Vokic and Vlass (Costs Application)

[2012] FamCA 476

FAMILY COURT OF AUSTRALIA

VOKIC & VLASS (COSTS APPLICATION) [2012] FamCA 476

FAMILY LAW – COSTS – mother to pay fifty per cent of the father’s costs

Family Law Act 1975 (Cth)

APPLICANT: Mr Vokic

RESPONDENT: Ms Vlass

FILE NUMBER: SYC 790 of 2010

DATE DELIVERED: 15 June 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Fowler

HEARING DATE: Dealt with by written submissions

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Felton

SOLICITOR FOR THE RESPONDENT: Mr Crawford

Orders

1. The mother is to pay fifty per cent of the father’s costs of an incidental to the parenting proceedings between the parties as agreed or assessed.

2. The mother is to charge all her right title and interest in and to the proceeds of sale of the property situate at and known as Property 1, D Street, Sydney Suburb H as security for the due payment of the Order to the extent of $100,000.

3. The Court declines to make any other order for costs.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Vokic and Vlass (Costs Application) 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 790 of 2010

Mr Vokic

Applicant

And

Ms Vlass

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court is an Application by the father in these proceedings for orders for costs in relation to proceedings between the parties for parenting and property orders determined by a judgment delivered on 15 February 2012.  The application is not however in respect of the property issues which were in dispute between the parties but rather the parenting issues.

2. The father seeks the quantification of his costs by the Court and opposes a requirement that he be obliged to undertake the process of assessment.  The father says that his costs totally incurred in the proceedings with respect to both issues in dispute are $188,413.07.  Of this amount the father asks that the Court attribute the sum of not less than 70% of those costs to the parenting matter which he assesses together with other costs claimed at close to $137,000 and make an order accordingly.

3. The father also seeks in his Further Amended application filed in the proceedings costs of this application and a refund of the monies paid by him to the Independent Children’s Lawyer.  He also seeks orders in relation to the payment of costs ordered from the proceeds of sale of a property sold by the mother the settlement of which sale is to take place on 20 June 2012, which proceeds he asks be placed in a controlled monies account and distributed firstly in payment of his costs and thereafter paid to the mother.

Background facts

1. The parenting issues in the case involved an examination of allegations concerning the mother’s drug use.  There had been a number of interlocutory proceedings.  The Court refers to the judgment delivered in the matter which should be read in conjunction with this judgment as if fully incorporated in it.

Section 117 considerations

1. The Court has a broad discretion as to the orders that it makes for costs and that discretion is set out in section 117(2) of the Family Law Act 1975 (“the Act”). In the consideration of the exercise of that discretion I am obliged to consider the matters set out in section 117(2A) of the Act. Those matters are set out in the following sub sections of that section namely:

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

1. In accordance with the orders the father has the primary care of the children of the parties although the parental responsibility for them is shared.

2. The children do spend time with the mother as set out in the judgment.

3. The father deposes that he has made application for a Child Support Assessment which has not been received.

4. The mother reports that she is obliged by a child support assessment to pay for the support of the children the sum of $484 per month.

5. The father’s evidence is that he is at the present time unemployed and although he is actively seeking work, he has remained unemployed since he was made redundant in January of this year.

6. As a result of the judgment the father received the property in which he lives with the children which is presently unencumbered and has a value of approximately the sum of $800,000.

7. The father says his current liabilities are a credit card debt of $105,000 and a debt to his solicitors of $26,000.

8. The mother as a result of the proceedings received assets which included the property at Sydney Suburb B used by her as her home of value of $2,050,000 and Property 1, D Street, Sydney Suburb H of a value of $1,000,000 now sold at a price of $1,065,000.  That latter property is encumbered by a mortgage to the mother’s solicitors securing costs to the extent of $78,000.  There will no doubt be expenses in relation to the sale.

