WGB and CEM (No.2) - [2004] FMCAfam 683

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WGB & CEM (No.2)

[2004] FMCAfam 683

CHILD SUPPORT – Costs – neither party makes full and frank disclosure – neither party “wholly unsuccessful” – each party to bear his/her own costs.

Child Support (Assessment) Act 1989
Family Law Act 1975

Kelly v Kelly (No 2) (1981) FLC 91-108
Hogan (1986) FLC 91-704
I & I (No 2) (1996) FLC 92-625
Penfold (1980) FLC 90-800

Applicant:

WGB

Respondent:

CEM

File No:

MLM 5891 of 2002

Delivered on:

29 October 2004

Delivered at:

Melbourne

Hearing Date:

29 October 2004

Judgment of:

Walters FM

REPRESENTATION

Counsel for the Applicant:

WGB appeared on his own behalf

Solicitors for the Applicant:

Nil

Counsel for the Respondent:

Ms B.A. Tulloch

Solicitors for the Respondent:

Anthony Peterson & Co

ORDERS

The wife’s application for costs be dismissed.
Each party do pay his/her own costs of and incidental to the within proceedings.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLM 5891 of 2002

WGB

Applicant

and

CEM

Respondent

REASONS FOR JUDGMENT

The question of costs in family law proceedings is dealt with in section 117 of the Family Law Act. The same provisions apply in proceedings by virtue of provisions of s.100 of the Child Support (Assessment) Act 1989. The trial judge, or in this case federal magistrate, has a broad discretion in costs matters — and the Full Court has said, for example, that it will not intervene unless the order is plainly unreasonable. Indeed it has been held that the court has an almost unlimited jurisdiction in relation to costs, although any costs order must be just (see Kelly v Kelly (No 2) (1981) FLC 91-108, Hogan (1986) FLC 91-704 and I & I (No 2) (1996) FLC 92-625).
It is not the law that a costs order can only be made in "a clear case". Thus, although a finding of justifying circumstances is an essential preliminary to the making of a costs order, there is no additional or special onus on an applicant for an order for costs. Although the general rule is that each party shall bear his or her own costs, that general rule is expressed to be subject to section 117(2), and must yield whenever the trial judge, or in this case federal magistrate, finds that there are circumstances justifying the making of a costs order (see Penfold (1980) FLC 90-800).
I turn now to consider the factors that I must under section 117(2A) of the Family Law Act. The first of those matters is the financial circumstances of each of the parties to the proceedings. I have dealt with this subject in some detail in the Reasons which I have delivered today. I made certain findings regarding the failure of both parties to make full and frank disclosure of their financial situation, and my overall inability to make firm findings as to precisely what their income and asset position might be. I concluded, however, that the husband has a significantly greater income (or income earning capacity) than does the wife. That does not mean that the wife does not have some form of income, but it is not at the same rate as that of the husband. The wife does have assets, however, and those are referred to in the judgment. As a result of the orders that I have made the wife is likely to receive a very significant lump sum by way of child support in the near future, including arrears owed from some time ago.
The next factor for the court to consider is whether any party to the proceedings is in receipt of assistance by way of legal aid. Clearly that is not a factor that is relevant in these proceedings.
The next factor for the court to take into account is the conduct of the parties to the proceedings in relation to the proceedings. The effect of this provision is that the court must have regard to the parties' conduct as litigants. I have made very firm findings in the judgment about the failure of both parties to make full and frank disclosure of their financial position, and I have commented upon the failure of the wife (who is the applicant for the order for costs) to present all documents in her possession. That is relevant when regard is had to the evidence of the expert relied upon by the husband. I take that factor into account.
Otherwise, in my view, the conduct of the parties to the proceedings (as litigants) is not worthy of criticism.
Section 117(2A)(d) requires the court to consider whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court. In the context of child support proceedings, and cross-applications for different orders, it is difficult to see how that is a factor which favours one party over the other.
Section 117(2A)(e) requires the court to consider whether any party to the proceedings has been “wholly unsuccessful” in the proceedings. Counsel for the wife argues that the husband has been wholly unsuccessful in the proceedings because the orders that he sought were not made. Whilst that is true, the main thrust of the husband's case, as far as I could ascertain, was to endeavour to minimise the excessive claim that the wife had made in the early stages of the case. The wife's claim was for $30,000 for each of the assessed periods, as I recall, and for the husband to pay school fees as well. She also sought that certain amounts of interest be paid, and that the husband pay future child support in the form of a lump sum.
It is true that the wife has been partially successful in her application.

I fixed the child support at the maximum amount and found that the husband's income ought to be regarded as being at the same rate as the cap. I did order that a lump sum be paid. But, notwithstanding that, the orders made were not at the rate as was sought by the wife. Further, the wife was wholly unsuccessful in relation to her claim for school fees, and I made certain findings regarding the evidence of both parties in relation to that subject. Suffice it to say that my findings in that regard favoured the version of events that the husband gave, and not the version of events that the wife gave.
The next factor under s.117(2A) is whether either party to the proceedings has filed an offer. Neither party has indicated to me that an offer was made.
Finally, the court must consider such other matters it considers relevant. In this regard, I refer to the judgment itself and to the adverse findings that I made regarding credibility and the manner in which each party conducted themselves during the course of the proceedings.
The law is that, before making a costs order, the court must conclude that there are justifying circumstances such as would warrant the making of such an order. In my view, although the wife was partially successful and, although the husband has obtained an order for capitalisation of maintenance, she was not “wholly successful”. Indeed, the wife was very unsuccessful in parts of her application. In those circumstances, I am not prepared to find that there are justifying circumstances (such as would warrant an order for costs). The wife's application for an order for costs will be dismissed.
I order that each party pay his or her own costs of and incidental to the proceedings.

I, Paul O’Halloran, certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Walters FM

Associate:

Date: 26 November 2004