Beckwith & Dass (No 2)
[2024] FedCFamC1F 177
•21 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Beckwith & Dass (No 2) [2024] FedCFamC1F 177
File number(s): PAC 5205 of 2018 Judgment of: BERMAN J Date of judgment: 21 March 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Costs – Where husband seeks orders for costs incurred throughout the entirety of proceedings – Circumstances justifying order – Consideration of whether the order would place the mother in considerable financial hardship – Consideration of s 117 of the Family Law Act 1975 (Cth) – Order for cost made. Legislation: Family Law Act 1975 (Cth) ss 117 Cases cited: Beckwith & Dass [2023] FedCFamC1F 834
Kohan & Kohan (1993) FLC 92-340
Prantage & Prantage (2013) FLC 93-544
Re Wilcox; Ex parte Venture Industries Pty Ltd and Ors (No 2) (1996) 72 FCR 151
Division: Division 1 First Instance Number of paragraphs: 70 Date of hearing: 23 February 2024 Place: Adelaide via MS Teams Counsel for the Applicant: Ms Watson Solicitor for the Applicant: Watson Law Pty Ltd Counsel for the Respondent: Ms Meares Solicitor for the Respondent: Derham Houston Lawyers ORDERS
PAC 5205 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR BECKWITH
Applicant
AND: MS DASS
Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
21 MARCH 2024
THE COURT ORDERS THAT:
1.The respondent pay the applicant’s costs fixed in the sum of TWENTY THOUSAND DOLLARS ($20,000) to be paid contemporaneously with the payment by the applicant of the settlement sum of $121,030 as provided for in paragraph 13 of the orders made 5 October 2023.
2.The Applications in a Proceeding filed 2 November 2023 and 22 December 2023 are dismissed.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
INTRODUCTION
By Application in a Proceeding sealed 3 November 2023, Mr Beckwith (“the applicant”) seeks an order that Ms Dass (“the respondent”) pay the applicant’s costs of the proceedings to be assessed on an indemnity basis or in the alternative on a party/party basis.
Following a final hearing on 18 to 21 April 2023 and 5 to 6 July 2023, parenting orders were made in respect of X born in 2010 (“X”) and Y born in 2012 (“Y”) (collectively “the children”).
The proceedings also resulted in final orders for property settlement.
In support of the costs application, the applicant filed a costs notice pursuant to r 12.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. The actual costs incurred by the applicant up to the hearing on 22 February 2024 is $260,192.75 with the estimate of further costs to the conclusion of the costs application (and an Application for Stay of orders pending appeal which was subsequently abandoned) was a further $11,890.
By comparison, the respondent was in receipt of a grant of Legal Aid from October 2021 to the conclusion of the final hearing. Her financial circumstances are such that she has a judgment debt against her in the sum of $19,740 with a former law firm, U Lawyers, she owes T Lawyers legal fees in the sum of $16,500 and a disbursement cost to Dr V of $5,000 for the preparation of his medico legal report.
Since the conclusion of the final hearing and the first return date on the Application in a Proceeding, the respondent has no longer been in receipt of a grant of Legal Aid and she has incurred costs of $7,800 with an estimate of a further $2,500 to the conclusion disposal of the costs application.
APPLICATION FOR COSTS
In considering what orders, if any, should be made in respect of the applicant’s costs, s 117(2A) of the Family Law Act 1975 (Cth) (“the Act”) sets out that the Court shall have regard to the following:
(a) the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance for that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the forgoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of fact, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the Court considers relevant.
Accordingly, whilst the primary consideration under s 117 of the Act is that each party should pay their own costs, the applicant argues that there are circumstances which justifies a costs order in respect of matters relevant to the application of s 117(2A)(a) to (f) inclusive.
If an order for costs is made in favour of the applicant, it is argued that it should be assessed and paid on an indemnity basis.
Legal principles
The discussion of the Full Court in Prantage & Prantage (2013) FLC 93-544 (“Prantage”), is of assistance in determining whether, and in what circumstances, an order for indemnity costs should be made.
The Full Court referred to the decision of Kohan & Kohan (1993) FLC 92-340 in which it was noted that, whilst there was nothing in the Act which in any way “inhibits” a consideration of indemnity costs, the following is said at 79,605:-
…it is fundamental to the exercise of that discretion in the Family Court that the Judge should not only understand that such an order is a very great departure from the normal standard, but also that the Judge should know what the terms of the agreement are, to what extent it exceeds the parameters set by the scale, and what its likely impact will be on the financial position of each of the parties.
