Walford and Walford (No 3)

[2009] FamCA 1056

FAMILY COURT OF AUSTRALIA

WALFORD & WALFORD (NO. 3) [2009] FamCA 1056

FAMILY LAW – COSTS – Applicant unsuccessful

Family Law Act 1975 (Cth)

APPLICANT: Ms Walford

RESPONDENT: Mr Walford

FILE NUMBER: MLF 6901 of 2002

DATE DELIVERED: 6 NOVEMBER 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: By way of written submissions

REPRESENTATION

THE APPLICANT: IN PERSON

COUNSEL FOR THE RESPONDENT: MR COLEMAN

SOLICITOR FOR THE RESPONDENT: COLEMAN LAWYERS

Orders

1. That the wife pay the husband’s costs of the child support proceedings culminating in orders being made on 21 August 2009 in the sum of $8000.

2. That the payment of the said costs be paid by 4.00pm on 8 January 2010.

IT IS NOTED that publication of this judgment under the pseudonym Walford & Walford is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 6901 of 2002

MS WALFORD

Applicant

And

MR WALFORD

Respondent

REASONS FOR JUDGMENT

1. On 21 August 2009 after a contested child support hearing, I made the following orders:

   4.That the wife’s application filed 28 November 2008 and the response thereto filed by the husband on 9 February 2009 are otherwise dismissed.

   5.That should either party seek orders relating to costs arising out of these proceedings, such application shall be in writing and filed and served no later than 4.00pm on 4 September 2009 to which a response shall be filed and served by the other party by no later than 4.00pm on 18 September 2009 and the applying party shall thereafter have a right of reply which shall be filed and served no later than 4.00pm on 25 September 2009.

   6.That upon any application for costs being made, the application be determined by me in chambers and judgment delivered thereafter accordingly.

2. On 4 September, the husband filed a submission relating to costs.  He sought $11,287.

3. On 7 September 2009, the wife filed an application in a case seeking costs.  That application was returnable on 23 September 2009.

4. On 23 September 2009, the wife did not attend because of illness but the husband did attend without being notified by the wife that she would not be present.

5. On 23 September 2009 I made the following orders:

   (1)That the wife’s application in a case filed 18 August, 2009 only relating to the enforcement of the school fees be adjourned as the fourth case in the list of defended matters before the Hon. Justice Cronin commencing on 5 January, 2010, but not to be heard before 11 January, 2010.

   (2)That insofar as the wife seeks anything other than the specific orders set out in the application in a case filed 7 September, 2009, that issue be adjourned to be determined at the same time as the matter referred to in paragraph (1) hereof. 

   (3)That the matter otherwise referred to in the order sought by the wife in the application in a case filed 7 September, 2009 be determined according to the provisions of paragraphs (5) and (6) of the orders made 21 August, 2009. 

6. Thus, the wife was to have any costs dispute determined according to the orders made on 21 August 2009.  I will treat her affidavit filed on 7 September 2009 as a submission relating to the costs of the proceedings that concluded on 23 August. 

7. The husband’s submission was as follows:

   ·    The wife was entirely unsuccessful;

   ·    The hearing was extended over six days as a consequence of the wife’s requests;

   ·    The third day of the hearing was almost totally lost as a result of the wife’s failure to attend on the basis of illness;

   ·    The fifth day was wasted as a direct result of the wife’s failure to prepare her case culminating in her desire to issue subpoenae;

   ·    The wife’s whole was what could be called a fishing expedition in which she claimed that the husband had assets overseas but proved nothing.  Despite significant argument about the validity of invoices, she failed to produce any evidence of invalidity, fraudulent behaviour or impropriety;

   ·    The husband had limited financial resources to fund his own case whilst the wife operated her own business;

   ·    The husband made an offer of settlement prior to trial which was rejected.  That was that the husband would withdraw his application if the wife withdrew hers and paid (back to him) three rare coins.

8. By way of costs, the husband sought the legal expenses associated with the preparation of affidavit material, financial statement, amended response and six days of hearing. 

