Eades & Wrensted
[2014] FCWA 64
•26 SEPTEMBER 2014
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: EADES and WRENSTED [2014] FCWA 64
CORAM: WALTERS J
HEARD: WRITTEN SUBMISSIONS
DELIVERED : 26 SEPTEMBER 2014
FILE NO/S: PTW 3045 of 2012
BETWEEN: MS EADES
Applicant
AND
MR WRENSTED
Respondent
Catchwords:
FAMILY LAW – Costs – Parenting proceedings – Where proceedings relate to temporary relocation of children – Where father opposed temporary relocation – Where father was wholly unsuccessful in the proceedings – Relevance of father's conduct as a litigant – Consideration of parties' financial circumstances – Consideration of mother's offer to settle and father's response to that offer – Whether other factors in Family Law Act s 117(2A) outweigh father's inability to meet a costs order – Where mother sought costs on an indemnity basis – Father ordered to pay mother's costs on party/party basis
Legislation:
Family Law Act 1975 (Cth), s 117, s 117(1), s 117(2A), s 117(AB)
Family Law Rules 2004, r 19.18, r 19.34, r 19.04(6)
Category: Not Reportable
Representation:
Counsel:
Applicant: Ms G Anderson
Respondent: Self Represented Litigant
Solicitors:
Applicant: Cullen Babington & Hughes
Respondent:
Case(s) referred to in judgment(s):
Baker & Darzi [2013] FCWA 84
Bouras v Grandelis (2005) 65 NSWLR 214
Braithwaite & Braithwaite [2007] FamCA 468
Cross v Beaumont (2008) 39 Fam LR 389
Eades & Wrensted [2014] FCWA 15
Edgar v Halle (No 2) [2010] FamCA 260
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 191 FLR 294
Hand and Bodilly [2013] FamCAFC 98
Hawkins & Roe [2012] FamCAFC 77
Hitch & Hitch (2012) 47 Fam LR 603
I and I (No 2) (1995) FLC 92-625
Kohan and Kohan (1993) FLC 92-340
Maker & Jets (No 3) [2012] FMCAfam 1104
Marinko & Marinko (1983) FLC 91-307
Munday & Bowman (1997) FLC 92-784
NMFM Property Pty Ltd v Citibank Ltd (No 11) (2001) 109 FCR 77
Penfold & Penfold (1980) 144 CLR 311
Prantage & Prantage [2013] FamCAFC 105
Re David Costs (1998) FLC 92-809
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL
JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN
CHANGED
Introduction
1This is an application for costs made by [Ms Eades] arising out of proceedings in which she was involved with her former husband, [Mr Wrensted]. Ms Eades ("the mother") and Mr Wrensted ("the father") were married in December 2005. They separated in January 2010. They have two children – [Child A] (born [in] 2003) and [Child B] (born [in] 2010).
2On 2 October 2013, the mother filed an application in this Court, seeking orders which would allow her to relocate Child A and Child B to Thailand for a period of approximately 18 months. The mother's fiancé, [Mr D], had obtained employment in Thailand as an electrical and instrumentation inspector. The mother proposed that she and the children should live with Mr D for the duration of his period of employment in that country.
3The father opposed the temporary relocation for a number of reasons. He also sought other orders.
4After a trial that occupied three days in late January 2014, I concluded that the mother should be permitted to take the children to Thailand for what I described as "the sojourn". I stood the proceedings over, however, for approximately 6 days before making final orders. The adjournment was ordered because elections were due to take place in Thailand immediately after the completion of the trial and I wished to satisfy myself that the Department of Foreign Affairs and Trade ("DFAT") travel advice for Thailand remained at an acceptable level.
5The travel advice for Thailand did not alter in any relevant sense between the final day of the trial and the adjourned date. Accordingly, on 6 February 2014 I made orders permitting the sojourn ("the final orders"). The final orders were in a form to which the parties agreed, but they were not made by consent.
6On 5 March 2014, I published my Reasons: see [Eades & Wrensted] [2014] FCWA 15 ("the Judgment").
7Pursuant to paragraphs 18, 19 and 20 of the final orders, directions were made regarding the filing of submissions in relation to the issue of costs. Those paragraphs are as follows:
[18]Within 28 days of the delivery of reasons for Judgment, the mother file and serve –
•a minute of orders she seeks in relation to costs;
•an affidavit upon which she seeks to rely;
•submissions in support of her orders sought; and
•a Form 13 financial statement.
[19]Within 28 days for service of the mother's documents, the father file and serve –
•a minute of orders he seeks in relation to costs;
•an affidavit on which he seeks to rely;
•submissions in support of his orders sought; and
•a Form 13 financial statement.
[20]The question of costs is to be determined on the papers and without further appearance by or On behalf of either party.
Application for costs
8The mother filed written submissions in relation to costs on 2 April 2014. She filed her financial statement on the same day.
9The father filed written submissions in response to those of the mother, together with a financial statement on 29 April 2014.
10The mother seeks an order to the effect that the father pay her costs on an indemnity basis. In the alternative, she seeks costs "on a solicitor/client basis" or "on a party/party basis plus 50%" (being scale costs plus 50 percent).
11The father seeks an order to the effect that each party pay his/her own costs of and incidental to the proceedings.
The law
12The following summary of the law is based on similar summaries in my decisions in Maker & Jets (No 3) [2012] FMCAfam 1104 and Baker & Darzi [2013] FCWA 84.
13The question of costs in family law proceedings is dealt with in s 117 of the Family Law Act 1975 (Cth) ("FLA"). A trial judge has a very broad discretion in costs matters.
14It is not the law that a costs order can only be made in what has been described as "a clear case". Although a finding of justifying circumstances is an essential preliminary to the making of a costs order, there is no additional or special onus on an applicant for an order for costs. The general rule is that each party shall bear his or her own costs (FLA s 117(1)), but that rule is expressed to be subject to s 117(2), and it must yield whenever a judicial officer finds that there are circumstances which justify the making of a costs order: see Penfold & Penfold (1980) 144 CLR 311.
15Section 117(2) of the FLA provides as follows:
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) ... and the applicable Rules of Court, make such order as to costs ... as the court considers just.
16Section 117(2A) of the FLA provides as follows:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
•the financial circumstances of each of the parties to the proceedings;
•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;
•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;
•whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
•whether any party to the proceedings has been wholly unsuccessful in the proceedings;
•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
•such other matters as the court considers relevant.
17The weight to be given to the various factors referred to in FLA s 117(2A) is a matter for the trial judge, but they must all be taken into account and balanced when considering whether the overall circumstances justify the making of a costs order: see I and I (No 2) (1995) FLC 92-625 and Hitch & Hitch (2012) 47 Fam LR 603. On the other hand, there is nothing to prevent any of the factors being the sole foundation for an order for costs: see Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 191 FLR 294 at 130.
18A disparity in financial resources between parties to family law litigation can sometimes justify an order for costs in favour of the party with fewer financial resources. At the same time, the apparent inability of a party to pay costs is not a bar to a costs order being made in circumstances where – for example – that party's conduct (being, presumably, that party's conduct as a litigant) warrants such an order: see Marinko & Marinko (1983) FLC 91-307 and Cross v Beaumont (2008) 39 Fam LR 389; see also Hitch & Hitch (supra).