1. The mother has deposed at the hearing that she was receiving rent in the sum of $305 per week in respect of the premises at D Street referred to in paragraph 13.  That income will cease but the mother will have available to her even after payment of the amount due to her solicitors a sum sufficient to meet the claim of the father if successful.  The mother asserts however that she is presently unemployed.  She says that she is actively seeking employment.  She has previously worked in healthcare and at the time earned in the order of $500 per week, and that whilst she will be the owner of the property at Sydney Suburb B she deposes that she at the present time is in difficulty in meeting her expenses.  That position will change on the proposed sale.

2. The mother deposes that her partner, who is referred to in the judgment, is presently unemployed but is actively seeking employment  She deposes that at the present time his occasional casual income does not permit him to make any contribution to the household expenses of any significance.

3. It seems clear that the mother will be in a superior financial position to that of the father at the present time and her position whilst attendant with current illiquidity will become liquid on the completion of the sale of her property.

(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. Neither party is in receipt of legal aid.

(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 father has made submissions that the mother’s conduct has obliged him to file more interim applications and affidavits in support than otherwise he might have been obliged to.  The Court accepts this submission.

2. The father also relies on the matters set out at paragraph 20 which involve to some extent considerations in this category and in relation to failure to comply with orders.  The Court will not repeat them but accepts the submissions made.

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

1. It was submitted by the father’s Counsel in the following terms:

   Throughout the proceedings the mother breached Orders of the Court.  These include:

   3.5.2.1.Order of 30 June 2010 restrained the mother from using illicit drugs while the children were in her care.  Despite this she conceded she used drugs in March 2011 and at the very least went to a unit in [Sydney Suburb AA] where she conceded drugs were consumed on the weekends of 20-21 August 2011 and 15-16 October 2011.  These were weekends the children were in her care.

   3.5.2.2.Order of 7 February 2011 obliged the mother to undertake fortnightly urinalysis testing up until 31 March 2011.  The mother failed to undertake any urinalysis testing in that period and then subsequently admitted she used cocaine in March 2011.

   3.5.2.3.Order of 25 May 2011 obliged the mother to provide a hair sample for testing by 15 June 2011.  The mother provided a hair sample 6 weeks late on 29 July 2011.  The hair test results were positive for amphetamine and methamphetamine.

   3.5.2.4.Order of 25 May 2011 obliged the mother to undertake urinalysis testing within 48 hours of being requested to do so by the Independent Children’s Lawyer.  She did not undertake a number of tests within the timeframe required by the Orders and then returned a positive test result for methamphetamine on 24 August 2011.

   3.5.2.5Order of 1 September 2011 for the mother to undertake urinalysis every Thursday of the week the children were in her care and every Monday in which the children conclude spending time with her.  She failed to undertake many of these tests.

   3.5.2.6.Order of 30 November 2011 obliged the mother to continue urinalysis testing each Monday.  For a six week period over Christmas and early January 2012 the mother did not provide one drug test result.  Her time with the children was suspended in accordance with the interim orders.

   3.5.2.7The mother continues to breach Orders by not having undertaken drug and alcohol counselling as required by the Final Orders.

   3.5.3.The mother failed to attend her interview with the single expert Professor [H] and this caused additional cost and delay as time had to be spent at the hearing obtaining oral evidence from Professor [H] that was not contained in his addendum report.

   3.5.4.The mother and her partner had to be extensively cross-examined regarding crucial events that were not explained in their affidavit evidence.  This increased the hearing time at trial.  Examples include:

   3.5.4.1.The mother provided no explanation in her affidavit evidence for her positive drug tests in 2011 or events on the important weekends of 20-21 August 2011 and
   15-6 October 2011.

   3.5.4.2.The mother failed to disclose information regarding her relationship with her partner [Mr Y] despite me instructing my solicitors to write to the wife on multiple occasions regarding this relationship and its impact on the children.  She admitted in cross examination that she had lied in the instructions she provided her lawyers regarding the nature of this relationship and his involvement with the children.  When challenged about this the mother blamed the father.

