Babkin and Babkin (No. 2)

[2019] FamCA 970

FAMILY COURT OF AUSTRALIA

BABKIN & BABKIN (NO. 2) [2019] FamCA 970

FAMILY LAW – COSTS – Where the Applicant and Independent Children’s Lawyer seek costs on an indemnity basis – where the Respondent was wholly unsuccessful in the proceedings – where there was an offer of settlement on the part of the Applicant – circumstances of an exceptional kind warrant the making of an order for costs.

Family Law Act 1975 (Cth) ss 62G, 117
Family Law Rules 2004 (Cth) rr 19.08, 19.18

Medlon & Medlon (No. 6) (Indemnity costs) (2015) FLC 93-664
Munday v Bowman (1997) FLC 92-784

APPLICANT: Ms Babkin

RESPONDENT: Mr Babkin

INDEPENDENT CHILDREN’S LAWYER: Robert Halliday and Associates

FILE NUMBER: MLC 6766 of 2011

DATE DELIVERED: 19 December 2019

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Hartnett J

HEARING DATE: 18 November 2019

REPRESENTATION

THE APPLICANT: Self-represented

THE RESPONDENT: No appearance

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Robert Halliday and Associates

Orders

1. Within 90 days hereof the Respondent pay the Applicant’s costs of and incidental to the parenting proceedings on an indemnity basis and fixed in the sum of $33,737.26.

2. Within 90 days hereof the Respondent pay the Independent Children’s Lawyer costs of and incidental to the parenting proceedings on an indemnity basis and fixed in the sum of $4,464.00.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 6766  of 2011

Ms Babkin

Applicant

And

Mr Babkin

Respondent

And

Independent Children’s Lawyer

REASONS FOR JUDGMENT

1. On 18 November 2019 final orders were made by consent of the Applicant mother (‘the mother’) and the Independent Children’s Lawyer in respect of the mother’s application for parenting orders first filed by her on 23 March 2018. The Respondent father (‘the father’) failed to appear at trial and thereby failed to participate in the final hearing. Thus the matter proceeded undefended by him. The history of the matter and the Court’s consideration of the matter is as described in the Reasons for Judgment of 6 December 2019 (‘the Judgment’). Facts and findings contained therein shall not be repeated here but are relied upon in these reasons.

2. The final orders made on 18 November 2019 provided, relevantly, for the mother to have sole parental responsibility of the children of the relationship namely X born in 2004 and Y born in 2008 (‘the children’); for the children to live with the mother; and for the children to spend supervised time with the Respondent father (‘the father’) when he is in Australia. Additionally, the Court made the following order which is relevant to these reasons:-

   …

   (21) Otherwise, all extant applications are dismissed save for the question of costs as sought by the Applicant and the Independent Children’s Lawyer which shall hereafter be determined by the Court. The Applicant and Independent Children’s Lawyer file and serve submissions as to costs within 21 days hereof and the Court shall make a determination as to such costs claimed on the papers.

3. Pursuant to the above order, on 4 December 2019, the Independent Children’s Lawyer filed written submissions as to costs. The Independent Children’s Lawyer sought the payment of costs:-

   … that have been incurred, paid and/or are in the process of payment, and are rates and fees that have been set by Victoria Legal Aid (“VLA”) as follows:

   a. 6 June 2018, a total of $935.00, being the sum of $576.00 for Counsel’s fees regarding court attendance and $359.00 for professional costs of preparation; and

   b. 18 November 2019, a total of $3,529.00, being the sum of $2,199.00 for Counsel’s fees regarding court attendance and $1,330.00 being for professional costs of preparation for Trial.

   In total, the Independent Children’s Lawyer sought costs in the sum of $4,464. In the alternative, the Independent Children’s Lawyer sought a costs order as against the father for the hearings of 6 June 2018 and/or 18 November 2019 in an amount to be determined by the Court.

