Breen & Callow
[2024] FedCFamC2F 1759
•10 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Breen & Callow [2024] FedCFamC2F 1759
File number(s): NCC 715 of 2022 Judgment of: JUDGE CARTY Date of judgment: 10 December 2024 Catchwords: FAMILY LAW – COSTS APPLICATION – granted – Respondent to pay costs of the applicant on a party and party basis in a fixed sum Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia Act 2021 ss 67, 69
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rr 1.04, 6.01. 6.05
Cases cited: Bant & Clayton (Costs) [2016] FamCAFC 35; (2016) 56 Fam LR 31
Fitzgerald v Fish [2005] FamCA 158
Hawkins & Roe [2012] FamCAFC 77
Medlon & Medlon (No.6) (Indemnity Costs) [2015] FamCAFC 157; (2015) FLC 93-664
Pascoe & Larsen (No 2) [2022] FedCFamC1A 126
Penfold & Penfold [1980] HCA 4; (1980) 144 CLR 311
Rice & Asplund (1979) FLC 90-725
Division: Division 2 Family Law Number of paragraphs: 64 Date of last submission/s: 3 April 2024 Date of hearing: On the papers Solicitor for the Applicant: CDG Law Solicitor for the Respondent: Hoffman & Associates ORDERS
NCC 715 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BREEN
Applicant
AND: MR CALLOW
Respondent
ORDER MADE BY:
JUDGE CARTY
DATE OF ORDER:
10 DECEMBER 2024
THE COURT ORDERS THAT:
1.The respondent will pay the applicant’s costs on a party and party basis fixed in the sum of fifteen thousand and five hundred dollars ($15,500) with payment to be made by no later than 10 April 2025.
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).
Part XIVB 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 subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE CARTY
INTRODUCTION
The applicant mother Ms Breen (“the applicant”) seeks an order that the respondent father Mr Callow (“the respondent”) pay the applicant’s costs as agreed or assessed, after the Court made final parenting orders by consent on 23 February 2024, late on the second day of a two-day parenting trial.
The final parenting orders were broadly consistent with the final parenting orders sought by the applicant at the hearing.[1]
[1] Exhibit M1
The respondent opposes the application for costs and seeks an order that each party bear their own costs in the proceedings.
For the reasons which follow the Court is of the opinion that there are circumstances which justify making an order as to costs in favour of the applicant, and that it is just to make an order that the respondent pays the costs of the applicant in a fixed sum.
BACKGROUND
The applicant and the respondent met in 2017 and commenced living together in 2018, by which time the applicant was pregnant with the only child of the relationship X, who was born in 2018 (“the child”). The parents were not married, and their relationship finally broke down in March 2019.
In late 2020 the respondent re-partnered with Ms B. Ms B’s two children from a previous relationship live with her in the respondent’s household, along with the paternal half-sibling born in 2022.
On 17 March 2022 the applicant filed an Application for Final Orders seeking parenting orders in respect of the child. In late 2022 the respondent was charged with a criminal offence. He did not inform the applicant that he was charged.
On 8 November 2022 final parenting orders were made by consent in the first round of parenting proceedings between the applicant and the respondent. The final orders provided that the parents have equal shared parental responsibility for the child, and that the child live with the applicant and spend time with the respondent four nights each fortnight, from Thursday after school until Monday before school, and during school holidays, and on special occasions. Those orders were largely complied with by both parents until 10 July 2023.
In early 2023 the respondent and Ms B were each charged with criminal offences in company, following an incident in public late at night. The respondent did not inform the applicant about those charges.
In mid-2023 the applicant became aware of the criminal charges. The applicant’s solicitor later informed her that the respondent was sentenced to a community corrections order and fined in respect of his offence. The respondent did not inform the applicant of the charges or the sentence, nor did he inform her that he had resigned from his employment as a public servant and gained employment in a higher paying job in Town C.
