Evidence – Trial judge’s enforcement of direction for single, consolidated affidavit material procedurally unfair where subsequent direction permitted reliance on multiple affidavits

In Krupin [2022] FedCFamC1A 136 (1 September 2022) Tree J (sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia) heard an appeal from a decision of Judge Young, which divided property 51.5 per cent to the husband and 48.5 per cent to the wife, but dismissed the husband’s case that the wife’s mother held property on trust for the husband and the wife.

After the original trial dates were vacated due to Covid-19, trial directions were made on 6 November 2020 that included an order that the parties file consolidated affidavits of evidence in chief and that no party was permitted to rely on more than one consolidated affidavit ([27]).

Those directions scheduled a trial that was also vacated. Further trial directions were made on 7 September 2021 by a different judge, which permitted the parties to rely on all affidavits previously filed in the proceedings.

When the trial commenced, the primary judge insisted on compliance with the 2020 directions as to consolidated material, notwithstanding that the husband’s case outline sought to rely on 11 previously filed affidavits; and the wife’s outline sought to rely on 13 affidavits ([33]). The parties then sought an adjournment by consent, which the Court dismissed.

Tree J said (from [35]):

“ … [T]he trial proceeded with each party only being permitted to rely on one affidavit of evidence-in-chief, together with [an] … ‘updating’ affidavit contemplated by the 7 September 2021 orders. … [T]he primary judge permitted the parties to tender bundles of additional primary documents they relied upon, but the earlier affidavits were not amongst them. …

[37] Procedural fairness requires each party to be given an adequate opportunity to be heard, and to present their cases (Kioa v West [1985] HCA 81 … ). However, it is only the opportunity to present evidence and argument which the interests of justice requires, not the actuality of it. Thus where a party has had a sufficient opportunity to put forward his or her case, it may be necessary for the court to make a decision for the sake of doing justice to the other party and to other litigants (Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27 (‘Aon Risk’) at [94]).

( … )

[39] … Crucially, the 7 September 2021 orders specifically permitted the parties to rely upon more than just one consolidated affidavit. Because the 6 November 2020 orders were expressed to be ‘until further order’, to the extent there was any inconsistency, the 7 September 2021 orders prevailed, and particularly, order 2 of the 6 November 2020 orders was superseded.

[40] Quite properly, between 7 September and 24 November 2021, all parties believed, and prepared their cases on the legitimate, court sanctioned basis, that they could rely upon all past affidavits, yet [at trial] … that was turned on its head, and without any forewarning, a significant restriction on the material they could rely upon was imposed upon them. That was procedurally unfair. More, since the 6 November 2020 order for one consolidated affidavit had been superseded, it was no longer in effect, and the primary judge was wrong to conclude otherwise. …

[41] Nor was the unfairness theoretical. In the case of the appellant, he was deprived of his properly anticipated recourse to a considerable body of affidavit material …

[42] Indeed this point was tellingly illustrated by the first respondent’s Summary of Argument in this appeal, where, in reply to the appellant’s arguments that many factual findings of the primary judge were contrary to the evidence, it was said that the material relied on by the appellant was not before the primary judge, and yet it was that very material which the appellant was denied the opportunity to put in to evidence.

( … )

[45] … Whilst the primary judge understandably recoiled in a degree of horror at the sheer volume of material which that order permitted to be relied upon, and correctly indicated such a procedure was contrary to good case management, that is no answer to the unfairness which the peremptory withdrawal of the right to rely on that material gave rise to.”

The appeal was allowed, orders discharged and the matter was remitted for re-hearing.

Property – Court erred by making enforcement orders that substantively varied the parties’ rights pursuant to a registered arbitral award

In Lasso & Malaka [2022] FedCFamC1A 130 (23 August 2022) the Full Court (Austin, Tree & Williams JJ) heard an appeal from orders of Wilson J in respect of an arbitral award made by consent, that was registered pursuant to s13H of the Family Law Act 1975 (“the Act”).

The award provided for the husband (“the appellant”) to transfer his interest in the former matrimonial home to the wife; and within 90 days the wife (“the respondent”) refinance a mortgage on an investment property.

If the wife was able to refinance the property, it was to be transferred to her and the parties’ 3 children. If the wife was unable to refinance within 90 days, the husband had opportunity to pay the wife $325,000 and retain the property.

The wife obtained finance approval and provided notice to her conveyancing lawyer, but not the husband. On the expiration of the 90 day period to refinance, the husband paid $325,000 to the wife and argued that the property now vested in him.

The wife filed an application for enforcement (seeking that the husband transfer both properties) arguing that the award did not compel her to notify the husband of her finance approval. The husband sought that the application be dismissed.

At first instance, the Court found that the “award should be given effect but in accordance with new dates” ([23]), ordering the wife to return the $325,000 sum to the husband; and that the husband transfer the investment property to the wife and children.

The Full Court said (from [30]):

“Counsel for the appellant submitted, subject to recognised exceptions, once perfected by being entered into the court record, an order finalising a proceeding is beyond recall (Gamser v Nominal Defendant [1977] HCA 7 … (‘Gamser’)). There is no reason why the same conclusion should not apply to an arbitral award, which determines an adjustment of property between parties pursuant to s 79 of the Act, when the award is registered by the Court pursuant to s 13H(2) of the Act. We accept that submission.

[31] Exceptions to the principle articulated in Gamser include matters where the orders sought to be varied are consequential or machinery orders as opposed to being substantive in effect (Phillips v Walsh (1990) 20 NSWLR 206 at 210). The distinction between an order of a consequential or machinery nature as opposed to an order affecting substantive rights was considered by the Full Court of the Family Court in Ravasini and Ravasini [1982] FamCA 62 … (‘Ravasini’) and Pera & Pera [2008] FamCAFC 87 …

[32] In the course of defining a consequential order, in Ravasini, the Court said such an order ‘in a property matter, would include an order following logically or of necessity from a prior substantive order. What a consequential order is not is an order the effect of which is to vary the prior order for property settlement’ …

( … )

[38] We do not accept the respondent’s assertion the obligations imposed by … the decree are limited to her obtaining finance. … [W]e consider it is implicit the respondent was required to advise the appellant of her compliance, to trigger his subsequent obligations. Paragraph 4 of the decree requires the appellant to transfer the [investment property] … to the respondent simultaneously with the respondent complying with paragraph 3. Logically, the appellant would never be able to comply … unless he were advised of the respondent’s prior compliance.

