COLE & INGRAM
[2020] FamCA 966
•18 November 2020
FAMILY COURT OF AUSTRALIA
| COLE & INGRAM | [2020] FamCA 966 |
| FAMILY LAW – COSTS – Application by the mother for costs in relation to substantive parenting and contravention proceedings – Consideration of the principles in s 117 of the Family Law Act 1975 (Cth) – Costs order against the father justified – Not appropriate to award indemnity costs – Orders made for the father to pay the mother’s costs on a solicitor-client basis in a fixed sum FAMILY LAW – Recommendation for law reform in terms of the repeal of s117(1) of the Family Law Act |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) r 19.18 |
| Baum & Lokare (No. 2) [2019] FamCA 292 Catlin & Catlin [2018] FamCA 235 Hawkins & Roe (2012) 47 Fam LR 526 Idoport Pty Ltd v National Australia Bank Ltd[2007] NSWSC 23 Lenardi & Lenardi (No.2) [2011] FamCA 604 Parke & the Estate of the Late A Parke(2016) FLC 93-748 Pearson & Pearson [2020] FamCA 329 Prantage & Prantage (2013) FLC 93-544 Worth & Worth (No.2) (2019) FLC 93-910 Wrensted & Eades (2016) FLC 93-697 |
| APPLICANT: | Ms Cole |
| RESPONDENT: | Mr Ingram |
| INDEPENDENT CHILDREN’S LAWYER: | Legal Aid Commission of Tasmania |
| FILE NUMBER: | HBC | 330 | of | 2018 |
| DATE DELIVERED: | 18 November 2020 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 10 September 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mrs Mooney SC |
| SOLICITOR FOR THE APPLICANT: | PWB Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Turnbull SC |
| SOLICITOR FOR THE RESPONDENT: | Murdoch Clarke |
Orders
Within thirty (30) days from the date of this order Mr Ingram shall pay the sum of $75,062 to Ms Cole (‘the mother’) being the mother’s legal costs of and incidental to these proceedings including her costs application.
All other extant costs applications are dismissed.
IT IS CERTIFIED
Pursuant to r 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage senior counsel to attend.
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 Cole & Ingram 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 HOBART |
FILE NUMBER: HBC330/2018
| MS COLE |
Applicant
And
| MR INGRAM |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
In family law proceedings few costs orders are meaningfully pursued and relatively few costs orders are made. This is particularly the case in parenting disputes.
When costs orders are made, they are generally on a party/party basis. Such costs often bear little or no relationship to the actual costs incurred by a party in the proceedings.
Indemnity costs orders are rarely made at first instance or supported on appeal, given the present jurisprudence from the Appellate Division of the Family Court.
There is power under the Family Law Rules 2004 (Cth) (‘the Rules’) for costs orders on a lawyer/client basis and on the other basis known to law.[1] Those powers to make costs orders, other than on a party/party or indemnity basis, are rarely used.
[1] Family Law Rules 2004 - Rule 19.18
On appeal costs orders are seemingly examined in minute detail and are quite often set aside (see Paradin & Paradin (2020) FLC 93-991).
The underlying reason for this approach is a view that parents should not be frightened by the fear of costs orders when deciding whether or not to bring proceedings.
As a result some parents improperly use the litigation process and are able to do so with relative impunity. There is little risk as to costs orders and if any costs orders are made, they are generally pitifully inadequate.
Some of this could be remedied by a more robust approach to the making of costs orders made at first instance and support from the Appellate Division in terms of the trial judge’s broad discretion as to costs.
In addition, judges at first instance, and on appeal can and should consider the broad powers of the courts pursuant to Division 12A of the Family Law Act 1975 (Cth) (‘the Act’) to manage difficult parenting disputes.
It may also be worthwhile for policy makers and legislators to consider some law reform.
This could include repealing s 117(1) of the Act and leave costs to the inevitable broader discretion of first instance judges. The jurisprudence of the Full Court regarding costs in general and proper costs orders which better reflects the realities of the parties’ expenditure would also need to be reconsidered.
Finally, there could be legislated a requirement for certification by legal practitioners as to the prospects of success. In civil proceedings in New South Wales legal practitioners have for some years been prohibited from acting for clients in litigation unless the responsible practitioner reasonably believes that the matter has reasonable prospects of success. Legal practitioners must certify their reasonable belief in the prospects of success. That duty overrides the legal practitioner’s duty to act in accordance with their client’s instructions.
The matter before me is a costs application following a lengthy defended parenting application heard by me over nine days in February and March 2020. Given the mental health of Mr Ingram (‘the father’), his history of violence (including sexual violence), his drug and alcohol abuse and his incapacity to tell the truth or comply with orders; his chances of any court making the orders he sought at the commencement of the trial were illusory.
This costs application also follows the determination of a number of contravention applications prosecuted by Ms Cole (‘the mother’) and the father.
The parenting proceedings involved three substantive questions:-
(a)Whether there ought to be an order for equal shared parental responsibility of the children. However, on about day six of the hearing the husband conceded that there ought not to be equal shared parental responsibility.
(b)How much time the parties’ daughter and son (then aged seven and four respectively), should spend with the father.
(c)Finally, whether there should be some ongoing level of supervision or the like in relation to the father spending time with the children.
On 12 June 2020 I had made orders and delivered reasons in relation to the parenting and contravention aspects of the proceedings. The mother was almost overwhelmingly successful.
On 8 July 2020 the mother filed an Application in a Case seeking a fixed costs order of $143,159.62 plus the costs of the Application in a Case.
This included the costs in the substantive parenting application (‘the Substantive Reasons’), the father’s January and April 2020 contravention applications and the mother’s April 2019 contravention application.
The matter was listed before me for a costs hearing on 10 September 2020 at Hobart.
In submissions provided prior to the hearing senior counsel for the mother indicated that she no longer sought the whole of the mother’s costs, but sought a sum of $72,412 being the costs incurred by the mother shortly before the matter was to proceed to hearing in 2019 before a Federal Circuit Court Judge. That hearing did not proceed due to the complexity of the matter and was transferred to the Family Court and heard by me.
The mother also sought costs on her costs application of $2,650 making a total of $75,062.
There remains an outstanding contempt application, being prosecuted by the mother. That application is to be listed before another judge of this Court later in 2020. I have had no regard to that application in the context of this costs application.
As I set out in Pearson & Pearson [2020] FamCA 329 (‘Pearson’) there are a number of steps I need to consider, sequentially. They are:-
(a) Whether there should be a costs order made in the proceedings pursuant to s 117(2A) of the Family Law Act 1975 (Cth).
(b) What form any costs order should take.
(c) Whether the Court should fix costs or whether it should be left to agreement between the parties for assessment by a Registrar of the Family Court under the Family Law Rules 2004 (Cth).
BACKGROUND
In the costs application I had regard to the matters set out in my reasons delivered 20 June 2020 (‘the Substantive Reasons’). From those reasons I note the various orders made by the Court and I note the background set out in the Substantive Reasons as follows:-
34. Both the mother and father are aged 39. The father is presently unemployed. The mother is employed by an organisation. There is evidence that in late 2009 the father made a serious attempt at suicide and that in the same month he was found by the police to be drunk, aggressive and violently resisted arrest.
35. The parties commenced cohabitation in 2010 and married in 2011.
36. The daughter was born in 2012 and is soon to celebrate her eighth birthday. The son was born in 2015 and is soon to celebrate his fifth birthday.
37. The mother asserts that on an occasion in 2013 and on another occasion in 2014 she was the subject of assault and non-consensual intercourse by the father. That assertion is disputed by the father.
38. In September 2016 the mother asserts that the father tried to drag the daughter away from the paternal grandmother and this had a significant emotional impact on the daughter.
39. The mother asserts that she was assaulted and was the subject of an attempt of non-consensual intercourse by the father in October 2016 whilst the parties were in Country B. The father denies those allegations.
40. The parties separated in May 2017. At about the same time a Police Family Violence Order was made and the father was admitted to a psychiatric clinic.
41. In December 2017 the mother terminated the children’s time with the father. It was recommenced in March 2018 with the father spending supervised time with the children at a Contact Service.
42. Proceedings were commenced in April 2018 in the Federal Circuit Court and interim consent orders were made on 13 July 2018 to enable the father to have time with the children, supervised by the paternal grandmother.
43. In September 2018 overnight interim contact was put in place with the paternal grandmother giving undertakings to be present.
44. In November 2018 a consent interim order was made for additional overnight contact from Wednesday 10am until noon the following day, but only during school holidays. The father’s time with the children ceased in November 2018 after an allegation by the mother and maternal grandmother of a disclosure by the daughter of inappropriate sexualised behaviour. The father asserts this was false, frivolous or mischievous conduct on the part of the mother. I have determined that it was not and that the mother acted appropriately and in a child -focused way.
45. After police investigations and child protection involvement, in January 2019 the father’s time with the children resumed in accordance with the Court orders.
46. The alleged sexualised behaviour was investigated by the Police and Child Protection Authorities and no further action was taken by them.
47. In January 2019 consent orders were made restraining the father from referring to the mother on social media and a single expert was appointed.
48. An Independent Children’s Lawyer was appointed to represent the interests of the children.
49. Given the seriousness of the allegations these proceedings were transferred to the Family Court and they were specifically listed for hearing in February/March 2020.
50. The father had spent significant time with the children, including overnight time with his mother present during the second half of 2017. After 17 December 2017 the father’s time with the children was initially supervised by the maternal grandmother until he was accepted into the Contact Service.
51. In relation to the Contact Service, I am satisfied and accept that the reports of the father’s time with the children were positive and that there were no difficulties. This arrangement continued until July 2018 when the father’s time with the children moved to being in the presence of the paternal grandmother. This developed into overnight time in September 2018 and further, Wednesday overnight times in November 2018.
52. The hearing of this matter ran over nine days from 24 February 2020 to 5 March 2020. The reasons were then reserved.
53. On 30 March 2020 the mother filed an application in a case seeking permission to re-open the parenting proceedings, some consequential listing and procedural orders and an interim order that the father be restrained from posting any photographs or causing any photographs of the children to be posted on any social media and that the father should remove all naked photographs of the children on his social media account.
54. In support of that application the mother filed an affidavit sworn 30 March 2020. In that she affidavit she observed that the father had re-opened his social media account and had posted a photograph of the daughter which the mother described as provocative, disrespectful and humiliating.
55. The mother requested that the father remove the photograph. It is not in issue that the father declined to remove the photograph, but edited it so that the photograph, insofar as showing the daughters crutch, was deleted.
56. The father filed a response to the mother’s application and an affidavit in reply on 2 April 2020. At the hearing the mother gave short oral evidence and tendered some photographs.
57. In his response the father conceded that he opened his social media account again and gave an explanation, and given the evidence, I do not accept his explanation. On the evidence, and notwithstanding the events surrounding the social upheaval with the Coronavirus pandemic, the father is addicted to his social media activities and it was inevitable that he would re-open his social media account and did so.
58. The father also complained that his communication with the children was by telephone and not Facetime or Skype or the like.
59. On 30 March 2020 there was an audio conversation between the daughter and the father, but it had been converted to video. Given the orders, the mother terminated the video and restored it as an audio communication. It then became a video again.
60. The mother gave evidence that she was concerned about hearing the father’s voice let alone having him see what was happening in their house. She asserted that when she raised the matter with the father he used bad and abusive language to her in the presence of the daughter.
61. The father denied that abuse occurred.
62. There was no further cross-examination of either the mother or the father in their evidence, as I have had the opportunity of observing the parties giving evidence over a number of days during the hearing. Neither party opposed that approach at that time.
63. Given my overall assessment of the father and his behaviour, I am satisfied that he placed the photograph of the daughter on his social media page showing her crutch, albeit covered with her underpants, in an overt and obvious way. I do not accept his explanation that he was naïve.
64. The father is not naïve. He is at times manipulative and at times fabricates evidence.
65. I am satisfied that the mother’s concerns that the father will use video calls to interfere with her life, and beyond the scope of contact with the children, are reasoned and reasonable fears given the history between them.
66. Accordingly, I made interim orders sought by the mother in terms of the limitation of contact to audio contact. This is to continue via telephone calls or the like as the form of communication.
67. I carefully looked at the photographs which the mother had downloaded from the father’s social media account and given the evidence to which I have alluded earlier, I am satisfied that those photographs ought to be removed from the father’s social media accounts in whatever form they are. I made that order on an interim basis and I make it on a final basis.
68. The father has no insight, at best, or acts with callous disregard for the welfare of the children by placing such photographs on social media and the like and sharing them with the three hundred people, at least, with whom he communicates.
69. During the course of the proceedings the mother complained about the father using emails in a way to engage with her. The photograph to which the mother referred to in her affidavit of 30 March 2020 is an example of this.
70. A simple look at the photograph would have made any concerned parent become alarmed. Yet the father, instead of quietly and quickly removing it, sought to engage in some sort of negotiation over what could be shown and what could not be shown. This was in my view more about engagement with the mother than about the needs of the children.
71. Given his history with regard to photographs and videos, my concerns about his evidence and the reliability of it, it is clear that orders need to be made requiring the father to remove the photographs of the children from his social media account, and given the personal nature of some of the photographs contained in evidence before me he will be ordered to remove the photographs and videos of the mother from his social media accounts.
72. Given the father’s propensity to obfuscate and dissemble, the mother should not be put in a position and place where she needs to negotiate as to what stays and what goes. Accordingly, I will make an order requiring the father to remove and destroy or delete all photographs and videos of the mother he has in electronic form.
73. It is significant that in the context of all of this the father had sent an email to Ms C on 18 March 2020 where he observed:-
… I also clearly need to learn better differential and social norms around things like nicknames and what is ok to share about my life with the kids and what can (and most likely will forever) be interpreted as sinister …
74. Despite the father saying he was wanting to learn this and hearing the evidence of Ms C he still posted the photograph of the child referred to in the mother’s affidavit.
75. In late April 2020 the father filed a contravention application sworn 24 April 2020 alleging that the mother contravened interim parenting orders made by me on 5 March 2020. He asserted that the mother breached the orders on 8 April 2020 in that she refused to make the children available on that date in accordance with order 6 of the March 2020 interim orders and that on 13 April 2020 the mother contravened those interim orders by not initiating a telephone call in terms of order 4(d).
76. The father filed an affidavit, sworn 24 April 2020, in support of the contravention application.
77. At the same time he filed an application in a case asking the Court to permit re-opening of his case to adduce the evidence of the alleged breach as part of the material in respect of the parenting determination.
78. In that application he sought an order that the mother be ordered to ‘comply strictly with the order of the Court in relation to the children’s time and communication with the father’. Parties are obliged to comply with validly made orders of this Court and to ask a court to make orders to require parties to comply with such orders is ridiculous, particularly when the party is legally represented. The order sought in that later regard was and is otiose.
79. The father sought a costs order on the application and costs of both parties were reserved.
80. The applications were listed before me on 19 May 2020 and were heard by audio visual means through Microsoft Teams due to the social distancing measures put in place by the Court given the Coronavirus pandemic.
81. On 13 May 2020 the mother filed material in reply being a response, her affidavit and an affidavit by the maternal grandmother. The father filed a further affidavits on 18 May 2020 by himself and the paternal grandmother. The applications were heard by me on 19 May 2020 and during that hearing all the witnesses were cross-examined.
82. The contravention application is to be dismissed.
83. The evidence provided in these interlocutory proceedings was admitted by consent and leave was granted for the parties to reopen. That evidence was taken into account in terms of this determination.
84. By an application filed 29 May 2020 the mother sought to again re-open and adduce further evidence of the father’s alleged breaches of orders with regard to text messages and publications on his social media account. That application to re-open was accompanied by an affidavit of the mother. The application to reopen was supported by counsel for the father and opposed by the Independent Children’s Lawyer. The application to re-open was dismissed on 12 June 2020 and I had no regard to the mother’s affidavit filed 29 May 2020 in the substantive parenting determination.
85. In addition, on 29 May 2020 and on 11 June 2020 the mother filed separate applications that the father be dealt with for contempt. Those applications were returnable on 12 June 2020 and were stood over for directions before a Registrar and for hearing by another judge. In respect of the substantive parenting proceedings, this Court had no regard to the material contained in the affidavits of the mother filed 29 May 2020 and 11 June 2020.
(Footnotes omitted)
In these reasons any statement of fact should be treated as a finding of fact unless the contrary is clear from the context of the statement.
THE EVIDENCE
In support of her costs application, the mother relied upon the following:-
(a)Her Application in a Case filed 8 July 2020;
(b)The amendment to that Application in a Case, in terms of quantum,) as set out in the mother’s submissions as to costs filed 9 September 2020;[2]
(c)Her affidavit affirmed 8 July 2020 together with the annexures to that affidavit;
(d)The Substantive Reasons;
(e)The costs orders made 12 June 2020; and
(f)Her tender bundle.[3]
[2] Exhibit E1, page 1.
[3] Exhibit E2.
The father relied upon the following documents:-
(a)His affidavit filed 4 September 2020; and
(b)Submissions prepared by senior counsel representing him filed 9 September 2020.[4]
[4] Exhibit E3.
THE EXHIBITS
The Exhibits consequently were:-
Exhibit E1: The mother’s submissions as to costs;
Exhibit E2: The mother’s 11 page tender bundle including correspondence from May 2019, January 2020 and March 2020 together with tax invoice from senior counsel from the mother of May 2020; and
Exhibit E3The father’s submissions as to costs.
No objections were taken to the evidence. The submissions were treated as submissions and I have included them in the oral submissions made by senior counsel for each of the parties.
For the purpose of the hearing I have noted that the mother and father each have at all relevant times been represented by experienced legal practitioners.
THE FACTS UPON WHICH THIS DETERMINATION IS MADE
I accept that the mother is in paid employment and earns a modest income. She receives no meaningful child support from the father for the support of the parties’ children.
The mother and her mother live together. The mother’s legal costs were funded by a joint home loan in the names of the mother and her mother.
I accept that the father is impecunious and has paid about $155,000 to $160,000 to fund these proceedings. The father has a debt of about $37,992 by way of a higher education loan amount and a further debt of $33,715 making a total student debt of about $71,780.
The father contends[5] that his conduct in the proceedings was solely motivated by his wish to obtain parenting arrangements to allow the children to have what he regarded as sufficient time with him and to have a meaningful relationship with him. Given the findings of fact in the Substantive Reasons I do not accept that, given his circumstances, the children do no already have sufficient time with him and a sufficient meaningful relationship with him.
[5] At paragraph 6 of the father’s affidavit filed 4 September 2020.
The father was determined to win. He was determined to use these proceedings to defend himself and to defeat the mother.
Senior counsel for the mother outlined the findings I made in relation to the father’s behaviour. I took those matters into account in the context of this costs hearing.[6]
[6] Exhibit E1 mother’s submissions as to costs filed 9 September 2020, pages 7, 8 and 9.
I find that the father’s comments in his trial affidavit in paragraph 7 demonstrate the father’s lack of insight into his approach to these proceedings and its impact on the mother and the children.
I note the offers contained in the mother’s trial affidavit and in her tender bundle.[7]
[7] Exhibit E2.
Had the father resolved these issues prior to the hearing the outcome for him, but not necessarily the children, would have been better than the orders made pursuant to my determination.
It was submitted to me by senior counsel for the father that there was some merit in the father’s case given the age of the family report and the evidence of the single expert psychiatrist and the father’s treating psychiatrist. I do accept that characterisation.
The father suffers from serious mental illness and his determination to pursue the litigation to the very end was apparent in observing him at the hearing and made clear in my Substantive Reasons.
This was a parenting hearing which ran for almost two weeks. There were three applications to re-open in each of the months following judgment being reserved. This showed an extraordinary appetite for litigation by the father and in circumstances where every dollar spent reduced the amount of monies available, particularly for the mother, to financially and economically provide for the children.
The father’s pursuit to a move to equal time and equal shared parental responsibility arrangement of the children was, in the circumstances of this case, fanciful and far-fetched.
In many ways the father saw it as his entitlement and did not adequately measure it against the best interests of the children.
It was put to me that the father’s decision not to pursue equal shared parental responsibility on day six of the hearing should be to his credit. That circumstance would have been apparent to him in May 2019 and given the way the evidence came out by day six his concession was inevitable and too late.
I reiterate the findings of fact referred to by me in those Substantive Reasons.
THE LAW REGARDING COSTS
The relevant law in relation to costs was set out in the mother’s case outline[8] as follows:-
[8] Exhibit E1 the mother’s submissions as to costs filed 9 September 2020, pages 2, 3 and 4.
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that in proceedings under the Act, each party shall bear his and her own costs. However, that is subject to the proviso that if there are circumstances which so justify it, the Court may make such order as it considers just, but that too is subject to the proviso that the Court must consider the matters set out in s 117(2A).
Section 117(2A) provides:
(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; Not relevant.
(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.
In Hawkins & Roe [2012] FamCAFC77 the majority of the Full Court, in identifying the underlying rationale for this starting point in relation to parenting cases, observed that:
14. In proceedings involving children’s or parenting matters, the general rule is not often displaced. The rationale for this practice is that in such matters it is proper that parents are able to put their case in seeking orders which they believe to be in the best interests of their children. It hardly needs to be said that the nature of family court litigation in relation to children is quite different to a commercial dispute in the state or federal courts.
The Full Court went on to note at 144 – 147:
... costs orders have been made where the Court is satisfied that a party has knowingly made a false allegation or statement in children’s proceedings. It is this kind of serious conduct which more predict ably attract the making of a costs order ...
... the occasions on which such an order should be made in a parenting dispute should have some particular features.
However, a later Full Court in Wrensted & Eades [2016] FamCAFC 46 cautioned that their Honours were:-
26. ... much attracted to what Thackray J said [in Hawkins] in dissent. The examples given by the majority of circumstances in which a costs order may be made and their statement that in such circumstances “a judge may well conclude that there are circumstances justifying an order for costs” does not fetter the wide discretion reposing in the trial judge as long as they are seen as examples rather than requirements. However if the majority in Hawkins& Rowe, by the use of the words “the occasions on which such an order should be made in a parenting dispute should have some particular features”, were intending to indicate that certain features need to be present before a costs order can be made, we respectfully disagree. The wide discretion in s 117(2) of the Act and lack of distinction between categories of family law cases (including the lack of distinction between parenting and property cases) would in our view render such a conclusion plainly erroneous, place a fetter on discretion which does not have a legislative basis and require us to depart from that conclusion ...
Any one of the above factors can found an order for costs. There is no hierarchy as to the factors. The Court has a discretion to accord weight to any or all of the factors as it thinks fit. There is nothing to prevent any factor being the sole foundation for an order for costs.
As such the Court has a broad discretion in determining costs. Costs orders are restorative and not punitive, and costs cannot exceed the amount actually incurred. When considering what specific order to make, r 19.18 of theFamily Law Rules 2004 (Cth) empowers the Court to make an order:
a.of a specific amount;
b.as assessed on a particular basis (e.g. lawyer and client, party and 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.
In considering what specific order should be made the same Rule provides that the Court may consider any of the following factors:
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.
It is submitted that the Court ought to consider setting any costs at a fixed amount. Any taxation process would be particularly time-consuming given the nature of the hearing.
(Footnotes omitted)
Senior counsel for the mother also took me to a decision of Deputy Chief Justice McClelland in Baum & Lokare (No. 2) [2019] FamCA 292 where his Honour set out the following:-
18. In respect to s 117(2A)(e), I note that the husband was wholly unsuccessful in his application, as set out in the wife’s submissions, to which I have referred. In that regard, I accept that the mere fact that a case is wholly unsuccessful is not a justification for ordering that a party pay the costs of the other. As Thackray J (in dissent) said in Hawkins & Roe (supra): “[E]ven a meritorious case can be “unsuccessful” when the other case is found to have greater merit”. However, it is significant that, in dismissing the husband’s application in my decision dated 12 March 2019, I found that there were a number of aspects of the husband’s evidence that lacked credibility (see paragraphs [92] to [106]). In that regard, I find that the wife was put to unnecessary expense by the husband agitating his case on the basis of false factual premises.
19. In considering what order to make, I have had regard to the fact that parties to proceedings before the Family Court are obligated to conduct themselves in accordance with the main purpose of the Family Law Rules 2004 (Cth) (“the Rules”), as set out at r 1.04, as follows:
The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.
20. Rule 1.04 is consistent with the obligation of parties and practitioners, under ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (“the Federal Court Act”). Specifically, s 37M(1) of the Federal Court Act provides:
The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
21. There is an obligation, under those principles, to not unreasonably fail to accept an offer to resolve a matter in dispute. This is made clear by Greenwood J in Julstar Pty Ltd v Hart Trading Pty Ltd [2014] FCA 108, where his Honour said, at [94], that this requires a party to “carefully assess all the material … to determine and confront the strengths and weaknesses of their case”.
I accept and adopt the principles enunciated by Deputy Chief Justice McClelland.
In essence his Honour said a lack of success is not in itself a justification for ordering costs. Further, parties to proceedings have the obligations to comply with the Rules to ensure that each case is resolved in a just and timely manner at a cost to the parties and the Court that is reasonable in the circumstances.
In this case I am satisfied that the father has used the platform of the hearing to ventilate more than the relevant issues.
Given those principles a party ought not to unreasonably fail to accept an offer and that consideration is real not simply rhetoric.
Step 1 – whether there should be a costs order against the husband pursuant to s 117(2A) of the Act
As indicated earlier, I need to have regard to the relevant provisions:-
(a)the financial circumstances of each of the parties to the proceedings;
The father is impecunious. He has significant debts and he has relied heavily on advances or loans from his family to fund these proceedings. He has no assets of any value and he has not undertaken paid employment for many years.
The mother has borrowed significant funds to fund these proceedings and I accept the estimates set out by her in her affidavit as to the costs so far in this process.
In these proceedings it was clear to me that the mother has spent about $135,000.
The mother has not received any meaningful child support from the father for the children since separation.
I have had regard to the principles set out by senior counsel for the mother in relation to a parties’ impecuniosity.
(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;
Neither party was in receipt of legal aid.
(c)the conduct of the parties of the proceedings in relation to the proceedings including, without limiting to the generality of foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answers to questions, admissions of fact, production of documents and similar matters;
There was no allegation that either party failed to provide discovery or that the proceedings were delayed by neglect of the parties or their legal practitioners.
However, this argument fails to see the forest from the trees. A parenting matter of this nature, given the circumstances, ought not to have taken the time it took and in many ways the length of time the hearing took reflected the father’s desire not only to win but to defend himself in relation to various allegations made.
As I indicated in my Substantive Reasons, the father prevaricated, obfuscated and at times, fabricated evidence. This included his fabrication of evidence of the assaults on his first wife, the assaults on the mother, his dissembling with regard to his failure to continue treatment and continue being supervised by his treating psychiatrist in 2017, and onwards.
In terms of the contravention applications the father was entirely unsuccessful and the mother was successful.
I adopt the submissions of senior counsel for the mother in relation to the quality of the father’s evidence, a witness from Country B, the mother’s former husband, the cross-examination of Ms C and the father’s ‘benign’ history provided to the single expert psychiatrist.
This was a case where the Independent Children’s Lawyer substantially supported the mother’s position.
(d)whether the proceedings were necessitated by a failure of a party to the proceedings to comply with previous orders of the court;
In relation to the contravention proceedings, the mother’s April 2019 application is indicative that the father contravened the order and the Application in a Case filed in March 2020 arose out of the father’s continual abuse of social media which was a feature of the trial.
The mother was not entirely successful in the substantive proceedings but was overwhelmingly successful.
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
Senior counsel for the mother said and I adopt:-[9]
[9]Exhibit E1 the mother’s submissions as to costs, pages, 10, 11 and 12.
The mother filed a Case Summary in preparation for the final hearing before Judge Harman in May 2019. When examining the orders sought in that Case Summary, it is clear that all the orders sought by the mother were in fact made by the Benjamin J some 11 months later in June 2020 save for two issues:
1.There was no order for the children to attend Ms C, as sought by the mother. The reason or this was that the children did in fact see Ms C in the ensuing 11 months before trial; and also because at trial the father indicated he was prepared to continue working with Ms C.
2.The indeterminate supervision by the paternal grandmother, as sought by the mother, was reduced to two years by Benjamin J.
The only factor saving the father from a submission that he was wholly unsuccessful in these proceedings, was that he changed his orders sought “at the 11th hour” prior to closing submissions at trial. Whilst this may not be apparent from the judgement, it is a matter of record that the father moved towards seeking orders which were perhaps more commensurate with the evidence. However, this occurred just prior to closing submissions.
Otherwise, it can be fairly said that he was in fact wholly unsuccessful; whereas save for two minor matters enumerated in the table below, the mother was entirely successful.
Contravention application filed by Mother filed April 2019 Father convicted on all five counts. Mother sought no other penalty. No further penalty imposed. (para 665) Contravention application filed by Father filed January 2020 Dismissed (para 677). Substantive parenting proceedings
‘[Ms D]’[Ms D’s] evidence admitted over the objections of the father and subsequently accepted by the judge. Injunctive/protective orders subsequently made to protect [Ms D] with no objection from father. Substantive parenting proceedings otherwise Mother wholly successful in the orders she sought save for two issues:
1. restricted distance for father is to be 10 metres not 20 metres; and
2. Period of supervision by grandmother to be 2 years not indefinite.
Interim application filed by mother in March 2020
Orders made as sought by Mother concerning social media postings.
Interim application and contravention filed by father in April 2020
Dismissed (paragraph 718).
Both of the Father’s contraventions failed. The April 2020 contravention, which related to an unexpected change to block overnight time due to Covid, was described by the trial judge as a “wasteful and puerile application which reflected badly on the Father.” (507). His conduct in the context of his allegations of contravention was described as “fatuous” and hypercritical” (509-10). His Honour went on to say:
511.The Father’s legal action wasted almost $8,000 in legal costs, including almost $4,000 incurred by the mother. All for his pursuit of the father’s meaningless legal exercise. The father has no job and no assets. He provides no meaningful financial support for the children, yet he was content to cause the mother to spend this serious amount of money. I determine that this was a financial abuse of the mother by the father through a frivolous and vexatious legal proceeding.
The mother ought not have to bear her costs of an application thus described.
From 2 May 2019, when the father filed a Case Summary in anticipation of final hearing the father’s case remained that the children should live with him for equal time and that there should be an order for equal shared parental responsibility. He submitted that the equal time arrangement should be built up over a period of one to two years.[10]
[10] Substantive Reasons at 7.
That position was patently outside the admittedly broad discretion available to the learned trial judge. It was an ambit claim. In support of that submission the following is noted:
1.The very serious allegations of rape made against the father by his two former wives, even if unfounded, would have demonstrated that the parties did not enjoy a relationship of mutual respect and cooperation such that equal time would be practicable and in the best interests of the children;
2.The Family Reporter’s recommendations were against such a result;
3.Dr A’s description of the limitations likely experienced by the father as a result of his illness were against such a result;
4.The father’s medical records detailing his health history demonstrated significant challenges for the father.
Despite the above, the father’s position as set out in his Case Summary filed 2 May 2019 was:
a)That there be an order for equal shared parental responsibility; and
b)That the children live with the parents equally.
The father’s position at the end of the hearing was that the mother have sole parental responsibility. He sought an order that he have time four nights per fortnight and from 2021 there would be equal time during the school holidays. From 2023 he sought five nights per fortnight and equal time during school holidays.
(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
The offers were in evidence before me including the following:-
-Offer made 15 May 2019 by the mother including an assessment at that time of an eight to ten day hearing.
-Offer to the father by the mother’s solicitor on 16 January 2020 which was not accepted.
I have had regard to these offers and positions.
(g) such other matters as the court considers relevant.
I accept and adopt the submissions by senior counsel for the mother, as to the following:-[11]
[11] Exhibit E1 the mother’s submissions as to costs filed 9 September 2020, pages 13 and 14.
1. The father is not naive, but he is at times manipulative and at times fabricates evidence (64);
2. The father had “no insight, at best, or acts with callous disregard for the welfare of the children” when placing photos of the children on social media which precipitated the mother’s April 2020 application in a case (68);
3. He has a “propensity to obfuscate and dissemble” (72);
4. He has a “tendency to push boundaries with the mother and others. He has a win at all costs approach, which can be seen in some of the examples set out in these reasons and in terms of the litigation as a whole.”(115).
5. The Father indulged in petty or provocative behaviour in persisting in calling the mother an affectionate name and sitting in the front row of her concert (119 and 120);
6. The father abused the trust the mother tried to place in him by hiding mental health issues from her in 2017 (121) and demonstrated an inability to be honest and straightforward with the mother at that time (124).
7. The trial judge accepted that the father’s messages to the mother were incessant, constant and emotionally wore her down (131).
8. The father hacked into the mother’s social media account in a gross breach of trust (136, 340).
9. When asked about his lack of any meaningful financial support for the children his answers deflected the questions and were dissembling in nature (227).
10. The father wanted the Court to watch a video of the mother dancing exotically. The Court was rightly critical of this (363).
11. The uncontested evidence from Dr A is that the father suffers from a personality disorder, although his symptoms are at the milder end of the spectrum. He has issues with emotional regulation and impulsivity, a degree of disregard for rules and perhaps egocentricity. Dr A noted that individuals such as the father tend to decompensate under stress and may have difficulties on focusing on children’s’ needs when [he is] in a state of emotional turmoil (325,326).
12. All of these characteristics of the father were on full display during the hearing. There is no doubt that Dr A’s evidence was correct. The trial judge made frequent mention of the father’s illness. He rejected (at 546) the father’s assertion that he was now well. He concluded that the father
has serious mental health issues, which give rise to poor boundary setting, impulsiveness, anger, and a lack of insight. (536).
13. Is it then unfair to condemn the father to a costs order, relying on behaviour which is a consequence of mental illness? The answer must be that if a person has capacity to conduct litigation; if that person has the capacity to instruct very experienced Counsel; then a mental illness per se does not preclude the making of a costs order.
14. In the recent case of Brown v The Queen a Full Court of the Victorian Supreme Court took the opportunity to change the status of personality disorders in the context of sentencing. At 29, their Honours rejected the formerly established sentencing (Verdins) principle that
‘personality disorders ... are not illnesses which impact upon the capacity of the sufferer to perceive the world around [him] and respond to it’.
15. It is conceded by the mother that the Court may give some consideration to, and weight to, the father’s affliction when assessing the ruinous consequences of his behaviour upon this litigation – before and during the hearing. In that regard the Court can take note of Dr A’s and Dr E’s descriptions of the father’s functioning. Absent such a diagnosis and such consideration, it is submitted that an application for indemnity costs could properly have been made.
(Footnotes omitted)
The Rule 19.18 considerations
Senior counsel for the mother set out those considerations in her costs submissions. [12]
[12] Exhibit E1 the mother’s submissions as to costs filed 9 September 2020, pages 14 and 15.
The Court has a wide discretion in relation to costs and given the particular circumstances of these proceedings. Given all the facts and circumstances in this matter and considering them against the provisions of s 117(2A) of the Act, I am satisfied that a costs order ought to be made.
Step 2 - What form should the costs order take?
In Pearson, a recent decision of mine, I set out the principles relating to indemnity costs as follows:-
Principles relating to indemnity costs
97.The law in relation to cost is well established and the general rule is that costs will be awarded on a party and party basis rather than an indemnity basis. In a recent Full Court decision of Worth & Worth (No.2) [2019] FamCA 126 the Full Court comprising of Strickland, Kent and Hogan JJ confirmed the ‘authorities are clear, that for the usual basis to be departed from, exceptional circumstances need to be demonstrated (see, eg, Limousin & Limousin (Costs) (2007) 38 FamLR 478).’[13]
[13] At paragraph 9.
98.The Full Court went on to say:-[14]
[14] Ibid.
The categories of such circumstances are not closed (Yunghanns & Yunghanns (2000) FLC 93-029), but some examples are provided in the oft-quoted decision of Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (“Colgate-Palmolive Co”), and usefully, Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660, drew from his Honour’s decision the following:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties.
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
(e)An imprudent refusal of an offer to compromise.
(Citations omitted)
99.In Prantage v Prantage (2013) FLC 93-544 the Full Court of the Family Court reviewed the law in relation to costs and affirmed that there needed be exceptional circumstances to justify an order for indemnity costs. Thackray and Ryan JJ considered other matters relevant to indemnity costs and observed:-
100.His Honour’s statement, at [50], that Sheppard J’s emphasis in Colgate-Palmolive was “on parties who must have or should have known their approach was simply imprudent” does not, in our view, accurately reflect the law as explained in Colgate-Palmolive and other cases dealing with indemnity costs.
101.It is true, as the trial Judge noted, that Sheppard J included in the list of situations that might give rise to an order for indemnity costs “the imprudent refusal of an offer to compromise”. However, in our view, imprudence by a party in “their approach” is not sufficient to enliven the power to award indemnity costs.
102.It is important in this context to recognise, as Lindgren J did in NMFM Property Pty Ltd v Citibank Ltd (No 2) (2001) 109 FCR 77 at [56], that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation”.
103.Lindgren J went on to point out (original emphasis):
Even in a proved case of fraud, for example, in my opinion the presumption is that a costs order against the fraudulent party will be on the party and party basis. The conduct of a party that is relevant to the issue of indemnity costs is the party’s conduct as litigant. But, as noted below, the knowledge that a party has, including knowledge of his or her past conduct, may be relevant to an assessment of his or her conduct as litigant.
100.I also adopt the observations of Berman J in Catlin & Catlin (2018) FamCA 235 at paragraphs 37 to 38 giving a broader definition of ‘wholly unsuccessful’:-
37.In Penfold & Penfold (1980) FLC 90-800 consideration was given by the Full Court to the extent to which an applicant had been substantially successful in the relief sought and whether that should be a factor in determining an order for costs. The majority of the Full Court said at 75,054:-
… True it is that the appellant obtained only some of the orders which she sought. However, it appears that she would have obtained other orders, those relating to the enrolment of the children as boarders in educational institutions, but for the circumstance that after the hearing before the vacation judge and immediately before the hearing before Allen C.J. in F.L.D. the respondent agreed to the arrangements proposed. …
38.I consider that for a finding to be made that the husband was “wholly unsuccessful” does not require the wife to establish that no part of the husband’s claim for a set off was successful.
This is a case where I am not satisfied that there ought to be an order for indemnity costs. However, given the finds in the Substantive Reasons and reflecting on those in terms of this application, I am satisfied that there ought to be an order for lawyer/client costs.
Step 3 -Whether the Court should fix costs sought by the mother?
I discussed the question of fixing costs in Pearson (supra) as set out below:-
107.In terms of this Courts determination of the quantum of costs, I note the remarks of Strickland, Kent and Watts JJ in the recent Full Court decision of Pierson & Romilly [2020] FamCAFC 91 where their Honours said:-
85.It is the policy of this Court to attempt to fix costs at the conclusion of the hearing in order to save the parties the cost, time and resources of a taxation, as well as to save the time of a Registrar in taxing the costs.
108.I take it that ‘the policy’ referred to in that judgment relates to that of the Full Courts of the Family Court. However, the underlying principles and reasoning upon which that jurisprudence rests must be equally apposite to judges determining costs at first instance.
109.For issues and conflict to require determination by a judicial officer, the parties or one or other of them have eschewed alternative dispute resolution.
110.First instance judges are often uniquely informed and equipped to determine costs at large and in particular. The determination of costs falls into three distinct areas of reasoning:-
a)whether or not a costs order ought to be made;
b)if there is to be a costs order on what basis should it be calculated; party and party, legal practitioner and client, indemnity, or some other basis;
c)once those determinations are made, then there needs to be serious consideration as a fixed costs orders or assessment under the Rules. In this phase of the determination judges should have regard to the ‘cost, time and resources of a taxation, as well as to save the time of a Registrar in taxing the costs’ and other relevant factors.
111.As with the jurisprudence and as set out in the Rules, the determination of the quantum of costs is a process of assessment, not taxation.
I have carefully looked at the costs set out in the material attached to the mother’s affidavit. This was a case that ran for almost two weeks.
There were parenting proceedings and other enforcement proceedings. I believe I am uniquely informed and equipped to determine the costs in particular and I have considered the costs in the terms of the material provided to me.
In Idoport Pty Ltd v National Australia Bank Ltd[2007] NSWSC 23 the Court said at [10] that the 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”.[15]
[15] Exhibit E1 mother’s submissions as to costs filed 9 September 2020, page 6.
In Parke & the Estate of the Late A Parke(2016) FLC 93-748 Murphy J noted at paragraph 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”.
(Footnotes omitted)
Collier J in the decision of Lenardi & Lenardi (No.2) [2011] FamCA 604 said:-
30. “Wholly unsuccessful” is difficult to define. However, to my mind, what it means is that a party has completely failed to attain what he or she sought by way of substantive relief.
The amount sought given the nature and scope of the litigation before the Court is, in my view, fair reasonable and proportionate given the nature of the determination needed to be made in the contents of these proceedings.
As such I intend to make a lump sum costs order that the father contribute to the mother’s costs in relation to both the substantive proceedings and in relation to this costs application and I will so order.
I certify that the preceding eighty three (83) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 18 November 2020.
Associate:
Date: 18 November 2020.
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