In July 2023 the child returned to the applicant after spending time in the respondent’s household and disclosed that Ms B had hit her across the face twice. The applicant photographed the injury, took the child to hospital, and contacted Police to make a report.
The following day, Police attended the home address of the respondent and Ms B and questioned Ms B in relation to the allegation that she had hit the child. The interactions between Police and Ms B were captured on Police Body Worn Video and are in evidence.[2]
[2] Exhibit M6
On 4 August 2023 the applicant filed an Initiating Application in which she sought orders seeking to vary the final orders made on 8 November 2022. The applicant relied on a significant change in circumstances to justify a variation of the final orders, and the non-disclosure of the respondent’s criminal matter in the previous proceedings.
On 9 August 2023 an Order was made by consent and pending further order which suspended the final parenting orders and varied the time that the child spends with the respondent. The Judicial Registrar noted that the respondent submitted that he intended to seek dismissal of the application pursuant to the principles in Rice & Asplund (1979) FLC 90-725. It was further noted that the applicant had raised concerns about the respondent’s non-disclosure in the previous proceedings and the Judicial Registrar encouraged the respondent to address such concerns in his affidavit.
On 18 August 2023 the applicant served a subpoena for production on NSW Police. On 13 September 2023 the material produced by NSW Police was released for inspection by both parties.
On 27 September 2023 the parenting dispute was listed for final hearing on 22 and 23 February 2024, noting that the Rice & Asplund issue was still live.
On 6 February 2024 the respondent provided the applicant with a copy of his work roster, which was the first disclosure of his rostered work hours, and filed an Amended Response, in which he sought final parenting orders including an order that he have sole parental responsibility for the child, and that the child live with him and spend time with the applicant.
On 20 February 2024 the applicant made a “without prejudice” offer which was rejected by the respondent on 21 February 2024.
On 21 February 2024 the respondent filed an Outline of Case Document wherein he maintained the proposal set out in his Amended Response filed on 6 February 2024, including the order that he have sole parental responsibility for the child, and that the child live with him and spend time with the applicant. The respondent alleged that the applicant had alienated the child against him, and that she had raised allegations of abuse to prevent the child from spending time with him because he had gained a higher paying job, and he implied that the mother’s motive was “weaponizing more child support”.
On 22 January 2024, at the outset of the first day of the final hearing, a consent position was reached in relation to final orders for the child, including the spend time arrangements for the child with the respondent from 6 September 2026 onwards. The scope of issues was narrowed to the spend time arrangements for the child with the respondent from the date of the trial through to 6 September 2026. Relevantly, the applicant sought an order that Ms B be restrained from being the respondent’s nominee at changeover.[3] The respondent continued to seek an order that either he or Ms B could facilitate changeover.[4] Evidence was heard in relation to the outstanding issues.
[3] Exhibit M1
[4] Exhibit F1
On 6 February 2024 Ms B had affirmed an affidavit filed in support of the respondent’s case, which included Ms B’s assertion that no child is regularly disciplined in the respondent’s household, and that there have been occasions where, as a last resort, the children have been smacked. Ms B deposed that the allegation that she punched the child in the face was baseless, simply untrue, and never happened. Ms B gave a detailed account of what she told the Police when they spoke with her in July 2023 about the allegation that she had punched the child in the face.
On 23 February 2024, after the Court had reviewed the footage of the Police interview with Ms B and following cross-examination of Ms B, the parties reached agreement in respect of the final orders, and the Court made final parenting orders by consent in accordance with the agreement. The final parenting orders provide that all prior parenting orders are discharged, that the applicant have sole parental responsibility for the child, and that the child live with the applicant and spend time with the respondent. Relevantly the respondent must ensure that the child is not left alone in the presence of Ms B for longer than 30 minutes, unless supervised by another adult, and Ms B is excluded as a nominee for the respondent at changeover.