4. The mother filed written submissions in respect of costs on 9 December 2019. In those written submissions the mother sought orders that the father pay her total costs in the sum of $33,737.26 comprised as follows:-

   a)23 March 2018: $8,800 for senior counsel’s fees for court attendance;

   b)6 June 2018: $5,675.16, being professional costs incurred in respect of that interim application and hearing; and

   c)18 November 2019: $19,262.10 (costs on an indemnity basis from 28 August 2019 to the date of the submissions), being $5,280 for counsel’s fees regarding preparation and court attendance and preparation of these submissions, and professional costs of $13,982.10 for preparation for trial.

   In the alternative, the mother sought that the father pay her costs of and incidental to the hearings on 23 March 2018, 6 June 2018 and 18 November 2019 in an amount to be determined by the Court.

5. No written submissions were filed or served by the father.

Legislation

1. Section 117 of the Family Law Act 1975 (Cth) (‘the Act’) provides the Court with power to make orders in relation to costs. Section 117(1) creates a statutory presumption that each party to proceedings under the Act “shall bear his or her own costs”.[1] This presumption is subject to s.117(2) of the Act, which empowers the Court to “make such order as to costs…as the court considers just”[2] if it is “of opinion that there are circumstances that justify it in doing so.”[3] Section 117(2A) provides that in “considering what order (if any) should be made” for the payment of costs, “the court shall have regard to” the matters identified in ss.117(2A)(a) to (g) of the Act. Rule 19.08 of the Family Law Rules 2004 (Cth) (‘the Rules’) similarly empowers the Court to make an order for costs.

   [1]Family Law Act 1975 (Cth), s 117(1).

   [2] Ibid s 117(2).

   [3] Ibid.

2. The making of a costs order is a discretionary exercise.

Consideration

1. On 23 March 2018, the Court made interim orders in respect of the mother’s application for parenting orders and reserved her costs of and incidental to the application.

2. On 10 April 2018, the Court made, relevantly, an order requiring the father to pay for the children of the parties attendance at counselling as follows:-

   …

   6. That the Wife be at liberty to facilitate the children’s attendance at confidential counselling with Ms K at the L Centre or such other counsellor as may be recommended by the Independent Children’s Lawyer, at the Husband’s expense.

3. The mother complied with the above order six of the orders made 10 April 2018. She facilitated the children’s attendance upon the counsellor recommended by the Independent Children’s Lawyer. The father however failed to meet his obligations pursuant to the order made. As a consequence, on 6 June 2018, the Court heard an application made in response to the father’s failure to comply with order six of the orders made 10 April 2018. His failure was a clear breach of the Court’s orders. In respect of that application the Court made a further costs order on 6 June 2018, being, relevantly, as follows:-

   …

   3. That the costs of the applicant wife and Independent Children’s Lawyer of and incidental to this listing be reserved.

Financial circumstances

1. The mother works on a part-time basis as a hairdresser and in a restaurant. Her income is very modest. She and the children reside with her current partner in a rental property. The mother receives no child support payments from the father and relies solely on her income and Centrelink benefits to assist in the payment of her and the children’s expenses.

2. There is no evidence before the Court as to the father’s financial circumstances.  Indeed, the father lives in Israel which is a non-reciprocating jurisdiction for child support purposes.

Conduct of the parties in relation to the proceedings and the father being wholly unsuccessful

1. As outlined in the Judgment, the father failed to properly engage with the proceedings.

2. At the case management hearing on 5 September 2019, the Court made the following order:-

   (2) Each party file and serve any affidavits of evidence-in-chief as follows:-

   (a) …

   (b) the Respondent file and serve such affidavits within 30 days of service upon him of the Applicant’s affidavits;

   …

3. No affidavit of evidence in chief was filed or served by the father prior to the final hearing in accordance with the above order. Rather, as outlined in the Judgment, the father filed an Application in a Case on the afternoon of 14 November 2019. In his Application in a Case, the father sought an adjournment of the proceedings; the discharge of the Independent Children’s Lawyer and appointment of an alternate Independent Children’s Lawyer; and the preparation of a family report pursuant to s 62G(2) of the Act. The father did not serve upon the Independent Children’s Lawyer the Application in a Case and supporting affidavit until the morning of the final hearing. This failed to afford to the Independent Children’s Lawyer any procedural fairness. Nevertheless, there was no objection by the Independent Children’s Lawyer or the mother to such application proceeding. Such application was entirely unsuccessful.