[39] The [first instance] … orders do not simply impose new dates to give effect to the decree. The orders impose completely different rights and obligations on the parties … The variations to the decree include an order extinguishing the respondent’s obligations to refinance the … mortgage within 90 days of the award and instead mandating her to ‘repeat the loan application process…until such loan application is successful’ … Unlike the decree, the [first instance] … orders do not provide for the appellant to acquire the [investment] … property if the respondent is unable to refinance …

[40] The [first instance] … orders were not confined to giving effect to the award (decree) ‘but in accordance with a new timetable of dates’ … The [first instance] … orders impermissibly substantially varied the terms of the decree and the vested rights of the appellant.

( … )

[42] It was incumbent on the primary judge to raise with the parties the orders he proposed to make, to enable relevant submissions to be made when those orders were not contemplated by either party and would deprive a party of some right or interest or the legitimate expectation of a benefit … The failure of the primary judge to do so is a denial of procedural fairness.

( … )

[49] … [T]he arbitral award was registered by the primary judge as provided by s 13H(1) of the Act and pursuant to s 13H(2) of the Act, has effect as if it were a decree made by the Court. The decree may only be varied if one or more of the conditions in s 13K(2) are satisfied.

[50] Neither party filed an application for variation of the decree, nor sought orders pursuant to s 13K(2). …

( … )

[55] Despite the respondent pressing her enforcement application, the primary judge declined to make orders exercising power pursuant to s 105 of the Act. …

( … )

[58] The remaining source of power available to the primary judge to make the … orders, is the power of the court to make or modify machinery provisions of an order to effect implementation, provided that by doing so it does not affect the substantive rights of the parties. There is no power to vary the original order (see Ravasini).

( … )

[60] Not only did the primary judge fail to identify the source of power he purportedly exercised to make the [first instance] … orders, the orders could not have been made pursuant to s 13K or s 105 of the Act, nor pursuant to the general power, as stated in Ravasini. …”

The appeal was allowed and the respondent wife ordered to pay the appellant husband’s costs of $24,182.

Property – Full Court sets aside property order in short, childless de facto relationship – Pet dog to be retained by registered owner

In Grunseth & Wighton [2022] FedCFamC1A 132 (26 August 2022) the Full Court (Alstergren CJ, Aldridge & Brasch JJ) heard a de facto wife’s appeal in a case involving a childless de facto relationship that lasted for “just under three years” from 2013 to 2016. The parties lived under one roof until 2019 ([4], [11]-[12]).

The parties purchased a property (“the B town property”) by the de facto wife contributing 70% of the purchase price and the husband contributing the other 30%. To reflect their contributions, the parties registered the B town property 70:30 in favour of the wife ([5]).

After receiving inheritances, the de facto husband paid $160,000 to the de facto wife. The parties agreed that the intention of the payment was such that the B town property would be registered 50:50 between them.

As first instance, the Court ordered a division of 52.5% to the de facto husband and 47.5% to the de facto wife. The Court also ordered that a pet spoodle (“Roxy”) registered in the de facto wife’s name, be transferred to the de facto husband, where the de facto husband had “an emotional interest” in the dog; where the purchase monies were “intermingled”; and where the dog was purchased for the de facto husband’s adult daughter of the relationship (“Ms T”) ([53]).

Determining the wife’s appeal and re-exercising the discretion, the Full Court said (from [24]):

“The [de facto wife’s] … primary submission is that, given it is accepted she contributed $910,000 as her share of the house and her superannuation of $372,712, a total of $1,282,712 or 52.79 per cent of the total property, the findings as to the appropriate division of the property are untenable. When the [de facto wife’s] … other assets are included, but leaving out the sum of $160,000, [her] … property increases to nearly 55 per cent (54.87 per cent) of the total. The submission continued, noting that the financial contributions during the relationship were equal, that the non-financial contributions favoured the [de facto wife] … and that there was to be a slight adjustment in her favour under s 90SF(3) of the Family Law Act 1975.

( … )

[37] … [W]e cannot reconcile the ultimate determination of a 47.5/52.5 per cent division with the central fact that the [de facto wife] … contributed over 52.5 per cent of the overall assets and with assets to which the [de facto husband] … made no contribution to at all. … [T]his tension cannot be resolved by reference to the reasons.

[38] Whether it be categorised as a lack of adequate reasons or as a decision which is unreasonable, the outcome is that the appeal must be allowed and the orders set aside.

( … )

[73] A particular feature of this matter is the shortness of the relationship. In such a case the comments in Anson & Meek [2017] FamCAFC 257 at [181] are apt. Justices Aldridge and Cleary said:

If the point is that, where there is a short marriage, where there are no children and where the parties’ contributions to their assets and to the welfare of the family from the commencement of the relationship to the time of the hearing is equal, any disparity in initial financial contributions is of critical importance in determining the overall contributions of the parties, then such a position is easily arrived at by the application of principle alone.

[74] … [T]here is much to be said for the proposition that the parties should simply receive the property owned by them. This is particularly so when the ownership of the B Town property was deliberately structured so as to reflect the parties’ contributions to it.

[75] There are, however, some other matters that require consideration.

[76] The first is the payment of $160,000. It … was paid by the [de facto husband] … to gain an increased share of the B Town property, but there the agreement ends. … Clearly an allowance must be made in the [de facto husband’s] … favour for at least that sum.

( … )

[85] The total assets available for distribution are $2,429,940. If the disputed sum of $160,000 is returned to the [de facto husband] … the [de facto wife] … would hold $1,333,290 or 55 per cent and the [de facto husband] … $1,096,650 or 45 per cent.

[86] … We offset the [de facto husband’s] … contribution to the mortgage against his use of the B Town property for nearly three years.

[87] We consider that, in broad terms, the above division, which simply returns the $160,000 to the [de facto husband] … without any allowance for any increase in value of the B Town property, adequately takes into account the above matters.

[88] … [T]he order will provide for the sale of the B Town property and the division of the proceeds 70 per cent to the [de facto wife] … and 30 per cent to the [de facto husband] … The orders will provide for the payment of $160,000 by the [de facto wife] … to the [de facto husband] … and for the parties otherwise to retain the assets in their possession or name.”

