Whitmore and Patrick

[2009] FamCA 1212

FAMILY COURT OF AUSTRALIA

WHITMORE & PATRICK [2009] FamCA 1212

FAMILY LAW – COSTS

APPLICANT: Ms Whitmore

RESPONDENT: Mr Patrick

FILE NUMBER: SYF 4075 of 2005

DATE DELIVERED: 10 December 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: COHEN J

HEARING DATE: 10 November 2009

REPRESENTATION

APPLICANT: Mr Hamilton of counsel

RESPONDENT: In person

Orders

1. The mother’s Application in a Case filed 2 May 2008 is hereby dismissed.

2. There shall be no order for costs of that application.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 4075 of 2005

MS WHITMORE

Applicant

And

MR PATRICK

Respondent

REASONS FOR JUDGMENT

Introduction

1. Her Honour Justice Moore delivered judgment in children’s proceedings between the parties on 4 April 2008.  The mother filed an application for costs on 2 May 2008 but for reasons which warranted the delay which has occurred in hearing that application it was not heard before her Honour retired.  I am now required to determine the costs issue.

2. The mother argued that the disparity in the parties financial circumstances, the fact that the orders which were made were such that the father could be regarded as wholly unsuccessful and the fact that the father, by his conduct, unduly delayed and prolonged the hearing and also failed to comply with orders warrant an order for costs.  The order of the Court largely coincided with the contact regime the mother first indicated preparedness to concede in March 2007.  That the orders the father sought were so dissimilar to those which were made and were always by their nature highly unlikely to be made were said to be the basis for a finding that the father was wholly unsuccessful.  The conduct of the father which was said to delay and prolong the proceedings unduly was said to be his prolixity while giving evidence under cross examination and his late decision to call additional witnesses and to rely on matters which had not been the subject of earlier filed affidavits.

3. The mother also says that the father, despite the proceedings and orders for contact, has failed from January 2009 to take the contact he was granted. She claims this has made the proceedings redundant and that is a further circumstance which warrants a finding that an order for costs against the father pursuant to s 117(2A)(g) is justified.

4. I note that counsel appeared for the mother on the costs application.  He did not press all the arguments contained in the mother’s solicitor’s affidavit filed 2 May 2008.

5. The father has argued that there was no adverse finding against him about his conduct.  The orders he sought were mainly in relation to a single contact period.  He assumed that otherwise the contact routine would settle into something much like the mother had agreed to.  He submitted that the financial disparity between the parties in his favour is not as great in reality as the mother suggests and that he had to bring the proceedings to gain any contact.  He said any facts or conduct which might have caused the Court to find against him in his application were the result of his poor emotional health and his health itself contributed to his failure to either seek more appropriate orders and to the lack of success of his application.  He also argued generally that there have been no circumstances which justify departure from the usual statutory requirement that costs lie where they fall.

6. He said that his decision to suspend contact arose after the judgment and should not therefore be regarded as a reason to order costs of the hearing against him but, in any event, that decision was made with the child’s best interests at heart.  I might add that there has been no decision and can be no decision in these proceedings on whether in the child’s best interests the father should or should not have ended contact in the circumstances which have arisen since the orders of Moore J were made.

