Jamine and Jamine (Costs)
[2010] FamCAFC 191
•22 September 2010
Family Court Of Australia
| JAMINE & JAMINE (COSTS) | [2010] FamCAFC 191 |
| FAMILY LAW - COSTS – Where the Husband is to pay the costs of the appeal proceedings on a party and party basis – Where the Husband is to pay the costs of the costs proceedings of a specific amount – Where the Husband is wholly unsuccessful in his appeal – Where the Wife has established a justifying circumstance – Application for costs granted |
| Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 Penfold v Penfold (1980) 144 CLR 311 Stephens & Stephens & Ors (Enforcement) (Costs) [2010] FamCAFC 172 |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| APPELLANT: | MR JAMINE |
| RESPONDENT: | MS JAMINE |
| FILE NUMBER: | MLC | 3286 | of | 2008 |
| APPEAL NUMBER: | SA | 108 | of | 2008 |
| DATE DELIVERED: | 22 September 2010 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | O’Ryan J |
| HEARING DATE: | By way of written submissions |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 10 December 2008 |
| LOWER COURT MNC: | [2008] FMCAfam 1189 |
Representation
| SOLICITOR FOR THE APPELLANT: | Bowlan Dunstan & Associates |
| SOLICITOR FOR THE RESPONDENT: | Lantern Hill Lawyers |
Orders
The Husband pay the costs of the Wife of and incidental to the appeal concluded by judgment pronounced on 15 June 2010.
The costs in order 1 hereof be in an amount as agreed by the Husband and the Wife within 21 days of the date of these orders and failing such an agreement as assessed on a party and party basis.
The Husband pay the costs of the Wife of and incidental to the appeal costs proceedings concluded by these orders.
The costs in order (3) hereof be assessed in the amount of $578.00.
IT IS NOTED that publication of this judgment under the pseudonym Jamine & Jamine (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE APPELLATE DIVISION OF THE FAMILY COURT OF AUSTRALIA |
Appeal Number: SA 108 of 2008
File Number: MLC 3286 of 2008
| MR JAMINE |
Appellant
And
| MS JAMINE |
Respondent
Reasons for Judgment
Introduction
On 15 June 2010 I pronounced judgment and dismissed an appeal by Mr Jamine (“the Husband”) against a divorce granted by Federal Magistrate Hartnett. The respondent to the appeal was Ms Jamine (“the Wife”).
I made the following orders in relation to any costs sought by the parties in relation to the appeal:
3. Each party be at liberty to make an application by way of written submissions in respect of costs incurred in relation to the appeal by the Appellant by filing such submissions at the Southern Region Appeal Registry of the Family Court of Australia and serving them on the other party within 28 days of the date hereof.
4. Each party have a further 14 days in which to make written submissions in answer thereto by filing such submissions at the Southern Region Appeal Registry of the Family Court of Australia and serving them on the other party.
5. Each party be at liberty to reply to an answer by way of written submissions by filing such reply at the Southern Region Appeal Registry of the Family Court of Australia and serving it on the other party within a further seven days.
6. Each party endorse on the cover sheet of any submissions filed pursuant to orders 3, 4 and 5 the date upon which a copy of that submission was served on the other party.
On 13 July 2010 the Wife filed her “submissions as to costs”. In her submissions the Wife stated that she was seeking costs assessed on a party and party basis in the amount of $6,796.25 in respect of the appeal and $3,432.05 in respect of the divorce hearing. The Wife attached an itemised costs schedule to her submissions.
On 20 July 2010 the Husband filed his submissions in reply to the Wife’s submissions. The Husband opposed the Wife’s application for costs and submitted that each party should bear his or her own costs in relation to the appeal and since Federal Magistrate Hartnett did not make any order as to costs that “therefore each party bears his or her own costs” of the divorce proceedings.
Relevant Principles
Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that “[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”.
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 secs (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.
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 (per Kay, Warnick and Boland JJ), referring to s 117(2A), said at 130:
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.
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)
As to the nature of the hearing of an application pursuant to s 117 of the Act 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.
In Stephens & Stephens & Ors (Enforcement) (Costs) [2010] FamCAFC 172 the Full Court observed at paragraph 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.
There are various machinery provisions within Part 19 of the Family Law Rules 2004 (Cth) (“the Rules”). Part 19 regulates the costs between parties for applications in family law cases.
Rule 19.01 of the Rules deals with the application of Part 19 and provides:
(1) Subject to subrule (3), this Chapter:
(a) applies to costs for work done for a case, or in complying with pre-action procedures, in relation to a fresh application, paid or payable by one party to another; and
(b) creates a duty for lawyers to give information about costs to their clients.
