Trayden & Trayden (No 2)
[2022] FedCFamC2F 329
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Trayden & Trayden (No 2) [2022] FedCFamC2F 329
File number(s): CAC 2262 of 2017 Judgment of: JUDGE W J NEVILLE Date of judgment: 24 March 2022 Catchwords: FAMILY LAW– PARENTING – application for costs filed after delivery of final judgment – where the Mother seeks the Father pay her costs of the substantive proceedings in the fixed sum of $140,000, and although being a sizable amount, it is a modest proportion of the Mother's overall costs – where the conduct of the Father throughout the proceedings is relevantly considered – where the orders sought by the Father in the substantive proceedings were not in the best interest of the children - where the Mother made multiple very reasonable offers of settlement notably in relation to property Orders – where found appropriate to make special costs order - Order made for costs as sought by the Mother Legislation: Family Law Act 1975 (Cth) s. 60CC(3), 75(2) Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Hawkins & Roe [2012] FamCAFC 77
Leslighter v Fitzgerald-Stevens (2013) 47 Fam LR 384
Stephens v Stephens (2011) 44 Fam LR 117
Wrenstead & Eades (2016) FLC 93-697
Division: Division 2 Family Law Number of paragraphs: 24 Date of last submission/s: 31 January 2022 Date of hearing: 29 & 30 October 2020 – principal hearing on parenting and property Place: Canberra Solicitor for the Applicant: Dobinson Davey Clifford Simpson Solicitor for the Respondent: Neilan Stramandinoli Family Law ORDERS
CAC 2262 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS TRAYDEN
ApplicantAND: MR TRAYDEN
Respondent
ORDER MADE BY:
JUDGE W J NEVILLE
DATE OF ORDER:
24 MARCH 2022
ON A FINAL BASIS, THE COURT ORDERS THAT:
1.Pursuant to Section 117(2) of the Family Law Act 1975 (Cth), the Respondent pay the Applicant’s costs of, and incidental to, the substantive proceedings and the Application in a Proceeding filed 22 November 2021, fixed in the sum of $145,000.00 by no later than 31 May 2022.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Trayden & Trayden has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE W J NEVILLE
Introduction
On 3rd November 2021, I delivered reasons and pronounced Orders in proceedings between the parties. The Orders related to both parenting and property matters. Amendments to the Orders under the Slip Rule were made on 16th November 2021. The Orders made provision for an Application to be filed within a specified time in the event that either party sought any Orders in relation to costs.
On 22nd November 2021, the Mother filed an Application in a Case by which she sought the Court award her costs in the sum of $140,000, together with a further sum (detailed in Submissions at par.3) relating to the Application in a Case, in the sum of $5,000. In general terms, the primary amount sought is less than half of the total legal fees incurred by the Mother/Wife. For comparison only, they are also approximately half the amount of legal fees incurred by the Father/Husband levied by his former lawyers (he has retained different lawyers from those who represented him at the trial for the Mother’s costs Application).
Among the reasons set out below, perhaps the most striking factual feature is the number of times that the Mother sought to resolve the litigation in making offers of settlement to the Father. No less striking is the number of times the Father refused these offers and continued to advance positions at trial, for example in relation to parenting, which were so soundly or significantly rejected or unsupported by the Expert, and the no less tenable position in relation to property he advanced.
In my view, it was (a) the very balanced and sound offers of settlement proposed by the Wife, (b) the number of times she made such offers, (c) the almost blanket rejections of such offers by the Father, (d) the fact that the Court awarded the Mother, particularly but not only in relation to property matters, everything she sought, and (e) the conduct of the Father as a litigant (and more widely), in the light of the principles set out below, which require that the costs Orders sought by the Mother are appropriate in all of the circumstances. The Mother’s costs are to be paid by 31st May 2022.
Factual overview
Rather than seek to summarise various “findings” or views expressed by the Court in the principal (November 2021) judgment, it is sufficient for current purposes simply to set out selected sections from the primary judgment, beginning with pars.1-7 and 20 from the introduction, thus (internal citations omitted):
[1] This matter involves the parties seeking property Orders following a 15 year marital relationship. The parties also seek parenting Orders that are in the best interests of now 13 year old X, and now 11 year old Y. The children, and X in particular, have a range of health issues. The litigation between the parties has been on foot since 2017.
[2] By definition, all trials are taxing, and usually much else. Clearly this is especially so for the parties. Sometimes, parties see the wood for the trees (to speak colloquially), while others do not – for any number of reasons. This matter fell very strongly into the latter category, which led to the trial being a quite enervating, and often remarkably exasperating, experience doubtless for all, sometimes including the Bench!
[3] Regularly and unsurprisingly, exasperation most commonly arises from the conclusion being quite readily apparent even quite early in a trial. However, it becomes clear that the parties (one or both) cannot, for any number of reasons, or will not, also for any number of reasons, see the reality of the evidence that is laid out (or being laid out) before them. Regrettably, such was the case here.
[4] Difficulties can also arise where usually one party has a particular fixation upon one incident or feature of the past relationship, and despite any number of attempts to assist the party to focus upon other, more important features of the matter, they cannot or will not do so. Regrettably, such was the case here. A singular example will suffice here, with many more to come later in these reasons.
[5] The parties separated in August 2017. There was a physical altercation between them at the time. Everyone agrees that this was the only incident of physical contest between them both during the relationship and after separation. Both parties give differing accounts of the incident, most notably who was the aggressor or instigator. As was made plain throughout the whole of the trial, from the Father’s perspective, he was the victim of the assault and the Mother the instigator and aggressor, and that until his account of things was vindicated “the 2017 incident” would (or will) continue to fester and blight all aspects of the parenting issues, and all else. Details of how fixated the Father was on this incident and how it coloured his perspective on so many aspects of the trial and the parenting relationship are set out later in these reasons. It mattered not a jot how many times the Court indicated that as significant as family violence is, a one-off incident three or more years ago was unlikely to be so crucial to making Orders that are in the best interests of the children. Ultimately, after yet another commentary on this incident in the course of the Father’s cross examination, the Court bemoaned:
HIS HONOUR: The bazillionth time! It’s like an audit of “he said/she said”. It’s like watching, respectfully, a bad slow-motion movie, and it’s very difficult not to be distracted in trying to focus upon how does this – or how does any of the evidence help me make orders that are in the best interests of the children? That’s what my focus has got to be. That’s what I’m trying to focus upon, so hence my comments this morning to everyone in court about this remarkable fixation upon an incident in August 2017. People have got to move on. We’re hopefully – at the end of this trial and whenever a judgment is, rule it off. Let it go. Sorry, Mr Howard.
MR HOWARD: You’ve used the words, “We have differing views about that incident,” and certainly that’s reflective of what his Honour has said as well?‑‑‑Yes.
But that’s not, with respect, what you tell medical providers, is it? You don’t say, “We have differing views.” You say, “Ms Trayden is not telling the truth about these things”?‑‑‑Yes. Yes, absolutely, I’m saying that.
