Wagner & Oakley (No 2)
[2023] FedCFamC1F 687
•18 August 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Wagner & Oakley (No 2) [2023] FedCFamC1F 687
File number(s): WOC 806 of 2019 Judgment of: ALTOBELLI J Date of judgment: 18 August 2023 Catchwords: FAMILY LAW – COSTS – Mother’s application for costs – Where the substantive proceedings involved parenting and an alteration of property interests – Where the mother was wholly successful in her parenting application – Where there was an offer accepted by the mother in relation to property proceedings less than what she ultimately received – Where the father reneged on the said offer – Where costs are ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 Sch 3 Pt I
Cases cited: Bhatt & Acharya (Costs) [2017] FamCAFC 71
Cole & Ingram (2020) 62 FamLR 158; [2020] FamCA 966
In the Marriage of I & I (No. 2) (1995) FLC 92-625; [1995] FamCA 80
Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116
Lenova & Lenova (Costs) [2011] FamCAFC 141
Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157
Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248
PBF (as child representative for AF (Legal Aid Commission of Tasmania)) & TRF & LKL (2005) 33 Fam LR 123; [2005] FamCA 158
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Wagner & Oakley [2023] FedCFamC1F 390
Zhou & Mei [2020] FamCA 1116
Division: Division 1 First Instance Number of paragraphs: 36 Date of last submission/s: 24 July 2023 Date of hearing: In Chambers Place: Sydney Solicitor for the Applicant: Mitchell Family Lawyers Solicitor for the Respondent: RMB Lawyers ORDERS
WOC 806 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS WAGNER
Applicant
AND: MR OAKLEY
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
18 AUGUST 2023
Amended pursuant to r 10.13(h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 on 25 September 2023
THE COURT ORDERS THAT:
1.Within 28 days of the date of this order,
Tthe Respondent father is to pay the Applicant mother’s costs of the proceedings fixed in the sum of $150,000.2.All other applications before the Court are dismissed.
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 the pseudonym Wagner & Oakley has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
The applicant mother (“the mother”) seeks an order for costs against the respondent father (“the father”) following the finalisation of the substantive proceedings in relation to their children and the division of their property. In her Application in a Proceeding filed 16 June 2023, the mother seeks an order that the father pay costs on an indemnity basis in the sum of $232,843.17; or on an indemnity basis as agreed or assessed; or on a party and party basis as agreed or assessed; or in accordance with Schedule 3, Part 1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. The mother further seeks an order that the father pay costs arising from the costs application.
In his Response to an Application in a Proceeding filed on 13 July 2023, the father seeks that the mother’s application be dismissed.
BACKGROUND
The Court heard the final hearing in this matter for five days in January 2023 in relation to parenting and property matters. On 19 May 2023, the Court delivered judgment and made orders for the mother to have sole parental responsibility for the children and for the children to live with the mother and spend time with the father, and orders for an alteration of property interests as to 60:40 in the father’s favour. Reasons for judgment were provided, Wagner & Oakley [2023] FedCFamC1F 390 (“my reasons for judgment”), and various passages will be referred to or reproduced where it is relevant.
PRESENT APPLICATION
In support of her case, the mother relies on the following material:
(a)Application in a Proceeding filed 16 June 2023;
(b)Her affidavit filed 16 June 2023;
(c)Affidavit of Shae Mitchell filed 21 June 2023;
(d)Written submissions filed 4 July 2023;
(e)Tender bundle filed 6 July 2023; and
(f)Written submissions in reply filed 23 July 2023.
In support of his case, the father relies on the following material:
(a)Response to an Application in a Proceeding filed 13 July 2023;
(b)His affidavit filed 13 July 2023;
(c)Tender bundle filed 13 July 2023;
(d)Financial statement filed 13 July 2023; and
(e)Written submissions filed 13 July 2023.
LEGAL PRINCIPLES
The law relating to costs in family law proceedings is well settled and is set out in detail in the Full Court decision of Parke & The Estate of the Late A Parke (2016) FLC 93-748.
An application for costs is governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). Section 117(1) of the Act sets out the general presumption that each party to the proceedings shall bear their own costs. This is subject to s 117(2), which provides that:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as the court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Section 117(2A) sets out the matters that the Court is to have regard to:
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(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;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(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; and
(g)such other matters as the court considers relevant.