(2) A party may only recover costs from another party in accordance with these Rules or an order.
Note A self-represented party is not entitled to recover costs for work done for a case (except work done by a lawyer) but, if so ordered, may be entitled to recover some payments.
(3) This Chapter does not apply to costs in any part of a case in which a Family Court is exercising its jurisdiction under section 35 or 35B of the Bankruptcy Act.
Rule 19.02 of the Rules provides that interest is payable on outstanding costs at the rate mentioned in r 17.03.
Rule 19.08 of the Rules provides:
(1) A party may apply for an order that another person pay costs.
(2) An application for costs may be made:
(a)at any stage during a case; or
(b)by filing an Application in a Case within 28 days after the final order is made.
(3) A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement in relation to those costs and, if so, the terms of the costs agreement.
Part 19.5 of the Rules deals with the calculation of costs. Rule 19.18 provides:
(1) The court may order that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
Example
For paragraph (1) (c), the stated method may be in accordance with Schedule 3 but with an additional percentage for complexity.
(2) If costs are payable under the Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party/party basis.
(3) In making an order under subrule (1), the court may consider:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the case;
(c)the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with pre-action procedures; and
(f)expenses properly paid or payable.
Rule 19.11 of the Rules provides:
(1) Before making an order for costs against a lawyer or other person who is not a party to a case, the court must give the lawyer or other person a reasonable opportunity to be heard.
(2) If a party who is represented by a lawyer is not present when an order is made that costs are to be paid by the party or the party’s lawyer, the party’s lawyer must give the party written notice of the order and an explanation of the reason for the order.
Rule 19.19 of the Rules provides:
(1) This rule sets out the maximum amount of party/party costs a person may recover:
(a) if the court orders that costs are to be paid and does not fix the amount; and
(b) if a person is entitled to costs under these Rules.
(2) The maximum amount of costs that a person may recover under this rule is as follows:
(a) for fees — an amount calculated in accordance with Schedules 3 and 4;
(b) for an expense mentioned in Schedule 4 (other than item 101) — the amount specified in Schedule 4 for that expense;
(c) for any other expenses — a reasonable amount.
Note This Division provides that, if an account payable by a person is not in an itemised form, the person has the right to request an itemised account (an "itemised costs account"). The person may then dispute the itemised costs account by following the procedures set out in this Division. A person may apply to extend the time for taking any action required under these Rules (see rule 1.14).
Relevant Statutory Considerations
Financial circumstances of the parties
Section 117(2A)(a) 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 financial circumstances of each of the parties to the proceedings.
In the Wife’s written submissions it was stated that:
4. The parties are currently involved in proceedings to effect a division of the joint matrimonial assets. The net asset pool is in the order of $1.75 million, essentially consisting of the matrimonial home, two (2) investment properties and the balance of the proceeds of sale of a third investment property (“[property C]”), which funds amount to approximately $33,500 and are held in trust by an independent legal firm. A half share interest in the matrimonial home (valued at approximately $500,000) is held by both parties as trustees on trust for their adult daughter who has Downs Syndrome.
5. The wife has no employment history and is in large part financially dependent on the spousal maintenance payments she receives from the husband in the amount of $900 per fortnight, as well as some assistance from Centrelink by way of a carer’s allowance. The husband is engaged in legal practice as well as being a director of a company purportedly involved in property acquisitions in Australia for overseas investors.
6. It is submitted that the husband has the financial means to pay any costs ordered against him, but in the event that costs orders are made and he is unable or unwilling to pay the costs, there would be sufficient funds held from the proceeds of sale of the [C] property to pay the said costs.
In his submissions the Husband contended that in relation to the net asset pool of the parties the “figure is exaggerated and does not take into account the joint liabilities of the parties approximately of $500,000 (and growing). [The Wife] is well aware of these liabilities as declared in the Financial Statement filed in Court by [the Husband]”.
The Husband also submitted that:
a) despite having the relevant carer’s experience and the qualifications (including one for becoming a Real Estate Representative) [the Wife] has deliberately and consistently refused to seek paid (even part-time) employment , although legally obliged to do so;
b) it is well known to [the Wife] that over the 5 or more years the [Husband] has been winding down/up his practice in Malaysia, as she had encouraged [the Husband] to be permanently with his family in Australia, Hence [the Husband]’s income has dwindled significantly and is having problems coping or sustaining himself let alone paying [the Wife] her interim spousal maintenance without relying on loans;
c) [the Husband] is a nominal director of a company but does not receive any remuneration for doing so Nor is he a shareholder of the company (whose shares are solely held by [the Husband]’s creditor’s family).
d) By contrast the monthly household income of [the Wife] is about $9,000 per month as stated (and has remained uncontradicted) in one of [the Husband]’s affidavit filed is respect of property proceedings.
e) [the Wife] is also acutely aware that [the Husband] has been drastically traumatised by the divorce proceedings initiated by her and is mentally tormented by them, such that [the Husband] has been seeking treatment and help from the [M Clinic]. [The Husband]’s mental capacity for sustained work has been substantially reduced.