[6] The so-called August 2017 incident came up multiple times in the course of the Father’s cross examination. Such matters are summarised below.
[7] Another unfortunate exchange, along lines similar to the above, was the following (emphasis added):
MR HOWARD: Yes. And it was after this series of communications that Dr P, firstly, cancelled the appointment and then later withdrew treatment, isn’t it?‑‑‑Yes.
You also shared with Dr O the details of your separation and that you considered that Ms Trayden was a liar about those – about the incident at separation?‑‑‑I was requested to give explanation of some of that.
So is the answer to my question, yes, you did share that with Dr O?‑‑‑Yes.
Thank you. I suggest to you that in neither case, neither with Dr P nor with Dr O, was it relevant for them to know the personal circumstances of your separation from Ms Trayden. Do you agree with that or you don’t agree with that?‑‑‑I think it was important for our children’s health potentially, until we worked out what was actually happening, so.
HIS HONOUR: Why? Why? In order to treat the children for whatever the malady, the situation, circumstances were, why would the circumstances of the separation be relevant to that?‑‑‑Because there was some irrationality, and I know that’s my view only, and so what if that was to be in what was informed to practitioners on behalf of children? So I just wanted to play a part in giving some input, so.
I know the input is important, but ‑ ‑ ‑?‑‑‑But, yeah. And so being – I guess we’ve both put the same view from what I can tell, “I’m going, you’re not.” So not – not helpful, wouldn’t have done it that way if my – my time over, and haven’t done it since, but ‑ ‑ ‑
[8] The Expert in the parenting side of the proceeding was Dr J. She did two detailed Reports, which became Exhibit A1 (dated 29th October 2018) and Exhibit A2 (dated 20th December 2019).
[9] Two interim oral judgments were delivered in November and December 2018, respectively. The November reasons and consequent Orders granted sole parental responsibility to the Mother regarding matters pertaining to health care for the children.
[10] In the Mother’s Case Outline for the Final Hearing in October 2020, her experienced Counsel stated (par.20), with wonderful if not eternal optimism regarding the parenting side of the proceeding: “In light of the recommendations of Dr J, this matter should be relatively easy to resolve without the need for a hearing.” Given the brief procedural history already set out, including the number of interim hearings, the two detailed Reports, plus the intricate layers of the dispute that has involved so many others (some noted below), the prospects of a quick resolution to the parenting side of things was indeed optimistic. Having sat through the trial, and laboured through detailed submissions (not to mention the multiple Affidavits), and the high level of conflict between the parties, which included the Father’s almost obsessive fixation upon a single and concerning physical contest between the parties (fortunately the only one) on the date of separation in 2017 (“the 2017 incident”) it was a plainly forlorn hope of any expeditious resolution. For the children’s sake, and for the parents’ sake too, it is extremely regrettable that they could not resolve their parenting contest.
[11] As an example of the Father’s fixation upon the single physical contest between the parties in 2017, in addition to him regularly raising it with experts, he effectively lodged a formal complaint to his evangelical Church (“M Church”) by which he sought to have the Mother “condemned.” His “statement” to M Church, dated 28th November 2017, became Exhibit C. The Father’s complaints against the Mother included that she lied about this incident, had perjured herself regarding its details, and had not taken responsibility for being the instigator and perpetrator of it. At the same time, he acknowledged that she was a good and attentive Mother to the children.
[12] Subject to what is said later in these reasons, because it was a single incident, and now the better part of 4 years ago, in my view, the 2017 incident was, at best, of marginal relevance to the principal matters for the Court’s determination. Of course, as is often the case, a party or witness who continues to press a particular matter in his or her evidence often tells the Court more about themselves than what they are seeking the Court to find regarding the other person.
[13] Subject to what is set out later in these reasons, the Father continued to press for parenting Orders that are not only unsupported by the expert evidence before the Court but were consistently contrary to what the expert cogently and consistently recommended. The Father’s persistence, in other circumstances, would doubtless be a virtue. In the ongoing parenting contest between the parties, it is anything but. It strongly bordered on confirming a reasonably strong impression of him as lacking in insight and or being over-confident in his own assessment of the children’s needs, X’s in particular.
[14] In Dr J’s first Report, noted in my oral reasons of November 2018, she said that the children have a good and close relationship with, and attachment to, both parents. However, the primary attachment is with the Mother (pars.1.2 & 1.5).
[15] In the oral reasons of November 2018, I noted the following, again by reference to Dr J’s first Report:
At par.1.8.2 (p.35) of the Report, Dr J said: “The parents appear not to be able to work together to manage the health needs of the children. Professional services for the children’s health needs appear to have become intertwined in the acrimonious parental relationship. This appears to be having a serious negative effect on the children’s health treatment, especially X’s treatment. It appears that the father’s interactions with health professionals have had the negative effect of health professionals withdrawing (or considering withdrawing) care to X. Specialist paediatric care in the Canberra region is difficult to source. Wait lists can be long. Interruption to positive professional relationships in children’s lives can have negative impacts on children’s health and wellbeing. It appears the parents, at this point in time, cannot work together to support the children to receive appropriate professional health care. Whether the parents can work together in other areas of decision making (such as supporting the children in choices for their educational needs and social / extracurricular needs) is unknown.”
[16] Also in those reasons I said:
In the Father’s submissions, emphasis was placed on Dr J’s comments regarding the children wanting to see their Father more. While he acknowledged that her recommendations, such as they were, did not propose any move to a shared care regime until perhaps 3-4 years’ time, he sought that there be some definite increase in time with arrangements now.
[17] Regrettably, so many of my concerns that were raised in the November 2018 reasons remained, in my clear view, unheeded at the final hearing in October 2020. That said, at the eleventh hour, so to speak, late in the hearing there was a modicum of a breakout of peace. The Father indicated at the commencement of the second day of the trial that he had changed his position regarding parental responsibility, more particularly regarding the Mother continuing to have sole parental responsibility in relation to the children’s health. Regrettably, this peace was not long-lasting.
…
[20] The Father’s position regarding parental responsibility changed a number of times in the course of the litigation. Curiously, if not alarmingly, in the final iteration of his written submissions (set out in full later in these reasons), the Father’s position regarding parental responsibility changed from what was articulated during the trial. No leave of the Court was sought; no authority was cited – for or against – this novel course. Unsurprisingly, the Father’s changed Orders regarding parental responsibility was vehemently opposed by the Mother.
The Court’s final comments regarding parenting matters were relevantly summarised at pars.134 – 146. These paragraphs also comment on the attitude and evidence of the parties, which are of some relevance to the current Application for costs. Again for ease of reference, those paragraphs are set out below:
[134] Without canvassing all aspects of the evidence because of the comments in the course of outlining the evidence, I need only note here the following.