7. Finally, the father argued that the mother’s claim for costs must be examined closely because there are claims by the mother for costs which were also made in the Supreme Court of New South Wales in the de facto property dispute between the parties.  There is no real substance in this submission.  The mother’s solicitor swore in paragraph 16 of his affidavit that the bill for $97,021.18 he sent the wife was for the parenting and de facto property proceedings. The wife is claiming $62,972.96 in costs for the parenting proceedings. In the bill for $97,021.18 the charges for the property proceedings are clearly distinguished from those for the Family Court proceedings.  $46,008.71 of this is identified as his legal costs for the children’s orders dispute.  Interest of a few thousand dollars on that sum is also included in the bill which makes up the $97,021.18.  The mother’s solicitor has provided copies of his itemised bills of costs of the children’s proceedings to the Court.  They amount to $46,008.71.  The additional amounts to make up the $62,972.96 are the costs she incurred for her prior solicitor and counsel to act for her.  This solicitor’s bills of costs are also disclosed to the Court.  They clearly mix and fail to distinguish between the costs of the property and children’s proceedings, but the total cost is only $4,455.00, all incurred before March 2007.  The balance of the costs the mother seeks are for her counsel’s modest fees from September 2007 to April 2008.  These are for or related to the Family Court hearing.  As any order I might make in favour of the wife, in the absence of agreement, requires taxation of the bills of costs; even an indemnity costs order can be the subject of taxation, there is no real risk of double payment of costs being assessed in these proceedings although the work was done for the Supreme Court action.  However, there is a fairly precise indication of what the costs were after 5 March 2007.  The mother’s current solicitors commenced accumulating fees in May 2006.  By 5 March 2007 they had only accumulated $11,271.36 in fees.  Overall their fees for the children’s proceedings were $46,009.00.  Of these, therefore, $34,738.00 accumulated after 5 March 2007.  With Mr Hamilton’s fees of $10,230.00 the amount subject to taxation from that date is $55,033.00.  The mother’s previous solicitor only acted for her in 2006 or earlier.

8. The Family Law Act, s 117, entrenches the principle that in matters governed by that Act ordinarily costs should be met by the party who incurs them. Only if the circumstances justify the Court in departing from this principle should a court order a party to pay any costs of another party, and then only after considering the matters required by s 117(2A) it must make what it considers to be a just order.

9. The financial circumstances of the parties must be considered pursuant to the Act.  Here, in my opinion, it doesn’t matter what might have previously been their separate situations, it is the comparison of their current wealth and resources and related factors which really matters.

10. The mother is aged 47 and holds permanent part time and what appears to be secure employment in regional New South Wales.  There are some errors in the calculations in her affidavit and omissions from her statement of financial circumstances.  By my calculations she has a gross income of $1,415.00 per week; $1,050.50 coming from wages with most of the balance coming from social security benefits and child support.  Her outgoings, including those on the parties’ 8 ½ year old son, amount to about $1,050.00 including income tax.  Of these about $250.00 is for superannuation contributions and mortgage payment, so there is an element of savings in the outgoings.  After taking into account the need to put aside some of her income to provide for eventual car replacement and other less usual outgoings which might be required from time to time, it could be said that, in view of what must have been her position in life during cohabitation with the father, her income situation is quite modest.  She works part time because she needs to care for the child.  It will be some time; I estimate about five years, before her obligation to make herself available for his care will be sufficiently reduced to permit her to work longer hours.  The child has behavioural problems.  He suffers from ADHD and Asperger’s Syndrome.  She currently works eight tenths of the hours required for full time work.  Her job is described as “classification officer”.  It is really clerical administrative work.

11. Leaving aside superannuation, the mother’s gross assets are worth about $350,000.00.  This includes a home in regional New South Wales worth $290,000.00.  It must be modest.  $142,000.00 is owing on her home loan, so her net assets are worth $208,000.00.  The only area where it might be said that she has indulged herself is with her car which is two years old and is worth $30,000.00.  Despite the father’s suggestion that this and her possession of personalised number plates are an indulgence which should militate against her on the issue of legal costs, I am of the view that a car worth $30,000.00 in the light of her way of life while living with the husband is far from an indulgence, even with personalised number plates which cost an extra $180.00 per annum, approximately.  The mother has superannuation which currently has a minimal value of $97,000.00 but it will be some years before it is able to be accessed by her.

12. The father has argued that as he is much older than the mother his working life will be much shorter.  He is 59 years old and says he is about 11 years older than the mother.  His past and present earnings, qualifications, status and experience might seem to make his earning capacity better than that of the wife.  He is a scientist who has held positions which attest to his eminence.  In 1999 when the parties commenced cohabiting he held a senior position in a University.  In 2003 the father moved to the United States of America where he had accepted a contract at a Laboratory.  He still works there and describes himself as a “senior scientist.”

