BREECH and ROSALINE

[2018] FCWA 17

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: BREECH and ROSALINE [2018] FCWA 17

CORAM: O'BRIEN J

HEARD: WRITTEN SUBMISSIONS

(FINAL SUBMISSIONS RECEIVED 15 DECEMBER 2017)

DELIVERED : 2 FEBRUARY 2018

FILE NO/S: PTW 1475 of 2000

BETWEEN: MR BREECH

Applicant

AND

MS ROSALINE
Respondent

Catchwords:

COSTS - where substantive proceedings summarily dismissed and found to be vexatious - where indemnity costs are sought - where an order for costs is clearly justified - where the vexatious nature of the dismissed application would ordinarily give rise to a consideration of costs on an indemnity basis - where the Court is not satisfied that the whole of the charges raised in respect of which indemnity costs are sought are reasonable - costs awarded in a fixed sum

Legislation:

Family Law Act 1975 (Cth) s 79, s 102, s117
Child Support (Assessment) Act 1989 (Cth) s 107
Family Law Rules 2004

Category: Reportable

Representation:

Counsel:

Applicant: Self Represented Litigant

Respondent: [Ms A]

Solicitors:

Applicant: Not Applicable

Respondent: [A Lawyers]

Case(s) referred to in judgment(s):

Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160

[Breech & Rosaline] [2017] FCWA 114

Braithwaite v Braithwaite [2007] FamCA 468

Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23

Kohan & Kohan (1993) FLC 92-340

Lenova & Lenova (Costs) [2011] FamCAFC 141

Madin & Palis (Costs) (2016) 55 Fam LR 59

Parke & the Estate of Parke (2016) FLC 93-748

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1The matter for determination is the application of [MS ROSALINE] (“the wife”) for an order that [MR BREECH] (“the husband”) pay her costs of the substantive proceedings on an indemnity basis in the sum of $30,966.

Background

2The proceedings between the parties have a long and chequered history. The parties separated in January 2000, and proceedings in this Court commenced shortly thereafter.

3The most recent proceedings, to which the present application relates, were commenced by a Form 1 application filed by the husband on 7 July, 2016. By that application, as subsequently amended, the husband sought a declaration pursuant to s 107 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) that he is not the father of the adult children of the marriage, an order pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”) setting aside or varying consent orders for alteration of property interests made in May 2000, and an order declaring the wife to be a vexatious litigant.

4In her amended response to that application the wife sought summary dismissal of it. In the alternative she sought dismissal of the application as an abuse of process. In the event that she was unsuccessful in seeking the early dismissal of the application, she sought an order for security for costs. She sought an order that the husband “be declared a vexatious litigant”, and costs on an indemnity basis.

5At the hearing of the application and response the husband consented to the dismissal of that part of his application which sought to declare the wife a vexatious litigant. The remaining matters in issue were argued and were then the subject of written submissions as detailed in my judgment in [Breech and Rosaline] [2017] FCWA 114.

6On 9 October, 2017 I summarily dismissed the husband’s amended Form 1 application. I declined to make a vexatious proceedings order against him, concluding that while he had instituted and conducted vexatious proceedings, they could not properly be described as “frequent” as required by s 102 QB of the Act for such an order to be made. I did, however, make orders designed to ensure that in respect of any future application filed by the husband, the wife would not be required to respond either by the filing of documents or by attendance at hearings unless and until directed to do so by a Judge.

7I made further orders for the wife to file and serve any written submissions in relation to the question of costs on or before 20 November 2017, and requiring the husband to file and serve any written submissions in response by 2 January 2018. The wife was afforded the opportunity to respond to any such submissions, and both parties were given liberty to seek a relisting for the making of oral submissions, such request to be made by no later than the close of Registry on 30 January 2018.

8No such request having been received from either party, I proceed as foreshadowed to determine the costs application in chambers.

The law

9There are two matters for determination; whether there are circumstances that justify an order for costs and if so, what order for costs is just.

10Subsection 117(1) of the Act provides that, subject to s 117(2), each party to the proceedings shall bear his or her own costs.

11Subsection 117(2) provides that if the court is of the opinion that there are circumstances that justify doing so, the Court may, subject to s 117(2A) make such orders as to costs as it considers just. Subsection 117(2A) provides as follows:

12In considering what order (if any) should be made under subsection (2), the Court shall have regard to:

(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 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 facts, 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.

