Farrand & Mahdi (No. 2)
[2021] FamCA 168
•26 March 2021
FAMILY COURT OF AUSTRALIA
Farrand & Mahdi (No. 2) [2021] FamCA 168
File number(s): BRC 11658/2018 Judgment of: CAREW J Date of judgment: 26 March 2021 Catchwords: FAMILY LAW – COSTS – Adjournment – Where the maternal grandmother contends that the determination of the costs application should be adjourned until after the determination of her appeal – Where the maternal grandmother argues that the granting of the ‘stay’ would avoid both parties incurring potentially unnecessary legal costs – Where costs already incurred in preparation of written submissions – Where hearing occurs in chambers – Where maternal grandmother may exercise her right to appeal against costs order and seek that it be heard at the same time as the appeal – application to adjourn dismissed.
FAMILY LAW – COSTS – Between parties – Where the father seeks an order that the maternal grandmother pay his costs on an indemnity basis – Where the maternal grandmother opposes any order for costs – Whether the maternal grandmother was wholly unsuccessful in the proceedings – Where there is no exceptional circumstance that would warrant costs to be ordered on an indemnity basis – Where there are circumstances justifying the maternal grandmother contributing to the father’s legal costs in a fixed sum within 30 days of the determination of an appeal against the substantive order.
Legislation: Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Collins & Collins (1985) FLC 91-603
Farrand & Mahdi [2020] FamCA 875
Fitzgerald v Fish sub nom PBF v TRF (FLR) (2005) 191 FLR 294
Genesalio & Genesalio (No 2) [2020] FamCAFC 180
Idoport Pty Ltd v National Australia Bank Limited [2007] NSWSC 23
Jackson & Balen [2009] FamCAFC 131
Kohan and Kohan (1993) FLC 92-340
Latoudis v Casey (1990) 170 CLR 534
Murray & Murray [2020] FamCAFC 293
Parke & the Estate of the Late A Parke (2016) FLC 93-748
Pera & Pera (2008) FLC 93-372
Penfold v Penfold (1980) 144 CLR 311
Prantage v Prantage (2013) 49 Fam LR 197Re Wilcox, Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151
Salt & Salt (No. 2) [2020] FamCA 170
Number of paragraphs: 53 Date of last submission/s: 12 March 2021 Date of hearing: Heard on the papers Place: Brisbane Solicitor for the Applicant L&S Lawyers Counsel for the Respondent Dr Brasch QC Solicitor for the Respondent Murdoch Lawyers ORDERS
BRC 11658/2018 BETWEEN: MS FARRAND
Applicant
AND: MR MAHDI
Respondent
ORDER MADE BY:
CAREW J
DATE OF ORDER:
26 MARCH 2021
THE COURT ORDERS THAT:
1.Ms Farrand contribute to the legal costs and outlays incurred by Mr Mahdi in the sum of $50,000 payable within 30 days of the determination of appeal number NOA76/2020.
2.All outstanding applications be otherwise dismissed.
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 Farrand & Mahdi has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAREW J
A final parenting order was made on 16 October 2020. The proceedings concerned two children X born in 2011 and Y born in 2012. Sadly the children’s mother passed away in 2018. The parenting proceedings were between the father and the maternal grandmother.
The final parenting order restrained the maternal grandmother from having any contact with the children other than sending a gift and card on special occasions.
The father has now applied for the maternal grandmother to pay his costs of those proceedings on an indemnity basis in the sum of $178,993.25 and the costs of his application for costs. In the alternative, the father seeks an order for the payment of his costs to be assessed or as agreed. The costs sought do not include the costs associated with an interim application; the subject of a separate application before a Deputy Registrar.
On 15 January 2021 an order was made for each party to file, among other things, written submissions, and provision was made for the application for costs be determined in chambers unless a party makes a request for the matter to be relisted. No such request has been received.
By her response filed 12 February 2021, the maternal grandmother opposes any order for costs. In the alternative, she applies for an adjournment of the hearing of the application until after the determination of her Notice of Appeal filed on 13 November 2020. Further, in the alternative, if a costs order is made, the maternal grandmother seeks that it be stayed until the determination of her Appeal. The maternal grandmother seeks her costs of the father’s costs application.
