Willis and Sampson & Anor

[2014] FamCA 39

FAMILY COURT OF AUSTRALIA

WILLIS & SAMPSON AND ANOR [2014] FamCA 39

FAMILY LAW – COSTS – Where the Husband’s late delivery or service of his affidavit on the Wife on 9 April 2013 necessitated the adjournment of the final trial set to commence on 15 April 2013 – Where the Wife is seeking an order that the Husband pay her costs thrown away by the adjournment of the trial on an indemnity basis – Husband ordered to pay the Wife’s costs thrown away by the adjournment on an indemnity basis

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Kohan & Kohan (1993) FLC 92-340
Munday v Bowman (1997) FLC 92-784
Prantage & Prantage (2013) 49 FamLR 197

APPLICANT: Mr Willis

FIRST RESPONDENT: Ms Sampson

SECOND RESPONDENT: M Pty Ltd

FILE NUMBER: BRC 12125 of 2010

DATE DELIVERED: 4 February 2014

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 10 April 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Dick

SOLICITOR FOR THE APPLICANT: Hartley Healy Lawyers

COUNSEL FOR THE FIRST RESPONDENT: Mr Kirk SC

SOLICITOR FOR THE FIRST RESPONDENT: Hopgood Ganim Lawyers

FOR THE SECOND RESPONDENT: No appearance

Orders

It is ordered that

1. The Husband pay the Wife’s costs thrown away by the adjournment of the trial set to commence on 15 April 2013, such costs to include the Wife’s costs in relation to preparation and/or filing and/or service of the list of objections to the Husband’s affidavit filed 16 April 2012; such costs to be agreed or failing agreement to be assessed on an indemnity basis.

2. Any other costs issues the Wife seeks to agitate arising out of the service of the Husband’s affidavit sworn on 8 April 2013 be reserved to the trial.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Willis & Sampson & Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 12125 of 2010

Mr Willis

Applicant

And

Ms Sampson & M Pty Ltd

Respondents

REASONS FOR JUDGMENT

1. The substantive property settlement proceedings were instituted pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) on 30 December 2010 by Ms Sampson (“the Wife”) by the filing of an Initiating Application naming Mr Willis (“the Husband”) as respondent.

2. On 27 March 2013, soon before the trial of the parties’ property settlement proceedings was set to commence on 15 April 2013, the Husband filed an Application in a Case and sought an urgent listing of the hearing of that application. It was listed for hearing and heard on 10 April 2013.

3. By that application the Husband sought a number of orders, including some which were not, in the event, seriously in contention on the hearing (those relevant to the Husband disputing facts and withdrawing earlier deemed admissions) whilst others, given the imminence of the trial were very much in contest. On 10 April 2013 I made a number of orders, including for the adjournment of the trial.

4. It is unnecessary for present purposes to detail the procedural history of these proceedings beyond those dates and events relevant to the adjournment, on 10 April 2013, of the final trial set to commence on 15 April 2013 for four days, and the Wife’s applications for costs be paid by the Husband on an indemnity basis as a consequence of the adjournment.

5. As long ago as 16 April 2012 the Husband filed what purported to be his affidavit material for the trial of these proceedings including his own affidavit of evidence-in-chief.

6. In the usual course of case management of pending cases, the docket registrar for this case made directions that the matter be listed to the 19 September 2012 callover of matters to be set down for trial.

7. On 19 September 2012 Murphy J set the matter down for final hearing over four days commencing 15 April 2013.

8. The Husband was represented by Mr Page SC at that callover. It was then noted, as appears in the notation on the order, that the parties certified, inter alia, “that the matter is in all respects ready for trial”.

9. By paragraph 4 of the orders made by Murphy J on 19 September 2012 the Husband was granted leave, with the consent of the Wife, in these terms:

   The respondent husband be granted leave to file and serve by 17 October 2012, further affidavit material to be relied upon at trial as follows:-

   a)         Dr [A];

   b)          [Mr B];

   c)         Dr [N]; and

   d)         [Mr C].

