JEWEL and JEWEL

[2013] FCWA 108

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: JEWEL and JEWEL [2013] FCWA 108

CORAM: WALTERS J

HEARD: WRITTEN SUBMISSIONS

DELIVERED : 19 NOVEMBER 2013

FILE NO/S: PTW 5193 of 2011

BETWEEN: CATHERINE JEWEL

Applicant

AND

CARL JEWEL
Respondent

Catchwords:

FAMILY LAW – Costs – Proceedings for property settlement – Application by the wife for costs– Where the conduct of the husband was confrontational and obstructive – Where the husband was wholly unsuccessful, or almost wholly unsuccessful in the proceedings – Where offers were made by the parties – Consideration of dicta from the decision of the Full Court in Prantage & Prantage (2013) FLC 93-545 – Order made for costs to be assessed on a party/party basis

Legislation:

Family Law Act 1975 (Cth), s 117
Family Law Rules 2004 (Cth) ch 19, r 19.01, r 19.18, r 19.34, sch 3
Legal Practitioners (Family Court of Western Australia) Determination 2012

Category: Not Reportable

Representation:

Counsel:

Applicant: Ms G Anderson

Respondent: Self Represented Litigant

Solicitors:

Applicant: David Mizen

Respondent: Self Represented Litigant

Case(s) referred to in judgment(s):

Baker & Darzi [2013] FCWA 84

Cross v Beaumont (2008) 39 Fam LR 386

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

Gallo v Dawson (1990) 64 ALJR 458

Hawkins & Roe (2012) 47 Fam LR 526

Hitch & Hitch (2012) 47 FamLR 603

I and I (No 2) (1995) FLC 92-625

Maker & Jets (No 3) [2012] FMCAfam 1104

Marinko & Marinko (1983) FLC 91-307

Nemeth & Nemeth (1987) FLC 91-844

NMFM Property Pty Ltd v Citibank Ltd (No 11) (2001) 109 FCR 77

Penfold & Penfold (1980) 144 CLR 311

Prantage & Prantage (2013) FLC 93-545

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

Introduction

1On 9 August 2013 I published my Reasons for Judgment in the substantive proceedings between Ms [Jewel] ("the wife") and Mr [Jewel] ("the husband"). On the same day, I made orders disposing of the proceedings. The orders gave the wife liberty to apply for costs and directed that the issue of costs be determined on the basis of written submissions (and without any further formal hearing).

2I shall refer to the Reasons for Judgment as “the Judgment”, and to the orders made pursuant to the Judgment as “the final orders”.

3The wife's application for costs is contained in her application in a case filed 10 September 2013. The application is supported by an affidavit sworn by the wife on 5 September 2013, and by written submissions. The husband filed submissions in response 2 October 2013, together with a supporting affidavit sworn the same day.

4In her application in a case, the wife seeks orders that “the [husband] pay the [wife’s] costs in the matter in the sum of $26,000” and that “the [husband] pay the costs of this [costs] application in the sum of $1,500". In her affidavit at [1], however, she suggests that she is seeking costs in the sum of $31,647.78. In her submissions at [2] she quantifies the costs sought in the sum of $26,500, but in her submissions at [14] and [15] she appears to be seeking costs in the sum of $27,500 (together with a further sum of $1500, being costs associated with the application for costs itself).

5In the circumstances, I propose to treat the wife's application for costs as being an application for costs of $26,000 in respect of the substantive proceedings, together with costs of $1500 in respect of the costs application itself. These figures are consistent with the application in a case filed 10 September 2013.

Background

6The background to the parties' dispute is set out in detail in paragraphs 2 to 43 of the Judgment. It is unnecessary to revisit that summary.

The law

7The question of costs in family law proceedings is dealt with in s 117 of the Family Law Act 1975 (Cth) ("FLA"). A trial judge has a very broad discretion in costs matters.