[135] First, where-ever there is any conflict in the account of events between the parties, and absent any supporting independent evidence to the contrary, I strongly prefer and accept the evidence of the Mother to that of the Father. Moreover, as is clear from her evidence, Dr J similarly supports the Mother’s account and evidence more generally in relation to parenting matters.
[136] Secondly, without necessarily referring to each paragraph in s.60CC(3), I should be taken to follow them sequentially.
[137] The views of the children are basically as recorded in the two Reports of Dr J and in the parents’ respective materials. Given their ages, some weight should be given to them, but the Court must also have regard to the various other matters that relevantly impact upon them, such as Y’s “need for cuddles” from his Mother, therefore questions about what weight can or should be given to them. Likewise, X’s ASD is a consideration in the attribution of weight, together with the evidence of Dr J in this regard.
[138] There is no question that both children have a close and loving relationship with both parents. X however seems to be quite acutely aware of the tensions and difficulties between her parents. As already noted, Y in particular has a very close attachment, and likely “need” to some degree, to be very close to his Mother. These matters are also relevant to sub-paragraph (g), among others.
[139] In relation to the “considerations” set out in sub-paragraphs (c), (ca), (e), (f) and (i), recalling what has already been observed in the course of these reasons, and without repeating them, in my view:
i.the children have a close relationship with both parents;
ii.the Mother has a much more intuitive, methodical and child-centred approach in relation to the children’s needs, while the Father, though well-intentioned, often seems very focussed on the amount rather than the quality of his time with the children, to their detriment. Plus, he has an unrelenting, almost zealous, need to have “input” to all decisions, which has led to some health care providers opting not to treat the children because of the Father’s interventions. His zeal and often self-focus must somehow be significantly tempered;
iii.the Mother works assiduously to involve the Father in many matters regarding the children but he is never relevantly satisfied. This regularly leads to ongoing “discussions”, if it is appropriate to call them such, but which must inevitably slow much decision-making regarding the children’s best interests, and doubtless too continues to exhaust the Mother. The Father is relentless in the prosecution of his views;
iv.the parties communicate with the children without much difficulty in the Father’s case, and well, in the case of the Mother;
v.the care and “maintenance” of the children is not a major issue, on the evidence, save in relation to the issue of child support, as set out earlier in these reasons;
vi.there are really no practical difficulties regarding the children spending time with the parents, other than those already noted; and
vii.there are no substantial issues, other than those recorded throughout these reasons, regarding the general capacity of each parent to provide for the children’s needs, including their intellectual and emotional needs. For reasons already given, in my view, the evidence strongly supports the Mother being the parent who most practically and intuitively provides the greater, more properly structured, psychologically and emotionally attuned care of the children, and significantly more so than does the Father;
viii.in terms of “attitude” to the children and responsibilities regarding parenthood, the comments already made show clearly where the Court’s views rest. This is not intended to be overly critical of the Father, but for the reasons given, the Mother carefully and properly focusses on the children, while the Father, for various reasons, although thinking that he is child-focussed, either is unable or unwilling to break out of his various fixations and pre-occupations of his own concerns. The Father’s past interventions with the children’s health care providers is a cause of very significant concern, as is his relentless desire or need to have “input” to decisions relating to such matters. The Father’s parenting position has been made all the more difficult because of it constantly changing regarding his Orders sought. That too does not augur well for the future, absent the Father getting relevant assistance to aid him in such matters.
[140] There is little or no question about the general capacity of the parents, for the further purposes of sub-paragraph (f) and other parts of s.60CC(3), to provide for the material needs of the children.
[141] Although canvassed a number of times already, it remains important to consider the somewhat infamous August 2017 incident between the parties at separation. In my view, it warrants separate attention and can be properly looked at under s.60CC(3)(m).[1]
[142] The August 2017 incident at separation was, and remains, the only matter of family violence. The Father’s pre-occupation with it, and at various times since, his need to find vindication against the Mother, remains a cause of significant disquiet and concern for the Court. The event was distressing for both parties. The Mother has moved on, to the degree that she has been able to do so, in the light of the Father’s unrelenting campaign to have some accounting for it. The Court cannot, on the evidence before it, make any relevant findings about instigator or principal perpetrator. In my view, it being now so relatively long ago, its weight or relevance is, at best, negligible. Everyone, but most especially the Father, needs to let it go and move on, so that they can focus upon the best interests of the children. It will very likely also assist him, indeed everyone, to do so.
[144] In the course of his cross examination, the Father was asked questions about the incident in the context, and in the light, of him writing to certain members of his Church at the time. The relevant correspondence was drawn to his attention from the Tender Bundle (pp.71 – 72).[2] Summarily, as set out in this correspondence, the Father sought, among other things, that the Mother be formally admonished and condemned by the Church for her actions as described by the Father. Fortunately, the Church did not proceed as the Father wished. Regrettably, others on his behalf pursued the Mother. In my view, such action was completely improper.
[145] In the course of the hearing, I questioned the Father about other Christian teachings such as forgiveness as perhaps being a more positive course to pursue. Of course, this is not a Court of morals or ethics. That said, I simply need to record that, in my view, the Father’s actions to press his (and the Mother’s) local Church to admonish her was a lamentable and completely inappropriate course. Among other things, it clearly showed that the Father, at the time, and in many respects repeated since, had (and may still have) little or no insight into the impact upon the Mother, and in turn on the children, of his fixation upon this very unfortunate event in August 2017. Hopefully it will suffice to recall from the Beatitudes the following (Mt 5,7): Blessed are the merciful, they shall have mercy shown them, and the instruction to forgive infinitely (Mt 18,21 – 35).
[146] In addition to these reasons, I accept and adopt the submissions by the Mother, and also by the ICL. Those submissions support, as these reasons also confirm, that the best interests of the children are served by the Mother having sole parental responsibility regarding the health care for the children. Otherwise, parental responsibility is to be shared equally between the parents.
[147] In the light of all the evidence and the findings and comments made by the Court along the way, and in the light of the statutory considerations, the Orders as sought by the Mother are, in my firm view, in the best interests of the children. The Orders so sought and to be made are least likely to result in further litigation.
[1] Formally, the incident can also be properly considered under s.60CC(3)(j).
[2] See TA 81 – 82. See also the Father’ detailed letter, dated 28th November 2017 (Exhibit C), to the M Church Council, in which he sought, among other things, to have the Mother formally rebuked for her “ungodly behaviour.” In that correspondence, he alleged that the Mother had injured herself in relation to the incident in August 2017.
Also for ease of reference, regarding property matters, pars.158 – 169, and pars.171 – 188 of the primary judgment summarise the Court’s findings and consideration of the evidence:
[158] The parties are aged respectively 46 (Husband) and 45 (Wife) years. In general terms, there are no health issues to speak of, although there was regular reference to the Father indicating that he was regularly afflicted with fatigue and some other conditions during the relationship, and certain levels of anxiety and the like following the separation. This, he said, left him unable to work full time for a significant period of time, post separation. There was evidence before the Court indicating that he could have returned to work full-time had he so wished during his period of working lesser hours. No medical evidence for any of these matters was provided.