10. No other order or direction was made permitting the Husband to file further or other affidavits of evidence in chief.

11. Paragraph 4 of the orders made by Murphy J as referred to was made in circumstances that the Husband had filed on 18 September 2012 an affidavit setting out the bases upon which the Husband contended that medical evidence was necessary. Notably, in that affidavit the Husband raised questions about his memory or potential memory problems by reference to the need for that evidence.

12. It may be inferred that the Husband, with the assistance of his lawyers including Senior Counsel, gave specific attention to any further evidence that might be required in his case in formulating the directions made by consent on 19 September 2012. Commensurately, the Wife had no reason to suppose that the Husband would seek to change or alter his own evidence in chief, beyond perhaps any necessary updating of that evidence by the time of trial.

13. On the evidence before me the first notice the Wife and her lawyers had that there may be some substantial change in the Husband’s evidence came from the letter of the Husband’s solicitors of 15 March 2013. However the language of that letter was cryptic at best in terms of giving any true or frank indication of the nature and substance of the further evidence the Husband ultimately provided or the degree of departure of that evidence from that contained in the Husband’s affidavit of evidence in chief for the trial filed on 16 April 2012. That letter contained no notice that previous evidence of the Husband had contained any errors. All that letter conveyed, relevant to this issue, was the following:

    We refer to our client’s previous affidavit material and in particular, our client’s Affidavit of Evidence in Chief filed 16 April 2012.

    Our client has made further enquiries and investigations in relation to a number of outstanding matters in issue in the proceedings, amongst other things, to satisfy the disclosure requests of your client. Upon review of his previous affidavit material, and given developments in this matter since the parties’ Affidavits of Evidence in Chief were filed, our client has instructed us to seek your client’s consent that the parties be granted leave to file further affidavit material by no later than 28 March 2013.

    Should your client not be agreeable to our client’s proposal that the parties file further affidavit material by 28 March 2013, then our client will again have no choice but to file an Application in a Case to be heard and determined on an urgent basis, to seek leave to file further affidavit material.

    (Original emphasis)

14. On 25 March 2013 the Husband’s solicitors sought an urgent listing of the Husband’s Application in a Case which was accepted for filing on 27 March 2013. That application was listed for hearing on 10 April 2013.

15. Effectively it was only on 9 April 2013 (given the lateness of transmission of the previous evening’s e-mails) that the Wife’s solicitors received an affidavit from the Husband sworn by him on 8 April 2013.

16. That affidavit runs to no less than a total of some 854 pages, including voluminous annexures.

17. I accept the unchallenged evidence of the solicitor for the Wife Alison Ross in her affidavit that the annexures to that affidavit include “many” documents not previously disclosed by the Husband. I regard as conservative Ms Ross’ expressed estimate that it would take no less than one week for instructions to be taken from the Wife in respect of that material.

18. Obviously enough, the affidavit was thus received by the Wife’s solicitors only the day before the hearing of the Husband’s Application in a Case on 10 April 2013 and only three (3) clear business days before the final trial of property settlement proceedings was due to commence on 15 April 2013.

19. At the hearing on 10 April 2013 the Wife’s position with respect to the leave sought by the Husband to read and rely upon his own further affidavit at the trial (in lieu of his previous affidavit of evidence in chief) was initially, as expressed by her counsel Mr Kirk SC, to oppose leave and contend that the Husband should be confined to reliance upon the affidavit of evidence in chief he had previously filed, that being his affidavit filed 16 April 2012.

20. However, as Mr Kirk acknowledged in the course of argument, the Husband’s further affidavit was not confined only to events since April 2012 or minor matters of detail. In fact the Husband had effectively acknowledged that his previous affidavit contained substantial errors and deficiencies of substance. The Husband sought, in effect, to abandon his earlier affidavit evidence and replace that with his affidavit sworn 8 April 2013.

