Hadlow and Davis (No. 2)
[2020] FamCA 925
•4 November 2020
FAMILY COURT OF AUSTRALIA
| HADLOW & DAVIS (NO. 2) | [2020] FamCA 925 |
| FAMILY LAW – COSTS – Circumstances justifying an order – Where the father seeks that the mother and the maternal grandparents pay his costs on an indemnity basis – Where the father is seeking costs in relation to various aspects of the proceedings including interim and final applications – Where the mother was wholly unsuccessful in relation to an application for a stay of orders and it is appropriate for the Court to consider the father’s costs - Where the father also contends he incurred costs as a direct result of the conduct of the mother and the maternal grandparents – Where the mother made allegations of sexual abuse and then withdrew the allegations – Where the mother’s assertions were egregious and support an award of indemnity costs – Orders. FAMILY LAW – COSTS – Non-parties – Whether the maternal grandparents should be the subject of a costs order - Where the maternal grandparents are non-parties – Where the maternal grandparents provided some financial assistance to the mother throughout the proceedings - Where the maternal grandparents were not the instigators of the litigation nor did they have a vested interest in the outcome of the proceedings. |
| Anison & Anison (2019) FLC 93-908 Beckham & Quarrington (2019) FLC 93-913 Knight v F.P. Special Assets Limited (1992) 174 CLR 178 Kohan & Kohan (1993) FLC 92-340 Pagliarella & Pagliarella (No. 3) (1994) FLC 92-460 Penfold & Penfold (1980) FLC 90-800 Prantage & Prantage (2013) FLC 93-544 Re Wilcox; Ex parte Venture Industries Pty Ltd and Ors (No 2) (1996) 72 FCR 151 Telfer & Telfer (1996) FLC 92-688 |
| Family Law Act 1975 (Cth) ss 117(2A) Family Law Rules 2004 (Cth) rr 19.08, 19.18, sch 3 |
| APPLICANT: | Mr Hadlow |
| RESPONDENT: | Ms Davis |
| NON-PARTIES: | Ms T Davis and Mr U Davis |
| FILE NUMBER: | ADC | 3076 | of | 2017 |
| DATE DELIVERED: | 4 November 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 30 September 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr McQuade |
| SOLICITOR FOR THE APPLICANT: | Janson Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Roberts |
| SOLICITOR FOR THE RESPONDENT: | VP Lawyers |
| COUNSEL FOR THE NON-PARTIES: | Mr Hoffman QC |
| SOLICITOR FOR THE NON-PARTIES: | Clelands Lawyers Adelaide Pty Ltd |
Orders
That on or before one hundred and eight two (182) days from the date of this order the mother do pay the father’s costs to the Trust Account of Janson Lawyers for and on behalf of the father the sum of EIGHTEEN THOUSAND THREE HUNDRED AND FIFTY DOLLARS AND SEVENTY EIGHT CENTS ($18,350.78).
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hadlow & Davis has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 3076 of 2017
| Mr Hadlow |
Applicant
And
| Ms Davis |
Respondent
And
Ms T Davis and Mr U Davis
Non-Parties
REASONS FOR JUDGMENT
Introduction
Following a hearing on 11 to 15 November 2019 judgment was delivered on 19 March 2020 and orders were made which finalised the future parenting arrangements for Z born in 2016 (“the child”). [1]
[1] See Hadlow & Davis [2020] FamCA 161.
By Application in a Case filed 17 April 2020 Mr Hadlow (“the father”) seeks that Ms Davis (“the mother”), Ms T Davis and Mr U Davis (“the maternal grandparents”) being non-parties to the proceedings pay his costs in the following terms:-
(1)That the respondent [mother], and the [maternal grandparents] together pay the father’s costs of these proceedings on an indemnity basis in such sums and in such proportion between them as this Honourable Court deems just and expedient.
The final orders provided for the parties to have shared parental responsibility for the child save that the mother have sole parental responsibility for any major issues affecting the child’s health.