The applicant sought an order that the respondent pay her costs. The parties were required to file and serve written submissions in support of any application or response concerning the costs of the Initiating Application, and a timetable was set for filing of the submissions.[5]
[5] Orders made on 23 February 2024
On 22 March 2024 written submissions were filed for the applicant.
On 3 April 2024 written submissions were filed for the respondent.
On 26 April 2024 written submissions in reply were filed for the applicant.
The costs application has been determined on the papers, with no appearances required by or on behalf of either party. I have carefully considered the written submissions filed by each party, along with the Costs Notice filed by the applicant on 22 February 2024 and the Cost Notice filed by the respondent on 27 September 2023.
LEGAL PRINCIPLES
In the exercise of the discretion whether to make an order for costs, the relevant starting position is section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) which provides, relevantly, that:
(1) Subject to subsection (2)…each party to proceedings under this Act shall bear his or her own costs.
Section 117(2) of the Act provides that:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
In a joint judgment of Stephen, Mason, Murphy, Aiken and Wilson JJ in the High Court of Australia in the matter of Penfold and Penfold [6] their Honours observed that:
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the subsection is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case"
Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised…Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
[6] [1980] HCA 4; (1980) 144 CLR 311 at p 315-316
The question is whether there are justifying circumstances to make an order as to costs.
Section 117(2A) of the Act provides that when considering what order, if any, should be made under subsection (2) the court shall have regard to the following matters:
(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.
No one factor in s.117(2A) of the Act prevails over any other factor in that section. The weight to be attributed to the relevant factors is a matter for the Court in the exercise of discretion.[7] There is nothing to prevent any factor in s.117(2) from being the sole foundation for a costs order.[8]
[7] Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157 at [24]; (2015) FLC 93-664.
[8] Fitzgerald v Fish [2005] FamCA 158
In a parenting proceeding the general rule that each party bears their own costs[9] is not often displaced, because it is proper that parents are able to put their case in seeking orders which they believe are in the best interests of their children.[10]
WHAT ORDER IF ANY WILL BE MADE UNDER S.117(2) OF THE ACT
[9] Section 117(1) Family Law Act 1975
[10] Hawkins & Roe [2012] FamCAFC 77 at [14]
Financial circumstances of each party
As this matter relates to a parenting proceeding, no financial disclosure has been made by either party.
The applicant submits[11] that the respondent is assessed to pay child support for the child in the sum of $108.76 per week, based on his 2023 taxable income of $75,060 and the applicant’s taxable income of $58,817. The subject child is the only dependent of the applicant.
[11] Costs Submissions on behalf of Ms Breen (“the mother”) Annexure B
The applicant’s Costs Notice dated 22 February 2024 discloses the following relevant matters:
(a)Her paid costs up to 21 February 2024 amount to $10,869, and were paid from her income or through a personal loan.
(b)Her anticipated further costs up to conclusion of the two-day trial are $24,000 exclusive of GST to be paid by way of an instalment arrangement using the applicant’s income.
At the trial, the respondent deposed that he resigned from his employment as a public servant shortly after he was charged with a criminal offence and gained employment in Town C in a higher paying job.[12] I am satisfied that the respondent has a higher income than the applicant does but he has two children to support, including the child the subject of the proceeding.
[12] Respondent affidavit [30]
The respondent’s partner works as a professional, and she has her own two children to support, as well as her child with the respondent.
The respondent’s Costs Notice dated 27 September 2023 discloses the following relevant matters:
(a)His costs up to 27 September 2023 were $3,000 and were unpaid.
(b)His anticipated further costs up to conclusion of the two-day trial are $20,000, which will be paid by instalments using the respondent’s income.
Overall, I consider that the financial circumstances of the parties are a neutral factor in determining the costs issue.
Legal Aid
Neither party was in receipt of a grant of Legal Aid for the proceedings.