8It is not the law that a costs order can only be made in what has been described as "a clear case". Although a finding of justifying circumstances is an essential preliminary to the making of a costs order, there is no additional or special onus on an applicant for an order for costs. The general rule is that each party shall bear his or her own costs (FLA s 117(1)), but that rule is expressed to be subject to s 117(2), and it must yield whenever a judicial officer finds that there are circumstances which justify the making of a costs order: see Penfold & Penfold (1980) 144 CLR 311.

9Section 117(2) of the FLA provides as follows:

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) ... and the applicable Rules of Court, make such order as to costs ... as the court considers just.

10Section 117(2A) of the FLA provides as follows:

In considering what order (if any) should be made under subsection (2), the court shall have regard to:

•the financial circumstances of each of the parties to the proceedings;

•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;

•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;

•whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

•whether any party to the proceedings has been wholly unsuccessful in the proceedings;

•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

•such other matters as the court considers relevant.

11The weight to be given to the various factors referred to in FLA s 117(2A) is a matter for the trial judge, but they must all be taken into account and balanced when considering whether the overall circumstances justify the making of a costs order: see I and I (No 2) (1995) FLC 92-625 and Hitch & Hitch (2012) 47 FamLR 603. On the other hand, there is nothing to prevent any of the factors being the sole foundation for an order for costs: see Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 191 FLR 294 at 130.

12A disparity in financial resources between parties to family law litigation can sometimes justify an order for costs in favour of the party with fewer financial resources. At the same time, the apparent inability of a party to pay costs is not a bar to a costs order being made in circumstances where – for example – that party's conduct (being, presumably, that party's conduct as a litigant) warrants such an order: see Marinko & Marinko (1983) FLC 91-307 and Cross v Beaumont (2008) 39 Fam LR 386; see also Hitch & Hitch (2012) 47 FamLR 603.

13Chapter 19 of the Family Law Rules 2004 ("the Rules") deals with costs between parties in family law proceedings. Rule 19.01(2) provides that a party may only recover costs from another party in accordance with the Rules or an order of the court.

14Rule 19.18 sets out various bases upon which costs may be assessed. The rule is as follows:

Method of calculation of costs

(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. ...

(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.

15Schedule 3 to the Rules comprises an itemised scale of costs relating to specified types of work. The scale is revised from time to time.

16The "default" method for assessing costs is on a party/party basis: see r 19.18(2). It is unusual for this Court to make orders on any other basis, but there can be no doubt that it has power to do so – and r 19.18(1) says as much.

17Rule 19.34 sets out the principles that are to be applied by a registrar when assessing costs payable pursuant to a costs order. The rule is as follows:

Assessment principles

(1)A Registrar must not allow costs that, in the opinion of the Registrar:

(a)are not reasonably necessary for the attainment of justice; and

(b)are not proportionate to the issues in the case.

(2)If the court has ordered costs on an indemnity basis, the Registrar must allow all costs reasonably incurred and of a reasonable amount, having regard to, among other things:

(a)the scale of costs in Schedule 3;

(b)any costs agreement between the party to whom costs are payable and the party’s lawyer; and

(c)charges ordinarily payable by a client to a lawyer for the work.

(3)When assessing costs as between party and party, a Registrar must not allow:

(a)costs incurred because of improper, unnecessary or unreasonable conduct by a party or a party’s lawyer;

(b)costs for work (in type or amount) that was not reasonably required to be done for the case; or

(c)unusual expenses.

18Given that the wife appears to be seeking costs of a specific amount (as opposed to, for example, an order for costs as assessed on a particular basis) I do not propose to discuss the law as it relates to indemnity costs. I refer, however, to my discussion of the subject in Baker & Darzi [2013] FCWA 84 at [23] to [39].

Section 117(2A) considerations

19I turn now to consider the various matters referred to in s 117(2A).

