Benson and Jenkins

[2016] FamCA 903

FAMILY COURT OF AUSTRALIA

BENSON & JENKINS [2016] FamCA 903

FAMILY LAW – COSTS – in relation to an appeal from the Magistrates Court of Victoria – where the appellant father seeks that costs be paid on an indemnity basis – where the Court considers there is merit in the appellant father’s application – where the Court does not consider it would be appropriate to award costs on an indemnity basis – where an order is made for the respondent mother to pay costs over an extended period.

Family Law Act 1975 (Cth) s 96, 117
Family Law Rules 2004 (Cth) pt 22.10, sch 3, r 19.08, 19.18

Prantage & Prantage (2013) FLC 93-544

APPELLANT: Mr Benson

RESPONDENT: Ms Jenkins

FILE NUMBER: MLC 1605 of 2015

DATE DELIVERED: 28 October 2016

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 28 September 2016

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Dillon

SOLICITOR FOR THE APPELLANT: Helen McCance

COUNSEL FOR THE RESPONDENT: Mr Wabnitz

SOLICITOR FOR THE RESPONDENT: Medina Legal

Orders

1. That the respondent mother pay the appellant father’s costs fixed in the sum of TWO THOUSAND THREE HUNDRED AND TWENTY FIVE DOLLARS ($2,325) within nine (9) calendar months from the date of this order.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Benson & Jenkins has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: MLC 1605  of 2015

Mr Benson

Appellant

And

Ms Jenkins

Respondent

REASONS FOR JUDGMENT

INTRODUCTION  

1. On 1 August 2016 orders were made by Magistrate Stuthridge in the Magistrates Court of Victoria sitting at B Town that injuncted Mr Benson (“appellant father”) from removing C (“the child”) from the care of Ms Jenkins (“respondent mother”).

2. In addition, a recovery order made on 28 July 2016 was to remain in force for 12 months, the child’s time with the appellant father pursuant to orders made in the Federal Circuit Court on 21 March 2016 was suspended and the appellant father was ordered to pay the respondent mother her costs and those incurred incidental to the recovery order fixed in the sum of $5,000 within 14 days of her Honour’s order.

3. The appellant father filed an Application in a Case on 11 August 2016 seeking to have the Court review and reconsider the parenting arrangements.  On 24 August 2016, Judge Heffernan reinstated paragraph 1 to 3 inclusive of the orders of Judge McGuire made 21 March 2016 be reinstated and rescinded order 6 of the orders made by Magistrate Stuthridge.

4. The only effective remaining order was order 3 namely, the costs order.

5. Agreement was not able to be reached in respect of the appellant father’s request for the costs order to be discharged and in the absence of agreement a Notice of Appeal was filed on 29 August 2016.

6. The appellant father sought the following orders:-

   (1)That Order 3 of Orders made by Her Honour Magistrate Stuthridge on 1 August 2016 be dismissed.

   (2)That the respondent mother pay the appellant father’s costs incidental to this appeal.

7. The appeal was heard by me on 28 September 2016 and following a concession by counsel for the respondent mother that there was no good reason for the costs order to have been made by Magistrate Stuthridge and that it was appropriate for the order to be discharged, I found favour with the appeal, discharged order 3 of the orders made by Magistrate Stuthridge on 1 August 2016 and required the parties to file and serve written submissions as to the question of the appellant father’s costs.  This judgment deals with the outstanding application for costs.

APPLICATION FOR COSTS

1. The appellant father argues that he was wholly successful in the application pursuant to s 96(4) and (5) of the Family Law Act 1975 (Cth) (“the Act”) and seeks the following costs:-

   (1)Filing fee of $825

   (2)Solicitors fees $900 plus GST

   (3)Counsel fees $600 plus GST (inclusive of the Application for Costs)

2. It is argued that the Court should have regard to pt 22.10 of the Family Law Rules 2004 (“the Rules”) when determining the question of costs arising from an appeal.

3. Whilst the hearing was de novo in nature, I do not consider that pt 22.10 in any way derogates from the Court’s obligation to consider and bring to account the provisions of s 117 when dealing with an application for costs.

4. It is also noted that the appellant father seeks an order for indemnity costs in the circumstances of this case.

5. Pursuant to r 19.08(3) of the rules:-

   A party applying for an order costs on an indemnity basis must inform the court if the party is bound by a costs agreement in relation to those costs and, if so, the terms of the costs agreement.

6. The method of calculation of costs is referred to in r 19.18:-

   (1)The court may order that a party is entitled to costs:

   (a)of a specified amount;

   (b)as assessed on a particular basis (eg lawyer and client, part/party or indemnity);

   (c)to be calculated in accordance with the method stated in the order; or

   (d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.

