Fabian & Azarola (No 2)
[2024] FedCFamC1F 496
•25 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Fabian & Azarola (No 2) [2024] FedCFamC1F 496
File number(s): SYC 5734 of 2023 Judgment of: ALTOBELLI J Date of judgment: 25 July 2024 Catchwords: FAMILY LAW – COSTS – Where costs were sought following a Hague Convention application – Where costs were sought incidental to the costs application itself – Where it was contended that the respondent was wholly unsuccessful – Where the respondent was not found to have been wholly unsuccessful – Where the applicant’s costs application is dismissed. Legislation: Family Law Act 1975 (Cth) ss 111B, 117
Family Law (Child Abduction Convention) Regulations 1986 (Cth) cl 16(3)(b)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.13
Cases cited: Anison & Anison (2019) FLC 93-908; [2019] FamCAFC 108
Bhatt & Acharya (Costs) [2017] FamCAFC 71
Cross & Beaumont (2008) 39 Fam LR 389; [2008] FamCAFC 68
Fabian & Azarola [2023] FedCFamC1F 949
In the Marriage of I & I (No. 2) (1995) FLC 92-625; [1995] FamCA 80
In the Marriage of S R Higginbotham and G M Robinson (1991) FLC 92-209; [1991] FamCA 5
Lenova & Lenova (Costs) [2011] FamCAFC 141; [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
Peake v Benedict (Costs) (2014) 53 Fam LR 476; [2014] FCCA 2723
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Division: Division 1 First Instance Number of paragraphs: 35 Date of last submission/s: 20 May 2024 Date of hearing: In Chambers Place: Sydney Solicitor for the Applicant: Bartier Perry Solicitor for the Respondent: Walter & Elliott Family Lawyers Pty Ltd ORDERS
SYC 5734 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS FABIAN
Applicant
AND: MR AZAROLA
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
25 JULY 2024
THE COURT ORDERS THAT:
1.The Applicant’s Application in a Proceeding filed 7 December 2023 is dismissed.
2.Each party is to pay their own costs of the proceedings, including the costs of the present costs application.
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 Fabian & Azarola has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
The applicant mother (“the mother”) seeks an order for costs against the respondent father (“the father”) in respect of his Hague Convention Return Application filed 17 August 2023 (“the Hague application”) and the costs incidental to the Application in a Proceeding filed 7 December 2023 (“the costs application”). The orders for costs are sought pursuant to r 12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) as a fixed sum of $82,744, or in the alternative, another such amount as agreed or assessed by the Court. The precise orders sought are as follows:
1.That pursuant to Rule 12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 the Respondent shall pay the applicant's costs in the sum of $82,744 or such other amount as determined by the Court with respect to the Hague Convention Return Application filed 17 August 2023 (“the Hague Application”
2. That further and in the alternative to order 1, that the Respondent shall pay the applicant's costs of and incidental to the Hague Application as agreed or assessed.
3. That any fixed sum for costs ordered to be paid by the respondent shall be paid within 28 days of the date of the cost order issued by this honourable court.
4.That the Respondent pay the costs of and incidental to this application in a proceeding.
The father opposes a costs order being made in respect of both the Hague application and the costs application. The precise orders sought are as follows:
1.That the Application in a Proceeding filed by the mother on 7 December 2023 be dismissed.
2. That there be no order as to costs.
BACKGROUND
The mother and the father are both Australian citizens who met and married in Australia in 2011. Following this, the parties moved to the United Kingdom and had two children, X born 2011 and Y born 2013 (“the children”). In early 2015 the parties moved to Country W where they lived together until late 2022.
In late 2022 Y suffered a medical condition causing him to remain in hospital. The mother and Y returned to Australia in late 2022 for Y to undergo surgery at F Hospital. From that point onward the mother has resided in Australia and the father has resided in Country W. During the period between March and April 2023 the parties agree that their relationship had ended.
On 17 August 2023 the father filed the Hague application seeking that X be returned to him in Country W pursuant to the Family Law (Child Abduction Convention) Regulations 1986 (Cth) (“the regulations”) and s 111B of the Family Law Act 1975 (Cth) (“the Act”). The father did not seek to return Y to Country W, only X. The mother opposed this application and sought that the children live with her in Australia as well as interim orders for sole parental responsibility, that the children spend time with the father as agreed, that the father be restrained from removing X from Australia and that a single expert report be prepared in relation to matters relevant to the parenting dispute.
Justice Rees dismissed the Hague application on 8 November 2023 on the ground that X would suffer grave risk of further psychological harm (Fabian & Azarola [2023] FedCFamC1F 949 at [173]–[176] (“Fabian & Azarola”)). The costs of the proceedings before Rees J, and those of and incidental to the costs application, are the subject of these reasons for judgment.
THE PRESENT APPLICATION
On 1 February 2024 I made orders for the costs application to proceed by way of written submissions and to be determined in chambers.
In support of her case the mother relies upon the following material:
(a)Application in a Proceeding filed 7 December 2023;
(b)Her affidavit filed 3 May 2024;
(c)Financial Statement filed 3 May 2024; and
(d)Written submissions filed 3 May 2024.
In support of his case, the father relies upon the following material:
(a)Response to Application in a Proceeding filed 20 May 2024;
(b)His affidavit filed 20 May 2024;
(c)Financial Statement filed 26 April 2024;
(d)Costs Notice filed 3 May 2024;
(e)Orders of Altobelli J made 1 February 2024;
(f)The reasons for judgment by Rees J in Fabian & Azarola [2023] FedCFamC1F 949; and
(g)Written submissions filed 20 May 2024.
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 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” (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). A discussion of these considerations follows.
