Farrand & Mahdi (No. 3)
[2021] FamCA 519
•15 July 2021
FAMILY COURT OF AUSTRALIA
Farrand & Mahdi (No. 3) [2021] FamCA 519
File number(s): BRC 11658 of 2018 Judgment of: CAREW J Date of judgment: 15 July 2021 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Registrar – Review of decision – Where an order was made for costs in the substantive proceedings – Where a Registrar made an order for costs associated with a previous interim application – Where there is a dispute as to whether the order for costs in the substantive proceedings dismissed the application for costs before the Registrar - Whether the order for costs in the substantive proceedings is amenable to variation pursuant to the slip rule – Where it is found that the reasons for judgment make it clear that the application for costs arising out of the interim parenting hearing was not before the Court – Where it is found that the order does not reflect the intention of the Court and can be amended pursuant to the slip rule – Where the decision of the Registrar stands. Legislation: Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)
Cases cited: Farrand & Mahdi (No. 2) [2021] FamCA 168
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Collins & Collins (1985) FLC 91-603
PBF v TRF (2005) 191 FLR 294
Kohan and Kohan (1993) FLC 92-340
Penfold v Penfold (1980) 144 CLR 311
Prantage v Prantage (2013) 49 Fam LR 197
Re Wilcox, Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151
Number of paragraphs: 54 Date of hearing: 9 July 2021 Place: Brisbane Solicitor for the Applicant: L & S Lawyers Solicitor for the Respondent: Murdoch Lawyers ORDER
BRC 11658 of 2018 BETWEEN: MS FARRAND
ApplicantAND: MR MAHDI
Respondent
ORDER MADE BY:
CAREW J
DATE OF ORDER:
15 JULY 2021
THE COURT ORDERS THAT:
1.Paragraph 2 of the order made by the Honourable Justice Carew on 26 March 2021 be amended pursuant to the slip rule to read as follows:
2. All outstanding applications (save for the Application in a Case for costs filed on 21 May 2020) be otherwise dismissed.
2.The time for filing the Application in a Case for review of the decision of Registrar Spink made on 16 April 2021 as amended on 16 June 2021 be extended to 18 May 2021 nunc pro tunc.
3.The Application in a Case filed on 18 May 2021 for review of the decision of Registrar Spink made on 16 April 2021 as amended on 16 June 2021 be 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:
The applicant seeks to review a decision of Registrar Spink made on 16 April 2021 (as amended on 16 June 2021) which required the applicant to pay costs to the respondent fixed in the sum of $15,000.
The Application in a Case for review of the Registrar’s decision was filed on 18 May 2021 and is in the following terms:
That the Orders of Senior Registrar Spink dated 16th April 2021 in the Application in a case for interim hearing costs be set aside because Order 2 of Justice Carew dated 26th March 2021 in the Application in a case for the substantive proceeding costs provided that all outstanding applications be otherwise dismissed.
Upon the applicant confirming that the only basis upon which she sought to review the 16 April 2021 decision was as stated in her Application (as set out in the preceding paragraph), the respondent submitted that the matter could be dealt with by way of written submissions and informed the Court that the respondent was seeking an amendment of the order made on 26 March 2021 pursuant to the slip rule.[1]
[1] Family Law Rules 2004 (Cth) r 17.02(1).
As the Court indicated a preparedness to deal with the Application immediately, both parties elected to proceed with oral submissions only, so as to avoid further costs for the parties. The matter was stood down briefly to enable the applicant to consider the application of the slip rule. Upon resumption of the hearing the applicant confirmed that the matter should proceed as proposed i.e. by way of oral submissions only.
Before considering the submissions of each party it may be helpful to set out some brief background.
BACKGROUND
The substantive proceedings were parenting proceedings. The applicant is the maternal grandmother of two children and the respondent is the children’s father. Sadly, the children’s mother passed away on … 2018.
A final parenting order was made on 16 October 2020. The final parenting order restrains the applicant from having any contact with the children other than sending a gift and card on special occasions. The applicant has appealed against that decision. The appeal was heard on 11 May 2021 and the decision is reserved.
On 26 November 2019 the applicant filed an interim application seeking an order that she spend time with the children pending the final hearing. The application was opposed by the respondent and the Independent Children’s Lawyer (“ICL”). The applicant’s interim application was dismissed by a Registrar on 14 May 2020. The respondent’s submissions and the ICL’s submissions were accepted by the Registrar, namely, that “the application of the grandmother was not one that could be determined on an interim basis” and was “misconceived”.
On 21 May 2020 the respondent filed an Application in a Case for costs against the applicant in relation to her failed interim application to spend time with the children pending the final hearing. The respondent sought costs on an indemnity basis fixed in the sum of $30,085.55 or alternatively in a fixed sum of $26,582.46.
On 18 August 2020 an order was made for the applicant to file her response to the respondent’s application filed 21 May 2020, and both parties were ordered to file written submissions. The last submission was made on 12 March 2021.