As to the pet dog, the Full Court said (from [52]):

“Roxy is a Spoodle who was acquired at some time in 2014. Perhaps, unsurprisingly given her age and likely limited economic value, Roxy did not appear in the list of assets to be divided. Nonetheless, each party sought an order for her possession.

( … )

[60] [The de facto wife] … is the registered and legal owner of Roxy. Whilst there is conflicting evidence … it is not in dispute that she at least paid for the deposit and ongoing costs. It was open to the primary judge to find on the evidence that the [de facto wife] … paid for Roxy.

[61] It does appear that there was a mutual intention of the parties that Roxy was purchased for Ms T …

[62] Notwithstanding this … Ms T is not a party to the proceedings and has no legal or equitable interest in Roxy …

[63] As much as it will pain pet lovers, animals are property and are to be treated as such. Questions of attachment are not relevant and the Court is not, in effect, to undertake a parenting case in respect to them.

[64] If the animals have significant value, they can be valued in the usual way. Of course, as with other assets, a party may have a particular reason for wishing to keep the animal, and that can simply be dealt with in the ordinary course.

[65] It is more difficult in the case of a family pet of limited financial value. If the ownership is contested, there is much to be said for each party making a blind bid for the pet, with the highest offer accepted and taken into account in dividing the property.

( … )

[89] With respect to the possession of Roxy, … the [de facto wife] … should retain her. However, the order will provide for an adjustment of $800 to the [de facto husband] … for the purchase price of Roxy, in the absence of Roxy being on the parties’ list of assets and liabilities and any evidence advanced by the parties as to Roxy’s current value. The [de facto husband] … may in turn consider giving this sum of $800 to Ms T towards the purchase of another dog.”

The appeal was allowed and new orders made. The de facto husband was ordered to pay the de facto wife’s costs fixed at $12,000.

Financial Agreements – Section 90B agreement signed after marriage rectified, but set aside as uncertain provisions as to joint property were void and where a material change of circumstances as to children was such that the agreement caused hardship

In Carran [2022] FedCFamC2F 818 (24 June 2022) Judge Turnbull considered a s 90B financial agreement that was first prepared before the parties’ marriage, but signed afterwards.

The agreement was signed while the wife was pregnant with the first of their two children together, each party also having two children of previous relationships.

The agreement stated that the husband owned property interests worth a total of $2,005,000, while the wife owned $75,000 “in sale proceeds, plus minimal superannuation” ([19]).

The agreement also provided that it was “the intention” of the parties to transfer a particular property (“the T Street property”) into the joint names of the parties within 12 months of the agreement, which never occurred ([21]).

The wife argued that the financial agreement was not binding as it was made under the wrong section (i.e. s 90B instead of s 90C) and that the agreement should otherwise be set aside, including because it was void (based upon its vague provisions); and because the children born after the agreement now lived primarily with her such that the agreement caused hardship.

As to rectification, the Court said (from [56]):

“The authorities describe informal rectification as a process by which a court may, while construing a contract, ‘rectify’ mistakes if they are appropriately ‘obvious’ on the face of the document. …

( … )

[59] Before considering whether rectification is available I must determine the parties’ common intention (if any) for executing the 2006 agreement. …

( … )

[65] The 2006 agreement does not prima facie satisfy the requirements of either s 90B or s 90C. The parties’ status as married contravenes s 90B(1)(a) and, absent any express reference to s 90C, it cannot satisfy s 90C(1)(b). …

( … )

[106] The reference to s 90B instead of 90C of the Act is, simply put, not a ‘fatal defect’ as was submitted … on behalf of the Wife … I do not accept the Wife’s submission in this respect.

[107] The parties agree that negotiations for the 2006 agreement commenced before their marriage and continued thereafter. The Wife, of course, knew about the marriage to which she was a party. The evidence of the negotiations having commenced prior to their marriage indicates that the 2006 agreement was subject to a technical common mistake which, by the nature of ss 90C, prevents its original form as executed from being a ‘financial agreement’ under the Act. The Husband’s submits, persuasively, that the agreement’s text objectively indicates the parties’ intentions …

[108] The common mistake in this case appears to be clear — the parties assumed that, with the aid of their solicitors, the formalities of the 2006 agreement would reflect the fact that they were married despite the negotiations commencing before their wedding. …

[109] The error is, seemingly, one of a purely technical character. …

[110] … I am satisfied that the parties intended to properly and effectively oust the court’s jurisdiction with respect to their property interests and make their own terms for the same. …

( … )

[113] It is plain to me that, while the title refers to s 90B, the parties’ common intention was to refer to s 90C for the purpose of compliance under s 90C(1)(b). The erroneous reference to s 90B, almost certainly a product of human error by the parties’ solicitors, prevents that common intention from properly manifesting in the written instrument. The title is the only instance of reference to s 90B throughout the agreement.

[114] I will, therefore, rectify the title of the 2006 agreement to refer to s 90C instead of s 90B, therefore establishing compliance with s 90C(1)(b).”

As to ambiguity, the Court said (from [46]):

“The presence of an ambiguity does not necessarily mean that the contract is unclear, incomplete, or lacking finality. …

( … )

[51] In construing the terms of the 2006 agreement I must, by virtue of s 90KA, utilise an objective approach. Any ‘intention’ of which I speak throughout these Reasons does not refer to any subjective intention before or at the time of execution. Instead the intention must be revealed by the text of the 2006 agreement as created, read, and understood in the context of the parties’ circumstances between 2005 and 8 December 2006. …

( … )

[79] The Wife submits … that a number of terms within the 2006 agreement are uncertain. …

( … )

[144] Clause 11 lists the Husband’s assets and liabilities and, in doing so, refers generally to a number of named properties at Town AB, together with properties described only as ‘factory, Town R’, ‘plant and equipment’, and ‘stock’. The nature of the Husband’s ownership of, or interests in, such assets is not clear. … The extent of the Husband’s interest or shareholding in all of the ‘businesses registered in his name’ is also not listed …

( … )

[146] These ambiguities, in my view, amount to uncertainty for incompleteness. The agreement does not sufficiently identify all of the items of property at cl 11. Not only is the property itself vaguely defined but, more fatally, the agreement does not set out the way in which each item of property was connected to the Husband … If the agreement cannot show the Husband’s legal or beneficial property interests it cannot, as is required by s 90C(2)(a), deal with the items of property sought to be dealt with.

