W and K

[2008] FCWA 85

[2008] FCWA 85

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY LAW ACT 1975
LOCATION	:	PERTH
CITATION	:	W and K [2008] FCWA 85
CORAM	:	MARTIN J
HEARD	:	11 JULY 2008
DELIVERED	:	18 JULY 2008
FILE NO/S	:	PT 4255 of 2005

BETWEEN : W

Applicant Wife

AND

K

Respondent Husband

Catchwords:

FAMILY LAW - orders - school fees - private school

COSTS

Legislation:

Family Law Act - s 117

Category: Not Reportable

Representation:

Counsel:

Applicant Wife	:	Ms Giles
Respondent Husband	:	Mr Rynne

[2008] FCWA 85

Solicitors:

Applicant Wife	:	Kim Wilson & Co
Respondent Husband	:	Paterson & Dowding

Case(s) referred to in judgment(s):

Nil

[2008] FCWA 85

1 The issues to be determined were:

• Whether the parties should be required to contribute towards the cost of school fees for their daughter, [A], at [the private school].

• Whether the husband should be required to contribute the sum of $50,000 towards the wife’s costs of the proceedings, or whether the wife should be required to make some payment to the husband.

2 The submissions in relation to these issues, were partly contained in written

submissions filed by each party following delivery of my judgment in relation to the
parties’ children and property settlement proceedings on 8 May 2008.

3 At the time I delivered judgment, I did not make orders in relation to property

settlement pending the further submissions from the parties. Neither party sought any substantial variations of my proposed substantive orders, apart from the fact that the wife sought an order restraining the husband, by injunction, from discussing the proceedings, the evidence produced by both parties, and the position taken by both parties in the proceedings, with the children.

4 It is clear that the husband, more than the wife, has been prepared to involve the

children in these proceedings, and I accept the order sought should be made in all the circumstances. However, the order will apply to both parties, so the children may appreciate that their parents are being treated even-handedly (as I expect them to be told that the Judge has ordered that the case may not be discussed with them), and because, while I accept that the wife has, more than the husband, tried to avoid doing this, it is the case that both parties have discussed matters with the children on some occasions.

5 In returning to the wife’s Minute of Proposed Orders at trial, I note she sought a

declaration pursuant to s 77A of the Act, that $50,000 be attributed to spousal maintenance for the husband. I overlooked referring to this in my judgment. I would now say that I did not make such a declaration, as on the evidence before me, I was not satisfied that spousal maintenance should be attributed to either party.

6 The wife sought a Section 81 recital, which is appropriate in the circumstances.

School fees

7 The issue of [A]’s enrolment at [the private school] was the subject of dispute

between the parties at the time. The background is referred to at paras 45 and 46 of my judgment. In summary, the position was that the wife had enrolled [A] at [the private school] without consulting the husband, but eventually he had acceded to the wife’s request, and [A] has attended [the private school] since August 2006.

8 [A] still has 3½ years of her secondary schooling to complete. It is the wife’s

position that it is very important for [A] to continue to attend [the private school] where she is progressing very satisfactorily. She estimates that the total costs per annum of [A] attending [the private school] are $20,000, including expenses.

[2008] FCWA 85

9 The husband’s position is that he cannot afford to contribute to [A]’s costs at

[the private school] and proposes that she attend [a college], the school attended by her brother [J]. However, he is prepared to pay one half of [A]’s school fees until the end of this year. His evidence is that he had, very reluctantly, previously agreed to meet one half of the school fees since he found that [A] was becoming increasingly distressed by the apparent dispute between the parties. At the time of the last hearing before me, he was in arrears in relation to the school fees in the sum of approximately $2,800, not including third term 2008. The child has missed a school camp recently since he had not been able to pay is share. He was due to attend a meeting at [the private school] to discuss the situation on 31 July 2008. He presently has only $5,000 in cash and no other savings. However, he has obtained approval to borrow a total of $450,000 through the Home Building Society. The intention is to discharge the current mortgage over the home which, by settlement, he anticipated would be about $320,000, pay to the wife the sum of $44,000, being her entitlement pursuant to the property settlement orders, and an allowance of about $37,000 to deal with mortgage instalments for the next 12 months. On an interest only basis, the instalments still are about $3,000 per month. The sum of $10,000 has been budgeted for “costs” and a further sum of $39,000 to meet the living costs of him and the children for the next 18 months. For the last six weeks, he has been receiving Centrelink benefits of $478 per fortnight. He has applied to Centrelink for assistance in obtaining full-time work and any vehicle charters he obtains will be in addition to this work. He has applied for some positions. At present, the Bentley motor vehicle requires repairs, so he has not been able to undertake charters.