13. Nevertheless, for some years he has suffered from emotional problems including depression.  His appearance before me in person convinced me that he is still suffering from these.  He was quite labile and at times became upset beyond the point of tears.  It is worth noting that although the father was represented during the hearing before Justice Moore, he represented himself before me and told me he had come to Australia for the hearing.  It would probably have cost him less had he engaged a lawyer and remained in the United States.  He has obviously spent a great deal of time in preparing his case on costs, a case which would in all likelihood have been much more efficiently and skilfully presented by a legal practitioner.  Considering his assets and circumstances, his actions, while not warranting any criticism of him for them, indicate a significant lack of judgment and insight.  He must or should have realised, it does not matter which, that in his state of mind he would be at an even greater disadvantage in not engaging a lawyer than would have been the case if he had not tended to be overcome by emotion.  In April 2009 the father’s terms of employment were changed without consulting him.  He was, in his own words, from 1 August 2009 “sidelined to a position without any major responsibilities” from having been the Director of his group.  His salary was halved although he was given the freedom to supplement it with outside work, but his tenure was to end on 31 July 2011.  His employers promised to “consider” any request he might make on a year by year basis to continue providing him with 25 per cent of his current salary if funds are available to pay him.  He will need independent grants to maintain his previous income level.  The attitude of his employers confirms my independent observations of the father.  The inference is that he has passed the point where he is able to maintain appropriate employment.  In his current condition I do not regard him as likely to be able to regain employment which will be more than an insult to him in his mind.  He is not the type of person who is likely to accept anything less than what he regards as appropriate.  His current employers appear to have tried to let him down softly while being intent on freeing themselves from him.

14. I find that the father’s earning capacity has been dramatically reduced and that he is likely to remain in what he regards as underemployment earning what he sees as meagre income, then become unemployed.  He had been receiving medication and psychological treatment for some time when I saw him.  He may have been improved by it, but not enough to get or keep a responsible job in his field.

15. His current weekly income is misleading.  It is $3,439.00 gross.  $2,918.00 comes from his employment but this is only payable for the first half of the year from 1 August 2009.  He had the right to elect to be paid his full prior salary for six months or half his prior salary for a year and chose the former.  Otherwise, he receives about $100.00 per week in royalties, $230.00 per week for rent for a home he owns and $190.00 per week for maintenance of his elder child, M, from his prior relationship.  His outgoings amount to $3,527.00 per week including tax and the child support he pays the mother.  On average over the year from 1 August 2009, his gross income will be much closer to $1,979.00 per week than $3,439.00 per week, but his outgoings will remain much the same as they are now.  $1,979.00 is calculated by halving $2,918.00 and adding $230.00, $190.00 and $100.00.  His emotional problems are likely to continue because they are likely to be based to some extent on reality; probably the lack of access to the parties’ child and the death of M’s mother in a car accident in 1994 when M was only 9 months old contribute to them. They have continued for some time despite treatment so are likely to persist.  M was born in January 1994 so she is now nearly 16.  She lives with the father and has always done so.

16. The father’s property is worth about $1.227 million gross.  It includes $78,000.00 in savings, the house which is worth about $700,000.00 and his home in the United States which is worth about $430,000.00 and interests in two horses worth $9,000.00, at least one of which is probably used by M.  His liabilities amount to $458,000.00, virtually all of which are secured over his home in the United States.  His net assets are, therefore, $709,000.00.  He has superannuation rights in addition to this which are currently based on an attributed value of about $191,000.00.  Given his age and the fact that he lives in the USA, his situation in this regard must be very poor.  If he retires there his superannuation will probably not provide him with enough to live on in a manner which is commensurate with the position in life he has occupied.  He is probably a European citizen, so may well be able to live a little better in Europe or even Australia.  If he sells his home in the United States, because of sale costs and taxes he is likely to be left with a deficit which will use up a considerable part of his savings.  In my assessment, his financial circumstances are at most little better than those of the mother and at worst are worse than those of the mother.  On balance I regard them as much the same and modest by any appropriate standard.  