For the reasons which follow, there are circumstances which justify the maternal grandmother being required to contribute to the legal costs and outlays incurred by the father in the fixed sum of $50,000. In circumstances where the appeal against the substantive order is to be heard in the May sittings in Brisbane I consider that payment of the fixed sum should be payable within 30 days of the determination of appeal. Each party’s application for costs of the father’s application for costs will be dismissed.
APPLICATION TO ADJOURN THE DETERMINATION OF THE COSTS APPLICATION UNTIL AFTER THE APPEAL
The maternal grandmother has appealed against the substantive order and contends that the determination of the costs application should be adjourned until after the determination of her appeal. The reasons for so submitting are that “relief is sought against adverse, prejudicial consequences to a party in being compelled to prematurely take steps that may be difficult to undo in the event of a successful appeal”. The authorities relevant to the stay of an order are relied upon by the maternal grandmother.[1]
[1] Jackson & Balen [2009] FamCAFC 131 at [28].
Specifically, the maternal grandmother argues that the granting of the ‘stay’ would avoid both parties incurring potentially unnecessary legal costs in the event that her substantive appeal is successful. Further, that adjourning the hearing of the costs application will “conserve [both parties’] costs of running the costs hearing until such time as it is conclusive that the final orders have withstood the appeal challenge … In the event that the appeal is successful, the Costs Application determination would be rendered nugatory and the parties will have needlessly expended further monies”.
The maternal grandmother submits that in circumstances where her grounds of appeal are arguable, if her appeal succeeds then “logically no costs consequences flow from the first instance decision as it is no more”. The maternal grandmother further submits that “[a]n award of costs presumes the correctness of the first instance decision, and then goes one step further to reward the successful party and penalise the unsuccessful party… the court should accordingly be very cautious about entertaining a costs application while an appeal remains on foot, as a preliminary costs award, later rendered empty by a successful appeal, may undermine public confidence in the administration of justice”.
The father opposes the adjournment of the hearing of his costs application and submits that “[i]f the maternal grandmother wishes to appeal any unfavourable costs order (if made), then she can go about it in the usual way, and then seek a stay. It is submitted that costs are not intended to be punitive but compensatory”.
Conclusion – adjournment
I am not persuaded to adjourn the determination of the costs application. As the matter is being determined in chambers and written submissions have already been filed, I fail to see any costs savings for the parties if the determination of the application is adjourned.
The maternal grandmother’s understandable concern about being required to pay any costs award prior to the determination of the appeal can be addressed by providing in any order that the time for the payment of any costs occur after the determination of the appeal in the substantive matter.
The maternal grandmother misunderstands the purpose of costs orders. Costs are awarded as compensation not as a punitive measure.[2] I reject the submission by the maternal grandmother that a determination of the costs application at this time will “undermine public confidence in the administration of justice”. In the event a costs order is made, the maternal grandmother may exercise her right to appeal that decision and seek that it be heard at the same time as the appeal against the substantive decision,[3] thus saving the costs of appearance at any further appeal.
[2] Latoudis v Casey (1990) 170 CLR 534 at 543 (Mason CJ), 563 (Toohey J), and 567 (McHugh J); See also: Murray & Murray [2020] FamCAFC 293 at [98] (“Murray & Murray”).
[3] See for example: Pera & Pera (2008) FLC 93-372; Genesalio & Genesalio (No 2) [2020] FamCAFC 180; Murray & Murray (n 2).
HOW COSTS APPLICATIONS ARE DETERMINED
Although each party generally bears their own costs in this jurisdiction (s 117(1) of the Family Law Act 1975 (Cth) (‘the Act’)), the Court has a broad discretion[4] to make such order as to costs as the Court considers just where there are circumstances that justify it in doing so (s 117(2)).
[4] Collins & Collins (1985) FLC 91-603 at 79, 877.
An applicant for costs bears no “additional or special onus” other than the establishment of “justifying circumstances”.[5]
[5] Penfold v Penfold (1980) 144 CLR 311 at 315.
In the exercise of the discretion to award costs, regard must be had to the factors set out in s 117(2A) of the Act, so far as they are relevant.
Those factors are as follows:
(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.
It is sufficient for one factor in s 117(2A) to be present.[6]
[6] Fitzgerald v Fish sub nom PBF v TRF (FLR) (2005) 191 FLR 294 at 301, [41].
