Cluny and Skinner
[2019] FamCA 465
•16 July 2019
FAMILY COURT OF AUSTRALIA
| CLUNY & SKINNER | [2019] FamCA 465 |
| FAMILY LAW – COSTS – Where the mother seeks that the father pay her costs for continuing to seek a variation of orders even after he filed a Notice of Discontinuance – S 117(2A) considerations – Where the court is not persuaded that the general rule in relation to costs is displaced – Where indemnity costs is not appropriate in this case – Where the mother did not put forward an alternative proposal for the applicable period of costs – Application dismissed. |
| Family Law Act 1975 (Cth) ss 117, 118 Family Law Rules 2004 (Cth) r 19.08, 19.10, 19.18 |
| Skinner & Cluny [2018] FamCA 478 Cluny & Skinner [2017] FamCA 255 Cluny & Skinner (No 2) [2017] FamCA 547 Yunghanns & Ors & Yunghanns (2000) FLC 93-029 adopting Sheppard J in Colgate-Palmolive Company & Colgate-Palmolive Pty Ltd v Cussons Pty Ltd (1993) FCR 225 Z (A Solicitor) v Limousin (Costs) [2010] FLC 93-433 |
| APPLICANT: | Ms Cluny |
| RESPONDENT: | Mr Skinner |
| FILE NUMBER: | BRC | 812 | of | 2010 |
| DATE DELIVERED: | 16 July 2019 |
| PLACE DELIVERED: | In Chambers |
| PLACE HEARD: | In Chambers |
| JUDGMENT OF: | Tree J |
| HEARING DATE: | Last submissions filed 21 March 2019 |
REPRESENTATION
| THE APPLICANT: | Feeney Family Law |
| THE RESPONDENT: | In person |
Orders
The mother’s Application in a Case filed 5 March 2019 be dismissed.
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 Cluny & Skinner 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 CAIRNS |
FILE NUMBER: BRC812/2010
| Ms Cluny |
Applicant
And
| Mr Skinner |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
On 10 February 2014 the father commenced these proceedings by Initiating Application, by which he sought to have the parties’ only child to their relationship, B, currently 9 years of age (“the child”) move from the mother’s care into his. That was despite parenting orders having been made by Kent J only something less than two years earlier on 21 June 2012, at the conclusion of a trial. However ultimately, on 18 February 2019, final parenting orders were made by consent, which orders saw the child remain primarily in the mother’s care.
Prior to then, on 21 December 2018, the mother had made an offer to settle the proceedings on substantially the terms as the 18 February 2019 orders. By Application in a Case filed 5 March 2019, the mother sought a variety of orders, the substance of which were to, firstly, require the father to pay her costs of the proceedings from 22 December 2018 (whether on an indemnity basis, or if not, then on a party/party basis) and to pay her costs of her application of 5 March 2019. She also sought a variety of ancillary orders, including an obligation on the part of the father to pay interest, and for restraints on the father being able to commence further parenting proceedings without having met his obligations to pay any costs order.
The father seeks that the mother’s Application in a Case be dismissed.
On 7 March 2019, by consent, I made orders in chambers establishing a timetable for the filing of material by the parties in relation to any application for costs, and thereupon, at the time for the last action contemplated under the timetable, my decision in relation to costs would stand reserved. This is that decision and the reasons for it.
THE FACTS
In reasons which I delivered on 26 June 2018 in relation to a Rice and Asplund issue between these parties,[1] I set out background facts as follows:
[1]Skinner & Cluny [2018] FamCA 478.
3. Mr Skinner (“the father”) was born in 1969, and hence is presently 49 years of age. As at the time of the trial of the first parenting proceedings between the parties on 27 February 2012, the father was the employee of a transport industry business which he owns, and had been so for some time. His role required regular national and international travel.
4.For her part, the mother was born in 1970, and hence is 47 years of age. She is in the education field, albeit at the time of the first trial before Kent J in February 2012, had not been so employed for some years.
5. The parties met in or around 2006, and commenced cohabitation in either December 2007 or May 2008 (the date is immaterial). They married in 2008, and B (“the child”) was born in 2009. However the parties separated less than one month later on 20 September 2009, thus terminating the relationship that had been in existence for about three years.
