Adams and James

[2015] FCCA 3417

FEDERAL CIRCUIT COURT OF AUSTRALIA

ADAMS & JAMES [2015] FCCA 3417

Catchwords:
FAMILY LAW – Application for costs on solicitor/client basis – whether or not costs orders justified – whether or not the Federal Circuit Court costs scale should be departed from – conduct of respondent – proportionality of costs charged.

Legislation:

Family Law Act 1975 (Cth), s.117

Australian Passports Act 2005 (Cth), s.11
Federal Circuit Court Rules2001 (Cth), Schedule 1

In the Marriage of Kohan(1992) 16 Fam LR 245
Prantage and Prantage [2013] FamCAFC 105
Medlon v Medlon (No.6) (Indemnity Costs) (2015) FLC 93 – 664

Applicant: MS ADAMS

Respondent: MR JAMES

File Number: MLC 844 of 2012

Judgment of: Judge Harland

Hearing date: 2 November 2015

Date of Last Submission: 27 November 2015 (considered in Chambers)

Delivered at: Melbourne

Delivered on: 18 December 2015

REPRESENTATION

Counsel for the Applicant: Ms Burt

Solicitors for the Applicant: Blackwood Family Lawyers

Counsel for the Respondent: Respondent appeared in person

ORDERS

1. That the respondent pay the applicant’s costs in the sum of $6,000 within 42 days.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 844 of 2012

MS ADAMS

Applicant

And

MR JAMES

Respondent

REASONS FOR JUDGMENT

1. The primary application before the Court was an application for a passport for the parties’ son X, who will turn 18 on (omitted) 2015. He needed the passport now rather than waiting until he turns 18 because he is due to compete in a (hobby omitted) competition in (country omitted) on (omitted) 2015. He has competed internationally for the past two years. His passport expired on 2 October 2015.

2. The mother’s counsel filed an affidavit the day before the hearing in relation to the mother’s costs. She seeks solicitor/client costs in the sum of $13,389.

3. That is an extraordinary sum to spend on such a simple application. It is a narrow issue which was resolved on the first return date. It was only due to the late service of the affidavit seeking costs which required the Court to make orders for written submissions.

4. In order for the Court to make a costs order in favour of the parties, there must be justifying circumstances as set out in s.117(2A) of the Family Law Act 1975 (Cth). I will address each of these matters in turn.

5. It is quite clear that there is a high level of acrimony between the parents and that the father’s relationship with X is completely broken down and that that has been the situation for the past few years.

6. The mother says that she requested that the father sign X’s passport in the first instance through a mutual friend and in the second instance by letter from her solicitor to the father’s solicitor dated 16 September 2015. The father’s then solicitors responded the saying they were instructed that the father would require the mother “go to court to seek the passport be issued”. It is significant that the father was legally represented at this stage.

7. The mother then made enquiries of the passport office as to the procedures that were available pursuant to s.11 of the Australian Passports Act 2005 (Cth) which provides for a mechanism for the passport office to issue a passport with only one parent’s consent. That administrative process is uncertain and the mother says she was advised that process could take 6 to 8 weeks. In my experience, it is by no means an automatic process unless a court has made an order specifically dispensing with the requirement to obtain the other parent’s consent. A general order granting a parent sole responsibility is not enough. The mother then filed an application to this Court for the issue of X’s passport.

8. The father responded, indicating that he was not willing to sign the passport form referring to “breaches of trust”. That does not address the relevant issue. The father’s attitude and response to this application was not child focused and it is clear from his own material that he remains very bitter.

9. It should not have been necessary for the mother to bring the application to court however, the father’s response was unreasonable and I accepted that as a result, the mother has incurred unnecessary costs. The concern I have is the proportionality of the costs she seeks.

(a) The financial circumstances of each of the parties to the proceedings

1. The mother accepts that she earns more than the father. She says that according to the most recent child support assessment, his taxable income was assessed as being $139,742 a year.

(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid

1. Neither party is in receipt of legal aid.

(c) The conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters

1. I have referred to the father’s conduct above. It is a relevant consideration under this factor.

2. It is also the case that the father’s affidavit in response addressed many irrelevant issues. He is critical of the mother’s actions without taking any responsibility for his own. It would have been a simple thing for him to sign the passport. His recalcitrant stance will not in any way improve the relationship with his son. The Court can only surmise that he wished to make it difficult for the mother and for her to incur costs. The father indicated previously the process under s.11 of the Australian Passports Act 2005 is not a guaranteed one and it was appropriate for the mother to commence court proceedings in light of the father’s responses.

(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. This factor is not applicable.

(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. The mother was entirely successful in the application without the need for argument and indeed the issue of X’s passport was inevitable in circumstances where X was almost 18 years old, he has travelled internationally before for (hobby omitted) events and he is a talented (hobby omitted).

