Gade and Jabbar (No.23)

[2019] FCCA 2500

FEDERAL CIRCUIT COURT OF AUSTRALIA

GADE & JABBAR (No.23) [2019] FCCA 2500

Catchwords:
FAMILY LAW – COSTS – Application for Costs arising out of a summary dismissal and vexatious litigant application.

Legislation:

Family Law Act 1975, s.117

Federal Circuit Court Rules r.21

Cases cited:

Colgate-Palmolive v Cussons Pty Ltd (1993) 46FCR 225

Gade & Jabbar (No.12) [2018] FCCA 1655
Tsekouras v Olsen; Olsen v Tsekouras [2007] NSWSC 556

Applicant: MR GADE

Respondent: MS JABBAR

File Number:	NCC 2265 of 2015
Judgment of:	Judge Terry

Hearing date: 4 September 2019

Date of Last Submission: 4 September 2019

Delivered at: Newcastle

Delivered on: 5 September 2019

REPRESENTATION

Counsel for the Applicant: Mr Weightman

Solicitors for the Applicant: NLS Law

The Respondent: In person

ORDERS

1. Ms Jabbar shall pay Mr Gade’s costs of and incidental to his application for summary dismissal of her initiating application filed on 7 May 2019 and his application for a s.102QB order together with costs of and incidental to finalising the costs application fixed in the sum of $7,794.50.

2. Such costs are charged against and are to be deducted from any proceeds due to Ms Jabbar pursuant to Order 8 of the orders made on 11 May 2018.

IT IS NOTED that publication of this judgment under the pseudonym Gade & Jabbar (No.23) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT NEWCASTLE

NCC 2265 of 2015

MR GADE

Applicant

And

MS JABBAR

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 6 August 2019 I heard an application by Mr Gade (“the father”) for:

   i)Summary dismissal of an application for parenting orders filed by Ms Jabbar (“the mother”) on 7 May 2019.

   ii)An order pursuant to s.102QB of the Family Law Act prohibiting the mother from instituting proceedings under the Family Law Act in a court having jurisdiction under that Act.

2. The father’s applications were contained in a Response filed on 21 June 2019.

3. On 16 August 2019 I handed down a decision and made orders that the mother’s application be dismissed and that an s.102QB order be made.

4. In his Response the father sought an order that the mother pay his costs on an indemnity basis. The costs issue was not argued on 6 August 2019 and on 16 August 2019 I made an order adjourning further consideration of the costs application to 4 September 2019.

5. The mother and the father’s counsel attended court on 4 September 2019 and the father’s counsel handed me an affidavit by the father attaching:

   i)Copies of his costs agreements with his counsel Mr Bithrey, his counsel Mr Weightman and his solicitors.

   ii)A summary of his total costs in relation to the proceedings including the costs of pursuing an order for costs and copies of the invoices underpinning that summary.

   iii)A schedule of the costs which would be payable if costs were calculated in accordance with Schedule 3 of the Family Law Rules.

6. The father’s counsel informed me that his solicitor had attempted to file the affidavit in the Registry the previous day but had been told that an order had been made that no further documents could be filed. This was an error on the Registry’s part and I therefore received the affidavit for filing in court.

7. I was informed that after the affidavit was rejected for filing the father’s solicitor forwarded it to the mother by email. The mother acknowledged that she had received it.

8. The father sought costs on an indemnity basis in the sum of $15,260.30. In the alternative he sought costs in accordance with Schedule 3 of the Family Law Rules fixed in the sum of $9,728.31.

9. These proceedings are in the Federal Circuit Court not the Family Court and while I could in theory have regard to Schedule 3 in the Family Law Rules I have never done it or been asked to do it and I am at a loss to understand why the father’s solicitors did not consider the applicability of Schedule 1 of the Federal Circuit Court Rules.

10. After I received the father’s affidavit the mother said that she sought an adjournment so that she could prepare a response to the costs application. The father’s counsel opposed an adjournment being granted and I refused to adjourn the matter. I gave reasons and should I be requested to do so in the future I will settle my reasons for refusing the adjournment.

11. I then heard submissions from the father’s counsel and the mother.

The submissions by the father’s counsel

1. The father’s counsel submitted that I should be satisfied that there were circumstances which justified a costs order.

2. Referring to the matters in s.117(2A) which pertained to the case he acknowledged that the mother’s financial circumstances were poor although in a supplementary submission he pointed out that the father was not seeking an immediate payment but was proposing that the costs be paid from the mother’s entitlement to a payment from the father pursuant to property settlement orders made on 11 May 2018.

3. He also submitted that the mother’s poor financial circumstances did not mean that a costs order could not be made against her.

4. He said that the court should have regard to the mother’s conduct in issuing subpoenas which the court determined were not relevant and to the fact that the mother had pressed to listen to the audio recording of court proceedings on 24 June 2016 which was also not relevant.