The Husband submitted that “he should not pay and does not have the financial means to pay” the Wife’s costs. The Husband submitted that he “himself has unsettled legal bills/payments due to his own solicitors” and in addition the Husband “has to bear all the costs of travelling to and staying in Australia for the divorce and other proceedings initiated by [the Wife]”.
Assistance by way of Legal Aid NSW
Section 117(2A)(b) of the Act provides that in considering what order, if any should be made under s 117(2), the court shall have regard to 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.
Neither party is in receipt of assistance by way of a grant of legal aid.
Conduct of the parties
Section 117(2A)(c) 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 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.
The Wife submitted:
8. In so far as the conduct of the parties during these proceedings is concerned, it is submitted that the wife has at all times sought to avoid unnecessary proceedings and attempted to resolve matters as efficiently as possible and with a view to minimising costs that may be incurred. In contrast, the husband has persistently availed himself of every opportunity to delay proceedings, appeal decisions, and force the wife to incur significant legal costs.
9. The husband refuses to accept that the marriage is over and is under the misguided belief that if he can delay the inevitable, by whatever means, it provides him further opportunities to achieve a reconciliation. In addition, the wife is largely dependent on the husband financially until the division of the matrimonial assets is effected, and it is submitted, that ongoing proceedings are seen by the husband as a strategy to put financial pressure on her and force her to negotiate a reconciliation.
The Wife submitted that the Federal Magistrate found at [19] of her reasons for judgment that:
The wife I find to have been consistent and adamant in her expression and desire to end the marriage. She has had to go through a defended divorce proceeding because the husband refuses to accept her oft-stated view and conduct in support of it, since December 2006, that the marriage is over. His actions have been oppressive to her …
The Wife also submitted that I expressed a similar view to the Federal Magistrate quoting [9], [152] and [153] of my reasons for judgment.
In response to the submissions of the Wife in relation to the conduct of the parties, the Husband submitted that he “has from the earliest sought to avoid any court proceedings and has done and will do the utmost to resolve matters by reconciliation/mediation or counselling rather than by litigation. It must be remembered at all times that it is [the Wife] who chose the Court route rather than the simple path of amicable resolutions”. The Husband then submitted that he wrote to the solicitors for the Wife on numerous occasions seeking that the parties attend counselling to reach an ‘amicable resolution’.
The Husband submitted that he objected to any suggestion that he is putting financial pressure on the Wife and that he himself is “under financial stress” due to the Wife’s actions and also that the Wife’s “attitude is damaging not only to herself but to everyone in the family” including the Husband. The Husband submitted that the Wife’s actions “have been traumatic and devastating to [him] to say the least”.
The Husband made other submissions which I need not repeat.
Failure to comply with orders
Section 117(2A)(d) of the Act provides that in considering what order, if any, should be made under s 117(2), the court shall have regard to whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court. No submissions were made by the Wife in relation to this matter.
Success in the proceedings
Section 117(2A)(e) of the Act provides that in considering what order, if any should be made under s 117(2), the court shall have regard to whether any party to the proceedings has been wholly unsuccessful in the proceedings.
The following was submitted by the Wife:
14. Significantly, the husband was wholly unsuccessful in these proceedings, both at appeal and at the hearing of the divorce application. In respect of the appeal, the Court dismissed the appeal, rejecting the submissions made on behalf of the husband in respect of all fifteen grounds of appeal. The Court also dismissed the husband’s application/s to adduce further evidence.
15. In respect of the hearing of the divorce application, again the husband had been wholly unsuccessful in that proceeding and the Federal Magistrate had granted the divorce
16. It is submitted that the circumstances of this case would justify the Court making an order for costs in favour of the wife in respect of the appeal, as well as the hearing of the divorce application in the first instance. The Wife has been forced to incur significant legal costs, as well as endure the considerable emotional stress, of dealing with the defended divorce and subsequent appeal proceedings, because of the husband’s unwillingness to accept that the marriage has broken down.
