Gulek & Sidu (No 2)
[2024] FedCFamC2F 1192
•29 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Gulek & Sidu (No 2) [2024] FedCFamC2F 1192
File number(s): SYC 2542 of 2024 Judgment of: JUDGE MURDOCH Date of judgment: 29 August 2024 Catchwords:
FAMILY LAW – COSTS – Application for the father to pay the mother’s costs of an Application for Review – where the father achieved a less desired result at the Review Hearing than before the Senior Judicial Registrar- Whilst any hearing of a review application is to be heard as an original hearing parties should still carefully consider the merits of a review of a Registrar’s decision in circumstances where parties are at risk of costs in the event their review application is unsuccessful – orders for costs made.
Legislation: Family Law Act 1975 (Cth) s 117(1),(2),(2A)
Federal Circuit and Family Court of Australia Act 2021 ss 190(1),(2) and 191
Federal Circuit and Family Court of Australia (Family Law) Rules2021 rr 1.04, 12.12(4), 12.17
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules2021 (Cth) Schedule 1
Cases cited: Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225
Kohan & Kohan (1993) FLC 92-340
Lenova & Lenova (Costs) [2011] FamCAFC 141
Munday & Bowman (1997) FLC 92-784
Northern Territory v Sangare (2019) 265 CLR 164
Penfold & Penfold (1980) FLC 90-800; [1980] HCA 4
Phillips & Hansford [2020] FamCAFC 28
Yunghanns & Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: Division 2 Family Law Number of paragraphs: 49 Date of last submission/s: 5 August 2024 Date of hearing: 29 August 2024 Place: Sydney Solicitor for the Applicant: A&E Lawyers Solicitor for the Respondent: Buckley Lawyers ORDERS
SYC 2542 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS GULEK
Applicant
AND: MR SIDU
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
JUDGE MURDOCH
DATE OF ORDER:
29 AUGUST 2024
THE COURT ORDERS THAT:
1.By no later than 4:00 pm on 29 November 2024 the Father shall pay the costs of the Mother at scale in accordance with Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) and fixed in the sum of $4,926.
2.The Application in a Proceeding filed 29 July 2024 and Response thereto filed 6 August 2024 is otherwise dismissed.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MURDOCH
INTRODUCTION
These are parenting proceedings commenced by the applicant mother with respect to the two children of the relationship:
·X born in 2020; and
·Y born in 2023;
(“the children”).
Property proceedings are concurrently on foot however they are not the subject of this determination.
The parties married in 2014 and separated in March 2024 following an incident of family violence witnessed by X. The children lived with the mother and spent no time with the father subsequent to separation.
Orders were made by a Senior Judicial Registrar on 11 June 2024 following a defended interim hearing on 31 May 2024 that the children spend time with the father commencing with an eight week period of supervised time and thereafter progressing on a graduated basis to weekly day time on an unsupervised basis. (“the interim orders”).
The father filed an Application for Review on 1 July 2024 seeking that the interim orders for supervision for the period of eight weeks be discharged and that both children spend time with him on Mondays and Thursdays from 9:00am to 5:00pm, that X spend 9:00am Saturday to 9:00am Sunday with him and that Y spend time with him on Saturdays from 9:00am to 5:00pm (“the Review Application”). These orders were broadly the same orders sought by the father before the Senior Judicial Registrar.
Such Application was heard by me on 15 July 2024. At this time the mother advised the court that she sought that the orders for the children’s time with the father to progress to unsupervised time on a graduating basis be discharged, such that the children would spend weekly supervised time with the father only pending further order.
Judgment was delivered and orders made on 22 July 2024 discharging the Senior Judicial Registrar’s orders for graduating and unsupervised time. Thus pending further order the children will spend supervised time with the father each week for a period of three hours. Further orders were made that the children have Facetime with the father for no longer than 15 minutes each Tuesday and Friday.
By way of her Application in a Proceeding filed 29 July 2024 the mother seeks that the father pay her costs of and incidental to the Review Application in the amount of $10,494 (“the costs application”). Although not particularised as such, it appears from the mother’s evidence that such costs sought are indemnity costs. The mother does not seek any orders in the alternative.
The father seeks simply that the mother’s costs application be dismissed.
Neither party objected to the application being determined on the papers in Chambers.
The mother relies upon the:
·Application in a Proceeding filed 29 July 2024; and
·Affidavit of Ms Gulek filed 29 July 2024; and
·Written Submissions filed 29 July 2024.
The father relies upon the:-
·Response to an Application in a Proceeding filed 6 August 2024;
·Written submissions filed 5 August 2024; and
·Application for Review filed 1 July 2024.
I incorporate into these reasons my judgment of 22 July 2024.
THE LAW
Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to proceedings shall bear their own costs subject to subsection (2), which states that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may make such order as to costs as the Court considers just.
Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, Penfold & Penfold (1980) FLC 90-800; [1980] HCA 4 states that there is no additional or special onus on the applicant who seeks the costs order.