9. The wife’s submission which was in the form of an affidavit and in so far as it was relevant to these proceedings was as follows:

   ·    The husband had a history of not producing documents or complying with discovery;

   ·    The wife had incurred costs for the preparation of documents in the sum of approximately $3000;

   ·    As a business owner, she had lost approximately $1400 of income and had employed two staff to work at $120 per day to open the shop in her absence;

   ·    Her income paid the business overheads;

   ·    That people were subpoenaed because of the husband’s non-compliance with discovery and when Mr G appeared in court without documents, time was wasted.

10. The wife sought costs for 15 and 16 July, 4 and 13 August 2009, 17 August 2009 and the costs incurred by her which were directed by the court to be paid to Mr G of $1700.

11. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) requires that each party bears their own costs. The exception to that rule is where the Court feels justified in the circumstances that a costs order should be paid and if that is the situation, then the Court must take into account the matters set out in s 117(2A).

12. There is justification for an order against the wife in this case.  She had spent an enormous amount of time in what should have been a modest hearing.  There was no evidence to indicate that the husband had been recalcitrant in relation to discovery notwithstanding matters that may have occurred up until the time that Guest J adjourned the child support proceedings and made final property orders.  There was no evidence before me that the documents that the wife was pursuing would have made any difference to the ultimate outcome of the child support proceedings and in particular the evidence relating to the husband’s income.

13. Having regard to the fact that the wife persisted and continued on with the proceedings, the husband had little choice but to follow and having incurred legal expenses, he did so unnecessarily.

14. Turning to the matters set out in s 117(2A), I find that the financial circumstances of the parties are similar although it would appear on the evidence of the wife that her business is generating income which is greater than the Newstart allowance received by the husband together with the part-time income that he received. The wife’s evidence about her income was entirely unsatisfactory having regard to the fact that I was satisfied she had not been honest with the relevant Commonwealth authorities in respect of obtaining pension entitlements.

15. Whilst it may be that the wife’s current financial position is such that she does not have significant assets, I am satisfied that she has an earning capacity and/or a business that over a period of time could generate income to pay costs.

16. The wife was never prepared for the proceedings properly and that necessitated adjournments.  In addition, the wife was ill on at least one occasion which necessitated the proceedings be adjourned.  Costs are not intended as any form of punishment but rather to compensate the party who has little choice but to participate as a result of the activities of the other.  The wife’s illness therefore still meant that the husband had incurred some costs on those days and he ought not be responsible for them because of the illness of the wife.

17. Although I made orders in relation to the child support income for the relevant periods, it could hardly be said that those matters were an indication that the husband was wholly unsuccessful.  Quite the contrary, the wife was wholly unsuccessful in that she was seeking significant sums of money and in the face of the husband with little or no assets and no income of any substance, her application was bound to fail.  In that sense, the wife was wholly unsuccessful.

18. I am not aware of any legal aid entitlements of the parties.

19. Importantly, I take into account that the hearing took a number of days in circumstances where had the wife been properly prepared, it would have been substantially shorter.

20. In the circumstances the wife should contribute towards the husband’s costs.

21. Having said that however, the husband was ordered to pay child support and the argument upon which the orders were ultimately based was that the income used by the Child Support Agency did not accurately reflect that which he had disclosed in his corporate financial statement.  It seems to me in those circumstances that he had to some extent contributed to the problem.  In the circumstances and in the exercise of discretion, it seems to me that the wife should contribute to at least three-quarters of his costs on the basis that although the hearing took approximately eight days, including days that were not able to be used, some time may have been used productively by the husband had his case been along the lines of what I ultimately decided.  In the circumstances therefore of the husband’s costs in the sum of $11,287 I order the wife to pay $8000.

22. As I have no indication of the wife’s view about the payment of those costs, they will be payable unless otherwise agreed or ordered within 60 days.

I certify that the preceding Twenty Two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  6 November 2009