HARMON & KARDOS
[2020] FamCA 452
•9 June 2020
FAMILY COURT OF AUSTRALIA
| HARMON & KARDOS | [2020] FamCA 452 |
| FAMILY LAW – COSTS – CONTRAVENTION – Where the mother seeks that the father pay her costs in respect to the contravention application filed by the father – Where the contravention application was dismissed on the basis that the father had failed to establish the existence of a precondition to the relevant orders alleged to have been contravened – Where the Court found that, in the event that it was necessary to determine the issue, that the mother would have established a reasonable excuse – Consideration of whether the father was wholly unsuccessful – Consideration of other relevant considerations – Consideration of the financial circumstances of the parties – Orders made for the father to pay costs to the mother on a party/party basis. |
| Family Law Act 1975 (Cth) s. 70NBA, 70NCB, 70NEB, 70NFB, 117. Emergency Management (Cross Border Travel No. 3) (COVID-19) Direction 2020 (SA) |
| Byrnes v Brisconnections Management Co Ltd (No. 2) [2009] FCA 1432 |
| APPLICANT: | Ms Harmon |
| RESPONDENT: | Mr Kardos |
| FILE NUMBER: | ADC | 4983 | Of | 2017 |
| DATE DELIVERED: | 9 June 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland DCJ |
| HEARING DATE: | By way of written submissions |
REPRESENTATION
| THE APPLICANT APPEARING IN PERSON. |
| SOLICITOR FOR THE RESPONDENT: | Best Wilson Buckley Family Law |
Orders
That Mr Kardos (“the father”) pay Ms Harmon’s (“the mother”) legal costs of and incidental to the Contravention Application filed by the father on 30 April 2020 within 28 days of the costs be agreed or assessed on a party/party basis.
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 Harmon & Kardos 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 SYDNEY |
FILE NUMBER: ADC 4983 of 2017
| Ms Harmon |
Applicant
And
| Mr Kardos |
Respondent
REASONS FOR JUDGMENT
Introduction
This decision concerns an application for costs made by Ms Harmon (“the mother”) related to the Contravention Application filed by Mr Kardos (“the father”) on 30 April 2020. By Orders made on 7 May 2020, the Court dismissed the Contravention Application that alleged the mother had contravened Orders made by the Federal Circuit Court of Australia on 5 December 2018 (“the final orders”).
That Contravention Application was dismissed on the basis that the father had failed to establish the existence of a precondition to the relevant final orders applying to the mother. That precondition placed a requirement upon the father to provide the mother with 90 days written notice in the event that he required her to facilitate the child travelling to Brisbane Airport. The Court also found that, in the event that it had been necessary to determine the issue, the mother would have established a reasonable excuse for failing to take the child from Adelaide to Brisbane as a result of health concerns that she had regarding the parties infant child travelling by aircraft during the current COVID-19 pandemic. The Court further indicated that, had it been necessary to determine the issue, the Court would have also found that the mother had a reasonable excuse for failing to comply with the final orders during the period when the Emergency Management (Cross Border Travel No. 3) (COVID-19) Direction 2020 (SA) required the mother to place herself and the child in self-quarantine for a period of 14 days upon her return from Brisbane to Adelaide. The Court found that self-quarantining for a period for 14 days would cause prejudice to the mother’s employment in circumstances where she is a casual employee and she would not have received income during the period of self-quarantine.
Relevant law – concepts and principles
As the mother’s application for costs arises from an unsuccessful alleged Contravention Application, the Court is empowered by s 70NCB of the Family Law Act 1975 (Cth) (“the Act”) to make an order for costs. That section relevantly provides:
(1) The court may make an order that the person who brought the proceedings (the applicant) pay some or all of the costs of another party, or other parties, to the proceedings.
(2) The court must consider making an order under subsection (1) if:
(a) the applicant has previously brought proceedings in relation to the primary order or another primary order in which the applicant alleged that the respondent committed a contravention of the primary order or that other primary order; and
(b) on the most recent occasion on which the applicant brought proceedings of the kind referred to in paragraph (a), the court before which the proceedings were brought:
(i) was not satisfied that the respondent had committed a contravention of the primary order or that other primary order; or
(ii) was satisfied that the respondent had committed a contravention of the primary order or that other primary order but did not make an order under section 70NBA, 70NDB, 70NDC, 70NEB or 70NFB in relation to the contravention.
The requirement of s 70NCB(2)(a) of the Act is not applicable to the present proceedings.