The orders provided for the child to live with the mother and spend time with the father each alternate weekend, half school holidays and on special occasions including the Christmas period.
Documents relied upon
The father relies upon the following documents:-
(1)Application in a Case filed 17 April 2020;
(2)Affidavit of the father filed 15 April 2020; and
(3)Affidavit of the father filed 11 June 2020.
The mother relies upon the following documents:-
(1)Response to Application in a Case filed 21 July 2020; and
(2)Affidavit of the mother filed 21 July 2020.
The maternal grandparents rely upon the following documents:-
(1)Response to Application in a Case filed 21 July 2020;
(2)Affidavit of the maternal grandfather filed 21 July 2020; and
(3)Affidavit of the maternal grandmother filed 21 July 2020.
Father’s application for costs
There is some uncertainty as to whether the father seeks that if successful in his application, the Court should determine the quantum of costs payable on an indemnity basis either by the mother, the maternal grandparents or to be apportioned in some way between. His application seeks that the mother and her parents together pay the father’s costs.
The father does not nominate a quantum of costs sought but relies upon his affidavit filed 11 June 2020 which provides an itemised list of the father’s costs from 6 July 2017 to 22 November 2019.
The father contends that he has incurred costs as a direct result of the conduct of the mother and the maternal grandparents. He considers that his costs should be awarded as and from the date of the filing of his Initiating Application on 28 July 2017.
The catalyst for the father commencing proceedings was to secure the return of the child from Queensland to South Australia, arising out of the mother’s unilateral decision to relocate.
The total costs incurred by the father was $167,890.37. The father’s application seeks that the respondent and the maternal grandparents be liable for the total of his costs.
The maternal grandparents are non-parties to the proceedings. Their active involvement was as witnesses for the mother consequent upon her evidence being given by affidavit filed 5 July 2019.
The father’s costs are broken down into the following categories:-
·Initiating Application and interim orders;
·Stay Application and Notice of Appeal;
·Preparation for November 2018 trial;
·Sexual abuse allegations; and
·Other costs.
Initiating Application and Interim Orders
The father seeks $7,383.25 for work undertaken in respect of the filing of the Initiating Application and interim orders sought therein, specifically in respect of the father’s application seeking the return of the child to Adelaide. Orders were made on 26 September 2017 requiring the mother to return the child to the Adelaide metropolitan area within 28 days. On 21 November 2017 the Court heard the mother’s application for a stay of the orders pending the outcome of her appeal. Judgment was delivered on 24 November 2017 which dismissed the mother’s application for a stay.[2]
[2] See Davis & Hadlow [2017] FCCA 2942.
No application was made for costs in respect of the application requiring the return of the child to South Australia, however, the question of costs in respect of the stay application were reserved. It is difficult to easily separate and identify the costs that relate to the application for the child to return to South Australia as opposed to the Initiating Application and general attendances.
Stay Application and Notice of Appeal
A Notice of Appeal was filed by the mother on 24 October 2017 and was discontinued by notice filed on 18 December 2017.
The father seeks a total of $9,435 in respect of the stay application and attendances relevant to the Notice of Appeal.
As already mentioned, only costs in respect of the stay application were reserved.
A perusal of the judgment delivered on 24 November 2017 demonstrates that the mother was wholly unsuccessful in respect of her application. It suggests that there was some concern raised as to the bone fides of the mother, with the gravamen of the stay application relying on the argument that a successful appeal by the mother may be rendered nugatory by the order requiring the child to be returned to South Australia.
Counsel clarified that the father does not seek his costs relating to the appeal but only to the stay application.
A perusal of the Court file would suggest that the costs are properly limited to a consideration of the mother’s application for stay and her affidavit filed in support, the father’s response together with his affidavit, some ancillary attendances and counsel fees incurred on 21 November 2017.
Preparation for November 2018 Trial
The father seeks the total sum of $56,972.50 in respect of preparation for the November 2018 trial which was subsequently vacated upon the application of the father, in circumstances where the mother’s trial affidavit sworn 7 November 2018 asserted at [92], [98], [103] and [104] that the father had touched the child’s half-sibling on his penis.
