Hillier and Olly

[2017] FamCA 2

FAMILY COURT OF AUSTRALIA

HILLIER & OLLY [2017] FamCA 2

FAMILY LAW – COSTS – Where the mother makes an application for indemnity costs – Where the mother submits that the conduct of the father caused her to incur additional costs – application dismissed

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

APPLICANT: Ms Hillier

RESPONDENT: Mr Olly

FILE NUMBER: BRC 2234 of 2015

DATE DELIVERED: 11 January 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Chambers

JUDGMENT OF: Forrest J

HEARING DATE: Last Submissions received 9 December 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bunning

SOLICITOR FOR THE APPLICANT: Pullos Lawyers

COUNSEL FOR THE RESPONDENT: Mr Galloway

SOLICITOR FOR THE RESPONDENT: Jones Mitchell

Orders

1. That the mother’s application that the father pay her costs of and incidental to the proceedings to this point in time, is dismissed.

2. That the balance of funds held in the mother’s solicitors’ trust account for the father pursuant to Orders made by Justice  Forrest on 11 November 2016, be paid to the father by payment to the trust account of his solicitors, Jones Mitchell Lawyers.

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 Hillier & Olly 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

FILE NUMBER: BRC 2234 of 2015

Ms Hillier

Applicant

And

Mr Olly

Respondent

REASONS FOR JUDGMENT

1. On 11 November, 2016, I made Orders and delivered written reasons in parenting and property adjustment proceedings between the parties in this matter. Notably, in the parenting proceedings I did not make final orders but rather interim orders that provided for a regime of family therapy for the father before further consideration is given to the child starting to spend time with the father, firstly, on a supervised basis, then, potentially, on an unsupervised basis.

2. The mother has now pressed an application that the father be ordered to pay her costs of and incidental to the proceedings fixed in the sum of $136,736.86. On the mother’s case, that amount accords with an indemnity costs order, it being equal to the total of her costs and outlays incurred in connection with all those parts of the proceedings not already dealt with by a previous costs order made in her favour.

3. The mother’s costs and outlays were charged pursuant to a costs agreement between her and her solicitors. The evidence is that the amount incurred is around twice as much as charges made pursuant to the Court approved scale of costs would amount to. Of course, I hasten to add, litigants and solicitors are perfectly entitled to reach agreements for fees to be calculated and charged other than pursuant to that scale.

The Competing Submissions

1. Acknowledging the statutory provision in s 117(1) of the Family Law Act 1975 that each party to proceedings under the Act bears his or own costs, counsel for the mother nevertheless submitted that there are factors in this case that would cause the Court to reach the conclusion that the costs order sought by the mother is justified and that the terms of the order she seeks are just. Of course, s 117(2) of the Act provides for the discretionary exception to the general position contained in s 117(1), if the Court is so satisfied. S 117(2A) lists the matters that must be considered when a decision whether to make a costs order is being made, and, if it is, then as to its terms. The inclusion in that list of “such other matters as the court considers relevant” marks the breadth of the discretionary exercise.

2. In support of the application for an indemnity costs order, counsel for the mother placed much weight on the ‘conduct’ of the father throughout the proceedings. He referred to the oft-cited Federal Court decision of Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 255 and the matters stated by Sheppard J in that judgment as relevant to the issue of whether an indemnity costs order should be made. Counsel then went on to submit that the father’s actions in this matter were of the requisite nature.

3. Those matters that Sheppard J set out, included:

   ·The making of irrelevant allegations of fraud;

   ·Misconduct which has caused loss of time;

   ·Proceedings commenced for ulterior motives;

   ·Wilful disregard for known facts or law;

   ·The making of allegations which ought never have been made or the undue prolongation of a case by groundless contentions;

   ·The imprudent refusal of an offer to compromise.

4. In summary, counsel for the mother submitted, with some force, that the father’s conduct in advancing the position that he did against the mother and her current partner, right up to the time of trial, could reasonably be considered as falling within the first five of the categories of conduct listed by Sheppard J. Accordingly, he submitted, an indemnity costs order against the father is justified and should be made.

5. In reply, counsel for the father submitted that the mother’s reference to and reliance upon the father’s ‘conduct’ in support of her costs application is misguided as the ‘conduct’ that is referred to in s 117(2A)(iii) of the Act is “conduct in relation to the proceedings” that particularly references the way in which the proceedings are actually run by the litigant and not the litigant’s conduct as a partner and parent.

6. Even if there is merit, as I consider there probably is, in such an interpretation of the ‘conduct’ that is caught by s 117(2A)(c), it is nevertheless open, in my view, to still consider the sort of conduct that counsel for the mother is actually referring to as another relevant matter within the bounds of s 117(2A)(g). 

My Determination

1. Quite obviously, however, the litigation between Colgate-Palmolive Company and Cussons Pty Ltd in the Federal Court was commercial litigation between two corporate business competitors. In such proceedings, costs generally follow the outcome of the litigation. The stark difference between that and litigation in the family law courts between parties to a former marriage or de facto marriage that has produced a child or children is plainly recognised in the fact that the legislature has deigned it appropriate to statutorily provide that the parties to proceedings under the Family Law Act shall bear their own costs of the proceedings, subject to a discretion conferred on the Court to depart from that general position in circumstances where the Court considers such departure is justified.

2. It is, in my judgment at least, recognised that relationship breakdown, particularly where there are children involved, can be productive of great trauma and stress for one or both parties to the relationship. That trauma and stress does in some instances lead to uninformed, misguided behaviour, particularly where the person does not have reasonable access to competent, specialist advice from lawyers and counsellors. Sometimes, when one party does have access to that advice and the other does not, the difficulties being experienced by the person who does not have that access can be magnified. Suspicion and mistrust may grow and complete loss of insight and judgment can follow. Relatively minor behavioural matters observed in the child can be seen, heard and interpreted through a distorted framework of perception and understanding. Ending this and returning post-separation, co-parenting relationships to appropriate, child-focused equilibrium is sometimes very difficult. Indeed, in some cases the lack of insight on the part of a parent can be such that strict application of best-interests principles can lead to severe restrictions being imposed by the Court on the time children spend with a parent.

3. That is the direction in which this case was inexorably heading from when the proceedings were commenced until the father was able to be put in a position to access expert legal and counselling assistance. That he realised and accepted that he needed that assistance demonstrated at least a modicum of insight on his part into the nature of the difficulties he was facing. It is that modicum of insight, it is hoped, from which the further development of greater insight will spring so that the child will be able to further her relationship with her father in the future.   

4. Whilst it might be relatively easy to continue to be critical of the father and to consider that by his generally insight-less behaviour over many months he has contributed to the circumstances in which the mother has incurred tens of thousands of dollars in legal fees, it is in my judgment no less important to acknowledge the significance of the involvement and influence of the lawyers and the family therapist the father did engage when he was able to. Their influence on the father, and the change in his position their involvement brought about was extremely important in providing a base for parenting orders to be made that give the child a chance to maintain and further develop a meaningful relationship with the father as she grows. That prospect, according to the expert witness, is something the child herself craved.

5. The father’s financial position at the end of the proceedings, including, in particular, the property adjustment proceedings, is clearly inferior to that of the mother. For the interim parenting orders to gain any traction insofar as farther improvements in the father’s insight and behaviour are concerned, such that the child might be able to begin to safely spend unsupervised time in the father’s care, the father is going to have to have money to spend on the ongoing family therapy (including the mother’s and the child’s involvement in that) and the interim supervised time the child is expected to get to spend with him. Ongoing involvement with the specialist family lawyers who have been advising and representing the father will also require him to be able to pay for it. Ordering that some or all of the $55,241 that is now held in the mother’s solicitors’ trust account for the father pursuant to paragraph (19)(iv) of the orders of 11 November would make it most unlikely that the father could continue to retain his current solicitors as the evidence adduced at the trial shows he already owes them more than that. Ordering him to pay costs far in excess of that amount would make it most unlikely that the family therapy and supervision would be able to be paid for by the father in the future either. Indeed, I am satisfied that it would probably ensure that it did not happen. 

6. The relationship between the mother and the father in this case needs to be given every chance to begin to improve for the child’s sake. A costs order, such as that sought by the mother now, would not, in my judgment, assist at all in that process.

7. Furthermore, although submissions were made by counsel for the mother about levels of success in the proceedings, it certainly cannot be said that the father has been “wholly unsuccessful” in the property or the parenting proceedings. Conversely, one could certainly not look at the outcome of the proceedings and compare it to the final orders the mother contended for in their various forms along the way from the commencement of the proceedings to the November judgment and conclude that the mother has been wholly successful. It is, I venture to postulate, because of the very rarity of complete success or failure in parenting orders litigation that costs orders are made so infrequently in such proceedings.

8. Whilst I appreciate that the mother has spent a lot of money on her legal costs and outlays in these proceedings, particularly when the amount she has spent is viewed relative to the total wealth of the parties – wealth that might  have been better accumulated and used for furthering the well-being of the child in the future – I do not lose sight of the fact that the mother voluntarily elected to retain solicitors pursuant to a contract by which she agreed to pay nearly twice as much for their services as is set out in the Court approved scale of costs, nor the fact that she did so, I have no doubt, knowing that costs orders are not easily obtained in this Court.

9. In the end, I am, with respect to the mother and her legal representatives, not satisfied that the circumstances of this case are such that an order for the father to pay the mother $136,736.86, or any amount thereof, is justified. I will dismiss her application for costs and order that the funds held in the mother’s solicitors’ trust account for the father be paid to the trust account of Jones Mitchell Lawyers.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 11 January 2017.

Associate: 

Date:  11 January 2017