Section 117(2A)(a): Financial circumstances of the parties
Both parties assert that they would be unable to meet an order for costs. However, mere impecuniosity is not a reason per se for declining to make a costs order (see, e.g., Lenova & Lenova (Costs) [2011] FamCAFC 141; 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 financial situation of both parties is poor. The mother is currently unemployed, receives nominal child support in the sum of $550.17 per month (which she asserts the father has not paid since April 2024), and attests to a weekly income deficit of $2,159.27. The father, despite deposing to an annual income of $143,988 per annum, asserts a weekly income deficit of $2,975. This is due to the substantial weekly rent payment of $3,231 required to retain the former matrimonial home and facilitate its use as the office for the father’s business.
The mother contends that the father has additional financial resources available to him, which he could call upon to meet a costs order, namely, the support and resources of his parents. The fathers’ parents contribute to his expenses in the amount of $1,846 per week subject to their wishes and financial circumstances. The father accepts that this resource is available to him, however, he cautions that it is not guaranteed. Additionally, the father contends that the mother and the children have also received the benefit of his parents’ generosity. Currently the father owes a debt of $253,000 to his parents.
The mother asserts that any costs order would “not impose any punitive obligation on the husband, if ordered, they assume a compensatory character given the disparate financial circumstances of the parties”. The argument that the father ought to compensate the mother is unconvincing as both parties suffer from untenable financial situations. The Court recognises that the mother might not have the full benefit of those financial resources available to the father.
I am satisfied that there is no evidence before me to indicate that a costs order should not be made against either party due to their financial circumstances.
Section 117(2A)(b): Whether the parties are in receipt of legal aid
Neither party is in receipt of legal aid.
Section 117(2A)(c): The conduct of the parties
The Hague application was made following a medical emergency suffered by Y. This led to the separation of the children for many months while Y recuperated. The father’s business and the parties’ only source of income was in Country W. The father attests that a determination needed to occur quickly as X was due to return to school in Country W.
The mother’s submissions are silent as to her reasons for opposing the Hague application. However, based on the reasons given in Fabian & Azarola, the Court assumes that the mother contended that there was a grave risk to X’s wellbeing should he return to Country W. Despite this, the mother did formally concede before Rees J that she had wrongfully retained X under the regulations, thus breaching an agreement she held with the father.
Neither party acted unreasonably or capriciously in the proceedings. The circumstances of the parties brought them to adopt opposing positions. Neither party argued without merit and as such this Court makes no finding as to the parties’ conduct that justifies a deviation from the standard position on costs.
Section 117(2A)(d): Failure to comply with orders of the Court
The mother does not contend that this was a relevant consideration in determining whether a costs order should be made. The father asserted that the mother’s wrongful conduct within the context of the regulations is relevant to a discussion under this provision. The father’s comments in that respect have been dealt with above and will be further dealt with below.
Section 117(2A)(e): Whether a party has been wholly unsuccessful in the proceedings
The mother submits that one of the dominant features of this matter justifying an order for costs is that the father was wholly unsuccessful in respect of the Hague application. She asserts that by virtue of her successful defence under cl 16(3)(b) of the regulations and the fact Rees J ultimately dismissed the Hague application, that the father was wholly unsuccessful in the proceedings.
The father submits that Rees J made several key jurisdictional findings in his favour that preclude him from being wholly unsuccessful in the proceedings. The father was able to establish that X was a habitual resident in Country W, that the mother had agreed that X would return to Country W, and that X was therefore wrongfully retained in Australia by the mother.
On the words of the Act alone, this Court is to consider whether a party has been wholly unsuccessful in the proceedings; not whether a party has been wholly unsuccessful in prosecuting his or her particular application. As stated by the Full Court in Peake v Benedict (Costs) (2014) 53 Fam LR 476 at [138]:
…“wholly unsuccessful” means there was no justified basis for the position adopted having regard to the outcome of the proceedings. Being “wholly unsuccessful” must look not just at the outcome but the position adopted by the party as well.
In this case, the father’s interpretation of the phrase “wholly unsuccessful” is to be preferred.
An application is only wholly unsuccessful where it is dismissed without merit (In the Marriage of S R Higginbotham and G M Robinson (1991) FLC 92-209; Anison & Anison (2019) Fam LR 581 at [37]). As expressed by the father, “he brought an application where the jurisdictional facts were proved, and it is only that the mother was successful with a defence that the child was not returned, and the application was dismissed” (emphasis added). The mother herself conceded that “[X] had been wrongfully retained in Australia by the mother for the purposes of the regulations” (Fabian & Azarola at [97]).
It cannot be said that the father’s case was dismissed without any merit. The father substantiated several crucial facts disputed by the mother that were necessary prerequisites to engage in proceedings under the regulations (Fabian & Azarola [96]–[97]). The substantive proceedings were strongly contested and required careful consideration. Consequently, this Court finds that neither party was wholly unsuccessful.
Section 117(2A)(f): Offers of settlement
Neither party made an offer of settlement relevant to the Hague application or the costs application.
Section 117(2A)(g): Any other relevant matters
In her written submissions, the mother raised that she has privately funded her legal fees for the Hague application in the sum of $82,744. The father indicated that he has privately incurred significant legal fees pursuing the Hague application and a separate interim decision with respect to the children’s time with him, totalling $228,097.20.
Neither of these points hold sufficient weight to deter the Court from upholding the status quo with respect to costs.
CONCLUSION
For these reasons, I am not satisfied that it is in the interests of justice for an order for costs to be made in favour of either party. Neither party was wholly unsuccessful and both parties face significant economic difficulties. On balance, the combined circumstances above are insufficient to displace the starting position that each party will bear their own costs in proceedings as set out under s 117(1) of the Act. Each party will bear their own costs relating to the Hague application and the costs application.
I certify that the preceding thirty-five (35) 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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