Gosai & Gosai (No 2)
[2022] FedCFamC1F 969
•9 December 2022
Federal Circuit and Family Court of Australia
(DIVISION 1)
Gosai & Gosai (No 2) [2022] FedCFamC1F 969
File number: SYC 5366 of 2018 Judgment of: HENDERSON J Date of judgment: 9 December 2022 Catchwords: FAMILY LAW – COSTS – Circumstances justifying order – Where the mother sought costs against the father on an indemnity basis – Where the original position of the father was doomed to fail – Where the mother made three offers to settle substantially in accordance with the final orders made – Where the father significantly amended his position during the proceedings – Where the father was wholly unsuccessful – Where the mother was entirely successful – Finding that the father is to pay the costs of the mother on an indemnity basis – Quantum of costs – Where the mother only provided evidence of quantum of costs relating to costs incurred after she entered into a capped pro bono costs agreement – Finding that in light of the evidence costs can only be ordered in relation to costs incurred in excess of the pro bono cap – Order made for any further costs sought to be assessed by a registrar. Legislation: Family Law Act 1975 (Cth) s 117(1), (2), (2A)(a), (b), (c), (e), (f), (g).
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 12.13(4), 12.17(1)(a).
Cases cited: Calderbank & Calderbank [1975] 3 All ER 333.
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801.
Gosai & Gosai (2020) 61 Fam LR 25; [2020] FamCAFC 176.
Gosai & Gosai [2022] FedCFamC1F 872.
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116.
Lenova & Lenova (2011) FLC 93-467; [2011] FamCAFC 141.
Limousin & Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCA 1178.
Munday & Bowman (1997) FLC 92-784.
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4.
Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28.
Rankin & Rankin (No 3) [2019] FamCAFC 133.
Sfakianakis & Sfakianakis (2019) 59 Fam LR 419; [2019] FamCAFC 54.
Smith & Fields (third party costs) [2013] FamCA 505.
Worth & Worth (No 2) (2019) FLC 93-910; [2019] FamCAFC 126.
Division: Division 1 First Instance Number of paragraphs: 60 Date of last submissions: 5 December 2022 Date of hearing: On the papers Place: Sydney – in Chambers Counsel for the Applicant: Mr Bennett Solicitor for the Applicant: Coleman Greig Lawyers The Respondent: Litigant in person ORDERS
SYC 5366 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GOSAI
Applicant
AND: MR GOSAI
Respondent
order made by:
HENDERSON J
DATE OF ORDER:
9 December 2022
THE COURT ORDERS THAT:
1.The father is to pay the mother’s costs, in the sum of $15,331, on an indemnity basis, within two months of the date of these orders.
2.The remainder of the costs claimed by the mother are to be assessed by a registrar of the Court.
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 Gosai & Gosai has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HENDERSON J
I heard the matter of Gosai on 20 September 2022 and delivered ex tempore Reasons in respect of final parenting orders relating to the youngest child of the marriage, Y (“Y”), born 2006. At the hearing, Y was nearly 16 years old. There is another child of the marriage, X (“X”), born 2004, who was over 18 years old at the hearing. Those Reasons were settled and provided to the parties on 9 November 2022.[1]
[1] Gosai & Gosai [2022] FedCFamC1F 872.
The orders made on 20 September 2022 were largely by consent, given the father’s initial position had changed and was largely aligned with the mother’s position at the time of the hearing. I was required to make a determination on discrete and narrow issues.
The consent orders provided that the mother have sole parental responsibility for Y, that Y live with the mother, spend time with the father in accordance with her wishes, and that the mother be able to apply for a new passport for the child without the father’s consent.
The father sought orders that he be notified of all instances of self-harm regarding Y, be able to speak to her therapist regarding her treatment, and that the mother provide the passport number of Y’s New Zealand passport, once received, to him. The father agreed to an order that the mother be permitted to take the child outside the Commonwealth of Australia, but only on an interim basis.
