HODGES & MANCINI (No.2)
[2014] FCCA 1684
•3 December 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HODGES & MANCINI (No.2) | [2014] FCCA 1684 |
| Catchwords: FAMILY LAW – Considerations regarding costs following property orders – likelihood of futility of orders. |
| Legislation: Family Law Act 1975, ss.117(1), 117(2A) |
| Humane Society International Inc v Kyodo Senpaku Kaisha [2004] FCA 1510 Latoudis v Casey (1990) 170 CLR 534 Stephens v Stephens [2011] FamCA 78 |
| Applicant: | MR HODGES |
| Respondent: | MS MANCINI |
| File Number: | CAC 414 of 2012 |
| Judgment of: | Judge Neville |
| Orders made on: | 3 December 2013 (in Chambers) |
| Date of Last Submission: | 18 December 2013 |
| Delivered at: | Canberra |
| Reasons provided on: | 4 July 2014 |
REPRESENTATION
| Counsel for the Applicant: |
| Solicitors for the Applicant: | Mazengarb Family Lawyers (from 28 August 2013 until 15 January 2014) otherwise de Facto Husband self-represented |
| Counsel for the Respondent: |
| Solicitors for the Respondent: | Farrar Gesini Dunn |
THE COURT NOTES THAT
(a) his Honour Judge Neville delivered an ex tempore judgment in this matter on 3 July 2013;
(b) on 31 July 2013 the Respondent (who is the Applicant in this current Application) filed an Appeal against orders made as part of that judgment;
(c) on 22 August 2013 the Respondent filed an Application in a Case to stay the orders made on 3 July 2013;
(d) written reasons for his Honour’s orders were provided to the parties on 23 September 2013 and
(e) the Appeal Registry wrote to the parties on 29 October 2013 and advised that as no Draft Appeal Index was received by 21 October 2013, the Appeal was taken to be abandoned as of the close of business 21 October 2013, accordingly
THE COURT ORDERS THAT
The Application in a Case filed by the Respondent on 22 August 2013 be dismissed.
Each party shall pay their own costs of and incidental to the Application in a Case.
IT IS NOTED that publication of this judgment under the pseudonym Hodges & Mancini (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAC 414 of 2012
| MR HODGES |
Applicant
And
| MS MANCINI |
Respondent
REASONS FOR JUDGMENT
Introduction
On 3rd July 2013, the Court delivered an extensive ex tempore judgment, which resulted in orders as largely sought by the Respondent de facto Wife. Those reasons were subsequently reduced to writing and provided to the parties in September 2013.
The reasons note, among other things, the long relationship, the de facto Wife’s poor health, the negative asset pool of the parties, and that the only asset available was the Husband’s superannuation.
On 22nd August 2013, the de facto Husband filed an Application in a Case in which he sought an order to stay the orders made by this Court on 3rd July. The only ground for the stay was that he had lodged an appeal. At the time of filing the Application, as he had been during the hearing in July, the de facto Husband was self-represented.
Written submissions were filed by lawyers acting for both parties, the de facto Husband’s lawyers having come on to the record on 28th August.
The Wife’s solicitors filed two lots of submissions: on 3rd September and in reply to the Husband’s submissions. In fact, the Wife’s solicitors filed two sets of submissions, both of which were by way of Response to the Stay Application. It could be argued that they were having ‘two bites of the cherry’, when only one should have been taken. Indeed, the first response submissions by the Wife were filed on 3rd September, which is after the Husband’s solicitors filed a notice of address for service. One would have reasonably concluded that those solicitors would be likely to file submissions in support of their client’s Application for a Stay.
Instead, the Wife’s solicitors, as I have noted, filed submissions on 3rd September, and again in response to the Husband’s solicitor’s submissions (which were filed on 2nd October) on 11th October.
However, because of a time-table made by the Court on 5th September for the filing of the “October submissions” by both parties, save for the Wife having ‘two bites of the cherry’, this argument has little substance.