10 The husband’s intention is to sell the [two luxury] motor vehicles, the latter,

apparently, has been returned from [Mrs C]. He anticipates receiving approximately
$18,000. [One of the luxury cars] requires some mechanical work.

11 In addition, the husband has spent some $2,000 on renovations to the home. His

evidence is that “the idea of creating what would be a fourth bedroom was to facilitate obtaining a boarder who could occupy the fourth bedroom and provide at least some income towards the needs of myself and the children”.

12 I do not understand this when the wife is vacating the home at the end of this month and, presumably, this will free up a bedroom.

13 The husband’s position is that he appreciates that it will be very difficult for him

to retain the home, but the financial arrangements he has proposed will, at worst, give the children an opportunity to settle down, and he should be able to stay there until the end of next year.

14 For the wife, it was submitted that it was a matter of grave concern that the

husband appeared to have very modest savings when the sum of $120,000 was distributed to him from the Citibank account in January 2008. There was no evidence from the husband in this regard, but I was informed that some funds had been spent on legal fees and the balance on general living expenses.

15 The wife’s position is that she has been able to obtain part-time employment at

[a department store]. Having become aware of my substantive determination, she has purchased a home in [the suburbs], with the assistance of family, as she was anxious to

[2008] FCWA 85

secure accommodation, and she felt this property was offered at a good price. She expects to move into the property on about 1 August 2008. She expects [A] will live with her there on a week about basis, spending the other week with her father.

16 In my substantive judgment I referred to the possibility of further dispute about

the payment of school fees, but at para 153, I said, in the context of s 79(4) factors, “on the evidence to date, both parties should share the cost of [A]’s [private school] education … Each party should bear a substantial portion of the costs of support of the children. I presume either child support will be agreed, or an assessment made, in due course”.

17 On 24 June 2008, the wife filed a Minute Of Proposed Orders, seeking by order

5:

“The parties do share the tuition and the cost of provision of school uniforms and payment for excursions and all other costs associated with [A] continuing as a day girl at [the private school] until [A] completes her high school education.”

18 The parties filed evidence and made submissions on this issue, but unfortunately

it was not until after the hearing, I realised that there had been no submissions as to the jurisdictional basis, and the specific relevant factors pursuant to the legislation. I caused both parties to be informed of this matter, and was informed by the wife’s solicitor that an application for child support assessment had been made by the wife with a nil assessment issuing. I was informed through the husband’s solicitor that his counsel had “clearly objected to the Court having jurisdiction” at the hearing on 27 June 2008. Clearly the issue needs to be properly addressed and I propose to hear further brief submissions on the issue.

Costs
19	The wife’s application by the last hearing was that the husband contribute
towards her costs of the proceedings in the sum of $50,000. The husband’s position was either that the husband should be awarded an amount for costs in relation to the portion of the trial relating to the children, or there should be no order for costs in respect of the trial that dealt with children’s issues. No specific sum was sought. The husband otherwise did not seek an orders for costs.
20	In summary, the wife’s sought the costs from the first day of trial, plus an
amount for the costs of the interlocutory proceedings. There was no evidence as to how the sum of $50,000 sought was calculated. Both parties proposed sought that any costs order be taxed, if not agreed, but I am very reluctant to do this, having regard to the extensive costs already incurred by both parties and the need to finalise this matter as soon as practicable in the interests of the parties.
21	Pursuant to s 117(1) of the Family Law Act 1975, subject to subsections (2) and 70NFB(1) and ss 117AA, 117AB, 117AC and 118, each party to proceedings under the Act shall bear his or her own costs. Section 117(2) provides if, in proceedings under the Act, the Court is of the opinion that there are circumstances that justifies it in doing so, the Court may, subject to subsections (2A), (4) and (5) and the applicable

[2008] FCWA 85

Rules of Court, make such order as to costs and security for costs, either by way of interlocutory order or otherwise, as the Court considers just. In considering what order (if any) should be made under subsection (2), the Court must have regard to a number of factors set out in s117(2A).