Although the Court is required to consider each of the abovementioned factors, it is plain that their relevance to a particular matter will depend upon the circumstances of that case and they should be considered in that light. That is, no one factor prevails over another and it is a question of the weight that is to be afforded to each of the relevant factors depending on the circumstances of the matter (Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664 at [24]). There is also “nothing to prevent any factor being the sole foundation for an order for costs” (PBF (as child representative for AF (Legal Aid Commission of Tasmania)) & TRF & LKL (2005) 33 Fam LR 123 at [41]).
Whilst the applicant in a costs application must establish the circumstances justifying the making of a costs order, the Court is not limited to making such an order only in what has been described as a “clear case” (Penfold v Penfold (1980) 144 CLR 311).
DISCUSSION
Costs orders are made at the Court's discretion based on the factors listed in s 117(2A) of the Act. The Court must consider all the factors in s 117(2A), and no one factor takes precedence over another (In the Marriage of I & I (No. 2) (1995) FLC 92-625). A discussion of these considerations follows.
Section 117(2A)(a): Financial circumstances of the parties
According to his financial statement filed 13 July 2023, the father has a total property value of $6,727 in his name with nil income. In his affidavit filed on 13 July 2023, he deposes to having received $282,912.49 from the conclusion of the property proceedings. The father states he was required to pay outstanding legal fees in the amount of $117,932.40 and provided the sum of $134,980.09 to his parents for “their previous and ongoing assistance to me...”. The father further deposes to having then received the balance of $30,000 but annexes his Commonwealth Bank account statement showing he has a total of $27.96 remaining as at 13 July 2023.
The father acknowledges that mere impecuniosity is not a reason per se for declining to make a costs order (see, e.g., Lenova & Lenova (Costs) [2011] FamCAFC 141; Bhatt & Acharya (Costs) [2017] FamCAFC 71).
However, he states that his affidavit and financial statement make clear that the father is without resources to meet a costs order. His solicitor furthers that, “This is not a case where a costs order will cause impecuniosity. Rather, this is a case where a costs order of anything but a negligible sum, cannot be paid.”
In relation to the payment made from the father to his parents, the mother submits that his financial statement filed 19 December 2022 contained no assertions as to any liabilities owed to the father’s parents. Therefore, the father has placed the monies into his parent’s account in order to avoid paying any amount subject to a cost order and his child support liability. The mother notes the father has ceased paying child support and is approximately $4,000 in arrears.
Section 117(2A)(c): The conduct of the parties
The mother submits that the father’s conduct throughout the proceedings unnecessarily protracted it and represented an extension of family violence perpetrated on her and that this is reflected in my reasons for judgment. The mother further explains that a parenting matter of this nature, given the circumstances and strength of the mother’s evidence, should not have taken the time it took which reflects the father’s desire to win and defend himself against various allegations.
The father submits the mother has misconstrued [57] and [70] of my reasons for judgment and that her assertions should be rejected. He submits there is nothing improper about his pursuit of parenting orders, alteration of property interests and defence of the mother’s claim for child support departure orders. The father comments that the mother herself is continuing the litigation in making this application for costs and that she is aware that he lacks capacity to pay her costs even if her application is successful.
I note [57] of my reasons for judgment states “The father’s conduct of the litigation itself was an ongoing manifestation of his controlling behaviour”. The mother has not misconstrued my reasons for judgment. The Court clearly finds there was significant family violence throughout the relationship which manifested itself in more subtle forms throughout the proceedings and that the father has shown little insight into his violence.
It is also unfair to comment on the “curiosity” of the mother’s filing of a costs application when the father lacks capacity to pay the mother’s costs. The father received almost $300,000 at the conclusion of the property proceedings and the alleged payment to the father’s parents was not listed as a liability on the balance sheet. The assumption would not be made that he would lack capacity to pay any costs orders.
Section 117(2A)(e): Whether a party has been wholly unsuccessful in the proceedings
The mother submits she has been wholly successful in her parenting application as the final orders made by the Court are almost entirely reflective of the orders sought by her. She furthers that her proposed orders were reflective of the expert’s recommendations but the father persisted in seeking equal shared parental responsibility and significant and substantial time when it was never going to be successful. The mother relies on Cole & Ingram (2020) 62 FamLR 158 at paragraph 11 of her written submissions: “[43] The father’s pursuit to a move to equal time and equal shared parental responsibility was, in the circumstances of this case, fanciful and far-fetched. [44] In many ways the father saw it as his entitlement and did not adequately measure it against the best interests of the children”.