[159] There are, of course, health issues in relation to the children (aged 13 and 11), for which the Mother bears the bulk of the care and responsibility. She did not, and could not, reduce her labours across the board, post separation because she was the primary carer of the children. The parties’ relationship was for approximately 15 years.
[160] Before finalising the size and composition of the property pool, the following matters need to be considered. Both parties provided Aide-memoires that set out the respective property pool claims. Relatively speaking, there are only a few matters of substance that separates them. Those issues are set out below.
[161] Issue 1: the Wife’s H Superannuation: pursuant to a valuation he obtained, the Husband ascribed a family law value of $363,232 to the Wife’s very modest H Super Fund pension (which arose from a voluntary redundancy she took in 2015); it is in the payment phase. She receives each week the sum of $331 from this pension. In accordance with authority discussed presently, and because the Husband does not seek any splitting of the Wife’s pension, it is inapposite that it be ascribed any value, and certainly not a capitalised value. It is proper for the Court to treat it only as a financial resource in the Wife’s hands.
[162] Further, the Wife’s pension is understandably, and realistically, treated as income for the purposes of the assessment of benefits, and for taxation and child support purposes.
[163] The two Full Court decisions in Semperton and in Welch & Abney confirm that, whilst a trial Judge has a discretion as to how superannuation interests will be treated in a particular case, the discretion is guided by statements of principle.[3] This includes, for example, the nature, form and characteristics of the subject interest which must be considered, including whether or not a splitting Order of the interest is sought or made.
[3] See Sempterton v Semperton (2013) 47 Fam LR 626 at [87] – [91] (May J); at [159] – [162] & [175] (Thackray & Ryan JJ); Welch & Abney (2016) FLC 93-756 at [59] and [61].
[164] In the light of the statements of principles in the two Full Court decisions referred to, the Husband’s position regarding the capitalisation of the Wife’s H Super Fund pension, and its inclusion in the property pool, is unsupportable.
[165] Issue 2: Add backs: The second area of contention for the purposes of confirming the details of the asset pool concerns the regularly contested area of “add backs.”[4] Factually, the principal area here concerns the Father’s times of “under employment” or non-employment, for a period of time, from July 2017 until April 2018 (9 months), during which time he was also not paying child support. He was paying half of the children’s school fees. During this period the Father withdrew $53,045 from joint funds for his personal use.
[4] This area of jurisprudence is well-trodden yet remains regularly fertile in property disputes. It is sufficient simply to note the statement of principle in Omacini v Omacini (2005) 33 Fam LR 134 at [30] – [31].
[166] It would usually be the case that funds used for living expenses are not treated as warranting to be added back to the property pool. Here, however, the Wife argues that it was the Husband’s decision either not to work, or not to work full-time. As already observed, the Husband contended that he suffered from various maladies that prevented him from working. He provided no medical evidence in this regard. And there was evidence before the Court of him indicating to others that he could have worked full-time if he so wished. Nor did the Husband provide any evidence as what the appropriated funds were used for.
[167] In my view, it is best in these circumstances to deal with this “claim” or aspect of dispute under s.75(2) (o) of the Act. The evidence and the Wife’s submission, and in the light of the principle referred to, are more than sufficient for this sum to be added back to the pool. Although considered elsewhere, during this period also, the Husband was living rent-free in the former marital residence while the Wife was renting a property for herself and the children. Moreover, as a matter of justice and equity, the Husband’s claims have no substance in this regard.
[168] A related matter of little consequence is that the Husband sought to have added back to the pool the sum of $1,920 paid to the Wife from NDIS funds. It seemed that the Husband may have, in more recent times, backed away somewhat from seeking this pittance of a sum to be added back, particularly in circumstances where the funds in question (a) benefit the children directly, and (b) the Wife’s bank statements are before the Court and are included in the asset pool in any event. To include it would, among other things, raise the prospect or risk of some double-dipping. Formally, I refuse to add back that sum into the pool in the unlikely event that such a course was still pressed.
[169] The Husband also sought to include into the pool of assets the value of a piano. It is not, and cannot be, disputed that the piano belonged to the Wife prior to the marriage. Nor can it be disputed that there is no valuation of it before the Court. There being no valuation, no value of such an “asset” can or should be ascribed to it, perhaps least of all by the person who has never owned it. The piano, to which the Husband suggested that a value of $3,000 should be ascribed, does not fit into any of the proper or usual categories for add backs. It will not be so included in the pool.
…
[171] I should only add that after the hearing and earlier this year, the Wife brought an Application to re-open the proceeding to seek to adduce further and more recent evidence regarding the value of the former marital residence. Ultimately, that issue was resolved by consent, albeit that it took (so it seems) a not insignificant period of time and some extra effort to resolve this aspect without the need for Court determination. The more recently agreed value of that property will be taken as set out in the Aide-memoire.
[172] The Wife sought her costs of that Application and filed submissions in this regard. The Husband likewise filed written submissions. Although the costs sought by the Wife were comparatively modest, I propose reserving her costs in relation to that Application, pending any other Application regarding costs more broadly.
Contributions
[173] In general terms, I accept the characterisation of contributions set out in the Wife’s submissions in relation to the contributions during the marriage as being basically equal. There is little in the Husband’s submissions that relevantly challenges this account, other than some fine-tuned parsing of a few matters that really make little difference to contributions during the relationship.
[174] The parties had few assets at the commencement of the relationship, and during it, both parties worked and earned income and both were involved in the care of the children. For a significant part of the relationship, the Husband was (in somewhat colloquial terms) the predominant “bread-winner” and the Wife the person primarily responsible for homemaking. That said, the Wife undertook employment outside the home when she could.
[175] During the relationship the Husband’s parents gifted the parties a significant sum, by way of a series of individual gifts of money. The total sum was $280,000. The issue here, at trial and to be determined is whether this was a gift solely to the Husband or to the couple. Perhaps unsurprisingly, the Husband asserts the former, while the Wife contends for the latter.
[176] It is uncontested that the funds were used by the parties to pay down joint mortgages and or into joint account(s). According to authority, the onus is upon the party to provide evidence in support of that party’s position. Here, the Husband could have, but did not, call his Mother in relation to her intention (and that of her deceased Husband) regarding the payment of these sums of money.
[177] In the recent Full Court decision in Mabb, the plurality of Ainslie-Wallace and Aldridge JJ said, at [37] – [38]:[5]
[5] Mabb & Mabb (2020) FLC 93-947.
[37] Each party bore an evidentiary onus to establish the facts to support their respective contentions. While it is reasonable to assume, as the Full Court did in Kessey, that the presumed intention of the donor is to advantage the child in the marriage, it is no more than an evidentiary device. Clearly as Fogarty J said in Gosper, that presumption can be rebutted by evidence of the actual intention that accompanied the gift and in this case, the transfer of the land to the parties jointly is a “strong indicator” of intention.
