Docklands and Marshman (Costs)

[2011] FamCA 217

FAMILY COURT OF AUSTRALIA

DOCKLANDS & MARSHMAN (COSTS) [2011] FamCA 217

FAMILY LAW - DOMESTIC RELATIONSHIP - Exercise of jurisdiction of the Supreme Court of the Australian Capital Territory pursuant to the Jurisdiction of Courts (Cross-vesting) Acts – Application for costs by the respondent against the applicant

Domestic Relationships Act 1994 (ACT)
Jurisdiction of Courts (Cross-vesting) Acts of the Commonwealth and the Australian Capital Territory
Court Procedure Rules 2006 (ACT): Part 2.7

Ferris v Winslade [1998] ACTSC 215
Kilby v O’Brien (No. 2) [2006] ACTSC 90

APPLICANT: Mr Docklands

RESPONDENT: Ms Marshman

FILE NUMBER: CAC 398 of 2009

DATE DELIVERED: 1 April 2011

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra – Considered “on the papers” in Chambers

JUDGMENT OF: Faulks ACJ

HEARING DATE:

Written submissions of the respondent filed 28 March 2011

Written submissions of the applicant filed 30 and 31 March 2011

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Self-represented litigant

COUNSEL FOR THE RESPONDENT: Ms J. Godstchalk

SOLICITOR FOR THE RESPONDENT: KJB Law

Orders

IT IS ORDERED THAT:

1. Mr Docklands (the applicant) pay Ms Marshman’s (the respondent) costs of and incidental to the application pursuant to the Domestic Relationships Act 1994 (ACT), as initiated in the Supreme Court of the ACT and subsequently transferred to the Family Court of Australia (File number CAC 398/2009).

2. Within twenty-one (21) days of the date of this order, the respondent cause a Bill of Costs to be filed in the Canberra Registry of the Family Court of Australia, and thereafter serve upon the applicant a sealed copy of the said Bill of Costs; such Bill of Costs to be in conformity with the Court Procedure Rules 2006 (ACT).

3. All extant applications are discharged.

4. The matter is otherwise removed from the Pending Cases Inventory. 

IT IS NOTED that publication of this judgment under the pseudonym Docklands & Marshman (Costs) is approved by order of the Court.

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER:

Mr Docklands

Applicant

And

Ms Marshman

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 4 March 2011, I made orders pursuant to s 15(1) of the Domestic Relationships Act 1994 (ACT) (“the DR Act”) as between the applicant, Mr Docklands, and the respondent, Ms Marshman (referred to hereafter in my Reasons for Judgment as the “applicant” and “respondent” respectively). The Family Court of Australia in the Australian Capital Territory (ACT) exercised power under the Jurisdiction of Courts (Cross-vesting) Acts of the Commonwealth and of the ACT. 

2. By way of Application in a Case filed 28 March 2011 pursuant to my orders of 4 March 2011, the respondent sought orders as to costs against the applicant as follows:

   “

   1)     That pursuant to the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)…Domestic Relationships Act 1994 (ACT) Part 2.17 of the Court Procedure Rules 2006 (ACT) the Applicant (in the substantive proceedings) pay the Respondent’s (in the substantive proceedings) costs of an incidental to these proceedings on a party/party basis.

   2)     That Pursuant to Rule 1800(1) of the Respondent (in the substantive proceedings) file a Bill of Costs with the court within 21 days from the date of this Order and thereafter serve a sealed copy of the Bill of Costs upon the Applicant.”

3. Written submissions as to the question of costs prepared by the respondent’s legal representatives were filed on 28 March 2011.  Two documents were sent by the applicant by fax and subsequently received by the Registry Manager of the Canberra Registry of the Family Court of Australia on 30 March 2011 and 31 March 2011 respectively.  This occurred after he was reminded orally by a Court Staff Member on 29 March 2011 that if he wished to make written submissions as to costs he should do so immediately (as he had not done so by 28 March 2011 as per my orders of 4 March 2011).  Those documents were filed accordingly.     

4. The material submitted by the applicant is irrelevant.  It is offensive, threatening, abusive and discursive.  Accordingly, I have been obliged to make my determination without the assistance of any submissions from the applicant.  In particular, without his counter-submissions to those raised by the respondent.      

Relevant Law

1. The award of costs in civil proceedings such as these is an exercise of the Court’s discretion. 

2. In Ferris v Winslade [1998] ACTSC 215, his Honour, Cooper J of the Supreme Court of the ACT, relevantly stated as follows:

   6. There is nothing in [the DR Act] which deals with costs in proceedings initiated for relief under it. Nor do the Rules make any specific provision for costs in proceedings under [the Dr Act] (this is in contrast to the New South Wales position: see Rule 24A of Pt 52 of the Supreme Court Rules (NSW)). In these circumstances, it is inappropriate to read s 23 of the Supreme Court Act or O 65 in such a way that the Court's jurisdiction or power to award costs is subject to conditions or limitations not found in the words used in s 23 and O 65 r 1: Emanuele v Australian Securities Commission (1997) 188 CLR 114 at 136-137; Oshlack v Richmond River Council (unreported [1998] HCA 11 at 9).