The trial affidavit of the maternal grandfather sworn 7 November 2018 at [20] alleged that the father had touched the child’s brother on his penis.
In later affidavits of the mother and the maternal grandparents further allegations were made that the father had touched or hit the child’s vagina. In particular, the allegation of the maternal grandmother in her affidavit sworn 5 July 2019 alleges that the child reported the father had touched or poked her vagina with a toy. No application for costs was made at the time that the November 2018 trial date was vacated and the father has not established that the entirety of the costs incurred were thrown away.
I am not satisfied that at least a significant proportion of the costs claimed as costs thrown away were not in part utilised for the trial listed for hearing in November 2019.
Both parties relied upon trial documents that had been prepared in anticipation of the November 2018 hearing.
Sexual abuse allegations
The father claims $79,121.87, inclusive of counsel fees of $35,000, in respect of the period from 11 December 2018 to the conclusion of the trial on 15 November 2019.
The reasonable conclusion from the manner in which the father’s costs schedule has been structured is that the fees incurred relating to the sexual abuse allegations are not to be conflated with the costs thrown away for the trial that was vacated.
It is not controversial that the mother indicated prior to the commencement of the November 2019 trial that she did not pursue an allegation that the father presented as a risk of sexual abuse. Whilst she accepted that the father had not sexually abused the child, she alleged he was “gas lighting” her in order to sow a seed of doubt that there may be substance to the allegation of sexual abuse which would then prompt her to explore and investigate the veracity of the claim and enable the father to project the mother as a person seeking to alienate him from the child by promoting a false allegation.
As discussed in the judgment delivered 19 March 2020, I was not convinced by the mother’s evidence and found the claim that the father was
“gas lighting” the mother to be fanciful.
I summarised the allegation that the father had sexually abused the children in the following manner:-
198.I am not convinced by the mother’s evidence. I find, that at best, the mother was reckless in making the allegation that the father had sexually abused the children, or at worst, she knowingly fabricated the allegations as a counterfoil to the father’s application seeking that the child spend time with him.[3]
[3]Hadlow & Davis [2020] FamCA 161
The father’s claim for costs in respect of the false allegation of sexual abuse is that it was central to the November 2019 trial.
Whilst the mother’s contention that the father was attempting to portray her as being unsupportive of his relationship with the child was a focus, it could not be said that it overwhelmed the proceedings.
The father readily acknowledged that whilst his Initiating Application filed 28 July 2017 sought final orders that the child live with him, he was not able to explain the basis upon which he sought the final orders other than it being a reaction to the mother retaining the child in Queensland.
No prior issue had been raised by the father and but for the mother’s conduct, the father’s position was that he had been satisfied with the pre-existing arrangements.
As such, the primary focus of the November 2019 trial was a dispute between the parties involving consideration as to parental responsibility and with which parent the child would primarily live.
Other costs
The basis for the other costs sought in the sum of $14,977 appears to arise out of an assertion that there were miscellaneous expenses due to the inability of the parties to agree the times that the child would spend with the father. The father asserts that the mother was difficult and deliberate in protracting negotiations.
Relationship between the mother and the maternal grandparents
The father submits that the Court should first consider whether the mother is liable for costs. If not then that puts an end to the matter. If the Court determines that the mother should pay costs then it is a relevant consideration that the mother submits that she is impecunious and has no financial capacity or resource that would enable her to meet any significant costs order.
In those circumstances, the father argues that the Court should then look to the maternal grandparents and determine that it would be appropriate to make a non-party costs order against them.
The costs of the entirety of the proceedings has been ruinously expensive. The mother’s position is that her total legal expenses were in excess of $374,000 which she paid for with a loan of $43,000 from the maternal grandparents and the balance following a sale of her assets.
There is no evidence that speaks against the extent of the purported financial involvement of the maternal grandparents.
The total fees incurred by the father is in excess of the total costs claimed, namely $167,890.37.