The parties' financial circumstances

20I discussed the parties' financial circumstances, in some detail, in the Judgment. The effect of the final orders is summarised in the Judgment at [170] to [173].

21The net value of the property available for distribution between the parties was very modest: it totalled just over $228,500, of which approximately $55,360 comprised the current value of the wife's superannuation entitlements. Pursuant to the final orders, the wife became entitled to property to the value of approximately $140,000 – including her superannuation entitlements. The husband was entitled to property to the value of approximately $88,500. In order to give effect to the division of property reflected in the final orders, the husband was obliged to pay $62,143 to the wife.

22The wife submits, and I accept, that neither party has assets of significance, that both parties work and have the capacity to continue to work in the future and that their incomes are similar.

23Although the wife received a greater share of the property available for distribution between the parties than did the husband, the difference between the parties' entitlements – amounting to approximately $51,400 – is comparatively modest in real terms. It is relevant to note, however, that the property retained by the wife included her superannuation entitlements amounting to approximately $55,360. Those entitlements are not currently available to her: she was born in August 1965 and is currently 48 years of age.

24Included within the property and liabilities to be retained by the husband is an amount of approximately $34,375 – being the amount owed by the husband to the Australian Taxation Office in respect of income tax for the financial years 2007, 2008 and 2009. In the Judgment at [107(e)(xii)] I said that the relevant figure "is neither vague [nor] uncertain; nor is it unlikely to be enforced". In the wife's costs submissions at [7(b)], however, it is suggested that a finding was made that the tax debt is unlikely to be enforced. That suggestion clearly arises from misreading of the Judgment.

25It is submitted on behalf the wife that the husband has "sufficient equity" in his property (being the property described in the Judgment as the [Suburb B] property) to meet the payment he is obliged to make to the wife pursuant to the final orders – being $62,143 – and pay the wife's legal costs as well. It is submitted on behalf of the husband that his bank has placed a value on the Suburb B property (for lending purposes) that is lower than the agreed value used at trial and that, as a result, he is unlikely to be able to borrow significantly more than the amount that he is required to pay the wife pursuant to the Judgment. In his affidavit at [4], he deposes to being able to borrow a total of $340,000 on the security of the Suburb B property. He already owes $267,622 in respect of the existing mortgage and is obliged to pay the wife $62,143. These two amounts total $329,765. It follows, according to the husband, that he will not be able to find more than $10,235 if he is obliged to pay a costs order.

26The wife submits that the income of the husband's partner – amounting to $500 per week – is relevant to his current financial circumstances. In my opinion, the relevance is marginal. I agree with the husband’s submission to the effect that any liability that the husband may have for costs is his own liability, and not that of his partner. That is not to say, however, that the partner's income cannot be used within the family to defray expenses that the husband might otherwise be obliged to meet.

27I accept that the husband is likely to have difficulty meeting a costs order. More accurately, and on the basis of his submissions, he is likely to have difficulty meeting a costs order pursuant to which he will be obliged to pay in excess of $10,235.

Whether any party was in receipt of legal aid

28Neither party was in receipt of legal aid.

The conduct of the parties in relation to the proceedings

29This factor requires the Court to have regard to the parties' conduct as litigants.

30The husband was self represented throughout the proceedings. Clearly, that does not absolve him from the responsibility of having to comply with orders and directions of the Court, and with the provisions of the Family Law Rules.

31It is submitted on behalf of the wife (see wife's costs submissions at [9]) that the husband "failed to comply with the Rules and orders of the Court", in that he –

a)did not specify the orders he sought in his response to the wife's initiating application and, as a result, orders were made on 30 November 2011 that he do so;

b)did not disclose "even the most basic of documents relevant to the proceedings", including his bank accounts, pay slips and the like;

c)responded to reasonable requests for information and disclosure in a "supercilious and belligerent" manner;

d)failed to provide "a full copy of his tax returns" when he had the opportunity to do so – namely, when he filed a further affidavit some nine days before trial;

e)failed to disclose that he had been provided with a motor vehicle by his employer when he had the opportunity to do so in his financial statement; and

f)did not file "Conciliation particulars"; and did not file his trial affidavit on time (and proceeded to file a further affidavit some nine days before trial).

