Bass & Bass
[2016] FamCA 412
•26 May 2016
FAMILY COURT OF AUSTRALIA
| BASS & BASS AND ANOR | [2016] FamCA 412 |
| FAMILY LAW – COSTS – Application in a Case – Applications for a stay of orders – Where the applications are in aid of an appeal – Where both applications are dismissed – Where costs of the applications are reserved pending the appeal – Where no evidence of the parties’ financial circumstances is adduced – Whether the applications were wholly unsuccessful – Whether an order for indemnity costs should be made – Where there are no exceptional circumstances which would justify an indemnity order – Where costs are ordered on a party and party basis – Where the father is ordered to indemnify the Child Support Trust against the costs and expenses of the case guardian. |
Family Law Act 1975 (Cth) s 117
| Child Support (Assessment) Act 1989 (Cth) |
| Colgate-Palmolive Co and Anor v Cussons Pty Ltd (1993) 118 ALR 248 D & D (Costs) (No. 2) (2010) FLC 93-435 Kohan and Kohan (1993) FLC 92-340 Limousin & Limousin (Costs) [2007] 38 Fam LR 478 |
| APPLICANT: | Mr Bass |
| RESPONDENT: | Ms Bass |
| CASE GUARDIAN: | Ms Shaw |
| FILE NUMBER: | PAC | 5029 | of | 2012 |
| DATE DELIVERED: | 26 May 2016 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge J |
| HEARING DATE: | 3 May 2016 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Mr Tilley of Tilley Family Law & Mediation |
| SOLICITOR FOR THE RESPONDENT: | Mr Burreket of Broun Abrahams Burreket |
| SOLICITOR FOR THE CASE GUARDIAN: | No appearance |
Orders (amended pursuant to rule 17.02 of the Family Law Rules 2004):
The Applicant Father pay the Respondent Mother’s costs of the Application in a Case filed on 18 February 2015, the Application in a Case filed 8 December 2015 and this Application for Costs as agreed or, in default of agreement, as assessed on a party and party basis.
The Applicant Father indemnify the Child Support Trust, the subject of these proceedings, against the costs and expenses of Ms Shaw as Case Guardian for B (the child) and pay to the Respondent Mother, in her capacity as the financial manager of the child, such sums as the trustees of the Child Support Trust have paid to the Case Guardian in relation to the Application in a Case filed on 18 February 2015 and the Application in a Case filed 8 December 2015.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bass & Bass and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: PAC 5029 of 2012
| Mr Bass |
Applicant
And
| Ms Bass |
Respondent
REASONS FOR JUDGMENT
Introduction
On 2 December 2014 I made orders in this matter. The proceedings were complex but, essentially, Mr Bass (“the father”) sought to overturn a Child Support Trust (“CST”) created by consent orders made on 17 July 2008. For a variety of reasons, he contended that the balance of money that he had paid to the trust in accordance with the 2008 orders should be returned to him. I did not make the orders as sought by the father. Rather, on the Application of Ms Bass (“the mother”), I made orders under provisions of the Child Support (Assessment) Act 1989 (Cth) varying the terms of the CST so as to make more funds immediately available to B (“the child”) for whose benefit the trust was created.
In the proceedings the child was represented by a case guardian Ms Shaw. The matter is more fully explained in the judgments given on 11 September 2014 (Bass & Bass and Anor [2014] FamCA 1000) and 2 December 2014 (Bass & Bass and Anor (No. 2) [2014] FamCA 1062).
The father appealed. The appeal was heard on 6 April 2016 and dismissed on 29 April 2016.
In support of that appeal the father brought two applications for a stay of the December 2014 order – an Application in a Case filed on 18 February 2015 and an Application in a Case filed on 8 December 2015.
The mother now seeks an order that the father pay her costs of the two applications and that those costs be assessed on an indemnity basis.
The mother also seeks an order that the father indemnify the CST in respect of the costs and expenses of the case guardian. Pursuant to the orders of 2 December 2014 the case guardian’s costs and expenses are to be paid by the CST. The orders of 2 December 2014 also required the father to indemnify the CST against those costs and expenses so that the funds available to the child under the CST would not be diminished by them.
On the appeal the Full Court took a similar approach and ordered the father to pay the costs of the case guardian incurred in relation to the appeal on an indemnity basis.
The solicitor for the father recognised the inevitable consequence of those orders upon the mother’s application. He properly offered no submissions in opposition to the making of the orders sought as to the case guardian’s costs.
Application in a case 18 February 2015
In this application the father sought a stay of the orders made on 2 December 2014 that provided for his indemnification of the CST against the costs and expenses of the case guardian and a stay in respect of the costs of the order that he pay one half of the costs of the mother.
The application also sought a stay of orders 22.4.3 and 22.4.4 made on 17 July 2008. It is to be recalled that they were the consent orders that created the CST. Order 22.4.3 required the CST to include a term that the trust be wound up on 31 December 2015 unless the parties agreed in writing to extend the date for its winding up. Order 22.4.4 provided that the terms of the CST must contain a term that upon the winding up of the trust the trustee shall hold any residual corpus in the CST for the child absolutely.
