Apostolou and Gough (Costs)

[2013] FamCA 509

FAMILY COURT OF AUSTRALIA

APOSTOLOU & GOUGH (COSTS) [2013] FamCA 509

FAMILY LAW – COSTS – application by the father for indemnity costs – mother wholly unsuccessful in primary proceedings to vary parenting orders – father made more than one offer of settlement – mother ordered to pay father’s costs of $6,000 – total amount of costs payable significantly reduced due to the mother’s financial circumstances and the adverse impact for the children

Family Law Act 1975 (Cth) s117
Family Law Rules 2004 (Cth)

APPLICANT: Mr Apostolou

RESPONDENT: Ms Gough

FILE NUMBER: NCC 2317 of 2010

DATE DELIVERED: 9 July 2013

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: 7 May 2013

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

Boyd Olsen Lawyers

Ms Manning

COUNSEL FOR THE RESPONDENT: Mr C Boyd

SOLICITOR FOR THE RESPONDENT: O’Hearn Lawyers

Orders

1. That the Mother Ms Gough pay to the Father by way of costs the sum of SIX THOUSAND DOLLARS ($6,000) within 42 days of the date of this Order.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Apostolou and Gough (Costs) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCC2317 of 2012

Mr Apostolou

Applicant

And

Ms Gough

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application for indemnity costs filed by the father on 23 April 2013.  The application is opposed by the mother.

2. The costs issue arises from an application for variation of parenting orders filed by the mother on 18 December 2012.  That application was dismissed on

   
   

   28 March 2013 for the Reasons given on that day.

Documents relied upon

1. The parties relied on the following material:

   Father:

   a)      Family Court memorandum dated 6 March 2013.

   b)      Application in a Case sworn 22 April 2013 filed 23 April 2013;

   c)      

   Affidavit of father, Mr Apostolou sworn 22 April 2013 filed

   
   

   23 April 2013;

   d)      Written submissions in relation to costs dated 12 June 2013.

   Mother:

   a)      

   Response to an Application in a Case sworn 13 May 2013 filed

   
   

   27 May 2013;

   b)      Affidavit of mother Ms Gough sworn 13 May 2013 filed 27 May 2013;

   c)      Written submissions in relation to costs dated 14 June 2013.

   d)      Letter dated 17 June 2013 from mother’s solicitors

The law

1. The Act establishes that subject to certain matters each party to proceedings bears his or her own costs. 

2. A party to proceedings may apply for an order that another person pay costs

   
   

   (r 19.08(1)) of the Family Law Rules 2004. If an application is made or the court itself is of the opinion that there are circumstances that justify it doing so, the Court may make such order as to costs and security for costs as the Court considers just.

3. The relevant considerations for an order, if any, to be made are in s 117(2A) of the Family Law Act 1975 (Cth). They are properly identified by both parties in their written submissions. 

4. I turn to those considerations as follows:

1. Financial circumstances of each of the parties

The father

1. The father does not own real estate.  He lives in rented premises with his partner, their young child and the two children (aged nine and six), the subject of the proceedings giving rise to this application.

2. He works on a casual contract basis in the entertainment industry, earning approximately $5,000 per annum and Family Tax Benefit of $209 per fortnight.  The father has debts including outstanding legal fees.  His partner is not currently employed.  She may be on maternity leave. It is hard to understand how the father is supporting a family of five on income of $200 per week.

The mother

1. The mother is self-employed and developing a business.  Her disclosed taxable income is slightly less but comparable to that of the father, about $4,000 per annum.  The mother is financially supported by her husband who owns the house in which they live in the USA and meets all joint expenses, including the mortgage from his income of $67,000 net per annum.

2. On the face of it neither party has the financial capacity to meet their own legal fees without third party assistance.  However the litigation was initiated by the mother.

1. Legal Aid

1. Neither party was in receipt of a grant of legal aid.

1. Conduct of the parties

1. Neither party asserts that there was obstruction or delay.  The proceedings were conducted in a timely way and expeditiously.

1. Failure to comply with previous Orders

1. I reject the submission of the mother that the proceedings were necessary to address the failure of the father to comply with orders.  The proceedings were to effectively vary the orders in a variety of ways which the mother thought more suitable.  That the father declined to consent to changes and did not agree to proposals put by the mother for particular arrangements, does not equate to non-compliance.

2. The fact that the mother has subsequently initiated Contravention proceedings is irrelevant to this application.

1. Whether a party has been wholly unsuccessful

1. It is properly conceded by the mother that she was wholly unsuccessful in her application.

1. Whether a party has made an offer to settle

1. This is a significant consideration.  The father made more than one offer to settle.

2. On 6 March 2013 the parties were both seen separately by the Family Consultant who had prepared the family report for the final hearing.  The Family Consultant prepared a contemporaneous memorandum identifying the issues in dispute recommending against changes which she identified as “very similar to those discussed at length in the family report of May 2011”.

3. This should have been an important indication to the mother that a person with detailed knowledge of the matter, and the children, saw the application to vary the orders in a negative light.

4. The next day (7 March 2013) the father caused a letter to be sent to the solicitors for the mother offering to settle on the basis that the mother discontinue her current application with no orders as to costs.  The offer was left open for five days.  The mother apparently did not respond.  She certainly did not accept the offer.

5. The matter proceeded to the next stage which was a hearing, by way of submissions on sufficient change of circumstance.  The hearing was on

   
   

   27 March 2013.  On the following day the application of the mother was dismissed.

6. The father then made another offer.

7. On 8 April 2013 the father caused a letter to be sent to the mother’s solicitors.  The letter advised that costs were sought, that costs before the Registrar had been reserved and that the earlier offer had been made.

8. Indemnity costs were raised on those bases. There was disclosure of the costs agreement pursuant to the Rules.  There was then an offer to discount outstanding costs of $6,762.81 by $1,762.81.The father was willing to accept $5,000.  The offer was left open for 10 days.  There is no evidence of any response by the mother and no counter offer to pay costs to any extent.

9. As foreshadowed in the letter, the father then made a formal application for costs.

10. I consider the mother’s non-acceptance of the offers and her decision not to make any counter offer as a justifying circumstance for making a costs order.

1. Any other relevant matter

1. The mother does not pay child support.  She has a zero assessment.  She is responsible for the costs of travel for the children to spend time with her in the United States of America and for her trips to Australia to spend time with the children here.  She provides for their needs, including clothes, during holiday periods.

2. That means the father is entirely responsible for the day to day costs of the children, their food, clothes and education expenses.

3. Costs expended by him in meeting the mother’s unsuccessful application represent money that could be spent on the children.

4. The mother estimates she will spend $14,000 to $19,000 annually on travel for herself and the children.

5. On balance it is preferable for the father to have funds for the day to day needs of the children.  I take this matter into account as a factor justifying departure from the principle of each party.

Summary

1. The father seeks indemnity costs.  He has complied with the Rules by disclosing the costs agreement [r 19.08(3)] and its terms[1].

   [1]  Affidavit of Father filed 23/04/2013 Annexure ‘E’

2. It is hard to see what more the father could have done to negotiate the issue of costs.  Naturally further costs were incurred in the Costs Application.  The total outstanding is:

   -          $6,762.81

   -          $1,837.35

   $8,600.16

3. However, I consider it appropriate to significantly reduce the total amount, given the financial circumstances of the mother and the likely impact on her own ability to travel with a consequential adverse impact for the children.

4. I consider the appropriate amount is $6,000 with six weeks allowed to pay.

5. I make Orders accordingly.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 9 July 2013.

Associate: 

Date:  9 July 2013