Edmunds and Edmunds (No.3)
[2018] FCCA 542
•7 March 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| EDMUNDS & EDMUNDS (No.3) | [2018] FCCA 542 |
| Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Costs – Application for leave pursuant to s.44(3) dismissed – whether costs should follow. |
| Legislation: Family Law Act 1975, ss.44, 43, 117 Federal Circuit Court Rules 2001, r.21.02 |
| Cases cited: Braithwaite & Braithwaite [2007] FamCA 468 Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 Fitzgerald (as Child Representative for A (Legal Aid Commissioner of Tasmania) v Fish & Anor (2005) 33 FamLR 123 Penfold & Penfold (1980) 144 CLR 311 Prantage & Prantage (2013) FLC 93-544 |
| Applicant: | MR EDMUNDS |
| Respondent: | MS EDMUNDS |
| File Number: | PAC 4882 of 2016 |
| Judgment of: | Judge Obradovic |
| Hearing date: | 7 March 2018 |
| Date of Last Submission: | 30 November 2017 |
| Delivered at: | Parramatta |
| Delivered on: | 7 March 2018 |
REPRESENTATION
| Appearing for the Applicant: | Mr McCarthy |
| Solicitors for the Applicant: | Michael Vassili Barristers & Solicitors |
| Appearing for the Respondent: | Mr Johnson |
| Solicitors for the Respondent: | Newhams Solicitors |
ORDERS
That within 28 days’ the Wife is to pay to the Husband costs in the amount of $21,960.
IT IS NOTED that publication of this judgment under the pseudonym Edmunds & Edmunds (No.3) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 4882 of 2016
| MS EDMUNDS |
Applicant
And
| MR EDMUNDS |
Respondent
REASONS FOR JUDGMENT
By application[1] filed 17 January 2017, the husband[2] sought an order that the wife[3] pay his costs of an incidental to the proceedings determined by this Court on 19 October 2017, being an application for leave pursuant to s44(3) Family Law Act1975 (Cth).
[1] Response to Initiating Application
[2] Respondent in substantive proceedings
[3] Applicant in substantive proceedings commenced by way of Initiating Application filed 17 October 2016
The wife’s application for leave to commence proceedings out of time was dismissed on 19 October 2017. The husband was at that time granted leave to file written submissions in respect of the costs application. Those submissions were filed on 16 November 2017, and the wife’s submissions in respect of the husband’s costs application were filed on 30 November 2017.
The husband seeks an order that the wife pay the husband’s costs of and incidental to the proceedings determined on 19 October 2017 on an indemnity basis and inclusive of Senior Counsel’s costs.
The starting position with respect to costs, as set out in s117 of the Act, is that, subject to subsection 117(2), each party to proceedings under the Act shall bear his or her own costs.
The discretion to award costs is a broad discretion.[4]
[4] see for example Collins & Collins (1985) FLC 91-603.
The High Court held in Penfold & Penfold[5] that it is necessary for the Court to make a finding of justifying circumstances as an essential preliminary to the making of an order for costs. The Court is not required to specify the circumstances which justify the making of such an order.
[5] (1980) 144 CLR 311
As long as there is an essential preliminary finding that there are justifying circumstances to make a costs order, there is no additional or special onus which the Applicant needs to establish for an order for costs. It is not the law that a costs order can only be made in what has been described as a ‘clear case’. [6]
[6] See in general the comments made by the Full Court in Wrenstead & Eades [2016] FamCAFC and in particular where the Full Court approved the comments of the judge below at [103]
In Latoudis v Casey[7] the High Court stated as follows:
… in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of an unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.”[8]
[7] (1990) 170 CLR 534
[8] Referred to in the context of family law proceedings by Judge Kemp in Cochrane & Cochrane [2012] FMCAfam 984 at [17]
The discretion to determine a costs dispute is a very wide one.
In determining what order, if any, should be made under s117(2) the Court must have regard to the prescriptive but non-exhaustive list of considerations in sub-section (2A).
Rule 21.02(2) Federal Circuit Court Rules2001 provides that in making an order for costs the Court may set the amount of costs; or set the method by which the costs are to be calculated; or refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules.
Section 117(2A) Factors
Section 117(2A) of the Family Law Act 1975 provides the factors that the Court in ordering what costs, if any, should have regard to.
All relevant matters referred to in s117(2A) must be taken into account: Re David Costs (1998) FLC 92-809; and Braithwaite & Braithwaite [2007] FamCA 468 at [115]).
In Fitzgerald (as Child Representative for A (Legal Aid Commissioner of Tasmania) v Fish & Anor (2005) 33 Fam LR 123, the Full Court held that there is nothing to prevent any one factor being the sole determinant for an order of costs to be made.
Financial circumstances of each of the parties: s117(2A)(a)
The wife has deposed, by way of her Financial Statement updated on 9 February 2017 that she has cash of $50,174.13 in the bank. This is a readily identifiable source of funds to meet any costs order. The husband has $10,486 in savings.
The parties are tenants in common as to 50% each of the property at Property A. This is a property which the husband seeks to sell pursuant to s66G Conveyancing Act 1900 (NSW). It is an asset that is realisable by both parties, and which is unencumbered.
