Costs award made against Husband due to Attitude & Conduct

The parties had a relationship of about 5 1/2 years and had one child together.

The usual position in family law proceedings pursuant to the legisation is that each party bear their own costs.

Property Settlement proceedings had been determined on a final basis with there being a 60/40 split in favour of the Wife (not including superannuation) and the Wife did not receive any superannaution splitting order against the Husband’s superannuation.

Given the Respondent Husband’s conduct in the property settlement proceedings, the Trial Judge entertained the request for costs by the Wife.

The Husband:

• sent offensive text messages to the Wife in which he also called her names including “mutt“, “whore“, “cunt” and “lowlife scum“.  In his text messages he also indicated he would be obstructive and purposely thwart the Wife obtaining financial benefit from the property settlement proceedings;
• did not comply with a previous Order to file documents;
• apparently failed to comply with almost every order made in the proceedings, as well as his obligations in terms of disclosure, including failing to comply with a Notice to Produce;
• was found by the court to be evasive and non-responsive.

The Wife submitted that the Husband contested every motion put forward, made every request as difficult as possible and endeavoured to ensure that every cent of her money went to her solicitors, which was essentially what he said he would do in his text messages.

The Husband and his father asserted the a loan between them, required to be repaid by the Husband.  The Husband’s father joined the property settlement proceedings as a Second Respondent.  The Husband’s father also lodged a Caveat over the former matrimonial property. 

The wife asserted there was no loan and the assertion of there being one was a sham. The Husband’s father was not successful in enforcing any loan, the Court finding the loan agreement document was a “sham document” and that the Caveat should never have been lodged over the property, nor was it necessary for the Husband’s Father to be joined as a party to the proceedings.

The Court found the Husband’s conduct in the proceedings to be “unsatisfactory” and described his text messages to the Wife as being “offensive“.

The Husband and ??? were ordered to pay the Wife costs fixed in the sum of $13,792.00, after the Wife had sought a costs order against them for $30,910.00.

---

NOTE:  This case has been published by the Court under a PSEUDONYM, rather than using the real names of the parties.  

Kaigler & Kaigler & Anor
(No.2) [2020] FCCA 610 (20 March 2020)

Last Updated: 8 April 2020

FEDERAL CIRCUIT COURT OF AUSTRALIA

REPRESENTATION

ORDERS

(1) The First Respondent pay the Applicant’s costs in the sums of:

(a) $4,922.00 (paragraph 28);

(b) $5,500.00 (paragraph 29); and

(c) $2,500.00 (paragraph 30),

Less any amount paid by the second respondent pursuant to Order 2(a).

(2) The Second Respondent pay the Applicant’s costs in the sums of:

(a) $2,000.00 (one quarter of (1)(b) and (c) above); and

(b) $870.00.

IT IS NOTED that publication of this judgment under the pseudonym Kaigler & Kaigler & Anor (No.2)is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

MLC 794 of 2019

Applicant

And

First Respondent

Second Respondent

REASONS FOR JUDGMENT

1. 1. On 10 December 2019, I made orders which relevantly required the applicant to file any written submissions on costs before 31 January 2020 and the respondent to file written submissions on or before 14 February 2020. The applicant filed comprehensive written submissions on 30 January 2020 and the first respondent filed written submissions on 24 February 2020.
   2. Because the applicant’s written submissions sought costs additionally against the second respondent, something not contemplated at least by me when I made the orders on 10 December 2019, I provided the second respondent an opportunity to file written submissions. Despite numerous requests from my associate, no such submissions have been received.
   3. I refer by reference to the entirety of the judgment that I handed down, but in view of the written submissions forwarded, I would perhaps draw attention to the following extracts. At paragraph 58, I dealt with a text message (K-6) dated 6 November 2018 at page 7 of the mother’s trial affidavit in which the father relevantly said:
      •  

I will contest every motion you put forward

I will make every request as difficult as possible.

1.  

I will endeavour to drive every cent that you stand to gain into the pocket of a lowlife solicitor.

1.  

I do not hope to gain a single cent from you and will make sure that the comforts you once knew are stripped from you and you suffer for the things you have done to me.

1.  

As for our son, assuming he is biologically my progeny, has everything he needs in his life, he will be by my side and the foul stench of his whore of a mother is but a distant memory.

1.  

You and your mum can both choke on civil for all I care your both lowlife scum and deserve all that is coming your way.

1.  

I’d feel really bad for my boy but it’s again the scummy greedy choice of his mother and grandmother.

4. The text message went on to gratuitously insult the mother. I note that at paragraph 59, I observed that despite some initial equivocation, the father appeared to accept that he had sent this message and there is no doubt that he did.
5. Paragraph 60, I dealt with the father’s alleged non-production of documents as follows:

When it was put to him that he had not complied with orders for the filing of relevant documentation, the father equivocated but it was clear that this was the case. His firearms are presently held by Suburb U Firearms and they had provided a valuation to his solicitors some three weeks ago. His firearms licence is suspended. He plans on a transfer until he reobtains his licence. His father will hold the guns in the meantime and they will be kept in a safe.

