Wadlow & Wadlow (No 2)
[2021] FedCFamC1F 200
•17 November 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Wadlow & Wadlow (No 2) [2021] FedCFamC1F 200
File number(s): LNC 116 of 2020 Judgment of: MCGUIRE J Date of judgment: 17 November 2021 Catchwords: FAMILY LAW – COSTS – where wife seeks an order that the husband contribute to her costs of substantive parenting and property proceedings – order that husband pay the wife’s costs of the property proceedings in the sum of $9,897.50 inclusive of contributions to disbursements Legislation: Family Law Act 1975 (Cth) s 117 Division: Division 1 First Instance Number of paragraphs: 18 Date of hearing: 10 November 2021 Place: Launceston Counsel for the Applicant: Ms Trezise Solicitor for the Applicant: Andrea Trezise Barrister & Solicitors Counsel for the Respondent: Mr Munro Solicitor for the Respondent: John Munro & Associates ORDERS
LNC 116 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS WADLOW
Applicant
AND: MR WADLOW
Respondent
ORDER MADE BY:
MCGUIRE J
DATE OF ORDER:
17 NOVEMBER 2021
THE COURT ORDERS THAT:
1.That the husband pay the wife's costs, including a contribution to disbursements, in a total sum of $9,897.50 within seven days of the date of these orders or by set off in respect of the execution of the final orders of 7 October 2021 whichever occurs first.
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 of Wadlow & Wadlow has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
McGUIRE J
APPLICATION
The wife makes application that the husband pay her costs in the sum of $20,000 following defended parenting and property proceedings in this Court. The application is opposed save for consent as to the husband meeting one half of the wife's paid costs for valuations.
The wife's seeks costs on a ‘contribution basis’ from the husband where her total solicitor/client costs exceed $71,000. The application is argued on the following bases:
(i)that the wife is substantially successful in her property application;
(ii)that the husband's conduct during the course of the proceedings was dilatory in respect of disclosure thereby lengthening the proceedings and causing unnecessary cost to the wife.
Matters of costs are provided for at s 117 of the Family Law Act 1975 (Cth) (“the Act”) where at subsection (1) there is a general rule that each party to family law proceedings be responsible for his or her own legal costs. There is, however, a discretion enlivened in the Court at subsection (2) to make an award for costs if there are “justifying circumstances”. It is well-established that the term “justifying” circumstances is not to be read as synonymous with “exceptional circumstances”. In considering whether there are justifying circumstances and whether and what order the Court is to make for costs, the Court is mandated to reference the factors set out at subsection (2A).
These were both parenting and property proceedings heard together with both being contested to their ultimate conclusion and judgment by this Court.
At the commencement of the trial the wife sought orders which would give her approximately 85 per cent of the property pool. The husband then argued that the wife should receive 60 per cent of the pool. It was only in his counsel’s final submissions that the husband moved to a position of the wife receiving 70 per cent of the pool whereas the wife maintained her position throughout the trial. My orders ultimately gave the wife 80 per cent of the property pool and in those circumstances and relative to the position taken by the husband throughout the trial, I accept the wife was substantially albeit not wholly successful. Whilst I might commend the amendment of the husband's position during the trial and obviously influenced by the evidence given and adduced, the fact remains that the wife received 20 per cent more from the property pool than was the husband's position throughout the trial. It follows that opportunities for settlement are lessened by reason of the wider ambit of dispute.
The evidence in the trial and as set out my reasons is that the husband has been in a superior financial position than the wife and continues to do so by reason of his employment. He has the advantage of a company and trust structure through which he conducts his self-employment thereby giving certain tax deduction benefits. To the contrary, the wife's employment history, skills and experience limit her income potential which was further hindered by the COVID–19 restrictions. The husband voluntarily paid a form of informal spousal maintenance for a short period after separation but unilaterally stopped those payments. Emphasis at the trial was placed on the husband's failure to honour his child support assessment commitments where arrears had accrued in the sum of more than $15,000 by the time of the judgment. The conduct of the trial generally and the wife's more onerous financial circumstances must be considered in respect of this application.