6.Since separation, the parties have been in almost constant litigation in relation to property, parenting and other matters.
7.The first iteration of the parenting proceedings were, as I have indicated, resolved by trial in February 2012 by Kent J, accepting that in fact the parties agreed a significant number of matters, and there were only relatively slender matters left for his Honour’s determination. At the time of that trial the child was 2 years and 6 months old. I will need to consider that judgment, and the matters then in dispute, in greater detail later in these reasons, but for present purposes it is significant to note that one of the matters that was unable to be agreed by the parties was whether the parties should be obliged to attend family dispute resolution once the child commenced school, with a view to revisiting the care arrangements for the child at that point of time. That issue was resolved by Kent J against the father, who had contended for such an order: Skinner & Cluny (No 2) [2012] FamCA 465.
8.At the time of the first trial, the parties also had extant property settlement proceedings. Although observing that most of the parties’ costs were in respect of financial issues, Kent J noted that “the amounts of money each party has expended on legal costs to date…is nothing short of extraordinary.” Given that the parties have thereafter continued to enthusiastically litigate on several fronts, albeit most recently seemingly without legal representation, one assumes those costs have continued to grow.
9.As is obvious from the fact of this judgment, the first trial and judgment did not permanently resolve the parties’ disputes in relation to parenting matters, and the father commenced the present iteration of these proceedings on 10 February 2014 being less than two years after the first trial. By then it seems that the parties had concluded some of their other litigation. For instance on 16 April 2013 Bell J made orders in relation to a departure from an administrative assessment of child support, together with orders for spouse maintenance and other matters. However the father did not comply with those orders, and the mother bought contravention proceedings.
10.On 29 November 2012, Bell J had made final property settlement orders, together with an order requiring the father to hand his passport over to the mother’s solicitors. Whilst he did so, he thereafter falsely represented to the Department of Foreign Affairs and Trade that he had lost his passport, so as to obtain a replacement one, which he thereafter received and used for international travel.
11.The mother brought both contempt and contravention proceedings arising from the father’s breaches. Those applications were heard by Kent J on 16, 17 and 18 September 2015, and for reasons delivered 28 April 2017[2] his Honour determined that both were established, and adjourned the applications for further submissions in relation to penalty. His Honour then dealt with the question of penalty on 10 July 2017, and for reasons delivered 31 July 2017[3] determined, firstly, that the father should be fined $30,000.00 for contempt and secondly, determined that the amounts payable to the mother exceeded $280,000.00, but gave the father a further 24 months to discharge those obligations. In default of doing so, the father was then to show cause as to why he should not be sentenced to a term of imprisonment for three months.
12.In the course of his reasons, Kent J noted that in the proceedings before him as to penalty, counsel for the mother had made the “remarkable submission” that the appropriate penalty was imprisonment for two years, to take effect immediately.
13.Again, the father did not comply with the order to pay the fine within the time stipulated, although he did file an application seeking an extension of time in which to pay the fine, but somewhat inexplicably, on the same day as he filed that application, in fact paid the full amount due. In consequence, he was five days overdue in paying the fine. For reasons given on 17 January 2018 in Cluny & Skinner [2018] FamCA 15, Kent J determined that he would not direct the Marshal to bring a further application for contempt against the father, but warned him in strong terms of the need to comply with court orders.
14.As at the time of the hearing of the preliminary issue before me, the most recent Family Report was prepared in July 2014, although a Child Inclusive Conference was conducted on 16 November 2015 by a Family Consultant. The parties have not filed recent trial affidavits. I therefore know little of the parties’ present circumstances, but make the following observations.
15.The mother has now returned to her previous profession of primary school teacher. It appears as though she lives with her parents at Suburb QQ, a City SS suburb. The father asserts, and the mother accepts, that the child’s cousin, PP, who is about 14 years of age, has also recently commenced residing with the mother and the child’s grandparents.
16.As to the father, it appears that he remains engaged in business, and indeed the purpose of the 24 month period in which to pay the outstanding monies due to the mother was to enable him to pursue business opportunities to enable him to meet the arrears.