21. As Mr Kirk also acknowledged, if called to give evidence in the context of only his April 2012 affidavit the Husband would have to disavow substantial contents of that evidence and there would follow a lengthy process of him attempting to make corrections orally or being led through numerous rectifications of his earlier evidence in his oral evidence at trial.

22. It was on that basis that Mr Kirk on behalf of the Wife acknowledged that the Court had little choice but to grant the Husband leave in the circumstances.

23. The Wife’s initial position as described reflects her imperative, given that these proceedings have been on foot since 30 December 2010, to achieve their finality. It is clear that the Wife had prepared for the trial to commence on 15 April 2013 and she and her legal representatives were ready and able to proceed at that trial, but not if the further affidavit of the Husband had to be dealt with given the breadth of that material (including annexures).

24. In the circumstances, leave to the Husband to rely upon the further affidavit had to be granted but the inevitable consequence of that was the unfairness and prejudice to the Wife that would be produced by the trial commencing only days later on 15 April 2013 without the Wife having had a reasonable opportunity to provide instructions on the Husband’s further affidavit.

25. Mr Dick of counsel for the Husband did not offer (nor could he in the circumstances) any cogent argument answering the obvious unfairness and prejudice to the Wife if the trial were to proceed on 15 April in circumstances of the Husband having been granted leave to rely upon his voluminous new affidavit.

26. Thus the trial had to be adjourned. In the event it is now listed to be heard over seven (7) days commencing 31 March 2014.

27. On this application the Wife seeks an order that the Husband pay her costs, on an indemnity basis, thrown away by the adjournment as well as her costs referable to what may be described as the Husband’s alterations in his evidence in chief represented by his further affidavit; and in particular his deficiencies in disclosure as addressed in his further affidavit.

28. I propose to deal at this stage only with the Wife’s costs thrown away by the adjournment of the trial including the Wife’s costs of having her Senior Counsel compile a list of objections to the Husband’s earlier affidavit of evidence in chief filed on 16 April 2012, rendered of little or no utility given the new affidavit.

29. Aside from costs thrown away by the adjournment, I reserve to the trial any further questions of the Wife’s costs established as being incurred consequent upon the Husband’s further affidavit and/or the Husband’s change in position in relying upon his new affidavit as distinct from his 16 July 2012 affidavit as his evidence in chief for trial; and any issues of non-disclosure; as it seems to me that the enquiry into such issues realistically may only fairly or properly be had within the context of the trial and any necessary cross-examination.

30. Aside from his own affidavit the Husband was granted leave to file an affidavit of his treating psychologist Mr B annexing his two reports addressed to the Husband’s solicitors and dated 17 and 19 October 2012 respectively; an affidavit of his brother Mr D; and an affidavit of a general medical practitioner, Dr A, who had historically treated the Husband.

31. The Husband’s resistance to any costs order and his resistance to costs being ordered on an indemnity basis, rests upon the contentions of his counsel on his behalf to the effect that the Husband’s health issues explain the previous errors in his previous affidavit of evidence in chief; his acknowledged deficiencies in disclosure in these proceedings historically; and his belated rectification of these things by his further affidavit.

32. It will be understood from the discussion thus far that the justification for the adjournment of the trial is not the Husband’s further affidavit per se. It is the late delivery or service of that affidavit, rendering the Wife incapable of properly dealing with it in the time available between its service, effectively on 9 April 2013, and the trial due to commence on 15 April 2013, that is the problem.

33. Put another way, had the Husband taken the steps he took to produce his affidavit served on 9 April, even a matter of several weeks or a couple of weeks earlier, it probably would not have been viable for the Wife to contend an inability to deal with that affidavit in sufficient time to proceed with a trial commencing on 15 April. The Wife might well have contended for other consequences, including as to costs of any work done with respect to the Husband’s earlier affidavit rendered obsolete, but not have been justified in seeking an adjournment of the trial. Indeed, the Wife’s commitment to achieve finality of the proceedings, as is obvious, might have led her to suffer some detriment but nevertheless proceed with the trial. The effective cause of the need for the trial to be adjourned can be seen and understood as the lateness of the service of the affidavit so proximate to the trial. It is the costs thrown away by that adjournment that the Wife seeks.

