Findlay and Daniels (Costs) - [2010] FamCAFC 212

FAMILY COURT OF AUSTRALIA

FINDLAY & DANIELS (COSTS)

[2010] FamCAFC 212

FAMILY LAW - APPEAL – APPLICATION IN AN APPEAL – COSTS – where the wife’s application for an extension of time was dismissed – costs sought by the husband on an indemnity basis – where the wife accepts that there should be an order for costs – where the Court is not satisfied that there is some special or unusual feature to justify costs on an indemnity basis – order for the wife to pay the husband’s costs as agreed or assessed on a party and party basis.

Family Law Act 1975 (Cth) s 117(2A)

Family Law Rules 2004 (Cth)

Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248
Munday v Bowman (1997) FLC 92-784
Yunghanns & Ors v Yunghanns & Ors; Yunghanns (2000) FLC 93-029

APPLICANT:

Ms Findlay

RESPONDENT:

Mr Daniels

FILE NUMBER:

MLC

1996

2008

APPEAL NUMBER:

2010

DATE DELIVERED:

24 September 2010

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Strickland J

HEARING DATE:

24 September 2010

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

9 March 2010

LOWER COURT MNC:

[2010] FamCA 195

REPRESENTATION

COUNSEL FOR THE APPLICANT:

In Person

COUNSEL FOR THE RESPONDENT:

Mr Ryan

SOLICITOR FOR THE RESPONDENT:

Hold & McDonald Pty Ltd

Orders

That the wife pay the husband’s costs of and incidental to the Application in an Appeal filed by the wife on 29 June 2010 as agreed and in default of agreement as assessed on a party and party basis.
That the said costs be paid by the wife to the trust account of the husband’s solicitors upon receipt by the wife of her entitlement to property settlement pursuant to the orders of Dessau J made on 9 March 2010.

IT IS NOTED that publication of this judgment under the pseudonym Findlay & Daniels (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

.

IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE

Appeal Number: SA 42 of 2010
File Number: MLC 1996 of 2008

Ms Findlay

Applicant

And

Mr Daniels

Respondent

EX TEMPORE REASONS FOR JUDGMENT

I delivered reasons for judgment on 7 September 2010 in relation to an Application in an Appeal filed by the wife on 29 June 2010. In the end result, I dismissed that application. Upon that order being made the husband, through his counsel, sought an order for costs.
Today is the hearing of that application for costs. I made an order on 7 September 2010 that the husband file and serve a written submission identifying the costs sought and the basis for the same. That has been done. There is a memorandum, a document entitled Memorandum of Respondent’s Costs, which was filed by the respondent on 17 September 2010, and in that document the costs sought are detailed and the basis of that costs application is set out. Also annexed to that memorandum is a costs agreement which is in existence between the respondent and his solicitors.
Ms Findlay has, in effect, in response to that, sought to file with the Court a document headed “Notice Disputing Itemised Cost Account”. That document has not been accepted by the Court because it is not a document which is appropriate to the circumstances. That is a document which is filed, for example, where there is a dispute between a lawyer and his or her own client and also, and this may be ultimately relevant here, if I made an order for costs and then there was a dispute about the costs sought, before, say, an assessor, then such a notice would be relevant at that point.
In any event, I am not being critical of Ms Findlay. She is still appearing for herself and it is not unnatural to think that this form is appropriate to file.
Ms Findlay’s position today in relation to the application for costs was firstly to seek an adjournment. I teased that out and it seems that what she was seeking an adjournment for was to obtain psychiatric and neurological reports as to her health. However, what Ms Findlay had in mind in that regard was obtaining those reports with a view to challenging or appealing my order made on 7 September 2010 dismissing her application.
I have explained to Ms Findlay that that is not a matter that I can deal with, as I also explained in my reasons for judgment. There is no appeal from an order dismissing an Application in an Appeal. The only avenue that is open to Ms Findlay is to seek special leave to appeal from the High Court of Australia, and, as I commented in my reasons for judgment, that is not necessarily a viable course.
Upon hearing that, Ms Findlay did not pursue her application, and then I sought to address with her, and also with Mr Ryan, who appears for the respondent, how this application should be dealt with. I explained to Ms Findlay that there are three possible topics for determination. One is whether there should be an order for costs. Secondly, if there is to be an order, on what basis those costs should be calculated and thirdly, what is the ultimate amount payable by way of costs.
In relation to the first matter, Mr Ryan, in his memorandum has set out by reference to s 117(2A) of the Family Law Act 1975 (Cth), what he submits are the factors justifying an order for costs. I do not need to determine that issue, though, because Ms Findlay has indicated that she accepts that there should be an order for costs. For my part, just so there is no issue about it, I consider that there are circumstances justifying an order for costs and that is that the applicant was wholly unsuccessful in relation to the Application in an Appeal. I have deliberately limited it to that, because I do not necessarily accept, for example, what the respondent puts to me in terms of the conduct of the wife.
The conduct that is relevant for the purposes of this application for costs is the conduct in relation to the Application in an Appeal, not any conduct of the wife in any of the proceedings which were determined by Dessau J and in respect of which the wife sought to appeal, but I have perhaps said more than I need to, because as I say, to repeat, Ms Findlay has accepted and confirmed that acceptance that there should be an order for costs. Thus that disposes of the first issue.
In relation to the second issue, though, namely on what basis should those costs be calculated, the respondent in effect seeks that they be calculated on an indemnity basis and specifically on the basis of a costs agreement which is in existence between the respondent and his solicitors and to which I referred earlier.
Ms Findlay opposes that and submits that the costs should be assessed on a party/party basis and, to perhaps put a finer point to that, that they be assessed on the scale in the Family Law Rules 2004 (Cth). Now, that is an issue that I need to determine and I will do that in a moment.
Just dealing though with the third topic, which is the ultimate amount that may become payable, Ms Findlay has asked that any costs that I order be as assessed, rather than me fixing those costs. Mr Ryan would prefer that I fix the costs. As I have explained, that is my usual practice when I am asked to do that by both parties, to then save the parties the time and expense of having the costs assessed, but equally my usual practice is, where one party says that the costs should be assessed, I generally accede to that, given that I am not a taxing officer or an assessor, and any decision I might make in fixing costs necessarily has to involve some guesswork and that is not necessarily appropriate. It is certainly not appropriate where one party is insistent on any costs being properly assessed.
Thus, as I have indicated to both parties, I will not be fixing the costs. I will be making an order that the costs be as assessed, and I will add, as I usually do in an order, or as agreed, because of course, there is nothing to stop the parties putting their heads together and reaching agreement about the costs, rather than going to, as I say, the time, trouble and expense of having those costs assessed.
Thus coming to the issue that I do need to determine today, namely whether the costs should be assessed on the basis of indemnity costs, or on a party/party basis, Mr Ryan has put to me that they should be on an indemnity basis, because – and summarising, without repeating everything that he put to me – the Application in an Appeal was without merit, as was the proposed appeal itself.
In response, Ms Findlay – and perhaps I should say, I take into account that she is representing herself – says that she is unwell, and I recall sighting during the course of the hearing of the Application in an Appeal an affidavit from her doctor confirming that. She was hospitalised for a lengthy period of time and she had some time recuperating at home. Her general practitioner indicated that she was suffering from depression and had a number of physical ailments. Thus I accept that she is unwell.
I repeat, though, Ms Findlay has not sought to adjourn these proceedings to a date when she might be feeling better or be better able to deal with the question of costs. She has been prepared to have this matter finalised to the extent that I can today. In any event, she says in response that she is not well. She has also told me that she has not been able to get legal aid because of other proceedings that are on foot. She has been therefore obliged to appear for herself, and her financial circumstances are such that she still has not received the property to which she is entitled pursuant to orders for property settlement made by Dessau J. Equally though, the husband has been in that position, and there are issues around that which I need not dwell upon, but Mr Ryan tells me that as far as he is concerned it should not be too far in the future when the orders for property settlement will be able to be fully implemented, and the effect of that will be that Ms Findlay will receive property of substantial value.
In any event, I accept her financial circumstances are strained at the moment. She tells me that she is on a disability pension and she has not been able to afford to have a lawyer representing her but in terms of the costs, she is due to receive substantial property and, as Mr Ryan has conceded, any order for costs can, and indeed should, be met out of that property. Now, whether there is money sufficient to meet the order that the wife receives or whether it is shares or some other item of property which she receives she will have sufficient assets to meet any order for costs.
With that issue the law is relatively clear and the ordinary rule is that where the Court orders the costs of one party to be paid by another party the order is for the payment of those costs on a party and party basis. There is ample authority to say that the Court should not depart lightly from that ordinary rule and the circumstances justifying the departure should be of an exceptional kind. I refer, for example, to the case of Yunghanns & Ors v Yunghanns & Ors; Yunghanns (2000) FLC 93-029 and, specifically, at 87,470 to 87,471. Further, an oft quoted decision of the Federal Court in this context is a decision of Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 where Sheppard J stated that there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice.
Colgate Palmolive has been followed in this court in cases such as Munday v Bowman (1997) FLC 92-784, and indeed, in that case, Holden CJ drew from the decision of Colgate Palmolive examples of circumstances warranting the exercise of the discretion, and I emphasise, of course, this is an exercise of discretion to award costs on an indemnity basis. I do not need to set out the quote from Colgate Palmolive. The facts of this case do not necessarily come within those particular examples, but, importantly, there is no doubt that the categories in which the discretion should be exercised to award indemnity costs are not closed and, indeed, I observe that the mere evidence of facts and circumstances capable of warranting an order for costs on an indemnity basis does not mean that the Court is obliged to exercise its discretion to make such an order.
Before exercising the discretion to make an order for indemnity costs the Court needs to be aware of the terms of any costs agreement between the party and his lawyers. Here, of course, I have that before me and the reason for that is that relevant to the exercise of discretion are the terms of any costs agreement and the extent the agreement exceeds the parameters set by the scale of costs under the Family Law Rules.
Thus they are the principles to which I must have regard in considering this application and, as I emphasised, it is an exercise of discretion pure and simple.
In my view, although I have sympathy for the husband in terms of having to meet an application which, ultimately, I found had no merit and which, of course, put him to costs in instructing lawyers and took time to deal with, and delayed, as I understand it, the finalisation or the progress of the case in terms of the other issues to be dealt with, I do not consider, to use the words of Sheppard J, that there is here some special or unusual feature to justify the Court in departing from the ordinary practice. Thus I refuse the application to have the costs in this case calculated on an indemnity basis.
Now that leads me to where this case goes from here, and the orders that I need to make in that regard. As I have said, I propose to make an order that the costs be assessed if not agreed. I will add, assessed on a party/party basis. I want to also make an order that the costs are to be paid, not necessarily out of, but at the time more to the point, when the wife receives her entitlement under the property settlement orders.

I certify that the preceding twenty three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court Strickland J

Associate:

Date: 28 October 2010