Durand and Pitt and Anor

[2011] FamCA 721

FAMILY COURT OF AUSTRALIA

DURAND & PITT AND ANOR [2011] FamCA 721

FAMILY LAW – COSTS – Successful costs applications – Conduct of Second Respondent unduly prolonged proceedings – Second Respondent wholly unsuccessful in substantive proceedings – Second Respondent ordered to pay First Respondent’s costs on indemnity basis and Independent Children’s Lawyers costs

Family Law Act 1975 (Cth)

Penfold v Penfold (1980) 144 CLR 311

Kohan & Kohan (1993) FLC 92-340

Munday & Bowman (1997) FLC 92-784
Colgate-Palmolive & Anor v Cousins Pty Limited  (1993) 46 FRC 225

APPLICANT: Ms Pitt

FIRST RESPONDENT:	Mr Durand
SECOND RESPONDENT:	Mr B
INDEPENDENT CHILDREN’S LAWYER:	Legal Aid Commission, NSW

FILE NUMBER: PAC 2237 of 2009

DATE DELIVERED: 11 October 2011

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Collier J

HEARING DATE: 18 September 2009,
12 November 2009,
19 November 2009,
30 April 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:

SOLICITOR FOR THE APPLICANT: Ms Pitt – Self Represented

COUNSEL FOR THE FIRST RESPONDENT: Mr Gruzman

SOLICITOR FOR THE FIRST RESPONDENT:	McBride Harle & Martin
COUNSEL FOR THE SECOND RESPONDENT:

SOLICITOR FOR THE SECOND RESPONDENT: Mr B – Self Represented

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Ms Hafey

Orders

1. That Mr B pay Mr Durand’s costs, on an indemnity basis being:

   a)The costs of and incidental to preparation of the matter so far as the Second Respondent was concerned.

   b)One half of the costs of 18 September 2009.

   c)Two thirds of the costs of 12 November 2009.

   d)The entirety of the costs of 30 April 2010.

2. That such costs be as agreed and failing agreement as assessed or taxed by a proper assessor or taxing officer as the case may be. 

3. That Mr B pay the Independent Children’s Lawyer’s costs in the sum of $1,144.00. 

4. That the amount determined to be paid, be paid within a time agreed between the parties or failing agreement, in the case of Mr Durand, within six (6) months of the issue of a certificate of assessment or taxation and in the case of the Independent Children’s Lawyer, within twelve (12) months of this date.

IT IS NOTED that publication of this judgment under the pseudonym Durand & Pitt has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 2237 of 2009

Ms Pitt

Applicant

And

Mr Durand

First Respondent

And

Mr B
Second Respondent

And

Independent Children’s Lawyer

REASONS FOR JUDGMENT

INTRODUCTION

1. In this matter applications for costs have been made by the Respondent Father, Mr Durand, against the Second Respondent in the substantive proceedings, Mr B. Additionally, the Independent Children’s Lawyer has made an application for costs against Mr B in respect of the appearance of the Independent Children’s Lawyer on 18 September 2009.

2. The substantive issue that the Court determined was the future living arrangements for the children of the Respondent Father and his deceased wife.  Those children are C born in 1995 and D born in 1998.

THE DOCUMENTS RELEVANT TO THE COSTS APPLICATION

1. In the Respondent Father’s case:

   a)His Application in a Case filed 2 September 2009;

   b)His  Affidavit sworn 31 August 2009, filed 2 September 2009;

   c)His further Affidavit sworn 3 November 2009, filed 3 November 2009;

   d)Affidavit of Ms E sworn 9 June 2009, filed 10 June 2009; and

   e)Affidavit of Ms E sworn 11 June 2009, filed 12 June 2009.

2. In the Second Respondent, Mr B’s, case:

   a)His Response to an Application in a Case filed on 11 November 2009;

   b)A letter he forwarded to the Registry, the Independent Children’s Lawyer and the Respondent Father on 17 September 2009.  That letter raised issues of a potential conflict of interest on my part.  It advised that the writer was not able to attend on 18 September because he was absent from Australia.  It further indicated that while there were matters raised in the Application filed by the Respondent Father, he contested that he “consented to being joined in the whole of these proceedings with Ms Pitt who is the initial Applicant in the proceedings”. 