32Wife argues that the effect of the husband's failures to disclose, and his attitude to the litigation, was to significantly increase the wife's costs – while "incurring none of his own". She argues further (at [9] of her costs submissions), that:

... she operates in a vacuum and must prove her case by first repeated request for financial information, subpoena, notice to admit and orders extending the time for the husband to comply. She is constrained financially from seeking interim orders from the court to procure the most basic of documents from the husband. All of this makes it much harder to prepare the wife's trial documents. The last knowledge of the husband's financial position is around separation.

33At [7] of the Judgment, I said:

... The husband was self-represented. His approach to the litigation – until trial – was confrontational and obstructive. He made no attempt to comply with his obligations regarding full and frank disclosure of his financial position. He clearly resented the wife's attempts to persuade him to participate constructively in the proceedings in this Court. His attitude in this regard was immature and irresponsible. It was also inexplicable – and, indeed, he made no attempt to explain it during the course of the trial.

34At [99] to [102] of the Judgment, I said:

99. As indicated above, the husband's approach to the litigation was confrontational and obstructive, and he made little attempt to comply with his obligations regarding full and frank disclosure of his financial position. For example, in a letter to the wife's solicitors in response to a request for copies of his recent pay slips and income tax returns (and other financial information), the husband wrote that:

•the letter from the wife's solicitors "provided great amusement";

•the request for recent pay slips "is a frivolous and vexatious request which amounts to an abuse of court processes"; and

•any suggestion by the wife that he had not made full and frank disclosure of his financial position "can only be drug induced by (the wife)".

100. In the same letter (which comprises part of exhibit W4), the husband wrote that an (overly broad) request for copy bank statements was "vexatious" and "churlish". During cross examination, the husband admitted that he did not know the meaning of the word "churlish" and said that "a friend" had prepared the letter for him. He appeared to accept that his response to the requests from the wife's solicitors was inappropriate and unhelpful.

101. In a subsequent letter to the wife's solicitors (see exhibit W5), the husband wrote that the wife's claim for property settlement comprised "a conjured up list of preposterous demands" and a "vexatious and contrived claim". He added that the documents relied upon by the wife were "manifestly factually fraudulent".

102. During the course of the trial, and in spite of his bluster – and what appears to be an attempt to bully the wife (through her solicitors) into abandoning her application for property settlement – the husband made no attempt to challenge the wife's evidence in any significant respect.

35At [107(e)(ix)] of the Judgment, I said:

Given the husband's failure to make full and frank disclosure of his financial position until what might be considered the 11th hour, the wife's legal advisers were not reasonably able to investigate the husband's indebtedness to the Australian Taxation Office; nor were they reasonably able to effectively "audit" the figures contained in the income tax estimates and activity statements attached to the husband's affidavit sworn 9 July 2013.

36In the circumstances, I agree with the wife's submissions to the effect that the husband failed to provide full and frank disclosure, and that he failed to comply with the Rules and with orders of the Court.

37In Nemeth & Nemeth (1987) FLC 91-844, the Full Court said at 76-385):

The failure of a party to be completely open and forthcoming as to his or her financial position should always place that party at risk in relation to an order for costs.

38As I indicated in the Judgment, the husband's conduct as a litigant was confrontational and obstructive. There can be no doubt that his conduct increased the wife's costs associated with the litigation.

39The husband only response to the matters raised by the wife under this heading is to submit that he was a self represented litigant and that he should "not be penalised" for "non-compliance with orders and directions of the Court": husband's costs submissions at [14]. I do not accept that submission. As McHugh J said in Gallo v Dawson (1990) 64 ALJR 458 at 459:

Lack of legal knowledge is a misfortune, not a privilege.