Neither party is in receipt of a grant of legal aid.
The wife argues that the husband's conduct of the proceedings generally and, in particular, his failure to make full and frank disclosure inhibited any prospects of settlement, lengthened the trial, and caused her unnecessary extra expense. In support of this application the wife's counsel tendered a plethora of correspondence throughout the duration of these proceedings. For example, a letter from the wife's solicitors to the husband's solicitors dated 21 December 2020 references her unanswered letters of 1 April 2020, 17 June 2020, 26 June 2020, 1 July 2020, 3 July 2020, 10 July 2020, 17 July 2020, 24 July 2020, 24 August 2020, 19 October 2020 (x 2) and 26 October 2020. These requests were for copies of the husband's tax returns, notices of assessment and financial statements for the Company of which he was the sole director. Obviously, bona fide efforts of settlement and, indeed, the ability of the wife's solicitors to properly advise her were limited in the extreme if not completely non-existent if such disclosure is not provided as is required by the Rules.
The same letter of 21 December 2020 puts the husband on notice as to costs “on the basis of your client's failure to comply with financial disclosure requests and prior orders of the Court”.
Despite court orders, the husband refused to contribute to the obtaining of real estate and plant and equipment valuations. Although he is now prepared to make that contribution, he has made a concession only in the face of this application and, despite his far superior financial position throughout the course of these proceedings. The wife was required to meet those costs at first instance herself in order to properly prosecute her application and where court orders provided for the husband to meet one half of the costs.
Despite requests by the wife during the interlocutory stage of these proceedings, the husband had not lodged his tax returns so as to obtain assessments in a timely fashion for the trial, with, from my recollection, three years returns outstanding. This fact alone lengthened the trial including the need for further listings following final submissions to receive some submissions as to appropriate orders in anticipation of the husband finally lodging those assessments.
I accept the wife's submissions generally that the husband's conduct of the proceedings was dilatory and lengthened the proceedings with little or no prospect of bona fide negotiations toward settlement where the legislation makes it clear that these Courts assist parties to negotiate their own settlements with a trial being only a final or default position.
As mentioned above, neither party was wholly successful or unsuccessful in respect of the financial aspects of this trial although I am able to find that the wife was substantially successful in receiving 80 per cent of the pool.
This is not a matter in which I was advised of any Calderbank offers of settlement although again it seems that the wife's position was consistently that she receive 85 per cent of the property pool and ultimately she received 80 per cent.
There were parenting proceedings running together with the financial aspects of this matter. I take a general view that parents should not be dissuaded in enquiries as to the best interests of children by reason of the spectre of costs. I am satisfied that the arguments mounted by each of the parties was meritorious with the dispute being finely balanced and it follows that there should be no award for costs in respect of the agitation of the parenting issues.
Given the matters set out above and my findings, I am of the view that the husband should make a contribution to the wife's costs and specifically in respect of the financial aspects. This trial continued over three days of evidence and was, in my opinion, lengthened by the husband’s failure to make a full and proper disclosure or timely disclosure. Similarly, further listings were needed due to the husband having failed to lodge his tax returns and obtain assessments in a timely fashion prior to the trial. More generally, any prospects of settlement were unlikely due to the husband's failure to make disclosure. I also placed some weight on the disparity in financial positions between the parties during the course of these proceedings including the husband's failure to meet his child support obligations thereby placing a greater impost on the wife during the proceedings.
Taking all these matters into account I am of the view that the husband should make a contribution to the wife's costs of and incidental to the trial in respect of the property part of these proceedings in the sum of $7,500. I will also order that the husband contribute to the disbursements of the wife to obtaining valuations which, of course, he was ordered but failed to do so. His one half contribution amounts to $2,397.50.
I am told that the terms of my orders are to be executed as soon as 20 November 2021 which will require a cash payment by the wife to the husband. As such, I will term my orders as the wife's award for costs being able to be set off against the husband's entitlement under the substantive orders or payment within a short timeframe whichever occurs first.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McGuire. Associate:
Dated: 17 November 2021
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