Bant and Clayton
[2020] FamCAFC 183
•30 July 2020
FAMILY COURT OF AUSTRALIA
| BANT & CLAYTON | [2020] FamCAFC 183 |
| FAMILY LAW – APPEAL – COSTS – Costs orders – Where the father seeks to challenge a costs order made by the primary judge in favour of the mother – Where the father made no submissions before the primary judge – Where the primary judge did not take into account erroneous or irrelevant matters – Quantification of costs – Where the outcome is not plainly wrong or manifestly unjust – Where appellate courts are reluctant to interfere with decisions on costs – Appeal dismissed. |
| Family Law Act 1975 (Cth) s 117 Federal Proceedings (Costs) Act 1981 (Cth) s 8 Family Law Rules 2004 (Cth) Sch 3, 4, rr 19.18, 19.19 Federal Proceedings (Costs) Regulations 2018 (Cth) reg 6 |
| Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30 De Winter and De Winter (1979) FLC 90-605 Fleming & Schmidt [2017] FamCAFC 12 Hanlon v Brookes (1997) 15 ACLC 1626 House v The King (1936) 55 CLR 499; [1936] HCA 40 Idoport Pty Ltd v National Australia Bank Ltd & Ors; Idoport Pty Ltd v Donald Robert Angus [2007] NSWSC 23 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28 Spotless Group Ltd v Premier Building and Consulting Pty Ltd (rec appt) [2008] VSCA 115 Stoian & Fiening (Costs) [2014] FamCA 944 Wentworth v Rogers(No 3) (1986) 6 NSWLR 642 |
| APPELLANT: | Mr Bant |
| RESPONDENT: | Ms Clayton |
| FILE NUMBER: | LEC | 310 | of | 2013 |
| APPEAL NUMBER: | NOA | 117 | of | 2019 |
| DATE DELIVERED: | 30 July 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Aldridge, Watts & Austin JJ |
| HEARING DATE: | Heard by way of written submissions |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 27 November 2019 |
| LOWER COURT MNC: | [2019] FamCA 891 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Richardson SC with Mr Todd |
| SOLICITOR FOR THE APPELLANT: | Watts McCray |
| THE RESPONDENT: | In person |
Orders
The appeal be dismissed.
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 Bant & Clayton 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).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NOA 117 of 2019
File Number: LEC 310 of 2013
| Mr Bant |
Appellant
And
| Ms Clayton |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal from an order made by a judge of the Family Court of Australia on 27 November 2019, which required Mr Bant (“the father”) to pay Ms Clayton (“the mother”) her costs of parenting proceedings fixed in the sum of $160,665.12.
At the request of the parties and with the concurrence of the Court, this appeal was heard by way of written submissions without an oral hearing.
Background
The parties have been engaged in litigation concerning, amongst other things, the parenting arrangements for their child who was born in 2009 since 2013.
On 19 November 2013, a different judge of the Court made orders pursuant to which the child was to live with the mother and have limited supervised time with the father in Australia under quite strict conditions. The father’s appeal against those orders was partly successful on 25 November 2015. The Full Court remitted the limited issue of the time that the child was to spend with the father and the conditions under which that time was to take place, if any, for rehearing by a different judge of the Court.
The father’s application to the High Court of Australia for special leave to appeal against that decision was dismissed in April 2016.
The rehearing took place before the primary judge from 31 July 2017 to 2 August 2017. Judgment was delivered on 18 October 2018. Although the orders made by the primary judge were slightly different to those that had been made on 19 November 2013, the time that the child was to spend with the father was still to take place in Australia and to be supervised at all times. This was because the primary judge found that there was an unacceptable risk that, absent such supervision, the child would be removed from Australia by the father.
The father’s appeal from those orders was dismissed by the Full Court on 5 November 2019. The High Court of Australia dismissed the father’s application for special leave to appeal against that decision on 18 March 2020.
On 15 November 2018, the mother filed an Application in a Case seeking the payment of her costs of the rehearing before the primary judge. Directions were made by the primary judge on 10 December 2018 for the filing of further evidence. The mother filed some affidavits and a Financial Statement late and the father was given an extension of time to file material in reply, but he did not do so.
