Aldridge and Keaton (Costs) - [2010] FamCAFC 78

FAMILY COURT OF AUSTRALIA

ALDRIDGE & KEATON (COSTS)

[2010] FamCAFC 78

FAMILY LAW - APPEAL – COSTS – Where the respondent seeks costs in the amount of $29,395.00 – Where the appellant seeks that each party pay their own costs or that the respondent be granted a costs certificate – Where circumstances warrant a departure from s 117(1) of the Family law Act 1975 – Where the appellant was wholly unsuccessful in the appeals – Parties’ financial circumstances considered – Where it is appropriate that any order for costs be limited to a proportion of the costs.

Family Law Act 1975 (Cth) – s 117(1), s 117(2), s 117(2A)
Federal Proceedings (Costs) Act 1981 (Cth)
Family Law Rules 2004

O’Rourke v P & B Corporation Pty Ltd [2008] WASC 36(S) (unreported, Martin CJ, 14 March 2008)

APPELLANT:

Ms Aldridge

RESPONDENT:

Ms Keaton

FILE NUMBER:

SYC

3130

2008

FIRST APPEAL NUMBER:

2009

SECOND APPEAL NUMBER:

2009

DATE DELIVERED:

21 April 2010

PLACE DELIVERED:

Sydney

JUDGMENT OF:

Bryant CJ, Boland & Crisford JJ

HEARING DATE:

By way of written submissions filed 12 February 2010 and 1 March 2010

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

9 April 2009

LOWER COURT MNC:

[2009] FMCAfam 314

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Ms Cleary

SOLICITOR FOR THE APPELLANT:

Dettmann Longworth

COUNSEL FOR THE RESPONDENT:

Mr Lethbridge SC with Ms Rees

SOLICITOR FOR THE RESPONDENT:

Inner City Legal Centre

Orders

The appellant pay two-thirds of the respondent’s costs of Appeal No EA 22 of 2009 as agreed and failing agreement as assessed under Chapter 19 of the Family Law Rules 2004.
The appellant pay two-thirds of the respondent’s costs of Appeal No EA 37 of 2009 as agreed and failing agreement as assessed under Chapter 19 of the Family Law Rules 2004.

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

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 22 of 2009; EA 37 of 2009
File Number: SYC 3130 of 2008