( … )

[151] Clause 32 provides that all ‘joint assets’ acquired during the period of cohabitation are to be divided by agreement or, failing agreement, sold with the proceeds to be evenly split. The agreement does not define what is to be considered a ‘joint asset’ and, beyond property being registered in joint names, the terms ‘joint asset’ or ‘joint assets’ are unclear.

[152] Clause 24 reflects this obvious meaning of the term by saying that property registered in their joint names will be deemed ‘joint property’. Clause 25, however, appears to introduce the concept of ‘joint’ in opposition to ‘sole’ ownership, by requiring a party to communicate an intention of sole ownership for any real estate or valuable item purchased during their relationship. If the party seeking to hold property solely fails to communicate the intention under cl 25 does this, as a necessary opposite, make such property ‘joint’ notwithstanding it not being registered in joint names pursuant to the ordinary meaning applied in clauses 24 and 32?

( … )

[154] I consider cl 32 to be unclear, amounting to uncertainty, and it is therefore void. Due to this uncertainty it also offends s 90C(2)(a) in that it does not allow property to be identified as ‘joint property’ or ‘joint assets’ (seemingly used interchangeably between cl 24 and 32). If one cannot say whether an asset is a ‘joint asset’, it cannot be dealt with in accordance with the agreement’s terms.

( … )

[182] … [T]he 2006 agreement is replete with uncertain clauses which cannot be rectified or severed. … The incompleteness and lack of clarity goes to the heart of their agreement — in failing to properly deal with their property, as required by s 90C(2)(a), the agreement cannot effect a financial settlement between the Wife and the Husband.

[183] The entire agreement must, therefore, be set aside on the basis that it is uncertain and thus void.”

As to s 90K(1)(d), the Court said (from [191]):

“If the 2006 agreement were not set aside, the Wife’s best possible outcome may be that she retains assets amounting to 23% of the asset pool. The agreement could also, however, afford her with as little as 12% of the asset pool. The 2006 agreement itself makes it difficult to ascertain the value of assets which may be retained by the Wife and, as determined above, those uncertainties are sufficient to make the agreement a nullity.

[192] In my assessment the Wife’s entitlement pursuant to a s 79 property adjustment order is likely to be higher than her best case scenario under the 2006 agreement. The impact upon her in dollar terms would plainly be significant in the current circumstances.

[193] In all of the circumstances I am satisfied that s 90K(1)(d) has been established. Even if the 2006 agreement is binding under s 90G, valid, and enforceable, the Wife will suffer hardship under any possible interpretation of her entitlement under that agreement. She will, as a result, suffer hardship if it is not set aside. …”

The financial agreement was set aside, with directions made to progress the wife’s application for a property adjustment.

Procedure – Parties granted release from Harman implied undertaking to use FCFCA documents in Fair Work litigation

In Plantier [2022] FedCFamC2F 840 (30 June 2022) Judge Kirton heard applications by both parties which sought an exemption from s 121 of the Family Law Act together with a release from the implied undertaking (per Harman v Secretary of State for Home Department [1983] 1 AC 280) to use documents filed in their matrimonial litigation in a Fair Work claim filed by the wife in the Federal Court of Australia; and for those documents to also be provided to tax authorities in respect of the husband’s tax affairs.

The wife had worked in day-to-day administration in the husband’s business during their marriage; the matrimonial proceedings having been concluded by the Court dismissing the wife’s spousal maintenance application; and final property orders being made by consent ([12]).

The wife subsequently filed a Fair Work claim in the Federal Court of Australia, which the husband opposed on the basis that the claim was a matrimonial cause, or ought to have been brought together with the family law proceedings ([14]).

The parties disagreed as to what documents should be released.

The Court said (from [38]):

“The function of s.121 of the Act is to restrict the publication and dissemination of information about a family law proceeding and any documents filed, produced or disclosed in a family law proceeding.

( … )

[42] The exemptions in s.121(9)(a) and (b) of the Act do not however extinguish the implied Harman undertaking. The purpose of the implied Harman undertaking is to preserve privacy and confidentiality, whilst ensuring that justice is done …

( … )

[46] … [T]he task of the Court in determining whether leave is granted to exempt the Wife from the Harman undertaking is to consider:

(a) Any injustice caused to the Husband; and

(b) Whether the Wife ought to be relieved from the Harman undertaking because some ‘special circumstance’ exists.

[47] Whilst s.121(9)(a) of the Act provides that s.121(1) will not apply when the communication is ‘to persons concerned in proceedings in any court, of any pleading, transcript of evidence or other document for use in connection with those proceedings’, there is no such exception for providing the documents to the Commissioner for Taxation.

( … )

[59] The Husband and the Wife are in agreement that the parties and their legal advisors should be relieved from the implied Harman undertaking with respect to any document sworn or affirmed and filed in the Proceeding for the limited use of these documents:

(a) In the Fair Work Proceeding; and

(b) For the provision to tax authorities concerning the Husband’s tax affairs.

( … )

[62] Senior Counsel objected to the inclusion of court books on the basis that they included documents that did not have any relevance to the Fair Work Proceeding … The difficulty with this submission is that three of the Affidavits that the Wife filed prior to the Final Hearing did not include annexures but instead referred to documents in the Wife’s court book. … In the circumstances I intend to Order that the documents in the Wife’s Court Book, … will be relieved from the implied Harman undertaking and s.121 of the Act.

[63] Further … I turn now to consider the Wife’s submission in relation to notices to admit. The Wife submitted that notices to admit which had been filed and any responses, whether filed or otherwise should be produced in the Fair Work Proceeding …

[64] A Notice to admit facts and documents, when drawn appropriately can be a significant evidentiary document. In this jurisdiction often the response to a notice to admit will not be filed. … In the circumstances … I intend to Order that the documents in the Wife’s Court Book, insofar as they are referred to in the Wife’s Notice to Admit will be relieved from the implied Harman undertaking and s.121 of the Act.

[65] I now turn to consider case outlines. In my view case outlines or case summaries which have been filed should be disclosed for the Fair Work Proceeding, as these are documents upon which the Court relies as representing a party’s account of the financial affairs between the parties.  Senior Counsel objected to unfiled case outlines on the basis that they may be privileged.