BRIEF HISTORY

1. On 21 March 2003 orders were made in the Sydney Registry of the Family Court of Australia in proceedings with the file number SYF5477 of 2002.  Those Orders provided for the said children to reside with the mother and spend time with the father as agreed. 

2. The mother commenced residing with the children at the Applicant Grandmother’s home in about March 2006.

3. The mother died on 22 March 2009 and the children continued to live with the Applicant Grandmother. 

4. On 14 May 2009 the Applicant Grandmother sought orders for the children to live with her, that the father have no contact with the children or the Applicant Grandmother until 31 December 2010 and that the father thereafter communicate with the Executor and Trustee of the mother’s Estate.  That person was the Second Respondent. 

5. In that document, that is the Initiating Application, she provided that her address for service was care of Mr B, PO Box …, Suburb F.

6. The Respondent father filed a Response on 5 June 2009 in which he sought orders that the Applicant’s Application be dismissed, that the orders made on 21 March 2003 be discharged and that he have sole parental responsibility for the children and the children to live with him.  He sought a further order that the children spend time with the Applicant Grandmother subject to their wishes and as agreed between the Applicant and the Respondent.

7. The matter was before Registrar Bartlett on 15 May 2009.  The matter was identified as a Magellan matter.  An Independent Children’s Lawyer was ordered and the matter was listed for directions before Justice Flohm on 28 May 2009.

8. The matter came before Justice Flohm instead on 5 June 2009 and was listed for further directions on 12 June (and for the Independent Children’s Lawyer to speak to the children in the interim).

9. The matter came back before the Court on 12 June 2009.  All previous parenting orders were vacated by consent.  Orders were made for the father to spend time with the children.  The listing of the matter for 29 June 2009 was vacated. 

10. On 17 July 2009 the matter was again before the Court. Directions were made for the further conduct of the matter including it be listed for a 3 day hearing, and for the father to spend further periods of time with the children.

11. The matter came again before the Registrar on 14 August 2009.  The Registrar indicated that if the Applicant Grandmother sought a variation of orders then she needed to file a Case Application and supporting Affidavit.  The Registrar declined to make an order for Mr B (who was not then a party to the proceedings) to have access to the subpoenaed material.

12. On 10 September 2009 the matter was again before Registrar Bartlett.  She listed the father’s Application in a Case filed on 2 September 2009 before me on 18 September 2009. 

13. On 18 September 2009 I made an order, by consent, as notified by the Second Respondent in his letter of 17 September that he be joined as the Second Respondent in these proceedings.  I ordered that he attend in person on the next occasion the matter was before the Court. 

14. I then made further orders concerning the Applicant Grandmother. 

15. Finally, I ordered that Mr B was to file and serve all material upon which he sought to rely in respect of the orders sought against him in the father’s Application in a Case, by close of business on Friday 30 October 2009.   I adjourned the matter to 12 November 2009.  I reserved costs of that day.

16. On 12 November 2009 orders were made requiring Mr B to lodge an application for a Grant of Probate in the Supreme Court of NSW and ordering him to provide information to the Respondent Father’s legal representatives thereafter.  He was also ordered to provide a copy of the Grant of Probate to the father’s legal representatives and to advise the father’s legal representatives of all amounts for superannuation or mortgage insurance policies held by the deceased. 

17. Further, he was to obtain from the Commonwealth Bank a statement of the mortgage in comprehensive form and, as Executor, to authorise the Commonwealth Bank to deal with enquiries of the Respondent Father’s legal representatives.  Further, orders were made restraining Mr B from communicating with the children about matters concerning the times they were to spend with the father, restraining him from arranging or taking the children to extra curricular activities on dates coinciding with dates the father was to spend time with the children and restraining Mr B from communicating with the father other than as provided by orders of the Court.  Mr B was further restrained from arranging for any person to collect the children from their schools on days when the children were to spend time with the father. 

18. Finally, Mr B was ordered to file material in relation to costs by close of business on Thursday 26 November 2009 and to notify the Court of his available dates for the costs application to be heard.

