Dunstan and Raines (No 3)

[2015] FamCA 1040

FAMILY COURT OF AUSTRALIA

DUNSTAN & RAINES (NO 3) [2015] FamCA 1040

FAMILY LAW – COSTS: Application by mother for costs - Question of costs and if made whether they ought to be indemnity – Costs allowed on a partial party and party basis

Family Law Act 1975 (Cth) s 117, 117 (2A)

Penfold v Penfold (1980) FLC 90-800
Brown v Brown (1998) FLC 92-822

Cachia v Hanes (1994) 179 CLR 403

APPLICANT: Ms Dunstan

RESPONDENT: Mr Raines

FILE NUMBER: HBC 401 of 2010

DATE DELIVERED: 26 November 2015

PLACE DELIVERED: Hobart

PLACE HEARD: Hobart

JUDGMENT OF: Benjamin J

HEARING DATE: In chambers – November 2015 pursuant to directions to make written submissions made 21 September 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms White

SOLICITOR FOR THE APPLICANT: Fitzgerald & Browne

COUNSEL FOR THE RESPONDENT: Mr Tucker

SOLICITOR FOR THE RESPONDENT: Grant Tucker

Orders

1. Mr Raines (‘the father’) pay one half of the legal costs and disbursements of Ms Dunstan (‘the mother’) in these proceedings; and such costs to be assessed and/or determined on a party/party basis in relation to the substantive proceedings heard in this Court on 14 August 2015 and determined by orders made on 20 August 2015 and to include the costs of this costs application.

   IT IS CERTIFIED

2. Pursuant to Rule 19.50 of the Family Law Rules2004 it was reasonable to engage counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Dunstan & Raines (No 2) has been approved by the Chief Justice pursuant to s121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT HOBART

FILE NUMBER: HBC 401  of 2010

Ms Dunstan

Applicant

And

Mr Raines

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. Ms Dunstan (‘the mother’) and Mr Raines (‘the father’) were involved in proceedings regarding permission for the mother to take the parties’ child J (‘the child’) to live with the mother and her now husband in the United States of America for a period of some 12 to 18 months.

2. Those proceedings were heard by me on 14 August 2015.  Reasons were delivered and orders were made permitting the mother to travel, with the child, to the United States of America on 20 August 2015.

3. Those orders provided for a party to make an application for costs, if they chose to do so, pursuant to the Family Law Rules 2004 (Cth) (‘the Rules’). The mother filed an application and affidavit in support on 16 September 2014 seeking indemnity costs.

4. Rather than put the parties to the expense of a further hearing, orders and directions were made on 21 September 2015 for the parties to file and serve evidence and written material in accordance with a schedule contained in that order in relation to any application they may have in respect of costs.  Orders 3, 4 and 5 provided:-

   3. [The mother] file and serve on or before the 23 October 2015, short submissions as to [the mother’s] application for costs.

   4.[The father] file and serve, on or before 6 November 2015, any submission in response.

   5.[The mother] file and serve, on or before 13 November 2014 any reply to the response.

5. Submissions were filed on behalf of the mother on 27 October 2015 and the respondent father filed a response and affidavit in reply, which contained submissions, on 16 November 2015.

6. The mother had leave to file and serve any reply before 13 November 2015 but did not file her reply until the 16 November 2015 because the father’s submissions were filed out of time. 

THE BACKGROUND

1. The background to these proceedings were contained in my reasons published 20 August 2015 and provide, relevantly, from paragraph 8 to 31 the following:-

   8.At the date of hearing the father was aged 39 and lived and worked in Town X in Tasmania, which is in North East of that state.  The mother lives in the Hobart area.  At the date of the hearing the mother was aged 32.

   9.The time to travel between the homes of the respective parties is about three to three and a half hours. 

   10.The father has a child of an earlier relationship, L, who is aged 11.  L lives primarily with the father.