40In any event, to give the husband's submission weight as a broad proposition would mean that a party who is represented will inevitably be disadvantaged in costs applications where there has been non compliance with orders and directions of the Court by a party who is unrepresented. In my opinion, the husband is not commercially naïve, and well understood the obligations that the orders and directions of the Court, and the Rules, imposed upon him. He was quite prepared to seek assistance from and follow the advice of a "friend" when that advice involved the drafting of insulting, confrontational and obstructive correspondence. As I have indicated in the Judgment, the husband's approach was, in effect, to place the wife at a disadvantage by disclosing as little as possible of his own financial circumstances and, at the same time, to attempt to effectively bully her into withdrawing or compromising her claim. Put another way, the husband's attitude to the conduct of the proceedings was (to use a colloquialism): "Catch me if you can".

41It needs to be said, as well, that the husband's reference to being "penalised" for being unrepresented, or for his failures to make full and frank disclosure of his financial position and to comply with orders and directions of the Court, is misconceived.

42In Maker & Jets (No 3) [2012] FMCAfam 1104, I said at [84]:

In broad terms, the general law is to the effect that it is just and reasonable that someone who causes a person to incur legal costs should reimburse that person for those costs: see, for example, Latoudis v Casey (1990) 170 CLR 534. Costs (relevantly, party and party costs) are compensatory, in the sense that they are intended to partially indemnify a successful litigant against his or her liability for legal costs. In other words, they are compensatory, not punitive: see Braithwaite (2007) FamCA 468. To that extent, "punishment" and "penalty" are not relevant considerations. Indeed, they are fraught concepts, given that – for example – a successful litigant who has fought long and hard through the court system to clear himself or herself of serious and perhaps malicious allegations that may have been made against him or her (which allegations may have the most profound effect on his or her relationship with his or her children, or on his or her financial well-being) might fairly consider that a reluctance of the part of the Court to order costs in his or her favour is tantamount to being punished, or penalised, for having chosen to litigate instead of, say, to metaphorically “walk away”.

43In other words, when considering whether it is just to make an order for costs, the Court is not concerned with "punishing" or "penalising" the husband for his behaviour, or for the fact that he was unsuccessful in the proceedings or for any other reason.; Nor is the Court concerned that the husband may have been "guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation": see NMFM Property Pty Ltd v Citibank Ltd (No 11) (2001) 109 FCR 77 at [56]. The Court is obliged, however, to consider whether there are circumstances that justify the making of an order for costs (including, for example, the husband's conduct as a litigant) – and if so, what a just order as to costs might comprise.

Whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court

44This does not appear to be a relevant consideration, and neither party suggests that it is.

Whether a party has been wholly unsuccessful

45The orders sought by the parties are summarised in the Judgment at [49] to [54]. It is clear that neither party was successful in obtaining the orders that he or she sought. In other words, each party has been unsuccessful in the proceedings to some extent.

46Although the wife was unsuccessful in obtaining the orders she sought, the overall result (being a division of the property available for distribution between the parties on the basis of 61.25 percent to the wife and 38.75 percent to the husband) was far closer to the result for which she argued than to the orders sought by the husband. The broad thrust of the orders sought by the husband was to the effect that the property available for distribution between the parties should be divided between them on an equal basis and, as a consequence, the husband should not be obliged to pay the wife anything. Indeed, in his papers for the judge, the husband proposed that the wife pay 50 percent of her superannuation entitlements to him, together with an amount of $5500. The effect of the final orders is that the husband was ordered to pay the wife $62,143. Seen in that light, it is not unfair to conclude that the husband was wholly unsuccessful in the proceedings.

