora

Applicant

And

Mr Mikan

Respondent

REASONS FOR JUDGMENT

Introduction

Background facts

1. The proceedings before the Court are proceedings by a mother Ms Sora for an order for costs with respect to proceedings determined by a judgment of the Court delivered on 6 March 2013.

2. That judgment should be read as if it were part of this judgment.

3. The application of the mother is for an order that the costs to be ordered be fixed in the sum of $50,000.

4. The mother acknowledges that the father has not the means with which to pay that sum immediately but raises a number of matters concerning its payment in due time.

5. The father opposes the making of any order for costs.

6. The Court is informed by the provisions of section 117 in relation to the question of orders for costs.

7. Section 117 provides that unless an order is made under section 117(2), each party to the proceedings under this Act shall bear his or her own costs.

8. However, section 117(2) provides that if in proceedings under this Act the Court is of the opinion that there are circumstances that justify it in so doing the Court may subject to sub-sections 2A, 4A and 5 and the applicable rules of Court make such order as to costs and security for costs whether by way of interlocutory order or otherwise as the Court considers just.

Section 117 considerations

1. The Court therefore has a broad discretion as to the order it makes for costs and that discretion is set out in those two sections that is to say 117(2) and 117(2A).

2. Clearly if the Court is going to exercise its power to make an order for costs it must consider the various matters set forth in section 117(2A) and they are as follows.

(a)    the financial circumstances of each of the parties to the proceedings

1. The mother is a resident of Japan.  She lives on a tomato farm which also produces some rice in Japan with her parents.

2. She is employed as a farm assistant and the evidence before the Court was that she received some compensation for undertaking that task.

3. The father is employed and his financial situation is set out in his Financial Statement sworn on 21 July 2013 in these proceedings and filed on 24 July 2013.

4. In that Financial Statement the father asserts that he has an income on a weekly basis of $1,153.84 and outgoings on a weekly basis of $1,141.84.

5. The Court notes that amongst his outgoings are expenses paid to his partner with whom he now resides.

6. Also included in the expenses claimed by the father is an amount of $500 paid to Messrs Craddock Murray Neumann Lawyers for legal and professional fees in these proceedings.

7. The amount of those fees is set forth in paragraph 50 of his affidavit and it is said to be in the sum of $113,540.

8. There is not on the existing commitments of the father much leeway and clearly any significant order for costs would be unable to be paid by him on his Financial Statement forthwith.

9. However the Court does not take the view that there is no capacity in the father to pay his costs and cannot see any reason why there ought not to be a consideration in his outgoings of payment he is presently making to his former solicitors.

10. Whilst it is true that the Court cannot interfere with the contract for repayment made between the father and his former solicitors, the fact is that he has obligations of another nature and he has to find a means where he can reasonably meet them.

11. Whilst of course the financial situation is as I said one which demonstrates modest means in the father, it is nevertheless only one of the matters that the Court is obliged to take into account under the provisions of section 117(2A) and the authorities are clear that even though there be little or no capacity to pay, that is not in an appropriate case where particularly conduct is involved, a bar to otherwise making an order.

(b)    whether any party to the proceedings is in receipt of legal aid and, if so, the terms of the grant of that assistance to that party

1. The mother is in receipt of legal aid it is understood in relation to the present claim for costs.

2. The mother was in receipt of legal aid at a time when she commenced the proceedings but that legal aid grant was terminated on the payment of some of her costs it is understood was made by her relatives.

3. The father has no grant of legal aid and did not have a grant of legal aid in the proceedings.

(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

1. 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 is a matter which clearly this Court can take into account.

2. The father points to the number of interim applications made by the mother for an order relating to the child of their relationship.

3. That child was taken under cloak of secrecy by the father from Japan to Australia, the mother having been dealt with in a duplicitous fashion by him.  It was clear that the mother desired the return of the child to Japan which under the law of Japan would have been an appropriate recognition of the relative rights of the parties in relation to the child.

4. The taking of the child from Japan was the cause of these proceedings.

5. The taking of the child was contrary to the law of Japan under a cloak of secrecy and without the consent of the mother and following of false information being given to her.

6. Reference is made to the judgment of the Court in the proceedings wherein the Court sets out some of the duplicitous dealing by the father with the mother.

7. If the father had not taken that step the matter could have been resolved in Japan but the father took the child to Australia.

8. He says that taking the child to Australia was following a determination he made that the interests of the child were served thereby and that he was concerned with the child’s welfare.

9. It may be that he has a concern for his child but he has to understand and does now I trust understand that that is not a concern which in a case such as this should be given effect to by illegal acts under the law of Japan.

10. Indeed, in due course, the proceedings before the Court determined that the interests of this child were served by a return of the child to Japan to reside with the mother.

11. In the course of the proceedings the father was told that he was the father of a second child by the mother.

12. The father denied that he had ever had sexual intercourse with the mother at a relevant time and said that the child was not his.

13. The consequential proceedings for DNA testing were expensive, took time and effort.  Whilst it is true that there has been some lengthy debate between two obviously active solicitors seeking to represent their client’s instructions the fact is that there should not have been the expensive debate that took place.

14. One would hope that ordinarily in proceedings such as this, those who act for participants do so in a way which minimises unnecessary costs.

