Andrews & Berry (No 3)
[2022] FedCFamC2F 1524
Federal Circuit and Family Court of Australia
(DIVISION 2)
Andrews & Berry (No 3) [2022] FedCFamC2F 1524
File number(s): TVC 667 of 2012 Judgment of: JUDGE BOWREY Date of judgment: 10 November 2022 Catchwords: FAMILY LAW – Costs – Claim by Father for costs of proceedings up to trial and for additional parenting applications following final order – Father wholly successful and Mother wholly unsuccessful, following trial – Orders after final order in Father’s favour Legislation: Family Law Act 1975 (Cth) Cases cited: Colgate-Palmolive Company & Colgate Palmolive Pty Limited v Cussons Pty Limited [1993] FCA 801
Collins and Collins (1985) FLC 91-603
Penfold v Penfold (1980) FLC 90-800
Division: Division 2 Family Law Number of paragraphs: 90 Date of hearing: 31 October 2022 Place: City C Counsel for the Applicant: Mr Fellows Solicitor for the Applicant: Macrossan & Amiet Solicitor for the Respondent: Hawkes Lawyers ORDERS
TVC 667 of 2012 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR ANDREWS
Applicant
AND: MS BERRY
Respondent
order made by:
JUDGE BOWREY
DATE OF ORDER:
10 November 2022
THE COURT ORDERS THAT:
1.The Respondent Mother pay to the Applicant Father within 60 days of the date of this order, the sum of $70,599 being legal costs incurred in the proceedings TVC667/2012.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Andrews & Berry (No 3) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BOWREY
This judgment is with respect to a Costs Application by Mr Andrews.
The matter was heard on 31 October 2022 and judgment was reserved.
The matter before the court arises from parenting issues in which Mr Andrews is the Applicant Father and Ms Berry is the Respondent Mother. The subject child is X born in 2010. She is now 12 and a half years old.
The Father has been represented by Macrossan & Amiet Solicitors of City B who instructed Mr Fellows of Counsel.
In the parenting proceedings the Mother was represented by Mark M Stone solicitor who instructed Mr Fischer of Counsel.
An Independent Children's Lawyer (ICL) was appointed. She is Ms Kyreakou. Ms Murphy was instructed by the ICL.
The parenting proceedings were heard on 24-26 November and 20-21 December 2021. I gave judgment and made orders on 17 January 2022.
The Father was successful following the parenting trial. The Mother was unsuccessful.
This year the Mother has been represented by her solicitor Mr Hawkes.
Further Proceedings
A final parenting order regarding the child was made on 28 May 2014. It provided that the parents share parental responsibility for decisions for the child, that the child live with the Mother and that the child spend time with and communicate with the Father as set out in detailed paragraphs in the order.
After some years of the May 2014 order operating successfully, the Father commenced proceedings, claiming that the Mother was no longer complying with the order in that the child was not spending the specified time with him. Those proceedings culminated in the trial over five days last year.
A summary of the proceedings this year is as follows:
(a)17 January 2022 – Final parenting order made after trial late last year.
(b)11 February 2022 – The Father filed an Application in a Proceeding seeking costs.
(c)11 March 2022 – The Mother filed a Response to the Application in a Proceeding.
(d)14 March 2022 – Order made adjourning the Application in a Proceeding to a date to be fixed.
(e)4 May 2022 – The Father filed an urgent Application seeking a recovery order for the child.
(f)5 May 2022 – Recovery order ex parte made and costs reserved.
(g)13 May 2022 – Order made for the Mother to return the child to the Father’s care.
(h)20 May 2022 – Order made for the Appointment of an ICL.
(i)20 June 2022 – Order made for the child to spend time with the Mother in City B or City C on alternate weekends.
(j)11 August 2022 – Order made discharging the ICL.
(k)20 October 2022 – The Father filed an Amended Application in a Proceeding seeking costs.
(l)31 October 2022 – Application in a Proceeding filed by Mother seeking adjournment of Father’s Costs Application.
(m)31 October 2022 – The Father’s costs application/s was heard and judgment reserved.
It will be seen from the schedule above that on 11 February 2022 the Father made an application for his legal costs of the litigation leading up to and including the trial. The Application in a Proceeding filed on 11 February seeks orders as follows:
(a)That the Respondent pay the Applicant’s costs on an indemnity basis in the sum of $138,809.29 or as may be taxed.
(b)Alternately that the Respondent pay the Applicant’s costs on a solicitor and client basis in such sum as may be agreed or as taxed.
(c)Alternately that the Respondent pay the Applicant’s costs in such lump sum as may be fixed by the Court.
(d)That the Respondent pay the costs of this Application.
The Father filed an Amended Application in a Proceeding on 20 October 2022 seeking orders as follows:
(a)The Respondent pay the Applicant’s costs on an indemnity basis in the sum of $149,683.95 or as may be taxed. These further costs have been incurred as a result of the Recovery Application I was forced to make on 3 May 2022 as a result of the Respondent breaching the Orders and withholding X at the time.
(b)Alternately that the Respondent pay the Applicant’s costs on a solicitor and client basis in such sum as may be agreed or as taxed.
(c)Alternately that the Respondent pay the Applicant’s costs in such lump sum as may be fixed by the Court.
(d)That the Respondent pay the costs of this Application.