After the appeal against the primary judge’s orders made on 18 October 2018 was dismissed by the Full Court on 5 November 2019, the primary judge, again, gave the parties the opportunity to file written submissions in relation to the mother’s application for costs. The mother did so but the father did not.
The mother’s application sought costs on an indemnity basis but that claim was abandoned and instead the mother sought her costs calculated at scale (pursuant to Sch 3 of the Family Law Rules 2004 (Cth) (“the Rules”)).
The mother’s evidence stated that her costs assessed at scale were in the sum of $162,632.17. She noted that a costs order had been made by the primary judge on 18 October 2018 in her favour for $1,967.05 which remained unpaid. The fee agreements and tax invoices of the mother’s solicitors were exhibited to her affidavit filed on 26 February 2019. The tender bundle contained invoices from the mother’s solicitors dated 24 May 2017 ($62,454.42), 8 August 2017 ($2,762.94) and 15 August 2017 ($112,743.64). In the first invoice, a number of items and the costs of those items were noted but not charged. The first and last invoices included counsel’s fees and other disbursements. The total of these invoices is $177,961.
The tender bundle also included an invoice dated 26 February 2019 which claimed $162,632.17, including disbursements. It was described by the mother’s solicitors as being in accordance with Sch 3 of the Rules.
It is apparent that the primary judge adopted the figure found on the invoice dated 26 February 2019 and deducted from it the amount of the earlier costs order to arrive at the sum the subject of the primary judge’s order.
The father seeks to challenge the primary judge’s order in three ways. First, it is submitted that the primary judge erred by taking into account erroneous or irrelevant considerations. Secondly, the father makes a number of criticisms of the calculation of the figure of $160,665.12. Finally, it is contended that the outcome is plainly wrong or manifestly unjust.
Each of these matters, if established and material to the outcome, is a basis for establishing error (House v The King (1936) 55 CLR 499; De Winter and De Winter (1979) FLC 90-605).
Were erroneous or irrelevant matters taken into account? (Ground 1)
The father contends that the primary judge wrongly took into account:
·speculation as to the outcome of proceedings between the parties in the Supreme Court of New South Wales (Ground 1.1);
·the father’s intent to make the mother “pay” for her decision to separate from him (at [16]) (Grounds 1.2 and 1.4); and
·the financial interests of members of the father’s extended family (Ground 1.3).
The proceedings between the parties in the Supreme Court of New South Wales (Ground 1.1)
The mother owns property in Australia which is the subject of claims made by the father. As matters presently stand, that is the only property available to the mother because her claim for property settlement orders in Australia have been permanently stayed. The stay was granted by the Full Court on 7 November 2019. The High Court of Australia has granted leave to the mother to appeal from the Full Court’s orders but that appeal has not yet been heard.
The primary judge said:
15.… Accordingly, the mother can expect no property adjustment that would have her receiving any more than the property interests she has in Australia. Indeed, she could lose some, if not most of those interests in the proceedings the father is running against her in the Supreme Court of New South Wales.
The quoted sentences are statements of fact and involve no speculation as to whether the property settlement proceedings will be successful or not. The mother did own properties in Australia which she could lose if the father’s proceedings in the Supreme Court of New South Wales, in which he asserts an interest in the properties, are successful.
Further, any error is inconsequential. The great disparity in the parties’ financial positions would remain whether or not the mother owns the properties in question.
The father’s motives (Grounds 1.2 and 1.4)
The father challenges the following paragraph in the primary judge’s reasons for judgment:
16.I also consider as relevant the fact that the father has acted on an expressed intent to make the mother “pay” for her decision to separate from him whilst in Australia and never to return herself or the child to the United Arab Emirates. His demonstrated committed determination to continue the litigation against the mother until the full extent of his appeal rights are exhausted, I am satisfied is indicative of his commitment to that outcome.