[38] True it is that in this case, there was no direct evidence from the husband’s mother about what she (and her husband) intended when they transferred the land to the parties, her Honour’s conclusion was an inference drawn from the facts and circumstances of the evidence before her Honour which included the fact that the transfer of the property was to both of the parties. There is no error in such an approach and the wife was not obliged to call evidence from the husband’s parents.
[178] The third member of the Full Court in Mabb, Kent J, commented to similar effect, at [110] – [120].
[179] In all of the circumstances, and in particular the failure of the Husband to call his Mother regarding the intention of the donors of the monetary gifts, plus the fact that the funds were used to benefit both parties with the paying down of joint debt and the family more generally, in my view clearly points or leads to the inference that the gifts were to both parties. Should it need to be noted, the failure to call a relevant witness – here the paternal Grandmother – will entitle the Court to view that failure as significant. More formally put, based upon the principles outlined in the long-standing decision in Jones v Dunkel, an unexplained failure to call a material witness may (not must), in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted that party’s case.[6] In my view, given how contested the issue of the “monetary gifts” was, and that the intention of the Father’s parents was crucial, his unexplained failure to call his Mother was a significant omission.[7] The relevant inference must, in my view, be drawn.
[6] Jones v Dunkel (1959) 101 CLR 298 at 308, 312 and 320-321.
[7] The Father’s evidence, such as it was, was to the effect that he did not know that he could or should. Given the experience of his lawyers, this cannot and is not a suitable or otherwise apposite “explanation.”
[180] In my view, in the light of the evidence canvassed above, it cannot be disputed that since separation, the Wife has had the greater proportion of the care of the children, thus for some 3½ years or so (as at the date of the trial in October 2020). The period of primary care is even greater now of course. None of this is said critically of the Husband; it is a statement of fact.
[181] It is also a statement of fact that between August 2017 and August 2019 the Husband paid no child support.
[182] Next, I accept the following propositions: (a) between August 2017 and 17th January 2018, the Wife and children resided at the former marital residence. During this period the Husband lived with his Mother and paid her no rent; (b) following the Husband’s insistence, the Wife and children left the former marital residence and rented elsewhere, while the Husband lived at that residence. Thus, the Husband lived rent- and mortgage-free at the former marital residence while the Wife and children lived in rental accommodation. The Wife said that she has paid in excess of $70,000 in rent as at the time of the final hearing. Obviously, when the children lived with the Husband it was at the former marital residence. I accept that the Wife’s rental was without any financial assistance from the Husband. These factors are relevant to the assessment of contributions.
[183] In my view, in the light of all the evidence, there should be a relatively modest contribution-based assessment in the Wife’s favour of 4.5%
Section 75(2) factors
[184] There is a significant difference in the income of the parties. Although the Husband says that he does not work full-time because of his care of the children, and thereby earns approximately $120,000 per year, in my view, the Court can and should consider the Husband as being capable of working full-time, especially where there is no medical or other independent evidence to support his contention: alas, another significant and unexplained omission. His full-time earning capacity, on the limited evidence, is approximately $180,000 + per annum. The Wife’s annual income is approximately $70,000.
[185] Even taking into account the Wife’s modest H Super Fund pension of $17,000 per annum, her income is significantly less than that of the Husband.
[186] As already noted a number of times, the Wife has, and will continue to have, the primary care of the children.
[187] In my view, on the very limited issues under this section of the Act, there should be a modest assessment in the Wife’s favour of 7%.
[188] Regarding superannuation, given the income disparity between the parties, but also having regard to their relatively young years, meaning that they each have a significant period of time available in their income-earning lives to accumulate reasonable amounts of superannuation, in my view, there should be a further adjustment to the Wife in this regard of 6%.
Written Submissions on Behalf of the Applicant Wife:
The Applicant Wife’s submissions (noting that she was the Respondent in the primary proceeding), filed 31st January 2022, were as follows (emphasis in original, footnotes omitted):
1.These submissions have been prepared in relation to the Wife’s application filed on 22 November 2021. Costs are also sought in relation to:
a.the costs of the wife for the Application in a Case filed on 9 March 2021 and the process relating to the filing of submissions in the substantive proceedings. In relation to these two aspects written submissions were filed by the wife on 2 June 2021. Those submissions are relied upon in relation to those applications; and
b.the costs of the wife for the process of this costs application (that is, her costs since 22 November 2021).
2.In relation to the costs of the substantive proceedings the following issues will be addressed:-
a.a brief summary of the case law relied upon;
b.the conduct of the husband;
c.offers of settlement by the wife in relation to property matters; and
d.That the wife was wholly successful and the husband was wholly unsuccessful.
3.The wife seeks an order for a specified amount of:
a.costs in the sum of $140,000 (relating to the substantive proceedings and the Application in a Case filed on 9 March 2021) (“the primary amount”); and
b.costs in the sum of $5,000 (relating to the process of this application).
4.It is noted that the primary amount is a relatively small proportion of the wife’s overall costs as set out in her affidavit. The order sought does not amount to complete indemnity costs but it is a significant proportion of the amount incurred by her since 29 March 2019 when a relevant offer was made (referred to below).
5.The general rule in Family Law proceedings is that each party should bear their own costs. The court may make an order for costs if it considers it to be appropriate. The case law on indemnity costs is applicable in family law proceedings. There is no distinction, either in the relevant statutory provisions or in the case law, between parenting and property matters. That is, there is no rule that costs are generally not ordered in parenting matters. The relevant examples in the leading case of Colgate-Palmolive v Cussons Pty Ltd relied upon are subparagraphs (a) & (e) as well as the husband’s conduct more generally.
6.The husband’s conduct in the proceedings justifies an order for indemnity costs. Part of his conduct was his focus on the single incident of violence between the parties at separation. This focus led to the husband taking positions on issues that were wholly unjustified and which were contrary to all of the evidence.
7.The husband sought parenting orders at the commencement of the trial for a reversal of primary care and that he have sole parental responsibility (SPR) in relation to medical matters (the latter also a reversal of the then current situation). In relation to parental responsibility for medical matters, the husband conceded that there were no justifiable complaints about the mother’s management of medical matters in the period in which she had had SPR for such matters. His only complaint in his affidavit material and to the Family Report writer was that he was “locked out” of receiving information about the children’s health. Ultimately, he had to concede that he had been provided substantial information about the children’s health and had not taken up the opportunity provided for by interim orders to either ask questions of the wife or of the medical providers.
8.This position of the husband can only be properly understood as a form of retribution against the wife either because he alleged she was the aggressor in the incident at separation or because she had obtained orders that she have SPR for medical matters. Either would be an entirely inappropriate basis for a formal position.
9.The reversal of primary care is also hard to understand on the basis of the evidence before the court. There was no support for this position in either Family Report and the wife had been the primary care of the children since separation.