(f) Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer

1. The mother says this is the primary factor upon which she relies on. She caused her solicitors to write to the father’s solicitors before she commenced proceedings. Whilst I have some doubts that that neatly falls into this category because it was made before the proceedings began, it makes no difference as I have already made it clear that the father’s response was unreasonable and caused the mother to incur unnecessary costs. The father presumably received advice at the time. He did not even instruct his lawyers to request more information about the trip but refused to cooperate and ceased instructing his lawyers.

(g)  Such other matters as the court considers relevant.

1. It is important to note that s.117(1) of the Family Law Act 1975 provides that the usual rule is that each party shall be responsible for his or her own costs.

2. To make a costs order at all is a departure from the ordinary rule. Schedule 1 of the Federal Circuit Court Rules2001 (Cth) sets out a scale of costs to be applied in family law proceedings and in general Federal Law proceedings. It is an events based costs scale. Part 21 of the Federal Circuit Court Rules 2001 deals with costs and disbursements. If the Court decides that it is appropriate to order costs, then in usual cases the scale of costs should apply.

3. In this case, I am comfortably satisfied that it is appropriate to depart from the usual rule that each party pay his or her own costs. I am also satisfied that it is appropriate to depart from the Court’s scale of costs because the father’s conduct was so unreasonable when all he had to do was provide his signature. By failing to do so, he has not only caused the mother to incur costs but has used valuable court resources.

4. If the Court applied the Court’s costs scale, mother would only be entitled to $2,326.

5. The mother seeks costs in the sum of $13,389. Her lawyer filed an affidavit on 30 October 2015 which annexes the firm’s costs agreement and her bill. As I have indicated previously I think some of the costs charged were excessive and disproportionate to the application. For example, on 16 September 2015 there is an entry charge for a letter of advice to her, conversation with the father’s lawyer and settling letter to the father’s lawyer which took 1.40 hours at a cost of $686. The only issue was obtaining a passport for a child who is almost 18 years old. It also appears that some of the charges relate to a principal settling work of a more junior solicitor. In my view, that is something that should probably properly be seen as part of firms’ training. This is particularly so with such a simple matter. I have some doubts that it was necessary to brief counsel although as I do not know counsel’s costs, I accept that engaging counsel may have been more cost effective .

6. Much of the father’s submissions were irrelevant. I do not accept the father submissions that “he could not have reasonably undertaken his parenting responsibilities with respect to the passport application” prior to being served with the initiating application. The father seeks to agitate other issues as he did in his affidavit and the submissions which are not relevant to the very limited issue.

7. The father also seeks to rely on the letter of engagement from the mother’s firm which refers to recovery of costs and the fact that usually the Court does not order costs in family law matters and in cases where it does, it usually applies the scale. I have already set out the father’s actions were unreasonable. It is also important to note that the appearance in Court is the least expensive aspect of these proceedings. If it is not already clear, in my view, it should not have been necessary for the mother to file the application. It is important to note that the costs agreement that the mother’s lawyers provided to her was at the point of their initial engagement. They could have not anticipated that the father would have responded in the way he did.

8. The reason for the requirement for there to be written submissions rather than the cost issue being addressed on the day was because of the late service of the affidavit of the mother’s lawyer setting out the costs sought.

9. The costs sought do not include costs of preparing submissions which is appropriate in the circumstances.

10. In the Marriage of Kohan (1992) 16 Fam LR 245, the Full Court of the Family Court stated that judge should understand that an indemnity costs order is such a great departure that it is necessary to know the impact on the financial position of each of the parties and to know the terms of the agreement which exceed the costs scale. It is necessary to know the extent of the departure from the scale and its likely impact on the parties' financial circumstances. By fixing a scale that must be understood that the scale contains the normal rates of charges. Indemnity costs are the exception in this and other jurisdictions.

11. In Prantage and Prantage [2013] FamCAFC 105, the Full Court stated when considering whether or not to make an indemnity costs order it is necessary to know what the departure is from the scale. (The same would apply when departing from the scale in order to make party/party costs presumably).

12. The Court was referred to the decision of Medlon v Medlon (No.6) (Indemnity Costs) (2015) FLC 93 – 664. In that case, the Court found it was appropriate to make an order for indemnity costs against the applicant who brought an application which should never have been brought. The compounding factor in that case was that the applicant was a legal practitioner.

13. In this case, I have found that the mother should not have had to have brought the application and was only required to because of the father’s unreasonable stance. This justifies a costs order being made and that the scale be departed from as to not do so would leave the mother significantly out of pocket. However, I do not think an indemnity costs order is warranted as I think some of the costs she has incurred are unreasonably high. Considering all of the circumstances, I think it is appropriate that the father pay the mother’s costs fixed in the sum of $6,000.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of Judge Harland

Date:  18 December 2015