19There is nothing in the provisions of s 117 to justify any difference in approach to the question of costs in parenting cases. Circumstances such as a totally unmeritorious case on one side, an attempt to vary a "live with" order which does not even establish a prima facie case, the withholding of evidence (and like matters), are common bases for such an order, but they are not necessarily prerequisites. Whether or not such factors exist, all relevant matters referred to in s 117(2A) must be taken into account – as in any application for costs: see I & I (No 2) (supra) and Re David Costs (1998) FLC 92-809; see also Braithwaite & Braithwaite [2007] FamCA 468 at [115].
20Hawkins & Roe [2012] FamCAFC 77 was an appeal by a father from a costs order where the substantive proceedings had concerned parenting matters only. The trial judge had found that the father was in "a better financial shape" than the mother, and that he had the financial capacity to pay costs in the amount ordered. In allowing the appeal, the majority (May and Ainslie-Wallace JJ) held that the trial judge had fallen into error "in placing considerable weight on the finding that the father was in a better financial position than the mother and had the capacity to pay a costs order" – for which finding that there was inadequate evidence. The majority continued at [72]:
… we would wish to emphasise that it is not necessary to conclude that a party has the capacity to pay a costs order before making any such order. … However if, as it seems clear from the reasons of the judge, the father's financial circumstances were a reason justifying the order, then to conclude that the father could meet this order was an error.
Accordingly, we conclude that the judge should have found the father did not at the time of the hearing have the capacity to pay, from his income or by reason of his assets, a costs order. His Honour could then have considered the other factors. (Emphasis added.)
21Having concluded that the appeal should be upheld on the basis of the trial judge's error as described above, the majority turned to consider whether there were (other) justifying circumstances for the making of the costs order under appeal. They concluded that although "there were circumstances which may have enlivened the consideration of whether a costs order could be justified, (the trial judge's) discretion should not have been exercised to order costs".
22With the greatest of respect to their Honours, the reasoning in this part of the judgment (comprising [141] to [148]) is difficult to follow. It also appears to be inconsistent with previous authority. For example, the majority referred to "serious conduct" – such as knowingly making a false allegation or statement – as "more predictably (attracting) the making of a costs order" in parenting proceedings. In support of such a proposition, the majority cited the first instance decision of Brown J in Edgar v Halle (No 2) [2010] FamCA 260, but Edgar v Halle (No 2) (supra) is no more than a single example of a costs order being made in circumstances where one party made numerous false allegations and statements in the course of the proceedings, motivated by antipathy towards the other party. It is clear from the judgment, however, that such behaviour was not the sole ground for the making of the costs order. Indeed, Brown J referred to the relevant behaviour under the general heading of s 117AB of the FLA, and in the context of making a finding to the effect that section 117AB(2) applied. Given that s 117AB was inserted into the FLA in 2006 and repealed in 2011, Edgar v Halle (No 2) (supra) is arguably a less than helpful example of the predictability of costs orders in parenting proceedings.
23After referring to Edgar v Halle (No 2) (supra), the majority in Hawkins & Roe (supra) cited the Full Court’s decision in Cross & Beaumont (supra) as authority for the proposition that "financial incapacity to pay a costs order is not a barrier where the conduct of the party may warrant the making of such an order". Cross & Beaumont (supra) was, however, a property case, which did not involve parenting issues.
24Although the majority quoted from Cross & Beaumont (supra) at [60], the full text of [59] and [60] help to elucidate the quotation:
59.In ordering the husband to pay 65% of the wife’s costs, his Honour made no mention of the fact that the husband’s liabilities exceeded his available assets – even before taking into account the property settlement he was obliged to pay. There was also no evidence that the husband could afford to borrow money from any source to meet the costs ordered. On the contrary, the husband had provided evidence that he would be unable to borrow funds unless he could provide security – which he could not.
60.We do not suggest that the apparent inability of a party to pay costs is a bar to an order being made, since there are cases where the conduct of an impecunious party will warrant costs being ordered without regard to the difficulties likely to be associated with enforcement. Although his Honour was critical of the way in which the husband presented part of his case, his conduct was not such as to make it immediately obvious why he should be required to pay costs he clearly could not afford. We are of this view notwithstanding the wife also has virtually no assets (other than her entitlement to the property settlement) and a significant liability relating to legal costs. (Emphasis added.)
25In re-exercising its discretion in relation to the issue of costs, the Full Court in Cross & Beaumont (supra) concluded that there were only two matters that could justify a costs order in the circumstances of the case then before it. The first related to the fact that the husband was unsuccessful in relation to "most" of his submissions to the effect that there should be certain deductions from the asset pool. The second related to certain non-disclosures attributed to the husband. In relation to the former, the Full Court considered that the propositions relied upon by the husband may not have been entirely without merit; in relation to the latter, the Full Court considered that the husband had already been "penalised" for his non-disclosure of financial accounts in that he had, in effect, received less by way of property settlement than would have been the case if the claimed liabilities (which were related to the disclosure issue) had been recognised and taken into account in the substantive judgment.
26In those circumstances, the Full Court was not persuaded that there were circumstances which justified a departure from the general rule that each party should pay his/her own costs. The Full Court's determination in that regard was, of course, simply an exercise of its discretion in the circumstances of the particular case. That exercise of discretion could not and did not amount to a binding determination or authority.
27The majority in Hawkins & Roe (supra) concluded their re-exercise of discretion as follows:
146.While in this case the judge expressed adverse findings about the conduct and attitude of the father in his reasons, it is relevant to note that there was no allegation or finding of dishonesty. Nor did his Honour make any adverse findings about the father’s conduct of his case at the trial. ….
147.Whilst the categories of occasions when costs may be ordered is not limited, the occasions on which such an order should be made in a parenting dispute should have some particular features. Where there is a complete absence of preparedness to compromise in the face of unambiguous expert evidence, where false allegations are made, or where one party is clearly motivated by self interest rather than the best interests of a child, then a judge may well conclude that there are circumstances justifying an order for costs. (Emphasis added.)
28Again, and with the greatest of respect to their Honours, these paragraphs appear to be unsupported by authority. Relevantly, decisions such as I & I (No 2) (supra) contradict them. Although the majority referred to I & I (No 2) (supra) in their judgment, the reference was in a different context: see [18]. Even if I am wrong in these observations, it is apparent that there is an internal inconsistency in the majority's approach: if the categories of occasions when costs may be ordered are unlimited, then it is clearly impermissible to attempt to limit them by suggesting that, before a costs order can be made in a parenting dispute, the case "should" have certain particular features. The inference from the majority's comments seems to be that the "particular features" that a parenting case "should" have before a costs order can be made comprise the following:
a)an allegation or finding of dishonesty;
b)adverse findings about a party's conduct of his/her case at trial;
c)a complete absence of preparedness to compromise in the face of unambiguous expert evidence;
d)the making of false allegations; or
e)where one party is clearly motivated by self-interest rather than the best interests of a child.