The mother sought orders for a personal protection injunction pursuant to section 68B of the Family Law Act 1975 (Cth) (“the Act”) for herself and the child and that she be permitted to take or send Y outside the Commonwealth of Australia without the father’s consent on any occasion. The mother did not agree with the father’s orders as sought.
After hearing the parties’ submissions, I dismissed the father’s application and the orders sought, and made all the orders sought by the mother. An oral application was made by counsel for the mother for costs.
Orders 4 and 5 of orders made on 20 September 2022 directed the parties to file written submissions of no more than two pages on the question of costs. I note that the mother’s initial written submissions were provided on time and father did not provide submissions by 1 November 2022.
I sought further submissions from the mother on the quantum of costs sought and the mother provided her additional material on 5 December 2022, with the father’s submissions being received on 3 December 2022.
These Reasons for Judgment are in relation to the costs sought by the mother against the father on an indemnity basis, amounting to $115,887 for the proceedings, including costs incurred under a costs agreement dated 19 October 2021. This is the only costs agreement and supporting documentation I have been provided and supports a costs order of $15,331, being the costs incurred in preparing for the final hearing over and above the pro bono costs allowed by the solicitors, as set out in the costs agreement dated 19 October 2021.
Rule 12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) is as follows:
12.13 Order for costs
(1) The court may make an order for costs on its own initiative.
(2) A party may apply for an order that another person pay costs.
(3) An application for costs may be made:
(a) at any stage during a proceeding; or
(b)by filing an Application in a Proceeding within 28 days after the final order is made.
(4)A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement or costs agreements in relation to those costs and, if so, the terms of the costs agreement or costs agreements.
(5)In making an order for costs in a proceeding, the court may set a time for payment of the costs, which may be before the proceeding is concluded.
The mother has complied with rule 12.13(4) of the Rules and has informed the Court she is bound by a costs agreement dated 19 October 2021 and thus an indemnity costs order can be applied for costs arising out of that agreement in the amount of $15,331, being counsel’s fees of $9,900 for the final hearing and legal costs of $5,431 incurred over the $35,000 pro bono limit. In relation to all the costs claimed of $115,877, which include the costs incurred under the 19 October 2021 agreement as set out above, I have no costs agreement and no supporting evidence. The only evidence to support this claim is set out in her Costs Notice filed 19 September 2022.
I relied on the following documents:
(1)For the mother:
(a)Written submissions provided on 4 October 2022, which had three offers of settlement annexed dated 11 October 2021, 2 March 2022, and 8 August 2022;
(b)Additional submissions received 5 December 2022, with a covering letter and various annexures; and
(c)Costs Notice filed on 19 September 2022.
(2)For the father:
(a)Written submission received 3 December 2002 with annexures.
(3)The Child Inclusive Conference (“CIC”) Memorandum prepared by Family Consultant (as they were then called) E dated 1 September 2021.
THE LAW
For any proceedings commenced under the Act, the presumed position is that each party is to bear their own costs,[2] unless there are circumstances that would justify the Court making an order for costs.[3]
[2] Family Law Act 1975 (Cth) s 117(1).
[3] Family Law Act 1975 (Cth) s 117(2).
The relevant matters for costs application are contained under section 117 of the Act:
117 Costs
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(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), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(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.
Rule 12.17(1)(a) of the Rules permits the Court to order costs in a specific amount and this is an order I will make in the event I determine not to order the father pay the mother’s costs on an indemnity basis for the following.
There is much force in the argument that a judge should assess costs to be awarded if there is sufficient evidence provided to enable the judge to do so, for if not, there will be further costs incurred in pursuing a costs order that is not quantified and that is an unacceptable outcome. It is an imperative to minimise costs for all parties in litigation.[4]
[4] Rankin & Rankin (No 3) [2019] FamCAFC 133 at [19] (Strickland, Kent and Austin JJ) (“Rankin”).
The Full Court of the Family Court of Australia (as it was then known) in Rankin further stated:
[A] court is not obliged to, nor should it attempt, something akin to a taxation of costs undertaken by an assessor”. [5]
[5] Rankin & Rankin (No 3) [2019] FamCAFC 133 at [23].
Only where the parties have provided sufficient particulars of the costs claimed, and there has been a sufficient challenge to the costs claimed, would the Court been a position to assess the costs.
I must first determine whether I would exercise my discretion to make an order for costs pursuant to section 117(2) of the Act. If I determine that I should exercise that discretion, I must then determine the costs to be paid.
The power to award costs involves a wide exercise of discretion and the breadth of that discretion is not limited.[6] The Court need not be satisfied that all the factors under section 117(2A) of the Act are present before making a costs order, rather the Court is required to find a justifying circumstance or circumstances as an essential preliminary step before making any costs Order. I will exercise my discretion to order costs be paid for the following reasons.
[6] Penfold v Penfold [1980] HCA 4.
(a) The financial circumstances of each of the parties to the proceedings
In her affidavit for the hearing, the mother briefly deposes that she works full time and she and the children live with her parents and that she has no other assets of significance.
The mother pays all expenses for the children and has no other assets. The father does not pay child support directly, instead he pays money into a Country G bank account which she cannot access in Australia and requires the assistance of relatives when travelling to Country G to withdraw the money. Between December 2016 and December 2020, the sum of $21,054 has been deposited for the children, being approximately $5,250 per annum. No payment has been received by the mother since December 2020.
The mother deposes that she is required to take time off work to attend to various appointments for X and Y arising out of their father’s violent treatment of them directly and towards her in their presence.
The father’s case is his taxable income last financial year was the equivalent of AUD $28,751.72,[7] and this year will be the equivalent of AUD $26,921.08 in Country G currency.[8] The father filed no documents in support of this assertion.
[7] As at 9 December 2022, this amount is AUD $28,751.72.
[8] As at 8 December 2022, this amount is AUD $26,921.08.
The mother deposes that the father is “wealthy” and owns “several [businesses] in [Country G]”. Whatever the fact, impecuniosity is not a sufficient reason from preventing a court from making a costs order against a party.[9]
(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
[9] Lenova & Lenova [2011] FamCAFC 141 at [12] (Murphy J).
The father was represented at the hearing by legal representation appointed via the Legal Aid Commission of New South Wales pursuant to section 102NA of the Act and the order was made on 8 June 2022.
The mother was privately represented by her instructing solicitors and counsel and has paid legal fees of $15,331, as the excess of the $35,000 pro bono allowance, paid from her income. There is no way to determine the sum paid by the mother to her lawyers prior to the 19 October 2021 costs agreement due to the paucity of evidence to support this claim including a costs agreement.
(c) The conduct of the parties to the proceedings in relation to the proceedings
The mother left Country G with the children and came to Australia in 2017.
On 23 August 2018, the father filed an Initiating Application for X and Y to return to Country G and live with him.
The father was initially successful in his application for the children to return to Country G. The mother appealed and the primary judge’s decision was overturned on 23 July 2020.[10] The mother and children have remained in Australia since that time.
[10] Gosai & Gosai [2020] FamCAFC 176.
In his written submissions, counsel for the mother highlighted significant aspects of the CIC Memorandum dated 1 September 2021:
This preliminary assessment indicated that the proceedings are having a serious negative impact on the mental health of [Y]. If proceedings continue to trial, [Y] is likely to suffer further psychological difficulties of escalated depression, anxiety, self-harm behaviours and further hospital admissions to treat her mental health. …
…
This assessment does not support that a Family Report is ordered because this is unlikely to be of a benefit to the Court, as well as possibly being an emotionally harmful and traumatic experience for [Y], which is considered not in her best interest.
(Bold emphasis added)
And further in the CIC Memorandum:
[Mr Gosai] is strongly encouraged to revise his Application regarding the children, as the priority for the [Y], would be support for her mental health and overall functioning.
On 25 February 2022, in addition to dismissing an Application in a Proceeding filed by the father, a Senior Judicial Registrar of the Court made a notation as follows:
B.The Court and Mother urges the Father to reconsider his current application before the Court which is for the children to return to [Country G] to live with him.
No such change to the father’s position occurred until the Further Amended Initiating Application on 28 July 2022.