[66] The difficulty with case outlines or case summaries is the practice of a case outline or case summary not being filed and being emailed to Associates’ Chambers or handed up in Court and then being relied upon during a hearing. … In my view these case summaries should be disclosed for the Fair Work Proceeding and I intend to Order accordingly. …

( … )

[68] In considering this matter it is my view that in addition to the Orders in the Proceeding, the Reasons for Judgment … and these Reasons for Judgment should be made available in the Fair Work Proceeding.”

Spousal maintenance – Wife’s non-compliance with rules as to size limits for affidavits flagged for trial judge as to costs – Wife obtains interim maintenance and partial property settlement

In Carswell & Tenson [2022] FedCFamC1F 467 (6 July 2022) Smith J heard a wife’s application for interim spousal maintenance, partial property settlement and a litigation funding order after a 10 year relationship, the parties having had three children together aged 12, 10 and 8 ([38]-[39]).

At the hearing, the husband relied on an affidavit of 25 pages of sworn text and identified 10 documents he relied upon per the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), however, the wife’s evidence “comprised in excess of 150 pages of text and 500 pages of documents”([20], [26]).

Smith J said (from [28]):

“The wife maintained her position, through Counsel acting on her behalf, that she was entitled to rely upon as much material as she desired, regardless of the provisions of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘the FCFCOA Act’) and the associated Rules on case management principles to which she was directed.

[29] Rather than have her application dismissed she ultimately selected and was permitted to read:

– Affidavit filed 26 October 2021 … from page 7 … until the end;

– Financial statement filed 26 October 2021 … ;

– Affidavit filed 14 February 2022 … of approximately two to three pages of text, but excluding the annexures; and

– Affidavit filed 27 May 2022 … of approximately five to six pages of text setting out her present position.

[30] Litigants with a long purse and a litigious disposition, or who are willing to spend a disproportionate percentage of their net assets on litigation, or with a litigious disposition and the time and inclination to act as their own advocate, have contributed significantly to the notorious delays in the Family Law lists … by taking up a disproportionate amount of the Court’s time while other citizens who abide by the Rules patiently await their turn.

[31] It is to this mischief that s 63 and the ‘case management’ provisions of Part 6 Division 4 the FCFCOA Act, as well as the provisions of the Rules such as Rule 5.08 ‘limit on number and length of affidavits’ were, in part at least, directed.

[32] The wife had a positive obligation pursuant to s 68 to act consistently with the ‘overarching purpose’ pursuant to s 67 of the FCFCOA Act …

[33] There is nothing in the wife’s application that is unusual or which required any more than the evidence allowed by the Rules. …

[34] Far more complex disputes, and those involving far larger sums, are regularly dealt with within the Rules.

[35] The process of allowing the wife to select segments of different affidavits has further complicated the hearing and determination of this matter. To avoid the risk of confusion … it has been necessary to have the hearing tapes reviewed to confirm the material the wife was permitted to rely upon. This has used Court resources that could have been better applied to other tasks and has delayed the preparation and delivery of this Judgment.

( … )

[37] On an interim basis it is not clear to me whether it is the wife or her solicitors whose conduct lead to the position adopted. Accordingly, after much consideration, I leave the issue of [sic] to the Trial Judge, who will be best placed to consider the totality of the conduct of these proceedings and whether any action is required either in respect of costs or referral.”

After finding that the parties’ positions as to the net asset pool was $4,746,421 on the wife’s case; and $2,717,481 on the husband’s case ([52]) the Court said (from [57]):

“An order for payment of $250,000 of the current pool, which is just under 10% on the husband’s assessment, would not mean that the remaining property would not be adequate to meet the legitimate expectations of the husband at a final trial. …

( … )

[67] … [T]he husband … said that his gross income during the 2021 financial year was $1.2 to $1.3 million. … I take the higher figure.

( … )

[133] The wife requires, even on the husband’s case, a degree of financial assistance. In that context he agrees to continue paying the weekly rent of $1,295 on the current property, or on a more suitable 4 bedroom property at the same rent which he says can be sourced in the local area.

[134] The real issues are the degree of the wife’s financial need in order to live adequately, which she frames by reference to parity with the husband’s lifestyle and not by reference to community standards …

[135] The wife is only 44. She suffers from no physical or psychological incapacity. She has a wide range of transferrable skills based on her education, training and experience which would make her a viable candidate for appropriate gainful employment in the current strong labour market …

[136] The wife’s submissions proceeded on the basis of her earning capacity in her business. While the wife might prefer to work in this field of interest, where there is apparently only limited work available in her preferred field of employment, and where she has other transferable skills which make her qualified for other appropriate gainful employment, I would not consider her present income a true measure of her earning capacity.

[137] The wife has extensive skills which would qualify her for work in the open labour market. As the husband submitted, a highly educated, well-spoken and presented former professional would be a viable candidate for an administrative role in a company. While she might need to accept an entry level role in the range of $55,000-$60,000 per annum plus superannuation, within a reasonable time she would be expected to earn substantially more. …

( … )

[139] That earning capacity is, however, subject to the wife’s duties as the primary carer of Y.

( … )

[141] I accept and find that the [wife] need to be available for Y, and for the other children in the context of the stress Y brought to their lives [where Y had been suspended from school] …

( … )

[150] Allowing for some additional weekly amount for more appropriate accommodation in the same area, and not being persuaded that the wife’s loan is currently repayable, and balancing all of the evidence and issues as best I can on an interim basis, I am satisfied that a sum of $2,500 per week by way of interim spouse maintenance payments would allow the wife to be adequately supported taking into account all of the relevant factors.

( … )

[167] I find that the husband is in a position of relative financial strength to the wife, and that the wife is not in a position to meet her own legal costs. …

( … )

[170] … I find that the wife has a financial need as set out in her affidavit for litigation funding and for other matters, and that $250,000 is an appropriate total sum. I find that the wife has no other source of funds, that her likely entitlement on a proper assessment of contributions exceeds $250,000, and that there is little real risk that the payment of this interim sum will mean that a Trial Judge cannot do justice and equity between the parties on a final basis, see for example, Strahan & Strahan (Interim property orders) [2009] FamCAFC 166.”

Interim orders were made for spousal maintenance of $2,500 per week in favour of the wife. The husband was also ordered to pay a partial property settlement of $250,000 to the wife within 60 days, with sale orders made in default.