29Earlier in their joint judgment, the majority had written at [14]:
In proceedings involving children’s or parenting matters, the general rule (that each party should pay his/her own costs) is not often displaced. The rationale for this practice is that in such matters it is proper that parents are able to put their case in seeking orders which they believe to be in the best interests of their children. It hardly needs to be said that the nature of family court litigation in relation to children is quite different to a commercial dispute in the State or Federal courts.
30To the extent that the majority might be perceived to be suggesting – in the various passages referred to above – that the discretion of a judicial officer at first instance to order costs should be fettered by rules or guidelines such as those listed above, I would simply record that the exercise of such discretion cannot be so fettered.
31In his dissenting judgment in Hawkins & Roe (supra), Thackray J also had discomfort with the majority's approach in this regard. In paragraph 162, his Honour said:
I also respectfully agree with May and Ainslie-Wallace JJ that the “general rule” that each party will pay their own costs is not often displaced in parenting cases, and that the nature of such litigation is quite different to a commercial dispute in other courts. However, the statute itself does not differentiate between parenting and financial cases. The discretion given to a trial Judge to determine a costs dispute, even in a parenting case, is a very wide one, and I am not persuaded there is an adequate basis for overturning the order.
32As Thackray J implies, statements to the effect that the "default position" (that each party should pay his/her own costs) is not often displaced in parenting cases are simply statements of fact – or, perhaps, perceived fact. They cannot and do not mandate the setting of a higher standard or threshold test to be satisfied before a judicial officer at first instance can make an order for costs in parenting cases. Such an approach would be in direct conflict with the costs provisions of the FLA. Further, the relevance of an observation to the effect that family law litigation in relation to children is quite different to a commercial dispute in the State or Federal courts seems marginal. If a comparison must be made, then it should be between family law litigation in relation to children (on the one hand) and family law litigation in relation to property or other issues (on the other). The law and practice regarding costs in commercial disputes in State or Federal courts is very different to the law and practice regarding costs in family law proceedings.
33The majority's suggestion that the reason why cost orders are made less frequently in parenting cases (than in, say, property cases) is because "it is proper that parents be able to put their case in seeking orders which they believe to be in the best interests of their children" seems directed towards creating or maintaining a distinction between categories of family law cases that may not, in fact, exist. To some litigants, their and their children's financial well-being is at least as important as parenting issues. In many cases, property and parenting disputes are intertwined. Some cases are primarily property disputes, with comparatively minor parenting disputes adhering to them; some cases are the opposite. And it is doubtful that the potential for an adverse costs order would be any more likely to dissuade or prevent a litigant from putting his/her case in a parenting dispute than in a property dispute (or, for that matter, a dispute involving elements of both parenting and property issues) – particularly after the repeal of s 117AB.
34The breadth of the judicial officer's discretion in family law costs matters has been recognised and acknowledged for over 30 years. If the relevant judicial officer is not persuaded that the circumstances warrant the displacement of the general rule to the effect that each party should pay his/her own costs, then the default position should adhere. In costs disputes under the FLA, it has never followed that the simple fact that one party has been successful and the other has not should necessarily and inevitably lead to the making of an order for costs in favour of the successful party. As is clear from the law discussed above, the success (or, more accurately, the lack of success) of a party in family law proceedings is but one of a number of factors to be taken into account in determining whether an order for costs is appropriate.
35In similar vein, I concur with Thackray J's comment (in par 161) that "even a meritorious case can be 'unsuccessful' when the other case is found to have greater merit". Section 117(2A) requires the court to have regard to (among other things) whether a party has been "wholly unsuccessful in the proceedings". This factor clearly says nothing about the merits or otherwise of each party's case, and hence it is not an automatic defence (as it were) to an application for a costs order to argue that the case of a party who was wholly unsuccessful was "not without merit". Again, the breadth of the judicial officer's discretion in relation to costs allows for argument regarding the comparative merits of each party's case and the reasonableness of pursuing the same.
36It follows from the above that I propose to bear in mind that the general rule (to the effect that each party should bear his/her own costs) is not often displaced in parenting cases, and that I should be alert to the need to identify features which might justify a departure from the general rule. I recognise, of course, that some relevant factors might support an order for costs, while other relevant factors might not. At the end of the day, however, the balancing of such matters is a matter for the Court in the exercise of its discretion.
37Chapter 19 of the Family Law Rules 2004 ("the Rules") deals with costs between parties in family law proceedings. Rule 19.01(2) provides that a party may only recover costs from another party in accordance with the Rules or an order of the court.
38Rule 19.18 sets out various bases upon which costs may be assessed. The rule is as follows:
Method of calculation of costs
(1)The court may order that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3. ...
(2)If costs are payable under the Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party/party basis.
(3)In making an order under subrule (1), the court may consider:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the case;
(c)the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with pre‑action procedures; and
(f)expenses properly paid or payable.
39Schedule 3 to the Rules comprises an itemised scale of costs relating to specified types of work. The scale is revised from time to time.
40The "default" method for assessing costs is on a party/party basis: see r 19.18(2). It is unusual for this Court to make orders on any other basis, but there can be no doubt that it has power to do so – and r 19.18(1) says as much.
41Rule 19.34 sets out the principles that are to be applied by a registrar when assessing costs payable pursuant to a costs order. The rule is as follows:
Assessment principles
(1)A Registrar must not allow costs that, in the opinion of the Registrar:
(a)are not reasonably necessary for the attainment of justice; and
(b)are not proportionate to the issues in the case.
(2)If the court has ordered costs on an indemnity basis, the Registrar must allow all costs reasonably incurred and of a reasonable amount, having regard to, among other things:
(a)the scale of costs in Schedule 3;
(b)any costs agreement between the party to whom costs are payable and the party’s lawyer; and
(c)charges ordinarily payable by a client to a lawyer for the work.
(3)When assessing costs as between party and party, a Registrar must not allow:
(a)costs incurred because of improper, unnecessary or unreasonable conduct by a party or a party’s lawyer;
(b)costs for work (in type or amount) that was not reasonably required to be done for the case; or
(c)unusual expenses.
42The law relating to indemnity costs has been reviewed recently by the Full Court in Prantage & Prantage [2013] FamCAFC 105. After observing that there is nothing in the FLA which inhibits the making of an order for indemnity costs and confirming that the law relating to such costs has been "well established in this jurisdiction for many years", the Full Court confirmed that the "usual rule" is that costs are awarded on a party/party basis and that an order for indemnity costs is "a very great departure from the normal standard": see Kohan and Kohan (1993) FLC 92-340 at page 79,605.
43The Full Court was unwilling to reconsider the existing law to the effect that the "usual rule" is that costs are awarded on a party/party basis. The plurality (Thackray and Ryan JJ) wrote (at paragraph 95):
... the "usual rule" relating to the basis upon which costs are ordered in this jurisdiction is well entrenched. We consider it would be most unsettling if we purported to depart from the existing practice. Furthermore, we would not consider it desirable to do so ...
44The question arises, therefore, as to when it might be appropriate to make an order for indemnity costs. In Munday & Bowman (1997) FLC 92-784, Holden CJ wrote (at page 84, 660-1, some references omitted):
The authorities were conveniently summarised by Sheppard J in Colgate- Palmolive Company and Anor. v. Cussons Pty. Limited (1993) 46 FCR 225. His Honour in that case summarised the position as follows:
(a)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.
(b)This has been a 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.
(c)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.
His Honour then went on to note some of the circumstances which have been thought to warrant the exercise of the discretion to award costs on an indemnity basis. Some examples which may be of relevance to the present case are as follows:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts ... ;
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud ... ;
(c)Evidence of particular misconduct causing loss of time to the court and to other parties ... ;
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions ... ;
(e)An imprudent refusal of an offer to compromise.
As to the latter category of cases relating to a refusal to compromise, the authorities giving rise to that proposition are in the main New South Wales authorities. The Full Court warned in Kohan that this is in part attributable to the amendment of the Supreme Court Rules of that State which provide for indemnity costs where a plaintiff obtains judgment in terms no less favourable than those of an offer to compromise made by him and not accepted by the defendant.
Sheppard J in the Colgate-Palmolive case (supra) stated the position as follows:
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 in Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991), "the categories in which the discretion may be exercised are not closed''.
His Honour went on to say:
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.
45The approach described by Holden CJ (relying, as it does, on Sheppard J's dicta in Colgate-Palmolive) remains good law. In Prantage (supra), however, the Full Court emphasised that Sheppard J referred to an "imprudent refusal of an offer to compromise" and not to imprudence by a party in his or her general approach to the proceedings. The former may be sufficient to enliven the power to award indemnity costs; the latter is not.
46The Full Court in Prantage (supra) also emphasised that there is no rule to the effect that indemnity costs will be ordered "where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation" (see NMFM Property Pty Ltd v Citibank Ltd (No 11) (2001) 109 FCR 77). The conduct of a party that is relevant to the issue of indemnity costs is that party's conduct as a litigant.
47I would add that it is, of course, the relevant party's conduct as a litigant to which the reference to conduct in FLA s 117(2A)(c) is directed, and not his or her conduct in other respects.
48In Hand and Bodilly [2013] FamCAFC 98, the Full Court appeared to accept that costs assessed on a lawyer and client (or solicitor/client) basis differ from, and provide a different level of indemnity to, costs assessed on a party/party basis (on the one hand) and costs assessed on an indemnity basis (on the other). The Full Court added, however, that, in some circumstances, an order for lawyer and client costs can provide a complete indemnity: see [100]. It then went on to say (at [102]):
Costs on a “solicitor and client basis” have had different shades of meaning over the decades. Sometimes that discussion equates “solicitor and client” costs with “indemnity” costs but as Santow JA said in Bouras v Grandelis (2005) 65 NSWLR 214:
125.The weight of authority is that solicitor and client costs and indemnity costs are distinct, though the difference between them has been eroded by practice and by inconsistent amendments to the various legislative instruments that make up the costs assessment regime.
126.An order for solicitor and client costs will allow all reasonable costs or all costs as fair justice to the other party will allow. The onus of proving that the costs are reasonable falls on the receiving party.
127.Historically, solicitor and client costs were somewhat more generous than party/party costs....
49The New South Wales Court of Appeal in Bouras v Grandelis (supra) was primarily concerned with the question of statutory construction – or, more accurately, the question of the proper construction of certain provisions contained in the District Court Rules (2005) (NSW). Giles JA described the issue as follows:
1.... The essential question for decision is the meaning of “assessed on a solicitor and client basis” in Pt 39A r 25(4) of the District Court Rules; more particularly, whether the claimant was correct in her contention that it meant costs on an indemnity basis as described Part 39A rule 13 of the Rules ...
2.... [Costs] on a solicitor and client basis has been given differing content, sometimes equated with indemnity costs but often distinguished from costs on an indemnity basis. The decision in the present case does not turn on an historical or abstract meaning of “assessed on a solicitor and client basis”. It turns on the meaning of the phrase as used in Part 39A r 25 of the Rules.
50Given the context of the Court of Appeal's decision in Bouras v Grandelis (supra), it may have been helpful for the Full Court in Hand and Bodilly (supra) to quote the entirety of [127] of the judgment. That paragraph is as follows:
127.Historically, solicitor and client costs were somewhat more generous than party/party costs. But now that the test for party/party costs is a fair and reasonable test under s208F (of the Legal Profession Act 1987 (NSW)), the gap between them has narrowed, if not disappeared altogether.
51At [91] of Hand and Bodilly (supra), the Full Court said:
[The trial judge] quoted from A. G. Saddington, Taxation of Costs Between Parties (at page 68), where the author explained the difference in the level of indemnity between party/party costs and solicitor/client costs in the following terms:
It appears, therefore, that on a taxation between parties on a solicitor and client basis, the unsuccessful party has to pay all the costs incurred by his opponent excepting in respect of (1) costs and expenses incurred prior to the institution of the action; (2) journeys and expenses of which the party liable could have no knowledge, and which would not ordinarily be performed or incurred; (3) the employment of more counsel, or the payment to them of larger fees than the circumstances of the case warrant, including the giving of special retainers.
52Is apparent that the method of assessment of solicitor/client costs referred to by the Full Court in [102] of Hand and Bodilly (supra) (within the passage quoted from Bouras v Grandelis) differs from the method of assessment referred to in [91] of the same judgment (within the passage quoted from A. G. Saddington, Taxation of Costs Between Parties). The Full Court did not indicate which of the two might be perceived to be the correct approach – perhaps because the trial judge had fixed costs in a specific amount (although calculated on a solicitor/client basis), and because the appeal itself was unsuccessful.
53In [142] of Prantage (supra), the plurality said:
The issue that arises now is the basis upon which the costs should be assessed. The argument proceeded on the unstated assumption that the choice was between costs on an indemnity basis or costs on a party and party costs. The issue of the distinction between solicitor and client costs and indemnity costs was not raised and we therefore propose to say nothing on that topic, other than to observe that in Hand & Bodilly [2013] FamCAFC 98 this Court recently observed that the weight of authority is that solicitor and client costs and indemnity cost are distinct; albeit that an order for solicitor/client costs may, in some circumstances, provide a complete indemnity. Assuming that is the case, it would ordinarily be appropriate for a judge to consider awarding costs on a solicitor and client basis before awarding costs on an indemnity basis.
54Clearly, the above comment was obiter. In a separate judgment in Prantage (supra), however, Murphy J implied that the Rules provide for a choice between costs on a party/party basis and costs on an indemnity basis. His Honour observed that the references in the Rules to costs on a solicitor/client basis (described as costs on a "lawyer and client" basis) have been repealed – save for the single reference in r 19.18(1)(b) to costs being assessed on a "lawyer and client" basis. Thus:
158.Despite the reference in r 19.18(1)(b) to “lawyer and client” costs as basis for an award, it should be noted that Part 19.4 of the Rules (entitled “Lawyer and client costs”) and r 19.53 (headed “Lawyer as counsel – lawyer and client costs”) were each repealed by amendments in 2008. Rule 19.34 was amended by those same amendments in 2008. The current r 19.19 was inserted by subsequent amendments in 2008.
159.Rule 19.34 seeks to distinguish between the amounts embraced by an assessment of “costs on an indemnity basis” and “party and party” costs (rr 19.34(2) and (3) respectively).
160.Absent an order by a Judge, r 19.19 “caps” the amounts of party and party costs to those provided for in Schedule 3. Rule 19.34 provides that a Registrar “must not allow costs” which are not “reasonably necessary for the attainment of justice” (r 19.34(1)(a)) and which “are not proportionate to the issues in the case” (r 19.34(1)(b)). The rule is not, in terms, confined to party and party costs; the rule refers merely to “costs”. “Costs” is defined to mean “…an amount paid or to be paid for work done by a lawyer, and includes expenses.” No distinction is made between “party and party costs” and “indemnity costs” in r 19.34(1) and neither expression is defined. Accordingly, the prohibition contained in r 19.34(1) would appear to apply equally to either party and party costs or indemnity costs (an interpretation reinforced by r 19.19 and its terms and by the fact that r 19.34 goes on to make separate provision for indemnity costs (r 19.34(2)) and party and party costs (r 19.34(3)).
55At [163] of Prantage (supra), Murphy J said:
... [Absent] other order or agreement between the parties, an order that one party should pay the costs of the other on an indemnity basis brings with it stipulated parameters governing the quantum of any such costs:
(a)Rule 19.34(1) provides that any item/s assessed as “not reasonably necessary for the attainment of justice” or “not proportionate to the issues in the case” must be disallowed;
(b)Rule 19.34(2) mandates the costs that must be allowed but limits those to costs “reasonably incurred” and, if reasonably incurred, of a “reasonable amount”; and
(c)the same rule mandates the (non-exclusive) matters to which regard must be had in assessing whether the amount is reasonably incurred and, if so, whether any individual amount is reasonable:
•The Schedule 3 scale of costs;
•“[A]ny costs agreement between the party to whom costs are payable and the party’s lawyer”;
•“[C]harges ordinarily payable by a client to a lawyer for the work.”
56Regrettably, the Full Court in Hand & Bodilly (supra) did not discuss the provisions of Chapter 19 of the Rules – although reference was made to passages from the judgment at first instance in which the trial judge applied some of the rules contained in the Chapter: see [90] and [93] of Hand & Bodilly (supra). The only provision of the Rules dealing with costs mentioned by the Full Court when dealing with the grounds of appeal was r 19.04(6), which is not presently relevant: see [109] of Hand & Bodilly (supra). It follows that the concerns raised by Murphy J in Prantage (supra) regarding the question of whether an award of costs on a solicitor/client basis remains an option under the Rules were not considered.
57Murphy J in Prantage (supra) also emphasised that comments to the effect that indemnity costs are "a very great departure" from what might be regarded as the normal or usual standard do not comprise "a fetter" on the court's discretion to award costs or indemnity costs if it considers it just and appropriate to do so. The normal or usual standard in family law proceedings recognises that the "default position" is that each party must bear his or her own costs. The normal or usual standard in family law proceedings where costs are ordered is that the cost are awarded are to be assessed on a party/party basis.
58I accept the guidance of the plurality of the Full Court in Prantage (supra) to the effect that it would ordinarily be appropriate for a judge to consider awarding costs on a solicitor/client basis before awarding costs on an indemnity basis. The precise manner in which costs awarded on such a basis are to be assessed, however, is not as clear as it could be. The assessment principles set out in r 19.34 focus on the manner in which assessments of costs on a party/party basis and on an indemnity basis are to be approached. They give no guidance as to the manner in which an assessment of costs on a solicitor/client basis is to be approached. Murphy J was clearly of the view that such an omission was deliberate. In those circumstances, and in the light of the matters discussed in these Reasons, I would be reluctant to award costs on a solicitor/client basis. In other words, I have considered awarding costs on a solicitor/client basis but have formed the view that an order to that effect would not be just – if for no other reason than the fact that it is likely to condemn the parties to a further protracted dispute regarding the assessment principles that should adhere to such an order.
Section 117(2A) considerations
59I turn now to consider the various matters referred to in s 117(2A). Before doing so, however, I will again record that I accept that the general rule (that each party should pay his/her own costs) is not often displaced in proceedings involving children or parenting matters. I also accept that the determination of the substantive dispute – relating, as it did, to the best interests of the parties' children – was of very great importance to both parties. Further, I am aware that I must be satisfied that there are circumstances that justify the making of an order for costs before proceeding to make such an order. Although, for the reasons that I have indicated above, I am not persuaded that my discretion is fettered in any way simply because these were parenting proceedings, in the course of exercising my discretion I am prepared to consider whether the case might fall within or contain one or more of the "features" alluded to by the majority of the Full Court in Hawkins & Roe (supra).
The parties' financial circumstances
60On 22 October 2010, consent orders were made dealing with the issue of property settlement. At or around the same time, the parties entered into a Limited Child Support Agreement pursuant to which the father was to pay $1770 per month in respect of child support.
61Because the former matrimonial home sold for less than had been anticipated, property settlement was re-negotiated. The orders of 22 October 2010 were set aside. The parties agreed, instead, that the father would pay certain outstanding debts of the parties and that the child support payable under the Limited Child Support Agreement would be varied. In that regard, it was agreed that payments to be made by the father towards a car loan relating to the mother's car would be regarded as a "non-agency payment" amounting to $450 per month. The re-negotiated arrangement formed the subject of a Form 11 Application for Consent Orders filed on 15 March 2012.
62The father swore a financial statement on 29 April 2014. It reveals that the father is employed by [Company K] as its [Manager]. He works on a full-time basis, and has been employed by Company K for just over five years. His average gross weekly salary is $2826. His 2013 tax return reveals that his gross salary in that financial year was $134,868 (or $2593 per week). His total deductions in his 2013 tax return amounted to $12,555, just over $9000 of which related to "home office running expenses".
63The father's financial statement records that he lives with [Ms G], who earns approximately $900 per week.
64According to the financial statement, the father pays approximately $765 per week in respect of income tax, $750 per week in respect of rent payments, $330 per week by way of child support and $750 in respect of "all other expenditure" (which amount was not particularised).
65The father's assets are modest. He has less than $1000 in savings, a motorcycle valued at approximately $5000 and household contents valued at approximately $15,000. He also has superannuation entitlements valued at approximately $110,500. In his submissions at [17], he says that the car he drives belongs to Ms G.
66The father's financial statement records that he owes $19,825 in respect of the Westpac Visa card and $42,000 in respect of a "loan to father and stepmother for mortgage arrears and [mother's] car".
67The father holidayed overseas in 2011, 2012 and 2013.
68In his submissions, the father said at [12] that he has "virtually no assets" and "no further capacity to borrow". He also asserted that his monthly expenditure regularly exceeds his income. In his submissions at [16], however, he referred to receiving "bonus payments" during the 2014 financial year. Those bonus payments were used to reduce debt.
69The father also said that his holiday to Europe in 2011 was "taken with frequent flyer points" and that he stayed with friends to minimise costs. His trip to Asia in the following year was "a budget holiday to Thailand" with Ms G and his trip to the USA and Mexico in 2013 was "made possible because we shared accommodation with friends and were able to obtain discount air fares".
70According to the mother's financial statement sworn 13 March 2014, she is unemployed. Apart from very modest Government benefits and the child support paid by the father, she receives no income and is financially dependent on Mr D.
71The mother owns a motor vehicle worth approximately $4000 and furniture, chattels and effects (including jewellery) worth approximately $10,000. Her superannuation entitlements are valued at approximately $11,500. She has no significant liabilities.
72The mother's submissions include the following:
[62]The mother is not currently employed in the workforce and has not held full-time employment for several years. She has been the primary carer of the children and has completed a secondary teaching degree, the qualifications for a career compatible with her circumstances because she will be able to work and still be the primary carer of the children… She is unlikely to work in the short to medium term.
[63][[Mr D’s]] income was closely considered during the trial. His package is as follows…:
•Base salary of A$250,000 plus fully paid for housing in [Thailand] (including utilities), a private driver to transport [Mr D] to and from work, private health insurance, school fees [for the children] and flights to and from Thailand (business class) once per year.
•When the mother and the children join [Mr D] in [Thailand], this income will increase to A$300,000 and at the conclusion of his contract he will have a severance payment of A$50,000.
[64]It is appropriate for the Court to take [[Mr D’s]] income into account, it is a resource of the mother and [[Mr D]] fully supported the sojourn and the court proceedings. [[Mr D]] will benefit financially as well as the mother and the children.
[65]While the mother has a reasonably comfortable financial position the legal costs she has had to incur have been considerable and have for a large part consumed the financial benefit that she and [[Mr D]] hoped to achieve by the relocation to Thailand.
[66]Added to this the mother agreed and has now been ordered to meet all of the costs of her and the children to enable them to spend time with the father.
73I accept that the mother and Mr D are in a stronger financial position than the father and Ms G – due to Mr D’s significant income and employment benefits. I also accept that the father does not appear to have the means to meet any significant order for costs. To that extent, this factor supports the father's submission to the effect that no order for costs should be made.
74As I have indicated above, however, the father's inability or apparent inability to meet an order for costs does not, in itself, prevent the making of a costs order. Still, there can be no doubt that it is a factor which the Court must take into account (along with all other relevant factors).
Legal aid
75This is not a relevant consideration, and neither party suggests that it is.
Conduct of the parties as litigants
76In broad terms, s 117(2A)(c) requires the Court to have regard to the parties' conduct as litigants.
77The father was not legally represented at the trial. As recorded in the Judgment at [75], however, he "participated in the trial process fully, confidently and relatively comfortably". Further, and as the mother submitted, the father –
a)has been educated at tertiary level and has a senior position in a major company; and
b)was "familiar with lawyers and their advice", having consulted experienced Family Lawyers in the past.
78In the Judgment at [116], I described the father as "an intelligent and determined man", who was controlling, demanding and lacking in insight. At [119], I wrote:
… [The father is] also articulate, and has a healthy self-esteem – but he displayed a noticeable sense of entitlement and lack of empathy. He was less prepared than the mother to give credit where it was due (particularly if he was required to give credit to the mother) and he was reluctant to make appropriate concessions. My impression is that the father expects to get his own way and is likely to become angry or frustrated when this does not happen. He has been contemptuous of the mother and has lacked patience when she has endeavoured to communicate about her own problems or concerns. He has appeared oblivious to the hurt his insults may have inflicted on the mother. His communications also reveal a disdainful and patronising attitude.
79The Judgment also reveals that the father used insulting language to the mother's solicitors (see [123]), that he sought to manipulate Mr D emotionally (see [124]) and that he failed or refused to show respect for the mother's position regarding the sojourn (see [125]). I added (again at [125]):
… In my opinion, it is apparent that, in his dealings with the mother, the father has consistently (but unjustifiably) felt misunderstood, inadequately appreciated and cheated. He has reacted with irritation, argument and the type of insults [referred to elsewhere in the Judgment].
80The Judgment also records at [125] that, in spite of the father's written and other communications with the mother, the mother's lawyers and Mr D (much of which was lengthy and detailed), it was clear that the father never intended to consent to the sojourn. The practical effect of the father's attitude and behaviour in this regard was that it served – directly or indirectly – to increase the mother's legal costs.
81Importantly, and as referred to in the Judgment at [114], much of the material contained in the father's trial affidavit was of little or no relevance to the question of whether the sojourn should be permitted. The same can be said for much of the other affidavit material filed by the father in support of his case. The material was irrelevant because it had been prepared in support of the father's application for shared care – which application was abandoned at the commencement of the trial in the circumstances described in the Judgment at [20] to [26].
82The father filed a total of nine affidavits, totalling nearly 380 pages (133 of which were, as the father described them, "research reports"). He later conceded that four of the affidavits were unnecessary and withdrew them when the application for equal shared care was abandoned.
83Some of the affidavit material filed by the father was prolix and argumentative. It also contained inadmissible evidence and did not confine itself to facts relevant to the issues in dispute.
84Given the nature of the father's case as it stood at the commencement of the trial, the mother had no alternative but to prepare her case fully on the basis that she was required to meet a claim for equal shared care of the children. As the mother submitted at [83], that preparation resulted in "considerable financial, physical and emotional cost".
85In the mother's submissions at [91] to [94], examples are given of the father's excessively combative approach to the conduct of the litigation. I accept those submissions. The father's strategy appeared to involve metaphorically "drowning" the mother in a sea of negativism and unnecessary detail. The father appeared to take every point he could. For example, the father's case included an assertion (from which he did not resile) that the mother would not support and promote his relationship with the children if the sojourn were permitted. This assertion was found to be baseless. Given the similarity of the material in the affidavits relied upon by the father and some of his family members, it seems apparent that the father's case was "workshopped" by the father and others with a view to leaving no stone unturned. Put another way, I find that the father made the case considerably more complex than it needed to be. As I said in the Judgment at [125], the question of whether the sojourn should be permitted was a difficult one, and it was never appropriate to dismiss the father's arguments (in particular, his primary arguments – which appear in the Judgment at [2]) lightly. Indeed, counsel for the mother conceded as much. But the father refused to recognise mother's application for what it was: a perfectly reasonable request by the mother, as the principal caregiver for the children, to take them with her to Thailand for a limited period so that she could join her partner (now husband) while he was working on a project there. The sojourn was likely to result in a significant financial benefit for the couple, and it overcame certain problems that the mother was likely to encounter if she and the children were obliged to remain in Perth (some of which had their genesis in the father's antagonistic attitude to her). There was never any credible evidence that the relationship between the father and the children would be harmed by the sojourn.
86The strongest of the father's arguments against the sojourn related to the children's security in Thailand (due to the political unrest in the country at that time, and the volatility engendered by that unrest). That is not to say that his concerns regarding the effect on the children of the travelling between Thailand and Australia, the separation of the children from him and his family and schooling issues were irrelevant. They were not, but they did not justify the full-throated attack on every aspect of the mother's case that characterised the father's approach to the proceedings. At no time, it seems, did the father simply "step back" and make a sincere effort to put the mother's application in perspective.
87I accept that the father's maintenance of his opposition to the mother's proposals regarding the sojourn with the children is not, in itself, relevant to his conduct as a litigant. He was entitled to argue that the sojourn was not in the best interests of the children. However, because his approach to the litigation was as combative, overly‑inclusive and declamatory as I have described it above, it crossed the boundaries of what might fairly be considered reasonable argument. It has therefore become relevant to his conduct as a litigant. Even if I am wrong in this regard, the father's approach to the litigation is relevant under s 117(2A)(g) – under the general heading of "other matters considered relevant".
88Although the father was entitled to maintain his opposition to the mother's proposals, to press the matter to trial and to conduct the trial himself, that says nothing about his liability for costs when the outcome of the trial is known. There appears to be a hint or underlying suggestion in the father's submissions that the Court might be minded to make an order for costs in order to punish him in some way. As I said in Maker & Jets (No 3) [2012] FMCAfam 1104 at [83], however:
... the Court is not concerned with punishing one party or the other, or rewarding one party or the other for that matter. In the substantive proceedings, the Court’s paramount consideration comprised [the children's] best interests – and punishing or rewarding one party or the other would have amounted to an abdication of the Court’s obligation to make such orders as are most likely to be in [the children's] best interests. It would have been an obvious failure to apply the law. Similarly, to incorporate inappropriate concepts of punishment of one party or the other into its consideration of an application for costs would amount to a failure of the Court's obligation to apply the provisions of section 117 of the Family Law Act and, in particular, to make such order as to costs as the Court considers just.
In broad terms, the general law is to the effect that it is just and reasonable that someone who causes a person to incur legal costs should reimburse that person for those costs: see, for example, Latoudis v Casey (1990) 170 CLR 534. Costs (relevantly, party and party costs) are compensatory, in the sense that they are intended to partially indemnify a successful litigant against his or her liability for legal costs. In other words, they are compensatory, not punitive: see Braithwaite Braithwaite [2007] FamCA 468. To that extent, "punishment" and "penalty" are not relevant considerations. Indeed, they are fraught concepts, given that [for example] a successful litigant who has fought long and hard through the court system to clear himself or herself of serious and perhaps malicious allegations that may have been made against him or her (which allegations may have the most profound effect on his or her relationship with his or her children, or on his or her financial well-being) might fairly consider that a reluctance of the part of the Court to order costs in his or her favour is tantamount to being punished, or penalised, for having chosen to litigate instead of, say, to metaphorically "walk away".
Whether the proceedings were necessitated by the failure of a party to comply with previous orders
89This is not a relevant consideration, and neither party suggests that it is.
One party wholly unsuccessful
90The single most significant issue in the case, and the dispute which lay at the heart of the proceedings between the parties, was whether the mother should be permitted to remove the children from Australia for the sojourn. Put another way, the core issue was whether it was in the best interests of the children for the sojourn to proceed. There can be no doubt that the father was wholly unsuccessful in his opposition to the sojourn.
91The father was also wholly unsuccessful in his attempts to persuade the Court that –
a)the mother will not foster a close and loving relationship between the children and himself;
b)the amount of travelling between Thailand and Australia (as proposed by the mother) would severely affect the children;
c)Child A’s schooling would be adversely affected by the sojourn; and
d)the children would feel isolated from their friends and family while in Thailand.
92He was also wholly unsuccessful in his attempts to persuade the court that the only reason – or one of the reasons – why the mother wanted to take the children to Thailand was to punish him and his family: see the Judgment at [128]. I concluded that this assertion was extraordinary, and that the evidence did not begin to support it.
93The DFAT travel advisories were discussed in the Judgment. I concluded that the potential risks to the children reflected in those advisories comprised the single most significant factor supporting a conclusion to the effect that the sojourn should not proceed. I found, however, that the mother and Mr D are mature and responsible adults and that they would do everything in their power to ensure that the children are not exposed to any unacceptable risks during the sojourn. The final orders deal with the possibility of changes in the DFAT travel advisory levels. For example, if during the course of the sojourn DFAT issues a travel warning for Thailand at level 4 ("Do not travel"), the mother must return to Australia with the children as soon as practicable.
94In the Judgment at [125], I recorded that Ms Anderson (counsel for the mother) conceded that the question of whether the sojourn should be permitted was a difficult one and that she acknowledged that the father's arguments should not be lightly dismissed. At [72], however, I commented that the proceedings did not comprise a relocation case in the usual sense:
… The mother's proposal is for the children to spend 18 months in Thailand with her and [Mr D]. It follows that the proposal does not entail the children being permanently removed from their present place of residence. That is not to say that the changes to the present arrangements sought by the mother are insignificant, or that the father's objections are to be treated lightly, but the temporary nature of the relocation and the comparatively substantial contact between the father and the children proposed by the mother serve to reassure the Court that the sojourn is unlikely to have the dire consequences foreshadowed by the father in his trial material. Importantly… I have concluded that the sojourn will not result in the father having anything other than an ongoing, meaningful relationship with the children.
95As I have indicated elsewhere in these Reasons, the father was entitled to oppose the sojourn and to present his arguments in support of his case. However, those propositions are irrelevant to questions relating to the father's success in the proceedings. As Thackray J wrote in Hawkins & Roe (supra), "even a meritorious case can be 'unsuccessful' when the other case is found to have greater merit". I am not persuaded that the father's case could ever have been fairly described as "meritorious", but even if it could be so regarded, the fact of the matter is that it was wholly unsuccessful. What the father most wanted was for the mother's application for orders enabling the sojourn to be dismissed.
Offers in writing
96The mother filed her application initiating proceedings on 2 October 2013. For some five months prior to that date, there had been communication between the parties dealing, directly or indirectly, with the sojourn and whether it should proceed. The parties attended Relationships Australia on 22 August 2013, but no agreement was reached at that time. As recorded in the Judgment at [125], however, it was clear to the Court that, in spite of the father's written and other communications with the mother, the mother's lawyers and Mr D (much of which was lengthy and detailed), the father never intended to consent to the sojourn.
97Annexure G to the mother's submissions comprises a letter dated 6 November 2013 from the mother's solicitors to the father. The letter is headed "Without prejudice save as to costs".
98The letter contains an offer to settle the proceedings. The offer is as follows:
We are instructed to write to you in an attempt to resolve matters as and by way of consent.
Our client is prepared to resolve the matter on the basis that:
1.She be permitted to relocate the children to Thailand from February 2014 until August 2015, where they will remain living with her.
2.You spend substantial and significant time with the children on each of the mid-term breaks, half-term breaks and mid-year summer break.
3.Our client will be responsible for the cost of flights to facilitate the children spending time with you as per the above and will travel with the children and the children will live with her when they are not in your care.
4.You spend time with the children at any time you are in Thailand provided that it does not unreasonably interfere with the children's schooling.
5.You communicate with the children liberally by Skype, FaceTime, Viber and such other electronic means as is available at the time.
6.The Limited Child Support Agreement be terminated and our client release you from paying child support to her during the period of relocation
Our client is hopeful that by releasing you from paying any child support for the children during this period, this will free up some of your income to potentially visit the children in Thailand and share this experience with them, however you are not bound to visit them in the event that you are unable to.
We would be pleased if you could notify our office if you are prepared to settle on this basis, and if so we will draw up the appropriate Minute of Consent Orders the filing in the Court.
In the event that you are not agreeable to resolving the matter on this basis and our client is successful in her application, we put you on notice that we anticipate receiving instructions from our client to pursue costs on an indemnity basis from the date of this letter.
99Clearly, the final orders were very similar to the mother's proposals – save for the reference to the DFAT travel advisories.
100The father's response to the mother's offer is dealt with in the Judgment at [120] to [123]: the father described the correspondence from the mother's solicitors as being "arrogant", but was unable to satisfactorily explain why he formed that view. Further, his accusation (in exhibit M2) that the offer "seeks to not only sever my emotional ties with the children, but my financial ties with them as well" is bizarre. Regrettably, it falls into the category of "spin".
101The father's response to the mother's offer went further. As exhibit M2 reveals, the father offered the mother's solicitor "a personal wager":
I bet you the full amount of your firm's presumably absurd fees that the court will apply the above principles (being "the fundamental principles of the Family Court's primary consideration that the children have the benefit of a meaningful relationship with both parents") to the supplied facts and will not grant the relocation to your client, the applicant.
Do we have a deal???
102Clearly, the mother's solicitors had done no more than present what has been shown to be a very reasonable offer to settle the proceedings and avoid the necessity of a trial. The father's response was inflammatory and discourteous.
103In his submissions at [48], the father argues as follows:
It was not reasonable or appropriate for the mother or her lawyers to think I would accept such an offer. It was not a reasonable offer and was never likely to result in a resolution of the disagreement over relocation…
104I do not agree. In my opinion, the mother's proposal was reasonable and constructive. It does not appear that the DFAT advisories were concerns from the father's point of view at that time, but if they were he could and should have raised them with the mother's solicitors instead of rejecting the proposal in the confrontational manner that he adopted.
105I accept that the mother made reasonable attempts to resolve the matters in dispute between the father and herself. It is clear that the father never intended to resolve the matter by negotiation. His approach made a trial inevitable.
Other matters considered relevant
106The mother submits that the father's comment regarding a "wager" should be considered as a factor to be taken into account either under the general heading of the father's conduct or, alternatively, under the present heading.
107I have referred to other aspects of the father's approach to the litigation elsewhere in these Reasons. I described that approach as being combative, overly‑inclusive and declamatory, and I found that it crossed the boundaries of what might fairly be considered reasonable argument. To the extent that such behaviour is not considered relevant under s 117(2A)(c), then it should fairly be considered relevant under s 117(2A)(g).
Conclusion
108In my opinion, there are circumstances which justify the making of an order for costs in the mother's favour. The most significant of those circumstances are –
a)the fact that the father was wholly unsuccessful in the proceedings;
b)the father's conduct as a litigant;
c)the mother's offer to settle the proceedings (and the father's response); and
d)to the extent that they have not been dealt within the other factors, the matters discussed under s 117(2A)(g).
109I have given careful consideration to the father's financial position and his apparent inability to meet an order for costs. I have also considered the mother's financial position in comparison with the father's financial position.
110I accept that the father's financial position is a factor that would mitigate against the making of an order for costs. At the end of the day, however, I am satisfied that the other relevant factors clearly, and significantly, outweigh it. In all the circumstances, it would be unjust and unfair for the Court to fail to make an order for costs in the mother's favour.
Form of costs order
111As explained above, the "default" method for assessing costs is on a party/party basis. Although it is unusual for this Court to make orders on any other basis, it has power to do so.
112The mother seeks an order for indemnity costs. Before making such an order, the Court must recognise that indemnity costs amount to a very great departure from the usual basis upon which costs are assessed, and be satisfied that the circumstances justifying that departure are exceptional in nature.
113In all the circumstances, I am not persuaded that an order for indemnity costs is appropriate in the present case. Although, properly advised, the father should have known that his case was not as strong as he perceived it to be, I am not satisfied that he should have known that he had "no chance of success".
114I accept that the father unduly prolonged the case "by groundless contentions" (for example, that the predominant reason why the mother wanted to take the children to Thailand was to punish him and his family). I also accept that the father's refusal to accept the mother's offer of settlement was imprudent. It is arguable, of course, that these matters would serve to justify an order for indemnity costs – and I have given careful thought to making such an order. It seems to me, however, that the father's financial position mitigates against the making of an order for indemnity costs (even if it does not mitigate against the making of an order for costs on a party/party basis). Further, stripped of its confrontational overlay, the father's case boiled down to a submission that it was not in the best interests of the children for the sojourn to occur. That submission was unsuccessful and a costs order is warranted, but it seems to me that the circumstances are not sufficiently exceptional to warrant the approach urged by the mother.
115I would add (bearing in mind the dicta in Hawkins & Roe (supra)) that this is a case in which adverse findings have been made about the father's conduct – including the conduct of his case at trial. Further:
a)although no expert evidence was presented to the Court, the father's approach revealed an absence of preparedness on his part to compromise;
b)the father's case included a claim for equal shared care which was misconceived and never likely to succeed (and which was withdrawn on the first day of the hearing); and
c)the inclusion of the claim for equal shared care meant that the case was significantly more complex that it ought to have been; and
d)much of the material relied upon by the father in support of his claim for equal shared care was either inadmissible or unhelpful.
116Where costs are to be assessed on a party/party basis, the itemised scale of costs contained in Schedule 3 of the Family Law Rules 2004 (Cth) applies.
117Although r 19.18(1)(b) provides that the Court may order that a party is entitled to costs as assessed on a "lawyer and client" basis (in other words, legal practitioner/client basis), Murphy J in Prantage & Prantage (supra) argued persuasively that such an option does not exist and that the rules provide for only two options – being costs on a party/party basis and costs on an indemnity basis. The other members of the Full Court in Prantage (supra) (Thackray and Ryan JJ) seemed to accept that costs can indeed be assessed on a "lawyer and client" basis, and added that it would ordinarily be appropriate for a judge to consider awarding costs on such a basis before awarding costs on an indemnity basis.
118Because the precise manner in which costs awarded on a "lawyer and client" basis are to be assessed is not as clear as it could be, I find that an order to the effect that costs be assessed on such a basis would be likely to condemn the parties to a protracted dispute regarding the relevant assessment principles.
119In all the circumstances, I am satisfied that I should not attempt to assess the quantum of costs in the present case. It is sufficient that I have determined that an order for costs on a party-party basis is appropriate. The quantum of costs can be assessed by a Registrar in the usual manner.
120In my opinion, it is just and appropriate that the father should pay the mother's costs of and incidental to the proceedings in their entirety.
121The orders that I propose to make are as follows:
a)Subject to (b) below, the father must pay the mother's costs of and incidental to the proceedings on a party/party basis ("the mother's costs").
b)In the event of the parties failing or refusing to agree the quantum of the mother's costs within 21 days from the date of these orders, the mother's costs be assessed by a Registrar pursuant to Chapter 19 of the Family Law Rules 2004 (Cth).
I certify that the preceding [121] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
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