Gillen & Lindo (No 4)
[2023] FedCFamC1F 384
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Gillen & Lindo (No 4) [2023] FedCFamC1F 384
File number(s): CAC 2594 of 2019 Judgment of: GILL J Date of judgment: 17 May 2023 Catchwords: FAMILY LAW - COSTS – parenting proceedings – caution before making costs order in contested parenting proceedings – where a party is wholly unsuccessful – where the father placed into contest pivotal factual issues – where those matters were proven against the father – where the father was successful in relation to some factual contests – costs awarded – claim for indemnity costs – insufficient to establish matter as extreme as to justify indemnity costs Legislation: Family Law Act 1975 (Cth) ss - 60B, 60CC, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) - r 12.13
Cases cited: Colgate Palmolive Co and Another v Cussons Pty Ltd
Hawkins & Roe [2012] 47 FamLR 526
I & I (1995) FLC 92-625
In the Marriage of W P J Munday and H J Bowman (1997) 22 Fam LR 321
Kohan & Kohan (1993) FLC 92-340
McDonald & McDonald (1994) FLC 92-508
Quickley & Pelissier [2016] FamCAFC 124
Division: Division 1 First Instance Number of paragraphs: 39 Date of last submission/s: 7 February 2023 Date of hearing: Heard in Chambers Place: Canberra Solicitor for the Applicant: Ms Riley, Parker Coles Curtis Solicitor for the Respondent: Mr Minshall, GA Lawyers Solicitor for the Independent Children's Lawyer: Ms Cruise, Legal Aid, ACT ORDERS
CAC 2594 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GILLEN
Applicant
AND: MS LINDO
Respondent
INDEPENDENT CHILDREN'S LAWYER
order made by:
GILL J
DATE OF ORDER:
17 MAY 2023
THE COURT ORDERS THAT:
1.The father shall pay to the mother costs in relation to the hearing of the proceedings conducted on 12-15 December 2022 as agreed or as assessed.
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 Gillen & Lindo has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
GILL J
Following a contested hearing as to parenting in relation to the parties’ child the mother seeks that the father pay her costs, initially on an indemnity basis, or otherwise on a party-party basis.
The father opposes an order that he pay the mother’s costs.
Material relied upon
The mother relied on her submissions as to costs received 25 January 2023. The father relied on his outline of submissions dated 7 February 2023.
Principles
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out the statutory framework for the exercise of the discretion in respect of costs in relation to proceedings such as these. The starting point is that each party will bear their own costs unless the circumstances justify otherwise, having regard to the considerations identified at s 117(2A).
In Kohan & Kohan (1993) FLC 92-340, the Full Court observed that:
The intent of s 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the court may make such order as the court considers just.
In I & I (1995) FLC 92-625 at 82,277, the Full Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs.” In this case Nicholson CJ, Ellis and Baker JJ diverged from the approach adopted in McDonald & McDonald (1994) FLC 92-508 wherein Mushin J stated that at 81,271
In the first instance it is important to note that the principal proceedings concerned questions of custody. As between parties in the strict sense of that word, it is rare for an order for costs to be made in such proceedings. Circumstances such as a totally unmeritorious case on one side, an attempt to vary a custody order which does not even establish a prima facie case, the withholding of evidence, the giving of false evidence and like matters are common bases for such an order. However, where no factor of this type exists, there would usually need to be a very significant disparity in financial circumstances between the parties before a costs order were made.
In I & I (1995) FLC 92-625, the Full Court instead asserted that while the factors referred to above do contribute to a consideration of whether a costs order is justified in a particular instance, all of the matters articulated by s 117(2A) must be considered and balanced. They stated:
With respect … we see nothing in the provisions of s 117 to justify the approach to the question of costs in custody or any other proceedings suggested by him. The matters to which he referred are matters which, in an appropriate case, would be taken into account in determining whether the circumstances justified the making of an order for costs in a particular case. However, whether such matters exist or not, the other relevant matters referred to in s 117(2A) must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs. The financial circumstances of the parties is but one of those matters and those circumstances must be taken into account whether or not there is a very significant disparity in financial circumstances between the parties.
The father relied upon Hawkins & Roe[1] where the Full Court observed at [14]:
In proceedings involving children’s or parenting matters, the general rule is not often displaced. The rationale for this practice is that in such matters it is proper that parents are able to put their case in seeking orders which they believe to be in the best interests of their children. It hardly needs to be said that the nature of family court litigation in relation to children is quite different to a commercial dispute in the state or federal courts.