Conduct of the Parties in relation to the proceedings
The applicant submits that the respondent failed to narrow the issues in dispute in the proceedings until the first day of the trial. In particular, he did not concede that there had been a significant change in circumstances which warranted a review of the previous final parenting orders. The applicant argues that because the respondent did not concede the Rice & Asplund issue, the matter did not proceed through ordinary case management pathways and accordingly there was no Family Dispute Resolution Conference which might have allowed the parties to further narrow the issues in dispute. In my view there is force in the applicant’s argument.
Further, the applicant was forced to prepare her case on the basis that:
(a)The respondent was seeking a dismissal of her application based on the principles in Rice & Asplund;
(b)The respondent sought an order that he have sole parental responsibility for the child; and
(c)The respondent sought an order that the child live with him and spend time with the applicant.
The settlement of the proceedings on the second day of the trial occurred after the Court had viewed footage of Ms B speaking with Police, and after Ms B was forced to concede in cross-examination that she had lied to Police. The respondent had the relevant material produced by Police available to him well before the trial commenced.[13]
[13] The material was released for inspection on 13 September 2023.
The applicant further submits that the current proceeding was prolonged due to the respondent’s failure to comply with his duty of disclosure in respect of his criminal offending.
The respondent submits that the circumstances of his offending did not bear upon the prosecution of the applicant’s case at trial. He argues that the offences occurred in relation to a confrontation with an adult person in a public place, that no child was involved and that the actions of the respondent and his de-facto partner do not speak of an inability to care for a child nor do such actions represent a real and impending risk to the child, and that no child safety authority became involved in the matter at any stage.
I reject the respondent’s submission that his offending, and that of Ms B, did not have a bearing on the prosecution of the parenting proceeding. Rule 6.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 casts a positive duty on each party to give full and frank disclosure of all information relevant to the proceeding in a timely manner. That duty of disclosure applies from the start of the proceeding and continues until the proceeding is finalised.[14] In a parenting proceeding, Rule 6.05 provides that documents that may contain information relevant to a parenting proceeding may include criminal records of a party. I consider that the respondent failed in his duty to make full and frank disclosure of his criminal conviction in the current proceeding, and that such failure is conduct in the proceeding which is relevant to the court’s determination of the costs dispute.
[14] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 Rule 6.01(2)
Furthermore, the overarching purpose of Family Law practice and procedure provisions is to facilitate the just resolution of disputes according to law as quickly, inexpensively, and efficiently as possible.[15] The parties are required to conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.[16] In my view, the respondent’s conduct in the parenting proceeding has involved a significant departure from his obligations under the Federal Circuit and Family Court of Australia Act 2021 and the Rules.
[15] S.69 Federal Circuit and Family Court of Australia Act 2021.
[16] Federal Circuit and Family Court of Australia (Family Law) Rules 2021, Rule 1.04(2)
I accept the submission of the applicant that the respondent’s conduct in relation to the proceeding delayed the proper identification of the real issues in dispute, adding to the number and the complexity of the issues and increased the costs of the applicant.
Whether a party has been wholly unsuccessful
The term “wholly unsuccessful” refers to a situation in which proceedings have been unsuccessful rather than necessarily a particular application.[17] The respondent sought an order that the substantive application be dismissed based on the principle in Rice and Asplund. He failed to obtain most of the final parenting orders he sought. Further, the final orders which were made by consent on 23 February 2024 after two days of hearing were stricter than the discrete issues orders proposed by the applicant on Day 1 of the trial.[18] The final parenting orders included an order which restrains the respondent from leaving the child in the presence of Ms B for more than 30 minutes unless supervised by another adult, whereas the applicant was earlier prepared to accede to an order which simply excluded Ms B from facilitating changeover. I find that that the respondent has been wholly unsuccessful.
[17] Bant & Clayton (Costs) [2016] FamCAFC 35; (2016) 56 Fam LR 31.
[18] Exhibit M1
Whether an offer of settlement had been made
An offer of settlement was made by the respondent on 24 January 2024. Importantly, the respondent’s offer did not include a restraint on physical discipline being used against the child, nor any restraint on the child being left in the presence of Ms B.
