Denford and Manville (No. 2)

[2020] FamCA 427

FAMILY COURT OF AUSTRALIA

DENFORD & MANVILLE (NO. 2) [2020] FamCA 427

FAMILY LAW – COSTS – where the Court is persuaded that the circumstances justify the making of an order for costs but is not persuaded that it is just to make an order for costs on an indemnity basis – where costs are ordered in a fixed amount

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)
Evidence Act 1995 (Cth)

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248
D & D (Costs) (No 2) (2010) FLC 93-435
Ding v Ding (2019) 59 Fam LR 262
In the Marriage of Kohan (1993) FLC 92-340
Limousin v Limousin (Costs) (2007) 38 Fam LR 478
Yunghanns v Yunghanns (2000) FLC 93-029

APPLICANT: Mr Denford

RESPONDENT: Ms Manville

INDEPENDENT CHILDREN’S LAWYER: Legal Aid Queensland

FILE NUMBER: BRC 5995 of 2019

DATE DELIVERED: 29 May 2020

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: Determined in Chambers following the receipt of written submissions 

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Brandon, Solicitor Evans Brandon Family Lawyers by way of written submissions filed 26 March 2020 in response

SOLICITOR FOR THE RESPONDENT: Naughton McCarthy Family Lawyers by way of written submissions filed 16 March 2020 and by way of written submissions in reply dated 6 April 2020 and filed 16 April 2020

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: Ms McMillan of Queen’s Counsel by way of written submissions filed 30 March 2020 in response

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Legal Aid Queensland

Orders

IT IS ORDERED THAT

1. The Independent Children’s Lawyer pay Ms Manville’ costs of and incidental to the Application in a Case filed by the Independent Children’s Lawyer on 20 February 2020, with such costs to be fixed in the amount of $1,200.00 and to be paid by 30 June 2020.

2. Mr Denford pay Ms Manville’ costs of and incidental to the Application in a Case filed by the Independent Children’s Lawyer on 20 February 2020, with such costs to be fixed in the amount of $1,200.00 and to be paid by 30 June 2020.

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 Denford & Manville 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 BRISBANE

FILE NUMBER: BRC 5995 of 2019

Mr Denford

Applicant

And

Ms Manville

Respondent

And

The Independent Children’s Lawyer

REASONS FOR JUDGMENT

1. On 28 February 2020 I dismissed the Application in a Case filed by the Independent Children’s Lawyer on 20 February 2020 (the February Application). I did so for the Reasons expressed orally that day, which have subsequently been settled and provided to the parties.  Clearly the Reasons for the decision I made are relevant to the determination of the current application for costs.

2. Ms Manville, who was successful in her opposition to the orders sought in the February Application, now seeks[1] an order that the Independent Children’s Lawyer and Mr Denford pay her costs of and incidental to that Application in a Case on an indemnity basis or, alternatively, on a party and party basis. It is understandable that she does so given that the evidence is that she has been charged $27,918.00 (including GST)[2] by her legal representatives to respond to the February Application.

   [1] Pursuant to Clause 4 of the Order made on 28 February 2020 and by way of written submissions filed 16 March 2020, supported by an affidavit by James Kelleher Naughton filed 16 March 2020 and by submission in reply filed 16 April 2020.

   [2] Affidavit of James Kelleher Naughton filed 16 March 2020 at [12].

3. Mr Denford and the Independent Children’s Lawyer oppose the making of any order for costs.[3] Both submitted that Ms Manville’ application for costs should be dismissed; the Independent Children’s Lawyer also submitted that there should be no order as to costs.

   [3] See: Submissions filed on behalf of Mr Denford on 26 March 2020; Submissions filed on behalf of the Independent Children’s Lawyer on 30 March 2020.

Discussion of Applicable legislation and principles

1. Section 117(1) of the Family Law Act1975 (Cth) provides that each party to proceedings under the Act shall bear his or her own costs. However, if the Court is satisfied there are circumstances which justify it, the Court may make such order as to costs as it considers just.[4]  In considering what order, if any, as to costs should be made, the Court must have regard to the matters set out in s 117(2A) of the Act. In addition, the Court must also disregard the fact that the Independent Children’s lawyer is funded under a legal aid scheme.[5]

   [4] Section 117(2) Family Law Act 1975 (Cth).

   [5] Section 117(5) Family Law Act 1975 (Cth).

2. I accept that Ms Manville is in receipt of the disability support pension. I also accept, though, that both she and Mr Denford were privately legally represented at the hearing of the February Application on 27 February 2020 and that neither of them was in receipt of assistance by way of legal aid.

3. Save for the assertion that Ms Manville currently receives child support from Mr Denford in the amount of $400.00 per fortnight and, prior to January 2020, had received $300.00 per fortnight for this, there is no other evidence before me about their respective financial situations. In a sense, this may not matter much because it is well established that impecuniosity on the part of a party opposing the making of an order for costs is, of itself, no bar to an order for costs being made where it is otherwise warranted.[6]

   [6] See, for example, D & D (Costs) (No 2) (2010) FLC 93-435.

4. The February Application was not necessitated by the failure of any party to the proceedings to comply with previous Court orders. There is no evidence before me to suggest that either Ms Manville or Mr Denford or the Independent Children’s Lawyer made any offer in writing to settle the February Application.

5. It is clear that the Independent Children’s Lawyer was wholly unsuccessful in her prosecution of the February Application; Mr Denford, whose Counsel vigorously supported the same and who would have benefitted from the orders sought by the Independent Children’s Lawyer and who, in addition, evidenced an intention to seek further orders if the Independent Children’s Lawyer had been successful on her application, was also unsuccessful.

6. Ms Manville was completely successful in her opposition to the relief sought by the Independent Children’s Lawyer in the February Application. Such success though is not, of itself, necessarily productive of an order for costs – otherwise there may be an inappropriate distraction from the proper consideration of all of the other matters particularised in s 117(2A) of the Act, those being matters to which the Court must give consideration in determining whether the circumstances in any case are such as to justify the making of an order that one party pay another’s costs.

7. It was submitted on behalf of Ms Manville that she was put to a considerable burden of costs, which could have been avoided if the Independent Children’s Lawyer had not made the February Application and the Independent Children’s Lawyer and Mr Denford had not prosecuted the same and that, as an order for costs is not a punishment but (if made) is made to compensate a party for the costs to which that party has been put, the Court would be persuaded that the circumstances justify the making of the same.

8. Having considered the contents of the written submissions provided on behalf of Ms Manville, Mr Denford and the Independent Children’s Lawyer, I am persuaded, in the broad exercise of discretion accorded to the Court in determining applications for costs, that the circumstances here justify the making of orders for costs in Ms Manville’ favour.

9. I have arrived at that conclusion having particular regard to: Ms Manville’ financial situation; that she was wholly successful in her opposition to the orders sought by the Independent Children’s Lawyer in the February Application and the Independent Children’s Lawyer was wholly unsuccessful in her prosecution of the same; that Mr Denford by his Counsel vigorously submitted in favour of the relief sought in the February Application and, by his participation, contributed to the length of the hearing on 27 February 2020; that the Independent Children’s Lawyer and Mr Denford both contended – unsuccessfully – that the Court was bound by authority which predated the operation of the Evidence Act1995 (Cth).

10. I accept that, having determined to seek the relief sought in the February Application, the Independent Children’s Lawyer acted in accordance with the comments made by the Full Court in Ding v Ding.[7] However, that she did so does not detract from the reality that she was wholly unsuccessful in her prosecution of the February Application.

    [7] (2019) 59 Fam LR 262.

11. Further, that the procedure for the making and hearing of applications such as the February Application is now as clearly prescribed in Ding[8] means, it seems to me, that any party seeking to prosecute the same must take into account that all parties will inevitably be put to additional costs: now an application must, where possible, be brought prior to the trial and be heard by a Judge other than the trial Judge rather than simply being left to be argued before the trial Judge at trial,  where the costs of the same would simply be subsumed in the costs of trial.

    [8] (2019) 59 Fam LR 262.

12. I do not accept the submissions made on behalf of the Independent Children’s Lawyer to the effect that, in bringing the February Application, the Independent Children’s Lawyer was doing no more than what she was required to do in order to discharge her statutory obligations: whilst the Family Law Act1975 (Cth) clearly creates a specific role of, and imposes specific duties on, an Independent Children’s Lawyer,[9] it does not provide an Independent Children’s Lawyer with a statutory indemnity for an order for costs. Further, that an Independent Children’s Lawyer considers the contents of privileged communications to be “highly relevant” to parenting proceedings does not remove the requirement for that Independent Children’s Lawyer to consider whether there is an appropriate basis on which to seek to remove the privilege which the law extends to communications between parties and their lawyers and which, of its nature, likely results in the inadmissibility of many “highly relevant” matters.

    [9] See: s 68L Family Law Act 1975 (Cth).

13. In arriving at my conclusion that the circumstances justify the making of an order for costs adverse to Mr Denford, I have rejected the submission that the circumstances do not justify the making of an order for costs against him  because he was not the party who brought the February Application: he strongly supported the same and, whilst there is no specific evidence before me to allow a quantification of any additional costs to which Ms Manville was put as a consequence of Mr Denford’ vehement support of the Independent Children’s Lawyer’s position, his Counsel made lengthy and substantial oral submissions in support of the relief sought – in that way, Mr Denford’ participation added to the length of time during which the parties were before the Court on 27 February 2020. Further, whilst it is clear that Mr Denford did not prosecute his own application, it is also very clear that, had the Independent Children’s Lawyer been successful in obtaining the relief sought in the February Application, he would have benefitted from that, as well as being then placed to then seek additional foreshadowed relief.

14. My conclusion that the circumstances justify the making of orders for costs adverse to both the Independent Children’s Lawyer and Mr Denford means that I must determine the just terms of the same.

15. As noted earlier, Ms Manville has been charged $27,918.00 (including GST)[10] by her legal representatives to respond to the February Application. She seeks to be indemnified in relation to these costs. However, authority makes clear that, unless there are exceptional circumstances, an order for costs should be made on a party and party basis.[11]

    [10] Affidavit of James Kelleher Naughton filed 16 March 2020 at [12].

    [11] See D & D Costs (No. 2) (2010) FLC 93-435; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; Yunghanns v Yunghanns (2000) FLC 93-029; In the Marriage of Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J.

16. I do not know what it cost Mr Denford to support the prosecution of the February Application, although I note he was represented by Counsel and solicitor at the hearing and that written submissions were prepared on his behalf. However, I also note and accept that the Independent Children’s Lawyer’s costs of prosecuting the February Application were $2,646.60 (inclusive of GST) in total, comprising the costs of both the Independent Children’s Lawyer and Counsel who appeared on her behalf.

17. There is no evidence before me to establish what Ms Manville’ costs of defending the February Application would be if they had been calculated on a party/party basis.

18. Despite the submissions advanced on behalf of Ms Manville, I am not persuaded that circumstances here are exceptional or extreme or such as to warrant departing from “the usual course” of ordering the payment of costs on a party/party basis to order that costs be paid on an indemnity basis – something which, as has been said in well-known authority, is a “very great departure” from the “normal standard” in this and other jurisdictions.[12]

    [12] D & D Costs (No. 2) (2010) FLC 93-435; Limousin v Limousin (Costs) (2008) 38 Fam LR 478; In the Marriage of Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J.

19. In arriving at this conclusion I am also mindful of the comments of the Full Court in Kohan[13] to the effect that the degree to which the costs, which would be payable if an indemnity costs order is made, depart from the established norm may itself be a reason for not ordering costs on an indemnity basis.  Such comments are, I think, particularly apposite in this case.

    [13] (1993) FLC 92-340.

20. In addition, I consider it appropriate that I record my conclusion that there is considerable force in the specific submissions made on behalf of Mr Denford about the quantum of Ms Manville’ costs; I also think that there is force in the submissions made by both the Independent Children’s Lawyer and Mr Denford that Ms Manville’ costs of defending the February Application are excessive.

21. Whilst the alternative order advanced on behalf of Ms Manville was that Mr Denford and the Independent Children’s Lawyer pay her costs of and incidental to the February Application on a party and party basis, the submissions filed on her behalf also contend that, should the Court determine – as I have – that costs are not to be ordered on an indemnity basis, it should consider exercising the power to order costs fixed in a specified amount.

22. Given the substantial costs incurred by Ms Manville in defending the February Application, I accept this submission. I consider that, in order to ensure that none of Ms Manville, Mr Denford or the Independent Children’s Lawyer incur any further costs in determining the quantum of costs that the Independent Children’s Lawyer and Mr Denford shall pay to Ms Manville, it is just and appropriate that I fix the quantum that each shall pay. Accordingly, and in the exercise of the broad discretion which exists in determining applications for costs, I consider that the just order is that each of the Independent Children’s Lawyer and Mr Denford pay Ms Manville’ costs fixed in the amount of $1,200.00. I also consider it just that such costs be paid by 30 June 2020.

23. For these short reasons, then, I make orders in the terms outlined at the commencement of these Reasons.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 29 May 2020.

Associate:     

Date:              29 May 2020