The financial circumstances of the parties

22 These have been referred to at length in my judgment. Both parties will have

similar assets, and a very modest earning capacity. They could not really afford to largely live on capital after they came to Australia, nor could they afford the costs of these proceedings. They are now in fairly average financial circumstances, when they should have been better off.

23 Neither party has been in receipt of Legal Aid assistance.

24 A significant factor is the conduct of the parties to the proceedings in relation to the proceedings, including in relation to procedural matters.

The wife’s position

25 The wife’s position is that the husband has failed to give full and frank

disclosure, and this has added significantly to her legal fees. Reference was made to
para 52 of my judgment, where I said:

“To the extent that the husband has not provided full and frank information to the court, for example, regarding expenditures on [Ms C], or the purchase of the [sportscar], I am prepared to accept that he did not do so because he considered the issues irrelevant, rather than any intention to mislead. Obviously, he and his legal advisers did not take such a detailed approach as those of the wife, and this affected the extent of the evidence provided. It is apparent that the Court would not have had all the relevant evidence unless the wife’s legal advisers, and the wife, had been so thorough. While generally speaking, I prefer the wife’s evidence in relation to financial matters, it is because of the enormous effort put into being precise in this regard.”

26 The husband was put on notice through correspondence of the wife’s concerns.

If the wife had not put the relevant evidence before the Court, which the husband had failed to do, the result of the trial would arguably have been very different, in relation to the add-back issue.

27 There were significant contradictions between the husband’s Form 13, his trial

affidavit and the schedule of expenses upon which he relied at trial, which put the wife
to further expense.

28 The fact that the husband may have thought relevant documents and information

to be irrelevant is not the wife’s responsibility, particularly as she sought to inform him of his obligations in correspondence, and had her solicitors write repeatedly asking for disclosure.

[2008] FCWA 85

29 The correspondence from the wife’s solicitors in relation to disclosure between

May 2006 and May 2007 was in evidence before me. Some of the correspondence was unanswered. It was not until the husband filed his trial affidavit that the husband attempted to particularise his expenditure and, to a considerable extent, this was inadequate, including double counting. He was unable to explain a significant portion of his expenditure.

30 There are also a number of errors, and significantly the expenditure on [Mrs C] was not disclosed.

31 Overall, the state of the husband’s evidence, including his trial affidavit and his oral evidence, was unsatisfactory.

The husband’s position

32 As to the children’s issues, the husband, in particular, referred to costs incurred

in the application for the appointment of [Dr W] as an additional expert, because the wife did not accept the report, or conclusions, of the single expert, [Mr C]. The husband proposed that he should have an order for costs in relation to this issue, and an order for costs in relation to the portion of the trial which was taken up on children’s issues, which was estimated to be about half the trial. The wife estimated it was about half the trial.

33 The husband’s conduct had not significantly increased the wife’s costs, which

were significantly increased by the wife’s unreasonable pursuance of the issues in relation to the children. The husbands’ position in relation to the add-backs was that he opposed the inclusion of the wife’s claim, but appropriately left it to the discretion of the Court.

34 I have specifically considered the history of the parties’ respective interlocutory

proceedings.

35 Orders were made shortly after the commencement of these proceedings, by

consent, in relation to the sale of the [DP] property. The single expert was appointed
by consent, on 15 December 2005.

36 The proceedings continued in the usual manner until mid 2006, and the wife filed a major interlocutory application on 2 August 2006.

37 On 17 August 2006, orders were made in relation to discovery, the provision of

information regarding disposal of funds by the husband, non denigration orders, and in relation to the provision of notice prior to disposition of funds. The costs of both parties were reserved.

38 The wife’s application in relation to the appointment of [Dr W] was filed

3 October 2006. On 10 November 2006, I ordered that [Dr W] be appointed as a
further expert witness.

39 By the pre-trial conference, on 2 February 2007, the wife had filed a very

extensive trial affidavit, but the husband required an extension of time to file his

[2008] FCWA 85

material. He had recently had a change of solicitor. The husband’s trial material was filed late on 20 March 2007, and he filed an application for leave to rely on this material, to which I acceded.

40 The proceedings were not necessitated by the failure of a party to comply with previous orders of the Court.

41 Neither party has been wholly unsuccessful in the proceedings, either regarding

the children or settlement of property. The wife, on her position at the commencement of the trial, was more successful than the husband on the proposed percentage division, and her application in relation to add-backs was more than half successful.