The husband has considerable superannuation.
The wife has the care of the parties’ daughter, who will turn 18 in (omitted) 2018.
Both parties are working and receive an income, albeit the husband’s income is greater than the wife’s.
The Court is satisfied that the Wife has the capacity to meet a costs order.
Conduct of the parties in relation to the proceedings
The proceedings which are the subject of the costs application were commenced by the wife after the husband wrote to her on 22 September 2016 asking to be paid out his 50% interest in the property or for the property to be sold.
The Wife’s application for property adjustment proceedings six years and nine months out of time was commenced without any invitation to the husband to resolve the matter. Indeed after receiving the husband’s letter, the wife responded by “we ask that you take no adverse action to that of our client until our office has had the opportunity to respond to your letter addressed to our client dated 22 September 2016”. The response was the Initiating Application filed 17 October 2016.
The Wife’s application was commenced in the Family Court of Australia, which has set out in the Rules pre-action procedures. There is no evidence that the wife complied with the pre-action procedures.
The proceedings were fiercely prosecuted by the Wife. There were lengthy and detailed submissions made from respective counsel of each of the parties at the hearing, the parties were cross-examined and the wife had filed extensive documents in the proceedings.
By 6 April 2017 when the hearing commenced, the Wife had amended her Initiating Application three times. There was no leave sought for any of the amended applications, and they were simply filed, requiring additional costs to be incurred from the husband by way of an Amended Response.
The proceedings were wholly necessitated by the Wife failing to commence proceedings within the limitation period provided by Parliament. The application to commence proceedings out of time was the seeking of an indulgence of the Court. As noted in the primary judgement[9]:
Even after it is satisfied that hardship in the requisite sense would be caused, the Court is not obliged to grant leave, rather it may grant such leave. Sections 44(3) cannot be read as giving the applicant a presumptive right to an order for leave once she has satisfied the conditions in s44(4). Rather, an applicant for an extension of time who satisfies those conditions is entitled to ask the court to exercise its discretion in his or her favour.
[9] Edmunds & Edmunds [2017] FCCA 2493 at [13]
Whether a party has been wholly unsuccessful
The Respondent has been wholly unsuccessful in the primary proceedings as against the Applicant.
Offers made & any other matters:
There is no evidence of offers made.
However, the Court notes that the Husband at all times resisted the relief sought by the Wife in respect of the application to commence proceedings out of time.
Costs Ordered
As a result of the consideration of the above matters and the findings which have been made, the Court finds that the circumstances of this case justify the Court making an order as to costs, as required by sub-section 117(2).
In determining what order should be made, the Court has had particular regard to the finding that the Wife was completely unsuccessful in respect of her application for leave to commence property adjustment proceedings out of time, as well as her financial capacity.
The questions remaining are quantum and whether costs are warranted on an indemnity basis.
Indemnity Costs
There is nothing in the Family LawAct 1975 which inhibits the making of an order for indemnity costs.[10] However, an order for costs itself is a great departure from the normal standard.[11]
[10] See Prantage & Prantage (2013) FLC 93-544
[11] See Kohan & Kohan (1993) FLC 92-340.
The passage of Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd[12] stating the position with regards to indemnity costs is well known:
… there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at p 8) in Tetijo, “the categories in which the discretion may be exercised are not closed”.
[12] (1993) 46 FCR 225
The above principles are of course, applicable to matters decided under the Family Law Act 1975[13], and have been applied by this Court, the Family Court and the Full Court of the Family Court in appropriate instances.
[13] Eg. Munday & Bowman (1997) FLC 92-784
Nothing which the Applicant submitted persuades the Court that an order for indemnity costs is appropriate in all of the circumstances of this case.
Quantum
In the alternative to an indemnity costs order, the husband seeks a costs order of $59,856.50 in total. It is submitted that this is based on solicitor’s costs of $26,856.50 (which are not itemised except by way of a doctored ledger), $2,200 for the submissions in respect of the costs application and Counsel’s fees in the amount of $30,800.
In exercising the wide discretion the Court has in respect of what costs order, if any, it will make, the Court is mindful of the scale in Schedule 1 of the Rules which provides for event-based costings. The Court is satisfied the Schedule is appropriate in respect of an assessment of costs incurred.
The Court therefore makes the following costs order, by reference to Schedule 1:
a)Opposing an application up to the completion of the first court date, including short mention: $2,498[14] ;
b)Short mention[15]: $299
c)Preparation for (final) hearing[16]: $4,686
d)Interim or summary hearing – as a discrete event[17]: $6,230
e)Daily hearing fee counsel (2 days)[18]: $6,597;
[14] Item 1 and mention on 17 January 2017
[15] 13 February 2017
[16] Set down for 1 day only, determination of issue finalised part of proceedings relating to property
[17] Item 3, matter heard over 2 days ultimately
[18] Daily hearing fee plus advocacy loading, matter heard over 2 days ultimately
In addition, costs of this application are assessed at $1,650.
Conclusion
Therefore, the total costs to be paid by the Wife are $21,960.
The Court proposes to allow a period of 28 days for the payment of costs.
Accordingly, orders are made as set out at the forefront of these Reasons.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Date: 7 March 2018
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Appeal
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