The Mother's Response to the Application in a Proceeding when the Father sought a costs order, was filed on 11 March 2022 – see 12(c) above. It seeks the following order:
(a)That the Application in a Proceeding filed by the Applicant on 11 February 2022 be dismissed.
On the day of the hearing of the Costs Application namely 31 October, the Mother filed an Application in a Proceeding and an Affidavit. The Mother's Application in a Proceeding filed 31 October sought an order that:
(a)The Costs Application by the Applicant Mr Andrews filed 11 February 2022 be adjourned to a date to be fixed.
It will also be seen from the schedule that there has been a considerable amount of further activity on the file up to 31 October 2022 when the Father's Costs Application was heard. The Father filed an application on an urgent basis seeking a recovery order, on 4 May 2022. That Application sought that the Mother pay the Father's costs. A recovery order issued on 5 May with the Father's Costs Application being reserved.
Further orders were made in May this year, namely on 13 May for the child to be returned to the Father and on 20 May for the appointment of an Independent Children's Lawyer for the child. Ms Kyreakou resumed the role of ICL which she had done up to and including the trial late last year.
I ordered on 20 June that the child could spend some time with the Mother.
The Mother's reason for seeking an adjournment of the hearing of the Father's Costs Application is in short, that the child no longer resides with the Father. Apparently, she has not resided with the Father since the end of September or start of October this year.
The Mother says that she intends to file an application seeking orders that the child live with her, attend boarding school in City C at the Mother's cost and that the Father not be required to pay child support.
I determined on 31 October that I would not adjourn the Father's Costs Application to await further litigation by the Mother.
In my view, the Costs Applications by the Father are for matters which occurred in the litigation in the past. The Mother may bring a parenting application which she foreshadows in her affidavit filed 31 October. If she does, the result is unknown. The Mother may apply for costs against the Father when any new application is filed. Any costs result is unknown.
I will deal with the Father's Cost Applications filed 11 February and 20 October this year. Those applications arise as a result of the litigation which ended in the trial late last year and judgment on 17 January this year, together with litigation since then when I found that the Mother breached the final parenting order of 17 January or facilitated non-compliance with that order. The matters the subject of the Father's Costs Applications have been completed. The Costs Applications themselves including the costs of those applications, are the only matters outstanding.
Continuing to Hear the Matter
The Mother's Solicitor Mr Hawkes advised at the hearing on 31 October of some concern he had about my hearing the matter any further.
Mr Hawkes did not say that I should make an order recusing myself. No recusal application has been filed. Mr Hawkes did not make an oral application on 31 October that I recuse myself.
Mr Hawkes said that comments I had made about the Mother lead to a conclusion that I had strong views against her. Mr Hawkes referred to the final judgment on 17 January this year and to comments in the court proceedings since then when the Mother breached the final order or facilitated non-compliance with it. This resulted in further proceedings and further orders including a recovery order, for the return of the child to the Father.
Mr Hawkes said that my comments raised a concern for him that my expressed views about the Mother would indicate that she may not receive a fair hearing or words to that effect. Mr Hawkes said that he was concerned and the transcript or transcripts would show, that I had a concluded view about the Mother or words to that effect.
It is the case that I made findings against the Mother in my judgment dated 17 January. I found that the Mother had taken an active course to prevent the child from having any relationship with the Father and with the Father's family. I found that the Mother did this in breach of then current orders of this court.
I note the following paragraphs in my judgment dated 17 January:
(a)Paragraph 97 – I am very concerned about the child being involved in the court proceedings by reading court documents. This should never have happened. It is important to consider paragraph 182 of the Family Report which I set out in full as follows:
Assessment data attests [X] and [Y] have been exposed to Court documents; such exposure ranges from reading the documents out of curiosity, [Ms Berry] reading the documents to them, one or both assisting [Ms Berry] with the details of alleged incidents when she is drafting her affidavits in addition to discussions about Court documents and the paternal family. From the writer’s perspective, such exposure can have life-long adverse effects on adolescents. Such exposure may result in a young person initially aligning themself with one parent, typically the parent they perceive to be the victim. However, as the young person matures and is less influenced by others, they reflect on past parental dynamics resulting in the once aligned parent being rejected. From a psychological perspective the exposure of young persons to Court documents can have detrimental impact on the young person’s mental health, placing them at greater risk of using and abusing illicit substances and alcohol, a lack of trust in relationships and at risk of suicide-related behaviour. During this assessment, [Ms Berry] identified [X] blames herself for the current situation and is experiencing distress. From the writer’s perspective, [Ms Berry] appears to lack insight as to how [X]’s and [Y]’s exposure to Court documents have impacted on their emotional health. The writer would argue, a young person’s exposure to Court documents is a form of psychological abuse perpetrated by the adult that is allowing and/or facilitating such exposure.
(b)Paragraph 199 – It seems to me that the Mother was telling the truth or the truth as she sees it, in most of her answers. However this raises a separate consideration. Does the Mother have insight into how her behaviour affects her children and in particular X? I think not, where one considers the domestic violence the child has been exposed to, the poor distance education and as Ms Murphy submitted, the complete abrogation of the Mother's responsibility as a parent, in letting the child choose whether she sees the Father or not.