This impact was a relevant matter to which the trial Judge should have had regard, when considering the financial circumstances of each of the parties to the proceedings under sec 117(2A)(a), or perhaps even more as a relevant matter under (g). The degree to which a costs agreement departs from the established norm and the actual financial significance of such a departure may itself be a reason for not ordering costs on an indemnity basis.
In Re Wilcox; Ex parte Venture Industries Pty Ltd and Ors (No 2) (1996) 72 FCR 151, Cooper and Merkel JJ said:-
156.The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.
The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd. (1993) 46 FCR 225.
In Prantage (supra) the Full Court said at 87,209:-
97. In our view, once it is recognised that ensuring access to justice is one of the key objectives of the “usual rule”, the claimed increasing disparity between scale costs and those being charged by lawyers becomes as much an argument against the awarding of indemnity costs as it is in favour of costs being ordered on that basis.
98. With respect to the trial Judge, we are not convinced that there is a great deal of difference between current “commercial realities” and those prevailing at the time Kohan was decided. It should be noted that the costs agreement in Kohan provided for a rate of payment three times in excess of the scale. However, even if there have been changes in the market place for legal services, we are not persuaded this should have any impact on the application of the “usual rule”, which seeks to balance competing public policy considerations.
(Emphasis per original)
THE APPLICATION
On 23 October 2018 the applicant engaged his current solicitors, Watson Law, to represent him in respect of proceedings involving parenting and property settlement. The applicant entered into a costs agreement, the terms of which form annexure “A” to the applicant’s affidavit filed 2 November 2023 in support of his application.
Whilst I do not propose to give detailed consideration to the terms of the cost agreement, it is a reasonable observation that the professional fees in terms of the hourly rate to be charged are fair and whilst higher than scale costs, not significantly so.
The unfortunate financial impact on the applicant is not only to be observed having regard to the extent of the applicant’s fees but also exemplified by part of the fees paid being derived from the applicant’s parents who entered into an equity release agreement in respect of their own property. The applicant borrowed $120,000 from his parents and sourced the balance of fees from his wages and salary. A particular focus of the applicant is his contention that the respondent made false allegations to the police which resulted in him being charged with seven domestic violence offences all subsequently withdrawn by the police when the respondent did not attend court. The applicant incurred $43,117.52 in relation to his legal costs to defend the charges.
Financial circumstances of the parties
As discussed, the applicant has paid legal costs in the amount of $239,821 in respect of the family law proceedings and a further $43,117.52 in respect of the criminal proceedings.
As part of the proceedings each of the parties were required to file a statement of financial circumstances.
The applicant’s position is that arising both from the debt to his parents for money provided by them in the part payment of his legal fees and the order made 5 October 2023 that requires the payment of a settlement sum of $121,030, the applicant has decided to sell the property at C Street, Suburb D, NSW (“the Suburb D property”).
The applicant anticipates the Suburb D property will sell for about $850,000 and after the payment of the mortgage of $480,000 the net sale proceeds will be $248,000.
The applicant’s father has recently died and agreement has been reached with his mother that she will sell her home with the intention that the applicant and his mother will combine their residual resources and purchase a home suitable for their needs but in particular, to cater for the special needs of the children. Even then, the applicant anticipates that a mortgage will be required given that he anticipates the combined net proceeds will be no more than $800,000.
Other than the applicant’s interest in the Suburb D property, his other financial resources are minimal.
The respondent is also in a precarious financial position. The respondent does not hold an interest in any real estate, has minimal savings and as considered, has an outstanding judgment debt and recently incurred legal fees arising out of the proceedings.
The respondent also has a HECS debt of about $14,000, an outstanding tax debt of $2,800, a Centrelink debt of $5,000, unpaid road tolls of $5,000, and credit card liabilities of $15,850 and outstanding legal fees of $7,800.
The respondent is in part-time employment and receives approximately $1,100 per week. Her rent is $580 per week, her car loan is $113 per week and in addition she has been assessed to pay child support in the sum of $210 per week.
The financial implication of the parenting orders made on 5 October 2023 requires each of the parties to share the costs of fortnightly visits. I accept that there is a financial consequence in the ancillary costs associated with the respondent’s travel required to spend time with the children.
For different reasons, the financial circumstances of each of the parties are parlous.
Conduct of the parties
Each of the parties presses an adverse view as to the conduct of the other party that should be considered as exacerbating the costs of the proceedings.