   7. The primary purpose of an award of costs is not to punish an unsuccessful party; it is to indemnify the successful party in respect of the costs of bringing or defending the litigation: Latoudis v Casey (1990) 170 CLR 534 at 543, 562 - 563, 566 - 567; Cachia v Hanes (1994) 179 CLR 403 at 410.

   8. The discretion to award costs is unfettered, save that it must be exercised judicially and not capriciously or arbitrarily: Hughes v Western Australian Cricket Association Inc [1986] ATPR 40-749 at 48, 136; Queensland Wire Industries Pty Ltd v Broken Hill Co Pty Ltd (1987) 17 FCR 211 at 222; Trade Practices Commission v Nichols Enterprises Pty Ltd (No 3) (1979) 42 FLR

   213 at 219; Latoudis at 557; Oshlack at 15, 27, 57.

   9. Because the discretion must be exercised judicially, the cases give some guidelines as to how the discretion may be exercised in different circumstances. The guidelines are not to fetter the discretion but to avoid arbitrariness or inconsistency in the awarding of costs in like circumstances: Oshlack at 27, 57; Latoudis at 541, 558. The discretion must be exercised not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the litigation: Oshlack at 15, 27, 57.

   10. Ordinarily, in civil proceedings, costs follow the event and a successful litigant receives his or her costs, absent special circumstances justifying some other order: Ritter v Godfrey [1920] 2 KB 4 7; Hughes at 4 8,13 6; Sheehy v Mitchell Lane Hire Pty Ltd (1991) 102 ACTR 1 at 10; Cummings v Lewis (1993) 41 FCR 559 at 603; Oshlack at 1, 28, 57.

   11. In my view, unless the defendant can establish special circumstances justifying some other order, the plaintiff should receive her costs. The plaintiff was obliged to institute the proceedings seeking an adjustment of property rights. She has obtained an order over the consistent opposition of the defendant. She should be compensated in respect of the costs she has incurred to obtain the order in her favour. (Emphasis added)

3. At paragraphs 22 and 23, his Honour relevantly stated:

   22. In my view there is nothing in the decisions of the Supreme Court of New South Wales which would cause this Court to abandon the ordinary situation in civil litigation that costs follow the event, unless there are special circumstances which would suggest otherwise. The existence of a "Calderbank" offer is a matter which falls within the proviso, along with a raft of other circumstances, eg the conduct of a party prior to and during the trial (see Latoudis at 544, 565; Re Elgindata Ltd (No 2) [1992] 1 WLR 1207 at 1214, 1217; Cummings v Lewis at 603; Oshlack at 58 - 59), which may operate to displace the ordinary situation. Subject to the operation of r 24A of Pt 52, this is the approach taken by the Supreme Court of New South Wales in respect of costs in proceedings under the NSW Act. The cases under the NSW Act where judges have not made orders where costs follow the event, upon examination, disclose circumstances which the court treated as sufficiently special in the exercise of a proper discretion to depart from the ordinary situation.

23. The submission as to the reasonableness or unreasonableness of the plaintiff in making claims originally which she did not achieve on trial, and the reasonableness of her refusal of the defendant's offer, gives no recognition to the fact that the plaintiff recovered a judgment significantly beyond anything offered to her by the defendant. In those circumstances it cannot be said that the failure to accept any of the defendant's offers and to go to trial was unreasonable. Nor does the fact that the plaintiff received less than she offered to settle for, constitute an occasion for depriving her of her costs, although it may be a circumstance telling against the making of a costs order on an indemnity basis: Wright v Fowler (1996) DFC 95-174 (CA (NSW)) at 77,503. The submission in paragraph (f) above does not assist the defendant. (Emphasis added)

1. I note that his Honour referred to the Supreme Court Act in Ferris v Winslade.  His Honour’s decision was handed down many years prior to the enactment of the Court Procedure Rules 2006 (ACT) (“the Rules”).  However, there is nothing in the Rules which would suggest that the substantive statements made by his Honour require re-examination as to the correct state of the law.  

2. I note also what was said in Kilby v O’Brien (No. 2) [2006] ACTSC 90 by his Honour, Connolly J of the Supreme Court of the ACT (who was (respectfully) the “architect” of the DR Act when he was the ACT Attorney-General) (at paragraph 2):

   2. It seems to me that, while costs are of course always discretionary, the normal rule that "costs follow the event" must be treated with caution in the context of an application for a property adjustment under the Domestic Relationships Act.

The Court Procedure Rules 2006 (ACT) (“the Rules”)

1. Part 2.17 of the Rules deals with matters pertaining to costs in civil litigation.

2. Regulation 1701 relevantly provides:

   1)     The costs that the court may award –

   a.   may be awarded at any stage of a proceeding or after the proceeding ends; and

   b.   must be assessed in accordance with this part.

   2)     If the court awards the costs of an application in a proceeding, it may order that the costs not be assessed until the proceeding ends.

3. Regulation 1705 provides the Court with the power to make an order for costs on a particular issue in, or a particular part of a proceeding (Reg. 1705(1)).  The Court is also empowered to make declarations about what percentage of the costs of the proceedings is attributable to the issue or part of the proceedings to which the order relates (Reg. 1705(2)). 

4. Regulation 1720, which deals with the power of the court to make specific orders about costs to be paid by a party to a proceeding, relevantly provides as follows:

   1)     A party to a proceeding cannot recover any costs of the proceeding from another party or anyone else otherwise than by agreement, under a territory law, or an order of the court under a territory law.

   Note     A territory law includes these rules (see Legislation Act, s 98).

   2)     If, under a territory law or an order of the court, a party is entitled to costs, the costs are to be assessed costs.

   Note     The parties may agree that the costs be set at a certain amount (see r 1702 (Costs—agreement about costs).

   3)     However, instead of assessed costs, the court may order a person liable for costs to pay to the party entitled to costs—

   a.   a stated part or percentage of assessed costs; or

   b.   assessed costs to or from a stated stage of the proceeding; or

   c.   an amount for costs decided by the court; or

   d.   an amount for costs to be decided in a way the court directs.

   Note     Pt 6.2 (Applications in proceedings) applies to an application for an order under this subrule.

5. Regulation 1721 relevantly provides that:

   1)     The costs of a proceeding or of an application in a proceeding are in the discretion of the court.

   2)     The costs of the proceeding include the costs of an application in the proceeding unless the court otherwise orders.

6. Regulation 1751 relevantly provides that:

   1)     Unless a territory law or an order of the court otherwise provides,  the registrar must assess costs on a party and party basis.

   2)     In assessing costs on a party and party basis, the registrar must allow all costs that the registrar considers were fair and reasonable for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed.

7. The general powers of the registrar in relation to the assessment of costs are contained in regulation 1760, which are broad, and include the power to “assess the costs in the absence of a party to the proceeding if the party does not appear at the time set for the assessment”.  Regulation 1761 sets out the matters that are relevant to the discretion of the registrar in the assessment of costs.

8. The Rules also prescribe what is to occur when a bill of costs is filed.  Regulation 1800 relevantly provides that:

   1)     This rule applies if costs are to be paid to a party to a proceeding by another party, by a person who is not a party to the proceeding, or out of a fund—

   (a)     under—

               (i)     a territory law; or

               (ii)     an order of the court; or

               (iii)     a filed written agreement; but

   (b)     the party entitled to costs and the person liable for costs cannot agree on the amount of costs to be paid.

   Note     A territory law includes these rules (see Act, s 98).

   2)     The costs must be assessed by the registrar.

   3)     The party entitled to costs must file a bill of costs.

   4)     On receipt of the bill of costs, the registrar must write on the bill, and a stamped copy of the bill, the day and time when the bill is to be assessed.

   5)     The party entitled to costs must serve a stamped copy of the bill on each party liable to pay the costs not later than 6 weeks before the day the costs are to be assessed.

9. There are other procedures outlined in Division 2.17.5 (Procedure for Assessing Costs) and Division 2.17.6 (Procedure on Costs Assessment) and Division 2.17.7 (Reconsideration and review of Costs Assessment) contained in Part 2.7 of the Rules.

Discussion    

1. In my opinion, there is no doubt that the respondent was obliged to institute proceedings (originally) in the Supreme Court of the ACT to obtain an order for the adjustment of the parties’ interests in property in her favour. 

2. I note that it is submitted, and I accept the submission is based on truth, that there were two letters sent on behalf of the respondent seeking to resolve the matter.

3. I accept that there were no genuine or reasonable counter-offers made in writing which have been part of the proceedings before me.

4. The conduct of the applicant during the proceedings and in relation to the proceedings in seeking the transfer of proceedings from the Supreme Court of the ACT to the Family Court of Australia is a factor which militates against the applicant. 

5. I accept that while my Judgment made a distinction which the parties did not perceive or did not argue that part of the property of the applicant was not amenable to the jurisdiction of the Court, this does not preclude my finding that the respondent was substantially successful in the proceedings.

6. It is unnecessary to detail further those aspects of the applicant’s conduct which might, in and of itself, have justified an order for costs or to examine in detail the correlation between the offers of settlement and the result that was achieved.  Within the context of the authorities (above) it is enough that I make the findings I have above. 

Conclusion

1. Accordingly, I determine that the respondent should have her costs paid by the applicant.  Those costs should be on a party/party basis.  I direct further that the respondent file a Bill of Costs within 21 days of the date of this order in the Family Court of Australia in Canberra Registry, and thereafter serve the Bill upon the applicant. 

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Acting Chief Justice Faulks.

Senior Legal Associate:

Date: 1 April 2011