(c)Paragraph 200 - On this last point, I think that there is more to the issue then appears superficially. It is not simply that “the child can do as she wishes”. The child should never be put in this position of making decisions about seeing her parents. The child should never be encouraged to take on that role which is for parents rather than children, to decide. In my view, the child remains so affected by the Mother abandoning her in early 2020 which in reality is what happened, that she will not be willing now to give any indication the to the Mother of an interest in seeing the Father and his family.
Further, I made statements when making orders this year that a recovery order in favour of the Father issue and that the child be returned to the Father, critical of the Mother's role in breaching the existing final order (then only a few months old), involving the child in the proceedings and appearing unconcerned (my description) about the effect of all of this on the child. I said in my Judgment dated 5 May:
9. As I have said, my view based on the material filed by the Father or on behalf of the Father, is that the Mother is in a clear breach of a recently made order. That order is very clear in its terms. It was made after a five-day trial in which significant findings with respect to the Mother’s parenting were made.
10. It is my view that it is in the child’s best interests that the terms of that order be enforced to the extent possible and similarly therefore, that the Mother’s breach not be tolerated and I will use that word, any longer than should be possible. In my view therefore, it is appropriate for the Court to make an ex parte order on an urgent basis.
I do not think that the comments I have made regarding the Mother precludes me from dealing with the Father's Costs Applications. As I said to Mr Hawkes on 31 October, costs orders are not a punishment nor a penalty. They are made in family law proceedings as an exception rather than the rule. They are made only after a court has considered the matters set out in section 117 and the relevant subsections.
The Parties’ Finances
One of the matters the court must consider as referred to in sub-section 117(2A) is the financial circumstances of the parties.
Father’s Financial Circumstances
The Father filed a Financial Statement on 11 February 2022 in support of his application for costs. The Financial Statement says:
(a)The Father is a self-employed transport worker. He also makes products for sale at markets around City B.
(b)The Father earns $400 per week salary from which $100 per week is deducted as tax. I do not know why the Father’s income is so low.
(c)The Father has minimal expenses, namely private health insurance of $70 per week, motor vehicle registration (although no running costs are shown) and other expenses of $150 per week which I assume is the cost of groceries.
(d)The Father has the following assets:
(i)Property at Town A worth $300,000.
(ii)Motor Vehicle 1 worth $15,000.
(iii)Motor Vehicle 2 worth $1,000.
(iv)His small business worth $20,000.
(v)Household contents worth $20,000.
(vi)$2,000 in the bank.
Item 44 of the Father’s financial statement says that his physical assets have a gross value of $338,000. I calculate this to be $358,000.
(e)The Father has Super Fund E worth $25,000.
(f)A housing loan or a business loan (the Father refers to his business) is $117,000. Further, the Father owes legal fees which I understand to be his parents paying his legal fees, in the sum of $138,809. The liabilities total $255,809.
The effect of the Father’s Financial Statement is that he may be worth around $100,000 in net terms or perhaps $80,000 after recent legal fees are taken into account. I say recent legal fees because as set out in paragraph 14(a) above and in the following paragraph, the Father’s legal costs have increased by $10,875 and this is not the final accounting. $22,495 may be the additional costs the Father will pay.
The most recent information for the court regarding the Father’s costs is set out in three documents as follows:
(a)In an Amended Application in a Proceeding filed 20 October 2022 11 days prior to the costs hearing, the Father seeks costs on an indemnity basis in the sum of $149,683.95. This is an amendment to the Father's previous application that the Mother pay his costs on an indemnity basis in the sum of $138,809.29.
(b)In his affidavit also filed on 20 October, the Father says:
(i)After filing his Costs Application on 11 February 2022 he has paid legal fees of $2,743, $1,115 and $6,527, in round dollars. Outlays paid were $490. The total is $10,875. There is no amount for Counsel’s fees.
(ii)The Father says that as at 20 October there were $1,620 in unbilled fees and he has been provided with an estimate of “around the $10,000” for ongoing fees, noting that he has not paid Counsel’s fees. The total is $11,620.
(iii)If the additional amount totalling $11,620 referred to in the previous paragraph are taken into account, the Father's costs this year are likely to be approximately $22,495 ($10,875 plus 11,620).
The above amount of $22,495 which includes an estimate for Counsel’s fees, would be approximately be the full amount paid by the Father. This would thus be an indemnity costs amount, rather than a scale amount.
This is consistent with the most recent Costs Notice given to the Father. A Costs Notice dated 28 October 2022 says that $10,000 - $15,000 are the estimated future costs of “continuation of proceedings to trial”. I am not sure that the reasonably short hearing on 31 October about the Father's costs claim could be referred to as a trial. The hearing was not lengthy and written submissions had been filed on behalf of each party.
One matter which is different in the 28 October Costs Notice however is that it refers to professional fees not billed of $4,204 in round dollars. This is different from what is said in paragraph 24 of the Father’s affidavit sworn the previous week, namely on 20 October. It says that he has been told that there is currently $1,620 in unbilled fees.
The Mother’s Financial Circumstances
The Mother’s financial circumstances are set out in a financial statement, two affidavits and a Costs Notice. What the Mother deposes to is not entirely consistent between parts of her evidence or is somewhat confusing. I set out the position as I see it in the following paragraphs.
The Mother’s Costs Notice was filed on 31 October, the day of the costs hearing. The Notice says:
(a)The Mother has incurred costs and disbursements of a significant amount with her previous Solicitors in the vicinity of that “suffered by the Father”.