The father submits that his case was arguable and the fact that he did not succeed should not itself be grounds for a costs order. He further submits that the mother was unsuccessful in relation to the financial aspects of the matter.
By the close of evidence, the mother’s proposal was that there should be an equal division of property between the parties and the father’s proposal was that it should be at least 70 per cent in his favour. The Court determined an alteration of property interests resulting in the father having 60 per cent and the mother having 40 per cent. The Court finds that neither party were successful in relation to the financial aspects of the matter.
The Court finds that the mother was wholly successful in relation to the parenting proceedings.
Section 117(2A)(f): Offers of settlement
In paragraph 5 of the mother’s affidavit filed 16 June 2023, she deposes to having ultimately received 40 per cent of the property pool which was $434,078.66 out of the total asset pool.
The parties are in agreement that there were several offers passed between the parties throughout these proceedings. In paragraph 6 of the mother’s affidavit, she deposes to making an offer of settlement in which she receives 30 per cent of the net asset pool being a total sum of $468,858.59. The mother also particularly relies upon an offer that was made by the father in relation to property settlement that she accepted on 1 December 2021 whereby she receives a total sum of $424,314.50, which is less than the sum she ultimately received. The father reneged from the offer despite it being possible to resolve property on a final basis at that time.
The father deposes about this in paragraphs 30–33 of his affidavit filed 13 July 2023. He states that he made the above offer in addition to the mother returning a number of his personal items on 1 December 2021. Later that day, he received correspondence that the mother had accepted his offer but she did not have any items belonging to the father. On 10 December 2021, the father received email correspondence from the mother’s solicitors that they held a fishing rod belonging to the father in their office. On 14 December 2021, the father received further correspondence that if the proposed consent orders were not received by the mother by 15 December 2021 in relation to the father’s settlement proposal, then the mother’s proposal would be withdrawn.
The father submits the mother does not successfully establish that the father unreasonably rejected a reasonable offer. He states that such an assessment needs to take into account what is reasonable at the time of the offer and the “pool” was an evolving thing during the litigation. The father also points out that some offers were made on specific issues whilst others globally (parenting, property and child support). The father submits it would be an exercise fraught with difficulty to discern which costs are referrable to different parts of the matter.
The Court disagrees. At the relevant time, the offers made, and the constitution of the pool, were clear enough for the parties to have made informed judgments about settlement. When the father reneged on the offer that the mother accepted on 1 December 2021 he was acting unreasonably. This is highly significant to the present issue. The father’s insistence on the return of personal items such as a fishing rod was unreasonable when viewed in the overall context of this case. The property litigation should have concluded as a result of the 1 December 2021 offer.
Section 117(2A)(g): Any other relevant matters
The mother seeks that the Court fix the amount for costs as any taxation process would be particularly time-consuming given the nature of the hearing, the length of the proceedings and number of applications within the proceedings generally (Zhou & Mei [2020] FamCA 1116).
The father states the Court should decline to do so as the Court should not be applying a broad brush approach to a litigation progressing over four years with various issues and causes of action.
The Court does not accept the father’s submissions. This is precisely the type of case where a broad brush approach should be adopted.
INDEMNITY COSTS
It is well settled that when costs are ordered by this Court, such costs are payable on a party and party basis. It has been held that the Court should not lightly depart from the ordinary rule (Kohan and Kohan (1993) FLC 92-340).
The Court accepts the father’s submission that the mother has not made out her claim for costs on an indemnity basis. Although the mother seeks an order for indemnity costs, she does not adequately make a case for it in her written submissions.
The Court declines to make an order for costs on an indemnity basis.
CONCLUSION
The Court has found that the mother was wholly successful in the parenting proceedings and that there was an offer of settlement in relation to the property proceedings accepted by the mother on 1 December 2021 in which she was to receive less than what was ultimately awarded. An order for costs is warranted.
The mother sought indemnity costs in the sum of $232,843.17. This gives an indication of the total amount of costs she incurred. The Court chooses to fix costs to take into account the fact that the property proceedings could have been settled much earlier, and the fact that the father was wholly unsuccessful in the parenting proceedings. Such costs will be fixed in the sum of $150,000.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 18 August 2023
5
2