Kramer & Smithson [2008]

FAMILY LAW - APPEAL – From decision of Federal Magistrate – appeal previously withdrawn on day of hearing – application for costs – financial circumstances of parties – father’s conduct – offer by father day before hearing – father wholly unsuccessful – appellant to pay respondent’s costs of appeal and application for costs, such costs to be taxed.

FAMILY COURT OF AUSTRALIA

REPRESENTATION

ORDERS

(1) That the appellant pay to the respondent the costs of the appeal and the application for costs, such costs to be taxed.
(2) That the oral application for costs be dismissed and removed from the active pending cases list.

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

Appeal Number: SA 83 of 2007
File Number: ADC 379 of 2007

Appellant

And

Respondent

EX TEMPORE REASONS

1. There was an order made by me on 5 March 2008 extending the time for each party to file and serve a brief affidavit setting out their financial circumstances. The respondent complied with that, the appellant did not. However, Ms Nelson has tendered today the father's affidavit, and there is no objection to me receiving that. Thus, I do not propose to take that any further, save and except just to make a formal order extending the time for the appellant to file and serve his affidavit to 10:00am today.
2. I have before me an Application by the respondent seeking an order for costs. The amount sought is set out in a schedule annexed to the mother's affidavit filed on 31 March 2008. The schedule contains a running total of the costs incurred by the mother in respect of both solicitors’ fees and counsel fees, and includes disbursements. There is a total at the end of the schedule of $9,408.94. I have commented that I consider that schedule to be unhelpful. It does not split up the counsel fees, and it does not split up the solicitors' fees, it does not split up the disbursements. Apart from this, there is a substantial dispute as to not only the reasonableness of some of the items but also whether it is appropriate to include all of the items. I am told that the rate of charging is on the basis of the family law scale but that does not take away the problem I have in trying to make some sense of it.
3. Although it is my practice to attempt to fix the costs, I am simply not in a position here to even guess at what the costs should be because of the way the matter has been presented by the respondent. Thus, if I do make an order for costs I have no alternative but to make an order that those costs be taxed. That, unfortunately for the parties at least, puts them to further expense and time and effort which could have been avoided if the matter had been presented properly. I do not propose to say anything more about that.
4. In terms of the application itself, it is opposed. I heard initial argument in relation to the application back on 30 November 2007 when I heard this appeal. However, it was recognised by both counsel, and certainly by me, that I was unable to finalise the application because I did not have sufficient information as to the financial circumstances of the parties, and thus the matter was adjourned to enable the parties to file brief affidavits setting out their financial circumstances.
5. There have been delays for various reasons which I do not consider relevant to the application that is before me, save and except to note that it has taken a far longer time to reach this stage than anyone thought it would.
6. In relation to the affidavits that I now have before me, I have commented already that each of the parties' affidavits go further than just setting out the financial circumstances. That concerns me, but as I have said, and I repeat, I only propose to take into account what is in the affidavits as to the specific financial circumstances of each party.
7. The Notice of Appeal was filed on 13 September 2007. It was heard by me on 30 November 2007. The appeal was from an order made by Federal Magistrate Kelly on 17 August 2007. There had been an application made by the father on 24 January 2007 to the Federal Magistrates Court seeking to vary final orders made on 25 August 2005. On 17 August 2007 Federal Magistrate Kelly dismissed the father's application primarily on the basis that the father had not satisfied the threshold test set out in the case of Rice v Asplund. The husband appealed against that order and it was on that basis that the appeal was listed before me on 30 November 2007.
8. I had a directions hearing on 31 October 2007 when I made orders as to the preparation of the appeal. Importantly at that time there was no indication given to me that the appeal would not be proceeding, and nothing was said about any negotiations.
9. The appeal came before me on 30 November 2007. The appellant's counsel indicated to me initially that the father's position was that he was no longer seeking an order that there be equal shared time in relation to the child, the subject of the proceedings. What he was seeking was more time than the order of 25 August 2005 provided. After discussion between bench and bar and both counsel taking instructions and hearing further submissions, the father instructed his counsel to withdraw the appeal on the basis that he would be filing an application in the Federal Magistrates Court seeking a variation of the previous order providing for him to spend more time with the child.
10. It was stressed to me at the time by his counsel that he was taking that position looking at, from his point of view, what was in the best interests of this child. The appeal was then withdrawn and I made an order dismissing the appeal on that basis.
11. What now I have to decide is this application for costs. As with any costs application section 117 of the Family Law Act 1975 governs the same. As everyone is aware, section 117(1) provides that subject to subsection (2) and some other sections which are not relevant for today's purpose, "each party to the proceedings shall bear his or her own costs." That is the result that the father seeks. He opposes the application and seeks that each party bear their own costs. However, the mother seeks that there be an order for costs, and she relies on subsection (2) which provides in effect that if the court is satisfied that there are circumstances that justify it in doing so, the court may make such order as to costs as the court considers just. It is then a matter of looking at the relevant factors set out in subsection (2A) of section 117. There are a series of factors to which the court must have regard in considering what order, if any, should be made under subsection (2).