17. Neither party had legal aid so the next matter which must be considered pursuant to s 117(2A) is the conduct of the parties to the proceedings in relation to them. This raises the issues of the father’s failure to file affidavits by witnesses he eventually relied on and his tendency for prolixity in his answers to questions during cross examination. The answer to these complaints is to be found in the mother’s solicitor’s submission at paragraph 24. Counsel for the mother departed to a very considerable extent from these submissions as a whole and I have only relied on the mother’s counsel’s submissions. Counsel for the mother said the trial was lengthened and the mother’s costs increased by the complained of behaviour. As the mother’s solicitor said in his written submissions, the trial was extended from an estimated 2 days hearing to 3 days plus written submissions. For a children’s issues hearing of the type the original was, 2 days is very short and 3 days is still short, 4 days being much more common. If the father had originally relied on affidavit evidence about the additional matters which had to be dealt with at trial it would probably have taken 3 days with written submissions. The original estimate of the time needed for the hearing was probably an underestimate occasioned by the father’s failure to fully formulate his case in the first place. That it was eventually properly presented cannot be regarded as undue lengthening of the hearing. I do not accept that any prolixity in the father’s answers significantly prolonged the hearing or increased costs. The evidence is not before me to satisfy me that it even might have done so, but if it did it must be realised that the personality of a witness and its effect on the length of hearing is, if the witness has given honest answers and has answered to the best of his ability without deliberately intending to cause delay, no more than a vicissitude of litigation.

18. The next matter to be considered is whether the proceedings were necessitated by any failure of a party to comply with previous orders of the Court.  They were final proceedings which were required so that the regime for the child’s care could be determined in circumstances where the parties could not agree.  If there was any failure to comply with previous orders, that failure was irrelevant to the necessity for the proceedings.  I know of no significant failure; that is, one which increased the costs of the hearing, especially after 5 March 2007.

19. The mother argues that the father has been wholly unsuccessful because she virtually achieved the orders she sought.  She adds that the only significant order which the father asked for was not granted.  The father argues that he was not wholly unsuccessful because the mother would not give him any time with the child in America so he was forced to initiate the proceedings which resulted in the mother’s agreement to give him time with the child which she had resisted before 5 March 2007.

20. After the parties separated because the father had gone to the United States and the mother refused to follow him there with the child, the mother originally failed to reply to his requests for contact, even for web-cam contact.  By Her Honour’s judgment in paragraphs 39 and 40 she makes it clear that the father initiated the proceedings so he could have some contact with the child and, as a result, it must be said that he was not wholly unsuccessful in them in the sense that they resulted in the consent orders made on 27 October 2005 which gave him face to face overnight contact whenever he was in Sydney as well as web cam contact on both days each weekend.

21. However, the mother’s case does not deny this.  It is that, on 5 March 2007, she made what is in effect an open written offer by virtue of the summary of argument filed on her behalf by her solicitor in preparation for the continuation of the final hearing and, by his failure to accept it and his continuing insistence on an order that he have a block period of 12 months in the United States with the father in the absence of the mother, the father was wholly unsuccessful after 5 March.

22. What each party has said is, limited as each submission was, essentially correct, but is not the whole story. The actuality is somewhere between what each says, but I do not regard the father as being “wholly unsuccessful in the proceedings” in the sense which must be considered pursuant to s 117(2A)(e). He was merely wholly unsuccessful in getting more than the mother offered on 5 March 2007 in the proceedings after 5 March 2007, but somewhat successful in the proceedings before that date because he achieved a level of contact the mother had refused to concede until that date.

1. This finding and the facts relevant to it which have just been related also dispose of the requirement in s 117(2A)(f) that written offers and their terms be considered.