10.The husband was wholly unsuccessful in relation to both of these applications. He amended his position at the beginning of the 2nd day of the trial to concede SPR to the wife for medical matters and to seek a gradually increasing regime of time until equal time was achieved. His position changed again in his submissions for substantive proceedings, where he sought that his concession about parental responsibility for medical matters be limited to the period ending in December 2021. It was inappropriate that the husband would seek to amend his position after the end of the trial.
11.The offers of settlement made by the wife in relation to property matters are set out at paragraph 22 of her affidavit. The 1st offer of settlement relied upon was made at the mediation with the Hon. Mr John Faulks on 29 March 2019. In each offer of settlement the outcome proposed by the wife was substantially less than the outcome she received from the court after hearing. Section 131 of the Evidence Act 1995 provides that offers of settlement are admissible in proceedings relating to costs applications.
12.The wife received 60% of the net asset pool (including superannuation) pursuant to the orders made 3 November 2021. The main non-superannuation asset was the property at B Street, Suburb C ACT. After the updating of value in early 2021, that property was valued at $1,125,000. This was significantly greater than the value of the property at the time of each of the relevant offers of settlement.
13.The wife’s offers were that she received 55% and later 50% of the net asset pool. The last relevant offer made by her in August 2020 proposed that she receive 50% of the net asset pool. In dollar terms, apart from the distribution of other assets, the wife proposed that the payment to her on the basis of the husband retaining the B Street, Suburb C property should be
a.$589,250 in the offer dated 8 November 2019; and
b.$518,675 in the offer dated 7 August 2020.
14.The payment to her as ordered by the court was $718,959. This was in addition to other assets to be retained by her.
15.Each of the offers were therefore substantially greater than the outcome ordered by the court, both in terms of the percentage outcome and the dollar amount payable to the wife. In his affidavit, the husband puts forward a perverse argument that costs should not be ordered as the wife received a significantly greater outcome from the court than she had proposed. The purpose of making offers of settlement is to try and resolve the matter without the need for hearing. The husband’s position that the wife should receive 38% of the non-superannuation asset pool and no adjustment for superannuation, was significantly outside a reasonable range of possible outcomes. It is submitted, therefore, that the husband’s refusal of the wife’s offers of settlement were imprudent refusals in the circumstances.
16.The husband took, to use words contained within the judgment, a “pernickety” approach to the matter (for example, seeking an addback for a minor amount of $1,920).
17.In summary, the wife was wholly successful in obtaining orders that she sought both in relation to parenting and property matters. The husband’s conduct in both aspects of the proceedings led to the matter being required to proceed to a two-day hearing. Much of his conduct can be traced to his sense of aggrievement about the incident at separation.
18.The husband relies upon his asserted precarious financial position. His income is substantially greater than the wife’s. Any difficulties he may have arising from the orders made by the court are solely because he did not accept previous offers made by the wife. The husband also retained the B Street, Suburb C property with significant equity.
19.It is submitted that asserted conduct of the parties after the conclusion of the substantive hearing is not relevant to the costs application.
Written Submissions on Behalf of the Applicant Husband:
The Respondent Husband’s submissions (noting that he was the Applicant in the primary proceeding), filed 31st January 2022, were as follows (emphasis in original, footnotes omitted):
Documents relied on:
Response to Application in a Proceeding filed 20 December 2021
Affidavit of Mr Trayden filed 20 December 2021 ("AF")
Reasons for judgment of his Honour Judge Neville dated 3 November 2021 ("RJ'')
Dispute Resolution Agreement of the Hon. John Faulks (referred to at paragraph 15 of AF but omitted from the Annexure and tendered with these submissions)
1.The Applicant seeks her costs of the parenting and property proceedings in the sum of $140,000. While not pleaded as costs on an indemnity basis, that sum clearly exceeds what would be assessed on a party and party basis- it is more than the Respondent paid his lawyers for the period used by the Applicant to calculate the sum ($125,000-AF [12]).
2.On behalf of the Respondent, it is said that the general rule that each party bears their own costs (s.117(1)) would be applied in respect of the parenting aspect of the proceedings. He submits to the making of a modest costs order in respect of the property aspect and made such an offer before the Application was filed (AF [7]).
3.In the substantive proceedings most of the parties' and the Court's time was consumed with the parenting aspect. This is significant because: the Court will distinguish between the parenting and property aspects when deciding whether there are circumstances which justify a departure from the general rule; the bulk of the parties' legal fees would have been incurred absent the property dispute; rejections of property offers were not imprudent when the parties were to be in court anyway and given the outcome in relation to parenting would inevitably and significantly have an impact on the property outcome.
4.The following questions arise for the Court to determine in its discretion:
i.In relation to the parenting aspect of the proceedings- whether there are "justifying circumstances" to depart from the general rule;
ii.And if so, what costs order is just and, in particular, on what basis costs should be ordered (whether "party and party" or some other basis), for what period of time or percentage (if on a "party and party" basis) or what amount (if on some other basis);
iii.In relation to the property aspect of the proceedings- what costs order is just and, in particular, what should be the amount or basis of the costs order and for what period.
5.A court should be reluctant to depart from the general rule in parenting proceedings. In Hawkins & Roe, the majority of the Full Court observed that: "In proceedings involving children's or parenting matters, the general rule is not often displaced. The rationale for this practice is that in such matters it is proper that parents are able to put their case in seeking orders which they believe to be in the best interests of their children. It hardly needs to be said that the nature of family court litigation in relation to children is quite different to a commercial dispute in the state or federal courts." [para 14] That the father did not achieve the parenting relief he sought is only one factor to be weighed with others.
6.The Father sought a progression towards equal time in circumstances where he had been heavily involved in the care of the children during the marriage (including by modifying his working hours), the expert in two reports had expressed some support for that progression over time and where Y was seeking more time with him. Ultimately, in the face of indications from the Court and the ICL at the trial, the Mother conceded a 9/5 arrangement, which is what was sought by the Father to the conclusion of 2021. He achieved that concession by running the matter to trial; there is no evidence any offer to that effect was made prior. Paragraphs 8(i), (ii) and 10 below are also relied on.
7.If a costs order was made in relation to the parenting aspect, the usual approach would be for that to be on a party and party basis, and it is submitted that none of the exceptional categories in Colgate Palmolive v Cussons are present to justify a departure from that position. Further, there is no basis to assess those costs from as early as March 2019- given the mediation then was in relation to property only, and there is no evidence of the parties undertaking mediation of parenting matters (AF, [14]).
8.What costs order should be made in relation to the property aspect of the proceedings?