An offer of settlement was made by the applicant on a without prejudice basis on 20 February 2024 proposing relevantly that:
(a)The applicant have sole parental responsibility for the child;
(b)The child live with the applicant;
(c)The child spend time with the respondent:
(i)Until 6 September 2026 from 9am to 4pm each Sunday on each alternate weekend; and
(ii)From 7 September 2026 on each alternate weekend from after school on Friday until before school on Monday and half school holidays.
(d)There be a restraint on the child being left alone in the physical presence of Ms B unless supervised by the father.[19]
(e)Each party meet their own costs of and incidental to the proceedings.
[19] Annexure A to the Mother’s submissions
The respondent submitted that the offer made by the applicant was not a genuine offer of compromise. I reject that submission. In her Amended Initiating Application filed on 25 January 2024 the applicant sought an order that the respondent pay her costs on an indemnity basis. By offering on 20 February 2024 that each party pay their own costs, the applicant compromised her position in relation to her legal costs.
THE COURT’S CONCLUSION AS TO COSTS
In my opinion, there are circumstances which justify the court making an order that the respondent pay at least a proportion of the applicant’s costs, due to his conduct in the proceeding, and the fact that the applicant was successful in obtaining the orders she sought, and the respondent was wholly unsuccessful.
In particular, had the respondent not insisted that the application be dismissed on the basis of the principles in Rice and Asplund and had he made full and frank disclosure as required then the proceeding may have been referred for a family dispute resolution conference and the parties would have had an opportunity to at least narrow the issues in dispute or to negotiate a final settlement of their dispute and avoid the escalation in legal fees that accompanies preparation for trial and appearances at a two day hearing.
What order for costs is appropriate?
The rules and authorities make plain that the court can fix an amount for costs[20]. To fix costs avoids further costs and delay, consistent with the overarching purpose of family law practice and procedure as set out in s.67 of the Federal Circuit and Family Court of Australia Act 2021.
[20] Pascoe & Larsen (No 2) [2022] FedCFamC1A 126 at [27]– [28]
In determining what costs order to make I am mindful of the financial circumstances of each of the parties, which appear modest. There is no evidence before me to suggest that the applicant owns any significant assets, and she currently owes about $24,000 in legal fees, and she has already paid an additional $10,869 in legal fees to date.
There is no evidence before me to suggest that the respondent owns any significant assets, and he currently owes about $23,000 in respect of his legal fees.
Both parties will have to pay their outstanding legal fees from their income by instalments or borrow the funds to pay. I accept that the apparent inability of a party to pay costs is not a bar to a costs order being made, but I am also mindful of the impact of a costs order on the respondent’s capacity to pay child support, and the difficulties which may be associated with enforcement.
The combined outstanding costs of both parties are currently in the vicinity of $47,000, and the applicant has already parted with more than $10,860 in respect of her paid legal fees. The total combined legal costs of the parties are therefore in the vicinity of $57,869.
As discussed already, I consider that the respondent was wholly unsuccessful in the proceeding, and that by his conduct he has caused the applicant to incur costs of litigation which might otherwise have been avoided. I consider it just that the respondent should reimburse the applicant for the liability she has incurred. To be clear, a costs order does not serve to punish the party against whom the costs order is made but is made to reimburse the successful party.
I consider that in this case it is just to make an order that the respondent pay the applicant’s costs fixed in the sum of fifteen thousand and five hundred dollars ($15,500). This will see the respondent assume the burden of approximately two -thirds of the total combined costs of the parties incurred in the substantive proceeding and the applicant about one-third of those combined costs, which I consider is just.
The respondent may not have the funds readily available to meet the cost order but, as noted previously, impecuniosity is no bar to the making of an order for costs and I will allow sufficient time for him to raise the required sum. I will order that the respondent pay the amount fixed within four months of the making of this order, that is by 10 April 2025.
I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Carty. Associate:
Dated: 10 December 2024
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