Property – Husband’s mother and partner necessary parties to determine claims in respect of monies transferred by the husband to third parties overseas

In Kachmar & Madero [2022] FedCFamC1F 476 (7 July 2022) Hartnett J heard countervailing applications for joinder – the wife seeking the joinder of the husband’s mother (“Ms C”) and new partner (“Ms D”) who lived overseas. The husband sought joinder of the wife’s father, her brother and two friends.

Hartnett J said (from [3]):

“Section 79(10)(b) of the Family Law Act 1975 (Cth) (‘the Act’) outlines that ‘any other person whose interests would be affected by the making of the order’, as sought by the parties, are entitled to be joined to the proceeding.

[4] The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘Family Law Rules’) sets out the procedure for the joinder of a party to the proceeding. Rule 3.01 states that:

A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in dispute in the proceeding, must be included as a party to the proceeding.

[5] The word ‘necessary’ was described by Warnick J in Wayne & Dillon & Anor [2008] FamCAFC 204 … as meaning: …

…something more than ‘useful’ or ‘expeditious’. In my view, if there are available alternative means to joinder to the substantive proceedings, of obtaining from a third person or someone already a party what is needed to allow an applicant for joinder to establish an identified ‘case’, joinder is unlikely to be ‘necessary’.

However, if a cause of action, recognisable at law, against a ‘third person’ is particularised, then it is at least highly likely that joinder will be ‘necessary for the court to completely and finally determine all matters in dispute.’

[6] Pursuant to r 3.03(4) of the Family Law Rules, a party who seeks to join a third party to the proceeding after the first court date must be granted the leave of the Court to do so. …

( … )

[23] Counsel for the wife submitted that pursuant to r 3.01 of the Family Law Rules it was necessary to join Ms C and Ms D to the proceeding to determine all issue in dispute in the proceeding as their rights may be directly affected.

( … )

[28] It is a fact … that the husband sent some part of the parties’ funds overseas. It is not in dispute that the husband has failed to disclose his application of those funds. The wife alleges that some of those funds were transferred by the husband to Ms C. The wife has now become aware of the fact that there is an apartment in the Country B, that the husband and his partner stay at occasionally, which is registered in the name of the husband’s mother. It is the husband’s evidence that his mother is a private person and that she will not allow him to disclose the address of the apartment. The wife seeks this information to enable the wife to undertake a title search.

[29] Order 7 of the orders made 16 March 2022 required the husband to disclose the address of the apartment by no later than 4pm on 23 March 2022. The husband has not complied with this order. …

[30] In these circumstances, I am satisfied that it is necessary to join Ms C to the proceeding to determine the application and/or location of the funds the husband allegedly transferred to his mother, and whether the parties or either of them have an equitable and/or legal interest in the apartment in the Country B.

( … )

[31] Counsel for the wife submitted that the husband has also transferred some of the parties funds to Ms D. The wife was required to subpoena the husband’s bank statements, which indicated that the husband had transferred $33,200 on 19 May 2021 from his Commonwealth Bank Account to Ms D’s account, plus an additional approximate $25,000 at an earlier date.

[32] The husband’s evidence is now that he transferred the funds … to Ms D’s bank account as he did not have a personal bank account in the Country B at the time. Upon opening a bank account in the Country B, he claims the subject monies were transferred out of Ms D’s account and put into his personal bank account newly established.

[33] I am satisfied in the circumstances as described above that it is necessary to join Ms D as a Third Respondent to the proceeding. That may be necessary only to the extent of her providing to the parties all bank statements in her sole name for the period from 14 May 2021 to date. Upon her compliance with an order that shall be made to that effect, Ms D can be removed from the proceeding in the absence of the wife making any application to maintain the joinder upon the wife’s inspection of the discovered documents. … ”

The wife’s application for joinder was granted whereas the husband’s application for joinder was dismissed, the Court finding that the husband had failed to serve his application in a proceeding upon the proposed respondent and that there was no basis to join the proposed respondents where the controversy involved monies provided to the wife by third parties ([36]).

The husband was ordered to pay the wife’s costs, fixed at $7,966.22.

Property – UK pension treated as a financial resource but in personam orders made to divide future pension payments equally

In Hardrick [2022] FCWA 90 (29 April 2022) Duncanson J of the Family Court of Western Australia heard an application for property settlement after a 23 year childless relationship between a 52 year old manager (“husband”) and 51 year old health care worker (“wife”). The parties had met and married in the United Kingdom (“UK”) before moving to Australia in 2004.

Single experts had been appointed in respect of the husband’s UK Pension (“Pension A’”, which provided for a pension upon the husband reaching retirement age (of 65) of £10,346 per annum ([51]).

If the husband exchanged his entitlement to a guaranteed income and spousal death benefit, a cash equivalent transfer value (“CETV”) was payable of £286,280 ([53]).

A UK lawyer, as single expert, gave evidence that because neither party was domiciled in the UK, it was unlikely that a UK Court would have jurisdiction to make a pension sharing order ([55]).

The husband argued that he did not intend to access the pension until he was 65; that the interest was not transferrable or splittable; and that the interest should be treated a financial resource. Notwithstanding that position, one option he put to the Court was that there be an equal division of property, with orders made as to the pension such that he ultimately pay one half of all net pension payments he received to the wife ([5] & [65]). The wife argued that the interest was property and that she ought to receive a percentage of the pool that included the Pension at its CETV value ([67]).

The Court said (from [47]):

“[Mr A], Cross Border Financial Advisor, was appointed single expert witness to enquire into and report on matters in relation to Pension A. …

( … )

[56] Mr A reported as to whether Pension A can be transferred to a qualifying recognised overseas pension scheme (‘QROPS’) in Australia. A QROPS must comply with prescribed reporting and compliance requirements set by HM Revenue & Customs (‘HMRC’). The obligation to meet those requirements lasts for 10 years from the date of transfer of UK sourced monies.

[57] A compliant QROPS can be achieved in Australia through establishing a self-managed super fund (‘SMSF’) that meets UK pension rules. …

[58] One such rule is that the trust deed will have to satisfy HMRC criteria. …

( … )

[61] At trial, the parties agreed an exchange rate for the purpose of the proceedings of $1.83 AUD to £1 GBP. The value of the quoted CETV for these purposes is therefore $523,892.

( … )

[66] The evidence of Mr A as set out above is that the CETV can be a lump sum.