17.A further development recently occurred on 13 February 2018, when the father filed contravention proceedings against the mother, asserting numerous breaches of the parenting orders by her from as long ago as December 2013. That application was listed for mention only before me on 13 March 2018, albeit the father relied upon his affidavit filed in support of the contravention proceedings as part of the material read before me.
[2] Cluny & Skinner [2017] FamCA 255.
[3] Cluny & Skinner (No2) [2017] FamCA 547.
Ultimately I determined, albeit with great regret, that particularly given some worrying anxiety issues which the child was demonstrating, it was in his best interests that there be further litigation in relation to his living arrangements. Consequent upon that determination, on 1 August 2018 I made trial directions for the matter to be heard commencing 5 February 2019.
I shall shortly review some communication between the parties which was thereafter exchanged, but the next significant matter was the release of the updated Family Report to the parties on 20 December 2018. That precipitated an offer being made the following day by the mother’s solicitors to the father, in terms I shall refer to in due course. That offer was expressed to remain open until 5:00pm on 11 January 2019. The father did not accept that offer. He made a counter offer to the mother on 31 January 2019, but that offer was rejected.
Next, quite unexpectedly, on 5 February 2019, the father filed a Notice of Discontinuance of all extant proceedings. However the mother wished to press on with some changes to the 2012 orders, and subsequently on 15 February 2019, filed a Further Amended Response to Initiating Application, in terms consistent with her 21 December 2018 offer to the father.
The matter remained listed for hearing on 18 February 2019, although ultimately it settled in terms acceptable to all parties on the morning of the first day of the hearing. The mother then foreshadowed this costs application. Although it was contemplated that the Independent Children's Lawyer may also pursue her costs, that has not transpired.
RELEVANT STATUTORY PROVISIONS AND LEGAL PRINCIPLES
Cost orders generally
The starting point for a consideration of these applications is s117 of the Family Law Act which relevantly provides as follows:
117(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118 each party to proceedings under this Act shall bear his or her own costs.
117(2) 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) and (5) 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.
117(2A) In 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.
…
It is also relevant to note s118 which provides as follows:
118 The court may, at any stage of proceedings under this Act, if it is satisfied that the proceedings are frivolous or vexatious:
(a)dismiss the proceedings; and
(b)make such order as to costs as the court considers just.
Part 19.4 of the Family Law Rules deals with costs orders. Rule 19.10 specifically contemplates costs orders being made against lawyers. It provides as follows:
19.10(1) A person may apply for an order under subrule (2) against a lawyer for costs thrown away during a case, for a reason including:
(a)the lawyer’s failure to comply with these Rules or an order;
(b)the lawyer’s failure to comply with a pre-action procedure;
(c)the lawyer’s improper or unreasonable conduct; and
(d)undue delay or default by the lawyer.
19.10(2) The court may make an order, including an order that the lawyer:
(a) not charge the client for work specified in the order;
(b) repay money that the client has already paid towards those costs;
(c)repay to the client any costs that the client has been ordered to pay to another party;
(d)pay the costs of a party; or
(e)repay another person’s costs found to be incurred or wasted.
Rule 19.08(3) imposes a mandatory obligation in the following terms:
A party applying for an order for 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.
Rule 19.18 deals with the method of calculation of costs in the following terms:
19.18(1) The court may order that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a particular basis (eg lawyer and client, party/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.
Example
For paragraph (1)(c), the stated method may be in accordance with Schedule 3 but with an additional percentage for complexity.
19.18(2) If costs are payable under the Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party/party basis.
19.18(3) In making an order under subrule (1), the court may consider:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness of each party’s behaviour in the case;
(c) the rates 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 properly paid or payable.
Principles relating to indemnity costs
In order to justify the making of an order for costs on other than a party/party basis, all that is required are particular facts and circumstances of the case in question warranting the making of such an order.[4] That said, such an order is a very great departure from the normal standard, and hence it is imperative that the court be aware of what the nature of the indemnity is, in the sense of what the costs agreement between the parties seeking the order and their solicitors is.[5] That said, such an order remains wholly compensatory and not punitive.[6]
[4]Yunghanns & Ors & Yunghanns (2000) FLC 93-029 adopting Sheppard J in Colgate-Palmolive Company & Colgate-Palmolive Pty Ltd v Cussons Pty Ltd (1993) FCR 225.