Subsections 117(2A)(a) to (g) of the Act set out the matters that must be taken into account in determining whether to exercise the Court’s discretion and make a costs order. No one factor must be present, and no particular factor has more or less weight than any other. There may however be a dominant or outstanding feature that makes an order for costs appropriate.
The ordinary rule is that an order for costs is calculated on a party/party basis, and to depart from that rule and award indemnity costs, exceptional circumstances must be demonstrated: Kohan & Kohan (1993) FLC 92-340, at 79,614.
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/s in relation to those costs, and, if so, the terms of the costs agreement/s: rule 12.13(4).
In Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 Shepherd J provided some examples of circumstances that might justify the awarding of indemnity costs, and usefully, Holden CJ in Munday & Bowman (1997) FLC 92-784, at 84,660, drew from his Honour’s decision those examples:
(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…
(b) Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud…
(c) Evidence of particular misconduct causing loss of time to the court and to other parties…
(d) The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions…
(e) An imprudent refusal of an offer to compromise.
The categories of circumstances which enliven the discretion to award indemnity costs are not closed: Yunghanns & Yunghanns (2000) FLC 93-029; [2000] FamCA 681 at [31].
The Full Court in Phillips & Hansford [2020] FamCAFC 28 stated as follows at [35]–[37]:
Indemnity cost orders are made only in exceptional cases.
Whilst the categories of cases in which indemnity cost orders may be awarded are not closed, it is accepted that such orders 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”.
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” and where “a party persists in what should on proper consideration be seen to be a hopeless case”.
(Citations omitted)
CONSIDERATION
Both parties depose to having little to no financial capacity to fund this litigation requiring them both to borrow of funds from family members to meet legal expenses. The mother’s financial circumstances do not appear to be disputed by the father, however the father’s capacity to meet a costs order is the subject of contention.
The mother details her financial position as follows:
·She is unemployed and dependent on Centrelink payments of $1,639.44 per fortnight for household and child expenses. Her weekly expenses include her share of the weekly supervised visits of $209 and X’s therapy of $152.28 per week.
·She has received a $5,000 voucher for groceries from K Organisation of which just $2,400 remains.
·Pursuant to orders of 3 June 2024, she has received $14,000 by way of lump sum spousal maintenance intended for personal living costs and not legal bills which she is concerned will be expended if the father continues to litigate in a “vexatious” manner.
·She has no savings, financial resources or significant assets.
·She has been loaned $50,000 from her mother to cover legal expenses; such loan is documented by way of a loan agreement and is in evidence.
The mother submits that the father is in a position of relative financial strength in comparison in circumstances where he is employed and receiving paid leave as well as being the sole proprietor of the matrimonial home.
The father deposes that he is employed on a part-time basis and is in receipt of a fortnightly net income of $1,764.94. From early to mid-2024 the father had been on long service leave. From mid-2024, the father asserts he will not be entitled to any further paid leave and intends to work on a casual basis until October.
The father submits that besides $3,000 in the bank and his modest motor vehicle, he has no other assets apart from his superannuation interests and his interest in the former matrimonial home. He further details weekly expenses for rent and supervised visitation of $686, non‑inclusive of food, household supplies and petrol. Such financial hurdles are the father’s primary bulwark to the mother’s costs application.
The mother deposes that the father has recently deposited $10,500 into his solicitor’s trust account which she submits is seemingly indicative of an ability to meet costs. The father contends that such funds were met by his brothers, as was a further $15,750 advanced to cover legal costs and disbursements.
I am satisfied that the father has the capacity to pay costs arising from the Review Application. In any event the case law makes it clear that modest, or even poor, financial circumstances are not determinative of the issue of costs: Lenova & Lenova (Costs) [2011] FamCAFC 141.
Neither party is in receipt of Legal Aid funding and both parties continue to manage their legal costs privately. Both parties were represented by instructors and counsel at the Review hearing.
The rules of the court should be taken into account when the court is exercising its discretion as to costs: see Northern Territory v Sangare (2019) 265 CLR 164 at [25]. Parties have a mandatory obligation pursuant to r 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021 to conduct proceedings in a manner consistent with the overarching purpose of the court, being the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible.
It is the mother’s submission that notwithstanding this backdrop, the father has not been amenable or willing to engage in negotiations outside the scope of litigation, meaning the proceedings have been protracted. The mother evidences such conduct in her affidavit, deposing to the following attempts at negotiation:
·On 8 July 2024, she instructed her solicitors to make an offer to the father to withdraw the Review Application in circumstances where the Review Application sought relief not placed before the Senior Judicial Registrar and where such Application was thought unlikely to succeed.
·On 12 July 2024, the mother’s solicitors sent a second letter to the father’s solicitors again in attempt to have the Review Application withdrawn. Such correspondence indicated that the mother was agreeable to engaging in mediation but that it may be premature noting the absence of a Single Expert Report; the mother proposed the appointment of a selection of three Single Experts from which the father was to nominate one.
A Notice of Address for Service was filed on 11 July 2024 evidencing Buckley Lawyers as the father’s new legal representation. It is asserted that that the father’s previous solicitors retained a lien on his file and therefore neither he nor his new solicitors had access to the 8 July correspondence, notwithstanding that the 12 July correspondence had enclosed and made reference to same.