(b)To date, the Mother has incurred total fees, costs and disbursements in the vicinity of $75,000 for her parenting matters since instructing Hawkes Lawyers and including costs orders which she was required to pay as a result of the appeal outcome.
I understand that the costs order in the Mother’s unsuccessful parenting appeal was $14,561.07. This seems to mean that the Mother has spent $60,438.93 ($75,000 less $14,561.07) in costs this year.
(c)The Mother’s estimated costs with respect to the Father’s Costs Application are $7,500 plus GST, thus $8,250, according to the Costs Notice provided to her on 31 October.
(d)The costs are being funded on a private basis (loans from the Mother’s Father) to be personally paid back by the Mother. The Mother owes her former partner Mr F money loaned to her for legal costs. It is not clear whether this is for the trial last year or the current application before the court (seeking payment of the Father’s costs) or both – see comments below.
(e)The Mother is not in receipt of a grant of Legal Aid.
The costs “suffered by the Father” referred to in sub-paragraph 41(a) above can be determined by reference to the Father’s affidavit fled 11 February 2022. He says that up until then, he had incurred legal fees of $138,809.
The Mother filed a financial statement on the 11 March 2022, in relation to the Father’s Costs Application. In that financial statement, the Mother says that at this time 7 months ago, her financial position was:
(a)She was not employed or self-employed.
(b)She had no income at all.
(c)She was supported by her then partner Mr F. He was providing expenses for her benefit as and when required.
(d)The Mother paid insurance for her house and her vehicles. She had additional expenditure for which no detail was required, of $795.00 per week and total expenditure of $1,070 per week. I assume Mr F was paying all or most of those expenses.
(e)Her Town G property is worth $1,100,000. She had $2,930 in the bank, two vehicles worth $62,900 and $14,600, a caravan worth $30,000, pieces of equipment worth $5,000 and household contents worth $10,000. The total was $1,225,430.
(f)The Mother had no superannuation.
(g)The Mother owed $377,300 to her Father for the Town G property and $151,960 to her then partner Mr F, for legal fees, for a total of $529,260 of liabilities.
In her affidavit filed 25 October the Mother says the following:
(a)She lives at H Street, Suburb J outside City C. She is unemployed.
(b)She is no longer in a relationship with Mr F. Mr F was in a relationship with the Mother during the parenting trial last year and gave evidence in her case.
(c)The Mother “participated” in the purchase of the H Street, Suburb J property outside City C with Mr F in April 2022 for $1.3 million. The whole of the purchase price plus a further $100,000 so $1.4 million in total, was borrowed from Bank K.
The Mother and Mr F owe $1,400,086 for the purchase of the H Street, Suburb J property.
(d)The Mother’s Town G property near City B was part of the security for the above-mentioned loan.
(e)The Mother owes Mr F about $152,000 for his payment of legal fees for her.
In her affidavit filed 31 October 2022 the Mother says the following:
(a)She is not personally the owner of the Town G property outside City B. It is owned by the Berry Family Trust. The title search annexed to the Mother’s affidavit indicates that this transaction may have occurred in June 2019.
(b)She is indebted to her Father personally or in relation to the Family Trust, in the approximate sum of $474,400. The documents said to explain this being annexure 4 to the Mother's affidavit, are not clear.
A letter from the law firm acting for the Mother in May 2019 appears to refer to the purchase of the Town G property. $445,606 is required to complete the purchase. There is a copy of a bank statement which might be a statement for the account of the Mother's Father, showing a transfer with the note/description “Ms Berry loan” in the sum of $445,606 on 11 June, apparently 2019.
(c)The amount owing by the Mother to her Father seems to be for the purchase of the Town G property and for legal fees. I say this because in her Financial Statement, the Mother says she owes her Father $377,300 for the loan to buy the Town G property. If $474,400 is now owing to the Mother’s Father, this suggests the Mother’s Father has loaned her not less than $97,100 for legal fees.
(d)Annexure 6 to the Mother's affidavit are bank records and a statement prepared I assume by the Mother or Mr F, showing money owed by the Mother to him. The Mother says at paragraph 21 of her affidavit that with respect to one of the loans namely $44,000 in January this year (although there is a reference to caravan rather than legal fees) she has repaid Mr F $30,000. The Mother says that all up, she presently owes Mr F about $155,000.
I would make two comments regarding the Mother’s financial position. With respect to the H Street, Suburb J property outside City C where she lives, the Mother would appear not to be able to retain that property. She has no income and if her other debts described in recent affidavits are correct, little or no borrowing capacity. The H Street, Suburb J property will have to be sold or Mr F will have to acquire it and become responsible for the bank loan.
The Mother says in her affidavit filed 25 October that she and Mr F will have to untangle themselves financially regarding the H Street, Suburb J property and in the falling market, they may be in a negative equity position. No evidence about a negative equity position is provided.
A second matter is that the family trust which owns Mother's Town G property can be regarded as her alter ego. It is not clear why the Mother would purchase the property or transfer it after purchase, in or to a family trust, except for asset protection. The Mother does not give any evidence about this in her material.
The Mother's material supports a view that the trust is an alter ego of the Mother. For example:
(a)In her financial statement under the heading in Part I “property owned by you”, the Town G property is listed.