The following matters support the making of a modest costs order only:
i.The Father's financial situation is strained; he has debts of $881,000 on an income of $142,000 gross per annum and a net asset position of approximately $200,000 (AF [18] [22]) - he has so far retained the B Street, Suburb C property as a home for the children;
ii.The Applicant has received nearly $720,000 and retained 60% of the parties' shareholding. The Applicant is in a much better position than had the offers she made been accepted, even allowing for her legal costs beyond that time.
iii.The Full Court has emphasised that - to justify costs on more than a party and party basis - the refusal of an offer must be "at the very least imprudent ...failure to accept an offer which in retrospect perhaps, should have been accepted is, without more insufficient to justify the making of a costs order on an indemnity basis." The Father's rejection of offers made in this case should not be seen as "imprudent" in circumstances where: the parenting matter was to be litigated anyway; the parenting outcome would significantly affect the property outcome; the Family Reports expressed some support for an equal time arrangement in time; and he had an arguable case in relation to the treatment of the gifts from his deceased father and his mother and the Applicant's H Super Fund interest. Further, the Applicant arguably should not be able to rely on a Mediation Paper covered by a Dispute Resolution Agreement providing for confidentiality and privilege. The standard practice of confirming an offer in writing after a mediation apparently did not occur and no offer was made in writing until some 9 months later.
9.The following matters are relevant (s117(2A)(c):
i.the Applicant did not file any document with the Court indicating the property orders that she sought until just before the final hearing (AF[23]);
ii.he agreed to a revaluation of the home given the delay between the trial and the written submissions, and this was significantly to the Applicant's benefit (AF[8]);
iii.he promptly and appropriately agreed to the rectification of the orders to correct the amount he was to pay the Applicant (AF[4]);
iv.he did not pursue an appeal, notwithstanding that the parenting orders provided for less time with the children than the Mother's (and the !Cl's) ultimate position at the trial (AF[S]) and the Applicant has not agreed to a rectification (AF[6]);
v.issues with the Applicant's compliance with the property orders (AF[29]).
10.Both parties incurred significant legal costs over the long history of this matter. Largely they were incurred because each was seeking a parenting outcome which they saw as in the children's best interests. The Applicant has had her justice. To make more than a modest Costs Order would not be just- indeed might reasonably be seen as punitive- and would leave the Father with very little in the way of net assets in circumstances where he has significant ongoing obligations to support the children.
Outline of Principle
Section 117(1) and 117(2) of the Family Law Act 1975 (Cth) are as follows:
(1) Subject to sub-section (2) and section 118, each party to proceedings under this Act shall bear his own costs.
(2) If the court is of opinion in a particular case that there are circumstances that justify it in doing so, the court may, subject to the regulations, make such orders as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court thinks just.
The statutory and jurisprudential considerations in relation to the making (or not making) orders for costs are well known. Although well known, it is sufficient to note the following from the Full Court decision in Stephens v Stephens.[8] Beginning at [62], the Full Court said (emphasis added):
[8] Stephens v Stephens (2011) 44 Fam LR 117.
[62] Section 117(1) of the Act provides: “[s]ubject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.”
[63] Section 117(2) of the Act provides that if, in proceedings under the Act, the court is of opinion that there are circumstances that justify it in doing so, it may, subject to sub-ss (2A), (4) and (5), and the applicable rules, make such order as to costs, whether by way of interlocutory order or otherwise, as it considers just.
[64] Section 117(2A) of the Act provides that in considering what order (if any) should be made under s 117(2), the court shall have regard to the matters set out in paragraphs (a) to (g). In Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 the Full Court (Kay, Warnick and Boland JJ), referring to s 117(2A), said at 130 [41] :
A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
[65] As to the relationship between s 117(1) and s 117(2) of the Act in Penfold v Penfold (1980) 144 CLR 311, in joint reasons, Stephen, Mason, Aickin and Wilson JJ said at 315:
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in “a clear case”. (emphasis added)
[66] As to the nature of the hearing of an application pursuant to s 117 of the Act in Penfold their Honours said at 315-16:
Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent [(1970) 92 W.N. (NSW) 503, at p. 505]). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
[67] We also observe that in Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 the majority of the High Court (Gaudron, Gummow, Hayne and Callinan JJ, Kirby J dissenting) held that s 117(2) of the Act referred to costs in the conventional sense and thus to the payment by one party to litigation of money by way of a partial indemnity for professional legal fees and expenses actually incurred by another party in the course of the litigation: see Hayne J at 219. An order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature. Costs are not a penalty or damages: Latoudis v Casey (1990) 170 CLR 534 per Mason CJ at 543 and McHugh J at 567; Ruddock and Ors v Vadarlis and Ors (2001) 188 ALR 143 per Full Court of the Federal Court at [12] and Brott and Joachim (2006) FLC 93-259 per Full Court (Holden, Warnick and Boland JJ) at 80,403-404.
In the same case, the Full Court commented summarily on the award of indemnity costs, relevantly at [73]:
An order for costs may be made on an indemnity basis, subject to a judicial determination capable of being made that there ought to be a departure from the usual basis that costs be payable on the party and party basis. For a discussion of the jurisdiction to order indemnity costs and its exercise see Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J at 256-257 and NMFM Property Pty Ltd and Others v Citibank Ltd (No 2) (Court’s “NMFM” Judgment No 11) (2001) 109 FCR 77 per Lindgren J at [53] to [90].
Although the costs sought by the Mother in this matter are significant, strictly speaking (or formally) indemnity costs are not sought, nor, in my view, could they be having regard to principle. That said, because issues of principle are invariably crucial for a Court to note and have proper regard to in the circumstances of the matters before it, I note the following comments.
The decision of Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (noted by the Full Court) is a regularly cited authority for relevant principle regarding the awarding of indemnity costs.[9] In that judgment, his Honour outlined the following principles, at pp.232 – 234, which I set out in full (emphasis added):
It seems to me that the following principles or guidelines can be distilled out of the authorities to which I have referred:-
1. The problem arises in adversary litigation, i.e. litigation as between parties at arm's length. Different considerations apply where parties may be found to be entitled to the payment of their costs out of a fund or assets being administered by or under the control of a trustee, liquidator, receiver or person in a like position, eg. a government agency or statutory authority.
2. The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis. In this Court the provisions of Order 62, rules 12 and 19, and the Second Schedule to the Rules will apply to the taxation. In many cases the result will be that the amount recovered by the successful party under the Order will fall short of (in many cases well short of) a complete indemnity.
3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of Court) or a decision of an intermediate court of appeal or of the High Court would be required to alter it. No doubt any consideration of whether there should be any change in the practice would require the resolution of the competing considerations mentioned by Devlin LJ in Berry v. British Transport Commission and Handley JA in Cachia v. Hanes on the one hand and by Rogers J in Qantas on the other. The relevant passages from the respective judgments have been earlier referred to.
4. In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v. Barnes (39 Ch D at 141) said the Court had a general and discretionary power to award costs as between solicitor and client "as and when the justice of the case might so require." Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v. Preston ((1982) 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo, "The categories in which the discretion may be exercised are not closed". Davies J expressed (at 6) similar views in Ragata.