A court will not lightly make an order for costs to be paid on an indemnity basis. There needs to be some circumstance of an exceptional kind to justify that course.[7]
[7] Kohan and Kohan (1993) FLC 92-340 at 79,614; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233 (‘Colgate-Palmolive’).
Rule 19.08(3) of the Family Law Rules 2004 (Cth) (“the Rules”) requires the terms of any costs agreement to be disclosed when indemnity costs are sought.
The tensions created by the differing objectives sought to be addressed by a costs order awarded on a standard basis as opposed to an indemnity basis were discussed in Re Wilcox, Ex parte Venture Industries Pty Ltd[8] where the Full Court of the Federal Court (Cooper & Merkel JJ) said at 156:
The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.
The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225.
[8] (1996) 72 FCR 151) at 156 (‘Re Wilcox’).
The Full Court (Cooper and Merkel JJ) went on to restate the principles from Colgate-Palmolive[9] in the following terms:
a)the Court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the Court in departing from the usual course;
b)the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the Court in departing from the usual course;
c)whilst the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis. [10]
[9] (n 7).
[10] Re Wilcox (n 8) at 156 – 157.
While there is no exhaustive list of what circumstances may warrant an order for costs to be paid on an indemnity basis, some particular circumstances that have been found to justify such an order were identified by Sheppard J in Colgate-Palmolive[11] as follows:
a)Making allegations of fraud knowing them to be false;
b)Making irrelevant allegations of fraud;
c)Evidence of particular misconduct that causes loss of time to the Court and to the other parties;
d)Commencing or continuing proceedings for some ulterior motive or in wilful disregard of known facts or clearly established law;
e)Making allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and
f)An imprudent refusal of an offer to compromise.[12]
[11] (n 7).
[12] Colgate-Palmolive (n 7) at 233.
The explanatory guide to the Rules provides a useful definition of costs on an “indemnity basis”, namely: [13]
[A]n entitlement to costs, including costs under a costs agreement, for all costs incurred, other than costs that are unreasonable in amount or that have been incurred unreasonably.
[13] Prantage v Prantage (2013) 49 Fam LR 197 at 200.
The Rules provide specific powers to the Court when considering what costs order to make and set out particular matters that may be considered. Rule 19.18(1) empowers the Court, when awarding costs, to make an order:
(a)of a specific amount;
(b)as assessed on a particular basis (e.g. 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.
In considering what specific order should be made, r 19.18(3) provides that the Court may consider any of the following factors:
(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.
DISCUSSION
Financial circumstances of the parties
Both parties refer to their respective financial circumstances as a reason justifying or not justifying, as the case may be, a costs order.
The father’s financial circumstances are as follows:
(a)He is employed as a project manager and his income for the 2019/20 financial year was $122,000 per annum;
(b)He owns the following real property:
(i)N Street, Suburb P;
(ii)A Duplex at Q Street, Suburb R;
(iii)T Street, Suburb S;
(iv)V Street, Suburb W; and
(v)20% share of land at Z Street, AA Town.
(c)He has home loans associated with those properties of $847,791;
(d)He has savings of $23,000; and
(e)He financially supports the two children.
The maternal grandmother’s financial circumstances are as follows:
(a)She is employed as a teacher on a salary of $112,164;
(b)She owns two real properties in Australia, namely, her home and a one bedroom investment unit, and another real property in Country C;
(c)She has home loans associated with her real property of $565,034;
(d)She owns a modest car, chattels and currently has savings of $1,992;
(e)She funded her legal costs of the proceedings ($233,532) by selling an investment property and is yet to pay capital gains tax arising from its sale; and
(f)She has no dependents.
Legal aid
Neither party is legally aided but a contribution to the costs of the independent children’s lawyer was required.