Whilst the orders sought by the mother in her application would suggest that the father seeks costs from both the mother and the maternal grandparents in such proportion as the Court may determine, it was not argued that in the absence of a basis for the mother to be liable for costs, there would be any separate claim against the maternal grandparents.
Non-party costs
The maternal grandparents do not challenge that the Court has jurisdiction to make a non-party costs order. The contention by the maternal grandparents is that a non-party cost order should be limited to exceptional circumstances. That is not necessarily conceded by the father.
In Knight v F.P. Special Assets Limited (1992) 174 CLR 178 (“Knight”) the High Court considered the circumstances in which a court should exercise its discretion and order costs against a non-party.
The High Court noted that the exercise of the jurisdiction to order costs against a non-party would be limited.
The following appears at page 192:-
Obviously, the prima facie general principle is that an order for costs is only made against a party to the litigation. As our discussion of the earlier authorities indicates, there are, however, a variety of circumstances in which considerations of justice may, in accordance with general principles relating to awards of costs, support an order for costs against a non-party. Thus, for example, there are several long-established categories of cases in which equity recognized that it may be appropriate for such an order to be made.
For our part, we consider it appropriate to recognize a general category of cases in which an order for costs should be made against a non-party and which would encompass the case of a receiver of a company who is not a party to the litigation. That category of case consists of circumstances where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Where the circumstances of the case fall within that category, an order for costs should be made against the non-party if the interests of justice require that it be made.
(Footnotes omitted)
In Pagliarella & Pagliarella (No. 3) (1994) FLC 92-460 at 80,756 the Full Court referred to Knight and said:-
Having cited that passage, Nicholson C.J. and Maxwell. J said in McAlpin and McAlpin at page 80,215:
“It seems clear from the above authority that while a discretion to order costs against a non-party should be exercised sparingly the jurisdiction to do so, at least in relation to cases governed by legislation similar to that contained in s 5 of the Judicature Act (1890) is unlimited. Further, where cases fall into the category identified by their Honours, they appear to consider that the Court should make such an order.
In our view, on a natural reading of s117(2) of the Family Law Act, this Court’s jurisdiction to order costs is similarly unlimited. It is true that s117(1) and (2A) refer to ‘parties’ but s117(2) is not so limited and is expressed in the widest possible terms. We therefore see no reason to confine the jurisdiction of this Court in this area.”
Although Mason C.J. and Deane J. referred to the recognition of a general category of case, it seems to me they were not stating that category as being exhaustive so as to exclude other cases where specific circumstances may justify an order for costs being made against a non-party in the interests of justice. … It can now be taken as clear law that this Court has jurisdiction to make an order for costs against a non-party at least if that person plays an active part in the litigation and has an interest in the subject of the litigation. …
The maternal grandparents were not parties to the proceedings.
It is conceded that they were supportive of the mother and each of them were prepared to give evidence as part of the mother’s case upon affidavit.
For her part, the maternal grandmother set out her involvement in the mother’s attempt to relocate the child to live in Queensland. The maternal grandmother had elderly parents in Queensland and she determined that she would live with them in order to provide assistance given her father’s poor health. The maternal grandmother did record alleged disclosures of the child and made a notification to the Child Protection Services Hotline. I found that the evidence of the maternal grandmother lent support to the finding that the relationship between the parties was not able to be easily reconciled, but did not provide corroboration for the mother’s assertion that the allegations of sexual abuse formed part of the father’s litigation strategy.
I did find that the evidence of the maternal grandmother regarding the arrangements for the child and her brother to live in different States was unsatisfactory.
The affidavit of the maternal grandfather contained an allegation by the child that the father had touched her on the vagina.
I found his evidence to be of little assistance.
There was nothing in the evidence of the parties or the maternal grandparents which could sustain or invite a finding that the maternal grandparents were the instigators of the proceedings and that the mother was in some way in their thrall. I did not find that the maternal grandparents had deliberately concocted their evidence touching upon sexual abuse.
The maternal grandparents were not in any sense parties to the proceedings and did not control or direct the mother in the sense that she was in reality their alter ego.
It is not suggested that the maternal grandparents had a vested interest in the outcome of the proceedings other than their reasonable support of the mother.
I accept that their financial involvement is limited to the sum of $43,000 as provided to assist the mother. In circumstances where the total fees incurred by the mother was in excess of $373,000, it could not be said that the mother’s ability to conduct the litigation was dependent upon the sum provided by her parents.
In any event the mother was not impecunious in respect of the principal litigation. It may well be the case that her current impecuniosity is a result of her exhausting her financial resources to conduct the substantive litigation.
As such, I do not consider that the interests of justice would in any event require a non-party costs order to be made against the maternal grandparents.
Application for costs
Pursuant to sub-r 19.08(1) of the Family Law Rules 2004 (Cth) (“the Rules”), the father has applied for an order that the mother pay his costs. The application is made by Application in a Case. The father also seek an order for costs payable by the mother on an indemnity basis. Sub-rule 19.08(3) of the Rules provides:-
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 in relation to those costs and, if so, the terms of the costs agreement.
The method of calculation of costs is referred to in r 19.18 of the Rules:-
(1)The court may order that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
Sub-rule 19.18(3) of the rules provides that the Court may consider:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the case;
(c)the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with pre-action procedures; and
(f)expenses properly paid or payable.
In considering what order should be made, if any, in respect of the applicant’s costs, section 117(2A) of the Family Law Act 1975 (Cth) (“the Act”) requires the Court to have regard to the following:-
(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.
I have a wide discretion in respect of matters relating to a potential costs order.
The weight that is to be given to any particular consideration is a matter of the exercise of discretion.
All relevant matters must be taken into account and balanced.
Financial circumstances of each of the parties to the proceedings
I have not been presented with the current financial circumstances of each of the parties other than the mother’s assertion that she is effectively impecunious. No documents have been filed nor was there any application by either party that a financial statement setting out the assets, liabilities, income and expenditure of the parties be filed.
The fact that a party may be impecunious is not a bar to a costs order being made. I do not consider that the financial circumstances of each of the parties would speak against an order for costs being made.
The conduct of the parties to the proceedings
The father contends that the litigation was necessitated by the conduct of the mother in relocating the child from Adelaide to Queensland. It is argued that as a result, the father was compelled to seek the return of the child.
The difficulty with the father’s position is that he did not simply seek the return of the child to reinstate the pre-existing parenting arrangements but rather, his Initiating Application sought orders for the primary care of the child. As discussed, it was not the father’s intention to seek those orders and but for the mother’s initial position that the father may well present as a risk to the child, he would have been more reticent in seeking the orders that he did.
The father’s initial application for the return of the child to South Australia was successful. The child was returned and whilst there was ongoing disagreement as to the parenting arrangements, the matter was resolved at least on an interim basis when the mother discontinued her appeal against the return orders.
The trial was initially listed for hearing on 28, 29 and 30 November 2018, however it was vacated upon the mother’s trial affidavit revealing an allegation that the father may have sexually assaulted the child’s half-sibling.
The allegations of sexual abuse, whilst initially promoted in the mother’s trial affidavit filed 5 July 2019, were abandoned.
I have referred to my findings at [198] of the judgment wherein I considered that the mother was either reckless or had knowingly fabricated allegations of sexual abuse.
In Penfold & Penfold (1980) FLC 90-800 the Court considered that the giving of false or misleading evidence, in particular where extra time and expense is occasioned to either meet, explain or disprove the allegation, was a basis for an award of costs.
No application was made for costs following the trial listed to commence on 28 November 2018 being vacated.
The mother argues that in circumstances where an application for costs is not made then unless leave is given for an extension of time the application must fail.
The Full Court considered the applicable principles in the decision of Beckham & Quarrington (2019) FLC 93-913 at [16]:-
The applicable principles were recently discussed by the Full Court of this Court, by reference to authority, in Gadzen & Simkin (2018) FLC 93-871 (“Gadzen”). These relevant passages from that judgment bear repetition. After setting out the relevant statutory provisions, the Full Court continued from [29] as follows:
29.The statutorily expressed requirements for the grant of leave in s 44(3) of the Act are in identical terms, for all practical purposes, as those requirements with the grant of leave under s 44(6). It follows that authoritative pronouncements as to the principles applicable to the operation of s 44(3) apply equally to s 44(6). In Whitford and Whitford the Full Court stated:
Thus, on an application for leave under sec. 44(3), two broad questions may arise for determination. The first of these is whether the Court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted. If the Court is not so satisfied, that is the end of the matter. If the Court is so satisfied, the second question arises. That is whether in the exercise of its discretion the Court should grant or refuse leave to institute proceedings.
30.…
31. In discussing hardship the Full Court in Whitford said:
The hardship referred to in sec. 44(4) is the hardship which would be caused to the applicant or a child of the marriage if leave were not granted. The loss of the right to institute proceedings is not the hardship, to which the subsection refers. It is with the consequences of the loss of that right, with which the subsection is concerned. The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits. If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted. …
Hardship must go beyond mere detriment.
The consideration of hardship and the merits of the application are informed by the evidence and the Court’s findings in the judgment.
I consider there is merit in the father’s application for costs arising from the conduct of the mother.
It was reasonable that the father’s application for costs be considered once final judgment was delivered. It is significant that I found the mother had either fabricated the allegations of sexual abuse or was reckless in doing so.
It necessarily follows that it was reasonable for the father to seek an adjournment of the November 2018 trial in order to explore and investigate the basis upon which the mother presented the allegation of sexual abuse and the assertion that the father presented as a risk to the child.
I do not suggest that the mother’s allegations of sexual abuse was the overwhelming consideration and subsumed the proceedings, but it was a significant matter.
Whether the proceedings were necessitated by the failure of a party to comply with previous orders?
The father argues that the mother was not compliant with orders made initially upon the child being returned to South Australia and then in circumstances which necessitated the filing of a contravention application.
I do not consider it appropriate to consider the question of costs in relation to the contravention proceedings, nor was the purported non-compliance with orders of the Court at a level so egregious that costs should flow.
Whether a party has been wholly unsuccessful?
The only aspect of the proceedings where it could be said that the mother was wholly unsuccessful is in respect of her stay application. Costs were reserved and I consider that it is open to the Court to consider the father’s costs in respect of the application for the stay of orders pending the appeal.
The father argues that the focus of the substantive proceedings was the mother’s application seeking orders that would allow the child to relocate to Brisbane. The father’s reasoning was that the mother was unsuccessful in her relocation application and accordingly it should be considered that she was wholly unsuccessful.
The mother argues that the proceedings involved the competing applications of the parties for parenting orders. It may have been a part of the mother’s application that she be permitted to relocate the child, however, it is self-evident that she was obliged to meet the Initiating Application of the father seeking orders for the primary care of the child.
The father was unsuccessful in his application for primary care. Neither party was successful in respect of the suite of orders that each of them sought.
In Anison & Anison (2019) FLC 93-908 the Full Court considered the proper interpretation of s 117(2A)(e) as follows:-
37.It is well settled that paragraph (e) refers to a situation where proceedings as a whole have been unsuccessful. For example, where an application without merit has been dismissed. In the oft-cited authority in this area of Robinson and Higginbotham earlier referred to, Nygh J (with whom Simpson & Smithers JJ agreed) said:
Her Honour then makes a reference to the question of which party was wholly successful but, of course, as counsel for the wife rightly submitted, paragraph (e) deals with a situation in which the proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed.
38.More recently in Bant & Clayton (Costs) (“Bant”) the Full Court (May, Strickland and Tree JJ) stated:-
(e) The mother was wholly unsuccessful in the proceedings.
21.The father submits that by filing a Notice of Discontinuance the mother has been wholly unsuccessful. The mother says that her application was never heard or determined, and thus it was not wholly unsuccessful.
22. There is an element of truth in both submissions, but it is apparent to us that this paragraph does not apply to the facts of this case; it is designed for cases where an application is heard and determined and the applicant is wholly unsuccessful.
23.Thus, this paragraph does not provide a circumstance justifying an order for costs.
It is appropriate that the Court consider the father’s costs in respect of the mother’s failed application for a stay of orders pending appeal, but not in respect of the balance of the proceedings.
Whether either party to the proceedings has, in accordance with s 117(c) of the Act or otherwise made an offer in writing to the other party?
There is no evidence of any offers or proposals for settlement.
Such other matters as the court considers relevant
In Telfer & Telfer (1996) FLC 92-688 at 83,189 Lindenmayer J considered that s 117(2A)(g) was “perhaps the all-encompassing paragraph”. It is an independent source of discretion and is not limited by paragraphs (a) – (f) of s 117(2A).
I consider that there is merit in the argument that where the proceedings are exacerbated and made more complex by a party either fabricating evidence of sexual abuse or being recklessly indifferent to the consequences of such an assertion, it is reasonable for the Court to exercise its discretion and consider the costs that a party has unnecessarily incurred.
It may be that the matter can be considered either in respect of ss 117(2A)(c) or (g).
Indemnity costs
The explanatory guide to the Rules has been accepted by the Court as an accurate definition of “indemnity basis”; namely:-
An entitlement to costs, including costs under a costs agreement, for all costs incurred, other than costs that are unreasonable in amount or that have been incurred unreasonably.
The discussion of the Full Court in Prantage & Prantage (2013) FLC 93-544 (“Prantage”) is of assistance in determining whether and in what circumstances an order for indemnity costs should be made. The Full Court referred extensively to the decision of Kohan & Kohan (1993) FLC 92-340 (“Kohan”) in which it was noted that whilst there was nothing in the Act which in any way “inhibits” a consideration of indemnity costs, the following is said in Kohan at 79,605:-
it is fundamental to the exercise of that discretion in the Family Court that the Judge should not only understand that such an order is a very great departure from the normal standard, but also that the Judge should know what the terms of the agreement are, to what extent it exceeds the parameters set by the scale and what its likely impact will be on the financial position of each of the parties. This impact is a relevant matter to which the trial Judge should have had regard, when considering the financial circumstances of each of the parties to the proceedings under s 117(2A)(a), or perhaps even more as a relevant matter under paragraph (g). The degree to which a costs agreement departs from the established norm and the actual financial significance of such a departure may itself be a reason for not ordering costs on an indemnity basis.
In Re Wilcox; Ex parte Venture Industries Pty Ltd and Ors (No 2) (1996) 72 FCR 151, Cooper and Merkel JJ said at 156:-
The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.
The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of the courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.
In Prantage the Full Court said at 87,209:-
97. In our view, once it is recognised that ensuring access to justice is one of the key objectives of the “usual rule”, the claimed increasing disparity between scale costs and those being charged by lawyers becomes as much an argument against the awarding of indemnity costs as it is in favour of costs being ordered on that basis.
98. With respect to the trial Judge, we are not convinced that there is a great deal of difference between current “commercial realities” and those prevailing at the time Kohan was decided. It should be noted that the costs agreement in Kohan provided for a rate of payment three times in excess of the scale. However, even if there have been changes in the market place for legal services, we are not persuaded this should have any impact on the application of the “usual rule”, which seeks to balance competing public policy considerations.
The father’s claim that his costs should be assessed on an indemnity basis arises because of the finding that the mother made allegations that she knew to be false or made them recklessly indifferent as to whether they were true or false.
The usual rule is that each party shall bear their own costs. An order for indemnity costs should be considered as exceptional and should only occur in rare circumstances.
The itemised cost schedule prepared by the father’s solicitors has not been prepared on a party/party basis but rather on a solicitor/client basis.
The application for a stay of orders should be considered as unremarkable. It was an application not without some merit and whilst determined in favour of the father and against the mother, was not to be considered a stalking horse intended to mask an ulterior motive. It is correct that the mother wished to remain in Queensland pending the determination of her appeal, but it could not be said that her application was unreasonable.
A different consideration applies to the costs that might be attributed to the costs incurred in meeting the mother’s allegations that the father was the perpetrator of sexual abuse on the child and her half-sibling. Moreover, the mother’s withdrawal of her allegations did not put an end to the matter but rather supported the further proposition that the father had concocted and promoted false allegations of sexual abuse in order to trick the mother into thinking that there was some truth to the allegations, which then enabled the father to demonstrate that there was no substance in the allegations and that the explanation was that the mother was attempting to alienate the child from the father.
Whilst a relatively narrow aspect of what was a larger dispute as to the primary care of the child, the mother’s assertions were egregious and should support an award of indemnity costs.
Quantum
The mother is impecunious and the father’s financial resources have been significantly depleted by the proceedings.
Neither party would wish the matter to be sent to a Registrar for a costs taxation and as such the parties seek that if the Court determines that an order for costs should be made against the mother, that it be quantified and dealt with to finality.
The manner in which the father has prepared his application for costs is predicated upon solicitor/client costs. It is confusing in its construct and the schedule of costs are difficult to separate into the components that would go to the stay application and a component of the trial that would relate to the mother’s allegations of sexual abuse and the consequences on the proceedings in terms of added complexity.
Doing the best that I can and in the absence of being able to separate the solicitor’s attendances that relate to the stay application, I propose to allow for the time reasonably spent by a lawyer requiring the skill of a lawyer (Item 108 of the 2017 costs schedule)[4] for four hours at $241.74, totalling $966.96.
[4]Family Law Rules 2004 (Cth) sch 3 pt 1, as at 1 January 2017.
There was an attendance of counsel to argue the matter on 21 November 2017 and I consider it reasonable that there be the costs of an attendance by counsel to peruse and consider the stay application (Item 201)[5] at $395.86 for one hour and the attendance of counsel of less than three hours (Item 203)[6] in the sum of $1,163.59.
[5]Family Law Rules 2004 (Cth) sch 3 pt 2, as at 1 January 2017.
[6] Ibid.
The total of the father’s costs arising from the unsuccessful stay application of the mother assessed on a party/party basis is $2,526.41.
The Court’s ability to assess the proportion of the father’s costs unnecessarily incurred as a result of meeting the mother’s allegation of sexual abuse, the subsequent withdrawal of the allegation and the consideration of the fresh assertion that the father created a false belief as part of his litigation strategy is unclear.
As discussed, I do not consider that the entirety of the preparation for the November 2018 trial should be considered as costs thrown away. It was only upon a perusal of the mother’s trial affidavit in preparation for the November 2018 trial that an application was made to vacate the trial date.
The amount of $79,121.87 attributed to the sexual abuse allegations does not accurately reflect that the November 2018 trial primarily dealt with the competing applications of the parties for a primary parenting order.
Doing the best that I can and noting that the trial was heard over five days, I consider that the equivalent of one day was taken up in dealing with the mother’s previous allegation of sexual abuse and the proposition that the father manipulated the mother.
I accept that there would have been the equivalent proportion of the father’s solicitor’s time taken up in meeting the mother’s case and accordingly I propose to rely upon the total of $79,121.87 and allow an amount representing one fifth of the solicitor/client costs namely $15,824.37.
Conclusion
I propose to exercise my discretion and order that the mother pay the father’s costs fixed in the sum of $18,350.78. I am aware of the mother’s poor financial circumstances and doing the best that I can without the assistance of counsel for the parties, I propose to allow the mother six months to pay the costs to the trust account of Janson Lawyers.
I make orders as appear at the commencement of these reasons.
I certify that the preceding one hundred and twenty one (121) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 4 November 2020.
Associate:
Date: 4 November 2020
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