12. The factors identified as relevant here are firstly subparagraph (a), which requires me to look at the financial circumstances of each of the parties to the proceedings, secondly (c), which is the conduct of the parties to the proceedings, thirdly (e), whether any party to the proceedings has been wholly unsuccessful, and finally (f), whether either party to the proceedings has made an offer in writing to the other party to settle.
13. In terms of the financial circumstances, I now have the affidavit material filed by each party. The financial circumstances are disparate as between the parties. The father is retired and his income comes primarily from a number of investment properties which he owns. The mother on the other hand has re-partnered, and her income is from one particular investment property, but primarily from child support that the father pays, and also from a Family Tax Benefit. In these circumstances it is difficult to compare the financial circumstances of these parties. Perhaps a more relevant question in looking at the father's financial circumstances is whether he can realistically afford to meet any order for costs. On the other hand, in looking at the mother's circumstances, that question might be whether she realistically needs costs to be paid, such that she can then meet not necessarily all, but some of the costs that she has incurred in this case.
14. Putting it that way in my view there is necessarily a greater concentration on the father's position than the mother's position. The mother certainly has more net income available, but it is not of significant proportions. Further, as I indicated to counsel, it is also difficult with a combined household like the mother has with her current partner, to identify precisely what expenses are met by the mother.
15. Looking at the father's position and his ability to meet any order for costs, in my view there is no doubt that he can. His expenses exceed his income, but that is only because he is not receiving the income that he either expects or anticipates from his investment properties. If that is the case he should sell one or more of his investment properties and create funds to better meet his expenses. I do not accept that it is a simple proposition of looking at a person in his position and saying, "his income is X and his expenses - particularly expenses associated with his investment properties - are more than his income." I consider it is perfectly open to me to find that the father can meet an order for costs.
16. As to what the order for costs might be, obviously the maximum it could ever be is the total amount sought by the mother, which is $9,000.00 odd. I have made some comments about that, but even if it went as high as that, I have no difficulty in finding that the husband could afford to meet that by various means. He has been able to juggle his finances such that he can live on a day-to-day basis and continue to maintain and retain his investment properties, thus I do not consider that it would be of any real hardship to him to find - if he had to - $9,400.00.
17. In relation to the wife's position, I consider that her financial circumstances are such that she should not be left to meet the burden of her legal costs, and thus I consider that the financial circumstances of each of the parties certainly do not prohibit an order for costs being made, but indeed if I do make an order for costs, I consider that such an order can be met by the husband and would be needed by the wife.
18. In terms of the conduct of the parties, it seems to me the only relevant issue is that the father chose to institute the appeal, and it was not until the day before the hearing of the appeal that any offer was made by the father to resolve that appeal. Right up until that point he was maintaining his appeal, and maintaining the orders that he was seeking. That clearly required the mother to prepare her appeal and incur significant legal costs.
19. Much has been suggested by the father's counsel of the mother's conduct in terms of allegedly she being obdurate and not being prepared to consider proposals put by the father, but the fact of the matter is there is an order of the court which is a final order, the husband made an application to vary that to equal shared time which the mother opposed; and the father's application was dismissed. The father's position subsequently changed, but in my view it could have changed well before the day before the hearing. If that had been the case it would have been a different circumstance, because the mother would then have had to deal with that. She cannot be criticised when the father only puts his proposal the day before the hearing of the Appeal.
20. In terms of subparagraph (e), it is clear from the result that that applies here. The father's appeal was withdrawn and then dismissed. I do not need to say anything more about that.
21. In terms of the offer, Ms Nelson QC has laid some store in that on her client's behalf. There is no doubt that he made an offer. There is an issue as to the terms of that offer, but at least an offer was made, and it may have been something that the mother should have seriously considered, but in my view the offer was far too late. If the father had been serious about that he should have made an offer well before then to resolve the matter. The mother had incurred almost all of her costs up to that point and counsel had been briefed, as I understand it, and so to make a proposal on the day before in my view was far too late. Thus, there are circumstances here that justify an order for costs.
    

I certify that the preceding 21 paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 23 May 2008.

Associate