England and Harrisson (No. 3)
[2021] FamCA 373
•8 June 2021
FAMILY COURT OF AUSTRALIA
England & Harrisson (No. 3) [2021] FamCA 373
File number(s): SYC 5095 of 2020 Judgment of: ALTOBELLI J Date of judgment: 8 June 2021 Catchwords: FAMILY LAW – COSTS – interim costs application – alleged family violence – costs reserved pending final determination. Legislation: Evidence Act 1995 (Cth) s 135
Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 19.18
Cases cited: Bhatt & Acharya (Costs) [2017] FamCAFC 71
England & Harrisson [2020] FamCA 1083
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123; [2005] FamCA 158
In the Marriage of I & I (No. 2) (1995) FLC 92-625; [1995] FamCA 80
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116
Lenova & Lenova (Costs) [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
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Phillips & Hansford [2020] FamCAFC 28
Number of paragraphs: 41 Date of last submission/s: 10 March 2021 Date of hearing: By way of written submissions Place: Sydney Solicitor for the Applicant: Tiyce & Lawyers Solicitor for the Respondent: Holmes Donnelly & Co Solicitors ORDERS
SYC 5095 of 2020 BETWEEN: MR HARRISSON
Applicant
AND: MS ENGLAND
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
8 JUNE 2021
THE COURT ORDERS THAT:
1.The husband’s costs in respect of the Affidavit of Ms B filed on 27 October 2020 and struck out on 18 December 2020 be reserved for determination at the conclusion of these proceedings.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym England & Harrisson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
These reasons for judgment concern an application brought by the father in his Application in a Case filed 13 January 2021 in respect of costs of and incidental to interim proceedings that were heard before me on 9 December 2020.
BACKGROUND
These costs proceedings are situated in the context of parenting proceedings between the parties (‘the substantive proceedings’). The father is the Applicant in these costs proceedings and the Respondent in the substantive proceedings. The mother is the Respondent in these costs proceedings and the Applicant in the substantive proceedings.
The substantive proceedings concern a two and a half year old child, X. There are allegations of family violence raised by both parties against the other.
On 27 October 2020, the mother filed an Affidavit sworn by Ms B, the former wife of the father in this case. In her Affidavit, she deposed to family violence which she says the father perpetrated throughout their relationship until their separation in 2011.
The father objected to the Affidavit on the basis of s 135 of the Evidence Act 1995 (Cth) and the matter came before me for interim hearing on 9 December 2020 to determine the discrete issue of the admissibility of Ms B’s Affidavit.
I ultimately determined that the probative value of Ms B’s Affidavit was outweighed by the danger that the evidence would cause or result in an undue waste of time. Accordingly, I made orders on 18 December 2020 for the Affidavit to be struck out and removed from the Court record. I refer to my judgment, reported as England & Harrisson [2020] FamCA 1083, which sets out my reasons for striking out the Affidavit. The present application for costs concerns the filing of, and interim hearing relating to, that Affidavit.
THE PRESENT APPLICATION
On receipt of the father’s costs application, Registrar Maitland made orders that each party file and serve written submissions with respect to the same. The father has subsequently filed, and I have had regard to, the following documents:
(a)Application in a Case filed 13 January 2021;
(b)Affidavit of the father filed 13 January 2021; and
(c)Written Submissions filed 10 March 2021.
The mother sought to rely upon:
(a)Affidavit of the father filed 1 September 2020;
(b)Affidavit of the mother filed 4 November 2020;
(c)Single Expert Report prepared by Dr D dated 2 December 2020;
(d)Financial Statement of the father filed 4 November 2020;
(e)Affidavit of the father filed 13 January 2021;
(f)Response to an Application in a Case filed 17 February 2021;
(g)Affidavit of the mother filed 17 February 2021;
(h)Amended Financial Statement of the mother filed 17 February 2021;
(i)Written Submissions filed 10 March 2021; and
(j)Tender bundle, marked as exhibit R1.
