FRISWELL & CHILD SUPPORT REGISTRAR (No.3)
[2016] FCCA 1609
•28 June 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FRISWELL & CHILD SUPPORT REGISTRAR (No.3) | [2016] FCCA 1609 |
| Catchwords: COSTS – Whether refusal of offer of settlement warrants an order for costs – financial circumstances of Applicant – where financial circumstances relevant to consideration of matters under Family Law Act 1975 (Cth), s.117(2A) – impecuniosity of a party not necessarily a bar to costs order – where financial circumstances of party relevant to order for time to pay. PRACTICE AND PROCEDURE – Application to reopen costs Application – where Applicant failed to comply with direction to file a submission within 21 days or at all – where oral application made on day judgment due to be delivered. |
| Legislation: Family Law Act 1975 (Cth), ss.117, 117C |
| Cases cited: Bixby & Bixby [2015] FCCA 816 Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania) v Fish & Anor (2005) 33 Fam LR 123[ [2005] FamCA 158 Friswell & Child Support Registrar [2016] FCCA 869 Friswell & Child Support Registrar [2016] FCCA 1545 Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 |
| Applicant: | MS FRISWELL |
| Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | WOC 521 of 2007 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 28 June 2016 |
| Date of Last Submission: | 28 June 2016 |
| Delivered at: | Sydney |
| Delivered on: | 28 June 2016 |
REPRESENTATION
| Applicant: | In person |
| Solicitor for the Respondent: | Mr Dean |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
The oral Application made by the Applicant to reopen the proceedings for an Order for costs is dismissed.
Order (2) made in proceedings [2016] FCCA 1545 and handed down today allowing the Applicant three (3) months to pay the costs of $5,251.50 is discharged.
The Applicant is allowed twelve (12) months to pay the costs referred to in the above Order.
IT IS NOTED that publication of this judgment under the pseudonym Friswell & Child Support Registrar (No.3) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
WOC 521 of 2007
| MS FRISWELL |
Applicant
And
| CHILD SUPPORT REGISTRAR |
Respondent
REASONS FOR JUDGMENT
Application
This is an oral Application by the substantive Applicant to reopen costs proceedings. The Application has been brought at the eleventh hour, as it was made immediately prior to the handing down of a decision as to whether the Applicant should pay the costs of the Child Support Registrar and, if so, the quantum of those costs.
The Application was opposed by Mr Dean for the Child Support Registrar.
Background
The circumstances of the matter that are relevant are that on 19th April 2016, I made a decision whereby an application filed by the Applicant was summarily dismissed. In arriving at the decision, I had considered submissions made by the Respondent, the Child Support Registrar, about why an order for costs should be made if the application was to be summarily dismissed and I considered submissions by the Applicant as to why an order for costs should not be made.
On 19th April, the decision I made was that the Application should be summarily dismissed and I further ordered:
Within 21 days of the date of these orders, the Applicant may file and serve a written submission showing cause why an order should not be made requiring her to pay the respondent’s costs of these proceedings in accordance with schedule 1 to the Rules.[1]
[1] Friswell & Child Support Registrar [2016] FCCA 869
The solicitor appearing for the Child Support Registrar on the day, Ms Taah, had submitted a schedule of costs calculated in accordance with the Rules amounting to some $5,251.50. The Applicant did not file any submissions within 21 days from 19th April. Indeed, she did not file any written submissions at all.
I proceeded to deal with the application for costs on the basis of the material that was before me and I took the view that it was appropriate that an order for costs should be made in favour of the Child Support Registrar. I also took the view that the amount of $5,251.50 was the proper figure calculated in accordance with the Rules. I also decided that the Applicant should be allowed three months to pay those costs. In doing so, I considered the written submission of the Child Support Registrar as to why an order for costs should be made if the substantive application were to be summarily dismissed and I refer to my findings there at paragraphs 6, 7 and 8 of the decision.
a)In doing so, I considered various matters referred to in subsection 117(2A) of the Family Law Act 1975 (Cth), including that:
i)there was no evidence of the Applicant’s financial circumstances;
ii)there was no evidence that any party was in receipt of a grant of Legal Aid;
iii)I found there was nothing untoward about the conduct of the parties;
iv)I found there was no evidence of a failure by either party to comply with the previous order of the Court;
v)I found that the Applicant has been wholly unsuccessful in the proceedings; and
vi)I noted that the Respondent did make a written offer of settlement early in the proceedings on 23rd January 2014 and a copy of that letter had been annexed to the affidavit of Mr Gouliaditis, solicitor, affirmed on that day. I then quoted from the letter.