With the consent of the parties the matter was determined in the absence of the parties.
On 16 April 2021 the Registrar ordered costs against the applicant in relation to the failed interim parenting application in the sum of $15,000.
I note that at paragraphs [4]–[6] of the Reasons delivered by the Registrar he said as follows:
4. The grandmother as a preliminary submission sought that I stay the father’s application pending the hearing of the grandmother’s appeal against the final parenting orders made by the Honourable Justice Carew.
5. In my view the interim orders that I made were discrete from the final hearing before her Honour and my orders were not reviewed.
6. It is my view that that the findings by the Full Court on appeal will not have any bearing on the father’s application for costs before me. It is my view that there is no basis for me to stay the father’s application for costs pending the appeal.
On 26 March 2021 i.e. prior to the delivery of the interim costs decision by the Registrar, a costs order was made against the applicant in a fixed sum of $50,000 in relation to the substantive proceedings. Paragraph 3 of the Reasons delivered on that day provides as follows:[2]
3. 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.
(Emphasis added)
[2] Farrand & Mahdi (No. 2) [2021] FamCA 168 at [3].
It does not seem to be in contention that the reference to an interim application related to the application pending before the Registrar about which orders had been made for the filing of written submissions.
The order made on 26 March 2021 is in the following terms:
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.
There were a number of applications i.e. relief sought, before the Court on 26 March 2021, in addition to the respondent’s application for costs of the substantive proceedings, as is apparent from the Reasons at [5] and [6]:[3]
5. 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.
6.… Each party’s application for costs of the father’s application for costs will be dismissed.
[3] Ibid at [5]-[6].
On 23 April 2021, the applicant filed a Notice of Appeal against the costs order made on 26 March 2021.
On 18 May 2021, the applicant filed an Application in a Case to review the costs order made by the Registrar on 16 April 2021 (as amended on 16 June 2021).
On 25 June 2021 the applicant’s appeal against the costs order made on 26 March 2021 (the costs of the substantive proceedings excluding the interim costs) was deemed abandoned pursuant to r 22.21 of the Family Law Rules 2004 (Cth) (“the Rules”) because the applicant had failed to file the appeal books by the date ordered.
REVIEW APPLICATION
Section 37A of the Family Law Act 1975 (Cth) (“the Act”) empowers the Judges of the Family Court of Australia, or a majority of them, to make Rules of Court delegating to Registrars all or any of the powers of the Court, subject to certain exceptions and limitations therein set out.[4]
[4] Family Law Act 1975 (Cth) s 37A(1)(f)(ii).
Rule 18.05(2) of the Rules delegates to Registrars the power to make an order for costs under s 117(2).
Rule 18.08(2) of the Rules permits a party to apply for a review of an order made by a Registrar within the time therein prescribed, relevantly, within 28 days after the Registrar makes the order.
No issue was taken with the late filing of the Application in a Case to review the decision made by the Registrar. In circumstances where it is only one day out of time I will extend the time to file the Application nunc pro tunc.
Rule 18.10 of the Rules sets out the power of the Court on review and, in particular:
Power of court on review
(1)A court must hear an application for review of an order of a Judicial Registrar, Registrar or Deputy Registrar as an original hearing.
Note: In an original hearing, the court rehears the whole matter and does not simply review the decision of the original court.
(2) The court may receive as evidence:
(a) any affidavit or exhibit tendered in the first hearing;
(b) any further affidavit or exhibit;
(c) the transcript (if any) of the first hearing; or
(d)if a transcript is not available, an affidavit about the evidence that was adduced at the first hearing, sworn by a person who was present at the first hearing.
Although the applicant did not cavil with the decision other than on the basis already indicated, it seems to me that I am required to consider the respondent’s application afresh. Neither party sought to rely upon any further material or indeed to make any further submissions other than on the issue as identified in the applicant’s review application. Each party made submissions in relation to the application of the slip rule. As reference was made to the written submissions filed in relation to the costs application determined by the Registrar, which is now the subject of review, I propose to have regard to those submissions and to the Reasons of the Registrar by way of background. I also note that the applicant’s financial circumstances have already been adversely impacted by a costs order in a fixed sum of $50,000.
SLIP RULE
It seems to me that the first matter to consider is whether paragraph 2 of the order made on 26 March 2021 is amenable to variation pursuant to the slip rule.
Rule 17.02(1) of the Rules provides as follows:
Varying or setting aside orders
(1) The court may at any time vary or set aside an order, if:
(a) it was made in the absence of a party; or
(b) it was obtained by fraud; or
(c) it is interlocutory; or
(d) it is an injunction or for the appointment of a receiver; or
(e) it does not reflect the intention of the court; or
(f) the party in whose favour it was made consents ; or
(g) there is a clerical mistake in the order; or
(h) there is an error arising in the order from an accidental slip or omission.
The respondent submits that the order should be varied pursuant to r 17.02(1)(e) given that the clear intention of the Court was that the respondent’s application for costs in relation to the interim proceedings was not intended to be disposed of (see [3] of the Reasons) and to the extent that paragraph 2 of the order may be interpreted to that effect it is amendable to variation. Further, the respondent argues that the applicant did not seek to make any further submissions to the Registrar after the order made on 26 March 2021 and before the Registrar’s costs order made on 16 April 2021 to argue that the application was now otiose. Indeed it is submitted that the applicant took no action prior to filing her application to review the Registrar’s decision on 18 May 2021.
The applicant opposes amendment of the order pursuant to the slip rule, submitting that the error does not arise out of an accidental slip or omission. I also infer that the applicant argues that the order does reflect the intention of the court. Further, the applicant submits that amendment of the order would cause her prejudice because she discontinued her appeal against the costs order made on 26 March 2021 on the understanding that it dealt with all costs applications and if that were not so, she would have to seek to reinstate her appeal. Although this submission was made, I note that there was no evidence as to the applicant’s state of mind at the time her appeal against the costs order was deemed abandoned.
Conclusion – slip rule
In my view, the Reasons dated 26 March 2021 make it clear that the respondent’s application for costs arising out of the interim parenting hearing was not before the Court. There were numerous applications before the Court at that time, as earlier outlined, and in my view the intention of the Court was to dismiss those applications. It is accepted that the wording in paragraph 2 of the order is infelicitous but in my view it may be amended pursuant to the slip rule and in particular pursuant to subrule (e) or subrule (h). The order does not reflect the intention of the Court and there is an error arising in the order from an accidental slip or omission.
Accordingly I propose to amend the order as follows:
2. All outstanding applications (save for the Application in a Case for costs filed on 21 May 2020) be otherwise dismissed.
REVIEW
I turn now to consider, as an original hearing, the respondent’s application for costs relating to the applicant’s failed attempt to obtain an interim order to spend time with the children pending the final hearing.
PRINCIPLES APPLICABLE TO AN APPLICATION FOR COSTS
Although each party generally bears their own costs in this jurisdiction (s 117(1) of the Act), the Court has a broad discretion[5] 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)).
[5] 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”.[6]
[6] 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.[7]
[7] 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.[8]
[8] 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 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 where the Full Court of the Federal Court (Cooper & Merkel JJ) said at 156:[9]
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) 46 FCR 225.
[9] (1996) 72 FCR 151 at 156 (‘Re Wilcox’).
The Full Court (Cooper and Merkel JJ) went on to restate the principles from Colgate-Palmolive[10] in the following terms:[11]
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] (n 8).
[11] Re Wilcox (n 9) 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 as follows:[12]
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] (n 8) at 223.
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 [17].
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
The respondent submits that given the nature of the factual disputes between the parties and the fact that he was seeking a no time order, the Court could not make an interim determination. The factual disputes included:
(a)Whether or not the applicant had the capacity to contain her emotions so as not to cause harm to the children;
(b)Whether or not the applicant could protect the children from her negative views of the father;
(c)The adverse impact on the father of the children spending time with the applicant; and
(d)Whether the children should spend any time with the applicant.
The respondent argues that a costs order would be ‘just’ given that the applicant was wholly unsuccessful; the applicant had no prospect of success; the applicant is employed and owns property and has the capacity to meet a costs order and the applicant persisted with her application despite the indication by the ICL that the matter could not be determined at an interim hearing. It is further argued that the circumstances warrant an order on an indemnity basis.
The applicant submits that it was reasonable for her to bring an interim application to spend time with the children in circumstances where the family report writer recommended that the children spend time with the applicant once she has demonstrated that she has commenced or is continuing counselling to address the issues identified by Dr BB and his recommendation in paragraph (ii) of his report dated 15 April 2019.
The applicant submits that the evidence from Ms L established that she had addressed the matters raised by the family report writer and Dr BB. The applicant submits that it was reasonable for her to bring an application when she had historically had a close relationship with the children prior to the father ceasing her time with the children in September 2018. The applicant argues that most parenting cases involve contested facts and that does not prevent interim orders being made.
Conclusion – costs
At the time the applicant brought her application for interim orders, she had not seen the children for over a year. The respondent opposed the applicant spending any time with the children. If his position was accepted at a final hearing (as it ultimately was) it would not have been in the best interests of the children to commence spending time with the applicant to only have that time again stopped. Whether or not the applicant had addressed the matters raised in the family report and in the report of Dr BB was contentious despite the evidence from Ms L.
Despite this being a parenting matter, in my view, there are grounds for a costs order given that the applicant was wholly unsuccessful and the applicant pressed ahead with her interim application despite the clear indication that the ICL would oppose it. The recommendation of an ICL was likely to be given considerable weight at an interim hearing.
There are no exceptional circumstances to warrant an order for costs on an indemnity basis.
I consider a reasonable sum for the applicant to contribute towards the respondent’s costs is $15,000. As this is sum determined by the Registrar, the applicant’s Application in a Case for review will be dismissed and the Registrar’s decision will stand.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 15 July 2021
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