Defrey & Radnor
[2021] FedCFamC1A 18
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Defrey & Radnor [2021] FedCFamC1A 18
Appeal from: Defrey & Radnor [2020] FCCA 713 Appeal number(s): EAA 54 of 2020 File number(s): SYC 3980 of 2012 Judgment of: AINSLIE-WALLACE, WATTS & TREE JJ Date of judgment: 23 September 2021 Catchwords: FAMILY LAW – APPEAL – COSTS – The parties asked the Court to resolve all issues as to costs for the proceedings overall – Where, although the father succeeded on certain grounds, his appeal was substantially unsuccessful and on a re-exercise his application was wholly unsuccessful – Where no offer made by either party to settle the proceedings was relevant to the issue of costs – Where it is just to make an order in the mother’s favour – Where the father is to pay the mother’s costs in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 117
Federal Proceedings (Costs) Act 1981 (Cth) ss 8, 9
Family Law Rules 2004 (Cth) Sch 3
Family Law Repeal Rules 2021 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Sch 3
Cases cited: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; [1995] FCA 350
Defrey & Radnor (No 2) (2021) FLC 94-044; [2021] FamCAFC 139
Rice and Asplund (1979) FLC 90-725; [1978] FamCA 84
Stopford Malloy & Malloy and Anor (Costs) [2018] FamCAFC 6
Number of paragraphs: 59 Date of last submissions: 25 August 2021 Date of hearing: By way of written submissions Place: In chambers Counsel for the Appellant: Mr Weightman Solicitor for the Appellant: Conditsis Lawyers Counsel for the Respondent: Dr Smith Solicitor for the Respondent: Lander and Rogers ORDERS
EAA 54 of 2020
SYC 3980 of 2012FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR DEFREY
Appellant
AND: MS RADNOR
Respondent
ORDER MADE BY:
AINSLIE-WALLACE, WATTS & TREE JJ
DATE OF ORDER:
23 SEPTEMBER 2021
THE COURT ORDERS THAT:
1.Leave is granted to the father to rely on submissions filed 25 August 2021.
2.The father pay the mother’s costs of these proceedings fixed in the sum of $35,510 within 28 days.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Defrey & Radnor has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AINSLIE-WALLACE, WATTS & TREE JJ:
INTRODUCTION
The father and mother in this case make competing applications for costs orders in relation to these proceedings.
The father seeks an order that the mother pay the costs of the appeal in the amount of $14,645.80 or in the alternative, the father be granted a certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) (“the Costs Act”) in respect of the appeal and pursuant to s 8 in respect of the re-exercise of discretion. Section 8 of the Costs Act only applies when this Court has granted a “new trial”. The father resists any costs order being made against him.
The mother seeks an order that the father pay her costs on a party/party basis fixed in an amount of $29,106.78 and in the alternative, be granted a costs certificate for the costs of and incidental to the appeal. In addition, the mother seeks an order that the father pay her costs on a party/party basis in relation to the re-exercise of discretion fixed in the amount of $14,169.65 or alternatively, a costs certificate of and incidental to the re-exercise of discretion. The mother also seeks that this Court make an order that the father pay her costs in relation to the primary proceedings on a party/party basis fixed in the sum of $5,509.74.
BACKGROUND
The father filed written submissions on 12 August 2021 and the mother on 19 August 2021. The father filed submissions in reply out of time, nevertheless we give the father leave to rely on them.
By Notice of Appeal filed 7 May 2020, the father appealed orders made by a judge of the Federal Circuit Court on 9 April 2020 dismissing his application for variation of parenting orders, having determined, as a preliminary issue, that the father’s application did not satisfy the threshold test in Rice and Asplund (1979) FLC 90-725 (“Rice and Asplund”) and the subsequent cases which have amplified that test.
By Ground 1, the father complained that the primary judge had ordered that the parties attend arbitration to resolve any continuing disputes in relation to passports and information sharing about the children’s participation in non-school activities (Order 4) or any “other issue relating to the past and current parenting Orders” (Order 5). That ground was conceded by the mother prior to the father filing his Summary of Argument on 23 September 2020 and the mother agreed that Orders 4 and 5 be set aside in their entirety.
By Ground 2, the father asserted that the primary judge’s exercise of discretion in dismissing his application miscarried because of 13 errors the primary judge had made either individually or cumulatively which infected the exercise of discretion. The father failed in relation to Grounds 2(c)–(l) (10 out of the 13 asserted errors).