Ms Aldridge

Appellant

And

Ms Keaton

Respondent

REASONS FOR JUDGMENT

Introduction

On 22 December 2009 we published our reasons for judgment and dismissed the mother’s appeal against orders made by Chief Federal Magistrate Pascoe on 9 February 2009. We concluded there was no appealable error in the Chief Federal Magistrate’s orders which provided for the applicant, Ms Keaton, to spend time with the child, B.
Prior to hearing the substantive appeal we heard an appeal against the Chief Federal Magistrate’s refusal to stay Order 1 of the parenting orders pending determination of the substantive appeal.
We delivered our reasons in respect of the stay appeal on 19 June 2009 and dismissed that appeal. At the same time we made the following order:
(2)That the respondent’s costs be reserved and dealt with at the same time the Full Court deals with the costs of the substantive appeal.
In our orders made on 22 December 2009 we provided a timetable for the filing of written submissions in respect of the costs of the appeal. Our order was as follows:
(2)The parties are at liberty to file written submissions with regard to the costs of the appeal in accordance with the following timetable:
(a)on behalf of the appellant within 21 days of the date hereof;
(b)on behalf of the respondent in response thereto within 21 days thereafter;
(c)on behalf of the appellant in reply thereto within seven days thereafter; and
(d)that each submission have endorsed on the cover sheet the date on which a copy of that submission was served on the other party.
On 12 February 2010 the applicant, Ms Keaton, who was the respondent to both appeals, filed her submissions in respect of costs. In her submissions the respondent seeks an order in her favour for an amount of $29,395.00. It is not clear to us whether the sum sought is a composite sum in respect of both appeals but we imply this to be the case as both appeals were heard on 16 June 2009. Forming part of the respondent’s submissions is a schedule setting out how the costs claimed are calculated. However, the basis of charging is not disclosed and counsel’s fees are in excess of the fees provided in Schedule 3 to the Family Law Rules 2004 (“the rules”).
The mother filed written submissions on 1 March 2010.
Notwithstanding our orders provided for the filing of written submissions, on 23 March 2010 the mother filed an application in an appeal in which she sought the following order:
1.That the appellant have leave to rely on her affidavit affirmed 25 February 2010 in support of submissions as to costs.
In support of her application the mother filed an affidavit affirmed on 22 March 2010. It appears that prior to filing that application the mother attempted to file an affidavit affirmed on 25 February 2010. It appeared that the mother’s first affidavit was attempted to be filed in lieu of, or in addition to, her written submissions as to costs. We propose to treat the affidavit affirmed 25 February 2010 as a submission on costs.
We think it appropriate at this point of our reasons we say something about the mother’s application in an appeal. From the mother’s separate submissions this application appears to have been filed because there was no provision in our orders or in the rules for the filing of affidavits on the issue of costs.
It is not in doubt that costs under the Family Law Act 1975 (Cth) (“the Act”) are governed by s 117. So far as this appeal is concerned the relevant provisions of s 117 are s 117(1), (2) and (2A). They provide as follows:
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(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;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(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; and
(g) such other matters as the court considers relevant.
Thus it is apparent that these specific provisions of the Act have unique features from costs provisions found in other jurisdictions, where generally costs follow the event. We accept s 117(2A) sets out matters which the Court shall take into account in determining whether there should be a departure from the provision (s 117(1)) that each party pay their own costs of and incidental to proceedings.
While acknowledging this unique feature we are conscious in this jurisdiction, having regard to the main purpose of the rules, that wherever possible costs applications should be conducted with minimal expense and not become what has been described in other jurisdictions as “satellite litigation” (see O’Rourke v P & B Corporation Pty Ltd [2008] WASC 36(S) (unreported, Martin CJ, 14 March 2008)).
It is for this practical reason that it is the general practice in dealing with costs following appeals that submissions are received at the conclusion of a hearing of an appeal, or in circumstances such as occurred in this case, where counsel felt unable to deal with the issue of costs without the benefit of our reasons for judgment, by way of brief written submissions outlining relevant matters under s 117(2A). We would not wish to be seen in reading the mother’s affidavit affirmed 25 February 2010 (which we note has not been the subject of cross-examination and contains controversial matters) and treating it as a submission as encouraging departure from the usual cost effective practice adopted in the Full Court.

The mother’s position

The mother seeks an order that:
(a) each party pay their own costs; or
(b) the respondent be granted a certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) (“the Costs Act”).
We note no submissions were made to us as to any provision of the Costs Act which would support the granting of a certificate to an unsuccessful appellant.
In paragraph 5 of her affidavit the mother sought that we treat her material as effectively a response to the material filed by the respondent. We propose to accede to that request. The mother’s affidavit material substantially repeats the matters raised in her submissions.

The respondent’s submissions

The respondent addressed relevant factors under s 117(2A) of the Act. She said she was employed on a full-time basis earning approximately $80,000.00 per year. She went on to say however she had, in the initial Federal Magistrates Court proceedings, exhausted her savings and she had to remortgage her property for an amount of $50,000.00 for legal costs.
In respect of s 117(2A)(c) the respondent said:
In the initial proceedings in 2008, after the hearing of the Application in a Case, and the substantive hearing in the lower court, the Appellant appealed those decisions unsuccessfully. This added to the Respondent’s costs, and in circumstances where the hearing of the appeal against the interim orders was superceded [sic] by the final hearing in the FMC which was expedited.
We do not have the benefit of any material before us in relation to the earlier proceedings. However, as our focus is on costs of the stay appeal and the substantive appeal it is unnecessary we consider proceedings in the Federal Magistrates Court in respect of which costs applications could and may have been made in that Court.
The respondent noted that the mother had been wholly unsuccessful at each stage of the proceedings, including her appeal against the decision of the Chief Federal Magistrate to refuse a stay of his final orders and the substantive appeal.
In dealing with such other matters as the Court considers relevant (s 117(2A)(g)), the respondent said:
The Appellant’s case has always been that the Respondent should have no time with the child. This has been unsuccessful at every point in the proceedings.
The Federal Magistrates Court made a finding that the parties were not in a de facto relationship at the time of conception, and that therefore the respondent is not a parent of the child. The Respondent chose to not cross-appeal this finding and seek additional time with the child, and was content with the orders of the lower court.