The father was the applicant in the substantive proceedings and has filed multiple interim applications, all of which have been unsuccessful. For example, on 13 December 2021, he filed an Application in a Proceeding seeking that:
(1)The proceedings be heard expeditiously;
(2)X have a “court appointed psychiatric [sic]” (noting that at this point, X was 17 years old); and
(3)An Independent Children’s Lawyer be appointed.
This Application in a Proceeding was dismissed on 25 February 2022. I note this Application in a Proceeding was filed well after the release of the CIC Memorandum.
The father’s conduct caused the mother significant financial hardship in responding to his unmeritorious and ultimately unsuccessful interim applications. The father’s conduct is but a further example of his bullying and coercive behaviour towards the mother and children, as she has described and confirmed by Y to the Family Consultant.
(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
This factor is not applicable in this matter.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The father was wholly unsuccessful in every application he filed after the successful appeal by the mother on 23 July 2020.
The mother was entirely successful in obtaining all the orders she sought in her Response at the final hearing.
(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
The mother provided three offers of settlement, with one offer stated to be a Calderbank offer.[11] These offers are dated 11 October 2021, 2 March 2022 (the Calderbank offer), and 8 August 2022. In essence, all three offers mirrored orders made on 20 September 2022, with only some minor additions, omissions, or mechanical differences.
[11] Calderbank & Calderbank [1975] 3 All ER 333.
The last offer dated 8 August 2022 contained the following:
My client is concerned about disclosures made by [Y] since the listing of this matter for trial. I am advised that [Y] has informed both my client and [Dr K] that if an order is made as sought by you she will:
•Stop attending school; and
•Not engage in therapy anymore.
(As per the original)
The father was aware, at least one and a half months prior to the hearing, the orders he sought would impact Y to the effect that she would cease engaging in therapy and had threatened to not attend school.
(g) Any other matter as the Court considers relevant
The father was aware from September 2021, when the CIC Memorandum was released, the views of Y vis-à-vis him and the dire consequences for her if any orders were made for communication with him, time with him or that he had any capacity to know what was happening in her life.
In these circumstances, it is proper I exercise my discretion to depart from the legislated initial position that both parties bear their own costs and I will now proceed to determine the quantum of costs to be awarded to the mother.
The law on indemnity costs
At the outset, indemnity costs are only ordered in exception circumstances, as the mother acknowledged in her written submissions, citing Limousin & Limousin (Costs).[12]
[12] [2007] FamCA 1178 at [41] (Kay, Coleman and Boland JJ), citing Kohan & Kohan (1993) FLC 92-340 at 79,614 (Strauss, Lindenmayer and Bulley JJ).
I am permitted to make an order for a party to pay a specific amount,[13] as such an approach is to avoid expense, delay, and aggravation that arises out of protracted litigation caused by taxation.[14] I am cognisant that a court should not attempt “something akin to a taxation of costs undertaken by an assessor”.[15]
[13] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 12.17(1)(a).
[14] Rankin & Rankin (No 3) [2019] FamCAFC 133 at [19].
[15] Rankin & Rankin (No 3) [2019] FamCAFC 133 at [23].
There is voluminous authority from the Full Court of the Family Court and in other jurisdictions in relation to costs and in particular, in relation to indemnity costs. Decisions such as Kohan & Kohan (“Kohan”)[16] are still good authority in relation to the Court's discretion to award indemnity costs and the factors which may weigh upon a judge's exercise of the discretion to so do.
[16] (1993) FLC 92-340.
Four recent decisions of Phillips & Hansford (“Phillips”),[17] Rankin, Worth & Worth (No 2) (“Worth (No 2)”),[18] and Sfakianakis & Sfakianakis (“Sfakianakis”),[19] all deal with the broad discretion of the Court in relation to costs applications. The power is to award costs on an indemnity basis, solicitor/client basis, party/party basis, scale costs, costs as assessed by the Court or a taxation by a registrar. As always in family law proceedings, each case turns on its particular and unique facts.
[17] [2020] FamCAFC 28.
[18] [2019] FamCAFC 126.
[19] [2019] FamCAFC 54.
The father imprudently failed to accept any of the three offers of settlement made by the mother after the release of the CIC Memorandum in September 2021. The father only amended his Initiating Application – that the children return to Country G – six weeks prior to the hearing. The father consented to a raft of orders on the day of the hearing, despite having had ample opportunity to do so previously, given the orders agreed were in substance contained in each of the three offers of settlement, thus saving the mother the costs of preparing for a contested trial.
Indemnity costs are only ordered in exceptional circumstances. The matters of Kohan and Smith & Fields (third party costs),[20] are both authority for this proposition. The category of cases in which indemnity costs may be awarded are not closed. Costs on this basis have been ordered in matters where an application is pursued with wilful disregard of known facts or clearly established law, where there has been an imprudent refusal of an offer to compromise.[21]
[20] [2013] FamCA 505.
[21] Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 801.
In relation to pursuing an application with wilful disregard to known facts or clearly established law, the decisions of Phillips, Rankin, and Sfakianakis reiterate that indemnity costs may be awarded where the applicant, properly advised, should have known they had no chance of success and where a party persists in what should, on a proper consideration, be seen to be a hopeless case.
The father’s case for the children to return to Country G was hopeless and bound to fail at the outset, particularly given their ages and expressed views. The father’s continuation of his Initiating Application for Y was particularly egregious after the release of the CIC Memorandum in September 2021, given the clear consequences on her functioning and mental health by the continuation of the litigation.
In Worth (No 2), the Full Court of the Family Court of Australia quoted from Holden CJ’s decision in Munday v Bowman (1997),[22] where the Court drew the following principles relevant to costs:
[22] (1997) FLC 92-784.
9 …
(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.
…
(e) An imprudent refusal of an offer to compromise.
(Citations omitted)[23]
(As per the original)
[23] Worth & Worth (No 2) [2019] FamCAFC 126 at [9] (Strickland, Kent and Hogan JJ).
The father imprudently refused the mother’s offers of settlement and pursued an application which had no prospects of success and was causing harm to Y.
In these circumstances, I find this is one of those exceptional cases and that it is proper I order indemnity costs in the amount of $15,331 to be paid by the father to the mother, being the costs incurred by her in excess of the pro bono cap of $35,000 in the costs agreement of 19 October 2021.
The remaining costs sought by the mother have caused me some difficulty. I am unable to precisely quantify what the remaining costs sought are, given the paucity of evidence to support the claim. I have no costs agreement, no invoices, no receipts for payment, no letter of explanation. The solicitors’ letter to the Court of 5 December 2022 is at odds with the Costs Notice of 19 September 2022.
The Costs Notice says the costs incurred (at 19 September 2022) are $115,877.03 being $75,703.93 incurred prior to accepting the matter on a restricted pro bono basis, $33,545.60 pro bono costs and an additional sum of $6,627.50 for costs not yet charged. The solicitors’ letter of 5 December 2022 repeats the claim for $115,877.03 in total and that costs have been incurred over and above the $35,000 pro bono fees totalling $15,331.
As much as I may wish to make a further order for costs, as I accept the mother has incurred costs due to the father’s conduct, I cannot do so on any basis given the paucity of necessary evidence. As the Full Court of the Family Court of Australia said in Rankin:
[A] court is not obliged to, nor should it attempt, something akin to a taxation of costs undertaken by an assessor”.[24]
[24] Rankin & Rankin (No 3) [2019] FamCAFC 133 at [23].
I reiterate the position regarding the circumstances that would allow the Court to be in a position to assess the costs.[25] I am not in that position.
[25] See above [18].
However, I will order that the remaining costs claimed by the mother are to be assessed by a registrar of the Court, that unfortunately being the only option available to the Court.
CONCLUSION
I will make an order that the father to pay the mother’s costs on an indemnity basis in the sum of $15,331 within two months of the date of these Reasons for Judgment.
The remainder of the costs claimed by the mother are to be assessed by a registrar of the Court.
I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson. Associate:
Dated: 9 December 2022
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