On 12 March 2015 I refused the stay sought by the father. Instead I granted, pending determination of the appeal, an injunction restraining the trustees of the CST from making a payment of over $3000 from the trust, or from making payments in excess of total payments of $30 000, other than for their costs and expenses, without giving the applicant 21 days prior notice, in writing, of their intention to do so. I reserved the costs of the application.
Applications for costs are governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). Each party is to bear his or her own costs unless the court is of the opinion that the circumstances justify a different order. In considering whether to make such an order the court is to have regard to the matters set out in s 117(2)A. The parties made submissions as to only three of those matters.
The mother submitted that she was in a worse financial position than the father. Neither party adduced any up to date evidence of their financial position. In my reasons of September 2014, I described the parties as being presently income poor but asset rich. I assume that remains the position. At the time, each party had access to assets worth several million dollars.
The mother submits that she has slightly less assets than the father. More importantly she has the primary care of the child subject of the CST. This child, although now over the age of 18, requires constant care and support. The mother also has the care of another child, also an adult who has a degenerative eye condition. It was also submitted that by reason of these matters and the absence of qualifications, experience or work history for employment and the primary care post separation of the children she has limited capacity to earn an income. The father did not address any submissions to this consideration and it supports, to a degree, the order sought by the mother.
The mother submitted that the proceedings were wholly unsuccessful. I do not completely agree. Whilst no stay was granted a limited form of injunction was imposed.
The court is to take any other relevant matter into consideration. Here I consider that whilst the application in a case was not a part of the appeal, it was in aid of the appeal in that it sought to preserve the father’s position pending the determination of the appeal. To that extent it was a proper application and it sought a level of protection for the father. However, as the appeal was dismissed the application for a stay was entirely unnecessary.
The father submitted that a great deal of the time of the hearing of the stay application was unnecessarily spent on the mother’s submissions that there was no power to grant an injunction. That may be so but that consideration, in my opinion, is a matter more properly addressed to assessment of the costs and not as to whether or not there should be an order at all.
I find the fact that the stay application was in support of the appeal, which was ultimately unsuccessful, carries particular weight.
Taking all these matters into account it is appropriate that there be an order that the father pay the mother’s costs of the application.
Should those costs be paid on an indemnity basis?
Costs on an indemnity basis are awarded only in exceptional cases.
The issue of indemnity costs was considered by the Full Court in Kohan and Kohan (1993) FLC 92-340 at 79,614:
The intent of s117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the Court may make such order as the Court considers just. As we have pointed out, the Court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges. By O. 38 r. 2, the provisions of O. 38 apply to costs ordered to be paid or taxed, and costs payable or to be taxed between solicitor and client. O. 38 r. 7 makes provision for the allowance of additional amounts for complexity, difficulty or novelty and special skill, knowledge or responsibility. Consequently, 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. [...]
Indemnity costs orders are still an exception in this and other jurisdictions. …
(Citations omitted)
This passage was followed by the Full Court in Limousin & Limousin (Costs) [2007] 38 Fam LR 478 and D & D (Costs) (No. 2) (2010) FLC 93-435. See also Colgate-Palmolive Co and Anor v Cussons Pty Ltd (1993) 118 ALR 248.
The mother submitted that the above costs should be paid on an indemnity basis because:
·The application for a stay was entirely without merit
·The funds the subject of the CST remained under the control of the court even if the trust vested
·In the event the appeal succeeded, the fund would not be substantially eroded
·The father could have but did not seek expedition of the appeal
·The application put the respondent to cost she would not otherwise incur.
None of these is an exceptional basis for justifying an order for indemnity costs. Although the application was dismissed, it was not so devoid of merit as to justify an indemnity costs order.
The costs will therefore be assessed on a party and party basis.
I was asked to certify for senior counsel. There is force in the mother’s submission that the stay application was unnecessarily complicated by the agitation of issues of jurisdiction and power. Absent those matters the application was relatively straight forward and I do not propose to certify for senior counsel.
Application filed 8 December 2015
In this application the father sought an order restraining the trustees of the CST from dealing with the funds in the trust until the appeal was heard. The application was made because the child, in whose favour the trust was created, had turned 18. The funds had vested in the child and the trustees were obliged, under its terms, to wind up the trust.
The application came before a judge in a duty list on 22 December 2015 when it was transferred to me. The matter was fixed for hearing in February 2016 but the father filed a Notice of Discontinuance on 4 February 2016.
The mother’s submissions as to costs of this application were similar to those advanced in relation to the earlier application in a case. She also submitted that the conduct of the father in relation to the proceedings was now a relevant issue because although the terms of the orders sought of the two applications were different in effect the father was seeking, as a matter of substance, the same relief in the December application as he had sought in the February application. I am of the opinion that the circumstances that applied in December 2015 were different to those that applied when the first application had been made. The funds the subject of the trust had vested in the child and the trustees were obliged to wind the trust up. The mother had become the case guardian of the child and the trustees proposed to pay the funds to her.
However, once again, the application was in support of the appeal and the same considerations as applied to the earlier application apply to this.
The application was also wholly unsuccessful in that it was discontinued by the father.
The appropriate order therefore is that the father pay the mother’s costs of the application.
Again no circumstance in exceptional nature has been identified that would justify an order for indemnity costs and the costs will be assessed on a party and party basis.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 26 May 2016.
Associate:
Date: 26 May 2016
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