(b)At paragraph 18 of her affidavit filed 31 October 2022, the Mother says that she has been advised by her solicitor and that she made an error with the ownership of the Town G property in that it belongs to a family trust.
(c)In her financial statement under “your liabilities” the Mother specifies at item 53 “other financial liabilities” a loan from her Father in the sum of $377,300 for the Town G property.
(d)In paragraph 10 of her affidavit filed 25 October regarding the H Street, Suburb J property purchase, the Mother says “my Town G property was also taken up in that cross securitisation by way of registered mortgage” (italics are mine).
(e)At paragraph 20 of her affidavit filed 31 October, the Mother says:
Presently, both personally and through the name of trust, I personally owe or otherwise as trustee must account for debts to my Father for monies in the approximate sum of $474,400.
This is referred to in 46(b) and (c) above.
Taking all of the above into account and if the information contained in her financial statement and more recent affidavits is accurate, the Mother's assets are:
(a)Town G property $1,100,000
(b)Motor Vehicle 3 $62,900
(c)Motor Vehicle 4 $14,600
(d)Bank accounts $2,930
(e)Personal chattels and effects $10,000
(f)Caravan $30,000
(g)Tractors, trailers and other equipment $5,000
Total $1,225,430
The Mother’s liabilities are:
(a)Debt to Father $474,400.
(b)Debt to Mr F $155,000.
Total $629,400.
The Mother's net equity in her assets is thus $594,500.
It will be seen from the above that I have not included the H Street, Suburb J property nor its debt, in the calculation of the Mother's financial position. I do not know whether the Mother will have to pay any part of a shortfall if the H Street, Suburb J property sells at a loss and I do not know whether a shortfall will in fact occur. The Mother does not say in her affidavits that she owes Mr F anything for the H Street, Suburb J property. She does identify that she owes him money for payment of legal fees.
On the basis set out in the above calculations, the Mother is in a more superior financial position than the Father.
Mother’s View of Present Proceedings
In paragraph 30 of her affidavit filed 25 October this year (in the week before the 31 October costs hearing) the Mother refers to a letter from the Father’s solicitors to her solicitors dated 28 September 2022. The contents of the letter are not relevant to the current costs proceedings except that the letter states the Father’s belief is that the Mother was responsible for the child not being in his care, either by the Mother doing something actively or the Mother not telling the child to return to the Father. In any event, the Mother goes on in her affidavit filed 25 October to say the following in paragraph 30:
In that emailed letter the Father made various allegations which I deny and which did nothing to assist [X] going back into the Father’s care. In that regard, I say:
a.That to a large degree, by his conduct, the Father’s real agenda now is to obtain a Costs Order against me having given up on his pursuit of sole parental care of [X];
b.In other words, he no longer believes it is in [X]’s best interests to reside with him;
c.Again in other words, the whole of the litigation process appears to have been a waste of time and morphed into a new agenda by the Father to obtain a Costs Order against me (as against identifying the best interests of [X], preserving the Final Orders of this court and an attempt of painting me in the poorest of light before this Court).
In my view, what the Mother says in her affidavit misrepresents the position. The Father obtained a final order dated 17 January this year, that the child live with him. This was after a lengthy and difficult trial. The Father commenced the proceedings when the Mother would not comply with court orders and would not facilitate a relationship or contact between the child and the Father.
The Father was wholly successful following the trial. The trial included evidence that the Mother had breached previous orders and had not facilitated the child spending time with the Father.
After the final order was made, the Father made applications to this court not only for costs from the trial but as he needed to do at the time, for orders that the child be returned to his care. Applications this year after 17 January were in circumstances where the child had returned to the Mother. The Mother denied taking the child or actively pressuring the child to be in her care. What she did not do was to take the child back to the Father or tell the child to return to the Father.
To say that the whole of the litigation process appears to be a waste of time and/or to say that there is now a “new agenda” by the Father to obtain a costs order against the Mother, is simply wrong. The Father took action to have a relationship with his daughter including that she live with him. The Father took further action to ensure that the final order of 17 January this year was complied with. In my view, a parent in the Father’s position was forced to do what the Father here has, in the face of breaches of orders and obstruction generally by the other parent.
Cases
In Penfold v Penfold (1980) FLC 90-800, the High Court allowed an appeal from a decision of the Full Court of the Family Court. The High Court held:
It is an accurate description of section 117(1) to say that it expresses a general rule, provided that it is firmly understood that the subsection is not paramount to section 117(2). As subsection (1) is expressed to be subject to subsection (2), the former must yield whenever a Judge finds a particular case that there are circumstances justifying the making of an order for costs.
Subsection (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an application for order for costs. Consequently with respect to their Honours in the Family Court, we do not agree with the suggestion made in the Judgment under appeal that an order can only be made under section 117(2) in “a clear case”.
I am able to and do make a finding that the circumstances of this case justify the making of an order for costs. The order will be that the costs incurred by the Father be paid by Mother. The quantum of those costs is a further issue and I refer to it below. In saying that the Mother should pay the Father's costs, I have taken into account:
(a)At the time the Father commenced the parenting proceedings which resulted in the final order made in January this year, there was already a final parenting order. It was made in 2014. The Mother was in breach of that order when the most recent parenting proceedings were commenced. I refer to paragraph 27 of the January 2022 Judgment.
