Hayes & Hayes (No. 2)

Case [2021] FamCA 201

FAMILY COURT OF AUSTRALIA

Hayes & Hayes (No. 2) [2021] FamCA 201

File number(s): PAC 1553 of 2018
Judgment of: HARPER J
Date of judgment: 15 April 2021
Catchwords: FAMILY LAW – COSTS – Where the mother seeks indemnity costs against the father – Where the father made misleading statements in his evidence and failed to disclose important evidence about his mental health – Where offers of settlement made to the father but were unreasonably rejected – Where the father failed to provide documents regarding his mental health resulting in delay – Whether exceptional circumstances are made out justifying indemnity or solicitor and client costs.
Legislation:

Family Law Act 1975 (Cth) ss 117

Family Law Rules 2004 (Cth) rr 1.04, 1.06, 1.07, 1.08, 19.18

Supreme Court Rules 1987 (NR) r 1.10
Cases cited:

Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873

Aon Risk Services Australia LTD V Australian National University (2009) 239 CLR 175

B v J (2006) FLC 93-259

Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29

Cachia v Hanes (1994) 179 CLR 403

Harris & Dewell and Anor (No. 2) (2018) FLC 93-863

Hayes & Hayes [2020] FamCA 1057

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish and Anor (2005) 191 FLR 294

Latoudis v Casey (1900) 170 CLR 534

Northern Territory v Sangare (2019) 265 CLR 164

Oshlack v Richmond River Council (1998) 193 CLR 72

Prantage & Prantage (Costs) [2014] FamCA 850

Re JJT; Ex Parte Victoria Legal Aid (1998) 195 CLR 184
Number of paragraphs: 55
Date of last submission/s: 29 January 2021
Place: Sydney
Solicitor for the Applicant: Swaab Attorneys
Solicitor for the Respondent: The Respondent appeared in person

ORDERS

PAC 1553 of 2018
BETWEEN:

MS HAYES

Applicant
AND:

MR HAYES

Respondent

ORDER MADE BY:

HARPER J

DATE OF ORDER:

15 APRIL 2021

THE COURT ORDERS THAT:

  1. Within 60 days, the Respondent Father pay the Applicant Mother’s costs of the parenting proceedings on an indemnity basis from 3 June 2020.

  2. Within 28 days of the date of these orders, each of the Applicant Mother and the Respondent Father contribute $9,280 to the costs of the Independent Children’s Lawyer, to be paid as the Independent Children’s Lawyer directs.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hayes & Hayes has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

HARPER J

INTRODUCTION

  1. These are parenting and property proceedings between the Applicant Mother, Ms Hayes (“the mother”) and the Respondent Father, Mr Hayes (

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AGLC
Hayes & Hayes (No. 2) [2021] FamCA 201
Case
[2021] FamCA 201
Decision Date

CaseChat Overview and Summary

In *Hayes & Hayes (No. 2)*, the Applicant Mother sought indemnity costs against the Respondent Father following parenting proceedings. The dispute concerned the mother's application for costs, with the father seeking dismissal of her application. The matter was heard by Harper J in the Family Court of Australia.

The primary legal issues before the court were whether exceptional circumstances existed to justify an order for indemnity or solicitor and client costs, and if so, on what basis and to what extent. The court was required to consider the conduct of the parties, including allegations of misleading statements and failure to disclose important evidence by the father, as well as the rejection of settlement offers and delays caused by the father's non-compliance with document production regarding his mental health.

Harper J applied section 117 of the *Family Law Act 1975* (Cth), which establishes that the usual starting point is for each party to bear their own costs, but allows for orders for costs if justifying circumstances are present. The court considered the factors outlined in section 117(2A), including the parties' conduct in relation to pleadings, discovery, and the production of documents, as well as the reasonableness of settlement offers. The court found that the father's misleading evidence, failure to disclose, and unreasonable rejection of settlement offers constituted exceptional circumstances justifying an order for indemnity costs.

The court ordered that the Respondent Father pay the Applicant Mother's costs of the parenting proceedings on an indemnity basis from 3 June 2020. Additionally, both parents were ordered to contribute $9,280 each towards the costs of the Independent Children’s Lawyer.

Orders

Orders of the court

PAC 1553 of 2018

BETWEEN:

MS HAYES

Applicant

AND:

MR HAYES

Respondent

ORDER MADE BY:

HARPER J

DATE OF ORDER:

15 APRIL 2021

THE COURT ORDERS THAT:

1.

Within 60 days, the Respondent Father pay the Applicant Mother’s costs of the parenting proceedings on an indemnity basis from 3 June 2020.

2.

Within 28 days of the date of these orders, each of the Applicant Mother and the Respondent Father contribute $9,280 to the costs of the Independent Children’s Lawyer, to be paid as the Independent Children’s Lawyer directs.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

On 11 December 2020, I delivered judgment in relation to the parenting aspect of the proceedings. By consent, I made orders that the mother have sole parental responsibility for the children and that the children are to live with her. I also made orders, not by consent, that the father spend supervised time with the children until the date of X’s 17th birthday and thereafter the father is to spend unsupervised time with the children. I also dismissed a contravention application filed by the father: Hayes & Hayes [2020] FamCA 1057 (“the primary judgment”). In the primary judgment I made orders that if any party sought an order for costs, an appropriate application to the Court may be made within twenty-eight (28) days of 11 December 2020, to be filed and served within that time period and a copy forwarded to my Chambers. The mother filed an Application in a Case on 23 December 2020 seeking a costs order. The father filed a Response to the mother’s Application in a Case on 29 January 2021. The Independent Children’s Lawyer filed a costs notice seeking a costs contribution of $9,280 from each parent. The history of the matter was outlined in detail in the primary judgment (see [22] - [47]). Repetition is unnecessary here. I will refer to specific aspects of the history only as necessary in these reasons. The mother’s Application in a Case for costs sought the following orders:1. That the Respondent Father, Mr Hayes ("the Respondent") pay to the Applicant's Mother, Ms Hayes ("the Applicant"), her legal costs and disbursements of, and incidental to, the proceedings on:1.1 An indemnity basis fixed at the sum of $238,994, with such sum to be paid within six months from the date of these orders; or 1.2 In the event that Order 1.1 is not made, then the amount of $121,510 which represents the costs from 9 September 2019 to date; or 1.3 In the event that Order 1.2 is not made, then such costs as calculated in accordance with the scale in the Family Court Rules. The father’s Response to the mother’s Application in a Case sought in summary that her application for costs be dismissed. In proceedings to which the Act applies, the starting point is that each party shall bear his or her own costs: s 117(1). If, however, the Court is of the opinion that there are justifying circumstances, the Court may make such order as to costs and security for costs as the Court considers just: s 117(2). In Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184; [1998] HCA 44, the majority of the High Court (Gaudron, Gummow, Hayne and Callinan JJ, Kirby J dissenting) held that s 117(2) referred to costs in the conventional sense, that is, as indemnity for another’s liability for professional fees and out of pocket expenses reasonably incurred in the litigation (see eg Hayne J at [97]). This position has been followed in the Full Court (B v J (2006) FLC 93-259; [2006] FamCA 256). When considering what, if any, order for costs should be made, the Court must have regard to the factors set out in s 117(2A). (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.

Ratio Decidendi

Legal Principle Established

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