The conduct of the parties to the proceedings in relation to the proceedings
The father argues that the maternal grandmother’s conduct in the proceedings is relevant in the following respects:
(a)The finding that her “incredibly negative” evidence in chief directed at the father in circumstances where she was “not seeking to challenge the father as primary carer for the children and ostensibly hoping to salvage her relationship with the children”;[14]
(b)Her presentation and demeanour at trial which led to a finding that:
… nothing about the maternal grandmother’s evidence at trial and the manner in which she gave her evidence gave me any reason to think that the children would not be exposed to her negative views if given the chance. The maternal grandmother was dismissive of the father’s response to her past behaviour, suggesting basically that he should get over it. What was particularly striking about the maternal grandmother’s demeanour and responses during cross-examination was the complete and utter lack of empathy or insight….[15]
(c)The father was required to meet a case at trial that he had alienated the children from her in circumstances where her counsel conceded that the only evidence relied upon to support such an allegation was the fact that the children had not seen the maternal grandmother since September 2018. The maternal grandmother’s position was described in the Reasons for Judgment as inexplicable[16] and “reflective of her lack of insight into the impact of her own behaviour and her role in the father’s decision to end the time the children spent with the maternal grandmother”.[17]
[14] Farrand & Mahdi [2020] FamCA 875 at [75] (‘Farrand & Mahdi’) (anonymised).
[15] Farrand & Mahdi (n 14) at [79].
[16] Ibid at [82].
[17] Ibid at [84].
The father further argues that he was put to the expense of obtaining a report from his treating psychologist to meet an accusation by the maternal grandmother that he was malingering when describing his feelings of anxiety and stress in having to deal with the maternal grandmother. The following finding was made on this issue:
The maternal grandmother’s response to this evidence was to suggest that the father is malingering and that he is in fact resilient. The reliance placed by the maternal grandmother on an innocuous observation by Dr M that the father’s response to a personality test indicated a level of exaggeration is rather telling. Despite Dr M’s explanation during cross-examination that the response related to a validity indicator and was not clinically significant, and despite Dr Varghese’s opinion that clinical assessment is far more important than self-reporting, the maternal grandmother maintained during submissions that the father was exaggerating his symptoms.[18]
[18] Ibid at [96].
The father submits that he was also required to meet a case for equal shared parental responsibility only to have that part of the maternal grandmother’s case abandoned on the last day of trial.
Even at trial, the father argues, the maternal grandmother sought to discredit him by disputing the authenticity of certain documents relied upon by the father that he contends were written by the mother, announcing that she had engaged an expert to examine “all these documents apparently or allegedly written by [the mother]”.
The maternal grandmother resists the father’s suggestion that her conduct in the proceedings justifies a costs order against her or, if it is, that it must be considered in the light of the extraordinary circumstances of having lost her daughter. She further submits that she made appropriate concessions during the trial about the impact on the father of her historic conduct and accusations against him. The maternal grandmother also points to her compliance with trial directions and contributions to experts’ reports. Further, the maternal grandmother argues that she “did not unduly prolong the proceedings or her conduct in the proceedings was appropriate and ought not be conflated with [the trial judge’s] assessments of the grandmother’s personal conduct in relation to the father or in respect of extraneous litigation, such as the coronial proceedings”.
Whether the maternal grandmother was wholly unsuccessful in the proceedings
The father argues that the maternal grandmother was wholly unsuccessful in the proceedings. Up until the last day of the trial the maternal grandmother was seeking an order for equal shared parental responsibility and to spend significant and substantial time with the children. She also sought extensive specific issues orders such as the ability to travel overseas with the children. On the last day of trial, just before the commencement of submissions, the maternal grandmother completely changed her case. She was granted leave, without objection, to seek an order for a gradual re-introduction with the children initially by telephone and then in a supervised setting gradually increasing to unsupervised time once per month. She was, as the father argues, wholly unsuccessful.
Reliance is placed by both parties on the decision of Salt & Salt (No. 2)[19] where Gill J said at [19] and then at [24]:
It is first necessary to pay close attention to the orders pursued by each party. The orders sought by each party represented the relief each said was in the child’s best interests. The first measure of either success, or conversely, of a lack of success, is against the orders pursued by a party.
…
Obtaining such orders is a mark of success in the proceedings. Failure to obtain such orders equates to a lack of success in the proceedings. That does not necessarily equate to a complete lack of success. Where, however, not only has a party not obtained the orders that party seeks, but has also failed to ameliorate the orders sought by the opposing party in the first party’s favour, the lack of success then becomes a complete lack of success. Obtaining a number of factual findings in a party’s favour does not alter the party’s success in the pursuit of orders, and hence in the proceedings.
[19] [2020] FamCA 170.