(b)Before the Trial last year, the Mother was in breach of interim orders in those proceedings. The interim orders required the child to spend time with the Father. In most cases, that did not occur. I refer to paragraph 30 of the January 2022 Judgment.
(c)The Mother’s breaches continued over an extended period including during the 2020/21 court proceedings. The Mother knew what she was doing was in breach of the orders including interim orders.
(d)I found that the Mother took no steps or effort to try to maintain or build on the child's relationship with the Father. In fact, the opposite was the case and the Mother while saying that the child could make up her own mind, never took any action to encourage the child in her relationship with the Father.
(e)The Mother was in breach of interim orders made in the recent and current (2022) proceedings to the extent that she did not facilitate the child remaining with the Father and/or did not take steps immediately to return the child to the Father on occasions this year.
(f)I found that the Mother's breach of orders were made in a positive sense, namely that she knew she was breaching the orders. I found that the Mother was acting with an intention that the child spend no time with nor have a relationship with, the Father.
I was referred to a more recent decision regarding subsection 117(2A). The Full Court dealt with an appeal in the case of Collins and Collins (1985) FLC 91-603. With respect to costs, the Full Court said:
In deciding whether the circumstances justify an order for costs, there is a broad discretion to be exercised, having regard to the factors set out in subsection (2A) so far as relevant. Those factors (the subsection (2A) factors) are not to be read in any restrictive way, however, the discretion remaining is a broad one. The Full Court referred to the High Court’s decision in Penfold.
I accept that there is a broad discretion to be exercised in considering whether a costs order is made, making a costs order in relevant circumstances and then deciding the quantum of any such order.
In addition to what I have said in paragraph 61 above, I should comment on findings I made following the trial, in the Judgment dated 17 January 2022 for the final order.
Including what has been submitted in writing for both parents and by reference to the Outline by Mr Fellows, the following is relevant:
(a)The Mother included a relocation application prior to trial. This would have involved the child being relocated to City C from the City B area where the child lived all of her life. As the Mother planned to live on a grazing property or similar outside City C, the Mother proposed that the child attend boarding school. The Mother was wholly unsuccessful in that application.
(b)As referred to above, the proceedings which culminated in the trial late last year arose out of the Mother's contravention of previous orders, namely that she did not as ordered, facilitate the child having a relationship with and spending time with the Father. I accept what the Father says in paragraph 18(d) of his affidavit filed 11 February this year with his Costs Application, namely:
The initial position I adopted in the conduct of this case was "merely" a restoration of the prior orders of the Court; I did not want to challenge the primary role that [Ms Berry] played in the life of [X]. It was only as time elapsed, and it became apparent that [Ms Berry] was not doing anything to support the relationship between [X] and me, that I changed my position to be one where she should reside with me.
(c)I found that the Mother's attitude was such and this was demonstrated by her behaviour, that it would be difficult if not impossible to build a relationship between the child and the Father without a change to the child's residence. The Mother had taken the child away for an indefinite time, to the Northern Territory. This was a feature of considerable cross-examination during the trial including that the travel involved breaches of regular time being spent between the Father and the child, questions about the child’s living arrangements and importantly, the Mother's failure to maintain the child’s education by remote learning.
(d)I found that the Father was a reliable witness – see paragraph 129 of the judgment.
(e)I found that the Father's partner Ms L was a reliable witness – see paragraph 143 of the judgment.
(f)I found the Father’s parents to be reliable witnesses - see paragraph 158 of the Judgment.
(g)Dr M gave evidence to rebut the Mother's claims about the Father's alleged excessive drinking. I accepted his evidence that the Father's CDT test result would not be consistent with a result from a person who drinks to excess.
(h)I expressed concern that the Mother did not or could not explain how the child could completely turn around in her view about spending time with the Father, to not wanting to see him at all. This included criticising the Mother for allowing the child to read court material – see paragraph 196 of the Judgment.
(i)I had a concern about the Mother's failure to provide satisfactory education for the child when she took the child on the lengthy trip to the Northern Territory – see paragraph 198 of the Judgment.
(j)I commented that while a lot of the Mother's evidence was correct or truthful from her point of view, the Mother's seemed to have no insight into how her behaviour (including domestic violence between the Mother and one or more partners) affected the child – see paragraphs 199 and 203 of the Judgment.
(k)I was critical of the Mother on a number of occasions through the Judgment, for letting the child read the court documents and going so far as to letting the child have some input into court documents either directly or indirectly.
(l)I found that the Mother did not have any basis for a concern that he child spending time with the Father was a risk to the child – see paragraphs 44 - 46 of the Judgment.
(m)Overall, it was my view as was demonstrated clearly through the evidence, that the Mother had no interest in the child continuing a relationship with the Father or spending time with him. She took active measures contrary to court orders, for this not to occur. Mr Fellows in his Written Submissions in item 11 refers to the Mother poisoning the child's attitude to the Father. I think that this is a correct description of what I heard about with numerous examples, during the trial last year.
Legislation
Section 117 of the Family Law Act refers to costs. Subsection (1) provides that subject to subsection (2) and to other sections which do not apply in these proceedings, each party to proceedings under this Act shall bear his or her own costs.