13The discretion conferred by s 117(2) is broad. The factors set out in s 117(2A) are not to be read in a restrictive way and any one of those factors may in appropriate circumstances be the sole basis for an order for costs. That said, the relevant matters in the subsection must be taken into account and balanced in order to determine whether an order for costs is justified.

14An order for costs is compensatory, not punitive: Braithwaite v Braithwaite [2007] FamCA 468.

15Impecuniosity is not of itself a bar to a costs order: Lenova & Lenova (Costs) [2011] FamCAFC 141 at [12].

16If an order for costs is to be made, the principle that such costs should be calculated on a party-party basis should not be “lightly departed from” unless circumstances of an exceptional kind exist: Kohan & Kohan (1993) FLC 92-340.

17The Full Court’s more recent admonition in Madin & Palis (Costs) (2016) 55 Fam LR 59 at [23] bears repeating:

Finally, we take the opportunity to observe that in so far as the appellant sought an order for indemnity costs, applications for such costs should only be made, and such costs will only be ordered, in the most extreme cases. This is particularly so having regard to the fact that the primary rule in this jurisdiction is that each party should pay their own costs. Unfortunately, however, applications for indemnity costs are increasingly being made in this jurisdiction, thereby imposing further burdens on the court’s limited resources and causing further unnecessary expense for litigants.

18The Court may order that a party is entitled to costs of a specific amount, as assessed on a particular basis, or to be calculated in accordance with a stated method: Rule 19.18.

19The purpose in all courts of rules enabling an order for costs in a specific amount, without formal assessment or taxation is to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”: Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 at 162.

20As Murphy J observed in Parke & the Estate of Parke (2016) FLC 93-748 at [130]:

If the Court is to fix a sum it should be “fixed broadly having regard to the information before the Court” … The process does not “by its very nature … envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”...

21The Court must act judicially, but that does not mean that it must exercise the power to award a lump sum in any “scientific or formulaic manner”: Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [10].

Matters required to be considered

22A number of the matters required by the legislation to be considered are not in issue.

23Neither party was in receipt of legal aid. The proceedings were not necessitated by the failure of either party to comply with earlier orders of the Court. Neither party submitted that any relevant written offer had been made.

24The matters requiring consideration, therefore, are:

(a)the financial circumstances of each of the parties to the proceedings;

(b)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 facts, production of documents and similar matters;

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

(d)such other matters as the court considers relevant.

The wife’s submissions

25Written submissions were filed on behalf of wife on 20 November 2017.

26The wife noted that the husband described himself as “unemployed” in his Form 1 application. She described herself as occupied as a “[secretary]”. She asserted that, to the best of her knowledge, the husband is indebted for arrears of child support in a figure approximating $60,000. She provided no further information in relation to the financial circumstances of the parties.

27The wife was highly critical of the conduct of the proceedings by the husband. She pointed to the volume of materials filed, and non-compliance by the husband with various procedural orders. She pointed also to the irregular nature of various of the documents filed by him.

28She submitted that, his application having been summarily dismissed, the husband was wholly unsuccessful in the proceedings.

29She submitted further that the Court should take into account the conduct by the husband of earlier litigation between the parties, and in particular the description of that conduct both by me and by an earlier judicial officer as vexatious.

The husband’s submissions

30The husband lodged a written submission dated 15 December 2017. That submission is reproduced in its entirety below.

“Sorry I can’t see how about 4 appearances have turned into $29,000. All that happened was you Judge O’Brien read the files and your on a fixed wage. Further, thanks to you hiding evidence from me and not allowing me to comment on that evidence this has severely hampered my ability to respond to these matters. But that is what you wanted.

As for my appeal I have a life and I am withdrawing it. But sticking to what I promise. You make your cost order against me. I will be handing out notices in front of the Family Court how you hid information from me deliberately, and obviously liaised with the other party’s lawyer. Further how you played the jump, sit, don’t look at me game. If you go to the media I will do the same as an equal response.

Make the cost orders you like. I will ask it to be taxed by the court. Whatever the said children were going to get as inheritance is going to [Ms D]. But as mentioned to [Ms D], who sent her whinging emails to you, since her computer server can’t even handle attachments. [Ms D] will never see a cent of this order. My house has damage that makes it unsellable. But it has renters in it on 7 year renewable leases. So whoever inherits the house will have to pay rates and fix up the house for at least 14 years plus.

I don’t live there anymore. So you do what you think is so important and I will let everyone know about you O’Brien.”

