Hampstead and McDougall

[2014] FCCA 369

FEDERAL CIRCUIT COURT OF AUSTRALIA

HAMPSTEAD & McDOUGALL [2014] FCCA 369

Catchwords:
FAMILY LAW – Costs arising out of parenting proceedings.

Legislation:  

Family Law Act 1975 (Cth), ss.117, 106A, 79
Federal Circuit Court Rules2001, Schedule 1

Collins & Collins (1985) FLC 91-603
Penfold & Penfold (1980) FLC 90-800
Cohan & Kohan (1993) FLC 92-340
Yunghanns & Yunghanns (2000) FLC 93-029
Colgate Palmolive v Customs (1993) 46 FCR 225

Applicant: MS HAMPSTEAD

Respondent: MR MCDOUGALL

File Number: PAC 4008 of 2011

Judgment of: Judge Altobelli

Hearing date: 4 June 2013

Date of Last Submission: 2 December 2013

Delivered at: Wollongong

Delivered on: 18 February 2014

REPRESENTATION

Solicitors for the Applicant: Susan Green Solicitor

Solicitors for the Respondent: Cooper Grace Ward Lawyers

ORDERS

1. The Respondent Husband pay the Applicant Wife’s costs to the amount of $7745.80 within 90 days from todays date.

IT IS NOTED that publication of this judgment under the pseudonym Hampstead & McDougall is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT WOLLONGONG

PAC 4008 of 2011

MS HAMPSTEAD

Applicant

And

MR MCDOUGALL

Respondent

REASONS FOR JUDGMENT

EX TEMPORE

1. The applicant in this case, the mother, seeks orders for costs arising out of the following circumstances. Firstly, the father’s unsuccessful Contravention Application filed 31 October 2012. Secondly, the mother’s application under section 106A of the Family Law Act to have a Registrar of this Court sign a transfer and mortgage discharge. The father opposes the making of any costs order against him.

2. The mother relies on the following documents:

   a)Application in a Case filed 7 June 2013;

   b)Application in a Case filed 27 June 2013;

   c)Mother’s written submissions dated 26 August 2013;

   d)Affidavit of Ms Hampstead dated 4 June 2013;

   e)Affidavit of Ms Hampstead dated 28 October 2013; and

   f)Affidavit of Susan Green dated 15 July 2013.

3. The father relies on the following documents:

   a)Response to an Application in a Case filed 25 November 2013;

   b)Father’s written submissions dated 2 December 2013;

   c)Affidavit of Mr McDougall dated 19 September 2013; and

   d)Affidavit of Mr McDougall dated 28 November 2013.

4. The Court has also had regard to the Court file and its reasons for judgment delivered 4 June 2013.

5. By way of an order made by Judge Kemp on 2 November 2013, he being the judge responsible for the Coffs Harbour Circuit, the matter was returned to me to determine the costs applications. I considered the applicable law relating to costs to be section 117 of the Act, as well as the relevant Federal Circuit Court Rules. 

6. Section 117 states:

   (1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, 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) and (5) 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.

   (3)To avoid doubt, in proceedings in which an independent children's lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children's lawyer in respect of the proceedings.

   (4)However, in proceedings in which an independent children's lawyer for a child has been appointed, if:

   (a)a party to the proceedings has received legal aid in respect of the proceedings; or

   (b)the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;

   the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.

   (4A) If:

   (a) under section 91B, an officer intervenes in proceedings; and

   (b) the officer acts in good faith in relation to the proceedings;

   the court must not, because of the intervention, make an order under subsection (2) of this section against the officer, or against an entity (including the Commonwealth or a State or Territory) by or on behalf of whom the officer was engaged or employed.

   (5)In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children's lawyer has been appointed, the court must disregard the fact that the independent children's lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney-General.

7. There is no principle that costs follow the event in family law.  Indeed, section 117(1) establishes the general rule that each party pays at their own costs.  In order to depart from this, there must be circumstances in the particular case that justify the imposition of a costs order (Collins & Collins (1985) FLC 91-603).

8. In Penfold (1980) FLC 90-800 the High Court described this as “justifying circumstances”. How this is established is assisted by the matters set out in subsection (2A) of section 117. If the Court decides to make an order for costs its discretion is very wide. It may order party and party costs based, for example, on the Family Law Rules, or as agreed, or by reference to the Federal Circuit Court Rules which, itself, gives a wide discretion to order lump sum or by reference to a scale.  Costs may also be on an indemnity basis, that is, designed to reimburse to the person entitled to the costs order all of the actual costs incurred.

9. Ordinarily, the Court would only order party/party costs (Cohan & Kohan (1993) FLC 90-800, Yunghanns (2000)).  An indemnity costs order is exceptional (Colgate Palmolive v Customs (1993) 46 FCR 225 in the High Court) but, subject to that, the circumstances in which such an order might be ordered and not closed.

10. In relation to the father’s Contravention Application, he was plainly unsuccessful in his contravention application.  The reasons for judgment speak for itself.  There are a number of significant paragraphs, though, that may be relevant to the costs issue.  Paragraph 4 refers to the multiple versions of the Contravention Application that the father filed which added unnecessarily to the complexity of the proceedings.  Paragraph 25 refers to the very sensible concessions the mother made which facilitated the hearing of the contravention Application.  Paragraph 29 refers to the favourable credit findings as regards the mother.  Paragraph 33 contains the finding that the father acted disingenuously.  Paragraph 35, the finding that the father could have done so much more to solve the problem.  Paragraphs 40 and 61 contain the adverse credit findings in relation to the father.  Paragraphs 44, 45, 50, 64, 65 and 70 contain the Court’s criticism of the father’s behaviour.

11. In relation to the Contravention Application, the mother submits that her financial circumstances are poor, the father acted inappropriately, the mother acted appropriately in relation to the proceedings, and the father was wholly unsuccessful.

12. The father’s submissions briefly stated that the father was motivated by a breakdown in his relationship with his daughter and therefore acted reasonably; the father believed that Jarrett FM, as he then was, encouraged him to file the Contravention Application; the father was self-represented; that the contravention was, in any way, dealt with at the same time as the mother’s application to vary the orders; that he is not in a financial circumstance where he could pay a costs order anyway and, lastly, that the contravention application was initiated because of the father’s perception that the mother had breached orders.

13. It is hard to contend with the mother’s submissions on the evidence before the Court.  The father’s contentions are problematic, for a number of reasons.  Firstly, he confused the issue of whether a costs order should be made with what type of costs order should be made and in what sum, should a costs order be deemed appropriate.  Thus, the fact that the contravention application was heard together with the mother’s Application to vary the parenting orders doesn’t mean that there should be no costs ordered in the Contravention Application, but it might reflect on how those costs are assessed.

14. Secondly, there was no evidence before the Court of what his Honour Jarrett FM, as he then was, said to the father.  But even if he did what the father contends, that is, encourage him to file a contravention Application, it is irrelevant.  The Court’s findings already deal with the father’s tendency to externalise responsibility for his actions or inaction to third parties.  This is yet another example of that.  The father is responsible for what he does or fails to do, not someone else.

15. Thirdly, it is clear from the reasons that the father could have dealt with the issue of the breakdown of his relationship with his daughter in other ways.  For example, engaging in therapy or even just ringing her up.  What he did was, metaphorically, bury his head in the sand and blame the mother and seek to punish her by way of a contravention Application.

16. Fourthly, it is no defence, nor does it even mitigate liability for a costs order, that the father is a self-represented litigant or that he might be impecunious, as he asserts.  These are relevant factors taken into account, but not definitive in a case where the Court finds that a costs order should otherwise be made.

17. The Contravention Application was ill-advised, unnecessary and a waste of Court time and resource.  A costs order should be made.  However, there’s no basis for the imposition of indemnity costs.  There is nothing on the evidence to justify this.  An order for costs calculated in accordance with the Federal Circuit Court Rules is just.

18. The matter was heard within one day.  I do accept, however, that there were multiple attendances, which were caused by various amendments to the contravention application.  I will order costs on the basis of the hearing plus two preceding Court attendances plus the usual preparation.

19. No order is sought by the mother in relation to her application to vary the orders, nor would the Court consider it appropriate.  I will assess costs at the end of these reasons.

20. I turn now to consider the application under section 106A. This is, seemingly, very straightforward. The father did not comply with order 11 of consent orders made 23 July 2012. He does not dispute this. The mother is put to the trouble of seeking orders so that the Registrar would sign. One would have thought this was a clear case for ordinary costs.

21. The father’s response is somewhat bizarre.  In his affidavit of 28 November 2013 he disputes the authenticity of a loan entered into in May 2009 that was secured over the property agreed to be sold.  He says he did not sign these documents.  He disputes, therefore, that the moneys borrowed were used for the stated purpose and asserts it funded the mother’s living costs.

22. In his affidavit of 19 September 2013 he agrees he refused to sign, but says he did not act unreasonably or maliciously.  At the time, he says, the act of signing the mortgage release was, and I quote “too difficult for me”.  He asserts that the mother forged his signature and that he got no benefit from the funds borrowed.

23. The father does not depose to when he first became aware of this alleged fraud. He does not explain why he would not take the obvious action of seeking to set aside the section 79 order. All he says is he did not act maliciously.

24. The Court will assume for present purposes that there is substance to the father’s allegation.  It is hard to believe that he did not know of what he now contends at the time of the consent order.  In these circumstances, his failure to implement these orders is, quite frankly, incomprehensible.

25. Having regard to the above and also to the discussion of section 117 and subsection (2A), the circumstances referred to earlier in these reasons, a costs order must follow.

26. It is noticeable that the wife only seeks $2087.80 which, on this Court’s assessment, is far less than what she would be entitled to by strict application of schedule 1 to the Federal Circuit Court Rules.  Accordingly, in relation to the 106A application, the costs will be $2087.80.

27. I assess the costs payable in relation to the Contravention Application by reference to schedule 1 to the Court Rules. I’m going to order item 1 opposing application first Court date at $1994. I’m going to allocate two daily hearing fees at $271 each. Pursuant to item 8, I’m going to allow preparation for final hearing, $1128. Pursuant to item 13, the daily hearing fee of $1994. Accordingly, the costs in the contravention application will be $5658.

28. When that is added to the $2087.80 referrable to the 106A application, the order will be that within 90 days the husband pay to the wife the sum of $7745.80.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Associate: 

Date:  7 March 2014