Corley & Petrie (No 2)

Case [2021] FCCA 1259

FEDERAL CIRCUIT COURT OF AUSTRALIA

Corley & Petrie (No 2) [2021] FCCA 1259  

File number(s): MLC 5458 of 2016
Judgment of: HER HONOUR JUDGE C. E. KIRTON QC
Date of judgment: 10 June 2021
Catchwords: FAMILY LAW – Costs – Mother’s application for indemnity costs – consideration of whether case of an ‘exceptional kind’ to award costs on an indemnity basis – application of principles in Kohan and Kohan (1993) FLC 92-340 – doctrine of precedent – no exceptional circumstances justifying departure from the ordinary rule – costs awarded on a party/party basis.
Legislation:

Family Law Act 1975 (Cth) ss 13C, 117

Family Law Rules 2004 (Cth) ch 1, pt 21, divs 21.2, 21.3, ch 19, pts 19.4, 19.5

Federal Circuit Court Rules 2001 (Cth) r 21.02

Cases cited:

Colgate-Palmolive v Cussons Pty Ltd  [1993] FCA 536; (1993) 46 FCR 225

D & D (No 2) (2010) FLC 93-435; [2010] FamCAFC 64

Danks & McCabe [2017] FamCAFC 41; (2017) FLC 93-767

Elmi & Munro (2019) FLC 93-912

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish [2005] FamCA 158; (2005) 33 Fam LR 123

Jensen & Jensen [1982] FamCA 57; (1982) FLC 91-263

Kohan & Kohan  [1992] FamCA 116; (1993) FLC 92-340

Limousin & Limousin (Costs) [2007] FamCA 1178; [2007] 38 FamLR 478

Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157; (2015) FLC 93-664; (2015) 54 Fam LR 1

Munday v Bowman  (1997) FLC 92-784

[2014] FamCAFC 207; (2014) FLC 93-612

Penfold  v Penfold  [1980] HCA 4; (1980) 144 CLR 311

Stasiuk & Guild [2021] FamCAFC 62

Yunghanns v Yunghanns [2000] FamCA 681; (2000) FLC 93-029

Number of paragraphs: 180
Date of last submission/s: 29 September 2020
Date of hearing: 3 August 2020
Place: Melbourne
Counsel for the Applicant: Mr Grant
For the Respondent: The Respondent appeared in person

ORDERS

MLC 5458 of 2016
BETWEEN:

MR CORLEY

Applicant
AND:

MS PETRIE

Respondent

ORDER MADE BY:

HER HONOUR JUDGE C. E. KIRTON QC

DATE OF ORDER:

10 JUNE 2021

THE COURT ORDERS THAT:

1.The Applicant Father (Father) pay the Respondent Mother’s (Mother) party/party costs of the proceedings, including the Mother’s costs reserved on 27 April 2017 and 30 October 2017, with the proceedings to be deemed to have commenced with the filing of the Father’s Initiating Application on 16 June 2016 (Costs).

2.In the event of the parties failing to agree upon the quantum of the Costs by 4.00 pm on 8 July 2021, pursuant to r.21.02(2)(c) of the Federal Circuit Court Rules 2001 (Cth), the Costs be referred for taxation on a party/party basis under Chapter 19 of the Family Law Rules 2004 (Cth).

3.For the purposes of Order 2 herein, the Mother shall file and serve by no later than 4.00 pm on 22 July 2021, an itemised Bill of Costs setting out the professional fees and charges she seeks to be paid by the…

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AGLC
Corley and Petrie (No 2) [2021] FCCA 1259
Case
[2021] FCCA 1259
Decision Date

CaseChat Overview and Summary

Her Honour Judge C. E. Kirton QC considered an application for costs made by the Respondent Mother against the Applicant Father in proceedings concerning parenting orders for their child. The dispute centred on whether circumstances justified making a costs order against the Father and, if so, on what basis (party/party, lawyer/client, or indemnity).

The court was required to determine if there were grounds to award costs against the Father in favour of the Mother. Furthermore, it needed to decide the appropriate basis for any such costs order, considering whether it should be a standard party/party cost order, a more extensive lawyer/client cost order, or an indemnity cost order.

Her Honour found that circumstances did justify making a costs order against the Father. In reaching this decision, the court considered the financial circumstances of both parties, noting the Mother's modest financial position and significant legal debt, contrasted with the Father's unsubstantiated claims of impecuniosity and his departure overseas for work. The court applied the principle that impecuniosity is not a bar to a costs order if otherwise warranted, and found the Father's submissions regarding his financial situation lacked evidentiary support. The court also considered the conduct of the parties, referencing the existence of unfounded allegations. Ultimately, the court ordered that the Father pay the Mother's party/party costs of the proceedings.

Orders

Orders of the court

MLC 5458 of 2016

BETWEEN:

MR CORLEY

Applicant

AND:

MS PETRIE

Respondent

ORDER MADE BY:

HER HONOUR JUDGE C. E. KIRTON QC

DATE OF ORDER:

10 JUNE 2021

THE COURT ORDERS THAT:

1. The Applicant Father (Father) pay the Respondent Mother’s (Mother) party/party costs of the proceedings, including the Mother’s costs reserved on 27 April 2017 and 30 October 2017, with the proceedings to be deemed to have commenced with the filing of the Father’s Initiating Application on 16 June 2016 (Costs).

2. In the event of the parties failing to agree upon the quantum of the Costs by 4.00 pm on 8 July 2021, pursuant to r.21.02(2)(c) of the Federal Circuit Court Rules 2001 (Cth), the Costs be referred for taxation on a party/party basis under Chapter 19 of the Family Law Rules 2004 (Cth).

3. For the purposes of Order 2 herein, the Mother shall file and serve by no later than 4.00 pm on 22 July 2021, an itemised Bill of Costs setting out the professional fees and charges she seeks to be paid by the Father by way of Costs pursuant to this order (Bill of Costs).

4. Within 21 days of receipt of the Bill of Costs, the Father shall file and serve a response to the Bill of Costs, setting out all items in the Bill of Costs to which he objects (whether in its entirety or in respect of quantum). Where the objection relates to quantum, the Father shall specify the amount which he seeks to pay in relation to that item.

5. The matter be referred to the Costs Registrar for Assessment not before 12 August 2021.

6. In the event the Father fails to file and serve a response in accordance with Order 4 herein, the Father is deemed to hold no objection to the Bill of Costs.

7. The Response to an Application in a Case filed by the Father on 7 August 2020 be dismissed.

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Reasons for Judgment were delivered on 16 October 2019 (Judgment) after a trial that proceeded over six days on 30 April, 1 May, 20, 21, 22 and 23 August 2018 (Final Hearing). Final Orders were made on 16 October 2019 (Final Orders). On 7 November 2019 the Mother filed an Application in a Case seeking a costs order against the Father. ISSUES FOR DETERMINATION The issues for determination in these proceedings are:(a) Whether there are circumstances justifying making a costs order against the Father in favour of the Mother; and (b) If a costs order is to be made, whether those costs should be ordered on the usual party/party basis, on a lawyer and client basis or on an indemnity basis.SYNOPSIS I have determined that:(a) There are circumstances justifying making a costs order against the Father in favour of the Mother; (b) The Father pay the Mother’s party/party costs of the proceedings, including the Mother’s costs reserved on 27 April 2017 and 30 October 2017, with the proceedings to be deemed to have commenced with the filing of the Father’s Initiating Application on 16 June 2016; and(c) In the event of the parties failing to agree upon the quantum of the costs by 4.00 pm on 8 July 2021, pursuant to r.21.02(2)(c) of the Federal Circuit Court Rules 2001 (Cth) (Rules), the Costs be referred for taxation on a party/party basis under Chapter 19 of the Family Law Rules 2004 (Cth) (Family Law Rules).BACKGROUND The history of the parties’ relationship and the circumstances leading to their separation was set out in paragraphs 4 to 26 of the Judgment. I will therefore not repeat those details, save where they are relevant in these Reasons for Judgment. PROCEDURAL HISTORY The procedural history of this matter was set out in detail in paragraphs 27 to 62 of the Judgment. It may be relevantly summarised and expanded upon for the current costs application as follows. The Father commenced this proceeding by filing an Initiating Application, an Affidavit and a Notice of Risk on 16 June 2016, seeking interim and final parenting orders in relation to X. At that time X was 7 and a half months old. At the time the Father commenced this proceeding he was represented by Bentleys, Barristers & Solicitors (Bentleys). On 12 July 2016 Marshalls & Dent filed a Notice of Address for Service on behalf of the Mother. On 28 July 2016 the Mother filed a Response to Initiating Application, an Affidavit, a Financial Statement and a Notice of Risk. In the Response to Initiating Application the Mother sought interim and final parenting and property orders. On the first return date of the proceeding on 2 August 2016 before Judge Bender, the Father was represented by Mr Goddard of Counsel and the Mother by Ms Paterson of Counsel.[1] On 2 August 2016 the proceeding was adjourned to 9 November 2016 for Mention.[1] Judgment, [29]. On 1 September 2016 the Father himself filed another document described as an ‘Initiating Application’ which indicated that he was self-represented (Second Initiating Application).[2] When cross-examined by Counsel for the Mother at the Final Hearing the Father confirmed that at the time he filed the Second Initiating Application he was no longer represented.[3] On 22 September 2016 the Father filed a Notice of Address for Service, which confirmed that he was self-represented. On 10 October 2016 Bentleys filed a Notice of Intention to Withdraw as Lawyer. [2] Judgment, [30].[3] Transcript (30.4.18) P66:L5-25.

Ratio Decidendi

Legal Principle Established

I turn now to consider the relevant matters pursuant to s.117(2A) of the Act.SECTION 117(2A) CONSIDERATIONS(a) The financial circumstances of the parties to the proceedingsThe Mother In the Mother’s 7 November 2019 Affidavit the Mother deposed that her financial circumstances were modest. The Mother said that she earned $3,999.23 net a fortnight ($103,979.98 net per annum) from which she had to pay almost the totality of X’s food, clothing, medical and educational costs. The Mother was in debt in the amount of $97,920 for legal costs relating to these proceedings.[71] [71] Mother’s 7 November 2019 Affidavit, [14]. In the Mother’s 18 July 2020 Affidavit the Mother deposed that she had a gross income of $175,000 per annum and that she was still paying off the debt to her parents for the legal costs relating to this proceeding at the rate of $1,000 per calendar month.[72] [72] Mother’s 18 July 2020 Affidavit, [4].The Father In the Costs Submissions, it is contended:(a)The financial circumstances of the parties […]. The situation of the [Father] at the trial was that he was being supported by his partner as he was unable to obtain employment. In recent times he has obtained some work overseas but it is submitted that this sub-section would not provide the basis of a costs order.[73] […][73] Costs Submissions, p.5.Whether any party has been wholly unsuccessful in the proceedings[…]It is also submitted that the making of a significant costs order against [the Father] that he cannot afford to pay will only lead to greater hardship and further litigation when [the Father] returns to Australia.[74] [74] Costs Submissions, p.9. The Father has not filed any affidavit material in relation to his current financial circumstances. The Mother has produced evidence that shortly after Judgment was delivered the Father left Australia to work overseas. In November 2019 the Father was anticipating being able to afford airfares to return to Australia on 9 occasions throughout 2020, as well as education fees for X of $6,000 per annum.[75][75] Mother’s 18 July 2020 Affidavit, [5], [9]-[10], Annexures 1 and -2. Impecuniosity does not necessarily prevent a costs order being made. In Nada & Nettle (Costs)[76] the Full Family Court held:11.That a party is impecunious, even indigent, is not a bar to the making of a costs order if the Court is otherwise of the opinion that such an order ought to be made.[77][76] [2014] FamCAFC 207, [11]; (2014) FLC 93-612. See also D & D (No 2) (2010) FLC 93-435; [2010] FamCAFC 64.[77] [2014] FamCAFC 207, [11]; (2014) FLC 93-612. In the absence of any affidavit evidence of the Father’s current financial circumstances the submissions in the Costs Submissions are without merit and based on speculation without any evidentiary basis. (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 As the Court is advised, neither the Mother nor the Father were in receipt of assistance by way of legal aid. (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 the pleadings, particulars, discovery, inspection, direction to answer questions, admissions of facts, production of documents and similar documentsUnfounded Allegations