5. He also relied on the fact that the mother had been wholly unsuccessful in the proceedings.

6. He submitted that the court should order indemnity costs and referred me to Colgate-Palmolive v Cussons Pty Ltd[1]. He submitted that the category of cases in which indemnity costs should be awarded is never closed but submitted that the mother’s application for parenting orders was clearly the type of case which might attract such an order because it had no reasonable prospects of success.

   [1]Colgate-Palmolive v Cussons Pty Ltd (1993) 46FCR 225

7. The father’s counsel acknowledged that there were two parts to the matter which I heard on 6 August 2019, one being the father’s application for summary dismissal of the mother’s parenting application and the other being the father’s application for a s.102QB order. He appeared to acknowledge that different considerations might apply to both, either when it came to considering whether costs should be awarded at all or alternatively when it came to considering whether indemnity costs should be ordered.

8. The father’s counsel submitted however that the matters were heard together and the court should treat them as one and award indemnity costs in relation to both.

9. In support of this submission he asked me to have regard to Tsekouras v Olsen; Olsen v Tsekouras,[2] a NSW Supreme Court decision of Justice Olsen. As part of one decision Justice Olsen dismissed an application by a party and made a vexatious litigant order and then ordered that the defendant (the party deemed a vexatious litigant) pay the plaintiff’s costs on an indemnity basis.

   [2] Tsekouras v Olsen; Olsen v Tsekouras [2007] NSWSC 556

10. That decision does not assist me. There is nothing in Justice Olsen’s judgment to suggest that the issue of costs was argued before him and the issue of whether costs should be awarded and if so on what basis is not discussed in the decision; a costs order is simply made at the end.

The mother’s submissions

1. The mother opposed a costs order being made. She submitted that she her employment had been terminated and that her financial circumstances were poor.

2. The mother asked me to have regard to my reasons for decision in respect of an application for costs by the Independent Children’s Lawyer following the final hearing of the matter. I dismissed the Independent Children’s Lawyers application.[3]

   [3] Gade & Jabbar (No.12) [2018] FCCA 1655

3. The mother did not explain why she considered that decision relevant.

Whether costs should be ordered

1. S.117 (1) of the Family Law Act provides (subject to a reference to some sections of the Act which are not relevant here) that each party to proceedings shall bear their own costs.

2. S.117(2) provides however that the court can make an order for costs if the circumstances of the case justify it doing so and s.117 (2A) sets out the matters to which the court must have regard in order to determine whether costs should be ordered.

3. Some of the matters in s.117(2A) are not relevant here. The parties are not in receipt of legal aid, the proceedings were not necessitated by the failure of a party to comply with previous orders and there were no offers of settlement.

4. I must consider the parties financial circumstances. I have no current evidence about their income but the father is a health care worker who at an earlier stage in the proceedings was earning over $300,000.00 per annum and the mother has never disclosed an income above the $20,000.00 to $30,000.00 range. I have no reason to believe that anything has changed in regard to their incomes and in terms of income the mother is in a poor financial position

5. Pursuant to property settlement orders made on 11 May 2018 the mother is entitled to about $80,000.00 from the father when ownership of two real properties is transferred to him. However the mother is already required to meet some costs orders from this entitlement and it is already likely that she will receive considerably less than $80,000.00.

6. The father’s counsel submitted that I should take the mother’s conduct at the hearing in seeking to inspect certain subpoenas and in asking to listen to the audio of a hearing on 24 June 2016 in order to check the accuracy of the transcript into account.

7. The latter request was completely irrelevant to the applications before me on 6 August 2019 and the subpoenas were also of questionable relevance and I referred to that in my judgment.

8. However discussion of these issues took up only a tiny amount of time on 6 August 2019 and I am not satisfied that there are any relevant conduct issues.

9. The mother was however wholly unsuccessful in relation to both applications.

10. Having regard to the s.117(2A) matters I am comfortably satisfied that a costs order should be made in respect of the parenting application. It had no reasonable prospects of success and there is strength in the submission by the father’s counsel that the mother should not have brought it.

11. The mother is in a poor financial situation but this is not the first time or even the fifth or sixth time when the mother has brought a parenting application without having any reasonable prospects of success. Costs have been awarded against her before and this should have given her pause before she filed another application. She did so at her peril and I intend to order that she pay the father’s costs of and incidental to the summary dismissal application.

12. The fact that the mother filed the parenting application prompted the father to bring the s.102QB application but I have carefully reflected on whether that application should be treated separately and whether each party should bear their own costs of and incidental to that application.

13. There is a good reason why the default position under the Family Law Act is that each party bears their own costs. In family law matters a party may be unsuccessful in whole or in part because their arguments are not accepted and a judge in the exercise of their discretion makes a different order but it does not necessarily follow that the losing party did not have a valid argument.