4. The father’s conduct throughout the running of the proceeding resulted in a significant accrual of costs to the mother and Independent Children’s Lawyer. The father in essence failed to comply with orders of the Court and failed to prosecute his application. His Application in a Case had no merit. His substantive application (as contained in his Response filed 9 April 2018) was not properly particularised. The proceedings were at trial undefended by him. The mother and Independent Children’s Lawyer’s compliance with all of the orders of the Court imposed a cost upon them not borne by the father.  

Proceedings necessitated by failure of a party to comply with previous orders of the Court

1. Final orders were made in the Federal Magistrates’ Court (as it then was) on 30 January 2013. Those orders did not permit the father to take the children to live outside the jurisdiction. In August 2016, the mother agreed that the father could take the children to Israel for 6 to 12 months. However, the father retained them after that period, in breach of a signed agreement between the parties and in breach of the existing final parenting orders. As submitted by the mother, Hague proceedings were necessary in order to have the children returned to Australia. Following their return, proceedings had to be initiated in the Court for differing parenting orders.

Offer to Settle

1. An offer to settle is a relevant consideration pursuant to s 117(2A)(f) of the Act.

2. As set out in the mother’s submissions of 9 December 2019, through her solicitors on 28 August 2019, the mother sent an urgent letter to the father and the Independent Children’s Lawyer seeking to resolve the matter without the need to proceed to final hearing.  The mother’s offer sought to formalise the then existing care arrangements of the children. The proposal for the children’s care arrangements was as contained in the affidavit of the mother affirmed 11 October 2019 and included that the mother have sole parental responsibility for the children; that the children continue to live with her; and that they spend supervised time, both personal and by Skype communication, with the father. In an email sent on 2 September 2019, that offer was rejected by the father and no counter offer was made.

3. The offer of settlement by the mother was, as submitted by her:-

   a)precise, clear and unambiguous in its terms;

   b)gave the father until 4.00pm on 30 August 2019 to respond, which was a reasonable timeframe for accepting the offer, given that a case management hearing was scheduled for 5 September 2019;

   c)a  genuine attempt by the mother to agree on orders that would be in the best interests of the children and was coupled with an unreasonable outright rejection by the father, who, in addition, made no counter-offer of terms;

   d)clear that an indemnity costs order against the father would be sought by the mother.

4. The final orders made on 18 November 2019 are at least as favourable as the orders proposed by the mother of 28 August 2019.

Conclusion

1. The Court has the power to order costs on an indemnity basis.[4]

   [4]Family Law Rules 2004 (Cth) r 19.18(1)(b).

2. For such an order to be made, the circumstances of the case must be such as to warrant a departure from the more usual party/party costs. Whilst the following is not a closed list, an order for indemnity costs may be appropriate where, relevantly:-

   a)a party, properly advised, should have known that there was no chance of success;

   b)there is evidence of particular misconduct that wasted the Court’s time and other parties’ time;

   c)allegations were made which should have never been made, or which prolonged a case by groundless contentions; or

   d)a party has imprudently refused an offer to compromise.[5]

   [5] Munday v Bowman (1997) FLC 92-784; Medlon & Medlon (No. 6) (Indemnity costs) (2015) FLC 93-664, [28]

3. It is relevant to this proceeding that:-

   a)the father should have known that his application to have the children live with him in Israel would not succeed given they had just been returned to Australia following a Hague proceeding together with all the other surrounding facts and circumstances;

   b)the hearing on 6 June 2018 was required because the father had breached the orders of 10 April 2018; and

   c)the mother’s offer of 28 August 2019 reflected the terms of the existing arrangements. The father rejected the offer, even though he has had no physical contact with the children since April 2018, a situation which is ongoing, and he provided no cogent evidence as to why the children should live with him, and in Israel.

4. Having regard to the entirety of the above, the Court shall make orders for indemnity costs as sought by the mother and the Independent Children’s Lawyer in their applications.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hartnett delivered on 19 December 2019.

Associate: 

Date:  19 December 2019