   3.5.4.3.Admitting in cross examination that she had used drugs in March 2011 but not disclosing this in her affidavit evidence.

   3.5.4.4.The mother and her partner [Mr Y] providing a number of different explanations regarding her failure to attend her interview with Professor [H] just prior to the final hearing.  Both explanations were inherently unbelievable and inconsistent with Professor [H’s] oral evidence.

   3.5.4.5.[Mr Y] having to be recalled as a witness due to new evidence being presented by the mother late in the hearing.

   3.5.5.The mother made an application for the Honourable Justice Fowler to disqualify himself at the conclusion of Day 4 of the final hearing that she should have known would fail and only served to delay completion of the hearing.

3.5.6.In his Judgment of 15 February 2012, His Honour found that the mother:

3.5.6.1.‘failed to undertake drug testing in accordance with court orders and had lied in her affidavit material’ #119 and #130;

3.5.6.2.‘was not candid and open and had been untruthful in her evidence’ #125;

3.5.6.3.‘made admissions in her cross examination that she had lied in instructions to her legal representatives and letters sent to the husband’ #126;

3.5.6.4.‘admitted to taking drugs despite knowing she was prohibited from doing so by court order’ #131;

3.5.6.5.Had sold shares since separation receiving net proceeds of $675,224, of which other than the sum of $140,000 allowed for reasonable living expenses, was unaccounted for.  The sum of $535,224 was added back into the asset pool #442 and 443;

3.5.7.The mother was represented throughout the proceedings by very experienced solicitors and counsel.  It can be assumed that she received advice from her legal representatives regarding her conduct and the consequences of that conduct.  In light of such advice, her conduct can only be viewed as either belligerent, malicious or reckless.

The Court accepts the submissions to an extent.  The Court is not in a costs order to be other than compensatory and not punitive.  It is not a punishment for wrong behaviour but a compensation for unnecessary legal costs occasioned by behaviour.  The Court’s order reflects the compensatory nature of such orders.

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

1. The mother has not been wholly unsuccessful having some partial success, for example resisting the father’s claim for sole parental responsibility.

(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. There is no evidence of any such offer.  The father submits that given the mother’s failures in relation to orders for drug testing he was not reasonably in a position to make any offer.  The Court agrees.

(g)    such other matters as the Court considers relevant

1. The mother argues that to make an order for costs would alter the division of assets already made.  That no doubt is true.  However the costs of a party are based on separate and/or different considerations to those which attend upon the making of an order under section 79.

2. The father submits that it would be an affront to justice if the mother was not ordered to pay his costs and those costs which he was obliged to pay for the Independent Children’s Lawyer.  The Court does not agree that the costs of the Independent Children’s Lawyer fall into the same category as the costs of a party to the proceedings.  The role of that office is to assist the Court in promoting the welfare of the children and putting before the Court evidence on which their best interests might be assessed.  The costs of such work are in the nature of costs of the children and as with general support ought to be shared in appropriate proportions between the parents.  The Court declines to make the order suggested by the father in relation to those costs.

3. However in relation to the litigation otherwise, the Court notes the request of the father that the Court assess the costs in a lump sum without recourse to the necessity of assessment.  The Court, whilst accepting that the majority of the Court’s time and the father’s costs were taken up with the child related issues, will not accede to his proposal that the costs should be paid calculated on the basis of 70% of his total but does propose that an order be made against the mother for costs.  On a consideration of the quantum of costs and the matters referred to above, the Court proposes to make an order that it considers in all the circumstances of the case proper.

4. The Court proposes that the mother be given some time to pay but to secure the costs liability the mother is to charge all her right title and interest in and to the proceeds of the sale of the property situate at and known as Property 1, D Street, Sydney Suburb H and pay it on the earlier of the settlement of the sale of the property or on 30 August 2012.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 15 June 2012.

Associate: 

Date:  15 June 2012