14. It would also not be in the best interests of children if a party was afraid to put forward a reasonable argument for fear that a costs order would automatically following if they were unsuccessful.

15. It could be argued that it was perfectly natural for the mother to oppose the s.102QB application, indeed how could she be expected to have consented to it, and that she should not be punished by a costs order because she was unsuccessful.

16. This may be the reason why the mother referred me to Gade & Jabbar (No. 12). One of the matters I took into account in that decision was that it was not unreasonable for the mother to oppose the father’s application for parenting orders at the final hearing given the extreme nature of the orders he sought.

17. However after careful reflection I am of the view that to focus on whether the mother could have been expected to consent to the s.102QB order is to look at the matter too narrowly.

18. The mother and father have been involved in litigation in this court for nearly four years. The mother has frequently filed vexatious applications. The parenting application she filed on 7 May 2019, the second parenting application she had filed since final orders were made on 11 May 2018, had no reasonable prospects of success. By filing that application she called the s.102QB application down on her own head. The s.102QB application was entirely meritorious and in my view that mother should also pay the father’s costs of and incidental to that application.

19. The father may have a high income but he is financially responsible for the children and it is not reasonable for him to be continually required to meet large legal bills because the mother will not cease bringing applications which have no reasonable prospects of success.

20. I accept that it will be hard on the mother to have yet another amount carved out of her property settlement entitlement but every time she has filed proceedings she has had a choice about whether to do so and I am not prepared to protect her from the results of her choices simply because she is in a weaker financial position.

The basis on which costs should be ordered

1. Rule 21.10 of the Federal Circuit Court Rules provides that unless the court otherwise orders, a party entitled to costs is entitled to costs in accordance with Parts 1 & 2 of Schedule 1 of the Rules and disbursements properly incurred.

2. Rule 21.02 provides that if costs are ordered the court may set the amount of the costs, set the method by which costs are to be calculated or refer the costs for taxation.

3. The father sought indemnity costs and I have the power to order costs on an indemnity basis if I choose to do so.

4. Indemnity costs are not commonly awarded because the result of such an order is that an unsuccessful party is required to accept every spending choice made by the other party including their choice of the hourly rate to be paid and their choice about the amount of work to be done.

5. However an order for costs in accordance with a scale or schedule almost inevitably leaves the successful party out of pocket, sometimes for as much as a third of their costs, and in Colgate-Palmolive v Cussons Pty Ltd the court said that there were situations in which indemnity costs might be considered so that this did not occur.

6. The court said that situations where indemnity costs might be ordered included where a party had:

   i)Commenced or continued an action knowing it to have no chance of success.

   ii)Made false or irrelevant allegations of fraud.

   iii)Made groundless allegations which prolong a case.

   iv)Made allegations which should never have been made or caused the undue prolongation of a case while making groundless contentions.

   v)Imprudently refused an offer to compromise.

7. There would be some justification for ordering indemnity costs in this matter. The mother’s parenting application had no reasonable prospects of success and the s.102QB application flowed naturally from the mother filing that application and that the costs incurred in respect of that were part and parcel of the mother filing an application which had no reasonable prospects of success.

8. I am however very mindful of the disparity between the parties’ income earning capacities and of the fact that I have now made a s.102QB order.

9. If I had only made an order dismissing the mother’s initiating application I might have been minded to order indemnity costs to drive home to the mother how much it was going to cost her if she kept filing such applications. However because of the s.102QB order she cannot cause the father any further unnecessary cost and although it will leave the father out of pocket I intend to order that the mother pay costs in accordance with the Federal Circuit Court scale.

10. Meaning no disrespect to the father’s counsel I am also a little disquieted about the father’s choice to pay his lawyers $2,640.00 to deal with a relatively straightforward costs application.

11. Using Schedule 1 of the Federal Circuit Court Rules to fix the costs I intend to order that the mother pay the father’s costs in the sum of $7,794.50 being the filing fee for the Response to the Initiating Application ($345.00), Item 1 ($2,704.00 plus $294.00), Item 13 for the first mention of the matter ($294.00) Item 3 for the hearing on 6 August 2019 ($1,801.00 plus half day daily hearing fee of $1,081.00 plus advocacy loading of $540.50), Item 13 for attending to receive the decision ($294.00) and Item 13 plus an advocacy loading for 4 September 2019 ($294.00 plus $147.00).

12. I am conscious of the fact that Schedule 1 is an imperfect tool and that it may seem to the father that some of the work done by his lawyers, such as the preparation of his affidavit filed on 4 September 2019, is not being recognised but I am satisfied that a costs order in this amount is appropriate in all the circumstances of the case.

I certify that the preceding fifty six (56) paragraphs are a true copy of the reasons for judgment of Judge Terry.

Date:         5 September 2019