5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v. Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v. Hutchinson (1987) 10 NSWLR 525, Maitland Hospital v. B Street, Suburb C (No. 2) (1992) 27 NSWLR 721at 724 (Court of Appeal), Crisp v. Keng (Supreme Court of New South Wales, 27 September 1993, unreported, Court of Appeal)and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice.
[9] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.
Should it need to be noted, the decision of Sheppard J in Colgate-Palmolive v Cussons has been consistently followed as an accurate statement of principle.[10]
[10] See for example, among many decisions in superior Courts generally, the Full Court decision in Leslighter v Fitzgerald-Stevens (2013) 47 Fam LR 384 at [141] – [150]. Among other things, at [146], the Full Court there said: “… the conduct of a party that is relevant to the issue of indemnity costs is the party’s conduct as a litigant.”
Consideration and Disposition
First, I simply emphasise what has already been set out in the authorities recorded above, notably that a single factor can be sufficient to warrant, in the circumstances of the matter before the Court, the making of an Order for costs.
Secondly, the financial circumstances of the parties were set out in the primary judgment. Those circumstances have been updated in the respective Affidavits filed by the parties. For current purposes, it is sufficient to note that there remains a significant disparity, in the Father’s favour, in the income of the parties. It also remains the case under the final Orders that the Mother continues to have, and will continue to do so, the primary care of the children.
Thirdly, the Father’s submissions that highlight his financial plight and the debt he has incurred (to banks and to his Mother), respectfully, are circular. By this I simply mean that had the matter been resolved in accordance with any of the earlier settlement offers set out in the Mother’s material, he would not be in the financial situation in which he finds himself today. Put another way, his submissions in this regard are completely self-serving.
Fourthly, the three most critical matters regarding the Court’s consideration of an award of costs in the Wife’s favour, in my view, are the following:
(a)whatever view is espoused by the Father in his submissions, there is no objective basis for any view other than that the Mother was wholly successful, and conversely, the Father was wholly unsuccessful in all relevant respects. The slight, graduated increase in the Father’s time with the children again demonstrated the co-operative approach of the Mother. It reflected little or nothing in relation to the Father’s relentless pursuit of the Mother as detailed in the primary judgment;
(b)the number and detail of the Mother’s offers to resolve the matter, over a significant period of time (summarised in the submissions but set out in full in her Affidavit) were not only very reasonable, they also consistently reduced any award to herself and increased it to the Father. I could not countenance that the Father was not fully and properly advised, nor is there any evidence to make any other comment on such matters. In my view, any reasonably advised person should have, and would have, accepted any one of the numerous offers made by the Mother to resolve the matters. Not to have done so, in my view and as recorded in the primary judgment, was unreasonable;
(c)the Father’s obsessional focus, set out in full in the reasons of the primary judgment, and recorded in some of the extracts set out earlier in these reasons, in my view, highlight his conduct as a litigant, which consistently, over the course of the litigation, required the Mother to incur ongoing costs in a matter which should have resolved, at least in relation to parenting matters, ever so much earlier, especially in the light of the detailed reports of Dr J. In my view, the Father’s parenting Orders in particular were significantly outside any plausible “best interests” range such that that aspect of the proceeding on its own would warrant an Order for costs in the Mother’s favour.
Only two further comments are warranted.
The Father submitted that his refusal to accept any of the Mother’s offers of settlement ultimately worked in the Mother’s favour because the Court ultimately made Orders that were, in fact, better than what the Mother proposed in her various iterations of resolution. As ingenious as this submission is, regrettably somewhat superficially, again it is a self-serving argument. The reality is that because of the Father’s refusal to accept any of the very reasonable offers proffered by the Mother, both parties inevitably incurred further and somewhat extravagant costs – noting that the Father’s costs (from his lawyers for the trial; the Father has changed lawyers recently) were in the region of $280,000. The ultimately better result for the Mother (a) was in accordance with what she was seeking (and conversely nowhere near what the Father was seeking; indeed, his Orders sought were rejected completely), and (b) to achieve this result (on both aspects of the matter – parenting and property) required the expenditure of significant funds, which otherwise would have been saved – by both parties – if those earlier, regularly made and reasonably termed, offers had been accepted by the Father. In short: there is no comfort to the Father by the complete success of the Mother in the litigation.
A modest point of principle regarding the award of costs in parenting matters was outlined in the Father’s submissions at par.5 in which there was reliance upon the majority’s reasons in Hawkins & Roe (“Hawkins”).[11] As was noted in a subsequent note from Counsel for the Father, the majority decision in Hawkins & Roe was disapproved of by the Full Court in Wrenstead & Eades (“Eades”), in which the Court also approved specifically the dissenting judgment of Thackray J in Hawkins.[12]
[11] Hawkins & Roe [2012] FamCAFC 77.
[12] Wrenstead & Eades (2016) FLC 93-697.
In addition to the more expansive comments in Eades (in various places but relevantly here commencing at [93] ff) regarding the decision of Thackray J in Hawkins, at [103] in Eades the Full Court said (internal citations omitted; emphasis added):
[103] We agree with his Honour’s analysis of the statements by the majority in Hawkins & Roe, and are much attracted to what Thackray J said in dissent. The examples given by the majority of circumstances in which a costs order may be made and their statement that in such circumstances “a judge may well conclude that there are circumstances justifying an order for costs” does not fetter the wide discretion reposing in the trial judge as long as they are seen as examples rather than requirements. However if the majority in Hawkins & Rowe, by the use of the words “the occasions on which such an order should be made in a parenting dispute should have some particular features”, were intending to indicate that certain features need to be present before a costs order can be made, we respectfully disagree. The wide discretion in s 117(2) of the Act and lack of distinction between categories of family law cases (including the lack of distinction between parenting and property cases) would in our view render such a conclusion plainly erroneous, place a fetter on discretion which does not have a legislative basis and require us to depart from that conclusion…
For the reasons given here, in the light of the detailed and unappealed primary reasons, the costs Orders sought by the Mother should be made. Again, it is not to the point that the Father submitted that he chose to spare himself, the Mother and the children of the further stress and costs of an appeal. To state again: lamentably for all, for completely inexplicable reasons, the Father (a) refused on a number of occasions the Mother’s extremely reasonable offers to settle the matter, and (b) chose to pursue Orders that were, in my strong view, plainly not in the best interests of the children and more likely potentially injurious to them, contrary to the expert evidence before the Court, and more generally regarding both aspects of the matter, nit-picking, unrealistic and essentially, in effect even if not in intent, antagonistic bordering on vengeful, self-justifying and close to persecutory towards the Mother. He relentlessly sought to justify his conduct, which he could not do, and equally relentlessly, he sought to almost belittle and at times to besmirch the Mother. His conduct as a litigant, and more widely, was very poor and strongly lacking in insight. Actions have consequences. One of them is now so ordered by the Court.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of Judge W J Neville. Associate:
Dated: 24 March 2022
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