Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd
[1988] FCA 364
•9 December 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Clancy & Alcott [2021] FedCFamC1F 270
File number(s): SYC 4960 of 2014 Judgment of: ALTOBELLI J Date of judgment: 9 December 2021 Catchwords: FAMILY LAW – COSTS – Application by the mother for indemnity costs – Where the father was wholly unsuccessful in his contravention application – Costs ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 70NBA, s 117
Family Law Rules 2004 (Cth) Sch 3
Cases cited: Bhatt & Acharya (Costs) [2017] FamCAFC 71
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; [1988] FCA 364
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116
Lenova & Lenova (Costs) [2011] FamCAFC 141
Clancy & Alcott [2021] FamCA 380
Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157
Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Phillips & Hansford [2020] FamCAFC 28
Division: Division 1 First Instance Number of paragraphs: 25 Date of last submission/s: 18 August 2021 Date of hearing: 18 August 2021 Place: Sydney (via videoconference) Counsel for the Applicant: Mr Hill (direct brief) Counsel for the Respondent: Ms Shea Solicitor for the Respondent: Broun Abrahams Burreket Solicitor for the Independent Children's Lawyer: Mark MacDiarmid Family Law Specialist ORDERS
SYC 4960 of 2014 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR CLANCY
Applicant
AND: MS ALCOTT
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
9 DECEMBER 2021
THE COURT ORDERS THAT:
1.Within 56 days of the date of these orders, the Applicant pay the Respondent’s costs fixed in the sum of $6,491.69.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Clancy & Alcott has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
These are reasons for judgment explain the order for costs made in this matter.
BACKGROUND
This case is about a child, X, born in 2013. Her mother is Ms Alcott (“the mother”) and her father is Mr Clancy (“the father”). On 14 September 2020 Williams J made orders by consent that provided for the mother to have sole parental responsibility, for X to live with her, and spend time with the father in accordance with that order. The Court notes that the father was represented by counsel at the time—indeed the same counsel who appeared for him on the present costs application.
On 31 May 2021 I made orders dismissing the contravention application filed by the father on 29 December 2020 in which he alleged that the mother had contravened the orders of 14 September 2020. The matter was adjourned to 28 June 2021 to enable the father to obtain legal advice in relation to his appeal rights and to consider each parent’s proposal for an order varying the father’s time with X pursuant to the provisions of s 70NBA of the Family Law Act 1975 (Cth) (“the Act”). I noted on that occasion that the mother intended to make a costs application.
On 12 July 2021 the father filed an Application in a Case seeking a stay of the orders that I made on 31 May 2021 pending his appeal to the Full Court. On 20 July I made procedural directions in relation to that application.
The father filed an appeal but on 6 August 2021, Aldridge J sitting as the Full Court dismissed the father’s Application in an Appeal arising from the father’s failure to comply with time limits in relation to the appeal. This put an end to the appeal. It is clear from the judgment of the Full Court that the father’s appeal lacked merit. He was ordered to pay costs fixed in the sum of $2,700.
On 18 August 2021 I made orders by consent pursuant to the provisions of s 70NBA varying the orders for X to spend time with her father. That effectively brought to an end the proceedings that between the parents, except in relation to the mother’s costs.
The application for costs proceeded by way of oral submissions made on 18 August 2021. The father was represented by Mr Hill of counsel, the mother by Ms Shea of counsel, and the Independent Children’s Lawyer, Mr MacDiarmid, also appeared. I had the benefit of a case outline document from both parents. The Independent Children’s Lawyer did not wish to be heard on the issue of costs.
The mother sought an order for indemnity costs in the sum of $19,980, or alternatively an order that costs be paid as agreed, or as assessed. She tendered documents to establish her financial circumstances which are clearly parlous. She has a low income and minimal savings. The amount sought as indemnity costs would simply reimburse the mother for the actual amount of costs incurred. The schedule of itemised costs pursuant to Sch 3 of the Family Law Rules 2004 (Cth) (marked as exhibit A4) amounts to $6,491.69.
The father opposed the making of any costs order.
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:
(2)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]).
Whilst the applicant in a costs application must establish the circumstances justifying the making of a costs order, the Court is not limited to making such an order only in what has been described as a "clear case" (Penfold v Penfold (1980) 144 CLR 311).