Subsection 117(2) provides that if in proceedings under the Act the court is of the opinion that there are circumstances that justify it in doing so, the court may subject to subsection (2A) and to other subsections which are not relevant here, make such order as to costs.
It is a requirement that the court consider the provisions of subsection 117(2A) for a costs order. In summary those matters to be considered according to the paragraphs in 117(2A) are the following:
(a)The financial circumstances of each of the parties.
(b)Whether a party is in receipt of legal aid.
(c)The conduct of the parties in the proceedings including in relation to pleadings, particulars, discovery, production of documents and so on.
(d)Whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court.
(e)Whether any party has been wholly unsuccessful.
(f)Whether either party has made an offer in writing.
(g)Such other matters as the court considers relevant.
It will be seen that (g) provides that other matters which may be particular to a case, may be considered if relevant, in making a costs order.
Taking into account the matters set out in subsection 117(2A) and the facts of this case I find as follows:
(a)The financial circumstances of the parties is as set out as best I can, in a previous section of this Judgment.
The Mother has the capacity to pay a judgment amount. This may be subject to two issues namely
(i)regarding the property at Town G outside City B owned by the Mother’s trust, as essentially the Mother’s property
(ii)the future of the H Street, Suburb J property outside City C being resolved between the Mother and Mr F. This could include the sale of that property and could include the Mother suffering a loss in this regard, although that is not clear.
This court and the Family Court including the Appeal Court, have held that being impecunious is not of itself a bar to a costs order being a made against a party when the court finds that such order is justified.
(b)Neither the Mother nor the Father are in receipt of legal aid.
(c)There was no conduct of the parties which brought criticism from the court with respect to the matters in (c) which is likely to apply more in financial cases rather than parenting cases.
(d)The proceedings were necessitated by the failure of the Mother to comply with previous orders off the court. A short summary is as follows:
(i)The Mother was in breach of the final order dated 28 May 2014 in that she did not facilitate the child spending time with the Father. This included the Mother taking the child away from the City B area to go to the Northern Territory without the Father’s knowledge and contrary to the final parenting order.
(ii)The Mother breached interim orders in the 2020/21 proceedings including orders by Judge Demack that the child spend time with the Father and that changeovers involve the Paternal Grandparents.
(iii)The Mother breached the 17 January order this year by taking the child into her care contrary to that order and not promptly returning the child to the Father.
(e)The Mother has been wholly unsuccessful in the proceedings resulting in a final order being made on 17 January 2022. I refer to my comments in (d). The Father has been successful and the Mother unsuccessful, when the court has made parenting orders.
(f)Neither party made an offer in writing to the other party. Each party sought orders that the child live with him or her and spend some time with the other parent. I would comment that the Mother did not change her position that the child live with her, when faced with the ICL recommendation in favour of the Father’s case.
(g)The only matter which may be relevant with respect to (g) is that the child is no longer living with the Father. She has been living with a person who is a friend of the Mother, for about 5-6 weeks. The Mother says in her affidavit filed 31 October 2022 that she intends to bring an application seeking orders that the child live with her and attend boarding school.
I raised with the legal representatives on 31 October that it might be said that further and new court proceedings being instituted may be a matter which the court considers relevant under subsection 117(2A)(g). I raised this issue, Mr Hawkes did not.
In considering the matter further, it seems to me that a costs order can be made without regard to the possibility or likelihood that the Mother may institute a further application to the court, seeking that the child live with her. I say this because the Father's costs applications with respect to both the trial and what has occurred this year, deal with matters which have been completed. The Mother was wholly unsuccessful in all proceedings. The issues relevant to the costs applications have been decided on and orders have been made.
In the circumstances, I do not think that a new set of circumstances which may have arisen very recently and which may be the subject of litigation in the future, should affect or delay the making of orders so as to finalise the current proceedings.
To be clear, I have considered whether any new proceedings should be dealt with before a costs order to finalise the existing proceedings is made. I do not think that this is the case. It is not known what the outcome of further court proceedings may be. I do not think it would be fair to the Father to leave his costs application/s outstanding for a lengthy period. For the court itself, it is important to finalise proceedings before it. The Mother and indeed both parents are able to bring further applications subject to the Rice & Asplund principle.
I do not think that the cost application/s before the court should be postponed indefinitely.
Quantum of Costs
Mr Hawkes for the Mother raised with me at the hearing on 31 October that the parties had agreed that a Contravention Application filed on behalf of the Father on 17 December 2020 would be dismissed with no order as to costs. Mr Hawkes is correct. An order was made on 26 November 2021 during part of the trial, that the Application – Contravention filed 17 December 2020 be dismissed and that there be no order as to costs in relation to the Application – Contravention.
The parties through their lawyers had advised me during the trial that the Application – Contravention filed in late 2020 with respect to alleged breaches of orders by the Mother earlier that year, would not be proceeding and would be dismissed. As a result, no time was taken during the trial in dealing with the Application – Contravention of the Father.
After finding that the Mother should pay the Father’s costs of the proceedings namely costs of the trial and costs of applications after final judgment in January this year, the court must consider what amount of costs is payable.
Chapter 12 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and including those rules which refer to Division 2 of this court, refer to costs. Part 12.6 of the rules refers to the calculation of costs. Rule 12.17 is specific about the method of calculating costs. It provides:
(2)The court may order that a party is entitled to costs:
(a)Of a specific amount;
(b)As assessed on a particular basis (for example party and party, solicitor and client or indemnity);
(c)To be calculated in accordance with the method stated in the order;
(d)For part of the proceeding. This is not relevant here.