I referred in my decision to the authority of Fitzgerald (As Child Representative for A (Legal Aid Commission of Tasmania)) & Fish and Anor[2] where the Full Court of the Family Court held that nowhere in subsection (2A) or elsewhere under section 117 was there any prescription that more than one factor must be present before an order for costs is made, nor of comparative weight of the factors set out in subsection (2A).
[2] (2005) 33 Fam LR 123; [2005] FamCA 158
I had considered in the substantive decision the Applicant’s reasons as to why a costs order should not be made. Nevertheless, the Applicant has turned up today and has told the Court this morning, as she had foreshadowed in an email to my associate, copied to the Respondent’s solicitor that she wished to make an oral application reopening the question of costs. She wished to make submissions as to why an order for costs should not be made. This was opposed by the solicitor for the Child Support Registrar, not surprisingly. The Applicant indicated that she would only require 10 minutes, although that subsequently proved to be a significant underestimate. I decided that, in the interests of justice, I would hear the oral Application and I would allow sufficient time for the solicitor for the Respondent to consider the application and to respond to it.
Submissions
The submission by the Applicant really goes to three specific points.
i)It was submitted that offers of compromise of a case do not lead to an order for costs if they are rejected only if they have been rejected unreasonably.
ii)It was submitted that there had not been a full and frank disclosure by the Child Support Registrar and that there had been multiple failures by the Child Support Registrar to comply with pre-court proceedings and directions of the Court.
iii)The Applicant was in impecunious financial circumstances. She told the Court that she had been evicted from her residence and had become homeless although subsequently it transpired that that was in 2014. She is currently living in rented accommodation for which she pays some $400 per week but as a result of the orders in the substantive proceedings, the Child Support Registrar has taken action to recover moneys claimed and her income has been capped at $961 per fortnight. As her rent is some $400 per week, that only leaves her a relatively small amount upon which to live. She did in fact tender copies of payslips and a rent agreement in support of that application.
Conclusions
Dealing with those submissions, turning first of all to the question of whether or not an offer of compromise if rejected does not lead to an order for costs, the applicant relied on decisions of Maitland Hospital & Fisher (No 2)[3], a decision of the New South Wales Court of Appeal. She also referred to a decision of the Full Court of the Family Court in Robinson & Higginbotham[4] which was a 1991 decision where the Full Court of the Family Court heard an appeal against a decision by the trial judge to make an order for costs after an offer of settlement. The Full Court was comprised of Simpson, Nygh and Smithers JJ and the primary judgment was that of Nygh J.
[3] (1992) 27 NSWLR 721
[4] (1991) FLC 92-209
In dealing with those two decisions, I note, first of all, that the decision of Maitland Hospital & Fisher (No 2) was an application to the New South Wales Court of Appeal for indemnity costs of an appeal against the decision awarding the plaintiff at first instance who had received a judgment in the sum of $206,090 and the respondent to the appeal had offered to accept payment of $200,000, together with costs to compromise her claim. The appellant rejected the offer of compromise and pressed on with the appeal. The appeal was unsuccessful and the respondent retained her judgment of $206,090.
The New South Wales of Court of Appeal held that it was appropriate that the respondent should have the indemnity costs order that she sought, noting that the objects of the rule in the Supreme Court, which was the subject of consideration, were
i)to encourage the saving of private costs and the avoidance of the inherent risks, delays and uncertainties of litigation by promoting earlier offers of compromise by defendants which amount to a realistic assessment of the plaintiff’s real claim which can be placed before its opponent that its bottom line will be revealed to the Court.
ii)To save the public costs which are necessarily incurred in litigation which events demonstrate to be unnecessary having regard to an earlier and, as found, reasonable offer of compromise made by a plaintiff to a defendant, and
iii)to indemnify the plaintiff who has made the offer of compromise later found to have been reasonable against the costs thereafter incurred.
I noted in a decision of this Court of Bixby & Bixby[5] that their Honours in the Court of Appeal were untroubled by the fact that the amount of the offer of compromise was only slightly less than the amount of the judgment holding at page 725:
Although the amount of the deficit is small, being only 2.5 per cent of the judgment sum, it is real and not trivial or contemptuous.
[5] [2015] FCCA 816
I would point out however that in my view Maitland Hospital & Fisher (No 2) can be distinguished because it dealt not with costs on a party and party basis but costs on a solicitor/client basis also known as indemnity costs. This is not a case relating to indemnity costs. The Child Support Registrar only sought party and party costs according to the Court scale set out in Schedule 1 to the Rules and did not seek and certainly did not receive indemnity costs.
I look at the decision of Robinson & Higginbotham which is a 1991 decision which was the case where the trial judge had refused to make an order for costs where a party had made an offer to settle her claim on the basis that the other party pay for her a further sum of $500,000. The offer, although not made within the terms of section 117C of the Family Law Act, exactly anticipated the outcome of the hearing.