34. Clearly enough, it is “conduct” within the meaning of s 117(2A)(c) of the Act and “failure” within the meaning of sub-section (d) that the Wife primarily relies upon for her contention that there are justifying circumstances for the costs order she seeks. Her application for costs to be ordered on an indemnity, rather than a party and party, basis requires a finding of sufficient gravity or aberrance in the Husband’s conduct, related to the effect of that upon the Wife, that costs on an indemnity basis are seen to be warranted.

35. The Husband’s version as to how it came to pass that this late affidavit was produced is contained within his affidavit sworn 8 April 2013 when read with his affidavit filed in support of his Application in a Case on 27 March 2013.

36. At paragraphs 15 and 16 of his 27 March 2013 affidavit the Husband deposes:

    15.After the Discrete Hearing on 31 July 2012 it soon became apparent to me that my single tablet may not have been sufficient for me to function at the level required of me to property engage in these proceedings and resolve the outstanding issues, including disclosure issues, which [the wife] and her solicitors have raised with me. This prompted me to seek treatment from Dr [N].

    16.Since I have started taking two tablets, I have felt more alert and capable of longer periods of concentration. I say that I continue to take two (2) Effexor tablets per day since 1 August 2012 when Dr [N] increased my dosage.

    (emphasis added)

37. It follows from that deposition that no later than 31 July 2012 or soon thereafter the Husband was aware of his deficiencies and that from 1 August 2012 when his medication was altered he was more mentally alert and capable.

38. At paragraph 18 of his further affidavit of evidence in chief for trial the Husband deposes:

    18.As a result of the cross examination which occurred at the Discrete Hearing, I now understand that I have not been sufficiently detailed and thorough with my investigations and cross-referencing of previous events. Whilst I was aware that I had problems with my memory subsequent to the suicide attempt, to which I have been informed by my psychologist, [Mr B] (“my psychologist”) and I verily believe that memory loss is a common side effect of carbon monoxide poisoning (as noted in my psychologist’s Psychological Assessment dated 19 October 2012).  

39. It bears repeating that it was the lateness of the service upon the Wife of the subject affidavit, and not simply its content, that brought about the need for the trial to be adjourned.

40. In my judgment the Husband thus carries the onus of establishing a satisfactory explanation for the delay between his realisations consequent upon the July 2012 hearing (as earlier referred to) including the adjustment to his medication which occurred on 1 August 2012; and the service of the subject affidavit effectively on 9 March 2013, some seven (7) months later.

41. Put another way, at paragraphs 23 and 24 of his new affidavit the Husband sets out the steps he took leading to the creation of that affidavit. The question is whether there is a cogent explanation for those steps not having been taken earlier, or early enough, to have avoided the lateness of service of the subject affidavit and the consequent adjournment of the trial.

42. The Husband, essentially relying upon the evidence of one Mr B, his treating psychologist, raises the possibility of carbon monoxide poisoning in his suicide attempt in May 2011 as being productive of memory problems in the Husband as explanation for what has occurred.

43. It seems to me that the first difficulty the Husband’s reliance upon Mr B’s evidence confronts is that both of Mr B’s reports were provided in October 2012. Moreover, in both reports Mr B agitates for formal neurological assessment or neurological testing of the Husband and it may be inferred that such testing would establish in some definitive or pathological way whether or not there exists a neurological basis for the Husband’s alleged problems with memory.

44. It is noteworthy that Mr B records in his 17 October 2012 report an initial willingness on the part of the Husband to undergo such neurological testing but it is then recorded that the Husband then “on advice” chose not to proceed with such testing. The need for, or desirability of, such neurological testing was re-visited in Mr B’s further report on 19 October 2012. Nothing was put before me to explain the Husband’s position in this respect.