   11.The father has another child, C, who lives with his mother in Queensland.

   12.The mother has known Mr R as a friend since 2001 and they commenced a romantic relationship in 2013.  Mr R is an Australian citizen.

   13.The mother and Mr R married in 2015.  Mr R works in the United States.  He has a two year temporary working visa which expires in June 2017.

   14.Mr R gave evidence, which I accept, that he had been applying for a permanent visa in the United States, but has withdrawn that and intends to return to Australia in the first half of 2017.

   15.The father and mother were in a relationship between 2007 and 2008.  The child was born in 2008 and shortly thereafter the parties separated.

   16.It is not in issue that the child has been in the primary care of the mother since that time and the father described the mother as a ‘top mum’.  Over 2009 the father had regular contact with the child.  The father’s evidence is that this continued until early to mid-2010.

   17.The mother’s evidence is that it became somewhat irregular and that the father only saw the child two or three times between January 2010 and April 2010.

   18.Given the comments I later make in respect of the evidence of the mother and father, I am satisfied that the mother’s evidence is more reliable.

   19.The father spent no time with the child between April 2010 and March 2013.  In March 2013 the father commenced spending supervised time with the child at a Children’s Contact Centre.  From March to June 2013 there were six supervised visits, however these were cancelled as a consequence of the father’s reluctance or inability to attend on regular occasions.

   20.There was an issue as to whether the last time the father saw the child was in June 2013 or June 2014.  Given the comments I make about the evidence of the father and the mother later in these reasons, I am satisfied that the child has not seen the father since June 2013.

   21.The communication between the mother and father is poor and there have been few direct discussions between them since 2010.

   22.In December 2012 the mother had been trying to obtain consent from the father for a passport for the child to travel to overseas for a holiday. The father resisted that request until proceedings were commenced, and he then conceded that the passport should issue.

   23.In October 2014 the mother endeavoured to enter into negotiations with the father in respect of the child relocating to the Unites States with her but the father did not attend mediation.

   24.As a consequence, on 14 November 2014, these proceedings were commenced in the Federal Circuit Court.

   25.A child dispute conference was held in April 2015 and these proceedings were heard in August 2015.

   26.On 7 May 2015 consent orders were made and directions were made for trial.  Directions were made for the parties to file affidavits and prepare for a hearing in early August 2015.  At that time the father was represented.

   27.The father did not comply with those directions in terms of filing his affidavits.  At the commencement of the hearing on 14 August 2015 the father sought an adjournment as he said that his legal representation had fallen through.

   28.At that time the mother was ready to proceed and Mr R had flown to Australia from the United States for the purpose of giving evidence.

   29.I gave ex tempore reasons and refused the father’s application for adjournment.

   30.The father was given leave to adduce oral evidence and otherwise represented himself.

   31.In coming to this decision the Court was very aware that the father was unrepresented and endeavoured to provide all reasonable assistance to the father in terms of the proceedings, given the juris prudence around the Court’s obligations in that regard.

THE EVIDENCE

1. The mother relied upon her affidavit and application in a case both filed 16 September 2015, her submissions filed 27 October 2015 and her reply filed on 16 November 2015 and the Reasons supporting the substantive orders.

2. The father relied upon his affidavit and application in a case both filed 19 October 2015.  There was evidence that the father had been served with the mother’s material.  This was contained in an affidavit of service filed 16 October 2015.

THE LAW

1. There are two areas to which I need to address the law: the first is in relation to whether a costs order ought to be made at all; and if so, the second is in relation to whether it ought to be an indemnity costs basis.

2. The power to make costs orders are set out in s 117 of the Family Law Act 1975 (Cth) (‘the Act’) which provides:-

   (1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.

   (2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

   (2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   (a)the financial circumstances of each of the parties to the proceedings;

   (b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

   (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f)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; and

   (g)such other matters as the court considers relevant.

3. In Penfold v Penfold (1980) FLC 90-800 the majority of the High Court expressed the general rule that s 117(1) is not paramount to s 117(2) of the Act. A court must make a finding that there are circumstances justifying the making of a costs order before proceeding to make the orders. I accept that there is no guidance in the legislation between the two sub sections nor any additional special onus on an applicant for an order as to costs. There is no threshold in the determination; however, the subsection requires that I identify the circumstances that enlivens the power under ss 117(2). In this case those factors equate to the matters to which I have referred under 117(2A) of the Act, and I am satisfied that there are circumstance which may give rise to a costs order.

4. The next step is to consider the matters set out in s 117(2A). In Brown v Brown (1998) FLC 92-822 Kay J said when determining whether a costs order ought to be made:-

   9. Mr Sweeney sought an order for costs of ''the pre-trial and the proceedings since the pre- trial''. That appears to be a reference to an earlier mention before the matter came on before Mushin J as well as any costs that had been incurred since that time. His Honour invited some submissions about the matters and then his Honour said as follows: 

   `` Yes. There is no question that costs will be paid for the reason that this matter should have been raised on the wife's side a long time ago. The fact that it has not, has occasioned an adjournment which could have been avoided. The whole thing could have been done administratively by way of inquiry through the List Registrar to me and the matter could have been determined straight away. I do not know how you quantify your costs Mr Sweeney.'' 

5. There is nowhere in s 117(2A) that says one factor provides any hierarchy in relation to the other factors. One factor may be enough. As such the Court has a wide discretion.

6. It is of value to consider the difference between the various types of unquantified costs orders available under the Act. There are many variations of types of costs orders, but they generally fall into three types:-[1]

   (a)Party and party costs - which are calculated having regard to the schedule of costs under the Family Law Rules 2004 (Cth);

   (b)Lawyer and client costs – these are essentially indemnity costs, with the onus upon the costs applicant to satisfy the taxing authority that such costs are on balance fair and reasonable; and

   (c)Indemnity costs[2] -  these are essentially lawyer and client costs, with the onus upon the costs respondent to satisfy the taxing authority that such costs are on balance not fair and reasonable, that is the reversal of the onus of proof. 

   [1] Rule 19.18(1)(b).

   [2] See also Rule 19.08(3).

7. It should be borne in mind that costs orders are restorative and not punitive, and costs cannot exceed the amount actually incurred.  They are an indemnity or partial indemnity.  In Cachia v Hanes (1994) 179 CLR 403, where the plurality of the High Court, comprising Mason CJ, Brennan, Deane, Dawson and McHugh JJ observed:-[3]

   Whilst the restricted basis upon which party and party costs are awarded may be debated as a matter of policy, it is to be borne in mind that party and party costs have never been regarded as a total indemnity to a successful litigant for costs incurred, let alone total recompense for work done and time lost. Putting to one side the question posed by the relatively rare exception of a solicitor acting in person, there is no inequality involved: all litigants are treated in the same manner. And if only litigants in person were recompensed for lost time and trouble, there would be real inequality between litigants in person and litigants who were represented, many of whom would have suffered considerable loss of time and trouble in addition to incurring professional costs. The partial indemnity which the law allows represents a compromise between the absence of any provision for costs (which prevails as a matter of policy in some jurisdictions) and full recompense. In these days of burgeoning costs, the risk of which is a real disincentive to litigation, the proper compromise is a matter of both difficulty and concern.

   [3] At pages 414 and 415.

8. In terms of s 117(2A) of the Act:-

Section 117(2A)(a) the financial circumstances of each of the parties to the proceedings;

1. The supporting affidavit of the mother shows she earns about $65,000 per year and that her present husband is in receipt of an undisclosed income.

2. The father is employed on a part-time basis and earns about $400 per week and receives a family tax benefit of about $115 per week.  He spends most of this money in living expenses.

3. I am satisfied that his financial circumstances are far less than those of the mother.

Section 117(2A)(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

1. The evidence is that neither party is in receipt of legal aid.

Section 117 (2A)(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

1. In the mother’ s reply she asserted that, in relation to the father’s claim that he did not attend mediation due to other commitments, he could have attended by telephone as he only works part-time, and that the care of his other child should not have prevented him attending.  The mother said she worked full-time and has the sole care of the parties’ child but she was willing to attend mediation.

2. The mother did not accept the father’s submission that the only reason he did not spend time with the child was due to delays associated with the Hobart Children’s Contact Service.  She asserted it had been agreed that time could occur if the father’s brother supervised the time.  The mother submitted that even if the father’s brother had been unable to supervise the time it was improbable that there were such extensive delays through the Hobart Children’s Contact Service that time could not occur between 23 March and 6 August 2015 as deposed by the father in his affidavit filed 19 October 2015.

3. The mother did not accept that the father’s failings, as conceded in his own submissions, prior to the hearing of this matter were caused solely by his lack of financial resources and confusion as to the Court process.  The father was legally represented between 5 November 2014 and August 2015.

4. The mother asserted that she sent letters to the father in relation to the proposed move on 30 September 2014, 21 October 2014, 12 March 2015 and 9 June 2015.  She said a letter sent on 25 March 2015 was not responded to by the father until 30 April 2015.  The mother asserted that these letters were not responded to ‘in due course’ as submitted by the father and said that evidence has not been provided that they were specifically responded to.

5. The evidence of the father is that there were some issues in his then lawyer’s office and as such replies did not go through to the mother, although there may have been a telephone call over that period.

6. Finally, the mother submitted that from the out-set the father’s application to oppose her relocation, given the time limited nature of it and the father’s lack of time with the child, had little prospect of success.  He repeatedly failed to meaningfully engage with her in an attempt to resolve the matter.  As a consequence, the mother asserted that she was put to unnecessary expense and stress in commencing proceedings and attending a final hearing, despite having made multiple attempts to resolve the matter.  These attempts included an offer for the father to spend greater time with the child than was ultimately ordered by the Court after the final hearing.

7. In any event by October 2014 the mother had tried mediation and the matter had not resolved.  It was necessary, from her point of view, to take the matter to court. It is not in issue that the father did not properly engage in the proceedings until the hearing on 15 August 2015.

8. Given the length of time involved, the father’s application for an adjournment was rejected.

9. I generally accept the mother’s submissions.

Section 117(2A)(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

1. Neither the father nor the mother addressed this factor in their material regarding costs.  As such, it was not a factor I took into account.

Section 117(2A)(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;

1. The mother submitted that the father was entirely unsuccessful in the proceedings and that assertion was not disputed by the father in his affidavit in reply.

2. Offers were made, as set out in the mother’s submissions, in particular regarding time with the child which was greater than that eventually made by the Court.

3. In the context of that the father complains that the child will be taken out of the country where he would not see the child for a period of time, although the child would see him via other communication.

Section 117(2A)(f) 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; and

1. From the material before me it is clear that the father did not engage in any meaningful negotiations with the mother.

Section 117(2A) (g) such other matters as the court considers relevant

1. Given the nature of the relationship between the father and the child and the mother’s circumstances in being married to her present husband, and the, relatively, short time that the mother was proposing to be overseas and the sensible suggestions she made in relation to communication, it was likely that the outcome of these proceedings was not unexpected or unforeseeable.

2. The father simply avoided and obstructed the mother and put her to the expense of this application.

3. Given all of the material before me I am satisfied, exercising the broad discretion I have with regard to costs, that there ought to be a costs order. However given the relative difference in wealth of each of the parties, I will have determined that the father pay 50 per cent of the mother’s costs as assessed or determined under the Rules. Accordingly, I will make that order.

I certify that the preceding thirty eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on  .

Associate:     

Date:              26 November 2015