This is a matter that the Court can properly take into account (s 117(2A)(g) of the Family Law Act 1975 (Cth) (“the Act”)). That does not mean that costs are being improperly imposed on the father by way of punishment but rather by having regard to circumstances that would render a departure from the usual position set out in s 117(1) of the Act. The fact the parenting proceedings are not being conducted with a view to ascertaining the parenting orders that are in the best interests of the child but, at least in part, for some other purpose is a relevant matter to be taken into account. As to costs being compensatory and not punitive, see Latoudis v Casey (1990) 170 CLR 534 per Mason CJ at 542-543.
Nonetheless, the father submits that there was no evidence that permitted a finding that the father’s pursuit of legal remedies was not bona fide, was unjustifiable, “[i]nvolved any improper or fake allegation of fault not relevant to the proceedings” or involved non-cooperation or obstruction (Father’s Summary of Argument filed on 22 April 2020, paragraph 38).
The primary judge’s finding was, however, a summary of the findings made in the parenting proceedings. The father did not attempt to explain why those findings from a judgment, which had been affirmed on appeal, were wrong or not available on the evidence in those proceedings. The transcript of those proceedings is not before us and, in any event, we would not be inclined to trawl through it to find the relevant passages for ourselves to see whether the findings were justified (Bahonko v Sterjov (2008) 166 FCR 415 at [3]).
We are not persuaded that this aspect of Ground 1 has been made out.
The financial interests of the father’s extended family (Ground 1.3)
It is submitted by the father that the primary judge erred by taking into account the financial circumstances of the father’s extended family.
The primary judge said:
14.I consider as significant also, the disparity in the financial positions of the parties. The father is an Emirate business person of significant wealth. He and his extended family have interests in a corporate group with various commercial interests. He has property in [the United Arab Emirates, Europe and South East Asia]. The group has at least one building … which alone houses some 700 employees…
His Honour’s finding was that the father and his extended family had interests in a corporate group. That simply identifies the father’s interests in the group, which is limited in the manner stated. The financial interests of the father’s extended family were not taken into account.
Ground 1 fails.
Quantification of the mother’s costs (Ground 2)
The father submits that the primary judge erred when fixing the sum of $160,665.12 because the sum:
·did not take into account a costs certificate granted to the mother by the Full Court for the rehearing before the primary judge (Ground 2.1);
·includes work for which the mother was not charged (Ground 2.2);
·includes counsel’s fees on an indemnity basis or in excess of counsel’s fee agreement (Grounds 2.3 and 2.4); and
·includes solicitors’ charges based on an impermissible time scale (Ground 2.5).
It is to be observed at the outset that the primary judge would have been assisted by submissions to the effect that are now made by the father. However, the father did not do so.
The costs certificate granted to the mother for the rehearing (Ground 2.1)
When the Full Court remitted the limited issue of the time that the child was to spend with the father, it granted both the mother and the father a costs certificate pursuant to s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) (“the Costs Act”) for the rehearing. Such a certificate entitles the recipient to approach the Attorney-General who may, but is not obliged to, authorise a payment towards the recipient’s costs of the rehearing up to $4,000 (reg 6 of the Federal Proceedings (Costs) Regulations 2018 (Cth)).
The father does not suggest that the mother has applied for, or received, such a payment, or that the Attorney-General will authorise a payment to the mother under the Costs Act, given the extant costs order against the father. No doubt, the nature and extent of the costs that the mother recovers from the father will bear upon the decision of the Attorney-General.
In any event, as costs were awarded on less than an indemnity basis, the receipt of a payment under the Costs Act, would not see the mother recovering more than the costs that she is obliged to pay her lawyers.
This ground of appeal is therefore a red herring in more ways than one.
The work not charged to the mother (Ground 2.2)
As we have recorded, on the tax invoice dated 24 May 2017, the mother’s solicitors included a number of items in which the cost was noted but followed by the words “but say no charge”. On the invoice dated 26 February 2019, the entries in the earlier invoice were repeated but on this occasion each entry was the subject of a fee. However, as we have seen, the total sum claimed in the invoice dated 26 February 2019 was some $15,000 less than the total of the three earlier invoices.
We do not see why, as a matter of principle, a client and a solicitor cannot come to an agreement that earlier work carried out which was billed at no charge, could subsequently be the subject of a fee. There is no evidence that the mother’s solicitors’ entitlement to be paid for that work had been waived.