45. It was not established before me that Mr B holds any formal medical qualifications. It seems to me that Mr B’s conjecture about carbon monoxide poisoning and its potential effects is properly within the province of a medical expert. In any event, Mr B’s statements are, in the circumstances, speculative. In short, it is not established on any cogent medical evidence before me that the Husband in fact suffered carbon monoxide poisoning or that, if he did, it is likely that he has memory problems as a result.

46. Whilst the F Hospital records attached to Mr B’s affidavit likewise postulate a possible diagnosis of carbon monoxide poisoning being raised at the hospital where the Husband was admitted in May 2011, I was not taken to any blood testing result within those records, or anything else within those records, as would confirm a medical diagnosis of such a result. There is one blood testing result indicating no abnormality was detected but nothing otherwise within those records is confirmatory of a diagnosis of carbon monoxide poisoning or consequent memory or cognitive difficulties.

1. In summary, even accepting Mr B’s untested opinions about the Husband’s psychological status, no cogent medical evidence was put before me capable of discharging the Husband’s onus referred to. This is not to conclude that the Husband may not have had significant emotional and psychological problems. Indeed it may even be that in fact the Husband does have neurologically identifiable memory deficits caused by carbon monoxide poisoning. The point is that such findings are not open to me on this application on the evidence presented on behalf of the Husband and what the Husband had to explain is why it was not until 9 April 2013 that the affidavit was served.

2. I therefore find that the Husband’s conduct in terms of his late service of the subject affidavit, leading to the consequence of the adjournment of the trial, constitutes justifying circumstances for an order for costs within the meaning of s 117(2) of the Act. I find that it is conduct which is not adequately explained in terms of meeting the contention that such conduct meets the kind of relevant conduct referred to in s 117(2A)(c) of the Act.

3. Neither party is in receipt of legal assistance and whilst the parties’ financial circumstances and use of funds post-separation will apparently be very much in issue at trial I am satisfied that on the evidence the Husband puts forward in the new affidavit he has the capacity to meet costs orders and it was not contended otherwise by his Counsel on the hearing before me as a basis for not making such an order.

4. In my judgment, taking into account all of the factors in s 117(2A) a costs order is justified given the overwhelming significance of the conduct factor. The remaining question is whether costs ought be ordered on the indemnity basis sought by the Wife or on the standard or party and party basis.

5. In Prantage & Prantage[1] the Full Court recently undertook a review of the law relating to indemnity costs. The Full Court referred to and affirmed previous authority including Kohan & Kohan[2] in which it was said that an indemnity costs order was a “very great departure” from the “normal standard” in both the family law jurisdiction and in other jurisdictions.

   [1] (2013) 49 FamLR 197.

   [2] (1993) FLC 92-340.

6. Absent, as I have found, any satisfactory or sufficient explanation by the Husband for the late service of the subject affidavit and the consequences of that, I am satisfied that this is an appropriate case to order the Husband to pay the Wife’s costs thrown away by the adjournment of the trial (including the costs of compiling a list of objections earlier referred to) on the indemnity basis. I do so recognising that such an order is a “very great departure” from what is described as the normal standard. I do so being aware of the terms of the Wife’s Costs Agreement as referred to in Ms Ross’s earlier affidavit filed on 27 July 2012 to which she refers in her current affidavit for this application.

7. The adverse consequences for the Wife, including as to her costs, of what has occurred are obvious. Through no fault of hers she has been unable to have her long-awaited trial to finalise financial issues. The Husband’s conduct confounds the system of case management, the Family Law Rules and the procedures implemented by the Court designed to avoid unnecessary expense to litigants.

8. It has long been recognised that conduct causing loss of time to the Court and to other parties is one example where an indemnity costs order is appropriate.[3]

   [3] See Munday v Bowman (1997) FLC 92-784.

9. I therefore make the orders at the commencement of these reasons.

I certify that the preceding fifty five (55) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 4 February 2014.

Associate:

Date: 4 February 2014