The first issue – whether there are circumstances which justify an order for costs

31There is insufficient information to permit a conclusion that the financial circumstances of the parties would, of themselves, justify an order for costs. While it appears that the wife’s financial circumstances are modest, and she has certainly incurred significant legal costs, no detail of her circumstances is provided. While in his submissions the husband acknowledges owning a house which is tenanted, there is no information before the Court to enable even a cursory estimation of his assets, liabilities, income or expenses.

32The husband’s conduct of the proceedings was, as observed by the wife, irregular. As summarised in my judgment in the substantive proceedings, he filed voluminous documents with varying degrees of relevance to matters in issue in the proceedings. There is no doubt that the wife’s legal costs were increased by the manner in which the husband conducted the proceedings.

33The proceedings commenced by the husband were summarily dismissed. Self-evidently, he was entirely unsuccessful in those proceedings.

34In addition, I found that his institution and conduct of those proceedings was both vexatious and an abuse of process.

35Those circumstances of themselves justify an order for costs. It is unnecessary, those findings having been made, to have regard to the conduct by the husband of earlier proceedings, as submitted by the wife.

The second issue – what order for costs is just

36While the circumstances of this case might normally be expected to justify consideration of an order for indemnity costs, I do not propose to make such an order.

37I reach that conclusion based on my review of the schedule of claimed costs annexed to the wife’s submissions. A number of the items claimed are not, in my view, appropriately the subject of a costs order.

38By way of example only:

(a)charges are raised in relation to work undertaken by the wife’s solicitors in responding to a complaint made by the husband to the Legal Practitioners Complaints Committee (“LPCC”). I do not regard those charges as appropriate as between the wife and her solicitors, let alone as a component of a costs order against the husband;

(b)charges reflecting a total of some six hours spent in “perusing and research of historical files and perusal of latest filed documents” and “preparation for Court and checking archives” are raised, with two separate further charges for 2 ½ hours on one occasion, and one hour on another, spent attending at Court to view the court file. While I have no doubt that considerable time had to be spent by the wife’s solicitors in compiling an appropriate chronology, in the context of both the claim that the husband’s application was an abuse of process, and the pursuit of a vexatious litigation order, I have some concern about the length of time spent, particularly in circumstances where the same solicitors have been involved in the proceedings throughout; and

(c)significant charges, totalling some $4,488 were raised for “research” as to the issues of vexatious litigation orders and applications to set aside orders for alteration of property interests. Lawyers are presumed to know the law, and charges may appropriately be raised for legal research only in certain limited circumstances, generally involving points of law with which a reasonably competent practitioner could not be expected to be familiar.

39In making those brief observations I acknowledge that I have not in any sense conducted a detailed assessment of the reasonableness or otherwise of the costs charged to the wife by her solicitors, nor is it my present function to do so. My observations are limited to the consideration of whether circumstances exist which make an order for indemnity costs against the husband appropriate; that necessarily would require a high degree of satisfaction that the totality of the indemnity costs claimed were reasonably incurred.

40I conclude that, notwithstanding the vexatious nature of the husband’s application, an order for indemnity costs would be inappropriate.

Quantum of costs

41As observed earlier, it is open to the Court, and often very desirable, for costs to be awarded in a fixed sum rather than subject to taxation or assessment.

42Notwithstanding the submission on the part of the husband that he would intend to “tax” any costs order made, bearing in mind the long and turgid history of the litigation between these two parties, the stress that litigation has no doubt caused both of them, the expense they have each incurred, and the disproportionate amount of Court resources already consumed to the detriment of other litigants, I conclude that this is clearly a matter in which costs should be awarded in a fixed sum.

43Doing the best that I can on the materials presented to me, I conclude that an order for costs in the sum of $10,000 is justified and appropriate.

Other matters

44In her submissions (though not in her application) the wife seeks an order that:

“Any such order that this Honourable Court may make in response to the submissions to be secured by caveat against the property registered in the sole name of the applicant [Breech].”

45No submissions are made in support of that request. I do not propose to make the order sought.

46The order for costs proposed to be made will stand as a judgment of this Court. The wife may, if so advised, take such steps as to enforcement or security as she considers appropriate.

Orders

(1)The husband pay the wife’s costs fixed in the sum of $10,000.

(2)All outstanding applications and responses, including as to costs, otherwise be and are hereby dismissed.

I certify that the preceding [46] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate