DAVENPORT & DAVENPORT
[2020] FCCA 2765
•8 October 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DAVENPORT & DAVENPORT | [2020] FCCA 2765 |
| Catchwords: FAMILY LAW – Costs – whether justifying circumstances to make costs order – order for costs. |
| Legislation: Family Law Act 1975 (Cth), ss.79, 117(1), 117(2A), 117(2A)(c), 117(2A)(e) Federal Circuit Court of Australia Act 1999 (Cth), ss.66, 67, 68, 69 Federal Circuit Court Rules 2001 (Cth), rr.21.10, 21.02(2), 21.04, 20.01(1)(b) |
| Cases cited: Bant & Clayton (Costs) [2016] FamCAFC 35 Colgate-Palmolive v Cussons Pty Ltd (1993) 118 ALR 248 Parke & Estate of the Late A Parke (2016) FLC 93-748 Penfold & Penfold (1980) 144 CLR 311 Prantage v Prantage [2014] FamCA 850 Stephens & Stephens (2010) FamCAFC 117 |
| Applicant: | MS DAVENPORT |
| Respondent: | MR DAVENPORT |
| File Number: | BRC 787 of 2020 |
| Judgment of: | Judge Tonkin |
| Hearing date: | 21 August 2020 |
| Date of Last Submission: | 4 September 2020 |
| Delivered at: | Brisbane |
| Delivered on: | 8 October 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms R. Horsley |
| Solicitors for the Applicant: | Michael Lynch Family Lawyers |
| The Respondent appeared in person. |
ORDERS
Within twenty-eight (28) days of the date of these Orders, the husband pay the wife’s costs associated with his application for review filed on 20 April 2020 calculated in accordance with Schedule 1 of the Federal Circuit Court Rules 2001 (Cth) fixed in the sum of $6,806.50.
IT IS NOTED that publication of this judgment under the pseudonym Davenport & Davenport is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 787 of 2020
| MS DAVENPORT |
Applicant
And
| MR DAVENPORT |
Respondent
REASONS FOR JUDGMENT
Introduction
The wife brings an application for costs with respect to the husband’s application for review of the decision of the Registrar filed on 20 April 2020. That application was dismissed on 21 August 2020.
Background
The parties commenced cohabitation in 2015, were married in 2017 and separated under one roof on 5 April 2019. There are no children of the marriage. The duration of the relationship was approximately 3 years and 8 months. On 8 May 2020 the husband vacated the former matrimonial home at B Street, Suburb C.
On 22 January 2020 the wife commenced proceedings seeking interim and final orders with respect to adjustment of property interests under section 79 of the Family Law Act1975 (Cth).
On 10 March 2020 the husband filed a response seeking inter alia that “final orders application by the applicant be rejected as the applicant has not undertaken any genuine effort at mediation.”
Further, he sought interim orders as follows:
“1. Interim orders application by the applicant be rejected as the applicant has not undertaken any genuine effort at mediation;
2. The parties be directed to participate in a genuine effort at mediation of the financial dispute;
3. The parties agree to the appointment of a private mediator from a list of potential mediator names and the costs of the mediation be shared equally by both parties;
4. Interim orders be granted for the respondent to have shared custody to ‘D’ the dog;
5. Costs of $2732.60 be awarded to the respondent and be paid by the applicant for personal loss and anxiety cause to the respondent by the applicant engaging in vexatious initiating application to the Federal Circuit Court for final and interim financial orders while rejecting all offers of mediation from the respondent over 9 months;
6. Ms E and the firm of Michael Lynch Family Lawyers are directed to cease efforts to approach the respondent at his workplace for any reason and all future documents requiring hand service be to his home address.”
On 11 March 2020 the husband filed a further affidavit claiming that the wife’s application was vexatious and an abuse of process maintaining that she had ignored his efforts to engage in Alternate Dispute Resolution processes prior to commencing proceedings.
On 17 March 2020 the matter came before Registrar Webb in the Discrete Property Listing Hearings in accordance with the practice implemented by the Court. This was also the first occasion when the Court was notified that Covid–19 had been declared a pandemic and safety precautions needed to be implemented to protect the health of individuals who came into contact with the Court. Registrar Webb made a number of orders (Orders 1 – 14) (mostly procedural) to advance the property application. Those orders were said to be “By Consent.” She adjourned the matter to 29 April 2020 for further procedural hearing. Order 14 of the orders made by the Registrar provides “the husband’s application in a case be adjourned before a Judge to 17 August 2020 for hearing.” She made a number of Notations including that the husband obtain legal advice regarding the Court’s power to make orders sought by the husband on an interim basis.
On 7 April 2020 the husband filed an amended response seeking final orders that the hearing before Registrar Webb “be cancelled and transferred to the Docket judge or another judge” and asserted that the wife’s application was an abuse of process. He sought interim orders as follows:
“1. The wife’s application be rejected as the applicant has not undertaken any genuine effort at mediation;
2. The parties are to agree to the appointment of a private mediator and costs to be shared equally by both parties;
3. If after mediation a property settlement is not agreed the parties can then make application for interim and final orders to the FCC;
4. That the hearing set by Registrar Webb to take place before a Judge on 17 August 2020 and dealing with an interim order sought by the respondent for shared custody to ‘D’ the dog be brought forward to a date as soon as possible and as a video hearing. The dog is kidnapped by the applicant for the purposes of stress and anxiety to the respondent.”
On 13 April 2020 the husband filed a further amended response as follows:
“1. Final Orders application by the applicant is rejected;
2. The parties are directed to undertake private negotiation and mediation in an attempt to resolve the property dispute and as a pre-requisite before any application for final or interim orders can be lodged with the Federal Circuit Court.
3. The hearing before Registrar Webb set for 29 April 2020 be cancelled and transferred to the Docket Judge or another judge at the first available date.
1. Interim orders application by the applicant is rejected;
2. Interim order is granted for the respondent to have shared custody of ‘D’ the dog and to include:
(a) Applicant as main custodian with ‘D’ resident with the applicant for five days/nights per week;
(b) Respondent to have shared custody with ‘D’ resident at the respondent’s home for two days/nights per week;
3. The 17 August 2020 date set by Registrar Webb to hear the respondent’s application for joint custody of the dog be urgently brought forward to an earlier hearing date.”
On 13 April 2020 the husband filed a third affidavit arguing that the parties should be required to attend private negotiation and mediation and largely repeating the evidence in his affidavit filed on 10 March 2020 concerning the dog ‘D’. In his affidavit he complained that he had sent a letter to the Court dated 12 March 2020 requesting that the procedural hearing set for 17 March 2020 be transferred to the Docket Judge. The letter was addressed to the “Senior Judge – Federal District Court – Family Law dated 12 March 2020” though the date of 12 March 2020 had been overwritten in pen deleting a typed date. He sought that the date set for hearing on 17 August 2020 be urgently brought forward to hear the application for joint custody of the dog.
On 14 April 2020 the husband filed a fourth affidavit arguing that the wife’s lawyer was engaging in a vexatious application and an abuse of process by putting pressure on the husband as a self – represented person. He argued that he was bullied into signing consent orders made by Registrar Webb. He argued that his request made on 12 March 2020 for his matter to be transferred to a Judge for hearing on 17 March 2020 was “never replied to.” He said he appeared before Registrar Webb on 17 March 2020 and requested a response to his letter dated 12 March 2020. He alleged that he was told there was a shortage of judges due to the outbreak of the Covid -19 pandemic and the earliest a judge was available was 17 August 2020. He claimed with respect to the orders that were made on 17 March 2020 by the Registrar that he objected to the use of the word “consent.” He claimed the Registrar threatened him that if he did not sign the Consent Orders as drafted she would require the parties to return to Court the following week “and make that very exact order.” He claimed he was bullied into signing the consent orders and threatened with an award of costs against him.
On 20 April 2020 the husband filed an application for review of the Registrar’s decision. His grounds for review included that at the hearing on 17 March 2020 Registrar Webb erred in proceeding that day and in the conduct of the hearing by exceeding the powers of the Registrar. Further he argued that the Registrar did not have the authority to determine the request that he delivered on 12 March 2020. He claimed that Registrar Webb denied his request to transfer the matter to a judge. He claimed that he was bullied by the Registrar into signing the consent orders. The husband’s application for review was not filed within 7 days of the Registrar’s decision but some four weeks later. He did not seek leave to extend the time for filing the application.