[5]See Kohan & Kohan (1993) FLC 92-340 and FLR 19.08(3).
[6]See Muldoon & Carlyle (2012) FLC 93-513 at [115].
It is well established that proceedings brought in wilful disregard of known facts or clearly established law are one of the established categories which justify indemnity costs.[7] An instance of that in this court is the decision of Limousin[8] where the Full Court did not disturb a costs order against a solicitor who had failed to have any proper regard to the prospects of success of a claim.
[7]Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 364; J Corp Pty Ltd v Australian Building Labourers Federation Union of Workers (WA Branch)(No 2) [1993] FCA 42; Colgate-Palmolive (supra and Yunghanns (supra).
[8]Z (A Solicitor) v Limousin (Costs) [2010] FLC 93-433.
CONSIDERATION OF S 117(2A) FACTORS
The mother is presently a supply teacher with the Department of Education in Queensland. Her salary for the year ending 30 June 2018 was $45,577.00 net of tax. As at the date she swore her affidavit on 4 March 2019, in that financial year to date, she had earned net of tax, $11,413.83. That said, pursuant to the orders of Kent J made 31 July 2017, according to the mother’s calculations, she will be due to receive an amount then likely approaching $500,000.00 from the father on 31 July 2019, although she appears however sceptical as to whether or not that will be paid then. In part, that might be informed by the fact that the father, although required to pay $665.00 per week to the wife by way of child support, and pay half of the child’s schooling expenses, has only paid $314.72 in child support since 10 August 2017.
Otherwise it would seem as though the mother is in rather straitened financial circumstances, living with her elderly mother, and driving a 13 year old car.
The father’s financial circumstances are not particularly clear. He appears to still operate a transport industry business. It seems to have had a chequered financial history, and the father says that there is some extant litigation in which creditors of the business are seeking to pursue him under personal guarantees. He further points to the fact, on his assertion, he was unable to continue to retain solicitors in these parenting proceedings,[9] and was last represented on 30 August 2018. However his material does not tell me his present income, nor the present estimated value of his assets. In any event, it cannot be ignored that he will shortly have to pay the mother a very large sum of money.
[9] Although his extensive written submissions opposing an order for costs seem likely to have been prepared by someone with legal training.
Neither party were in receipt of Legal Aid.
The mother says that the father’s conduct of these proceedings is relevant, in that she says he has knowingly raised false and malicious allegations in relation to her, in an effort to, as I read her material, cause her to stress and aggravation. She then says that the Notice of Discontinuance was filed without warning, and asserts that the father never intended to press these proceedings to finality, but was using them as a vehicle to harass her.
For his part, the father says that my determination of the Rice & Asplund issue demonstrated that there was a sufficient basis for his further litigation, and further, explains the filing of an otherwise unheralded Notice of Discontinuance upon the suicide of a friend, his subsequent reflection upon the important things in life, and the need to try and minimise conflict. That may or may not be so. I would have to say I have some grave reservations that was the only reason behind the discontinuance.
The father makes the valid point that much of the mother’s expression in relation to his alleged harassment of her, is in somewhat intemperate language. However it is perhaps not surprising that the mother uses such language, and that the father criticises her for it: these are parties who, as I said at [67] of my first reasons, “appear intent on litigating indefinitely.” I also noted the father’s concession in cross-examination “that the high level of animosity between the parties will continue, no matter what.”
Whist the mother is correct that the filing of a Notice of Discontinuance is plainly relevant conduct, it also has to be acknowledged that parties should be encouraged to terminate litigation if they form the view that it should not thereafter continued. They should be so encouraged, firstly, because unnecessary litigation is a waste of the parties’ resources, time and emotional energy, but secondly, it is also a waste of judicial resources. Moreover, the father’s timing of the Notice of Discontinuance, albeit shortly after a compliance hearing, nonetheless was well in advance of the trial, being nearly two weeks out. The mother says that she did not believe that the father would in fact not continue to litigate, and therefore she continued to prepare her case for trial. The father criticises her for that conduct. I think that criticism is in large part warranted. Given that the father was no longer the moving the party, it was the mother who thereafter continued to press for a variation in orders to those made in 2012 by Kent J. In effect, she now seeks that the father should meet her costs of doing so, when by then he had assumed a position of passivity.