2. Finally, the Court must consider any matters which it regards as relevant to the costs issue.  It is relevant that the father persisted with a case for orders which were quite unlikely to be made after the 5 March 2007.  I think there is substance in the submission that the father by doing so acted in a manner which unduly prolonged the proceedings.  The prospects for his application, where a 6 year old boy who had always lived with his mother and had not lived with his father since 2004 and had had very little contact with him since and, more importantly, had never spent more than 11 consecutive days without spending time with the mother, were obviously very poor.  The child himself has emotional difficulties.  He has been diagnosed as an ADHD and Asperger’s Syndrome sufferer.  This is relevant to his education.  The evidence that he was progressing well at his school, no doubt to a large degree because the school was very sensitive to his special needs and instituted a specific program to meet them, made them worse and the father should have expected the Court to be very reluctant to make orders to move the child from a school situation which was meeting his needs to one where the outcome would be less certain.  It should not have been ignored by the father that the family consultant appointed by the Court had recommended that the child’s residential arrangements be much as the mother asked.  It is not that a litigant should not challenge such witnesses; the Court does not routinely accept their opinions, it is that there was no other expert evidence on the issue.  Nevertheless, the father was not bereft of arguments in support of his stance.  These could have been, but were not likely to be, accepted.

3. The argument of the mother that an order for costs after 5 March 2007 is justified because the father did not accept the offer implicit in her submissions has a major logical fault. It is that the father has an equally strong argument that up to 5 March 2007, because the mother had not granted the contact she had been conceding and which was ordered, he should have costs to that date. I do not regard that as an insignificant matter. It strongly supports the contention that the plain words contained in s 117(2A) really mean what they say; that the Court must consider whether the party from whom costs are claimed was “wholly unsuccessful;” that is completely unsuccessful on the whole issue which was the subject of the proceedings which were heard.

4. There is evidence before me from the father that his legal expenses have been more than $200,000.00 (see paragraph 68 father’s affidavit of 14 July 2008).  It is probable that the costs of the Supreme Court action are included.  It is likely, in view of this figure, that the father’s costs in the Family Court are about the same as the mother’s.  Her costs in the Supreme Court alone were about $190,000.00 and were taxed at about $140,000.00, which the father was ordered to pay.

5. Finally it was suggested that a situation which arose after judgment should have a bearing on costs.  Despite the orders of Moore J in January 2009 the father decided to end contact with the child into the foreseeable future.  The mother argues that this is relevant because it made the proceedings futile.  She says that, as the father initiated the proceedings then failed to take advantage of the orders they produced, he should pay her costs of them.

6. The father’s argument is that the circumstances which caused him to decide to suspend contact arose out of the contact which was ordered and that there has been no finding on whether he was right or wrong to suspend contact, so it cannot be said he was not acting in the child’s best interests in doing so.  He says he believes he has acted in the child’s best interests in suspending contact and in effect says that this situation would not have arisen if the orders he sought had been made.  His reason for suspending contact is that the mother has alienated the child from him and that he knew this situation was evolving prior to the conclusion of the hearing before Moore J and the year to 18 month period he claimed that the child should live with him was intended to overcome further alienation from him in the child.

7. Although I regard subsequent occurrences as capable of being relevant in a costs application, I am far from satisfied what has happened here should have any influence in favour of the wife’s application for costs.

8. On an overall consideration of all the matters I have canvassed I conclude that this is a clear case where the circumstances do not justify an order for costs in favour of the mother against the father. I think any order for costs against the father would be unjust. There is nothing about these proceedings which takes them out of the ordinary and it is ordinarily the case that costs orders are not made in children’s matters. The father’s financial situation is not so much better than that of the wife to warrant the step required to find justifying circumstances. I shall dismiss the mother’s application but I do not regard it as so unjustified that I should in all the above circumstances make an order for costs against the mother on the costs application. I have already considered the matters required by s 117 on this and only that relating to the mother’s lack of success in the costs application is altered by the outcome of it. Even though she has been wholly unsuccessful in it I do not regard the situation to be one where the circumstances require a costs order to be made against her for justice to be done.

9. The orders I shall make are:

10. The mother’s Application in a Case filed 2 May 2008 is hereby dismissed.

11. There shall be no order for costs of that application.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen

Associate: 

Date:  10 December 2009