( … )

[69] Having regard to the evidence as to Pension A as set out above and the husband’s stated intention with respect to it, I do not consider it appropriate to include the CETV in the balance sheet as the CETV does not constitute funds available to the husband capable of division at this time.

[70] Pension A is a financial resource to be considered along with the other financial resources including the parties’ other pensions. It will nevertheless be necessary to consider the ‘real nature’ of this financial resource when considering matters relevant to s 75(2) of the Act and in considering the justice and equity of the outcome. (Coghlan and Coghlan [2005] FamCA 429).”

After finding that the net asset pool, inclusive of superannuation (but excluding the Pension A interest) totaled $447,188 ([86]); and that the husband received a post-separation inheritance of $118,882 ([108]); the Court found the contribution division between the parties ought be weighed 55% to the husband and 45% to the wife ([121]).

As to s 75(2), the Court said (from [134]):

“Both parties are entitled to receive … pensions … upon retirement as a consequence of their employment in the UK. The pension to which the husband is entitled [ed. ‘Pension A’] … at normal retirement age of 65 years … is £10,346 per annum. Applying the agreed exchange rate of $1.83 AUD to £1 GBP that is equivalent to $18,933 per annum. The husband’s primary proposal is to share Pension A equally with the wife.

[135] The husband will be entitled to a UK State pension at State Pension age, which the wife estimated to be $325 per week. The husband did not take issue with the wife’s estimated value.

[136] The wife will be entitled to Pension B, the value of which she said was $50,139 as at January 2021, although the weekly amount is not known. The wife will also be entitled to a UK State pension which she will receive when she reaches the State Pension age [in] 2038. This is estimated to be £86 (or $156) per week based on her National Insurance record to [April] 2020. It is forecast to be £178 per week if she continues to contribute to it until [April] 2038, although there was no evidence that she is doing so.

( … )

[151] This matter and others discussed under s 75(2), taken as a whole, warrant an adjustment in favour of the wife. In my discretion I consider an adjustment of 10% in her favour is appropriate to take account of these matters. 10% of the parties’ property is $44,719.”

The Court continued (from [155]):

“Pension A is a valuable financial resource. The husband’s contributions to it were greater than those of the wife, but nevertheless he proposes to pay one half of the Pension A he receives after tax to the wife. I have not overlooked that this proposal was made in the context of an equal division of the parties’ property overall and I have found that a division 55% to the wife and 45% to the husband is appropriate. I take into account however that the disparity in the percentage division is relatively modest.

[156] To achieve a just and equitable outcome, I consider that to the extent possible, Pension A and the other pensions should be divided equally. The husband said he has no intention of retiring early and will not access the pension before the age of 65 years. In that event the parties will share the pension equally at that time. However, should the husband choose to make retirement decisions which include transferring his interest in Pension A to a qualifying SMSF in Australia, that interest will become a defined contribution and capable of being divided equally.

( … )

[165] Part VIIIB of the Act provides for the splitting of superannuation interests and applies to eligible superannuation plans. This Part does not apply to the parties’ overseas pensions. A pension sharing order cannot be made by the Court [in the United Kingdom] as both parties live in Australia. This Court however can make an order with respect to Pension A by making an order that the husband deal with it in a particular way. The orders proposed by the husband in his minute of proposed orders … are consistent with this approach.”

The Court ordered a 55:45 division overall in favour of the wife with in personam and injunctive orders, requiring the husband to pay 50 per cent of future pension payments received by the husband, net of tax, to the wife; with notice to be provided to the wife of any early access to the interest or early retirement.

Spousal maintenance – No error in interim maintenance order where wife’s need was premised on anticipated, not actual costs, payable once she vacated the former matrimonial home

In Badir [2022] FedCFamC1A 109 (19 July 2022), McClelland DCJ heard an appeal from an order that the husband pay interim spousal maintenance of $600 per week.

At first instance, the husband sought that the wife’s application be dismissed and that she vacate the former matrimonial home within 14 days ([12]).

The maintenance order was worded to commence upon the wife vacating the home and establishing her own residence in alternate premises ([14]).

The husband appealed, arguing the Court erred where there were no findings as to when the wife would leave the home; and no findings as to what the financial circumstances of the parties would be at the time that the wife left the home ([16]).

McClelland DCJ said (from [20]):

“The appropriate process to follow in considering an application for spousal maintenance is the four step process as set out in Saxena and Saxena [2006] FamCA 588 … per Coleman J:

(1) To what extent can the applicant support him/herself?

(2) What are the applicant’s reasonable needs?

(3) What capacity does the respondent have to meet an order?

(4) If steps 1-3 favour the applicant, what order is reasonable having regard to s 75(2)?

[21] In Redman & Redman [1987] FamCA 2 … the Full Court said that it was appropriate to maintain some flexibility in approach in considering an application for interim spousal maintenance. …

[22] … In Crawford and Crawford [1979] FamCA 38 … ) it was determined that the primary purpose of spousal maintenance is to make provision for future needs, whereas a statutory-based property distribution is mainly concerned with past contributions.

( … )

[57] … [T]he [wife] … knew of the [husband’s] … desire for her to leave the matrimonial home. This was communicated to her in a text message … In that message, the [husband] … requested the [wife] … to ‘look into going away from my house’ … Moreover … [the husband] … sought a specific order for that to occur.

[58] In those circumstances, it was not only entirely appropriate but necessary for the primary judge to make an assessment of the [wife’s] … future needs based on the assumption that she would vacate the matrimonial home. Those needs were identified by the [wife] … [in her] affidavit and in her Financial Statement. Having regard to those needs, the primary judge found that the ‘other adequate reason’ threshold test as set out in s 72(1)(c) was satisfied with the [wife’s] … ‘unavoidable living expenses’ being, in those circumstances, ‘in excess of her available income’ …

[59] As noted in the exchange between counsel for the [husband] … and the primary judge … the primary judge effectively granted an indulgence to the [husband] … to avoid a situation where he would be responsible for paying spousal maintenance until such time as the anticipated additional expenses were actually incurred. It is not only quite common but invariably the case that orders for spousal maintenance are made on the basis of anticipated but not yet incurred expenses. In the circumstances of this case, the primary judge was entitled to find that the expenses set out in … the [wife’s] … affidavit were, as a matter of probability, likely to be incurred. While it is the case that the primary judge did not make a finding as to the date upon which the [wife] … would vacate the matrimonial home, there was no error on his Honour’s part in finding that it is likely she would. In the absence of evidence as to the date that the [wife] … would rehome herself and in the context of the issue being raised by counsel for the [husband] … it was … entirely appropriate that the orders made by the primary judge did not require the [husband] … to meet those expenses until such time as they were actually incurred.