Had the father raised this issue before the primary judge, evidence may have been given to explain the course that was taken by the mother and her solicitors. It is therefore difficult for the father to take the point now (Metwally v University of Wollongong (1985) 60 ALR 68 at [71]).
The primary judge explained how he came to the figure of $160,665.12 in the following terms:
18.The mother initially sought indemnity costs, but, more recently, in her written submissions, sought an order that her costs as calculated in accordance with the Scale of Costs set out in the Family Law Rules 2004 (Cth) be paid. Though the mother incurred costs in excess of those permitted in the Scale of Costs because she had entered into a Costs Agreement with her solicitors, those solicitors nevertheless calculated her costs pursuant to the Scale of Costs for the relevant period (3 November 2016 – 18 October 2018) at a total of $162,632.17.
19.Included in the work so costed was work for which the mother already received the benefit of a costs order from me fixed in the sum of $1,967.05. Those costs were to be paid by 1 November 2018, but have not been paid yet by the father.
20.In any event, the mother appropriately accepts that the sum of $1,967.05 should not be included in any amount the father is now ordered to pay. It will not be.
These findings were made in accordance with unchallenged evidence. We do not see why, in the absence of any evidence or submissions from the father, the primary judge was obliged to conduct an assessment or taxation of the mother’s costs on his Honour’s own motion.
We are not persuaded that any error has been identified in this ground of appeal.
Counsel’s fees (Grounds 2.3 and 2.4)
The fee agreement of the mother’s senior counsel dated 22 June 2017 indicated that he would charge her $8,000 per day for appearing in court at any hearing of the matter, with work carried out before 8.00 am or after 5.00 pm charged at $800 per hour, plus GST. For work performed in chambers, he would charge her $800 per hour. However, the tax invoice that was rendered charged the mother for three days of preparation and three days of hearing at $9,000 each, plus GST.
The fees charged by senior counsel for the days of hearing may have included time before 8.00 am or after 5.00 pm. The preparation could have been calculated at 11.25 hours per day at $800 per hour. It is not, therefore, obviously apparent that the amounts charged exceeded what was envisaged in the fee agreement. If this matter had been raised before the primary judge, it could have been the subject of an appropriate explanation or concession.
So expressed, the fees charged by senior counsel for the mother may have exceeded those envisaged in the fee agreement by approximately $3,000 (or possibly up to $6,000) plus GST. However, the fee agreement also contained a term that if the matter was listed for more than two days and concluded before the time set aside for it, senior counsel would charge for the unused days at 60 per cent of the usual rate.
The fee agreement provided an estimate for a five day hearing, leading to an inference that the estimated hearing time was for five days. If that was so, senior counsel would have been entitled to charge $9,600 plus GST for the additional two days but did not.
Had the father deigned to raise these matters before the primary judge, again, an explanation may have been given as to the fees charged by senior counsel.
Under r 19.18(1) of the Rules, the Court may order that a party is entitled to costs assessed in different ways, namely: of a specific amount (r 19.18(1)(a)); as assessed on a particular basis (r 19.18(1)(b)); in accordance with the method stated in the order (r 19.18(1)(c)); or as assessed under Sch 3 of the Rules (r 19.18(1)(d)). Rule 19.19 provides that where a Court orders costs to be paid and does not fix an amount, the maximum amount recoverable is an amount calculated in accordance with Sch 3 (solicitor and counsel fees) and Sch 4 (conduct money and witnesses fees). As we have indicated, the primary judge was not conducting an assessment of costs under Sch 3, rather his Honour was fixing an amount under r 19.18(1)(a) of the Rules and was entitled to take a broad brush approach (Idoport Pty Ltd v National Australia Bank Ltd & Ors; Idoport Pty Ltd v Donald Robert Angus [2007] NSWSC 23 at [9]; Stoian & Fiening (Costs) [2014] FamCA 944 at [95]–[99]).