The Husband submitted at paragraph 14 of his written submissions that:
a) with respect, the Courts have made appealable errors in law;
b) application for special leave to appeal to the High Court was made 13.7.2010, pursuant to which the Family Court (on 14.7.2010) granted a stay of the Federal Magistrates Order of 10.12.2008 pending the outcome of the said leave application. Serious questions of public interest and law are involved, inter alia in relation to the period of separation and privileged communications;
c) Under the circumstances, it would only be fair and just that each party bears his own costs in accordance with the Act. [The Husband] has had no choice but to defend the divorce application which in [the Husband]’s view is based on hearsay, untruths, wrong perception and is unjustified. An easier way would have been simply to talk over the issues in dispute and find satisfactory outcomes, thus avoiding mutual emotional stress. [The Husband] should not be made to pay for [the Wife]’s intransigence.
Offers of settlement
Section 117(2A)(f) of the Act provides that in considering what order, if any, should be made under s 117(2), the court shall have regard to 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. This matter was not relevant.
Other relevant matters
Section 117(2A)(g) of the Act provides that in considering what order, if any, should be made under s 117(2), the court shall have regard to such other matters as the court considers relevant.
No submissions were made in relation to this matter.
Discussion
At the conclusion of my reasons I said:
151. For reasons I have given I propose to dismiss the appeal. In my view, no appealable error on the part of the Federal Magistrate has been demonstrated.
152. I am concerned about the way this litigation has been conducted. My observation is that the Husband may be endeavouring to put pressure on the Wife by the avenue of litigation. This view is in part founded on the applications by the Husband for adjournments, his failure to comply with orders and his applications to adduce further evidence.
153. Although I accept that given the delay in the delivery of these reasons, I must bear some of the responsibility for the waste of public resources in my view, regrettably, this litigation has become a waste of public and private resources.
Conclusion
I am satisfied that the Wife has established a justifying circumstance and that an order for costs should be made. The matter to which I attach the most significant weight is the outcome of the proceedings. I dismissed the Husband’s appeal and thus he was wholly unsuccessful in the proceedings.
I am aware that the Husband has made an application to the High Court for special leave to appeal against my judgment and this application may be successful and on appeal my judgment may be reversed. If that happens then the order for costs would also have to be set aside and any amounts paid remitted to the Husband. However, I see no reason why I should not determine the costs proceedings.
The Wife is also seeking an order for costs of the appeal costs proceedings. Having regard to the matters in s 117(2A) of the Act I propose to make an order that the Husband pay such costs. The Wife was successful in obtaining an order for her costs of the appeal proceedings.
The Wife is also seeking an order for the costs of the divorce proceedings before the Federal Magistrate. I do not propose to deal with that application. The Wife can make an application to the Federal Magistrate for those costs.
Quantum Of Costs
The Wife seeks that the costs be assessed on a party and party basis in the amount of $6,796.25 in respect of the appeal as itemised in the costs schedules attached to her written submissions. It includes an amount of $578.70 for costs of the costs proceedings.
There are 20 items in the schedule setting out the costs of the Wife in the appeal proceedings. It was submitted on behalf of the Wife that the costs calculated in accordance with Schedule 3 of the Rules are modest. The cost of sending and/or receiving faxes has been calculated at a rate of $1.00 per page. The Wife did not engage counsel and relied on the services of her solicitor.
The Husband submitted that the costs claimed for the appeal are excessive in terms of the itemised billing.
The Husband contended that the item for 2 June 2009 for the costs for reading 104 pages of transcript should be $1,601.60 ($7.70 x 208). The Husband submitted that the Wife should not charge for reading the Husband’s cases and materials as these were substantially considered and taken as read at the Federal Magistrates Court for which no order for costs were made. It was submitted that hence $2,248.40 ($3,850 less $1,601.60) should be taxed off the total for this item.
The Husband contended that the item for 15 June 2010 being the costs of reading 37 pages of the order and reasons for judgment should not have taken the Wife’s solicitors more than one hour ($192.90 per hour) to read. The Husband submitted that hence, an amount equivalent to $361.50 ($554.40 less $192.90) should be taxed off.
The Husband submitted that the total taxed off amount is $2,610.50 ($361.50 + $2,249). Therefore the total of the appeal costs should be $4,185.75 ($6,796.25 less $2,610.50).
I am not going to undertake a taxation of the amounts set out in the Wife’s schedule of costs. However, I have the power to order that the Wife is entitled to costs of a specific amount or as assessed on a particular basis. I remain troubled about the manner in which the Husband is conducting the litigation in relation to a divorce. I am also concerned about the Husband’s attitude to the assessment of costs and I have no doubt that if I did not order a specific amount then there would have to be an assessment. Notwithstanding my concerns, I am going to order that the costs of the appeal proceedings be assessed on a party and party basis. I am, however, going to order that the Husband pay the amount of $578.00 for the costs of the costs proceedings.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Ryan delivered on 23 September 2010
Associate:
Date:23 September 2010
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