The wife had argued that she was entitled to her costs and the Full Court of the Family Court upheld that claim. Their Honours found that the matters set out in subsection 117(2)(a) were the only matters which were relevant. And their Honours went on to find that, although the offer made by the wife was not in accordance with section 117C, it came within the terms of the words “or otherwise” in paragraph 117(2A)(f) of the Act and this was the most relevant consideration.
Their Honours went on to hold that it was quite clear that the purpose of paragraph (f) was to ensure that offers to settle if made seriously, are considered seriously to ensure that the cost of litigation is avoided and the workload of the Court lightened. I might comment that their Honours’ words were not dissimilar to similar comments made by their Honours in the Court of Appeal of New South Wales the following year in Maitland Hospital & Fisher.
On the subject of an offer of compromise made by the Child Support Registrar which was the subject of an open letter annexed to an affidavit, the Applicant submitted that the offer of settlement was not a genuine offer. In effect, what was submitted that if the Applicant were to discontinue her proceedings and make representations to the Child Support Registrar about matters that were of some concern and if she were to do that by the particular court date, that the proceedings would come to an end and the Child Support Registrar would not seek costs.
The Applicant submitted that she had made some four offers of settlement which were rejected but in my view that does not sway proceedings in her favour. The Applicant submitted that there had been multiple failures by the Child Support Registrar to comply with directions of the Court including late filing of documents and that that should be taken into account against the making of an order for costs.
I did consider those matters in the substantive decision which was handed down on 19th April 2016 but was not of the view that anything turned on that or that any prejudice had been shown to the Applicant. What was relevant I found were the financial documents which the Applicant tendered. They set out her current income. They set out her current rent and pointed out what her financial circumstances were.
Mr Dean, for the Child Support Registrar, referred to the Applicant’s financial circumstances and pointed out that impecuniosity of the losing party will not necessarily mitigate against a costs order. The making of an offer of settlement is a matter that comes into consideration under subsection 117(2A) of the Family Law Act 1975. He noted that not only had there been an offer of settlement that was rejected but the application had been summarily dismissed. This in his view was a powerful and weighty matter to be considered.
His submission was that nothing that the Applicant had said should persuade the Court not to make a costs order. He also noted that the conduct of the Applicant was entirely unsatisfactory in not filing a written submission. The explanation given by the Applicant in not filing a written submission in response to the order made on 19th April 2016 was that in early May she was involved in proceedings in the District Court of New South Wales and as a result of her involvement with those, noting that she herself was not legally represented, she was unable to prepare written submissions against a costs order within the time prescribed by the order which she calculated to be 10th May 2016.
As was submitted, she did not apply for an extension of time and indeed as the decision on costs was only completed about a week ago, it still would have been possible for a late written submission to have been filed. Even though a submission is filed late and outside the time prescribed by the Court, that does not necessarily mean that such a submission would not be considered. It would at least be arguable. But the Applicant chose not to do that. What she did was to my mind the less satisfactory course which was that she indicated several days before the judgment was to be handed down that she wished to attend Court and make an oral application.
The fact is that costs in proceedings under the Child Support (Assessment) Act 1989 (Cth) and the Child Support (Registration andCollection) Act 1988 (Cth) are dealt with under the provisions of subsection 117(2A) of the Family Law Act and there is a list of matters that the Court needs to consider. Those matters were considered.
The Applicant did not file a submission against the making of an order for costs. When she did, and she only made an oral application at the last moment when the judgment was due to be handed down. In my view there is no basis shown by the Applicant for the Court not to make the costs order that was foreshadowed. And accordingly, I order that the Applicant is to pay the costs of the Respondent child support registrar fixed in the sum of $5,251.50.
It was also my view to make order 2 which was that the Applicant is allowed three months to pay. What I have considered and in fact I raised with the solicitor for the Child Support Registrar, is that an applicant or a party’s financial circumstances are relevant not just in respect of a consideration under subsection 117(2A) as to whether an order for costs should be made but if an order is made for costs that the party’s financial circumstances can be considered in respect of time to pay.
Whilst the order for costs will stand in that judgment and the reasons for decision will be handed down I propose today to make these orders in respect of the oral application. I do propose to allow a greater period of time to pay, and I will discharge the earlier order.
By way of explanation, I will make it clear that in doing so and making what I consider to be an extended and relatively generous time to pay, I have taken into consideration the Applicant’s financial circumstances but I have not taken the view as I have dismissed the application that impecuniosity should of itself be a ground not to make an order for costs.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Date: 30 June 2016
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