Bell and Bell (No.2) - [2017] FCCA 2138

FEDERAL CIRCUIT COURT OF AUSTRALIA

BELL & BELL (No.2)

[2017] FCCA 2138

Catchwords:
FAMILY LAW – Costs – whether the father should pay the mother’s costs of parenting proceedings in which the father, as Applicant, continued the proceedings after three family consultants recommended that his son spend no time with him.

Legislation:

Family Law Act 1975 (Cth), ss.117, 70NFB(1), 117AA, 117AC, 118, 117(2A), 117(2), 11F

Kohan & Kohan (1993) FLC 92-340
Hawkins & Roe [2012] FamCAFC 77
Colgate-Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248

Applicant:

MR BELL

First Respondent:

MS BELL

File Number:

MLC 12264 of 2007

Judgment of:

Judge Small

Hearing date:

3 February 2017

Date of Last Submission:

15 March 2017

Delivered at:

Melbourne

Delivered on:

7 September 2017

REPRESENTATION

Counsel for the Applicant:

Self-Represented

Solicitors for the Applicant:

Self-Represented

Counsel for the Respondent:

Ms Mimmo

Solicitors for the Respondent:

Plaza Legal

ORDERS

The Father shall pay the costs of the Mother in these proceedings on a party and party basis as agreed, or failing agreement as taxed, from the date of the letter of offer prepared by the wife’s solicitor, being 15 June 2016, to the date of her filing her costs submissions, being 17 February 2017.
The husband shall pay those costs no later than 7 March 2019.
All extant applications are otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Bell & Bell (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 12264 of 2007

MR BELL

Applicant

And

MS BELL

Respondent

REASONS FOR JUDGMENT

On 3 February 2017 the court gave judgment and made final orders in the substantive parenting proceedings between Mr Bell (“Mr Bell” or “the father”) and Ms Bell (“Ms Bell” or “the mother”) in relation to the care arrangements for their son X born (omitted) 2003 (“X”).
The substantive proceedings were initiated by Mr Bell on 25 August 2014 with the final trial being held over three days from 13 July 2016.
Throughout the proceedings, Mr Bell had sought orders for X to spend time with him, but at the final hearing he sought only orders for X to attend counselling so that he could explore his negative feelings about his father in the hope that he might be able to spend time with him in the future.
The final orders pronounced on 3 February 2017 provided that X would spend time and communicate with Mr Bell only at X’s instigation and in accordance with his wishes. The orders did not force X to attend counselling.
After the final orders had been pronounced 3 February 2017, the solicitor for the mother sought an order for her client’s costs of the proceedings and orders were made for her to file written submissions on that question by 17 February 2017 with the father to file written submissions in response by 17 March 2017.
Both parties complied with those orders.

The law

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] FCCA 2138
Decision Date: 7 September 2017

CaseChat Overview and Summary

In *Bell and Bell (No.2)*, the court was asked to determine the appropriate basis for awarding costs between the parties. The proceedings involved a dispute between a Father and a Mother, and the specific issue before the court concerned the costs incurred by the Mother from a particular date.

The central legal question before Judge Small was whether the costs should be awarded on a party and party basis or on an indemnity basis. This required the court to consider the established principles governing cost orders in adversarial litigation and the circumstances under which a departure from the ordinary rule of party and party costs might be warranted.

The court applied the principles outlined in *Colgate-Palmolive Co and Another v Cussons Pty Ltd*, which confirm the ordinary rule that costs are awarded on a party and party basis, meaning the successful party may not recover all their expenses. Departures from this rule, such as awarding costs on an indemnity basis, require special or unusual features in the case. While the categories for such departures are not closed, they typically involve misconduct such as making false allegations, commencing proceedings for an ulterior motive, or unduly prolonging litigation. The court's discretion to award costs is broad but must be exercised having regard to applicable principles and the specific circumstances of the case.

The court ordered that the Father pay the Mother's costs on a party and party basis from 15 June 2016 to 17 February 2017, with payment due by 7 March 2019. All other outstanding applications were dismissed.

Orders

Orders of the court

The Father shall pay the costs of the Mother in these proceedings on a party and party basis as agreed, or failing agreement as taxed, from the date of the letter of offer prepared by the wife’s solicitor, being 15 June 2016, to the date of her filing her costs submissions, being 17 February 2017.

The husband shall pay those costs no later than 7 March 2019.

All extant applications are otherwise dismissed.

Background

Background to the litigation

In Colgate-Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248, Sheppard J sets out in some detail the history of the law in relation to applications for costs. He then says:It seems to me that the following principles or guidelines can be distilled out of the authorities to which I have referred:1. The problem arises in adversary litigation, ie litigation as between parties at arm’s length. Different considerations apply where parties may be found to be entitled to the payment of their costs out of a fund or assets being administered by or under the control of a trustee, liquidator, receiver or person in a like position, eg a government agency or statutory authority.2. The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis. In this court the provisions of O 62, rr 12 and 19, and the Second Schedule to the rules will apply to the taxation. In many cases the result will be that the amount recovered by the successful party under the Order will fall short of (in many cases well short of) a complete indemnity.3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it. No doubt any consideration of whether there should be any change in the practice would require the resolution of the competing considerations mentioned by Devlin LJ in Berry v British Transport Commission[3] and Handley JA in Cachia v Hanes[4] on the one hand and by Rogers J in Qantas[5] on the other. The relevant passages from the respective judgments have been earlier referred to.4. In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v Barnes[6] (39 Ch D at 141) said the court had a general and discretionary power to award costs as between solicitor and client ′′as and when the justice of the case might so require”. Woodward J in Fountain Selected Meats[7] appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston ([1982] 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo[8]:′′the categories in which the discretion may be exercised are not closed”. Davies J expressed (at 6) similar views in Ragata[9].5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131at 152 evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp);the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721at 724(Court of Appeal); Crisp v Kent (SC(NSW)(CA), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records[10]). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.[11]6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice.[3] Berry v British Transport Corporation [1962] 1 QB 306.[4] Cachia v Hanes (1991) 23 NSWLR 304. [5] Qantas Airways Ltd v Dillingham Corporation (SCNSW 14 May 1987, unreported). [6] Andrews v Barnes (1887) 39 Ch D 133. [7] Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397. [8] Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (1991) FCA 225. [9] Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) FCA 115. [10] EMI Records Ltd v Ian Cameron Wallace Limited [1983] Ch 59.[11] Emphasis added.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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