The maternal grandmother contends that she was not wholly unsuccessful in the proceedings because she obtained an order, sought by her, to be at liberty to send cards and gifts to the children on special occasions which was opposed by the father.
Offers
The father argues that he made four relevant offers. The first was made on 18 June 2018 when he offered the maternal grandmother one night per week with the child which she scoffed at.[20] The second offer was made on 27 July 2018 in which he made an offer of one day per month and the third offer was made on 15 August 2018 restating the one day per month offer. The fourth offer was made on 19 May 2020 in which he proposed that the maternal grandmother withdraw her application and there be no order as to costs.
[20] Farrand & Mahdi (n 14) at [102].
The maternal grandmother’s response to the father’s submission about offers are as follows:
(a)The finding that the father made an oral offer on 18 June 2018 that the maternal grandmother scoffed at, is the subject of challenge on appeal;
(b)In any event, no such offer was made in writing and was made before the commencement of the proceedings;
(c)In relation to the offers made on 27 July 2018 and 15 August 2018 by text message there were no particulars included e.g. which day of the month, change over locations, special days, care arrangements and communication between the grandmother and the children;
(d)The father’s offers for a day per month were not genuine offers because after a mediation on 24 August 2018 where a verbal agreement was reached, the father refused to enter into a consent order and commenced proceedings against the maternal grandmother for a protection order. He withdrew his offers and/or agreement on 20 September 2018;
(e)The father’s only genuine offer was made on 19 May 2020 but the order ultimately made on October 2020 was “marginally but materially more generous to the grandmother [than] the absolute no-time, no-communication position pressed by the father in this offer”.
The maternal grandmother contends that she made three offers, namely on 27 July 2018, 24 August 2018 and 15 August 2019. While that may be so, all of the offers contained proposals for the children to spend time with the maternal grandmother in addition to specific issues orders. The final parenting order did not permit the maternal grandmother to spend any time with the child and there were no specific issues orders made. Accordingly, I do not consider that any of the offers are relevant to the determination of the costs application.
Other matters
The maternal grandmother argues that as she is the only maternal blood relative of the children living in Australia, her estate will pass to the children, so any costs order would be taking away from the children to give to their father. Further, she contends that after the Coroner’s decision was handed down she “ceased her campaign against the father”. Finally, the maternal grandmother submits that she acknowledged (presumably at trial) that “she felt very differently about the father at the time of her daughter’s death and during the period which she was suffering an intense grief reaction. The father ceased all contact between the children and the grandmother from 11 September 2018, compounding her grief at the loss of her daughter”.
CONCLUSION
The financial circumstances of each party does not preclude the making of a costs order.
The maternal grandmother contends that she made appropriate concessions about her conduct towards the father during the trial and that her conduct should be considered in the context of the untimely death of her daughter. As I observed in my Reasons for Judgment[21] at [28]: :
It is perhaps understandable, given that background, that the maternal grandmother would reject the non-suspicious circumstances of her daughter’s death, particularly when the maternal grandmother said that when she last spoke to the mother, she was happy and talked about future plans. One can readily understand the terrible grief the maternal grandmother experienced, and no doubt continues to experience, and a wish to find answers to explain the inexplicable. One might even understand the maternal grandmother harbouring suspicions about the father having regard to her poor opinion of him. However, the maternal grandmother’s behaviour, including making extraordinary allegations against the father without any reasonable foundation, and her intrusion and undermining of the father’s relationship with the children, combined with her extraordinary lack of insight, cannot be neutralised by a simple acknowledgement that she is a grieving mother.
[21] Farrand & Mahdi (n 14).
The content of the maternal grandmother’s affidavit of evidence in chief (which was highly critical of the father’s parenting), in circumstances where she was not seeking to challenge the children’s living arrangements was inexplicable (an observation made in the Reasons for Judgment[22] at [75]). The maternal grandmother pressed ahead with an application for equal shared parental responsibility until the last day of trial in circumstances where, given the history and the content of her affidavit of evidence in chief, she had no prospect of success. The maternal grandmother also pressed ahead with her allegation that the children had been alienated against her by the father despite there being no evidence to support such an allegation and indeed, the evidence was to the contrary (see Reasons for Judgment[23] at [84]). The maternal grandmother maintained her allegation that the father was malingering in relation to his anxiety at the prospect of having to deal with her in the future. I regard such conduct, which would necessarily have prolonged the trial, as relevant to the determination of whether or not a costs order should be made.