6. At paragraph 64, I observed:

He also admitted sending a text message on 18 November 2019 in the following terms, although he said he might have been drinking as it was the night before X’s birthday:

You’re a fucking mutt, dragging him out in the heat to satisfy yourself just look how flared up he is you are nothing but a cunt and i’m gonna fight you tooth and nail so he doesnt have to be around a bunch of selfish pieces of shit. I’m not going to think about other than tearing your solicitors to shreds and you get your just deserved in time to come, MUTT.

7. At paragraph 150, I dealt with the father’s future employment.

I doubt that there will be any financial difficulty in X spending time with his father. Given that it seems more probable than otherwise that the father will resume paid employment with his own father in the relatively near future, he is likely to have sufficient funds to pay for supervised time. In any event, his own father will undoubtedly assist him if need be. I note that the relationship itself only lasted for five and a-half years and that it was for this reason I did not in the ultimate, take in conjunction with the overall settlement, make a superannuation splitting order.

8. I note that I was aware that the mother had $83,000 to pay, which was submitted to be a relevant consideration under section 75(2)(o). At paragraph 164, I noted:

The mother has some $83,000 of legal fees to pay which she submits are a relevant consideration under section 75(2)(o). $20,000 of this has been loaned by her brother but there is nothing before the Court as to its repayment.

9. Finally, I would note that at paragraph 161, I dealt with the father’s firearms:

As indicated during the running of the hearing, the father’s firearms were wholly owned by him before the relationship started. Even if they do have a value of some $25,000 as the mother’s Outline of Case estimates, they are his now and always were and were not in any way contributed to by the mother. Plainly he should retain them. The relationship was one of some five and a half years at its most and it is simply not long enough to make an adjustment in respect of those chattels appropriate.

The applicant’s written submissions

10. The applicant seeks costs on an indemnity basis from the husband in the sum of $30,910. She also seeks contribution and further orders against Mr A Kaigler, the second respondent.
11. The submissions acknowledge the general proposition in section 117(1) of the Act that each party should generally bear their own costs unless there are circumstances warranting an order for costs pursuant to section 117(2).
12. The submissions then go on to detail the financial circumstances of the parties and note the net effect of the orders made, following payment of the wife’s outstanding costs, will leave her only with $50,000. The wife earns $60,000 per year and the husband had an earning capacity of not less than $90,000.
13. The written submissions then go on to concentrate on the husband’s conduct of the proceeding. At paragraph 19, the submissions note that the Court found the husband to be evasive and non-responsive and assert that he failed to comply with almost every order made and his obligations in terms of disclosure, including failing to comply with a Notice to Produce. Complaint is made of his endeavours to sustain the asserted position in relation to the alleged loan from his father and his breach of orders in relation to the firearms. The complaint is further made that the second respondent inappropriately lodged a caveat on the former matrimonial home which the Court ultimately caused the second respondent to remove and noting the second respondent’s unsuccessful intervention as a third party seeking to enforce his loan.
14. A further complaint was made as to the husband’s failure to conduct supervised urine screens in a timely way and asserts that the husband was wholly unsuccessful in the proceeding, as was the second respondent. The written submissions also take the court to the offensive text which I set out above and assert that the husband had indeed conducted himself in accordance with that expressed intention.
15. The submissions go on to note at paragraph 31 that following the conclusion of evidence, correspondence was received that indicated that the husband was caught driving a motor vehicle under the influence of an illicit substance on 6 July 2019 and annexes confirmation of such suspension, noting that this was not disclosed to the court or the wife.
16. The remainder of the submissions deal with the question of indemnity costs and the particular breakdown of fees sought.

The respondent’s written submissions

17. The husband’s written submissions point to the general rule under section 117 of the Act. They take issue with the husband’s earning capacity. The submissions appear to put in issue Mr A Kaigler’s financial circumstances, albeit that the submission suggests it is written only on behalf of the first respondent. The written submissions made complaint as to alleged failures on the wife’s part to comply with orders, most particularly in relation to her jewellery, the husband’s personal belongings and time with the father. The submissions repeat the assertion that the wife held documents at the matrimonial home. The submissions, in my view, descend to hyperbole at paragraph 19 where it is asserted “It was evident from the beginning that the Wife will not compromise until she gets everything from the Husband and stops the Husband from having any form of contact with the child”.
18. The submissions otherwise take issue in a generalised way with the asserted success or failure of the parties in the proceeding.
19. The submissions further point to the lack of appropriate circumstances justifying indemnity costs in any event. What is noteworthy is that there is no response to the submission at paragraph 30 of the wife’s written submission that the husband had, indeed, contested every motion put forward, made every request as difficult as possible and endeavoured to ensure that every cent of her money went to her solicitors.