The wife sought that her costs be paid on an indemnity basis.
It is well-settled that when costs are ordered by this Court, such costs are payable on a party and party basis. It has been held that the Court should not lightly depart from the ordinary rule (Kohan & Kohan (1993) FLC 92-340).
In relation to an award of indemnity costs, the recent Full Court decision of Phillips & Hansford [2020] FamCAFC 28, helpfully summarises the position as follows:
35. Indemnity cost orders are made only in exceptional cases (Kohan and Kohan (1993) FLC 92-340; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; D & D (Costs) (No. 2) (2010) FLC 93-435).
36. Whilst the categories of cases in which indemnity cost orders may be awarded are not closed, it is accepted that such costs may be ordered where a case was pursued with “wilful disregard of known facts or clearly established law” and where there has been “an imprudent refusal of an offer to compromise” (Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233).
37. In relation to the first category, it has been said that indemnity costs may be awarded where “the applicant, properly advised, should have known that he had no chance of success” (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401) and where “a party persists in what should on proper consideration be seen to be a hopeless case” (J Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers – Western Australian Branch & Anor [1993] FCA 70 per French J at 5).
THE CASES OUTLINED
The mother’s case was, in essence, that the father’s contravention application was wholly unsuccessful and, indeed, was “doomed to fail”. The father’s financial circumstances were superior to that of the mother. The father’s impecuniosity was not a reason not to make an order for costs in circumstances where an order was otherwise appropriate.
On behalf of the father it was submitted that he commenced the contravention application proceedings in good faith, as he was not spending time with his daughter in accordance with the orders. He contended that a variation to the order was inevitable and was in fact made by consent. The difference in the respective financial circumstances of the parents includes that the mother owns her home, but the father does not. In addition, he has had to bear the cost of supervised contact, and has borne the burden of an order for costs made by the Full Court.
THE REASONS FOR JUDGMENT OF 31 MAY 2021
In my reasons for judgment delivered ex tempore on 31 May 2021 (Clancy & Alcott [2021] FamCA 380) I found at [4] that based on the father’s own evidence (including his affidavit) the mother did in fact comply strictly with the orders that he alleges she contravened. Moreover, the mother and father agreed to, in effect, vary the order and use the services of another supervised contact centre. The father’s reasons for bringing the application were quite understandable—he just wanted to spend time with his daughter. As I noted at [6] it is possible that he did not give much thought to the legal implications of what he was doing but, from a legal perspective, he had technically acquiesced to a change in the orders such that it would be extremely unfair for him to now bring contravention proceedings based on an order that had been varied by agreement. I was satisfied that he had acquiesced to the variation of the order both objectively, and subjectively. I therefore found that there was no prima facie case.
THE SUBMISSIONS MADE
On behalf of the mother it is submitted that, in these circumstances, the father’s case was doomed to fail. The technical way of expressing that proposition is that for the purposes of s 117(2A)(e) of the Act the father had been wholly unsuccessful in the proceedings. The submission is correct. This is not a matter of hindsight—the facts that I have identified above should reasonably have been apparent to the father, even without the benefit of legal representation. The mother’s submission is established.
It is well-established law that even if the father were impecunious, that is not a reason per se not to make an order for costs against him (see, e.g., Lenova & Lenova (Costs) [2011] FamCAFC 141; Bhatt & Acharya (Costs) [2017] FamCAFC 71).
When counsel for the mother submitted that the father’s case was “doomed to fail”, she was alluding to the principle that “the applicant, properly advised, should have known that he had no chance of success” (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401).
DETERMINATION
The father has put the mother to significant legal expense in the context of the case that should never have come to Court in the first place. In mitigation of that is the reality that the orders in question were ultimately varied by consent, and quite properly so. It was beyond the capacity of the parents to settle this issue without the Court’s intervention. Whether a contravention application was brought, or an application to vary the orders based on the changed circumstances, litigation would have occurred. This contraindicates indemnity costs. Nonetheless an order for costs is strongly indicated.
The father is ordered to pay to the mother costs fixed at $6,491.69, such sum to be paid within 56 days.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 9 December 2021
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