7. Sub rule 19.18(3) provides that the Court may consider:

   (a)the importance, complexity or difficulty of the issue;

   (b)the reasonable of each party’s behaviour in the case;

   (c)the rate ordinarily payable to lawyers in comparable cases;

   (d)whether a lawyer’s conduct has been improper or unreasonable;

   (e)the time properly spent on the case or in complying with pre-action procedures; and

   (f)expenses property paid or payable.

8. In considering what orders should be made, if any, in respect of the appellant father’s costs s 117(2A) of the Act requires the Court to 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 assistance to that party;

   (c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, 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 the party to the proceedings to comply with the previous orders of the court;

   (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f)whether any 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.

9. Accordingly, I have a wide discretion in respect of matters relating to a potential costs order.

10. I also bring to account the helpful assistance of counsel in terms of their separate written submissions.

11. The appellant father is 28 years of age with a net income of about $702 per week.  It is not controversial that the appellant father does not have a grant of legal aid.

12. The respondent mother is employed on a casual basis and receives gross fortnightly income of $480 which is supplemented by a modest Centrelink pension or benefit.  She has the primary care of two young children and whilst she receives some child support from the appellant father, it is likely to be modest.  The summary of her financial position is that she has no present financial capacity to comply with any order that might be made requiring her to pay for the appellant father’s costs of the appeal.

13. Whilst it is nonetheless significant that the respondent mother would appear to be impecunious, it is not permissible to ignore the impact of the proceedings on the appellant father.  Whilst I suspect that his financial circumstances are superior to that of the respondent mother, it could not be said that either of the parties are well placed to meet the costs of the current litigation.

14. It is also well settled that mere impecuniosity alone will not inevitably be a barrier or a bar to a costs order being made against an unsuccessful respondent to an appeal.

15. The respondent mother argues that I should bring to account the appellant father’s alleged conduct in removing the child from the respondent mother’s care in contravention of the final orders made on 21 March 2016.  It is conceded that the appellant father asserted that the removal was based upon his belief that the child was at risk in the respondent mother’s care because she “is a drug user and drug dealer”.

16. The respondent mother argues that the appellant father’s conduct was reckless and inappropriate.

17. Whilst it can be argued that the conduct of the parties does not necessarily have to be confined to the manner in which the proceedings are conducted, it is my view that where the focus relates to the parties conduct as between themselves and not in relation to proceedings, the Court should exercise caution in bringing to account such considerations where there has not been any concluded finding as to conduct.

18. The respondent mother complains of the appellant father’s removal of the child following the conclusion of the proceedings and the making of final orders.

19. The appellant father argues that his actions were justified.  There has been no determination of the accuracy of that position.

20. The difficulty for the respondent mother is that the submission is misdirected.  The appellant father did not appeal against the totality of the order made by the Magistrate, but only the continued imposition of a substantive costs order.  It was conceded by counsel for the respondent mother that such an order should not have been made on an ex parte basis where the Court received no assistance as to the circumstances of the appellant father.  Submissions were critical to a determination of costs.

21. By letter dated 25 August 2016, the appellant father’s solicitors sought the consent of the respondent mother via her solicitors to discharge the costs order.  If that had occurred the appeal would have been unnecessary.

22. The letter of offer makes it clear that if there is no agreement to the discharge of the costs order then the applicant would have no option but to appeal the Magistrate’s order.

23. It is now not controversial that there was either no response to the letter of offer, or if there was, there was no agreement.

24. The consideration of a letter of offer is a relevant factor pursuant to s 117(2A). The offer is in clear terms and is appropriately targeted to the central issue namely, the discharge of the costs order.

25. In circumstances where the retention of the costs order was clearly untenable, it is difficult to consider any explanation for the respondent mother’s refusal to concede the point.

26. Accordingly, I find that there is merit in the appellant father’s application for costs (notwithstanding the respondent mother’s impecuniosity) and an order should be made for the appellant father’s costs to be paid by the respondent mother.

INDEMNITY COSTS

1. The appellant father seeks that costs be paid on an indemnity basis. 

2. The discussion of the Full Court in Prantage & Prantage (2013) FLC 93-544 is of assistance in determining whether and in what circumstances an order for indemnity costs should be made.

3. In Prantage (supra) the Full Court said at [97] – [98]:-

   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.

   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.

4. I do not consider that it would be appropriate to award costs on an indemnity basis.

CALCULATION OF COSTS

1. The total costs as sought by the appellant father is $2,325 excluding GST.

2. By reference to Schedule 3 of the Rules and taking into account the appropriate cost items for work done by solicitor and counsel, I consider the amount sought by the appellant father to be reasonable.

3. Taking into account the circumstances of the respondent mother, it is reasonable that she be given an extended period in which the costs order is to be paid.  I propose to order that the respondent mother pay the appellant father’s costs fixed in the sum of $2,325 (excluding GST) to be paid within a period of nine calendar months from the date of judgment.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 28 October 2016.

Associate: 

Date:  28 October 2016.