It appears further correspondence was received from the father’s solicitors on 11 July 2024. The father’s written submissions indicate that such correspondence contained a Calderbank offer wherein the proposal of a shorter period of supervised time and a graduated time arrangement thereafter was canvassed. There is however no further evidence as to the contents of such offer before me.
The mother’s letter of 12 July is acknowledged by the father as being received however no response was provided. The father submits that there was no opportunity to provide instructions to his legal representatives in relation to the offer prior to close of business on 12 July in time for the Review hearing on 15 July. There is no explanation given as to why such instructions could not have been given prior to the review hearing, even if it were the morning of.
It is the mother’s case that the father has been wholly unsuccessful in his “imprudent” Review Application, where it is submitted that he has effectively been left in a position less favourable than he was prior to the Review hearing and in contrast to the relief he sought. But for the Review Application, the father would shortly be commencing unsupervised time with the children in at least some alignment with the relief he sought. Supervision now exists for an indefinite period pending a further or final hearing of the matter.
The father submits that the Review Application cannot have been wholly unsuccessful in circumstances where the orders made by me did in fact amend the Senior Judicial Registrar’s orders in favour of a more cautious approach. New orders for video communication on Tuesdays and Fridays each week represented an increased frequency in electronic contact than that ordered by the Senior Judicial Registrar. This is a curious submission to make in circumstances where the children’s face to face time with the father is significantly less than that sought by him and less than the orders made by the Senior Judicial Registrar.
The Review brought no change to orders in the father’s favour and as noted the orders made were in stark contrast with the relief the father sought. To put it bluntly, the father’s position would have been far superior if he had not filed the Review Application.
The court has a mandatory obligation pursuant to section 190(1) of the Federal Circuit and Family Court of Australia Act (2021) to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. Parties and lawyers must conduct proceedings in a way that is consistent with the overarching purpose: see s191.
Pursuant to section 190(2) the overarching purpose includes the following objectives:-
(a)the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 2);
(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c)the efficient disposal of the Court's overall caseload;
(d)the disposal of all proceedings in a timely manner;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. These mandatory obligations are further codified in Rule 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021.
The delegation of powers to registrars of this court is one method the court employs to ensure it meets its mandatory obligations. Such delegated powers are to ensure that matters requiring determination by a Judge of this court can be heard as expeditiously as possible. Whilst any hearing of a review application is to be heard as an original hearing, both parties should still carefully consider the merits of a review of a registrar’s decision in circumstances where parties are at risk of costs in the event their review application is unsuccessful.
Having regard to the above considerations, I am satisfied that an order for costs should be made in favour of the mother.
QUANTIFICATION OF COSTS
Rule 12.17 states that the court may order costs:-
·of a specific sum;
·as assessed on a particular basis;
·to be calculated in accordance with a method determined by the court;
·or as assessed in accordance with Schedule 3 of the Rules. In circumstances where this schedule is applicable to proceedings in Division 1 of the court, this court may apply the scale of costs at Schedule 3 or the scale of costs at Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules2021 (Cth) (“the Division 2 Rules”).
The mother seeks costs on an indemnity basis as foreshadowed in correspondence to the father’s previous solicitors on 8 July 2024, and to his current solicitors on 12 July 2024 (which referred to and enclosed the 8 July letter). Accordingly, the father and his legal representatives have been put on notice of the mother’s intention.
In evidence is the costs agreement of the mother’s solicitors, A&E Lawyers, as well as the costs disclosure for counsel’s preparation and attendance at the Review Hearing. Further, the mother has provided an itemised bill for work completed by her solicitor in preparation for the Review Hearing.
Whilst I am satisfied that an order for costs should be made, I do not consider the father’s conduct in these proceedings to be so exceptional as to warrant an order for indemnity costs.
I am satisfied that it is appropriate to fix a lump sum so as to avoid further delay and inconvenience to the parties by the requirements of a bill being taxed: see Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432 at [51].
The scale of costs as set out in the Division 2 Rules are as follows:-
Item
Description
Amount (including GST)
3
Initiating or opposing an application for interlocutory orders (including an interim hearing) that is not otherwise described in item 1 or 2
(a) $2,093.62 and
(b)$1,255.75 (the daily hearing fee for a half day hearing)
14
Advocacy Loading
$627.88 (50% of half day hearing)
10
Attendance at hearing to take judgement
And explain orders
(a) $342.19; and
(b) $342.19
16
Printing fees
$264.00
Total
$ 4,925.63
I am satisfied that it is appropriate to apply the Division 2 scale of costs and thus costs will be awarded to the mother in the sum of $4,926. This includes printing fees of $240 plus GST charged to the mother which I am satisfied has been reasonably incurred.
Whilst no submissions were made on the issue, I am satisfied that it is appropriate to allow the father three months to pay such costs order.
Orders will be made accordingly.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Murdoch. Associate:
Dated: 29 August 2024
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