His Honour Foster J, in Cheni & Stiller (No.2) [2016] FamCA 2018 at [13]-[14], stated in respect to s 70NCB of the Act:
13. Other than the provisions of s 70NCB referred to above there is no reference in the section to any applicable principles in determining the exercise of the Court’s discretion contained in subsection (1).
14. Accordingly it is appropriate to look at the general principles that apply to costs as set out in s117 of the Act
I respectfully agree with his Honour and note that ss 117(1) of the Act excludes from its operation s 70NFB(1) but not s 70NCB.
Section 117 of the Act relevantly provides:
(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.
Those provisions make clear that, while the general rule in family law proceedings, other than those excluded from the operation of s 117(1) of the Act, is that each party bears his or her own costs. The Court, however, may order a party to pay the costs of another where there are circumstances justifying the making of such an order.
As such, a litigant seeking a costs order must establish that the justice of the case requires an order for costs, by reference to the non-exhaustive list of statutory considerations set out in s 117(2A) of the Act, before such an order is made. Although the applicant for costs must establish circumstances which would justify such an order, it is not the case that a costs order can only be made in what has been described as “a clear case”: Penfold v Penfold (1980) 144 CLR 311 at 315.
The considerations set out in s 117(2A) of the Act must be taken into account in deciding whether or not to order a party to pay the costs of another. No one factor under s 117(2A) prevails over any other factor. It is a matter of weight that is accorded to each of the relevant factors in the trial judge’s discretion: Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 per Strickland J.
Accordingly, there is “nothing to prevent any factor being the sole foundation for an order for costs” being made: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123 at 130.
Consideration
It is first necessary to determine whether the mother, who seeks an order for costs, has established circumstances justifying such an order which displaces the position articulated in s 117(1) of the Act. It is not necessary to establish extraordinary or exceptional circumstances, however, there must be circumstances which, at the absolute discretion of the Court, justify a costs order: Stoian v Fiening (Costs) [2014] FamCA 944 at [19] (“Stoian”) having regard to the matters set out in s 117(2A) of the Act.
Dealing with those considerations, in order of significance to my decision in this matter, I will set out my reasoning as to why an order for costs should be made having regard to ss 117(2A)(e), (g) and (a).
Whether any party to the proceedings has been wholly unsuccessful in the proceedings
In this matter, I am satisfied that the Applicant father was wholly unsuccessful in respect to his Contravention Application. The father failed to establish the existence of a contravention as he failed to establish the existence of the precondition, set out in Order 27 of the final orders, that 90 days written notice had been provided to the mother requiring her to take the child from Adelaide to Brisbane Airport. In the judgment,[1] I also found that, in the event that the alleged contravention had occurred, I would have found that the mother had a reasonable excuse for her conduct.
[1] [2020] FamCA 328
The father submits that, in circumstances where the Court exercised its jurisdiction, pursuant to s 70NBA(1) of the Act, to make an order varying a parenting order within contravention proceedings, it could not be said that the father was wholly unsuccessful. In that respect, it is contended that “the orders … facilitate make-up time between the child and the father, which was a desired outcome of the father. It therefore cannot be established, as it is contended, that the father was “wholly unsuccessful”.”
It is the case that the Court also exercised its discretion to make such an Order for make-up time, however, the evidence in the proceedings was that the mother had offered the father the opportunity to spend make-up time with the child providing that it occurred in Adelaide. The father was unsuccessful in his contention that the make-up time should occur in Brisbane.
If, however, I am wrong in reaching that conclusion, I would nonetheless have concluded, as a relevant consideration in respect to the exercise of my discretion, having regard to the provisions of s 117(2A)(g) of the Act that the father was substantially unsuccessful in respect to the proceedings.
The financial circumstances of each of the parties to the proceedings
The mother is a 26-year-old single mother with a young child who, to make ends meet, works as a casual rural worker three (3) or four (4) days per week. While the mother admirably self-represented herself at the hearing of the matter, she incurred legal costs to assist her to prepare the case including preparing and filing her Response and Affidavit.
In this respect, as set out in her written submissions, the mother submits::
My financial circumstances are such that the payment of my legal costs ($4,290) that I have been forced to incur due to the Applicant’s Contravention application against me are oppressive on me as I am a 26 year old, single mother who lives with her parents, is employed as a casual rural worker earning about $600 per week. This has caused me significant financial hardship...
[and further:]
I will suffer financial hardship to pay the $4,290 in legal costs as I earn a very modest income as a casual rural worker, and cannot afford the payment of any legal costs. On 8 May 2020, I have also received a coronavirus supplement payment of $550 from the Australian Federal Government which I understand is to assist low income earners.
(Emphasis in original) (Citations omitted)
Comparatively, the father disputes the veracity of the mothers representations in respect to her financial circumstances and, as set out in his written submissions, submits that: ;
3. The father submits that he is not in a financial position to meet payment of the mother’s costs associated with these proceedings. The father’s weekly net income is approximately $954. The father’s weekly expenses total approximately $1,006, which the father is able to depose to if required. Further, the father’s cash reserves as at the date of these submissions total $1,756. However, the father currently has an outstanding bill owing to his current solicitors for an amount in excess of $4,000, which will deplete the father’s cash reserves.
4. The father does not have the financial capacity to meet payment of the costs order sought by the mother, in circumstances where he experiences a shortfall between his weekly income and expenses and he does not have sufficient cash reserves to meet payment of the costs sought by the mother. The father has consistently had a shortfall between his weekly income and expenses, which he deposed to in his Financial Statement filed on 1 November 2018. The father is willing to depose to his current financial circumstances if required. Even if an order was made requiring the father to pay the mother’s costs through a payment plan, this would cause significant financial detriment to the father, and render him unable to meet payment of his day to day living expenses.
5. The father pays child support to the mother in the amount of $336 per month. The father is up to date with his child support payments.
6. Additionally, the father asserts that on 25 December 2018, he paid to the mother the sum of $25,000, by way of property settlement, in accordance with orders made on 29 November 2018.2 The father does not know how the mother has applied these funds.
(Citations omitted)
It is to be noted that 17 months have elapsed since the mother received a payment of $25,000 by way of property settlement occurring in circumstances of the termination of the parties’ relationship. There is no reasonable basis upon which it can be assumed that those funds remain available to the mother. This is in circumstances where the mother attested, during the course of the proceedings, that she was left with a substantial legal bill arising from her dispute with the father.
During the course of the proceedings I was impressed by the mother’s evidence and the manner in which she conducted the proceedings. I am, therefore, satisfied of the veracity of her account of her financial circumstances.
In circumstances where the father has been wholly unsuccessful in these proceedings, it would be unfair and unjust to require the mother to meet the totality of her legal expenses.
Conclusion
Having considered each factor set out in s 117(2A) of the Act, on the basis of the matters that I have set out in this decision, I am satisfied that an order for costs against the father in relation to his Contravention Application should be made in favour of the mother.
Amount of costs
I am not satisfied, however, that the circumstances of this case justify an order be made for indemnity costs, which the Full Court confirmed, in Kohan and Kohan (1993) FLC 92-340 at 79,614, is an order of “an exceptional kind.”
Rule 19.18 of the Family Court Rules 2004 (“the Rules”) provides for the methods of calculating costs. These include, in r 19.18(1)(a), the Court fixing upon a specific amount for costs or, in r 19.18(1)(b), an order for the costs to be assessed on a particular basis.
In Stoian (supra) at [91], Kent J endorsed the principles for applying a rule equivalent to r 19.18 of the Rules as adumbrated by Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [8]. Those principles are:
i. the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation;…
ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable;…
iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available;…
iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place;…
v. the gross sum “can only be fixed broadly having regard to the information before the Court”;…
…
(Citations omitted)
Consistent with those principles, it has been determined that, where a court orders a party to pay costs, it may be appropriate for the court to fix a lump sum. By doing so, the court can avoid further delay and inconvenience being occasioned by the requirement to tax a bill: Byrnes v Brisconnections Management Co Ltd (No. 2) [2009] FCA 1432 at [51].
The difficulty that I have in this case is that the mother’s reference to having incurred legal costs in the sum of $4290 appears to be a reference to the totality of costs which she has incurred. Making an order for the father to pay costs in that sum would, in those circumstances, amount to making an order for payment of costs on an indemnity basis.
The mother offered to provide the Court with particulars of the legal costs she has incurred however, that would result in further delay in the finalisation of these proceedings.
In the circumstances, it is appropriate that I make an order for the father to pay the wife’s legal costs incurred subsequent to and in respect to the father’s Contravention Application which was filed on 30 April 2020. Those costs should be paid within 28 days of being agreed or assessed.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 9 June 2020.
Associate:
Date: 9 June 2020
0
5
3