On 22 April 2020[1] the wife’s solicitor wrote to the husband advising him to withdraw the application for review on the basis that it was both out of time and had no prospects of success. The husband was advised that his failure to withdraw the application placed him at risk of costs on an indemnity basis.
[1] Annexure -01 of the affidavit of Ms E filed on 27 April 2020.
On 24 April 2020 the wife’s solicitor filed an affidavit in response to the application for review. She argued that:
a)The husband’s application for review was out of time;
b)There was no legal basis for the review given that the matter was first listed in the Discrete Property List before a Registrar;
c)The interim application sought by the respondent was not urgent requiring a judge to consider the application on the first return date; and
d)She sought the application for review be dismissed with costs on an indemnity basis.
The wife’s solicitor deposed that she was present during the procedural hearing on 17 March 2020. Registrar Webb advised both parties that the husband had requested the matter be transferred to a judge and that “no judge was available that day to hear the matter.” According to the wife’s solicitor the husband responded “I am being denied my justice” and “I am the victim.” According to the wife’s solicitor, the Registrar advised the husband the Court did not have jurisdiction to hear some of the husband’s interim application including that he be compensated for anxiety, restraining orders and costs orders.
The wife’s solicitor deposed that a number of procedural orders were agreed to and the husband was invited to sign the draft orders. She alleged that the husband said he would not sign the orders as he did not want to be “tricked into signing them.” When asked by the Registrar if he had a problem with the orders he did not dispute any individual order but stated that the wife’s application was “out of order” as he had been denied mediation and there had been a 5 month delay. When asked if he had read the guidelines on the Court’s website regarding the Discrete Property Hearing List he indicated that he wanted the matter transferred to a judge. He was advised no judge was available. According to the wife’s solicitor he said “I want my day in Court, I am a law abiding citizen, I have been denied access to a docket Judge, I am the little mouse that roared.” According to the wife’s solicitor the husband signed the orders though he said “I am stressed today but I will sign.” The husband’s interim application was adjourned to 17 August 2020. It is unclear whether the matters contained in the wife’s solicitor’s affidavit are disputed by the husband as he has not responded to the allegations regarding the conduct of the proceedings before the Registrar. I make no finding at all regarding what occurred before the Registrar nor am I required to as the husband subsequently withdrew his application for review stating that the matters contained therein had been “overtaken.”
With respect to the availability of a judge it was a matter for the Registrar to make appropriate enquiries whether there was capacity for a judge to hear and determine the matter and to balance the competing interests of all litigants regarding whether the matter was urgent or not. That decision was not subject to review. Further the husband was seeking an urgent hearing of his application for “shared custody” of the dog. It is apparent from the orders made by the Registrar that she queried the Court’s power to make orders for “shared custody” of the dog and invited the husband to obtain legal advice.
The matter was listed before me on 28 April 2020. I made orders for the parties to attend a conciliation conference including procedural orders in preparation for the conference. On that occasion the wife’s Counsel made an oral application for summary dismissal of the husband’s application for review filed on 20 April 2020. I made directions for filing written submissions with respect to the oral application for summary dismissal. I adjourned the husband’s application for shared custody of the dog to 21 August 2020. I reserved the wife’s costs. The matter remained listed before the Registrar on 29 April 2020.
On 25 May 2020 the husband filed a fifth affidavit again complaining about the protracted nature of the property dispute and the conduct of the wife’s lawyer alleging unnecessary delay of the proceedings.
On 31 July 2020 the wife complied with Order 21 of the orders made by me on 28 April 2020 and filed written submissions with respect to the application for summary dismissal. The husband did not comply with that order on or before 7 August 2020 or at all.
On 21 August 2020 the matter was listed before me for hearing. The husband represented himself whilst the wife was represented by Counsel. The matter proceeded via audio link.[2] During the hearing the husband acknowledged that his application for review of the Registrar’s decision had largely been overtaken by subsequent events, including the Conciliation Conference which had occurred on 26 May 2020. As such he indicated he did not intend to pursue his application for review of the Registrar’s decision and that application was dismissed. The wife made an application for costs and I made directions for the parties to file written submissions on that issue. The husband indicated that he was pressing his application for “shared custody” of the dog ‘D’.
[2] The matter proceeded electronically via audio link pursuant to sections 66 to 69 of the Federal Circuit Court of Australia Act1999 (Cth) and Joint Practice Direction 2 of 2020 – Special Measures in Response to COVID-19
Both parties filed written submissions with respect to costs.
Orders sought by the parties
The wife is seeking the following costs orders in the alternative:
“1. Within twenty eight (28) days of the date of these Orders, the Husband pay the Wife’s costs associated with his application for review filed 20 April 2020 on an indemnity basis, fixed in the sum of $15,827.26, or such lower sum as the Court may consider just.
IN THE ALTERNATIVE TO ORDER 1
2. Within twenty eight (28) days of the date of these Orders, the Husband pay the Wife’s costs associated with his application for review filed 20 April 2020 calculated in accordance with Schedule 1 of the Federal Circuit Court Rules 2001 (Cth), fixed in the sum of $6,806.50.”
The husband seeks the application be dismissed. He submitted that “the claims for a cost award was premature and for determination at the final hearing.”
Legal principles
The starting point with respect to a consideration of an application for costs is subsection 117 (1) of the Family Law Act 1975 (“the Act”) which provides that each party shall pay his or her costs. Subsection 117 (2) of the FLA provides however that the Court may make an order for costs if satisfied there are justifying circumstances.[3] When exercising its discretion the court is required to have regard to the factors set out at subsection 117 (2A) of the FLA in so far as they are relevant.
[3] Penfold & Penfold (1980) 144 CLR 311 at 315
In Stephens & Stephens (2010) FamCAFC 117 at [67] the Court observed that “An order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature. Costs are not a penalty or damages: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 per Mason CJ at 543 and McHugh J at 567; Ruddock and Ors v Vadarlis and Ors (2001) 188 ALR 143 per Full Court of the Federal Court at [12] and Brott and Joachim [2006] FamCA 256; (2006) FLC 93-259 per Full Court (Holden, Warnick and Boland JJ) at 80,403-404”
Rule 21.10 of the Federal Circuit Court Rules 2001 (Cth) provides:
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:
(a) costs in accordance with Parts 1 and 2 of Schedule 1; and
(b) disbursements properly incurred.
Rule 21.02(2) of the FCC Rules confirms that:
In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
( c) refer the costs for taxation under Part 40 of the Federal Court Rules or under
Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.
Rule 21.04 of the FCC Rules provides:
If the costs of a motion, application or other proceeding are reserved, the costs reserved follow the event unless the Court otherwise orders.
Indemnity costs
Regarding the applicant’s contention that an order for costs be made on an indemnity basis Shepherd J in Colgate-Palmolive v Cussons Pty Ltd (1993) 118 ALR 248 having reviewed relevant authorities summarised the applicable principles with respect to costs at [24] as follows:
“[24] It seems to me that the following principles or guidelines can be distilled out of the authorities to which I have referred:-
1. The problem arises in adversary litigation, i.e. litigation as between parties at arm's length. Different considerations apply where parties may be found to be entitled to the payment of their costs out of a fund or assets being administered by or under the control of a trustee, liquidator, receiver or person in a like position, for example a government agency or statutory authority.
2. The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis. …. In many cases the result will be that the amount recovered by the successful party under the Order will fall short of (in many cases well short of) a complete indemnity.
3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of Court) or a decision of an intermediate court of appeal or of the High Court would be required to alter it……
4. In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. ….. The Court of Appeal in Andrews v. Barnes (39 Ch D at 141) said the Court had a general and discretionary power to award costs as between solicitor and client “as and when the justice of the case might so require.” Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v. Preston ((1982) 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice…..
5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud ….. evidence of particular misconduct that causes loss of time to the Court and to other parties ….. the fact that the proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law ……….. the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions ………an imprudent refusal of an offer to compromise ………. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice.”
The Full Court in Prantage v Prantage [2014] FamCA 850 endorsed Shepherd J’s approach in Colgate Palmolive (supra) when considering an application for indemnity costs.
Discussion
There are a number of relevant considerations under subsection 117 (2A) of the FLA in this matter. In his financial statement filed on 10 March 2020 the husband deposed that he was employed as a Professional earning $2226 gross per week. He estimated his weekly expenses were $1310 per week. He deposed to property worth $1,125,609 with liabilities of $81,967 and superannuation interests of $98,903. The wife deposed in her financial statement filed 22 January 2020 that she was employed as a care worker earning $677 gross per week with expenses of $965 per week. She has property worth $769,074, liabilities of $78,467 and interests in superannuation of $237,478. I am satisfied that the husband’s financial position is superior to the wife’s financial position.
Regarding ss117 (2A) (c) of the FLA I am satisfied that the wife has at all times complied with orders made by the Court. Following the conciliation conference which occurred on 25 May 2020 there was little utility in the husband pursuing his application for review. He conceded that on 21 August 2020 but failed to file any Notice of Discontinuance or withdraw the application or advise the wife or her solicitor of his intention to do so prior to 21 August 2020. I find that the wife was unnecessarily put to the expense of filing written submissions with respect to her application for summary dismissal. Had the husband advised her of his intention not to pursue the review application those legal costs could have been avoided.
Further I accept the submission of Counsel for the wife that the husband’s application for review had no reasonable prospects of success. The husband had failed to file the application for review within the seven (7) day timeframe required by rule 20.01(1) (b) of the FCC Rules, the application for review being filed approximately four (4) weeks out of time. He did not seek leave to extend the time for filing. In my view the application for review of the decision of the Registrar was misconceived. The husband sought to challenge an administrative decision by the Registrar not to refer the husband’s “urgent” application for “shared custody” of the dog before a judge. That decision was not open to challenge. Further by the time the husband’s application was referred to a judge his review application was rendered otiose.
The husband failed to comply with orders made on 24 April 2020 for the filing of written submissions regarding why his application for review should not be summarily dismissed.
While the husband ultimately elected to discontinue his application for review, and the Court proceeded to dismiss the application on that basis, discontinued applications are not seen as “wholly unsuccessful” for the purposes of s117(2A)(e).[4] Subsection 117(2A) (e) of the FLA is directed to “cases where an application is heard and determined and the applicant is wholly unsuccessful”.[5]
[4] Parke & Estate of the Late A Parke (2016) FLC 93-748 at [17]
[5] Bant & Clayton (Costs) [2016] FamCAFC 35 at [22].
The wife through her solicitors made an offer in writing to the husband in an attempt to settle the application for review, on two occasions:
a)Four (4) days after the husband filed his application for review, on 24 April 2020; and
b)Approximately one (1) month after the unsuccessful Conciliation Conference, on 24 June 2020.
Both offers invited the husband to withdraw his application for review and confirmed that the wife was intending to seek an order for indemnity costs if he did not so. I accept the submission of Counsel that by the time the second offer was made, the orders sought by the husband in his application for review were without merit. The husband acknowledged as much on 21 August 2020. In my view it was imprudent for the husband to refuse the wife’s offers of compromise.
I accept that the wife’s costs for Counsel’s appearance on 28 April 2020 were reserved. I accept that the husband unduly prolonged the proceedings by persisting with the application for review and waiting until the hearing date before electing to discontinue. I am not satisfied however that the husband’s conduct amounted to wilful disregard of known facts or demonstrated some ulterior motive on his part. Neither has been established to the requisite degree.
I reject the husband’s submission that the application for costs is premature and should await the final hearing. I reject the husband’s assertion that the wife’s legal representatives are putting pressure on him and seeking to intimidate him as a self-represented litigant.The husband has elected to appear for himself as is his right.
Conclusion
In this matter I am satisfied that there are justifying circumstances that a costs order should be made against the respondent. I take into account all of the matters considered above. In particular I take into account that the husband pursued an application that had little merit and ignored offers of compromise at his peril. The wife has incurred significant costs in defending that application. I am satisfied that the respondent has the capacity to pay the costs order.
I am not satisfied that there are circumstances in this case to depart from the usual course with respect to making an order for costs. I decline to make an order on an indemnity basis.
I order that within twenty eight (28) days of the date of these Orders, the applicant husband pay the respondent wife’s costs associated with his application for review filed 20 April 2020 calculated in accordance with Schedule 1 of the Federal Circuit Court Rules 2001 (Cth), fixed in the sum of $6,806.50.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Tonkin
Date: 8 October 2020
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