On 3rd December 2013, the following orders (with detailed notations) were made in this long-running property matter:
NOTING THAT (a) his Honour Judge Neville delivered an ex tempore judgment in this matter on 3 July 2013; (b) on 31 July 2013 the Respondent (who is the Applicant in this current Application) filed an Appeal against orders made as part of that judgment; (c) on 22 August 2013 the Respondent filed an Application in a Case to stay the orders made on 3 July 2013; (d) written reasons for his Honour’s orders were provided to the parties on or around 23 September 2013 and (e) the Appeal Registry wrote to the parties on 29 October 2013 and advised as no Draft Appeal Index was received by 21 October 2013, the Appeal was taken to be abandoned as of the close of business 21 October 2013, accordingly,
THE COURT ORDERS THAT:
1. The Application in a Case filed by the Respondent on 22 August 2013 be dismissed.
2. Each party shall pay their own costs of and incidental to the Application in a Case.
The Wife’s solicitors now seek written reasons for order 2 made on 3rd December. Given the inordinate demands on the Court’s resources, this is the earliest opportunity that the Court has had to attend to the reasons. Two preliminary matters, both of some significance, should be noted at the outset, however.
First, no submissions were ever made in relation to costs, other than simply to seek such an order. Thus, the Court was given no assistance, least of all from the party seeking the order, regarding the application of principle to the facts of the matter to justify the making of such an order. Simply: the submissions was, in effect, ‘we seek an order for costs’, and the Court has to do all the work either to explain or justify (or not) the order made.
Secondly, a third-party debt notice had been sought by the Wife, and granted, to secure funds from the Husband. Thus, accepting (as I did at trial) that the Wife’s financial circumstances were grave, the Husband’s evidence was to the effect that, whatever his contract with the Defence Department, it was more likely than not to be a short-lived contract. Following redundancy, his prospects were limited. Presumably in recognition of the limited funds available to the Wife from the Husband, the Wife’s solicitors acted so as to protect the orders made in her favour. This is also to say that there was, apparently, a clear recognition by the Wife’s solicitors of the parlous state of the financial position of both parties.
Principles Regarding Costs Orders
The statutory and jurisprudential considerations in relation to the making (or not making) orders for costs are well known. Although well known, and although nothing was provided by the Wife’s solicitors in relation to relevant principle, it is sufficient to note the following from the Full Court decision in Stephens v Stephens.[1] Beginning at [62], the Full Court said:
[1] Stephens v Stephens [2011] FamCA 78
[62] Section 117(1) of the Act provides: “[s]ubject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.”
[63] Section 117(2) of the Act provides that if, in proceedings under the Act, the court is of opinion that there are circumstances that justify it in doing so, it may, subject to sub-ss (2A), (4) and (5), and the applicable rules, make such order as to costs, whether by way of interlocutory order or otherwise, as it considers just.
[64] Section 117(2A) of the Act provides that in considering what order (if any) should be made under s 117(2), the court shall have regard to the matters set out in paragraphs (a) to (g). In Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 the Full Court (Kay, Warnick and Boland JJ), referring to s 117(2A), said at 130 [41] :
A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
[65] As to the relationship between s 117(1) and s 117(2) of the Act in Penfold v Penfold (1980) 144 CLR 311, in joint reasons, Stephen, Mason, Aickin and Wilson JJ said at 315:
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in “a clear case”. (emphasis added)
[66] As to the nature of the hearing of an application pursuant to s 117 of the Act in Penfold their Honours said at 315-16:
Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent [(1970) 92 W.N. (NSW) 503, at p. 505]). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
[67] We also observe that in Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 the majority of the High Court (Gaudron, Gummow, Hayne and Callinan JJ, Kirby J dissenting) held that s 117(2) of the Act referred to costs in the conventional sense and thus to the payment by one party to litigation of money by way of a partial indemnity for professional legal fees and expenses actually incurred by another party in the course of the litigation: see Hayne J at 219. An order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature. Costs are not a penalty or damages: Latoudis v Casey (1990) 170 CLR 534 per Mason CJ at 543 and McHugh J at 567; Ruddock and Ors v Vadarlis and Ors (2001) 188 ALR 143 per Full Court of the Federal Court at [12] and Brott and Joachim (2006) FLC 93-259 per Full Court (Holden, Warnick and Boland JJ) at 80,403-404.