42 As to whether either party has, in accordance with s 117(C), made an offer in

writing to the other party to the proceedings to settle the proceedings and the terms of any such offer, it was not suggested by either party that they had made significant offers prior to trial.

43 On 17 July 2006, the wife’s solicitors wrote to the husband’s solicitors saying that, as their client had:

“made no disclosure, our attempts to obtain further information from your client has been unsuccessful and your client continues to ignore our letters, we are unable to make an offer to your client.

Once your client discloses his financial position and responds to our correspondence, we will be in a position to determine the asset pool and therefore make an offer.”

44 On 7 May 2007, the wife’s solicitors forwarded an offer in relation to the issue

of settlement of property, proposing what was said to be a 61%/39% division in the wife’s favour, referring to the lack of information about some aspects of the asset pool. The offer was made on the basis of an add-back of $173,847 from the $488,307 withdrawn by the husband on 22 December 2004.

45 The husband responded by letter dated 19 June 2007, proposing that the children

live with him, with the wife to have liberal contact, and with the husband to retain the [present] home subject to mortgage. The wife should be required to pay to the husband the sum of $300,000.

46 The wife responded, on 26 June 2007, with an offer that the children live with

her and that she purchase the husband’s interest in the home with her sister [C]’s assistance. She estimated the offer, in total, was for 44% of the asset pool. This included an add-back of $195,817 from the funds of $488,308.

47 At the commencement of the trial, the wife’s position was there should be an

equal division and that the sum of $330,486 should be added back after deducting
various accepted amounts. I concluded there should be an add-back of $200,000.

48 The husband’s position was that he should receive 60% of the property, with the

allowance only definitely of an add-back for legal fees with the balance being left to my discretion. The husband proposed his add-back for legal fees paid be $45,621.

[2008] FCWA 85

The wife’s costs have come to the very large amount of $243,168. I was informed the wife’s costs of the trial were about $80,000.

49 Any other matter the Court considers relevant will be considered in my

conclusion.

Conclusion

50 As I have said, the parties could ill afford the extensive costs of these

proceedings, and it is most unfortunate that this is likely to adversely affect the parties’ standard of living in the future, and that of the children. The principal problem has been the very poor relationship between the parties, and the fact they have chosen to continue to live under the one roof despite this.

51 As to the issues in relation to the children, while I have some sympathy for the

position in which the wife was placed, and understand her desire to have “a second opinion” from [Dr W], it has to be said that, while I can appreciate that the wife, in particular, but to some extent, both parties, wanted the whole background of the issues in relation to the children to be aired, to a large extent, it was a pointless exercise, having regard to the age of the children in particular. I appreciate it is difficult to accept this when considering the future of one’s children, but proportionately, the costs of the exercise could not be justified.

52 To the extent that the matter was pursued at trial, this was very largely the wife’s responsibility, and did increase the costs of the trial substantially.

53 As to financial matters, neither party made offers which I would regard as

justifying an order for costs, until the wife’s offer at the commencement of trial. However, the effect of the proposed division in monetary terms obviously hinged on my conclusion in relation to the add-backs.

54 As to the conduct of the trial, it is the case that the trial was extended as a result

of having to pursue the issue of the add-backs and the husband’s expenditures, and the evidence of [Mrs C], and for this, the husband must bear more responsibility than the wife. To the extent that the wife’s pursuance of children’s issues at trial put him to additional expense, the merits of these issues substantially cancel each other out.

55 However, there is the issue of the effect that the husband’s failure to give proper

disclosure increased the wife’s costs of the proceedings. While the husband and his adviser took a minimalist view of how the proceedings should be conducted, the wife’s advisers, it has to be said, took a Rolls Royce (or Bentley) approach, and while I do not like to criticise the care which was taken to conduct the proceedings in a detailed and proper manner, issues of proportionality do arise. It was the wife’s decision whether she wished to incur such costs.