( … )

[62] It is clear that the primary judge based his assessment of the [wife’s] … future needs on a finding that she would vacate the matrimonial home … The [wife] … gave evidence that she had made relevant inquiries as to the availability and likely cost of rental accommodation. …

[63] The facts of this matter, as described in the judgment, make it appropriately clear that the primary judge inferred that the [wife’s] move from the matrimonial home to rental accommodation was imminent and the orders his Honour made should be read in that context.

( … )

[65] Insofar as the [husband] … contends that there is uncertainty and/or potential injustice in the manner in which the orders have been expressed such that he is unable to reasonably comply with them, that is, with respect, a matter which he can raise in the event of there being the need for enforcement proceedings.”

The appeal was dismissed and the husband ordered to pay the wife’s costs fixed at $17,416.65.

Children – Court’s reliance on academic article without notice to the parties breached procedural fairness, but was not material to its reversal of care order

In Berry & Andrews [2022] FedCFamC1A 120 (3 August 2022), the Full Court (Tree, Jarrett & Campton JJ) heard an appeal from final orders that the parties’ 12 year old daughter live with the father; that the father have sole parental responsibility for the child; and after a moratorium of maternal time, the child spend alternate weekends with the mother, graduating from supervised to unsupervised time ([2]).

The background to the order included the parties separating in the same year that the child was born; a final order being made in 2014; and the mother absconding to the Northern Territory with the child in breach of the order, resulting in no paternal time occurring for 6 months ([5]).

When reversing care of the child, the Court referred to the article of J B Kelly and J R Johnston entitled “The Alienated Child: A Reformation of Parental Alienation Syndrome”.

The mother appealed, arguing an error of law resulting from a denial of procedural fairness, where she had been given no notice of the Court’s intention to rely on the article, nor opportunity to respond to the article.

The Full Court said (from [10]):

“ … [T]he rules of procedural fairness require that anything relied upon by a court in reaching its decision be made known to the parties to the proceeding prior to the making of the decision, so that the parties may oppose reliance upon it, produce evidence in relation to it and make submissions about it. Reliance upon material which does not emerge in that manner is a breach of the rules of procedural fairness: McGregor & McGregor [2012] FamCAFC 69.

[11] It is uncontroversial that the article … was referred to by the primary judge in his reasons for judgment. All parties agree that neither the article nor any intention by the primary judge to rely on it was identified to any party prior to the delivery of his Honour’s reasons for judgment. Assuming that his Honour relied upon the article, the parties agreed that a breach of procedural fairness was made out.

[12] … [N]ot every breach of the rules of procedural fairness will lead to a new trial. If further information would not possibly have made any difference to the result of the case before the primary judge, an appeal establishing a breach of the rules of procedural fairness or natural justice will inevitably fail: Stead v State Government Insurance Commission [1986] HCA 54 … ; Lindfield & Romano [2022] FedCFamC1A 81 …

( … )

[15] The article in question was extraneous material. It was not part of the body of evidence before the primary judge. In this respect, this case bears a striking similarity to Shell & Armel [2022] FedCFamC1A 83. In that case, the primary judge had relied upon the very same article that is central to this appeal. The parties had been referred to the article in the course of the hearing. Nonetheless, the Full Court allowed the appeal. …

( … )

[19] Assuming that there has been reliance upon the article in question, it is necessary to carefully scrutinise his Honour’s reasons … so as to discern whether it is realistically possible that the decision made could have been different had the breach of procedural fairness not occurred …

( … )

[38] In general, his Honour … thought that [the mother] … demonstrated a lack of insight into the impact of her conduct on the child and her brother. That included the domestic violence to which the child was exposed, her failure to support the child’s education and the complete abrogation of her responsibility as a parent in letting the child choose whether she sees the [father] … or not. Permitting the child to make such serious decisions revealed, in the primary judge’s view, a significant issue with her care by the [mother] …

( … )

[43] … [H]is Honour considered that the child would benefit from a meaningful relationship with both parents, but that continuing to live primarily with the … [mother] … would mean the child would not spend time with her father. …

( … )

[50] His Honour draws attention to the article and the criticisms of it … He expresses no view about the validity of the criticisms, something to be expected if his Honour was going to adopt or apply the article or material within it. Instead, his Honour remained focused upon the facts of the case before him. …

[51] … [H]is Honour sets out four behaviours said by the authors of the article to be ‘exhibited by a parent who may be guilty … of parental alienation syndrome’. He makes no findings about any of them save the last – a belief that the other parent does not and has not loved or cared about the child. In that respect, he records that the [mother] … made it clear in cross-examination that ‘this is her position’. …

[52] The … [mother] … argues that … the reasons establish that the primary judge’s approach to the evidence was explicitly informed by the research to which he referred. …

[53] … [W]e do not accept those arguments. His Honour made no finding that the [mother] … was ‘guilty’ of parental alienation syndrome. …The primary judge’s focus was firmly on the facts of the case … He was not so much interested in the label that might attach to the [mother’s] … conduct as he had found it than he was with what she had done and how that had affected the child and her relationship with the respondent. …

( … )

[55] Although we are unconvinced of the proposition, we have assumed that his Honour did in fact rely upon the offending article as the [mother] … submits. Doing so breached the rules of procedural fairness as the [mother] … postulates and … constitutes an error of law because his Honour relied upon material that was not within the body of evidence before him.

( … )

[57] The [mother] … does not establish that the breach was material in the relevant sense. The findings of fact made by the primary judge are unchallenged. Those factual findings informed his Honour’s separate consideration of the ‘legislative pathway’ and his conclusion … that a decision to move the child’s primary residence to the respondent’s household was in her best interests. …

[58] … [T]hat was the path that his Honour took. … [W]e do not consider it realistically possible that the orders made by the primary judge could have been different had the breach of procedural fairness not occurred. The want of procedural fairness was not material.

( … )

[60] … [W]e are comfortably satisfied that the subject error has not resulted in, or provided the foundation for a conclusion that, a substantial miscarriage of justice had occurred.”

The appeal was dismissed and the mother ordered to pay costs of $14,561.07.