DRURY & BENSON (No.3)

[2020] FCCA 1925

FEDERAL CIRCUIT COURT OF AUSTRALIA

DRURY & BENSON (No.3) [2020] FCCA 1925

Catchwords:
FAMILY LAW – Costs – where the father sought to re-agitate parenting proceedings – where the father’s applications were dismissed - where the father has been wholly unsuccessful in the proceedings – where the mother sought an order for costs which departed from the Federal Circuit Court Scale – costs ordered pursuant to the Federal Circuit Court Scale.

Legislation:  

Family Law Act 1975 (Cth)
Federal Circuit Court Rules 2001 (Cth)

Colgate-Palmolive v Cussons Pty Ltd [1993] FCA 536

Applicant: MS DRURY

Respondent: MR BENSON

File Number: ADC 3749 of 2015

Judgment of: Judge Kari

Hearing date: 24 June 2020

Date of Last Submission: 24 June 2020

Delivered at: Adelaide

Delivered on: 25 June 2020

REPRESENTATION

Counsel for the Applicant: Ms Pyke QC

Solicitors for the Applicant: D’Angelo Lawyers

Counsel for the Respondent: Mr Praolini

Solicitors for the Respondent: Kennedy Partners

ORDERS

1. That the Respondent pay the Applicant’s costs fixed in the amount of TWENTY ONE THOUSAND EIGHT HUNDRED AND EIGHTY SIX DOLLARS ($21,886), with such sum to be paid no later than 27 August 2020 to the trust account of D’Angelo Lawyers.

2. That all applications for costs with respect to the parenting proceedings be otherwise dismissed.

3. That all outstanding interim applications be adjourned to 9:15am on 23 July 2020.

IT IS NOTED that publication of this judgment under the pseudonym Drury & Benson (No.3) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT ADELAIDE

ADC 3749 of 2015

MS DRURY

Applicant

And

MR BENSON

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. As I indicated yesterday at the conclusion of submissions, I am satisfied that it is appropriate to make a costs order pursuant to the Federal Circuit Court scale in this matter with respect to both the parenting applications, which were all dismissed by my orders made on the 29^th of November 2019, together with orders for costs in relation to the costs application. 

2. In being satisfied that it is appropriate to make those orders, I have had regard to those matters set out in section 117 of the Family Law Act 1975 (Cth) (‘the Act’), and in particular those matters set out in section 117(2A).

3. By way of background, as the parties know, these proceedings at the moment seem to be having a recurring history before me. 

4. The parenting aspects of the matter, however, were a discrete issue and my reasons with respect to costs, should be read in conjunction with the reasons that I delivered on the 29^th of November 2019, bearing in mind that those reasons set out the history of the parenting proceedings and how it came to be that those proceedings were before me, having been decided previously by his Honour Justice Berman at the conclusion of a trial.  I do not propose to repeat those matters in these reasons.

5. Suffice to say that the parenting applications were instituted by the husband within relatively short compass of final orders being made.  The husband, when he commenced proceedings before me, sought effectively to reagitate parenting proceedings.  Not simply to reagitate parenting proceedings, but as I found in my reasons, he sought to reagitate the very questions that his Honour had decided when he finalised the matter at the conclusion of the trial. 

6. In particular, I had formed a view, and indeed I accepted submissions that had been made on behalf of the mother by her counsel, that the father was effectively seeking to reagitate the question of relocation, being the very question that his Honour had decided when he disposed of the matter. 

7. This, in my view, is a significant factor.

8. I acknowledge that section 117 of the Act provides for each party to bear their own costs.

9. I also, however, have regard to section 117(2A), which gives the court the ability when determining whether or not to make a costs order to have regard to a range of factors which are to be considered and weighed when deciding whether or not to make a costs order.

10. It must be said that no one factor in section 117(2A) is determinative of the question, and nor should any one factor take precedence over the other. Indeed, some of the factors set out in section 117(2A) may well be irrelevant. In the present circumstances for example, section 117(2A)(b) is not relevant. That is the section which requires the court to consider whether or not either party is in receipt of legal aid.

11. Having regard to the relevant matters in section 117(2A), I also am mindful of those matters that I set out in my reasons delivered with respect to property settlement, so far as the financial circumstances of each of the parties are concerned as provided for in section 117(2A)(a). To the extent that is necessary, I refer to and incorporate those matters set out in my earlier reasons relating to the parties financial circumstances.

12. I do have some significant knowledge of the parties’ respective financial circumstances as a result of hearing their competing claims for property settlement, and I have had regard to all of those matters when making the orders that I propose to make today.

13. I also have regard to those matters set out in section 117(2A)(e), namely whether a party has been “wholly unsuccessful” in the proceedings. I am satisfied that with respect to all of the matters that were agitated before me by the father with respect to parenting matters, that he was ultimately wholly unsuccessful. So much so as is evidenced by my reasons where I dismissed all of the applications that had been made by the father in the proceedings.

14. It is not clear to me what offers had been made as and between the parties with respect to the parenting proceedings.  I would have to infer that where those matters have not been brought to my attention, no offers were made in that regard. 

15. While I have had regard to the matters set out by both of the parties in their affidavit material with respect to the costs application, I consider it appropriate taking into account all matters that I have referred, to make an order for costs. 

16. I am mindful that the mother seeks that I depart from the scale provided for in the Federal Circuit Court Rules 2001 and that an order be made on one of two bases – either on an indemnity basis, although I am not sure that was ultimately pressed, or alternatively pursuant to the Family Court scale.

17. I am not satisfied that it is appropriate to depart from the Federal Circuit Court scale in this matter. 

18. I have had regard to those matters referred to in Colgate-Palmolive v Cussons Pty Ltd ([1993] FCA 536 (“Colgate-Palmolive”), with respect to the question of indemnity costs and in particular:

    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, ie 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, eg. 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 this court the provisions of O 62, rules 12 and 19, and the Second Schedule to the Rules will apply to the taxation. 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. No doubt any consideration of whether there should be any change in the practice would require the resolution of the competing considerations mentioned by Devlin LJ in Berry v British Transport Commission and Handley JA in Cachia v Hanes on the one hand and by Rogers J in Qantas on the other. The relevant passages from the respective judgments have been earlier referred to.

    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. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. 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. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo, "The categories in which the discretion may be exercised are not closed". Davies J expressed (at 6) similar views in Ragata.

    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 (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525, Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (court of Appeal), Crisp v Keng (Supreme Court of New South Wales, 27 September 1993, unreported, court of Appeal) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. 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.”

19. I do not consider that there is any basis when turning my mind to those matters set out in Colgate-Palmolive to depart from the scale in the present circumstances.

20. While my reasons have been focused to date on those costs flowing from the parenting application, so far as there is an overlap and a need to deal separately with the orders for costs sought on the costs application, I am mindful again, and I incorporate what I have previously said with respect to the parties’ financial circumstances.

21. I am told that the mother did make an offer to resolve all aspects of the costs applications on the basis of the Federal Circuit Court Scale. Hindsight may well tell the father that accepting that offer without the need for more litigation would have been wise in all the circumstances.

22. For all of those reasons, I make orders in the following terms.

NOTE: These reasons were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to make the orally delivered reasons easy to read.

I certify that the preceding twenty two (22) paragraphs are a true copy of the reasons for judgment of Judge Kari

Associate: 

Date:  16 July 2020