[1] Hawkins & Roe [2012] 47 FamLR 526.
Further, the father relied upon the following passage in Hawkins & Roe at [146]:
While in this case the judge expressed adverse findings about the conduct and attitude of the father in his reasons, it is relevant to note that there was no allegation or finding of dishonesty. Nor did his Honour make any adverse findings about the father’s conduct of his case at the trial. Counsel for the mother conceded in oral submissions before us that at no point during the trial did his Honour direct the father to cease repetitive questioning, or to move his questioning more quickly, for example.
Whilst the categories of occasions when costs may be ordered is not limited, the occasions on which such an order should be made in a parenting dispute should have some particular features. Where there is a complete absence of preparedness to compromise in the face of unambiguous expert evidence, where false allegations are made, or where one party is clearly motivated by self interest rather than the best interests of a child, then a judge may well conclude that there are circumstances justifying an order for costs.
The principles to be applied in relation to indemnity costs are neatly set out by the Full Court in Quickley & Pelissier:[2]
We then turn to consider whether costs should be awarded on a party/party or indemnity basis.
In Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 at 256, Sheppard J referred to the “settled practice” that where a court orders one party to pay another party's costs, the order is for costs to be paid on a party/party basis. His Honour also said “there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice” at 257.
In an appropriate case the court has a discretion to order costs on an indemnity basis. An order made in the exercise of that discretion is a very great departure from the normal approach and the circumstances justifying the departure should be of an exceptional kind (Kohan and Kohan (1993) FLC 92-340).
In the recent case of Madin & Palis (Costs) [2016] FamCAFC 25 this Court made reference to the increasing number of applications for indemnity costs and said at [23]:
Finally, we take the opportunity to observe that in so far as the appellant sought an order for indemnity costs, applications for such costs should only be made, and such costs will only be ordered, in the most extreme cases. This is particularly so having regard to the fact that the primary rule in this jurisdiction is that each party should pay their own costs.
[2] Quickley v Pelissier [2016] FamCAFC 124 at [119].
The principles in Colgate Palmolive Co and Another v Cussons Pty Ltd are also usefully discussed in Munday & Bowman.[3] In that judgment, Holden CJ extracted a series of circumstances which have been thought to warrant the exercise of the discretion to award costs on an indemnity basis, being:
(a) Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts: see Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd(1988) 81 ALR 397.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud: see Fountain Selected Meats (Sales) Pty Ltd.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties: see Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (French J, Fed C of A, 3 May 1991, unreported).
(d) The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions: see Ragatta Developments Pty Ltd v Westpac Banking Corporation (Davies J, Fed C of A, 5 March 1993, unreported).
(e) An imprudent refusal of an offer to compromise.
[3] In the Marriage of W P J Munday and H J Bowman (1997) 22 Fam LR 321
It ought, however, to be noted that in citing such examples, Holden CJ was dealing with extremes. For example, in relation to the “no chance of success” example Holden CJ indicated that the conduct was to be such as to allow a finding of “ulterior motive” or “wilful disregard of known facts.” That is, it is not sufficient to reflect that the application had a low chance of success, but rather that the prospective lack of success was so stark as to require the inference that the application was occasioned by an ulterior motive.
Further, in relation to the final example of ‘imprudent refusal[s]’, Holden CJ noted, as did the Full Court in Kohan, that the authorities giving rise to such a category are predominately New South Wales authorities, and are in part “attributable to the amendment of the Supreme Court Rules of that state which provide for indemnity costs where a plaintiff obtains judgment in terms no less favourable than those of an offer to compromise made by him and not accepted by the defendant.”[4] The Rules of this court do not provide in the same manner.
[4] In the Marriage of W P J Munday and H J Bowman (1997) 22 Fam LR 321 at 323.
Where, as here, costs are sought on an indemnity basis, Rule 12.13(4) provides that a party is required to inform the court if the party is bound buy a costs agreement, and, if so, the terms of such.
The circumstances of this case
The circumstances of this case will be examined through the considerations set out at s 117(2A) as identified by the parties in their written submissions.
The financial circumstances of each of the parties to the proceedings
The financial circumstances of the parties were not matters in play during the parenting proceedings. The mother points to the apparent capacity of the father to retain counsel as indicative of financial resources.