(d)    whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. The proceedings were not necessitated by the failure of a party to comply with a previous order of the Court but they were necessitated by the failure of the father to obey the laws of Japan and by reason of his acting contrary to those laws in relation to the removal of the child.

2. Whilst that is not a matter that would be taken into account in a direct fashion under this subsection it is a matter that goes to the general exercise of the discretion within the provisions of section 117.

(e)    whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. The father has been wholly unsuccessful in the proceedings in the sense that the primary purpose of the proceedings brought was to retain the child in Australia in his care.  The mother’s primary purpose in the proceedings was to have the child returned to Japan and her care and that has been the result of the litigation.

(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

1. The Court is obliged to take into account whether any party has made an offer in writing to the other party to settle the proceedings and the terms of such offer.

2. There appears to have been no offer to settle the primary proceedings.

3. In relation to the current proceedings for costs it is noted that the father gave evidence of an offer to credit to a trust fund the sum of $1,000 per year to be applied to the child’s tertiary education and that it be accepted in lieu of any order for costs.

4. Not only is the amount infinitesimal compared to the costs incurred by the mother which the Court is informed is $145,000, but it is even insignificant when compared to the costs incurred by the father and was set forth in his Financial Statement.

5. It appears that no offer in writing was made to settle the primary proceedings.

   (g)such other matters as the Court considers relevant

6. A number of matters have been raised with the Court concerning the conduct of the mother post determination.

7. They involve assertions that she has not fully complied with the order of the Court.

8. The Court takes the view that there is a temporal limitation on conduct within the meaning of section 117 and that is up to the end of the proceedings which constituted the primary cause the subject of the order for costs and that it is inappropriate for the Court to take into account post-determination conduct.

9. In any event it is noted that Mr Hodgson on behalf of the mother asserts that the order has been substantially complied with although there are assertions that parts of it have not been complied with.

10. The Court in an application such as this with the mother in Japan and the father in Australia is not able to test the evidence which is received by way of affidavit only and accordingly the Court will not have regard to those matters.

11. The original judgment of the Court contains very forthright findings about credit and to the extent that there is a conflict as between the mother and the father on issues of fact, the Court prefers the evidence of the mother.

12. Reference has been made to the conduct of the proceedings in relation to an asserted unwillingness on the part of the father and the maternal grandmother to admit the mother to spend time with the child.

13. There is an issue in relation to the appointment of an expert and the costs are very substantial.

14. The Court is informed that no indemnity costs are sought.

15. The Court is asked for an order for a specified amount and an amount of $50,000 is sought.

16. The Court is informed that the father has made no payments post the event by way of child support but consistent with the Court’s earlier ruling in relation to post-determination matters the Court does not take that into account other than to note that it is a matter which would indicate that the father does not presently have that expense.

17. The father has re-partnered and is living with a lady who earns significant monies, allegedly in excess of $1,000 a week and she is meeting some of their expenses.

18. The father has submitted to the Court that the international relocation matter was a complex one and should not be treated in effect in a simple way.

19. He points to the difficulty in the determination of the various issues.

20. He asserts strongly that it was his genuine belief that the child should be brought to Australia for the child’s best interests.

21. He says that to the extent that his conduct of himself during the proceedings was criticised, that it was an emotionally-charged situation and that he was driven to that conduct by what he says were safety concerns and a love for his child.

22. He says in relation to the DNA testing to determine the parentage of his second child by the mother that he had concerns that the mother might have been sexually involved with someone else.

23. Mr Hodgson as the Court apprehends it did not complain of that so much but rather that the father asserted clearly falsely that he had had no sexual contact with the mother as alleged by her.

24. The father pointed to the fact that he said no offer of settlement was made in these proceedings and I think it would be true to say that that is so and it does not apply to either and it I think brings no comfort to either side that that is so.

25. He refers to the various visits to his home by the police.

26. The Court does not consider those matters now are relevant but observes that the mother at the time was in Australia without any support and when matters concerned her she turned to the only authority that she thought might be able to give her some assistance.

27. The father also says that he has sent toys, snacks and two laptop computers, one of which melted apparently to assist the children.

28. As I see it this is not a case in which the continuing support of the children is litigated except to the extent that it explains some of the father’s expenditure.

29. The father also complains that if an order is made for costs it would jeopardise his plans to visit Japan and have a relationship with the children.

30. The Court intends to make an order for costs but is going to give him time to pay and to the extent that that will hopefully enable him to renegotiate his arrangements with his present solicitors, will afford him a situation where he is paying little more than he is presently paying.

31. Be that as it may the obligation to pay the costs in these proceedings arises out of the nature of these proceedings and the various matters to which I have referred.

32. For the father in this case it is a question of where the priorities in payment of creditors lies.

33. One assumes that if an arrangement cannot be worked out between the father and his creditors which common sense dictates should be worked out, then no doubt one or other of the creditors will take those proceedings which enables a trustee in bankruptcy to sort out the priorities, payments and entitlements.

34. It is an appropriate case where there should be an order for costs and the Court proposes to fix a sum.

35. It does so in part because the costs incurred on a solicitor client basis are clear indication that the amount sought is within a reasonable range for party and party costs.

36. It also will make an order as requested that the sum ordered to be paid should be paid by instalments and accordingly the Court makes the Orders set out above.

I certify that the preceding seventy-seven (77) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 26 July 2013.

Associate:

Date:  28 August 2013