There was merit in Grounds 2(a) and (b) of the father’s appeal which complained that the primary judge’s application of the test in Rice and Asplund when dismissing the father’s application for changes in usual time, school excursions, international travel and passports, extra-curricular activities and changeovers was infected by the assertion the primary judge made that such disputes should be resolved by counselling, mediation and arbitration. The father was successful in arguing that whatever processes for alternate dispute resolution may be available, they are largely irrelevant to the determination which the primary judge was required to make, namely, whether the father’s application should be dismissed because new events were insufficient to provoke a new inquiry.
Ground 2(m) was a ground similar to Grounds 2(a) and (b). There was merit in the father’s argument that the primary judge misinterpreted Order 23 of the final parenting orders made in 2015, incorrectly reading it to mean that it provided a machinery provision for the alternative resolution of further disputes between the parties.
As a result of the father’s challenges in Grounds 2(a), (b) and (m), part of the father’s application, which the primary judge had entirely dismissed applying the Rice and Asplund test, were required to be reheard.
There was an additional difficulty in relation to the father’s application concerning the child’s international school excursions (to which the rule in Rice and Asplund did not apply and which the primary judge did not entertain and determine) thus, also needed to be reheard.
In addition, the primary judge announced his intention to make orders in relation to passports and future extra-curricular activities requiring the parties to provide his chambers with a form of order in accordance with his ruling. The parties were unable to agree on that form of order and the orders were never made.
Grounds 3–5 challenged the costs order that the primary judge had made in the mother’s favour. Whilst some of those challenges were unsuccessful, the father successfully argued that the primary judge had given no explicit reason for making the costs order.
Given the appeal was partly successful, the question arose as to whether or not the matter should be remitted or this Court should re-exercise discretion. The mother sought that we
re-exercise; the father initially opposed that course. We made directions for the filing of evidence and submissions as to whether or not we should re-exercise.
Upon the receipt of written submissions, the father indicated he agreed that this Court should re-exercise discretion. Given the unfortunate and protracted history of this matter, that was a sensible decision particularly given that it was unlikely the father could have resisted the mother’s application for this Court to re-exercise in any event.
Both parties reiterated the positions which they had pressed before the primary judge. The father continued to argue that there was a sufficient change of circumstances to vary the final orders. This Court applied the Rice and Asplund test and found that there were no new relevant change in circumstances and the father’s Initiating Application was dismissed.
COSTS
Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that subject to s 117(2), each party should bear their own costs. Section 117(2) provides that if there are circumstances which justify doing so, the court may make such order as to costs as the court considers just. In considering what order (if any) should be made, the court shall have regard to those matters set out in s 117(2A).
The Court has no information as to the financial circumstances of each of the parties and has been informed that neither party is in receipt of assistance by way of legal aid.
The only relevant s 117(2A) considerations are (e), (f) and (g).
Whether any party to the proceedings has been wholly unsuccessful in the proceedings and such other matters as the court considers relevant (s 117(2A)(e) and (g))
The mother asserts that, taken as a whole, the father has been wholly unsuccessful.
Following this Court’s re-exercise of discretion, there is no doubt that the father has ultimately been wholly unsuccessful. The mother’s case, both at first instance and before this Court, was always that there had been no relevant change in circumstances and that the father’s application should be dismissed.
At [86] of this Court’s reasons for judgment on the re-exercise (see Defrey & Radnor (No 2) (2021) FLC 94-044 (“Defrey & Radnor (No 2)”)), we say:
We are not satisfied that, assuming the evidence of the father is accepted, there are “new events” sufficient to establish a new inquiry would be in the child’s best interests or that the father has established a prima facie case of a relevant change of circumstances.
With respect to the appeal, we have detailed above how it was allowed in part. Apart from three peripheral issues, the appeal succeeded, despite the primary judge being correct in relation to the application of the Rice and Asplund test because the primary judge had in addition assumed that any future difficulties between the parties could be resolved by an order that they attend compulsory arbitration or alternatively, resolved by other means of alternate dispute resolution.
As is clear, the mother conceded those errors prior to the father filing his Summary of Argument. It was always the mother’s position that given that error, the Full Court ought to
re-exercise discretion and deal with the father’s application having regard to the
Rice and Asplundtest.
The father submitted that the mother has conflated the “first instance” proceedings with “the appeal” and the “re-exercise proceedings”, whereas they should be considered separate and distinct proceedings. Although the father properly concedes that the re-exercise proceedings are an extension of the first instance proceedings, he argues that it could at least properly be considered had it not been for the result of the re-exercise it could not be argued he was not “wholly unsuccessful”.
The parties are asking this Court to resolve all issues as to costs arising from the proceedings overall. We are of the view that it is just to do that in a holistic manner.
The father argues that his institution of proceedings could not be said to have been wholly unsuccessful, for no other reason, than the issue of the child’s passports being resolved between the parties. In the context of this case, that is a minor consideration.
The father accepts that on the re-exercise, he was wholly unsuccessful, however argues that needs to be considered in the extenuating circumstance that the father’s concern regarding international travel which was current at the time of the filing of his Initiating Application, had been overtaken by the difficulties in international travel occasioned by the COVID-19 pandemic, at the time the primary judge’s discretion was re-exercised (Defrey & Radnor (No 2) at [64]). Whilst we acknowledge the logic in that submission, ultimately whether the father would have been successful in that application prior to the pandemic is problematic.
Taking into account everything discussed above, we agree with the father’s submission that he was not technically “wholly unsuccessful” in respect of the appeal. In that event the mother relies permissibly on s 117(2A)(g). We accept the mother’s submission that the father brought an application which ultimately failed, because he did not demonstrate the requisite prima facie change in circumstances.
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 (s 117(2A)(f))
Litigation between the parties in relation to the child commenced when the child was 10 months old. He is now 10 years old. The parties’ written material before the primary judge was extensive.
Each party in these proceedings made various written offers of compromise to the other.
The parties in their written submissions have attached that extensive exchange of proposals.
The father points to written offers made by him to the mother on 12 May 2020 and 14 September 2020. The offers proposed that the appeal be allowed, all orders made by the primary judge be set aside and that the matter be remitted for rehearing before a judge of the Federal Circuit Court other than the primary judge.
The first offer in addition required the mother to pay the father’s costs in the sum of $6,627.05 and the second that the mother pay the father’s costs in the sum of $13,937.31.
The obvious difficulty with each of these offers is that although, as the mother conceded at the outset Orders 4 and 5 needed to be set aside, substantial parts of Order 1 were not. Accordingly the mother achieved a result on the appeal, prior to the re-exercise of discretion, which was more advantageous than these two offers.
Next, the father’s initial submissions do not set out the complete set of correspondence which make up the various written offers of compromise which were exchanged between the parties during the proceedings. Those documents are attached to the mother’s submissions. That correspondence consists of a number of letters which evidence a genuine attempt by the mother to resolve the conflict by attempting to address some of the father’s concerns, whilst maintaining her core position that she would not agree to significant changes to the 2015 final parenting orders.
The mother refers to the fact that on 19 July 2019 the mother offered that changeovers take place at school, an offer which the father rejected and the mother then did not renew. The father points out this offer was made prior to him filing his Initiating Application on 7 November 2019 and as such cannot be an offer “to settle the proceedings”. Even if that is so, pre-action offers made to settle a controversy may still be a relevant consideration (s 117(2A)(g)).
On 22 September 2020, the mother offered to consent to the discharge of Orders 3, 4 and 5 made by the primary judge on the basis that the father would discontinue his appeal. That offer however left in place the costs order made by the primary judge without the mother making any offer to resolve that issue by way of order for a fixed sum.
Further, on 7 June 2021, the mother provided the father with a proposal in which she made concessions as to how the 2015 orders might be changed to address many of his concerns. The mother asserts that offer was rejected by the father on 10 June 2021 with the father making a counter-offer seeking a more extensive change to the 2015 orders. The father rejects that proposition and correctly points out that the offer made by the mother on 7 June 2021 expired on 9 June 2021. We accept that was an unreasonably short period of time to allow the father to consider the offer. Again the offer was silent on the costs of the hearing at first instance and on appeal. The father also points out that the material provided by the mother does not include an email from the father’s lawyers to the mother’s on 9 June 2021 which sought to clarify aspects of the offer on 7 June 2021; an email to which the father asserts there was no response.
We accept that there were aspects of offers made by the mother which could have been accepted by the father and he would be in a better position than the result from the proceedings. However, because of the multiplicity of issues it is difficult for the mother to make the case that the father should have accepted an offer that she made in the form in which it was made at the time it was made.
CONCLUSION
The error of law made by the primary judge was acknowledged at the outset by the mother. That is not why the appeal was run. The father sought to have all orders made by the primary judge set aside and up until 3 June 2021, the father resisted this Court re-exercising the primary judge’s discretion.
In those circumstances, it is not appropriate to make any order under the Costs Act.
When the proceedings are looked at overall the father was substantially unsuccessful, a matter which in the complexities of this case is a consideration of significant weight. Having considered the relevant matters pursuant to s 117(2A) as discussed above, we conclude that it is just to make a costs order in the mother’s favour.
QUANTUM
Both parties seem content for this Court to re-exercise the discretion in relation to the mother’s application before the primary judge for costs of the initial hearing.
The father’s submissions in reply do not assert that it would be inappropriate for us to consider the mother’s application but rather that, it would not be appropriate to depart from the general rule that each party pay their own costs in respect of that application.
The father does not dispute the quantum of costs claimed in accordance with the Federal Circuit Court scale in the sum of $5,509.74. Indeed that is a modest amount given the extent and nature of the material provided by both parties to the primary judge.
The father has ultimately been wholly unsuccessful in relation to the application he made to the primary judge which was dismissed in its entirety by us on 5 August 2021.
Accordingly, at the request of the parties, we deal with the question of costs of proceedings before the primary judge on the basis that we find that it is just that the father pay the mother’s costs fixed in the sum of $5,509.74 within 28 days.
As indicated, the mother seeks costs of the appeal on a party/party basis fixed in the amount of $29,106.78. The purpose of the usual practice to attempt to fix costs is to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation” (Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120). Whilst this Court does not involve itself in a process akin to how a taxing office would approach the task, we take into account the schedule of costs provided by a party and the comments made by the other party when reaching a fixed sum costs order (Stopford Malloy & Malloy and Anor (Costs) [2018] FamCAFC 6).
The father makes a number of observations about the mother’s schedule of costs:
a)There are various e-mails and telephone calls to Senior Counsel without any indication as to their purpose. This is not to suggest that the work was not undertaken, but rather that such items would more probably than not fall into the category of solicitor/client costs rather than party/party costs);
b) The mother claims for her solicitor spending 4-hours “reviewing” the Appeal Book which contained documents that which no doubt were read as part of the first instance proceedings (12 August 2020);
c) The mother claims for 6-hours and 6-minutes preparing and settling the costs schedule, the first 4-hours of which seems to have been undertaken by a paralegal (when regard is had to the notation for 6 February 2021), yet is charged at the rate of a solicitor
d) The mother claims an 8-hour charge for “attendance on file from 21 January 2021 to 16 February 2021” (see entry 16 February 2021), in circumstances where there is a whole raft of individual charges throughout that period.
e)The mother claims costs for Senior Counsel when the nature and complexity of the appeal did not warrant the briefing of Senior Counsel.
(Father’s costs submissions in reply filed 25 August 2021, paragraph 13)
We generally accept submissions (a)–(d), although the charge referred to in (b) also includes reviewing the transcript of the hearing. No allowance will be made for the preparation of costs schedules. We do not accept the father’s submission in (e) that the nature and complexity of the appeal did not warrant the briefing of senior counsel.
The father submits that any costs against him for the appeal, for example, should be something less than those sought by him ($14,645.80) noting that the father incurred expenses in relation to the appeal. For example the preparation of the appeal books which were not incurred by the mother.
We find that it is just that the father be responsible for paying $20,000 of the mother’s costs in relation to the appeal.
In respect of the application for costs in respect of the re-exercise, the mother claims party/party costs in the sum of $14,169.65. This hearing took place on the papers after each party had prepared written submissions.
Again, acknowledging that it is not a taxation we note the following observations made by the father:
a)There are various e-mails and telephone calls to Counsel without any indication as to their purpose. This is not to suggest that the work was not undertaken, but rather that such items would more probably than not fall into the category of solicitor/client costs rather than party/party costs);
b) There is a charge on 16 August 2021 which the notation records was for 2.5 hours work in drafting the Schedule of Costs, which then resulted in a charge of 3.5 hours, which in either case, appears wholly disproportionate. In addition, the work was seemingly charged at a solicitors rate even though the notation records at least some, if not most, of the work was undertaken by a paralegal.
c) The amount sought of $14,169.65 is wholly disproportionate given the costs sought at first instance are $5,509.74.
(Father’s costs submissions in reply filed 25 August 2021, paragraph 15)
Charges for the preparation of costs schedules and the costs of preparing submissions on the costs application (for which no application has been made) will not be allowed.
In relation to the observation in (c) the difference in the two amounts is explained by the application of the Family Law Scale in respect of the first figure and the Federal Circuit Scale in respect of the second. The parties requested that this Court re-exercise the discretion and the applicable scale is Sch 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). The new Sch 3 is in similar form to the old Sch 3 in the Family Law Rules 2004 (Cth) (as repealed by the Family Law Repeal Rules 2021 (Cth)) apart from an incremental increase in item rates.
We assess an appropriate amount for the father to pay the mother in relation to the costs incurred for the re-exercise is $10,000.
Accordingly, we find that it is just for an order to be made that the father pay the mother’s costs of the proceedings fixed in the sum of $35,510 ($5,510+$20,000+$10,000) within 28 days.
I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Ainslie-Wallace, Watts & Tree. Associate:
Dated: 23 September 2021
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