The father says that the proceedings were necessitated by the mother’s failure to comply with the orders of Kent J, by withholding the child from time to time. However he simultaneously brought contravention proceedings, which, given the provisions of s 70NBA, would have accommodated proportionate changes to the orders of Kent J, even if a contravention was not established.
The mother contends that the father has been wholly unsuccessful in these proceedings. The father denies that. However it cannot be ignored that the father was primarily seeking a change of residence of the child, and the orders which he ultimately consented to did not effect that. If not wholly unsuccessful, the father was substantially unsuccessful.
I have adverted to the fact that the mother made an offer to the father to settle the proceedings on 21 December 2018. It was said to be without prejudice save as to costs. It relevantly reads:
…
Our client’s proposal is for the current arrangements as set out in the final orders made in June 2012 to remain in place but for the orders in respect to make up time to be removed. Given that T will be 17 years old next year and she is spending time with you as she wishes the specific provision in relation to her birthday has also been removed.
For completeness, our client also proposes including orders in respect of obtaining a passport for international travel. We note that the previous final orders did not cover these matters and we understand that [the child] does not currently have a passport.
As stated (sic, in) previous correspondence it is our opinion that your application seeking a change in residence is entirely without merit.
We confirm that in the event that you proceed with your application to trial our client will be seeking a costs order against you on an indemnity basis. Please note that this offer will be disclosed for the court’s consideration when it is deciding whether to make an order as to costs in this matter…
The above settlement proposal is open for your consideration and acceptance until 5:00pm on Friday 11 January 2019 (original emphasis).
The father did not accept that offer.
The mother had previously made an earlier offer on 4 September 2018, although it does not directly found her application for costs. In that correspondence her solicitors had said that “it is our client’s view that your client’s application is entirely without merit.” It continued “We put your client on notice of our client’s intention to seek a costs order against your client on an indemnity basis in the event that your client proceeds with his application to trial and that application is wholly unsuccessful.”
A number of points need to be made in relation to the 21 December correspondence. At the risk of being somewhat pedantic, the father did not “proceed with [his] application to trial…” but rather discontinued it 13 days previously. It was the mother who then pressed on for a trial. The second point is that I am not able to determine the degree of merit which attended the father’s litigation, save to say that in June 2018 I was satisfied that it was in the best interests of the child for the litigation to continue, given particularly his reported anxiety. Further, as the father points out in his material, in the Family Report there was some limited support for the change in residence of the child into the father’s care.
The father also made an offer to settle these proceedings on 31 January 2019. In it, he linked changes to parenting orders with some changes to the property orders. However it is correct, as the father says, that those were not contingent on each other, and to the extent that the mother says to the contrary, I reject that. The mother simply rejected the father’s offer, and made no counter offer.
The father says that there are additional relevant matters, namely the mother has in the past refused his offers to mediate. I give that little weight. These parties are, as I have previously observed, locked in intractable conflict.
EVALUATION
Weighing all of those matters in the balance, I am not persuaded that the general rule in relation to costs is displaced. I decline to make any order for costs. It therefore follows that I do not need to determine whether or not the costs should be on an indemnity basis, or party/party basis. However to cover the eventuality that I am wrong in relation to the question of costs generally, I should say that this is not a case where it would have been appropriate to order indemnity costs.
Further, had I been persuaded that some costs orders should be made, it is unlikely that it would have been for the period claimed by the mother, who seeks her costs from 22 December, rather than 11 January, when the 21 December 2018 offer expired. Moreover, she also seeks her costs after the time the discontinuance was filed, when logically, thereafter she was the moving party. It was her decision to continue to press on as if the trial would proceed, and in my view, it would be unfair and unjust for the costs of that to be visited upon the father. The mother did not put forward some alternative proposal, so as to carve out the period between 11 January and 5 February 2019 as being the applicable period for costs. Has she done so, the result of this application may have been different.
It also follows that it is unnecessary for me to determine the balance of the orders which the mother seeks in her Application in Case.
CONCLUSION
For these reasons the mother’s Application in a Case filed 5 March 2019 will be dismissed.
I certify that the preceding thirty six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 16 July 2019.
Associate:
Date: 16 July 2019
0
8
2