The applicant refers to orders made on 15 November 2018 which enabled the respondent to spend supervised time with the children. On 20 January 2019 the applicant asserts that further costs were incurred consequent upon the mother’s behaviour resulting in the supervisor refusing to remain further involved.
The respondent denies the allegation and alleges that the supervisor was drunk and that her conduct was such that she was no longer considered as a suitable supervisor.
The respondent argues that the applicant did not comply with orders made on 7 June 2019 concerning the sale of a vehicle returned to him.
Further, the respondent considers that the applicant did not provide discovery of bank statements in respect of the period 9 July 2019 to 7 August 2019 which would have established when the applicant received money from the sale proceeds of the motor vehicle.
The applicant refers to the respondent’s failure to comply with five sets of trial directions resulting in two final hearings having to be vacated due to the respondent’s non-compliance with court orders.
The respondent denies the assertion and states that the first hearing date set for 16 August 2021 was vacated due to the respondent’s hospital admission for valid mental health reasons.
Other aspects of non-compliance by the respondent are explained by a contention that she received inadequate legal representation.
Whilst the respondent admits that a hearing did not proceed on 4 October 2022, she denies that it was caused by her deliberate conduct or non-compliance with court orders.
It is a feature of the respondent’s presentation that she has had a checkered history of legal representation.
The consequence for the parties is that the proceedings extended over a period of five years.
Whether any party to the proceedings has been wholly unsuccessful
The applicant concedes that the respondent was not wholly unsuccessful in respect of the property proceedings but that the proportion of costs likely to have been incurred dealing with property would only represent a small proportion total costs incurred given that parenting was the main focus of the proceedings.
No attempt has been made by the applicant to separate costs incurred in respect of parenting issues as opposed to the property settlement component. Whilst I suspect that the task would be a complex endeavour, in the absence of appropriate evidence, it is not possible to satisfy the elements required for the exercise of discretion.
I consider that the proceedings should be considered holistically rather than adopt an artificial exercise of attempting to separate costs incurred for the matrimonial component as opposed to the property component.
Other relevant considerations
The applicant argues that the orders sought by the respondent bordered on vexatious. The applicant sought orders for sole parental responsibility, that the children live with him and spend supervised time with the respondent subject to regular urine drug screening tests resulting in a negative test result for the use of drugs or non-prescribed medication.
The respondent sought orders for sole parental responsibility, that the children live with her and spend supervised time with the applicant on the first Saturday of each school holiday period from 10.00 am to 12.00 pm.
From the outset, the Independent Children’s Lawyer (“ICL”) broadly supported the orders sought by the applicant but that after a period of supervised time, the respondent would transition to unsupervised time.
The respondent’s contention in the proceedings was that the applicant was an unstable person and posed an unacceptable risk of harm to the children. Moreover, the respondent argued that the applicant embarked upon a deliberate course of action to dissuade the children from spending time with her.
The difficulty created by the respondent’s position at trial is summarised in the following extract of Beckwith & Dass [2023] FedCFamC1F 834 (“the judgment”) delivered on 5 October 2023:
17.A significant difficulty in this case is that the mother has an overarching and genuine fear of the father, and she concedes that she cannot countenance the Court making any orders that would provide the father with knowledge of her location. She considers that if the children live with her and spend more time with the father than her proposed orders, there is a risk that her location will be disclosed. The mother concedes that if she is not successful in obtaining an order for the children to live with her, then she could not contemplate the children spending significant time with her out of fear that it would jeopardise her safety.
18.I am therefore being asked to make orders that, irrespective of whether I find there is, or is not, an unacceptable risk of harm to the children in a party’s care, the children should live with either the father or the mother and spend limited time with the other party such that they would effectively be unable to have a meaningful relationship with that parent.
19.A further difficulty is that the mother has proposed orders that seek to reverse the children’s current primary care arrangements. The mother provides no orders for how the children would transition into her care or what would happen in the event she has a bi-polar episode and is unable to properly care for the children or is required to be hospitalised. The mother considers that she has appropriate friends and family who could assist her should she have another bi-polar episode however, it is the father’s case that the mother associates with unsavoury characters who would pose a risk to the children and further, that the mother does not have the support from the maternal family.
I found that the applicant was an impressive witness and was not challenged in respect of his denial that he had subjected the respondent to serious sexual and/or physical assault. Further, I considered that his evidence as to the needs of the children was compelling. There was no support in the evidence for the respondent’s position that the applicant was not able to provide appropriately for the needs of the children taking into account their significant complex requirements.