Rule 12.6 (2) goes on to say that if costs are payable under the Act or Rules and the court does not specify the method of their calculation, the costs are to be assessed on a party and party basis.
Rule 12.17 (3) says that in making a costs order, the court may consider the following:
(a)The importance, complexity or difficulty of the issues.
(b)The reasonableness of each party’s behaviour in the proceedings.
(c)The rates ordinarily payable to lawyers in comparable proceedings.
(d)Whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate – I do not think that this applies here.
(e)The time properly spend on the proceeding.
(f)Whether expenses paid or payable are fair, reasonable and proportionate.
Finally, rule 12.18 provides that if the court makes a costs order and does not fix the amount by means of a maximum costs order (maximum costs orders are referred to in rule 12.10), the maximum amount of costs that a person may recover are calculated in accordance with schedules 2 and 3 with respect to legal fees and the actual amount of out of pocket expenses.
I would mention that rule 12.10 refers to party and party costs. Sub-rule 12.10 (5) says that in considering whether to exercise its discretion to make a maximum costs order, the court must consider all of the circumstances of the proceeding including:
(a)Whether there is a substantial imbalance between the financial positions of the parties.
(b)Whether the costs of determining the appropriate maximum amount are likely to be proportionate to the overall costs.
(c)The stage which the proceedings has reached. In this case, they are completed.
(d)The costs that have been incurred to date and the likely future costs of the proceeding. As referred to in (c) the proceedings have been completed. The costs incurred by each party appear to be approximately the same and have been substantial.
In his written submissions provided on 31 October, Mr Fellows of Counsel for the Father has set out a schedule of costs, being the minimum costs which may be awarded. The reference to minimum costs is perhaps more correctly, to scale costs. The total figure including costs for the trial and costs of the Recovery Application which the Father brought earlier this year after the final order, is said to be $60,599.
To this figure should be added the cost of the Father’s Costs Applications. The Father does apply for these costs.
The Father says at paragraph 17 of his affidavit filed 20 October 2022 the following:
I have now spent my parents entire life savings on these proceedings. They have no money left and neither do I, which is why I have been unable to file further recovery proceedings in this court and an application for contravention.
And at paragraph 18:
While I am not financially able to file another recovery application, I continue to check in with the school to make sure [X] is attending school and is well. I also continue to reach out to [X] directly.
Quantum of Orders
In my view and taking all of the evidence and submissions into account, the Mother should pay the Father's costs according to the relevant scale. In coming to this view, I have taken into account the following:
(a)It is quite unusual for an indemnity costs order to be made. Cases including Colgate-Palmolive Company & Colgate Palmolive Pty Limited v Cussons Pty Limited [1993] FCA 801 in the High Court set out the relevant principles.
(b)I do not doubt that the Father has paid or has been billed, at least $150,000 in legal costs since commencing the current proceedings, most of which he (or his parents on his behalf) has paid. This level of costs would not be considered excessive for the litigation in the principal proceedings and then this year.
(c)There is a good argument for the Mother to pay substantial legal costs. I made findings against her in the primary Judgment delivered on 17 January this year, that not only had the Mother breached final and then interim orders during the proceedings which provided that the child spend time with the Father, but she was consciously and actively doing this. I did not accept the Mother's evidence that the child did not wish to spend time with the Father. The Mother made no effort to facilitate time between the child and the Father. The Mother's behaviour continued this year. The child came into her care or was otherwise not with the Father, on occasions when the primary order dated 17 January was breached. The Mother made no or no proper efforts to return the child to the Father or to encourage her to return.
A taxation of costs would be an expensive exercise for both parties. I did consider ordering a taxation of costs on a solicitor and client basis. It is possible and indeed likely, that such an assessment which would refer to item scale costs, would produce a quantum higher than the scale applied in Division 2 matters. The cost of a taxation would be significant.
I have decided to apply the Division 2 scale costs. These are event-based costs rather than for individual items. They are according to Mr Fellow’s Outline, $60,599, subject to what I say in the following paragraph. Mr Hawkes did not challenge the quantum which is taken from the scale.
I think that it is reasonable to add to the quantum of costs at set out in the Father's Case Outline for the 31 October hearing namely $60,599, the further sum of $10,000. This is to cover Counsel’s fees for when Mr Fellows has appeared regularly in these proceedings and to cover additional costs for the Father's solicitors as referred to in the most recent Costs Notice. It may be that when Counsel’s fees are taken into account, any amount remaining as solicitor’s costs will be no greater than the scale amount.
It is not that I have decided against an order for solicitor and client costs because I am concerned that such order may result in costs which are not fair, reasonable ad proportionate in their amount, so as to offend against rule 10.08. These proceedings were complex. There were a number of witnesses on each side. There was a detailed the Family Report. Each party contested the hearing with considerable energy and effort. As I have said above, the cost and potential delay in a taxation of costs might not justify the completion of a taxation.
Taking all of those issues into account therefore, I will order that the Mother pay to the Father the sum of $70,599. The payment is to be made within 60 days of the date of this order.
I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Bowrey. Associate:
Dated: 10 November 2022
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