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, it is plain that 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”: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (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.
THE APPLICATION FOR COSTS
The orders sought by the father are set out in his Application in a Case filed 13 January 2021, and are as follows:
1.That the Applicant pay the Respondent’s costs in respect of the Affidavit of Ms B filed 27 October 2020 and struck out on 18 December 2020 on an indemnity basis.
2.That the Applicant pay the costs of and incidental to this application.
In her Response filed 17 February 2021, the mother proposes:
1.That the Respondent’s Application in a Case filed 13 January 2021 be dismissed.
2.In the alternative, that the question of costs of the interlocutory application be reserved to the trial judge.
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. A discussion of these considerations follows.
Section 117(2A)(a): Financial circumstances of the parties
In his Financial Statement filed on 4 November 2020, the father deposes to a weekly income of $1,142 and expenditure of $1,972. He estimates the total value of his assets to be approximately $330,000, including superannuation, and the total of his liabilities to be approximately $151,800. He further deposes at Part O that he cannot access the funds contained in his R Bank account (about US$60,000) other than by using his credit card. Part N of his Financial Statement was not completed.
In her Amended Financial Statement filed on 17 February 2021, the mother deposes to a weekly income of approximately $1,798 and expenditure of $1,945. She estimates that her total assets including superannuation are valued at approximately $645,400 and the total of her liabilities to be approximately $12,800.
As such, both parties depose to a weekly deficit. Each party is being supported by their respective parents in some form—the father deposes to receive financial support from the paternal grandfather in respect of his legal fees, and the mother is residing with the child at the home of the maternal grandparents.
Both parties are experienced educators. The mother is in New Zealand, and as at September 2020, the father indicated he had been employed in New South Wales. At the time, he also deposed to other potential opportunities with superior remuneration, however it is unclear to the Court at this stage whether those opportunities have eventuated. In this respect, both parties possess comparable earning capacity. I note that the father’s Financial Statement appears to contradict his Affidavit evidence, in that the father deposes to being unemployed in his Financial Statement.
In terms of assets and liabilities, the Court accepts that it appears from the Financial Statements that the mother is in a superior financial position. Indeed, in recognition of this, she paid for the Single Expert Report in the first instance. Despite this, given the lack of clarity surrounding the father’s current earnings, and given the fact that both parties are receiving assistance from their parents and report expenditure that exceeds their income, I am not satisfied at this stage of the proceedings that the parties’ financial circumstances are necessarily a determining factor that warrants the making of a costs order against the mother. In any event I note that mere impecuniosity is not a reason per se for declining to make a costs order: see, eg, Lenova & Lenova (Costs) [2011] FamCAFC 141; Bhatt & Acharya (Costs) [2017] FamCAFC 71.
Section 117(2A)(b): Whether the parties are in receipt of legal aid
Neither party is in receipt of legal aid in these proceedings.
Section 117(2A)(c): The conduct of the parties
The father submits that the mother engaged in conduct that would warrant the making of a costs order against her. He refers, for example, to an indication given to the Court by the mother on 2 September 2020 seeking expedition of the matter in circumstances where the estimated final hearing time was two days, with minimal witnesses required.
He further draws the Court’s attention to the fact that the mother pressed the Affidavit after Henderson J suggested that the Affidavit lacked probative value. I note that the orders made by her Honour on 18 November 2020 do not contain any notations about an invitation made to the mother to not press the Affidavit. In any case, I place little weight on this, as ultimately the issue of admissibility was determined by myself after having had the benefit of evidence and submissions not put before her Honour.
The mother, in her submissions, argues that the father contributed to the necessity of the discrete hearing by failing to provide further details about the witnesses that would be called in response to Ms B’s evidence. Indeed, the Court forms the impression that the mother had little information about the witnesses that the father foreshadowed would be necessary to call in response to the Affidavit. As will be further discussed below, the context of the proceedings supports my view that the mother was entitled to press the Affidavit.