Section 117(2A) – The Prescribed Matters for Consideration

20. The wife’s earning capacity is approximately $60,000 a year and the husband has capacity to earn up to $90,000 per year. The wife’s financial circumstances are not beneficent. She has an outstanding costs obligation of $80,000, which will substantially eat into her receipt from the proceeds of sale of the former matrimonial home. However, it should be noted that this was a matter of which the Court was apprised during the hearing. It was pressed as a section 75(2)(o) matter. The judgment did not say so in terms, but it was part of the Court’s consideration in the division of the property that was reached.
21. Neither party is in receipt of legal aid.
22. The husband’s conduct of the proceedings was, in my view, unsatisfactory. He did not comply with his obligations of disclosure and he simply ignored the Notice to Produce. His asserted view in the text sent in 2018 was one plainly still held by him when he sent the other offensive message in late 2019. It is open to the Court to infer that the husband, in fact, conducted his case consistently with his expressed intention, and I am more than content to make that finding in the light of the way his case was run, and from the evidence that he gave and the impression that I formed of him.
23. The extent to which the proceedings were necessitated by the husband’s failure to comply with Court orders is, however, difficult to calibrate. Property proceedings, in my view, are notorious for lack of disclosure, and while not condoning it, it is a fact of life that often people will not be able to find documents that are some years old, even though in a perfect world they should be able to do so. I note that there are countervailing assertions of non-compliance on the part of the wife, but I give these no weight as they were not in any way pressed during the proceeding.
24. The parties had mixed success in the proceedings. The wife obtained a 60/40 division of the property, other than superannuation, in her favour, but did not achieve a superannuation splitting order. She was, however, wholly successful in relation to the question of the loan asserted to subsist between the husband and his father (see paragraphs 168 – 178 of the judgment). Given the incontrovertible evidence that the loan document did not mean what it said, the position of both of the respondents in running that aspect of the case was, in my view, always untenable and should have been apparently to them to be so at all points.
25. Neither party has made any offers of settlement.

Conclusion

26. The second respondent should never have lodged a caveat on the property. It should not have been necessary to join him to the proceeding as a result of that caveat. The alleged loan on which the caveat was seeking to protect was a sham document. In my opinion, the conduct of the husband generally taken together with the manifest weakness of the respondent’s case about the loan lead inexorably to the conclusion that the wife should have the cost associated with that aspect of the case.
27. I do not have transcript of the proceeding, but looking at my notes it is apparent that the issue of the loan occupied a not negligible part of the trial proceeding. In circumstances where any kind of minute disaggregation is simply not practicable, I think it is reasonable that the wife should have one-quarter of the costs of the actual trial itself.
28. I further note that the first respondent has not responded to the claim at paragraph 45(b) of the applicant’s written submissions, and I see no reason why the wife should not have her costs of the contravention application discontinued by the husband in the sum of $4,922.
29. The costs claimed of $20,488 for the whole of the trial, which is based on the Federal Circuit Court Rules 2001, amount to in excess of $20,000 and I will allow a figure of $5,500 rounded off for that. (It is marginally in excess of 25% of the total but is in my view an appropriate quantification in the circumstances).
30. I do not think that it is possible to disaggregate in any kind of meaningful way the additional costs caused by the husband’s failure to disclose. I note that he failed to respond to the Notice to Produce. This was an egregious failure. It is asserted that the indemnity costs engendered by the husband’s failure in this regard (see paragraph 45(a) of the applicant’s written submissions) amount to $10,000. In the circumstances and bearing in mind the undoubted failure to comply with the Notice to Produce, I will allow the sum of $2,500 under this heading.
31. It should be noted that while this approach is necessarily somewhat rough and ready, the majority of the costs claimed are, in fact, party-party costs pursuant to the Court’s rules, and to the extent that I have calibrated the matter otherwise, I find the husband’s conduct taken overall to fully justify the awards made.
32. I note further the application to make the second respondent jointly and severally liable for a quarter of the fees of the hearing. I think in the circumstances that is a reasonable proportion, and I will order that he pay one-quarter of the figure that I have directed the husband to pay. I also see no reason whatever why the second respondent should not pay the $870 sought for the necessity to join him directly in the proceedings.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date: 20 March 2020

ADDENDUM

These reasons were settled on 17 March 2020 and the parties were notified on that day that judgment would be delivered on 20 March 2020. Later that day, the solicitor for the second respondent emailed my chambers seeking an extension of time for the second respondent to file submissions.

As earlier indicated, my Associate had already made a number of requests for such submissions, but no response was received.

In my view, the second respondent has had every opportunity and a more than reasonable amount of time to forward his submissions. I regard it as inappropriate to put the matter to an indeterminate date (the solicitor’s email did not propose any definite time within which submissions would be provided).

My Associate informed the Second Respondent’s solicitors accordingly.

A printable version can be accessed from Austlii without pictures or advertisements here, which should be used if you wish to provide the case to the Court in your matter.