The respondent’s case was that she was not able to consider any outcome such that the children would remain in the primary care of the applicant even if orders were made that the children spend substantial time with her.
Whilst the basis for the respondent’s entrenched position was her fear of the applicant, the evidence did not support her position.
Moreover, the respondent was not able to countenance the uncontested evidence of the single expert witness that the children had a positive relationship with the applicant. In addition, the respondent disclosed that she now lived on the central coast of New South Wales but that she was not prepared to either disclose her address or comply with orders that would likely result in the children learning of her whereabouts and then being able to disclose that information to the applicant.
At paragraph 169 of the judgment, the following appears:
The mother alleges that the father perpetrated family violence and coercive and controlling behaviour. I have given careful consideration to the allegations of the mother and do not consider that the mother has presented any evidence that would enable a finding on the balance of probabilities that the father engaged in aggressive or harmful conduct as alleged.
In summary, the evidence did not support a finding that the children were at risk in the applicant’s care.
CONCLUSION
The respondent was steadfast throughout the trial that the applicant had not only perpetrated significant violence towards her but also presented as an unacceptable risk to the children.
The evidence relied upon by the respondent was set out in her trial affidavit filed 20 March 2023 considered by me to be unwieldy, verbose and comprising substantial annexures which were of little assistance.
The respondent sought that her allegations that the applicant had committed significant sexual and physical assault upon her and that he presented as an unacceptable risk to the children should be determined by the application of s 140 of the Evidence Act1995 (Cth) (“the Evidence Act”). Ultimately, I determined that s 69ZN of the Act would be better served by receiving the evidence of each of the parties but exercising my discretion as to weight pursuant to s 69ZT(3) of the Act.
As such, there could be no uncertainty as to the evidential burden needed to be satisfied by the respondent. As is apparent, the paucity of evidence presented by the respondent enabled a finding to be made that the respondent had fallen well short of the mark in attempting to establish that the applicant’s conduct was so egregious both towards her but also the children that they should transition to her primary care with only minimal time to be spent with the applicant.
It could not be said, given the report of the single expert and the clear position adopted by the ICL, that the respondent did not understand the task that confronted her in terms of the paucity of evidence available to support the dramatic orders that she sought.
It also could not be said that the trial strategy adopted by the respondent was open to her on the evidence that was available or could be seen as within the general ambit of the exercise of the Court’s discretion.
A party to litigation must carefully consider whether the evidence that is to be presented has the capacity to provide support for the orders sought. In the present case, the respondent’s case was forlorn of hope but with a further exacerbating aspect that alleged the applicant had committed significant sexual and physical assault upon the respondent and presented as an unacceptable risk to the children.
I consider that an order for costs should be made in favour of the applicant but limited to four days of the hearing.
By reference to the applicant’s Costs Notice dated 17 April 2023, the costs to the conclusion of the final hearing (estimated at 4 days) was between $20,000 and $30,000. That estimate includes counsel and instructing solicitor’s time.
Doing the best that I can, the estimate is approximately $6,250 per day.
By reference to item 205 of Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Family Law Rules”), counsel fees are in the sum of $3,296.54 per day and by reference to item 108, solicitor’s fees are $1,658 for a 6 hour day at $276.33 per hour totalling $4,954 for solicitor and counsel. I propose to round up the amount to $5,000 per day and multiplied by four days I consider that the respondent should pay the applicant’s costs fixed in the sum of $20,000.
STAY OF ORDERS
As part of the application for costs, the applicant sought that the orders for property settlement be stayed pending the resolution of the costs argument.
Ultimately a stay was not deemed necessary in circumstances where the applicant discontinued his appeal and the Suburb D property is now to be sold. The only method by which the respondent could enforce her order is by the sale of the Suburb D property.
I do not propose to do more than to order that the sum of $20,000 be offset as against the order made for the payment of the settlement sum of $121,030.
There is no good reason why the respondent should be denied the benefit of the litigation in the sense that but for the application for costs no basis exists for the order to be stayed.
For the avoidance of doubt, the respondent is entitled to the settlement sum together with whatever default interest should properly apply pursuant to the Family Law Rules less the sum of $20,000.
COSTS OF THE CURRENT APPLICATION
Neither party has been wholly unsuccessful and having regard to the balance of the factors pursuant to s 117(2A) of the Act, I consider that each of the parties should bear their own costs without contribution from the other.
I make orders as appear at the commencement of these reasons.
I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 21 March 2024
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