The mother’s affidavits and submissions

In her affidavit, the mother said she had assets of $6,707.07. She also disclosed that she received a compensation payment of about $144,000.00 in 2007. She said she deposited the entirety of her compensation payment into an account in her father’s name in repayment of borrowings. She said thereafter from time to time her father provided her with funds to pay her legal fees for her family law proceedings.
The mother is in receipt of social security benefits of $997.84 per fortnight. The mother said she received assistance from her parents to pay for the child’s child care fees of $29.66 per day. She further said she had recently applied for, and was successful in obtaining, a fee exemption for 13 weeks.
The mother said she is seeing a psychiatrist on an approximately fortnightly basis and her father had given her $500.00 to pay for some appointments in addition to the Medicare rebate.
The mother disclosed she has tertiary qualifications (a Bachelor of Science and Bachelor of Teaching) but said she had not been able to seek employment by reason of her care of the child and her medical conditions.
The mother’s solicitors sought disclosure from the respondent’s solicitors by seeking copies of any costs agreement between the respondent and her solicitors, and senior and junior counsel retained on her behalf. The respondent’s solicitors, by letter dated 28 January 2010, declined to provide such documents.
In her second affidavit affirmed 22 March 2010, the mother referred to our timetable for the filing of submissions and noted that on 12 February 2010 the respondent’s solicitors transmitted to the mother’s solicitors a copy of their submissions on costs. The mother stated that on 17 February 2010 her solicitors received from the respondent’s solicitors a letter dated 16 February 2010 enclosing a copy of their letter to the Court, together with submissions on costs, being identical to the submissions transmitted on 12 February 2010.
The mother then noted that on 1 March 2010 her solicitors filed her submissions as to costs. The mother said her solicitors also attempted to file her affidavit affirmed 25 February 2010 and that the Appeal Registrar accepted her submissions but not her affidavit.

Conclusions

We are satisfied there are circumstances in this matter which warrant a departure from s 117(1).
The principal matter which we have taken into consideration is that the mother was wholly unsuccessful in respect of both the stay appeal and the substantive appeal.
In noting that fact we also take into account that the respondent did not challenge by way of cross-appeal the finding of the Chief Federal Magistrate that the parties were not in a de facto relationship at the time of the child’s conception. We accept that although the Chief Federal Magistrate’s findings on this topic were considered and well open to him on the evidence, as it was the first time the definition of de facto relationship had been considered following amendments to the Act, a cross-appeal could have been filed.
We have also carefully considered the parties’ respective financial circumstances. While we accept the mother’s present income is derived from social security benefits, she has tertiary qualifications which she can utilise in the future. She has also been able to make arrangements for payment of her legal fees. We have also taken into account the superior financial position of the respondent, and that she has no financial obligations in respect of the child. In these circumstances, we think it is appropriate to limit any order that the mother pay the respondent’s costs to a proportion of those costs.
We have already referred to the fact that the respondent has provided a schedule of costs claimed but without any basis for the amounts set out therein.
In the exercise of our discretion we have determined it is appropriate that the mother pay two-thirds of the respondent’s costs of and incidental to the stay appeal and the substantive appeal. The reduction afforded the mother takes into account her present lack of earnings but also gives due recognition to the fact that the respondent has incurred substantial costs in opposing the mother’s appeals in which the mother has been wholly unsuccessful.
As we are unable with any degree of precision on the material before us to assess the appropriate quantum of costs, we propose to order that the mother pay two-thirds of the respondent’s costs of and incidental to the stay appeal and the substantive appeal as agreed and failing agreement as assessed.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate:

Date: