Barret & Barret (No 2)
[2022] FedCFamC2F 423
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Barret & Barret (No 2) [2022] FedCFamC2F 423
File number(s): ADC 4496 of 2018 Judgment of: JUDGE BROWN Date of judgment: 4 April 2022 Catchwords: FAMILY LAW – costs – application for costs – assessment of legal principles applicable to costs – where two offers of settlement were made by the mother – where offers were not accepted – departure from the general rule that each party bear their own costs – costs order made against the father – special costs order. Legislation: Family Law Act 1975 (Cth) ss 67ZBA, 79, 117, 117C,
Family Law Rules 2004 (Cth) Pt 10.1.
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) Sch 1, r 4.01.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Ch 12; Pt 4.2, 12.6; rr 12.08, 12.13, 12.17
Federal Circuit Court Rules 2001 (Cth).
Cases cited: Browne v Green (2002) 29 Fam LR 428.
Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.
Barret & Barret [2021] FedCFamC2F 14.
Davida & Davida (Costs) [2011] FamCAFC 61.
Garrod & Davenort [2021] FamCA 276.
In the Marriage of I & I (No 2) (1995) 22 Fam LR 557.
In the Marriage of Kohan (1992) 16 Fam LR 245.
Lenova & Lenova (Costs) [2011] FamCAFC 141.
Roverati & Roverati [2021] FedCFamC2F 590.
Division: Division 2 Family Law Number of paragraphs: 125 Date of hearing: 21 March 2022 Place: Adelaide Counsel for the Applicant: Ms Lewis Solicitor for the Applicant: Norman Waterhouse Counsel for the Respondent: Mr Bowler Solicitor for the Respondent: Martin Robinson Solicitors ORDERS
ADC4496 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BARRET
Applicant
AND: MR BARRET
Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
4 APRIL 2022
THE COURT ORDERS THAT:
1.Within twenty eight (28) days of the date of these orders, the respondent, Mr Barret pay the applicant, Ms Barret a lump sum of costs fixed at FORTY THOUSAND DOLLARS ($40,000.00).
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 the pseudonym Barret & Barret has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
These reasons for judgment relate to an application for costs, following a rigorously contested eight day parenting hearing, which centred on allegations of serious and protracted coercive and controlling family violence and the potential implications, for three children aged nine to 13, of exposure to such conduct.
The parties to the case were Ms Barret (“the mother”) and Mr Barret (“the father”). The mother seeks her costs in the trial either on an indemnity basis, or failing that, on a party/party basis.
The father resists this application and seeks that he and the mother bear their own respective costs. As will be shown, the costs in question are extraordinary when the financial means of each of the parties is considered.
BACKGROUND
The mother commenced the proceedings in late-2018. Initially, they concerned both property and parenting issues. In her financial statement, filed on 30 October 2018, Ms Barret described her employment as being a professional and declared an income of approximately $45,000.00 per annum.
In respect of her then level of asset backing, she disclosed a half interest in the home she then owned with Mr Barret, which she valued at $525,000.00 in total, which was subject to a mortgage of $247,386.00.
In addition, she indicated that the parties jointly-owned two cars and Ms Barret had savings of approximately $43,000.00. She had modest superannuation, reflecting approximately 20 years in the workforce, interrupted by maternity leave.
In his financial statement, Mr Barret disclosed an income of approximately $139,000.00 derived from his employment as a fly-in/fly-out worker. He agreed that the parties’ most significant asset was their family home, which was subject to a significant level of mortgage.
In the past, Mr Barret has been a member of the Australian Defence Force. As a consequence, he has military superannuation - an industry based fund. In December 2018, his total superannuation was valued at approximately $285,000.00. There was no dispute about the motor vehicles each party had.
Accordingly, at first blush, there was no great complexity about the issues surrounding the settlement of matrimonial property issues, other than it was self-apparent that the division of the parties’ modest resources would not result in any significant windfall to either of them and the fact of their separation would result in a significant diminution of financial security for each of them in the coming years.
To the parties’ great credit, each recognised the financial reality of their situation and were able to agree the property aspects of the case relatively quickly. On 10 September 2019, they agreed on final property orders ending their financial relationship with one another, after a relationship of approximately 10 ½ years in duration.[1]
[1] See orders of Judge Kelly dated 10 September 2019.
The parties agreed that there would be a split, in the mother’s favour, in respect of Mr Barret’s superannuation. It was further agreed that Ms Barret would transfer her interest in the parties’ former family home to the father and he would be pay her a sum of $184,000.00, in consideration of the transfer, which sum I understand he secured by increasing the mortgage on the property concerned.
As is self-apparent, the parenting aspects of the case were far more problematic and involved not only a lengthy final hearing, but also numerous interlocutory applications and the compilation of two expert Family Reports, each of which was authored by Ms D, the first of which was released to the parties in September 2019, with the second being available in April 2021.
Ms Barret has been represented through the proceedings through the same firm of solicitors, with whom she has a cost agreement, which was executed in November 2018. Ms Barret’s solicitor has calculated the solicitor/client costs due to her, pursuant to that agreement on two bases.
Firstly, the total costs and disbursements incurred by Ms Barret, throughout the entirety of the proceedings, which amount to $235,888.71 and secondly, the party/party costs calculated by reference to what was then the applicable scale of costs, which was the Federal Circuit Court Scale. The second calculation produces a figure of $135,897.26.
Two other dates are relevant. These relate to the release date of each of Ms D’s Family Reports, which made some specific recommendations regarding how the parenting aspects of the case should be approached. It is Ms Barret’s evidence that she discussed the Family Reports with her solicitor shortly after they were each released and, as a consequence, instructed her solicitor to write to Mr Barret’s solicitor on 20 September 2019 and 12 May 2021 setting out proposals to resolve the case without, in the first case the final hearing commencing and, in the second case, avoiding its further prolongation.
In each case, her letter was marked as follows: without prejudice save as to costs. Mr Barret did not accept the proposal in either case. As a consequence the matter proceeded to judgment.[2] It is the mother’s position that she should be entitled to costs from the date of her first offer to settle but if the court is against her in that regard, certainly from the date of the second letter.
[2] See Barret & Barret [2021] FedCFamC2F 14.
In her application for costs filed on 26 October 2021, the mother seeks costs in one of these forms:
·Solicitor/client from 20 September 2019 in the sum of $235,888.71;
·In the alternative, solicitor/client costs from 12 May 2021 in the sum of $64,846.10;
·Failing the granting of indemnity costs, party/party costs from 20 September 2019 in an amount of $135,897.26;
·In the alternative, party/party costs from 12 May 2021 in an amount of $40,064.32.
In his response filed on 23 December 2021, the father seeks the dismissal of the mother’s application for costs. The reasons for judgment are directed towards the resolution of this controversy.
THE PRINCIPAL PROCEEDINGS
The eight day trial was directed towards the resolution of one central issue, which can be easily summarised. Did the father subject the mother to coercive and controlling family violence, or had she essentially fabricated or exaggerated her claims against him as a consequence of her malice for him and desire, to satisfy her own emotional needs, to shut him out from having any meaningful level of involvement with the parties’ three young children.
Section 67ZBA of the Family Law Act 1975 (Cth) (“the Act”), mandates that any party to a proceeding under the Act, who alleges that a child to whom such proceedings relate has been exposed to abuse or family violence, be required to set out particulars of such abuse. When Ms Barret filed her application, she filed such a notice, which alleged as follows:
·One child had been hit with a wooden spoon by the father;
·The children had been exposed to their father referring to their mother in abusive terms;
·The father had thrown food in the kitchen, broken their toys and had locked their mother out of their home on several occasions;
·The father had hidden and broken the mother’s possessions;
·The father had choked and assaulted the mother in the presence and hearing of the children.[3]
[3] See Notice of Risk of Ms Barret filed on 30 October 2018.
In her initiating affidavit, the mother annexed a letter, which she had written to the father around the time the parties separated. In this personal letter, she indicated that the father had broken his trust with the family and, as a consequence, the parties’ children were suffering and fearful of him. At this stage, she also indicated that the children were imitating their father’s aggressive behaviours and thought such behaviour was normal.[4]
[4] See Affidavit of Ms Barret filed 30 October 2018.
The father also filed his own Notice of Risk in which he alleged that the mother had physically assaulted the children and exposed them to serious physical harm.[5] He denied the gravamen of the allegations made against him. Accordingly, at an early stage of proceedings, the diametrically opposing positions of the parties were formally delineated.
[5] See Notice of Risk of Mr Barret filed 19 December 2018.
Shortly after the case began, as routinely occurs in parenting cases, the parties were referred to a Child Dispute Conference. In this conference, the relevant Family Consultant summarised the respective positions of the parties, in relation to the issues of family violence, in the following terms:
[Ms Barret] alleged coercive controlling violence in the relationship, specifically, that the father had anger issues, he had spat on her, puller her hair pushed her, withheld the car keys from her, locked her out of the house, denigrated her in front of the children, smashed and damaged her possessions, and otherwise punished her if she did not agree with him. There is an Intervention Order naming the mother and the children as protected persons.
[Mr Barret] denied the allegations and said the mother denigrated him. He intends to contest the Intervention Order.[6]
[6] See Child Dispute Conference Memorandum prepared by Dr UU dated 12 February 2019.
There can be no dispute that police were called to the parties’ family home on the evening on September 2018, which marked their final separation. In addition, there can be no doubt that Mr Barret was arrested by police on this occasion and was subsequently charged with assaulting the mother. Later again, Mr Barret became the subject of an Intervention Order.[7]
[7] See Affidavit of Ms Barret filed 30 October 2018 at [9].
To Ms D, in the context of the first Family Report, Mr Barret is reported to have acknowledged that the children had been exposed to the parties’ conflict but blamed the mother for precipitating this conflict. He also raised concerns with Ms D that Ms Barret had herself physically assaulted the children.[8]
[8] See Family Report prepared by Ms D dated 12 September 2019 at [82]-[83].
Further on in the first report, Ms D identified what she considered to be concerning features in the family which related to her view that the parties’ children had been exposed to their father’s aggressive behaviour towards their mother. In this context, Mr Barret indicated to Ms D his view that his actions were in response to physical violence from Ms Barret. Ms D did not find this statement to be congruent with what the mother and the children had reported to her.[9]
[9] See Family Report prepared by Ms D dated 12 September 2019 at [156].
In her first report, Ms D wrote as follows:
Whilst the issue of family violence between [Mr Barret] and [Ms Barret] remained a matter for the Court to assess, it was noted that there was a current Intervention Order preventing [Mr Barret] from being within 50 metres of [Ms Barret]. Of further noted to the writer was that [X], [Y] and [Z] individually described incidents of conflict between their parents during which they had allegedly witness [Mr Barret] breaking and throwing items choking [Ms Barret] and engaging in extensive verbal abuse towards [Ms Barret]. Moreover, [X] reported that [Mr Barret] had continued to send [Ms Barret] inappropriate text message. Of significant concern was that [Z] acknowledged having been present when his father allegedly choked his mother.[10]
[10] See Family Report prepared by Ms D dated 12 September 2019 at [157].
Again, whilst conceding that the issue was one which fell solely within the province of the court to determine, Ms D’s professional assessment was, from the descriptions provided to her, that the parties’ three children had been exposed to family violence, emanating from their father and directed towards their mother. This included choking, verbal abuse and the throwing of items.
Each party provided a case summary, at the commencement of the trial, each of which had been prepared by the parties’ experienced counsel. The mother’s position was that each of the children had been exposed to protracted and serious family violence, which had resulted in them displaying violent and antisocial behaviour at school.
The father’s position was that any dysfunction exhibited by the children was referrable to the mother’s own dysfunctional parenting of them and their own idiosyncratic behavioural issues. The father denied any violent conduct on his part.
Unfortunately, the estimates of time provided for the completion of the trial proved to be inadequate. As a consequence, the final hearing occurred in two tranches in October 2020 and May 2021 respectively. The first portion of the trial was largely taken up by counsel for the father extensively cross-examining the mother.
The thrust of this cross-examination, in my view, was that the mother had either manufactured her complaints against the father or had consciously exaggerated or misrepresented incidents of familial conflict to portray him in a poor light. Underpinning this approach, was the assertion that the mother had engaged in a campaign to alienate the parties’ children from their father and was a compromised parent – essentially it was suggested to Ms Barret that the children’s dysregulated behaviour at school was not due to exposure to their father’s conduct but flowed from her poor parenting of them.
Besides the mother, in the first portion of the trial, time was taken up with the cross-examination of a school counsellor, Ms Q, whom the children had approached, and Dr C, a psychologist whom the mother had arranged for the children to consult, after referral by her family doctor. Ms Q confirmed the children had made disclosures to her of having seen their father’s violent behaviour towards their mother.
Mr Barret was critical of Dr C, asserting that she had, in effect, an agenda to entrench the children’s claims of family violence and any therapy provided by her, particularly in terms of facilitating any repair of the children’s relationship with him, was largely doomed to fail, which was impliedly the outcome desired by the mother and one which she had engineered.
Ultimately, I found that Dr C, given her views of herself as a professional advocate and truth teller for children, was not likely to be a means of shifting the children’s view of their father, but I rejected any suggestion that the mother had consciously sought out Dr C as a mechanism to drive a deeper wedge between the children and their father. I wrote as follows:
[T]he most significant factor in the current matter, regarding what has shaped the children’s views, is their direct experience of their father. As such, important though it is, the involvement of [Dr C] in the matter to date should be regarded as more peripheral to it than influential. The most cogent factor in shaping the children’s views of their father is [Mr Barret] himself and what he has done.[11]
[11] Barret & Barret [2021] FedCFamC2F 14 at [117] (Brown J).
I accept that it is a common incident of human engagement that individual views of what happened in an intimate relationship are shaped by subjective recollections, many of which are self-serving. There is much truth in the old saw of Robert Burns who remarked: Oh to see ourselves as others see us.
In the present matter, the only individuals who are unable to provide accounts of what actually occurred between them, particularly in terms of delineating who was the aggressor or precipitator of all the undoubted unhappiness between them, which clearly has had a corrosive effect on their children, are the parties themselves. They were each there, at relevant times, within the confines of the family home. They knew what happened there.
Without wishing to appear trite or unduly simplistic, given the dichotomy in their views of who was at fault in their relationship, at least in the first stage of proceedings, one party must have known that he or she was embarking upon a course of deception, directed towards securing an advantage over the other, when the case outlines were filed. In my view, it is impossible for me to conclude that this extreme level of divergence was either inadvertent or the result of some explicable lack of objectivity driven by the blinkering emotion of the situation.
At the end of the first tranche of the hearing, the mother’s case had been exposed to intricate scrutiny, at the direction of the father. As I ultimately found, Ms Barret is not a robust personality or one who relishes the verbal jousting of cross-examination. However, in my assessment, whilst subject to the stressful circumstances of the witness box, she maintained her composure. She was not given any quarter in this regard.
Given the lack of success in the therapy provided by Dr C, I considered that it might be helpful to re-engage Ms D to see if she was able to provide any guidance (not only for the court, but also the parties themselves) as to what mechanisms might be engaged to secure some form of rapprochement between, at least, the older children and their father. This opportunity arose because the hearing was obviously far from finished.
At the time of the second Family Report, Ms D reported that the issue of family violence remained in dispute, and still required the court’s evaluation.[12] Ms D also noted the children’s continuing reticence about spending time their father.[13] In this context, Ms D recommended that Mr Barret sought to minimise his behaviour and continued to blame Ms Barret for the children’s relationship difficulties with him.[14] As a consequence, Ms D observed that he needed to acknowledge his behaviour towards the children.[15]
[12] See Family Report prepared by Ms D dated 29 April 2021 at [139]-[140].
[13] See Family Report prepared by Ms D dated 29 April 2021 at [139]-[140].
[14] See Family Report prepared by Ms D dated 29 April 2021 at [141].
[15] See Family Report prepared by Ms D dated 29 April 2021 at [141]-[142].
Given the continued dichotomy between the parties as to what had been the nature of their relationship, the second tranche of the hearing, which primarily focused on the cross-examination of Mr Barret by Ms Lewis, counsel for the mother, was required. This consisted of a painstaking and forensic destruction of his case. In marked contrast to the mother, Mr Barret’s case did not survive this onslaught.
Judgment was delivered on 24 September 2021. I found Ms Barret to be the more reliable witness. I ultimately found that Mr Barret had exposed Ms Barret to an unacceptable level of coercion and control during their marriage and had, in effect tyrannised her, conduct to which the children had been exposed, and which had influenced their subsequent views of him.[16]
[16] See Barret & Barret [2021] FedCFamC2F 14 at [296]-[297] (Brown J).
In short, Ms Lewis achieved the forensic outcome postulated at the commencement of her case, and which she had announced to Mr Barret, prior to her cross-examination of him. I summarised the effect of this cross-examination, which consumed many days of the trial, as follows:
Ms Lewis set the scope of her cross-examination of the father from the outset, when she invited him to provide his assent to the proposition that he was the victim of the mother’s deception and behaviour rather than vice versa. [Mr Barret] provided this assent, in my view, without equivocation.
Thereafter, incident by incident, in my view, Ms Lewis forensically demolished his position to such an extent that, in his closing submissions, his counsel conceded that his client had been guilty of appalling behaviour during the parties’ relationship. This is both the central factual and legal issue in the case and I accept Mr Bowler’s description of his client’s behaviour.
In my view, this forensic cross-examination resulted in a fatal blow to the father’s credibility, which he himself recognised at it drew to its conclusion. As such, I do not accept the manner in which he attempted to recreate the nature of the parties’ past relationship with one another, in his affidavit material and through the manner in which his counsel cross-examined [Ms Barret].
Throughout his evidence, as it developed issue by issue, the father was compelled to make frequent concessions about his conduct, as described by him in his affidavit, which were extracted in the face of incontrovertible evidence and his own earlier denials. Sadly, he was not an impressive witness.
At the end of his cross-examination, the father apologised to the mother for his conduct towards her. In this context, he indicated that he wanted to change his behaviour and become a better person. He conceded that [Ms Barret] had been a very good mother. He also indicated a willingness to take advice on board and said that he regarded his life at present as being a work in progress. He also indicated a willingness to keep his distance from the mother and refrain from denigrating her in future.[17]
[17] See Family Report prepared by Ms D dated 29 April 2021 at [129]-[133].
The intellectual pining of the mother’s application for costs is clear. The parties’ view of the evidence in the case were diametrically opposed. As such, this cannot be a case where, for reasons of human frailty one of the party’s has mistakenly adopted a subjective view of what occurred. Rather, from the outset, one of them was determined to lie about the other’s behaviour to gain an advantage over the other through deception.
It is Ms Barret’s case that the court entirely vindicated her in its findings and therefore must also find that Mr Barret, in a calculated fashion, was prepared to lie to the court. Moreover, this deception is compounded by her obvious emotional vulnerabilities, of which Mr Barret was aware. In short, not only was he prepared to lie, he was also prepared to subject her to the bullying which is integral to many aspects of cross-examination, in the vain hope, as it turned out, that she would crack.
On any view, the fact that a person, who earns a modest income less than $50,000.00 per annum, has incurred legal fees of over a quarter of a million dollars, in a family law case must be considered extraordinary. It is another element of the mother’s case that the father was prepared to push her to the brink financially for tactical reasons, through the maintenance of his unrealistic stance in the matter and this, of itself, is another manifestation of his coercive control of her, which deserves the court’s censure.
It is in this context, that two letters, each marked without prejudice save as to costs, delivered to the father’s solicitors, loom large. The first dated 20 September 2019, after the release of Ms D’s first report, contained a proposal to compromise the case on the basis of Ms D’s recommendations. As previously indicated, this report provided some evidentiary support for the mother’s position that the children had been exposed to family violence but deferentially conceded that it was the court’s role to make the relevant findings in this regard.
The mother asserts that the father must have known that, if he was candid in his evidence, these findings would be made. In these circumstances, it is the mother’s case that her willingness to settle the case demonstrates her bona fides as a prudent and child-focussed litigant in marked contrast to the father, who was prepared to push the matter to the brink.
The second letter, dated 12 May 2021 was forwarded after the release of Ms D’s second report and prior to the recommencement of the second five day portion of the trial, which would include the cross-examination of Mr Barret and Ms D herself.
Ms Barret proposed the two younger children spending time with their father during the day pending their involvement with another therapist rather than Dr C, after which the time would be extended to a longer term time weekend, from after school Friday until Saturday afternoon. The mother proposed the children continuing their therapeutic involvement with Dr C.
So far as the parties’ older child was concerned, Ms Barret proposed that he spend time with his father subject to his wishes and he too engage in some form of therapy. She sought the conferral on herself of sole parental responsibility for all three children. She sought some injunctions regarding her personal protection.
In the letter, Ms Barret indicated that she was mindful of the cost of the ongoing litigation and expressed her view that all concerned would benefit from a final resolution of the matter, at this stage, rather than when judgment was delivered at an unknown date in the future.
Ultimately, in the final orders made, Ms Barret was conferred with sole parental responsibility for the children but subject to the obligation to inform Mr Barret in writing of significant issues relating to their health, education and welfare. This did not include any obligation to confer about such issues.
Otherwise cautious orders were made for the younger children to spend time with their father within a framework of the continued involvement of the ICL, who was directed to arrange therapeutic counselling for them. A raft of orders were made for Ms Barret’s personal protection.
OTHER MATTERS
The mother’s evidence is that she has utilised her property settlement entitlements ($184,000.00) and her savings of $40,000.00 to fund the proceedings but otherwise has borrowed $100,000.00 from her father, which she intends to repay. For all intents and purposes, at 48 years of age, she is essentially without any significant level of financial backing, apart from her modest accrued superannuation. She has a car worth about $12,000.00.
She and the children live in accommodation owned by her father, for which she pays a commercial but modestly subsided rental of $370.00 per week. She receives child support from Mr Barret of $596.00 per week and parenting payments. It is her case that given the parties’ three children live almost exclusively with her, the costs of their financial support will be extensive and fall mostly on her shoulders.
The father has deposed that he has incurred legal fees of $139,728.00, which is significantly less (approximately $100,000.00) than those incurred by the mother. The parties’ counsel fees are approximately the same given both parties engaged experienced junior counsel. He has further deposed that he borrowed $80,000.00 from his mother to fund the case, of which he has repaid $10,000.00.
Mr Barret’s most significant asset is his home, which he valued at $535,000.00 at the time of the parties’ property settlement.[18] It is subject to a mortgage of $408,000.00. Mr Barret is in receipt of a much greater income ($2,634.00 per week) than Ms Barret. As a consequence, he has been able to defray some of his legal costs in the running.
[18] See orders of Judge Kelly dated 10 September 2019.
Mr Barret also points to the fact that he was willing to compromise the case, in September 2019, on an interim basis, in the terms recommended by Ms D, an offer which the mother refused being prepared only to settle in final terms.
In summary, the proceedings constitute an economic catastrophe for the parties, but more so for the mother, who has greater costs and a lesser income. The parties became embroiled in vitriolic litigation, which neither could rationally afford, which has resulted in a deeper rift within their family.
In my view, it is not hyperbole to characterise the case as a modern tragedy. In combined terms, it has cost the parties approximately $375,000.00 – equivalent to just under three times what Mr Barret earns in a year; and over eight times what the mother earns. In objective terms, this is not a prudent manner in which the parties should allocate their financial resources.
THE LEGAL PRINCIPLES APPLICABLE
Section 117(1) of the Act abolishes for the purpose of family law proceedings, the general rule that, in civil proceedings, costs follow the event. It provides that each party should bear his or her own costs in such proceedings.
However, pursuant to section 117(2), if the court is of the opinion that there are circumstances that justify it in doing so, it may, subject to a number of stipulated considerations, make such order as to costs as it considers just.
The relevant considerations are set out in section 117(2A) of the Act and are as follows:
•The financial circumstances of each of the parties to the proceedings;
•Whether any party to the proceedings is in receipt of legal aid;
•The conduct of the parties to the proceedings, including in respect of issues of discovery and production of documents;
•Whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court;
•Whether any party to the proceedings has been wholly unsuccessful in the proceedings;
•Whether any party has made an offer in writing to settle the proceedings and the terms of any such offer;
•Such other matters as the court considers relevant.[19]
[19] Family Law Act 1975 (Cth) s 117(2A).
The court’s discretion to make an order for costs is a wide one and includes the authority to make an order for indemnity costs. However, the discretion remains one which must be exercised carefully and judicially.
In the case of In the Marriage of I & I (No.2),[20] the Full Court said as follows:
Section 117 confers upon the court a broad discretion in relation to costs. That discretion is one which the Court should not seek to fetter. As was pointed out by the High Court in Penfold v Penfold:
It is an accurate description of s 117(1) to say that it expresses a general rule, provided that it is firmly understood that the subsection is not paramount to s 117(2). As subs (1) is expressed to be subject to subs (2), the former must yield whenever a judge finds in 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 applicant for an order for costs.[21]
[20] In the Marriage of I & I (No 2) (1995) 22 Fam LR 557.
[21] In the Marriage of I & I (No 2) (1995) 22 Fam LR 557. 558 (Nicholson CJ, Ellis and Buckley JJ).
Section 117C deals specifically with offers of settlement. Section 117C(2) provides as follows:
If:
(a)a party to proceedings to which this section applies makes an offer to the other party to the proceedings to settle the proceedings; and
(b)the offer is made in accordance with any applicable Rules of Court; the fact that the offer has been made, or the terms of the offer, must not be disclosed to the court in which the proceedings are being heard except for the purposes of the consideration by the court of whether it should make an order as to costs under subsection 117(2) and the terms of any such order.
At relevant times when the previous rules were in force, Part 10.1 of the Family Law Rules 2004 (Cth) stipulated how an offer to settle was to be made in family law proceedings. In general terms such offers are to be made in writing and not filed with the court. Offers can be made as without prejudice or open. It is not asserted by either party that there was any procedural defect in the relevant order in these proceedings.
Given the inter-relation between sections 117(1) and 117(2) and the nature of family law proceedings generally, orders for indemnity costs are extraordinary or exceptional in nature. The Full Court of the Family Court noted Inthe Marriage of Kohan, that an order for indemnity costs is ‘a very great departure from the normal standard’.[22] In this context, the Full Court said as follows:
The court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind.[23]
[22] In the Marriage of Kohan (1992) 16 Fam LR 245, 254 (Strauss, Lindenmayer and Bulley JJ).
[23] In the Marriage of Kohan (1992) 16 Fam LR 245, 254 258.
There is no closed category of cases in which indemnity costs may appropriately be awarded. However, in Colgate Palmolive Co v Cussons Pty Ltd,[24] the Full Court of the Federal Court indicated that the kinds of situation in which indemnity costs might be considered included those in which a litigant had:
•Commenced or continued an action knowing it to have no chance of success;
•Made false or irrelevant allegations of fraud;
•Made groundless allegations, which prolonged the case concerned; and
•Imprudently refused an offer to compromise.[25]
[24] Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.
[25] Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 231-233 (Sheppard J).
The previous regulatory regime applicable to costs and which was in force at the time of the first trial was the Federal Circuit Court Rules 2001 (Cth). These rules have been repealed and replaced by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), which came into force on 1 September 2021. Chapter 12 thereof deals with costs.
If the Court determines to make an order for costs, it has a wide discretion as to the calculation of such costs. Pursuant to rule 12.17, it may order costs in a specific amount or to be assessed on a particular basis, including in respect of indemnity costs.[26] It may also direct that costs be calculated pursuant to a methodology prescribed in schedules to the Rules.
[26] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17.
In brief, the schedules concerned enable the calculation of costs on either a party/party basis or by reference to fixed court events. The procedure in respect of the latter methodology is clearly designed to allow the ready calculation of costs, by either the parties themselves or the court, which have been incurred following the various procedural stages of litigation from filing to finalisation with judgment.
The schedule in question is referenced in the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth), particularly rule 4.01, which provides that in applying Chapter 12 of the Rules, the Court may apply the events based cost system detailed in Schedule 1.
Accordingly, the court in the present matter may make an award of costs based on fixed fees relating to the preparation of the case up until certain stages or, as the mother advocates, make an award for indemnity costs, the latter approach requiring the application of Part 12.6 of the Rules.
If this second approach is adopted, pursuant to rule 12.17(3), amongst other things, the court may have regard to the reasonableness of each parties’ behaviour in the proceedings concerned and the level of expense sought and whether they are fair, reasonable and proportionate to the matter concerned.
Rule 12.08 provides a list of criteria, for the Court to apply, as to whether costs have been incurred fairly, reasonably and proportionately. Pursuant to rule 12.13(4) a person seeking indemnity costs must provide to the court a copy of any relevant costs agreement with their solicitor.
In the present matter, Ms Barret was subject to a costs agreement, which she has provided to the court.[27] Among other things, it provided hourly rates for the various lawyers and staff assigned to perform professional services at her firm of solicitors. These ranged between $220.00 and $500.00 per hour.
[27] See Affidavit of Ms Barret filed 22 October 2021 at Annexure -1.
In addition, those representing Ms Barret have tabulated their costs on attending upon her and on preparing and perusing correspondence and affidavits, and so on and so forth. This was calculated pursuant to the cost agreement, and the relevant scale between September 2019 and June 2021.
DISCUSSION
It is now appropriate to consider whether there are any circumstances which justify a departure from the general rule provided by section 117(1) by virtue of any of the considerations specified in section 117(2A).
The financial circumstances of the parties
The purpose of an inquiry under section 117(2A)(a) is to enable “the court to have some concept of the relative financial positions of the parties.”[28] The mother is not in a strong financial position. She is in debt; has exhausted her savings; and is a modest income earner.
[28] See Browne v Green (2002) 29 Fam LR 428 at 432 at [20] (Kaye, Coleman and Warnick JJ).
The father has a trade, which provides him with a secure income. He is not wealthy but is likely to have a higher standard of living than the mother, particularly given he owns his own home, albeit it is subject to a high degree of indebtedness. He pays child support as assessed.
The considerations arising under this heading favour the mother. I accept that the father cannot be regarded as having ready access to liquid assets, and he is also in debt. As such, it will be difficult for him to satisfy an order for costs in a significant amount. However, as the Full Court pointed out in Lenova & Lenova (Costs):[29]
[A] limited financial capacity to meet an order cannot be determinative; if it were, a party would always be able to plead impecuniosity as a means of avoiding a cost order in circumstances where the pursuit of litigation has continued in the face of a reasonable offer to cease that litigation and the incurring of its attendant costs.[30]
[29] Lenova & Lenova (Costs) [2011] FamCAFC 141.
[30] Lenova & Lenova (Costs) [2011] FamCAFC 141 at [12] (Bryant CJ, Coleman and Murphy JJ).
Clearly, these comments must also be considered in the light of the matters falling for deliberation under section 117(2A)(g) and may also be more applicable to an unrepresented litigant, who can cavalierly continue proceedings, without any exposure to costs, whilst knowing the other party is incurring such a liability.
Receipt of legal aid
Neither party was in receipt of legal aid during these proceedings. Accordingly, this is not a relevant consideration.
Conduct of the parties
The matters falling for consideration, under this heading, are to be assessed in a general way. However, the court is specifically directed to consider issues which may have had the effect of protracting proceedings or may be indicative of a lack of cooperation with the litigation process. These matters may include: discovery, production of documents and the drafting of pleadings. None of these issues are specifically relevant to this case.
However, the court is authorised to consider admissions of fact and similar matters.[31]This is not a case where any formal notice to admit a fact was filed or anything analogous. However, as indicated above, this was a case in which the divergences in the parties’ evidence was readily apparent. As I have already observed, I accept that the father knew that he had not been frank in how he had characterised his behaviour towards the mother during the parties’ relationship.
[31] See Family Law Act 1975 (Cth) ss 117(2A)(c).
Given the stance of the father – that he was the victim of the mother’s controlling behaviour and she was a poor parent and which he maintained in his cross-examination of her - the mother was left with no alternative other than to put every aspect of family violence, which had been denied, to Mr Barret. This significantly added to the length and expense of the proceedings. In addition, Mr Barret’s approach to the case was subsequently repudiated by the court, largely in its entirety.
The manner in which Mr Barret elected to conduct the proceedings, which I accept was based on an entirely disingenuous premise of which he was fully aware, significantly increased the costs incurred by the mother. If Mr Barret had been frank sooner it would have reduced the length of trial and would have rendered unnecessary the painstaking and time consuming demolition of his case, upon which Ms Lewis was forced to embark to secure her client’s interests.[32]
[32] See Garrod & Davenort [2021] FamCA 276 at [29] (Bennett J).
Mr Bowler referred me to some comments made by me in Roverati & Roverati:[33]
Hindsight is a wonderful thing. Acrimonious litigation, in the context of high stakes proceedings involving arrangements for children and the division of property – decisions likely to have long term ramifications for the individuals concerned – do not assist to bring cool-headed and objective decisions to how litigation is to be conducted. It is for this reason, the court should not easily depart from the general rule regarding costs in family law proceedings.
Every case has its idiosyncratic features, which must be balanced against each other in order to ensure that whatever order for costs is made, it is a just and fair one. The general rule that parties bear their own costs in family law proceedings can be modified only if one or more of the circumstances set out in section 117(2A) is established.[34]
[33] Roverati & Roverati [2021] FedCFamC2F 590.
[34] Roverati & Roverati [2021] FedCFamC2F 590 at [80]-[81] (Brown J).
I do not resile from these comments. I acknowledge the high level of emotion incumbent in the vast majority of family law cases. However, every case must be judged in the context of its individual facts. In this case, the father knew his case was based on a lie. Nonetheless, he continued in his attempts to discredit and humiliate the mother. As such, I am satisfied that he had a cavalier attitude to the costs the mother was incurring. This factor weighs heavily in Ms Barret’s favour.
Failure to comply with previous orders
It is the mother’s case that one feature of the proceedings on which she was compelled to focus on, was her assertion that the father had disregarded earlier orders made by the court directed to ensure that she did not have to engage with the father, or be subject to his coercive and controlling conduct.
Ultimately, I made a finding that Mr Barret had displayed a cavalier disregard for these various orders, and his on-going conduct was a perpetuation of his previous controlling behaviour. Necessarily, the mother was forced to persist with this aspect of the proceedings because of the father’s conduct and the necessity to bring it to the court’s attention. This is a factor which also militates in the mother’s favour.
Party wholly unsuccessful
It is the submission of Mr Bowler that his client cannot be considered wholly unsuccessful in the sense that although he did not achieve the orders he promoted at trial he did achieve an order which envisages him spending some time with the two younger children.
The Full Court in Davida & Davida (Costs),[35] has indicated that it not necessary for the court to analyse success or lack thereof in purely dichotomous terms. It said as follows:
True it is that the relevant paragraph of section 117(2A) refers to a party being ‘wholly unsuccessful’ but I think it fair to say that the practice has been to look at what might have been the relative merits of success or lack of success between the parties, even if necessary doing that under the last matter mentioned in section 117(2A) being any ‘other’ matter.[36]
[35] Davida & Davida (Costs) [2011] FamCAFC 61.
[36] Davida & Davida (Costs) [2011] FamCAFC 61 at [14] (Finn J).
When the court’s decision is analysed, it is apparent that, in comparative terms, the mother set out the vast majority of what she hoped to achieve in the case, whilst the father did not. His case was the mother was a violent and poor parent, who had caused the children to have behavioural problems, which were unrelated to his own conduct. The mother’s case was that the children had acted out in response to seeing their father assault and demean her.
As such, I accept that there was no justifiable basis for the position adopted by Mr Barret and in this sense he must be considered to be wholly unsuccessful. He wished to portray himself as the victim of the mother’s poor conduct and parenting rather than vice versa. The court wholly rejected the father’s portrayal of her.
As such, he was wholly unsuccessful in achieving his objective in the case and, as a consequence put the mother to significant expense in negating his case. It is in this manner, and in my view, in which success is to be gauged.[37] In my view, this is a significant factor which militates in favour of the court making an order for costs in the mother’s favour.
[37] See Garrod & Davenort [2021] FamCA 276 at [37] (Bennett J).
Offers to settle in writing
The import of section 117(2A)(f) is to ensure that, when offers to settle are made, they are seriously considered by the other party concerned. Litigation is expensive, not only in financial terms but also in emotional ones. This case was particularly gruelling for those involved in it. For that reason, litigation is not to be embarked upon lightly. Accordingly, courts such as this one should encourage the parties to litigation to seek a compromise of their proceedings and should discourage a party from cavalierly disregarding any reasonable offers to settle.
Generally speaking, negotiations between the parties and/or their legal advisers, to compromise proceedings under section 79 of the Act are privileged.[38] Section 117(2A)(f) does not specifically delineate how an offer to settle proceedings is to be made, other than it is to be made “in writing”. Section 117C is more specific. It authorises offers to settle in accordance with rules made by the Court and stipulates that such offers are not be disclosed to the court itself, until such time as an application arises under section 117(2) of the Act.
[38] See In the Marriage of Steel (1992) 15 Fam LR 556, 560 (Nicholson, Strauss and Nygh JJ).
Part 4.2 of the Rules stipulates that an offer to settle is made without prejudice, unless the offer states that it is an open offer. Such offers need not be filed with the court. They may also be withdrawn. They remain privileged until an issue of costs arises following the completion of the matter.
Accordingly, sections 117(2A)(f) and section 117C, together with the applicable rules, recognise the procedure known as a “Calderbank” letter or offer. This procedure was described in Cross on Evidence as follows:
This procedure, known as the Calderbank letter or offer, was first used in matrimonial cases, but is now recognised to be of general application. The consequence of marking an offer “without prejudice save as to costs” is that the document and its contents are treated as being without prejudice for the determination of the substantial issues between the parties – they are privileged. But they may be used after these issues are determined, for the purpose of deciding the incidence of costs. Where the payment into court procedure is available, it is prudent that it be used.[39]
[39] J D Heydon, Cross on Evidence (Lexis Nexis, 12th ed, 2020) 1018 [25360].
In Browne v Green, the Full Court said as follows:
We think that while s 117(2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made. The insertion of s 117C into the legislation is a clear indication of the desire of Parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it a proper consideration, is something to which very significant weight indeed ought normally be given. It is clearly a circumstance that would justify the making of an order for costs in favour of the husband.[40]
[40] See Browne v Green (2002) 29 Fam LR 428, 439 [57] (Kay, Coleman and Warnick JJ).
Mr Barret has deposed that he seriously considered the two relevant offers made to him by Ms Barret. I have no way of gauging the truth or otherwise of this assertion. I would hope he did give them significant thought. However, the fact remains that he rejected them. As I observed earlier, hindsight is a valuable commodity, when making any decision, but, by its nature, is not available when most needed.
What Mr Barret did know, at the time he rejected the second offer, was that the mother’s allegations that he was a coercive and controlling person and the relevant children had been exposed to this conduct, remained a potent factor in the case and had not been negated by the contents of Ms D’s second Family Report. He also was aware of the nature of his own behaviour during the parties’ marriage.
In these circumstances, he should have been aware of the fact that his case was based on false premises, and it would have been both prudent and decent for him to have sought a compromise. Nonetheless, he elected to push the case to the brink in the hope that he would be able to brazen out Ms Lewis’s cross-examination of him, which proved to be a misguided decision on his part. It also had the consequence of putting Ms Barret to yet more expense, which she could ill afford.
Again, this is a factor which warrants the making of a costs order in the mother’s favour, particularly in respect of the costs incurred by her in the second tranche of the proceedings from May 2021 onwards.
Other fact or circumstance
The mother, a person of modest means, elected to engage a firm of solicitors, pursuant to a cost agreement, which has resulted in her incurring a significantly greater level of fees than has been incurred by the father.
The mother is entitled to engage whoever she feels is appropriate for her. It is not the role of the court to criticise her choices in this regard. However, in my view, it appropriate for the court, in assessing the overall justice of the case in its assessment of costs to look at the disparity in the fees to which each party is now liable. This particularly applies as to whether it can be considered just to compel the father to pay the mother’s solicitor/client costs.
CONCLUSIONS
At the end of the day, it is the responsibility of the court to balance the various matters set out in section 117(2A) to arrive at a result, which it considers just. In my view, the various factors delineated in that section point in favour of the abrogation of the general rule, in family law proceedings, that parties bear their own costs.
This is a sad and dispiriting case, which exhibits many of the worst features of applying adversarial legal mechanisms to determine what is in the best interests of children. Essentially, two parents, whom I accept both love their children, neither of whom can be considered wealthy, have both committed enormous sums of money, which they do not have, to a case which I suspect has left each of them emotionally shattered.
Yet, given the dichotomy arising between the parties, regarding an essential component germane to how the best interests of a child are to be determined, namely the psychological consequences of exposure to family violence, the dispute between them had to be resolved judicially, and I hope in a methodical and transparent manner. Necessarily, this must be a time consuming and expensive exercise. It was necessary because of the factual disagreement between Mr Barret and Ms Barret, which was promulgated largely by Mr Barret. This is the main rationale for the costs order having to be made. In my view, it is clearly just that such an order be made.
In Garrod & Davenort,[41] a case involving a lengthy trial regarding issues of family violence, Justice Bennett in determining whether a costs order was justified said as follows:
I have taken into consideration the father’s blatant failure to comply with the requirements of Family Law Rules which impose an obligation of full and frank disclosure. Failing to admit the truth of facts and allegations resulted in the mother incurring unnecessary costs. In particular, costs arising from being required to prove to the satisfaction of the court the truth of the allegations which she made.
The father misled the Court. He consistently denied the mother’s allegations of serious domestic violence including coercive controlling behaviour for six years and until the mother’s case was closed. During this time, there were further occasions of family violence against the mother.
The father conducted these proceedings by putting the mother to proof of her allegations in relation to violence by him father to herself and to others. He consistently denied the allegations of violence both on oath and in assessment interviews with the family report writer. It was not until the father went into the witness box that he admitted the mother’s allegations of violence to the mother and Ms O. Even after admitting violence generally, it was a feature of the father’s presentation in the witness box to deny or try to deflect specifics and only admit the specifics of the allegation when he was backed into a corner by cross-examination by Ms Lewis. That was a forensic exercise which took time and extended the trial and increased the mother’s costs. Then his case became, that by virtue of the admission, he should have unrestricted time with B.[42]
I am satisfied that there are circumstances pursuant to (2A) (c) which justify the Court departing from the general rule. Not only was the father unsuccessful in his application to spend time with B, the manner in which the father’s case was conducted vastly increased the legal costs and disbursements incurred by the mother in the conduct of her case.
[41] Garrod & Davenort [2021] FamCA 276.
[42] Garrod & Davenort [2021] FamCA 276 at [16]-[19] (Bennett J).
In my view, these comments are apposite to the current matter. Mr Barret was intent on misleading the court. He denied that he was a controlling and coercive person so far as the mother was concerned in his affidavit material, to the Family Report writer, and in his formal opening to the court. He instructed his counsel to vigorously cross-examine Ms Barret, on this basis, knowing that she was not an emotionally robust person, or was someone who would be adept at presenting herself well whilst placed under forensic pressure.
His case was one of deception and dissimulation, which ultimately disintegrated when the same tactics which he had utilised for Ms Barret were turned on to him and he was compelled to recant. As a consequence of his conduct, Ms Lewis was compelled to forensically demolish his case, which took time and consumed money. In these circumstances, there are circumstances which justify the court in departing from the general rule that each party bear their own costs, and making an orders for costs against the father.
A more difficult aspect of the case, is determining what should be the quantum of those costs. Given the extraordinary extent of the mother’s solicitor/client costs, which beggars belief that they will ever be satisfied from the parties’ own financial resources, given their respective means.
At the end of the trial, I determined that the parties’ two younger children would benefit from having some form of relationship with their father, albeit that it would need to be supported by some form of independent therapy, which was to be organised by the Independent Children’s Lawyer. In large part, I did so because I was satisfied that, notwithstanding his failings, the father loved the children and, from time to time, in the past, all had enjoyed some happy times together. The oldest child has the option of spending time with his father at his own volition.
Accordingly, this was not a case in which the father has been excised from the family indefinitely. There remains a possibility of some healing of the rifts in the family. Both parties have indicated a willingness to embark upon this difficult process. In this context, trite though it may appear, the monies spent on legal fees would have provided a great deal of counselling and indeed, could have provided the children concerned with many educational, leisurely, and sporting opportunities.
In these circumstances, I do not consider that an order for full indemnity costs is warranted notwithstanding my stringent criticisms of the father’s approach to the litigation, which was prolonged because he made allegations which ultimately proved to be baseless.
The court’s discretion in how it elects to calculate an order for costs and the manner in which it elects to calculate such costs is broad. It need not be a strictly arithmetical task based on the strict application of a fixed event scale or a rigid calculation of solicitor/client costs for a particular period or periods. Relevant authority (and indeed the applicable rules of court) recognise what has been characterised as a special costs order.
In Sfakianakis & Sfakianakis,[43] the Full Court said as follows:
[T]he Court is not bound only to make an order on a party and party basis or on an indemnity basis. It may take an intermediate course if that is the order that is just in all of the circumstances. A special costs order may be assessed by reference to a particular period of time or set of events. Alternatively, the Court may fix a sum for costs that exceeds party and party costs but falls short of an indemnity.[44]
[43] Sfakianakis & Sfakianakis (2019) 59 Fam LR 419.
[44] Sfakianakis & Sfakianakis (2019) 59 Fam LR 419 at [40] (Aldridge, Watts and Austin JJ).
The mother has provided an itemised account of her costs incurred on a solicitor/client basis from the start of the proceedings. In addition, this indicates that she incurred solicitor/client costs in an amount of approximately $64,846.10 from the date of her second letter of settlement prior to case resuming in May of 2021. In my view, this latter event should provide the yardstick from which to calculate the appropriate award of costs.
I propose to allow the mother approximately 60% of her costs incurred from the date of her second offer to settle, which equates to a sum of around $40,000.00. This also equates to party/party costs for the same period. This will take the form of a special costs order. I consider this a just outcome, which still leaves the mother with a very significant liability for costs.
At the same time, although he is better off, I have taken into account the fact the father is not a wealthy person and has also incurred a significant level of costs, albeit significantly less than those incurred by the mother.
For these reasons, I will direct that the father pay the mother’s costs fixed in an amount of $40,000.00. I will grant a stay of twenty eight days in respect of payment.
I certify that the preceding one hundred and twenty-five (125) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 4 April 2022
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