56 The issue remains as to the appropriate contribution the husband should make to

the wife’s costs in these circumstances. The sum of $50,000 was eventually claimed by the wife, to include a contribution to the costs of the trial, the wife’s costs of the trial totalling $80,000, so, as I have not accepted this argument, the amount should be less than this. I am not prepared in the circumstances, to require the costs to be taxed,

[2008] FCWA 85

as it would be far too expensive an exercise to quantify with precision, each item claimed as being incurred as a result of the husband’s delays and obfuscation. Using something of a broad brush approach, I have concluded that it is appropriate to require the husband to contribute the sum of $20,000 towards the costs of the proceedings.

Proposed orders

It being noted that the parties have agreed that each party will be responsible for one and the wife within the meaning of Section 81 of the Family Law Act 1975:

half of the child [A]’s school expenses until the end of 2008;

1.(1)	Within 28 days, the husband pay to the wife the sum of $43,426.
(2)	Upon payment of this sum, the wife’s title and interest in the former matrimonial home at [the suburban address], vest in the husband, with the husband to indemnify the wife with respect to the outgoings on the property and any other outgoings.

2. Any interest the husband has in the following assets vest in the sole name of

the wife:

(a)	The wife's ANZ Bank accounts including the ANZ Bank account xxxxxx V2 Plus, account numberxxxxxxx Progress Saver, account number xxxxxxxxxxx, account number xxxxxxxxxOnline saver;
(b)	The wife's Esanda Online saver account number xxxxxxx;
(c)	The wife's Citibank Citigold account Singapore;
(d)	The wife's Post Office Savings Bank account number xxxxxxxxx less the funds which comprise the children's Singapore monies of [J] (S$1,082.68) and [A] (S$954.20);
(e)	The wife's Singapore Telecom shares;
(f)	The wife's Citibank Unit Trust;
(g)	The wife's AIA Regional Equity Investment Fund;
(h)	The wife's AIA Global Equity Fund investment;
(i)	The wife's AIA US Equity Fund investment;
(j)	The wife's jewellery;
(k)	The wife's motor vehicle xxxxxx;
(l)	One half of the contents of the former matrimonial home excluding the computer equipment purchased by the husband.

3. The husband do sign all documents and do all acts necessary to transfer and assign his interest in all these assets which are to vest in the sole name of the wife, to the extent that this is necessary.

4. Any interest the wife has in the following assets vest in the sole name of the husband:

[2008] FCWA 85

(a)	The husband's personal bank accounts including the husband's Citibank Citigold account Singapore;
(b)	The [luxury] motor vehicle;
(c)	The [luxury] motor vehicle;
(d)	The computers purchased by the husband for himself and the children;
(e)	One half of the remaining contents of the former matrimonial home.

5. The wife do sign all documents and do all acts necessary to transfer and assign her interest in all these assets which are to vest in the sole name of the husband, to the extent that this is necessary.

6. Any interest or liability the wife has in the debt owed to the parties by [Mr P] will vest in the sole name of the husband.

7. Any interest the wife has in the husband's UK pension entitlements and superannuation vest in the sole name of the husband;

8. Any interest the husband has in the wife's superannuation entitlements including the [MP] investment and the proceeds of sale of the [DP] investment in the wife's name, vest in the sole name of the wife.

9. Any interest that the wife has in the proceeds of sale of the [DP] property, in the husband's name vest, in the sole name of the husband.

10. The wife keep the husband indemnified as to any liability which relates to the [MP] investment.

11. Any interest the wife has in any other property in the name or possession of the husband do vest in the sole name of the husband;

12. Any interest of the husband in any other property in the name or possession of the wife do vest in the sole name of the wife.

13. The husband pay and indemnify the wife as to any personal debt in his name including the Lloyds debt in the joint names of the parties.

14. The wife pay and indemnify the husband as to any personal debt in her name.

15. The husband pay and indemnify the wife as to any liability whatever arising from any debt, claim, loan or demand made against him.

16. The wife pay and indemnify the husband as to any liability whatever arising from any debt, claim, loan or demand made against her.

17. Any other assets in the name or possession of the parties vest in the sole name of the party in possession.

18. Within 28 days, the husband pay to the wife the sum of $20,000 by way of contribution to her costs.

19. The parties be restrained by injunction from discussing the proceedings, the evidence produced by both parties, and the position taken by both parties, in the proceedings with their children.

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20. The parties have liberty to apply in relation to the implementation of these orders.

21. The application in relation to payment of school fees be reserved.

22. The proceedings otherwise be dismissed, including all previous orders made and any undertakings given by the parties.

I certify that the preceding [56] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate