Edinger & Duy (No 5)
[2024] FedCFamC1F 495
•25 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Edinger & Duy (No 5) [2024] FedCFamC1F 495
File number(s): PAC 4543 of 2020 Judgment of: ALTOBELLI J Date of judgment: 25 July 2024 Catchwords: FAMILY LAW – COSTS – Where the father seeks costs for the entirety of the proceedings – Application for indemnity costs – Where the mother is in breach of Court orders – Where the mother has fled the jurisdiction – Where costs are ordered on a party-party basis in a fixed sum. Legislation: Family Law Act 1975 (Cth) ss 117
Federal Proceedings (Costs) Act 1981 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Hague Convention on the Civil Aspects of International Child Abduction
Cases cited: Bant & Clayton (Costs) (2016) 56 Fam LR 31; [2016] FamCAFC 35
Bhatt & Acharya (Costs) [2017] FamCAFC 71
Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432
Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; (1993) 118 ALR 248
Cross & Beaumont (2008) 39 Fam LR 389; [2008] FamCAFC 68
Edinger & Duy (2023) 68 Fam LR 55; [2023] FedCFamC1A 194
Edinger & Duy (No 4) [2024] FedCFamC1F 303
Imberg & Cabrey [2020] FCCA 1053
In the Marriage of I & I (No. 2) (1995) FLC 92-625; [1995] FamCA 80
Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116
Lenova & Lenova (Costs) (2011) FLC 93-467; [2011] FamCAFC 141
Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157
Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248
PBF (as child representative for AF (Legal Aid Commission of Tasmania)) & TRF & LKL (2005) 33 Fam LR 123; [2005] FamCA 158
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28
Division: Division 1 First Instance Number of paragraphs: 47 Date of last submission/s: 5 June 2024 Date of hearing: In Chambers Place: Sydney Counsel for the Applicant: Mr Givney Solicitor for the Applicant: Maclarens Lawyers The Respondent: No appearance ORDERS
PAC 4543 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR EDINGER
Applicant
AND: MS DUY
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
25 JULY 2024
THE COURT ORDERS THAT:
1.The Respondent pay the Applicant’s costs fixed in the sum of $55,000.
2.Such payment shall be made within 28 days of the publication of these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Edinger & Duy has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
The applicant father (“the father”) seeks an order for costs against the respondent mother (“the mother”) arising out of the entirety of the proceedings. The orders for costs are sought on an indemnity basis, or in the alternative, to be calculated in accordance with Sch 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). The precise orders sought are as follows:
1. That the Respondent pays the costs arising out of the entirety of the proceedings on an indemnity basis or otherwise as to scale pursuant to Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
The mother has not participated in proceedings since her solicitor last appeared before the Court on 30 June 2023. No material has been provided by the mother since she filed written submissions on 31 March 2023 in accordance with Order 3 made by Hannam J on 7 March 2023. Despite being a party to the proceedings, and being aware of the father’s pleadings, the Court cannot compel the mother to engage (Imberg & Cabrey [2020] FCCA 1053 at [186] (“Imberg & Cabrey”)).
BACKGROUND
These proceedings between the father and the mother have been ongoing since 1 September 2020. The parties were married in early 2012 and separated on 31 August 2020. There is one child to the marriage, X born 2015 (“the child”). The mother has another child from a previous relationship who also lived with the parties when they resided together.
On 2 June 2023, Hannam J made final orders for the child to live with the mother, for her to have sole parental responsibility for the child and for the child to spend no time with the father. The mother was permitted to apply for a passport and to travel overseas with the child for a holiday. Following these orders, in June 2023, the mother departed Australia for Country D with the child and has not returned since.
The father appealed the final orders made by Hannam J, and on 10 November 2023 the Full Court allowed the appeal (Edinger & Duy (2023) 68 Fam LR 55 (“Edinger & Duy”)). The father was granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) in respect of the costs incurred by him in the appeal, and the matter was remitted for rehearing. On 14 December 2023, I made orders by consent between the father and the Independent Children’s Lawyer for the mother to return the child to Australia, cause him to reside within a 15 kilometre radius of V School, and for service to be effected on the mother by way of substituted service. I also listed the matter for final hearing and made trial directions, noting that if there was no appearance by the mother, the matter would proceed on an undefended basis.
The matter proceeded before me on 18 April 2024 on an undefended basis. I made orders on a final basis for the father to have sole parental responsibility for the child, for the child to live with the father, for the mother to return the child to Australia within 21 days, and thereafter for the mother to be restrained from causing the child to reside in any country other than Australia. I further made orders for the child to spend time with the mother from 10.00 am until 1.00 pm each Sunday supervised by a contact agency with staff who are able to understand the Country D language.
Contrary to orders of this Court, the child is living with the mother, most likely in Country D, where she is known to have both family and assets. As Country D is not a signatory to the Hague Convention on the Civil Aspects of International Child Abduction, the father will be using his best endeavours to have orders made by this Court recognised and enforced in Country D, such that the child returns to Australia.
In my judgment delivered 10 May 2024 (Edinger & Duy (No 4) [2024] FedCFamC1F 30 (“Edinger & Duy (No 4)”), the father was granted leave to provide a copy of those reasons and orders made 18 April 2024 to any government department and/or any official of a government department whether in Australia or in Country D to assist in causing the child to be returned to Australia. The father was also granted sole beneficial ownership of the property situated at K Street Suburb L; the property situated at M Street, Suburb N; Motor Vehicle 1; all bank accounts in the name of the father; all shareholdings in the name of the father; and those personal effects in his possession or control. The mother was declared the sole beneficial owner of the property situated at 1 P Street Country D (“the Country D property”); all bank accounts in the mother’s name; and those personal effects in her possession or control.
Whether the father needs to resort to further litigation in Country D to enforce these orders is not apparent to the Court.
THE PRESENT APPLICATION
On 20 May 2024, I made orders for the costs application to proceed by way of written submissions and to be determined on the papers.
In support of his case, the father relies on the following material:
(a)Application in a Proceeding filed 20 May 2024;
(b)His affidavit filed 20 May 2024; and
(c)Written submissions filed 5 June 2024.
The mother was given the opportunity to provide a response to the costs application, affidavit material in support and written submissions, but failed to do so.
LEGAL PRINCIPLES
The law relating to costs in family law proceedings is well settled and is set out in detail in the Full Court decision of Parke & The Estate of the Late A Parke (2016) FLC 93-748.
An application for costs is governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). Section 117(1) of the Act sets out the general presumption that each party to the proceedings shall bear their own costs. This is subject to s 117(2), which provides that:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as the court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Section 117(2A) sets out the matters that the Court is to have regard to:
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
Although the Court is required to consider each of the abovementioned factors, their relevance to a particular matter will depend upon the circumstances of that case and they should be considered in that light. That is, no one factor prevails over another and it is a question of the weight that is to be afforded to each of the relevant factors depending on the circumstances of the matter (Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664 at [24]). There is also “nothing to prevent any factor being the sole foundation for an order for costs” (PBF (as child representative for AF (Legal Aid Commission of Tasmania)) & TRF & LKL (2005) 33 Fam LR 123 at [41]).
Whilst the applicant in a costs application must establish the circumstances justifying the making of a costs order, the Court is not limited to making such an order only in what has been described as a “clear case” (Penfold v Penfold (1980) 144 CLR 311).
DISCUSSION
Costs orders are made at the Court’s discretion based on the factors listed in s 117(2A) of the Act. The Court must consider all the factors in s 117(2A), and no one factor takes precedence over another (In the Marriage of I & I (No. 2) (1995) FLC 92-625). Full consideration of these factors has been made more difficult by the dearth of evidence on behalf of the mother. Nonetheless, a discussion of these factors follows.
Section 117(2A)(a): Financial circumstances of the parties
Mere impecuniosity is not a reason per se for declining to make a costs order (see, e.g., Lenova & Lenova (Costs) (2011) FLC 93-467; Bhatt & Acharya (Costs) [2017] FamCAFC 71) especially if that party’s conduct is found to warrant such an order (Cross & Beaumont (2008) 39 Fam LR 389).
The father does not assert any particular financial circumstances that would warrant the attention of this Court. The mother was declared to be the sole and beneficial owner of the Country D property in my judgment delivered 10 May 2024 (Edinger & Duy (No 4)). It is reasonable to assume that the father would have suffered an economic loss from this outcome, but not one so great that it justifies a departure from the status quo with respect to costs.
The Court has attempted to inform itself of the financial circumstances of the mother from the evidence available to it. The mother’s Financial Statement filed 15 February 2023, written submissions filed 20 February 2023, and Costs Notice filed 27 February 2023 provide a slim, albeit outdated, snapshot of such circumstances.
As of 15 February 2023, the mother claimed to have a weekly income deficit of $633, net assets worth $30,000 and $2,000 in superannuation. In her written submissions dated 20 February 2023 the mother asserted that she did not have any significant savings or assets at the commencement of the relationship and had refused offers of employment to accompany the father to Country O. In the mother’s Costs Notice filed 27 February 2023, she deposed to having incurred $20,664.84 in legal expenses prior to the hearing before Hannam J. In total the mother’s costs for these proceedings were estimated to amount to $81,464.84. It is noted that the mother’s solicitors held $79,105 in trust on account of anticipated fees and disbursements.
Whilst it appears that the mother does not have access to a large amount of funds, she is also not indigent. The mother has a net positive Financial Statement and has since received funds and real property valued by the father at $637,718, as per the final property orders in this matter. The financial circumstances of neither party warrant a costs order in their favour.
Section 117(2A)(b): Whether the parties are in receipt of legal aid
Neither party is in receipt of legal aid funding.
Section 117(2A)(c): The conduct of the parties
Perhaps the strongest argument raised by the father in this application for costs is that the wilful conduct of the mother was so repugnant as to justify a departure from the norm.
The mother raised significant allegations against the father with respect to his alleged abuse of her and the child. At the first trial, Hannam J made a number of findings of fact as to the existence of family violence that were “not open to her on the evidence” rendering her judgment “infected with errors and inaccuracies” (Edinger & Duy at [74]). Consequently, the Full Court overturned the 2 June 2023 decision of Hannam J and remitted the matter for rehearing.
The mother was not prepared to be re-tested as to the veracity of those claims and instead fled the jurisdiction with the child in mid-2022. By virtue of this, the mother has denied the father any opportunity to participate in decision-making about the child, or to spend time and communicate with him as ordered. The mother’s lack of participation has deprived the parties of any opportunity there may have been to resolve proceedings without Court intervention. This is to both the father’s and the child’s disadvantage.
The mother is presumably the primary carer of the child in Country D, and she has not furnished the Court with any material relating to the care, welfare, and development of the child. The mother has wilfully refused to do so notwithstanding her continual accessing of the Commonwealth Court Portal. There is no evidence from the mother to justify her conduct, save for the allegations made against the father which remain untested in this Court. Alternatively, the father and the Independent Children’s Lawyer assert that the child was, in fact, at an unacceptable risk of harm if he continued to live with the mother because of the mother’s firmly held, but misconceived, belief that the child was at risk in the father’s care.
It has been established that the mother had notice of all proceedings, including those on 18 April 2024, and that she had accessed the Commonwealth Courts Portal in anticipation of these proceedings. It is difficult to imagine the mother’s conduct as anything but wilfully determined to avoid these proceedings. The Court thus finds that the mother’s conduct necessitates a costs order in favour of the father.
Section 117(2A)(d): Failure to comply with orders of the Court
The mother has wilfully hidden the child from the jurisdiction of this Court, in circumstances where the Court has found that it is in the best interest of the child to live with the father. The mother continues to contravene orders of this Court by not returning the child to Australia.
The mother has failed to provide full and frank disclosure despite being aware of these proceedings, having access to the Commonwealth Courts Portal and presumably having the means to contact the father’s solicitors. This has undoubtedly made the job of the father’s legal team and this Court more difficult.
The mother has not provided any new material in her defence, nor does her previous material explain these contraventions. Consequently, her failure to comply with orders of this Court justifies a departure from the standard position on the award of costs.
Section 117(2A)(e): Whether a party has been wholly unsuccessful in the proceedings
Where a party has not participated in proceedings it cannot strictly be said that they were wholly unsuccessful, as they did not put forward an argument upon which to be tested.
The phrase “wholly unsuccessful” is heavily fact dependent. The Full Court recognised, albeit in the context of a Notice of Discontinuance, that s 117(2A)(e) of the Act “is designed for cases where an application is heard and determined and the Applicant is wholly unsuccessful” (Bant & Clayton (Costs) (2016) 56 Fam LR 31 at [22]).
Judge Morley considered a similar issue following a costs application stemming from an undefended property hearing In Imberg & Cabrey at [186]:
The wife has been wholly successful in the proceedings, in that the orders made are the orders sought by her at the undefended hearing, but it cannot be said that the respondent husband has been wholly unsuccessful in the proceedings. The husband exercised his right not to engage with the proceedings.
I am not convinced on the father’s evidence alone, that the mother was wholly unsuccessful in the entirety of these proceedings. This is especially so regarding parenting issues, where the mother has been granted time with the child from 10.00 am until 1.00 pm each Sunday as per orders made 18 April 2024.
Section 117(2A)(f): Offers of settlement
The father deposes that an offer for settlement was made to the mother on 2 May 2023, and that this offer mirrors those ultimately made by this Court. The father asserts that no response was received to this offer. It is noted that no such settlement offer was proffered to the Court as an attachment to the father’s material despite being indicated so “(attached)”. This is to the detriment of the father’s case.
The offering and rejection of favourable offers, while significant, is not determinative of a costs order and is only one of the factors that the Court will consider when deciding whether to make a costs order. On this basis, without testing the validity of the father’s claims, I am reluctant to make a costs order on this basis.
Section 117(2A)(g): Any other relevant matters
All considerations contemplated by the evidence of each party are addressed above.
INDEMNITY COSTS
It is well settled that when costs are ordered by this Court, such costs are payable on a party-party basis. It has been held that the Court should not lightly depart from the ordinary rule (Kohan and Kohan (1993) FLC 92-340).
The provision relating to the calculation of costs is governed by r 12.17(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) which is as follows:
12.17 Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c) to be calculated in accordance with the method stated in the order; or
(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
The rule further provides that:
(3) In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre‑action procedures; and
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
In relation to an award of indemnity costs, the Full Court decision of Phillips & Hansford (2020) FLC 93-941, helpfully summarises the position as follows:
35.Indemnity cost orders are made only in exceptional cases (Kohan and Kohan (1993) FLC 92-340; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; D & D (Costs) (No. 2) (2010) FLC 93-435).
36.Whilst the categories of cases in which indemnity cost orders may be awarded are not closed, it is accepted that such costs may be ordered where a case was pursued with “wilful disregard of known facts or clearly established law” and where there has been “an imprudent refusal of an offer to compromise” (Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233).
37.In relation to the first category, it has been said that indemnity costs may be awarded where “the applicant, properly advised, should have known that he had no chance of success” (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401) and where “a party persists in what should on proper consideration be seen to be a hopeless case” (J Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers – Western Australian Branch & Anor [1993] FCA 70 per French J at 5).
Whilst there is no doubt that the mother’s conduct and failure to comply with Court orders in this matter gives rise to a costs order on a party-party basis, there is no “special or unusual feature… to justify the Court in departing from the ordinary practice” as asserted by the father (Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233). It is unfortunately common that this Court determines cost applications based on poor conduct from one or multiple litigants. This case is not special. I am not minded to award indemnity costs in this matter.
FIXED COSTS
The most recent evidence proffered by the father as to his legal costs in this matter can be found in a Costs Notice filed 27 February 2023. This at most provides a limited and outdated insight to the Court. It has long been accepted that “where a Court orders a party to pay costs, it may be appropriate for the Court to fix a lump sum, by doing so, the Court can avoid further delay and inconvenience” (Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432 at [51]). Due to the paucity of evidence and the practical limitations this imposes, it is appropriate to order a fixed sum of costs in this matter.
CONCLUSION
Based the mother’s conduct and failure to comply with the orders of this Court, the father ought to receive some relief towards to his costs. The mother’s behaviour since fleeing the jurisdiction can only be thought of as deliberately designed to frustrate proceedings and to prevent the father from accessing the child, especially in circumstances where she continues to view filed material on the Commonwealth Courts Portal. The mother is currently in breach of my orders made 18 April 2024.
In the father’s most recent Costs Notice filed 27 February 2023, it is estimated that the father would incur a further $55,000 in legal fees to the conclusion of these proceedings. It is unfortunate that more up-to-date material is not available to verify this. However, on this basis, I am satisfied that it is in the interests of justice for the mother to pay costs fixed in the sum of $55,000.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 25 July 2024
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