[22] Ibid.
[23] Ibid.
The whole point of making offers at an early time is to encourage settlement. Rejection of offers comes with the risk that a costs order may be made. The father made four relevant offers. If the maternal grandmother had accepted the first three offers she would have been in a far better position than provided for in the final parenting order. I do not regard the father’s refusal to sign a consent order in August 2018 and his application for a protection order against the maternal grandmother as an indication that his offer was not genuine. It is accepted by the maternal grandmother that the August offer remained open until 20 September 2018. If the maternal grandmother had accepted the fourth offer she would not have had the benefit of an order that she was at liberty to send a card or gift to the children on special occasions but there would not have been an order preventing her doing so. Arguably she is marginally better off as a result of the final parenting order.
The final parenting order was not in the terms sought by the maternal grandmother in any respect. Even the terms of the order sought by her to be able to send cards and gifts was unsuccessful as the final parenting order permits the father to vet any such card or gift. In my view, the maternal grandmother has been wholly unsuccessful in the proceedings.
I do not place any significant weight on the ‘other matters’ raised by the maternal grandmother.
In my view, a costs order would be just in the circumstances of this case.
Despite being satisfied that this is a case that justifies a costs order, I do not propose to award costs on an indemnity basis. In my view, there is no exceptional circumstance that would warrant such an order. While an “imprudent refusal” to accept an offer can support an award for costs on an indemnity basis, it does not follow that every such case warrants such an order. Nor do I regard the conduct, to which I have referred, an exceptional circumstance. In this context I consider the circumstances of the mother’s death and the maternal grandmother’s reaction to it, to be relevant factors.
An order for a specific sum is preferable to an order requiring an assessment because the latter will inevitably involve the parties in yet further conflict, delay, and cost. Murphy J in a separate judgment in the Full Court’s decision in Parke & the Estate of the Late A Parke[24] provides a helpful example of the process involved in awarding a specific sum and his Honour draws assistance from the observations made by Einstein J in Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus[25] when considering an analogous provision to that contained in r 19.18(1)(a) of the Rules. Murphy J said in particular at [130]:
130. If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court” (Beach Petroleum NL v Johnson (No 2) [1995] FCA 1250; (1995) 57 FCR 119, at [24]cited in Idaport at [9]). The process does not “by its very nature ... envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”. (Idaport at [9](v), citing Harrison v Schipp[2002] NSWCA 213; (2002) 54 NSWLR 738).
131. Obviously enough, the court must act judicially in fixing or specifying a sum of costs, but:
...the requirement that the power to award a gross sum should be exercised judicially does not mean that it must be exercised in any scientific or formulaic manner. At the heart of the judicial function is the responsibility to weigh up competing factors and considerations, many of which might conflict, to reach a determination. Acting judicially carries with it an obligation to apply the rules of natural justice, to act impartially and to apply the law to the facts. ...
(Idaport, at [10] per Einstein J.)
[24] (2016) FLC 93-748 at 81,943–81,944, [122]–[134].
[25] [2007] NSWSC 23 at [9].
In quantifying a just amount I have had particular regard to the following factors:
(a)Matters referred to in r 19.08(3) of the Rules; namely:
(i)the reasonableness of each party’s behaviour in the case (in this context the grandmother’s conduct is relevant in the sense of prolonging the trial and pursuing issues which were doomed to fail);
(ii)the rates ordinarily payable to lawyers in comparable cases by reference to the costs agreement entered into between the father and his lawyer and family law scale;
(iii)expenses properly paid or payable (e.g. expert’s fees, contribution to independent children’s lawyers costs).
(b)The hourly charge out rate for a director in the law firm, under the costs agreement, is more than twice the hourly charge out rate for a solicitor under the family law scale;
(c)The sum claimed includes amounts that are properly described as solicitor and own client costs and not party and party costs;
(d)This case was not a matter for which I would certify it necessary to engage Queen’s Counsel.
I conclude that a just amount for the maternal grandmother to pay by way of costs is $50,000. Payment of that sum will be required within 30 days of the determination of the appeal against the final parenting order, given that the substantive appeal is listed for hearing in the May sittings.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 26 March 2021
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