Bradshaw & Bradshaw (No 6)
[2024] FedCFamC1F 223
•5 April 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Bradshaw & Bradshaw (No 6) [2024] FedCFamC1F 223
File number: NCC 535 of 2022 Judgment of: SCHONELL J Date of judgment: 5 April 2024 Catchwords: FAMILY LAW – COSTS – PARENTING – Where the father’s Application for Review was dismissed – Where the mother sought indemnity costs against the father – Consideration of factors under s 117(2A) of the Family Law Act 1975 (Cth) – Where the Court is not satisfied there are exceptional circumstances warranting indemnity costs – Order made for the father to pay the mother’s costs in the sum of $6,600. Legislation: Family Law Act 1975 (Cth) ss 67U, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Colgate Palmolive Company & Anor v Cusson Pty Ltd (1993) 118 ALR 248; [1993] FCA 801
Cross & Beaumont (2008) 39 Fam LR 389; [2008] FamCAFC 68
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116
Pascoe & Larsen (No 2) [2022] FedCFamC1A 126
PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123; [2005] FamCA 158
Penfold and Penfold (1980) 144 CLR 311; [1980] HCA 4
Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: Division 1 First Instance Number of paragraphs: 27 Date of last submissions: 29 February 2024 Date of hearing: Determined on the papers Place: Sydney Solicitor for the Applicant: Gillard Family Lawyers Solicitor for the Respondent: Powe & White Family Lawyers ORDERS
NCC 535 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BRADSHAW
Applicant
AND: MR BRADSHAW
Respondent
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
5 APRIL 2024
THE COURT ORDERS THAT:
1.The father pay the mother’s costs of the Application for Review filed 30 January 2024 assessed in the sum of $6,600 within 28 days.
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
SCHONELL J:
On 29 January 2024, a Senior Judicial Registrar made a Recovery Order pursuant to s 67U of the Family Law Act 1975 (Cth) (“the Act”). On 30 January 2024, the father filed an Application for Review of the order made 29 January 2024 which was heard on 20 February 2024. The father’s Application for Review was dismissed. On 20 February 2024, the Court made directions for any costs application to be determined by way of written submissions.
On 27 February 2024, the mother filed written submissions and on 29 February 2024, the father filed written submissions. I have had regard to both of those documents and the other documents referred to in the submissions in the determination of this application. The mother seeks what is described as “full indemnity costs” in the sum of $13,200. In the alternative, she seeks an order that in the event the Court does not make an indemnity costs order, that her costs be fixed in the sum of $6,600.
The father opposes the mother’s application for costs and contends that the mother has not made out a sufficient basis to warrant the exercise of discretion in her favour. He seeks that the application be dismissed or alternatively, be adjourned to a later date.
I do not propose to adjourn it. There is no proper basis to do so.
An application for costs is governed by the provisions of s 117 of the Act, which provides a general rule that each party to the proceedings should bear their own costs.
Section 117(2) of the Act reposes in the Court a discretion to make a costs order if the Court determines there are circumstances that justify this and, if there are such circumstances, the Court may make such order as it considers just, having regard to the matters set out in s 117(2A) of the Act.
In Penfold and Penfold (1980) 144 CLR 311 at 315, the plurality in the High Court determined that to make an order under s 117(2) of the Act, the Court needs to make a finding of “justifying circumstances” as a preliminary prerequisite to the making of an order. Their Honours also observed that a term such as “a clear case” is not necessarily a determiner of whether an order for costs should be made. All that is required, or necessary, is that there are justifying circumstances.
It is well-settled law that no one factor in s 117(2A) is determinative, and the Court may give such weight as it considers relevant to any factor. In PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123 at 130, the Full Court observed:
41. … Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
The written submissions addressed what each of the parties regarded to be the relevant sub‑sections under s 117(2A) of the Act.
(a) The financial circumstances of each party to the proceedings
The mother refers to a Financial Statement filed 6 July 2023 and submits that the father has sole control of all financial assets as set out in his Financial Statement filed 25 May 2023. The father points to having paid the mother the sum of $200,000 in mid to late 2023 to permit her to fund the litigation. I am not entirely sure what the relevance of that assertion is to this application. The mother also seeks to rely upon her litigation funding agreement.
(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
The mother relies upon what she refers to as the father’s conduct in not returning the child. I am satisfied that the application that was before the Senior Judicial Registrar arose entirely as a consequence of the father failing to comply with his obligations to ensure that the child is returned to the mother. The orders of the Court are clear that the child is to be with the mother. As made evident in my judgment of 20 February 2024, the father has not complied with his obligations in ensuring the return of the child to the mother.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The mother contends that the father was wholly unsuccessful in the orders he sought. The father, in his written submissions filed 29 February 2024, submits that he was partially successful and partially unsuccessful, whilst the mother was also partially successful but partially unsuccessful (paragraph 5).