I place some weight on this factor, but the view I have formed is that the conduct of both parties contributed to the necessity of the discrete hearing before me on 9 December 2020.
Section 117(2A)(d): Failure to comply with orders of the Court
Both parties submit that this is not a relevant factor to the present application.
Section 117(2A)(e): Whether a party has been wholly unsuccessful in the proceedings
The father’s application to strike out the Affidavit of Ms B was successful and in this way, the mother was wholly unsuccessful in seeking to lead this evidence. The mother’s submission that her application was not wholly unsuccessful is, with respect, weak. Section 135 allows discretion for evidence to not be admitted in circumstances where its probative value is substantially outweighed by certain risks. It is sufficient for only one of those risks to be present in order for the evidence to be struck out. Therefore, it is immaterial that I determined that the Affidavit only offended s 135(c) of the Evidence Act.
This factor therefore militates against the mother. However, the weight I place on this factor is determined by reference to the other factors in this matter.
Section 117(2A)(f): Offers of settlement
The father submits that he made an offer to settle the issue by way of a letter sent to the mother on 18 November 2020. The relevant offer was contained in order 2 proposed by the father, which read: “That the [A]ffidavit of Ms B is struck out and subsequently removed from the Court record”. In effect, the offer was for the mother to not press the Affidavit of Ms B. I note that the other proposed orders are not relevant to the present determination of costs.
It is important to note that at the time this offer was made, the mother had not yet been provided with a list of the names of the witnesses that the father intended to call in response to Ms B’s evidence. The mother had received correspondence from the father’s solicitors indicating there would be a further eight witnesses and “1,400 hundred pages of further evidence…” but provided no elaboration on the specifics of the same. Indeed, at the hearing, the number of potential witnesses had increased to nine. The mother provides evidence of correspondence showing requests from the mother for such a list. The Court accepts the mother’s submission that at that juncture, the mother was unable to ascertain for herself the number of witnesses required, and accordingly the extent of the delay to the proceedings.
It is common ground that a list of witnesses was provided by the father in his Case Outline document filed on 7 December 2020. No evidence was adduced showing any offers of settlement that were made following the availability of this information.
In light of the above discussion, I place little weight on this factor.
Section 117(2A)(g): Any other relevant matters
The mother draws the Court’s attention to the context in which she sought to file the Affidavit of Ms B. While I determined that the probative value of Ms B’s evidence was low, and her case for admission of the evidence ultimately unsuccessful, I accept that the patternistic nature of the family violence alleged by the mother was such that she was entitled to attempt to adduce evidence about the father’s alleged past behaviour.
INDEMNITY COSTS
The father sought that costs be paid on an indemnity basis.
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 & Kohan (1993) FLC 92-340.
The provision relating to the calculation of costs is governed by r 19.18(1) of the Family Law Rules 2004 (Cth) (‘the Rules’) which is as follows:
19.18 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.
The Rule further provides, in subparagraph (3), that:
(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.
In relation to an award of indemnity costs, the recent Full Court decision of Phillips & Hansford [2020] FamCAFC 28, 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).
The father submitted that the mother’s action in seeking to adduce the evidence of Ms B was not child-focused and was calculated to cause emotional harm by, in effect, “reach[ing] into [his] past”. I do not accept this submission and I am not satisfied that the circumstances of this case are so exceptional so as to warrant costs to be paid on an indemnity basis.
CONCLUSION
I am of the view that it is not appropriate to make a costs order against the mother at this stage of the proceedings. As such, I reserve the question of whether the mother ought to pay the father’s costs of and incidental to the filing and interim hearing relating to the Affidavit of Ms B to be determined by the trial judge at the conclusion of the substantive proceedings. The learned trial judge will be in a much better position that I am to ascertain the merits or otherwise of the mother’s case based on family violence. It is only in the context of the totality of the evidence that the Court will be able to understand the reasonableness and appropriateness of the mother’s actions in filing the Affidavit.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 8 June 2021
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