19. The matter was stood over until 19 November 2009.  On that occasion, the matter took an unexpected and unusual turn as between the maternal grandmother and father in that the grandmother consented to the father having sole parental responsibility for both girls and for both girls to live with him. 

20. I fixed the Application for Costs on behalf of the father and the Independent Children’s Lawyer for 30 April 2010.  Mr B was notified of this date, as were the Respondent Father and the Independent Children’s Lawyer.  Mr B was given the opportunity to file material provided it was filed and served no later than 21 days prior to 30 April 2010.

21. On 30 April 2010, I heard submissions from the Respondent Father’s counsel and the Independent Children’s Lawyer.  Mr B made it clear that he believed the only issue of costs required to be determined related to the costs of 18 September 2009.  When it was made abundantly clear by the Respondent Father’s counsel that he sought costs for 12 November 2009 and costs of and incidental to the proceedings, Mr B sought that he be given time in which to file documents in response. 

22. Upon receipt of Mr B’s written submissions, the Respondent Father was to have 14 days thereafter to file material in reply. I also allowed for a costs agreement to be tendered as Exhibit A in the Costs Application.

23. From that time on, there has been a litany of non-compliance by Mr B in respect of those written submissions.  A number of letters were written to Mr B by my Associate reminding him of the requirement that he finish his material.  In this regard, letters were written to Mr B on 20 August 2010, which elicited a request for further time, 28 February 2011 requiring documents be filed within seven (7) days. I ordered that Mr B provide to the parties and to the Court written submissions in response to the application for costs. 

24. The end result is that, as at the date of these reasons for Judgment, no response from Mr B has been forthcoming and no material has been filed by him.

THE LAW TO BE APPLIED

1. The issue of costs in the Family Court is governed by s 117 of the Family Law Act 1975 (Cth). Section 117(1) makes it clear that in the usual course of events each party should bear their own costs.

2. Subsection 2, however, provides that if circumstances require it, an order for costs can be made in favour of one party as against another party.  The High Court of Australia in the Penfolds[1] case made it clear that the circumstances justifying an order need not be extraordinary or exceptional. 

   [1] (1980) 144 CLR 311

3. Section 117(2A) sets out the matters that must be taken into account in determining whether or not an order for costs ought be made.  In this case, there is also the issue of whether or not, if an order for costs is to be made it should be made on an indemnity basis rather than on a party/party basis.

4. Mr B was joined as the Second Respondent in the substantive proceedings, that is to say he became a party to the proceedings, by consent.  I am satisfied that there is no impediment in making an order for costs against Mr B.

5. I turn then to the matters I am required to consider.  Section 117(2A)(a) makes reference to the financial circumstances of each of the parties. 

6. I am not aware with precise detail of the financial affairs of either the father or Mr B.  The father is in employment.  He now has the care of his two daughters.  I am satisfied that he expended amounts of money in relation to the proceedings both as against Mr B, and the Applicant Grandmother. 

7. I am satisfied that his position is that, whilst he is by no means impecunious, he does not have an excess of funds.

8. So far as Mr B is concerned, I know little of his situation, other than that he is in employment and able to travel overseas. 

9. Subsection 117(2A)(b) speaks of Legal Aid.  I am satisfied that neither the father nor Mr B is in receipt of any grant of Legal Aid.

10. Subsection 117(2A)(c) speaks of the conduct of the parties.  To my mind this is of great importance in resolving this dispute.

11. Mr B sought orders as against each of the Applicant Grandmother and the Respondent Father.  However, when required to do things, such as file an application for a grant of Probate in his capacity as Executor and Trustee of the deceased’s Will he was tardy in doing this and certainly did not comply with time limits imposed by State legislation.

12. Mr B entered into correspondence with the Respondent Father’s solicitors.  That correspondence was couched in quite firm times.  Whilst he made it clear that he was not acting (for the Applicant Grandmother), he endeavoured to deal with matters directly affecting her and on her behalf. 

13. Mr B, whatever his protestations as to his part in the matter, acted in such a way that I am satisfied that he sought to take over the running and conduct of the matter on behalf of the Applicant Grandmother, at least in respect of significant parts of the case as it affected the subject children.

14. There are attached to the affidavits of the father and his solicitor correspondence that passed between his solicitors and Mr B in relation to information sought in the matter, and in endeavouring to communicate with the grandmother as to matters directly involving the children.

15. All in all, I am satisfied that Mr B caused this matter to be made more complex than it need have been. 

16. I am concerned by the fact that on 19 November 2009, in the absence of Mr B, the grandmother consented to orders placing the children in their father’s care, and for him to have sole parental responsibility.  This is a position very different to that indicated on behalf of the grandmother by Mr B.

17. I am satisfied that Mr B encouraged and assisted the grandmother in taking the approach that she did.  I am satisfied that to a significant degree he persuaded the grandmother to allow him to determine the course and conduct of those substantive proceedings.  Mr B sought to affectively take control of the proceedings for some reason known only to himself.  Thus, I find these matters of conduct weigh against him in determining whether or not an order for costs would be made.   

18. Subsection (2A)(d) (where the proceedings were necessitated by failure to comply with orders) to my mind has no application in this present case.

19. Subsection 117(2A)(e) makes reference to whether any party to the proceedings has been wholly unsuccessful.  Mr B, as I have said, filed a Response to the father’s Application in a Case.  In that Application, he sought orders that were on the face of them intended to bind both the Applicant Grandmother and the Respondent Father.  Those orders sought to place him in a position of assisting the grandmother and sought to have him given the opportunity and authority to be involved in negotiations and discussions with the father on the grandmother’s behalf.  Those orders were clearly inappropriate.  No orders were made in the terms of the orders Mr B sought (or in any other form).  So far as the orders he sought were concerned, he was thus wholly unsuccessful.

20. There was no offer in writing which would attract the provisions of subsection 117(2A)(f). 

21. Subsection 117(2A)(g) refers to such other matters as the Court considers relevant.  Whilst I have dealt with Mr B’s conduct under the appropriate hearing earlier in these reasons for Judgment, I propose under this present heading to express my alarm that Mr B, regardless of his intentions, became involved in these proceedings, and in his dealings with the grandmother and the father caused complications and delays in resolving this matter as between the people who were directly concerned with the welfare of the subject children, that is to say the Applicant Grandmother and the Respondent Father.

22. I am satisfied that in all the circumstances of this case, an order for costs in favour of the father as against Mr B is unavoidable. 

23. As I understand, the Respondent Father he seeks costs in respect of 18 September 2009, 12 November 2009 and 30 April 2010.  In addition, he seeks costs for work of and incidental to the preparation of the matter.  In this regard, I must be careful not to award costs against Mr B for work done involving the Applicant Grandmother. 

24. So far as the appearance of the father’s counsel and solicitor on the days there needs be some apportionment of those days. 

25. On 18 September 2009, whilst Mr B did not appear, he consented in a letter to be joined as a party and further orders were made in his absence.  I propose that on that occasion the father’s counsel and solicitor should each receive an amount equivalent to one half of the amount as assessed for that day.

26. On 12 November 2009, a number of orders were made requiring Mr B to do certain things as sought by the father.  In effect therefore the father achieved all that he sought on that day.  There were however orders made which did not directly affect Mr B.    

27. Thus, I am satisfied that there should be an allocation of two thirds of the costs of the father’s counsel and solicitor for that day. 

28. No application for costs is sought or made in respect of the appearance of 19 November 2009. 

29. Costs are sought for 30 April 2010.  On that occasion, Mr B was present and the father’s counsel made an application for costs of 18 September 2009, 12 November 2009 and 30 April 2010, and for preparation generally.  Mr B indicated that he was taken by surprise.  He asserted that he had understood that costs were sought only in respect of 18 September.    

30. There is no doubt in my mind that Mr B was entitled to say he was taken by surprise in this regard.  However, the father’s counsel presented his case for costs in its entirety.  Having been given the opportunity to consider his position and to deal with the issue of costs in writing, Mr B knew precisely what it was that he had to answer.  I am satisfied that the father is entitled to the entirety of his costs for that day. 

31. So far as preparation is concerned, there were, as I have said, a significant number of pieces of correspondence that passed between the father’s solicitor and Mr B.  Care however will have to be taken in distinguishing clearly the correspondence involving Mr B from any correspondence involving the Applicant Grandmother.  I would be confident that any bill of costs would clearly distinguish the parts of the correspondence to demonstrate this.

32. I am satisfied that the father is entitled to his costs in respect to the work of and incidental to the preparation of the matter, in relation to the preparation of documents to be filed in court and relied upon insofar as they relate to Mr B.

SHOULD COSTS BE AWARDED ON AN INDEMNITY BASIS

1. The question that is then raised is whether the costs that I award should be on a party/party basis or whether the order should provide for costs on an indemnity basis.  I am satisfied that the Court has the power to make an order for indemnity costs: Kohan & Kohan[2].  I am equally satisfied that indemnity costs are still the exception as against the rule.  In the decision of Munday & Bowman[3] Holden CJ (as he then was) relying on authority of cases such as Colgate-Palmolive & Anor v Cousins Pty Limited[4] sets out with particularity circumstances whereby indemnity costs would be justified.

   [2] (1993) FLC 92-340

   [3] (1997) FLC 92-784

   [4] (1993) 46 FRC 225

2. His Honour referred to a situation where an action had been commenced or continued in circumstances where there was no chance of success.  I am satisfied that there is an element of that in this case.

3. His Honour made reference to a situation where there had been allegations of fraud made, knowing them to be false.  That appears to have no application in the present case. 

4. His Honour identified a situation where there was particular misconduct causing a loss of time to the Court and the other parties.  I am satisfied that Mr B’s conduct in seeking orders of the kind he did caused a loss of time to the Court and the father.  I am also concerned that the inactivity by Mr B insofar as the Estate of the mother was concerned of itself required action to be taken by the father to compel his attendance to and compliance with his statutory duties.  His behaviour therefore, I am satisfied, fell within this heading.

5. His Honour then referred to the making of allegations which ought never have been made or the undue prolongation of a case by groundless contentions. I am again satisfied that this case was prolonged by Mr B’s actions and activities. 

6. The behaviour and conduct of Mr B when looked at as a whole, having regard to the matters identified by his Honour in Munday &Bowman, in my view, clearly require that the costs order I have indicated that I will make must be on an indemnity basis.  The father had no alternative but to take the steps he did in relation to the matter, so far as they involve Mr B.  Mr B chose to put himself in a position where he knew, or should have known, that his actions would be carefully examined.  He has not sought to put any material before the Court to explain why an order, and an order on an indemnity basis, should not be made against him.  Therefore, the order for costs I will make will be on an indemnity basis as between the father and Mr B. 

7. I turn then to deal briefly with the Application by the Independent Children’s Lawyer.  This was a very different situation.  The amount sought by the Independent Children’s Lawyer related only to costs thrown away on 18 September 2009.  I was provided with an assessment of costs totalling $1,144.00, including GST.  I am satisfied that this is in all the circumstances a proper charge for work that was done by the Independent Children’s Lawyer in relation to her appearance on that date.  I am satisfied that having regard to the matters I have already set out, it is entirely appropriate that an order be made for payment of the Independent Children’s Lawyer’s costs in that sum. 

8. I will then order that Mr B pay Mr Durand’s costs, on an indemnity basis being:

   a)The costs of and incidental to preparation of the matter so far as the Second Respondent was concerned.

   b)One half of the costs of 18 September 2009.

   c)Two thirds of the costs of 12 November 2009.

   d)The entirety of the costs of 30 April 2010.

9. I will order that such costs be as agreed and failing agreement, as assessed or taxed by a proper assessor or taxing officer as the case may be. 

10. I will order that the amount determined to be paid, be paid within a time agreed between the parties or failing agreement, in the case of the Mr Durand, within six (6) months of the issue of a certificate of assessment or taxation and in the case of the Independent Children’s Lawyer, within twelve (12) months of this date.

I certify that the preceding seventy-three (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Collier delivered on 11 October 2011.

Associate:     

Date:              11 October 2011