Both parties’ submissions fail to engage with the language of the sub-section. The sub-section deals with a party being wholly unsuccessful in the proceedings rather than in a particular application.
(g) Any other matter the Court considers relevant
The mother contends that the Court should make an order for costs on an indemnity basis.
The authorities make plain that an order for indemnity costs is not one that is lightly made, and there should be circumstances of an exceptional kind that warrant orders for costs on an indemnity basis. In Kohan & Kohan (1993) FLC 92-340, their Honours in the Full Court observed 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. See Degmam v. Wright (No.2) “(supra); Wentworth v. Rogers (No. 5) (1986) 6 NSWLR 534; Hobartville Stud v. Union Insurance Co. (1991) 25 NSWLR at 368 to 370.
Indemnity costs orders are still an exception in this and other jurisdictions. …
Justice Sheppard in Colgate Palmolive Company & Anor v Cusson Pty Ltd (1993) 118 ALR 248 observed at 256–257:
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 and Handley JA in Cachia v Hanes on the one hand and by Rogers J in Qantas 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 (39 Ch D at 141) said the court had a general and discretionary power to award costs as between solicitor and client 88as and when the justice of the case might so require’’. Woodward J in Fountain Selected Meats 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: the categories in which the discretion may be exercised are not closed’’. Davies J expressed (at 6) similar views in Ragata.
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 the 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 131 at 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 721 at 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). 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.
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.
The category of cases in which a Court may make an indemnity costs order are not closed and are not limited to those identified by Sheppard J.
In Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029 at 87,471 the Full Court said:
… It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought. All that is required is that the Court asked to exercise the discretion be satisfied that some “particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party and party basis”: per Shepherd J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233.
In light of the authorities, I am not satisfied that there are exceptional circumstances that warrant an order for costs on an indemnity basis.
I am, however, satisfied that an order should be made for the father to pay the mother’s costs. The application heard by the Court on 20 February 2024 arose entirely as a consequence of the father’s Application for Review. The father was unsuccessful in that review application. The mother was put to some significant cost in the proceedings. Litigation in this Court is expensive (evidenced by the claim by the mother for indemnity costs). Where a party brings an application before the Court and the Court does not make orders in accordance with their application, then notwithstanding the provisions of the Act that provides that each party pays their own costs subject to the matters under s 117(2A), they remain at risk of a costs order. The mere fact that the father was entitled to file an Application for Review does not render him immune from a costs order.
I am satisfied that the dismissal of the father’s Application for Review is a justifying circumstance in which to make a costs order.
The mother seeks costs in the sum of $6,600. The father’s submissions do not directly engage with the mother’s alternative order. The issue then becomes whether, in the exercise of my discretion, it is just to make an order for costs in a fixed amount or leave the parties to an assessment process.
The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) and authorities make plain that I can fix an amount for costs. As McClelland DCJ observed in Pascoe & Larsen (No 2) [2022] FedCFamC1A 126:
27.Rule 12.17 of the Rules sets out the methods of calculating costs. These include the Court fixing a specific amount for costs (r 12.17(1)(a)) or an order for the costs to be assessed on a particular basis (r 12.17(1)(b)).
28.In Stoian v Fiening (Costs) [2014] FamCA 944 at [91], Kent J endorsed the principles for applying a rule equivalent to r 12.17 when referring to r 19.18 of the now repealed Family Law Rules 2004 (Cth) as adumbrated by Einstein J in Idoport Pty Limited v National Australia Bank Limited & Ors [2007] NSWSC 23 at [9]. Those principles include:
i.the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation;…
ii.the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable;…
iii.the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available;…
iv.a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place;…
iv.the gross sum “can only be fixed broadly having regard to the information before the Court”;…
(Citations omitted)
29.Consistent with those principles, it has been determined that where a Court orders a party to pay costs, it may be appropriate for the Court to fix a lump sum. By doing so, the Court can avoid further delay and inconvenience being occasioned by the requirement to tax a bill: Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432 at [51].
Having regard to the costs sought and the authorities to which I have referred to earlier, I am satisfied that it is appropriate to fix costs in a lump sum. Doing so avoids further delay, inconvenience, and further costs to the parties. I accept that it involves a broad assessment on the basis of the information before the Court.
Doing the best, I can, I determine that an appropriate sum is $6,600 for the mother’s costs.
The only evidence as to the father’s financial affairs is his Financial Statement filed 25 May 2023 referred to in the mother’s written submissions. He has elected not to put on more up‑to‑date evidence and cannot therefore, be heard to complain if the Court proceeds on the best evidence available. In any event, I note that financial impecuniosity to pay a costs order is not a barrier to the making of such an order where there are circumstances that justify the Court in doing so: Cross & Beaumont (2008) 39 Fam LR 389 at [60].
Therefore, having regard to the father’s Financial Statement filed 25 May 2023, I am satisfied that the father has the capacity to pay the mother’s costs within 28 days.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 5 April 2024
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