In the costs proceedings the father filed a Financial Statement. As pointed out by the mother, the father was not permitted to file such a Financial Statement by the procedural orders dealing with a potential costs claim. Again, as pointed out by the mother, to rely upon such a Financial Statement, the father was required to obtain the leave of the Court. He did not seek to do so, even on the prompting that was offered by the mother’s reply.
Accordingly, the father’s Financial Statement ought not to be taken into account.
This leaves no cogent material upon which to assess either parties’ financial position, although it may be noted that impecuniosity (if such had been established) is no absolute bar to the making of a costs order where other circumstances together render it appropriate.
Whether any party is in receipt of assistance by way of legal aid
Neither party was in receipt of legal aid.
The conduct of the parties to the proceedings in relation to the proceedings
The mother identified one issue in respect of the father’s conduct of the proceedings, being that the mother was put to proof in respect of her allegations of violence, the father contesting such where it was a matter central to the case.
The father contended that he conducted the proceedings as quickly, inexpensively and efficiently as possible.
The father also submits that the mother breached s 121 of the Act. This appears to relate to the mother’s provision of information and material to witnesses or to an associate of the fathers’ previous girlfriend. It is unclear how this matter bears weight on the issue of costs.
Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
No party suggested an issue of non-compliance with orders.
Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The mother contends that the father has been wholly unsuccessful. The father, as applicant, sought orders, in general terms, for equally shared parental responsibility, for the child to live with the mother, and for time with the child transitioning from supervised into unsupervised time.
In general terms the orders provided for the mother to exercise sole parental responsibility, for the child to live with her, and for the father to spend no time with the child. Further, injunctions were made to prevent the father coming into contact with the child.
The father may be taken to have been wholly unsuccessful.
The father however counters that the matter required the testing of the evidence, and that his position aligned with the Independent Children’s Lawyer and found some support in the expert evidence.
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
No offer was made.
Any such other matter as the court considers relevant
The father observes that at no point in the proceedings did the mother pursue indemnity costs.
Further the father observes both that the current claim by the mother ($195,448) exceeds the amount disclosed in her Costs Notice ($183,131) and that the mother has not complied with Rule 12.13 to inform of a costs agreement.
The mother contends that the findings as to family violence against the father, in the context of the objects at s 60B and considerations at s 60CC of the Act mean that the mother should not face the financial burden of legal proceedings where such have been put into issue. Further the mother submits that the “Court ought demonstrate its disapproval of domestic violence by protecting victims from the burden of having costs incurred to ensure their child’s protection, and their protection, from domestic violence.” Authority was not cited in support of this proposition.
DISCUSSION
The first key question is whether the circumstances of the case mean that the starting point of each party bearing their own costs should be departed from.
The father having been wholly unsuccessful points toward an award for costs against him. That lack of success, however, occurred in a broader context that the mother was successful in relation to establishing some contested factual matters, established some matters sufficiently to point to risk, and being unable to establish other matters. Whilst criticism of the father was in part directed to his putting the mother to proof in relation to her family violence allegations, in some of these matters he successfully resisted the findings pursued by the mother.
It is also a lack of success that occurs in parenting proceedings where there was a genuine contest as to whether there should be no time spent with the father or time transitioning to unsupervised time. Bearing in mind what was said in Hawkins & Roe, care should be exercised prior to awarding costs in parenting proceedings, noting the desirability of parents being able to put their case in pursuit of orders that they contend are in the best interests of their child.
However, here that lack of success accompanies the father’s unsuccessful contest of the pivotal factual issue, being the assault of the mother, as supported by the assault of his previous partners, each found to have occurred contrary to the father’s evidence on the incidents. By his manner of conduct of the hearing, the father placed in contest and positively denied a pivotal factual component that was proven against him.
When considered against the background of the other considerations, those matters are sufficient to warrant departure from the starting point that each party bear his or her own costs.
The second key issue is the basis on which the costs should be paid. The circumstances are not, however, such that fall into the description of extreme that is necessary to justify an order for indemnity costs. Each party unsuccessfully pursued factual conclusions from the court, and whilst the father was unsuccessful in his case and in his pursuit of findings in relation to a pivotal factual matter, this is not here sufficient to warrant indemnity costs as opposed to costs in the usual form.
CONCLUSION
Orders will be made for the father to pay costs as agreed or as assessed.
I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill. Associate:
Dated: 17 May 2023
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