Consideration & Resolution
On the facts of the present case, the difficult financial plight of both parties was plain for all to see. In the Husband’s case, part of that was because of his amazing lack of organisation, which was commented on in the principal judgment. Indeed, as already observed, it is perfectly apposite for the Court to conclude, inter alia, that the Wife’s solicitors recognised the difficulties she would have in securing further funds from the Husband (other than from his superannuation), and because of this, filed the third-party debt notice.
In short, by way of principle (and, as I have already noted, in the absence of any relevant submissions in relation to costs by the solicitors for the Wife) I note that (a) according to the High Court in Penfold, s.117(2) requires a finding of justifying circumstances as an essential preliminary to the making of a costs order; (b) however, there is no requirement to specify particular circumstances to justify the making (or not making) of an order in relation to costs; and (c) the Court has a very wide discretion to award, or not to award, costs.
At the time of lodging the Appeal, and the filing of the Stay Application, as he was at the trial, the Husband was a self-represented litigant (as I have earlier observed). His knowledge of legal process, and the consequences of such things, was patently (and understandably) very limited.
In my view, this [common] deficiency [alone] confronting a self-represented litigant, is sufficient to warrant the order made on 3rd December 2013 that each party pay his or her own costs.
There are some other factors, briefly put, and not necessarily of any great moment (unless otherwise specified), which further support (if such be needed) the costs order made on 3rd December 2013.
First, given the state of the parties’ finances, including that of the Husband, to make an order for costs in the current circumstances would, in effect and in all likelihood, be a futile order.
It has long been the practice of Courts not to make orders where to do so would be utterly futile. Allsop J (as his Honour once, and then, was) discussed this judicial principle or practice in Humane Society International Inc v Kyodo Senpaku Kaisha.[2] At [70], his Honour said: “The Court will not make futile orders. Whether or not they are futile may depend upon many matters, including but far from limited to the attitude of persons who are not present before the Court.”
[2] [2004] FCA 1510.
In my view, the making of a costs order here against the Husband would more likely than not be a futile order of the Court.
Secondly, as the comments from the Full Court make plain in their citations from the High Court in Latoudis v Casey, costs are not intended to be either a form of damages, or a punishment.[3] To make an order in this matter against the Husband would, in my view, constitute a needless and improper punishment. In deliberately dramatic terms, it would be akin to the Wife’s lawyers acting like Shylock: having secured the result for the Wife, still a ‘pound of flesh’ – an order for costs - was necessary.[4]
[3] Latoudis v Casey (1990) 170 CLR 534.
[4] See The Merchant of Venice, among other places, Act 1 Scene 3, 140-170 and particularly Act 4 Scene 1, 90 – 330.
Secondly, no submissions specifically in relation to costs have ever been made by the Wife’s solicitors, other than to seek such an order. There are no submissions on any relevant section of the Act, or any case-law, or in the application of either to the facts, regarding costs.
Here, the Court has been put to the labour (in some respects properly so) of combing through extensive written submissions on two occasions on behalf of the impoverished Wife, and where parts of those submissions are needlessly, and quite unfortunately, grandiloquent and hubristic. For example, at pars.34 & 35 of the submissions filed on 3 September 2013 the following is set out (emphasis in original):
The Court is asked to now determine that the decision made by it at first instance could be wrong. As Oliver Cromwell wrote in a letter to the general assembly of the Church of Scotland in 1650 “I beseech you in the bowels of Christ, think it possible you may be mistaken.” Here, however, the Court is not mistaken.
Yet, there is silence in submissions regarding costs.
In the face of such silence, and for these reasons, the orders of 3rd December 2013 were made.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Judge Neville
Associate:
Date: 4 July 2014
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