It is true that in doing so, his Honour accepted the evidence that the calculation was at scale and that senior counsel’s fees may have exceeded both the scale amount for senior counsel (which at the time was $797.02 per hour for preparation – not greatly less than the amount that was charged) and his own fee agreement. Nonetheless, the amount awarded was still less than the mother was obliged to pay her lawyers. However, the course that the primary judge would have taken had this been pointed out to his Honour by the father remains entirely speculative. There is no obvious reason why an appropriate fixing of costs would not have included the costs of counsel as charged as opposed to the scale figure.
On any view, the amount in issue on this aspect of the matter is small and cannot justify an appeal or the costs that the father has incurred ($13,481.89 at scale, including those of senior counsel). It is out of all proportion to the total amount in issue. We consider this matter, as with many aspects of this appeal, to be a gross misuse of the parties’ and the Court’s resources, particularly when the father declined the opportunity to place either evidence or submissions before the primary judge.
Thus, even if we found this aspect of the appeal to be established, having regard to the amount involved, we would have still dismissed the appeal, as success would not justify setting aside the orders because the error was not material and no miscarriage of justice would result.
However, we are not so satisfied. As we have already said, the primary judge was not conducting an assessment of costs as such. Thus, his Honour was entitled to take into account counsel’s fees as charged and not as indicated by Sch 3 of the Rules.
Were the time periods charged by the mother’s solicitors impermissible? (Ground 2.5)
The mother’s solicitors, in accordance with their fee agreement, charged the mother in units of six minutes, even if the time actually taken for the task was less than that. Thus, the father submits that “such items of work may have occupied significantly less time” and that “perhaps in truth, the quantum of the alleged scale invoice is consequently far in excess of the actual time for the actual work” (Father’s Summary of Argument filed on 22 April 2020, paragraph 64) (Emphasis added). Consequently, the father submits that the primary judge should have referred the question of costs for assessment.
A compelling response to that submission is that the father did not ask the primary judge to take such a course. Another response was provided by his Honour, who considered that an assessment would “simply put the mother through more expense, dispute and a contested assessment process. That would further be facilitating the father in his endeavours to make the mother ‘pay”’ (at [21]).
We agree. There is no merit in this ground of appeal.
Is the order plainly wrong or manifestly unjust? (Ground 3)
As part of the challenge under this ground of appeal, the father relied on the above matters, as well as submitting that the father was not wholly unsuccessful but “substantially or principally unsuccessful” (Father’s Summary of Argument filed on 22 April 2020, paragraph 68.1) and that the costs ordered which he says were 92.5 per cent of what was claimed by the mother, were close to indemnification.
As none of the earlier grounds of appeal succeeded, it remains only to deal with the two last submissions. We bear in mind that decisions on costs are of a particular kind with which appellate courts are reluctant to interfere. This is for two reasons. The first is that a costs order is regarded as falling into the category of cases concerned with practice and procedure which rarely attract intervention on appeal (Wentworth v Rogers(No 3) (1986) 6 NSWLR 642 at 651–652). The second is that “[i]t is almost invariably the case that the judge at first instance is better placed to deal with costs” (Hanlon v Brookes (1997) 15 ACLC 1626 at 1632; Spotless Group Ltd v Premier Building and Consulting Pty Ltd (rec appt) [2008] VSCA 115 at [9]–[11]; Fleming & Schmidt [2017] FamCAFC 12 at [42]–[44]).
The fact that the father was not wholly unsuccessful but substantially unsuccessful, as the primary judge implicitly found at [13], remains a relevant consideration but under s 117(2A)(g) of the Act and not s 117(2A)(e).
We do not see how the fact that the costs that were awarded were approximately 92.5 per cent of those claimed is of any relevance whatsoever. If the costs were properly fixed, that proportion does not, of itself, render the outcome unjust or unreasonable. It is worth recording the mother’s submission that the percentage is incorrect in any event, as it was calculated assuming that the mother’s original claim for costs was $173,744.70, which is incorrect. The correct sum was $177,961 and therefore the percentage is 90.3 per cent.
We are not satisfied that the outcome is plainly wrong or manifestly unjust and this ground of appeal fails.
Conclusion
The appeal will be dismissed.
I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Aldridge, Watts & Austin JJ) delivered on 30 July 2020.
Associate:
Date: 30 July 2020
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