47A party does not have to be wholly successful in proceedings for the Court to conclude that the other party was wholly unsuccessful in the same proceedings. Parliament has directed the Court's attention to a party's lack of success in preference to a party's success in the proceedings. As Thackray J said in Hawkins & Roe (2012) 47 Fam LR 526 at [161], "even a meritorious case can be 'unsuccessful' when the other case is found to have greater merit". It must be said, however, that "meritorious" is not an adjective that springs to mind when considering the husband's case in the current proceedings.

Whether an offer to settle was made

48At or around the conciliation conference which took place on 26 March 2012, the wife made a formal offer to settle. The only relevant aspect of the offer is that the wife was prepared to accept a payment of $65,000 from the husband: see annexure CJ 7 to the wife's affidavit sworn 5 September 2013. The final orders require the husband to pay her $62,143.

49The husband wrote to the wife's solicitors on 12 April 2012. The letter contains an offer to settle the proceedings: see annexure CJ 8 to the wife's affidavit sworn 5 September 2013. The husband's primary proposal was as follows:

We both contemporaneously do whatever is reasonably necessary to effect the expedient transfer of the respective residential properties into our own names solely and having completed such, we walk away and finalise this matter by way of you drawing up and filing agreed to consent orders in full and final satisfaction.

50In other words, the husband's primary proposal was that each party should retain the property in his or her possession and that no moneys should be paid in either direction.

51The husband's letter of 12 April 2012 contained an alternative proposal on the following terms:

Your client continues on with this vexatious, fanciful and contrived claim whereby I will vigorously defend such to the end, with absolutely no compromise whatsoever, seeking that she pay me a sum in the vicinity of $60,000 for which I believe I can show to the court that I am justifiably owed.

52According to the wife's costs submissions, her offer to accept a payment to her of $65,000 was repeated on 19 April 2012 and again on 3 May 2013. All her offers included a requirement that the 50 inch Palsonic flat screen television be delivered up to her. At trial, the husband conceded that the wife should retain the television and the final orders contain a provision that he must deliver it up to her, and must ensure that it is in good condition and in working order.

53On 26 May 2013, the wife's solicitors wrote to the husband in the following terms:

If you have a settlement proposal please put it in writing and send it to me so that I may discuss it with my client.

54The husband did not respond to the letter from the wife's solicitors dated 26 May 2013.

55The difference between the amount that the wife receive pursuant to the final orders (being $62,143) and the amount referred to in her offers (being $65,000) is minor. It is clear from the husband's letter of 12 April 2012 to the wife's solicitors (see annexure CJ 8 to the wife's affidavit sworn 5 September 2013) that the wife had incurred legal costs for approximately $5200 to that point. The amount that she is now claiming is approximately five times that sum. Clearly, it would have been prudent for the husband to accept the wife's offer when it was first made and when it was repeated. It is also fair to say that it was prudent and reasonable for the wife to reject the husband's primary and alternative offers contained in his letter of 12 April 2012, and to proceed to trial.

Other relevant matters

56Under this heading, the wife submits that "the main and probably only barrier to an orderly resolution of this relatively straightforward matter is that the husband was self represented": wife's costs submissions at [13]. According to the wife, the effect of the husband being self represented was that (among other things) –

a)the husband had no incentive to settle the matter because he did not have the pressure of legal costs;

b)the wife was obliged to "do much more to prove her case", because she received – and she could expect – no cooperation from the husband; and

c)the husband was given the opportunity to seek legal advice on the first day of the trial, which extended the hearing by approximately half a day.

57The husband also refers to the fact that he was self-represented "and without legal advice" under this general heading.

58I am not persuaded that the husband's lack of legal representation has any relevance – save to the extent that I have referred to the subject elsewhere in these Reasons.

Conclusion

59In my opinion, it is clear beyond argument that there are circumstances which justify the making of an order for costs in the wife's favour. The most significant of those circumstances are:

a)the husband's conduct as a litigant (as discussed above), including his attitude – which I have described as confrontational and obstructive;

b)the fact that the husband was wholly unsuccessful, or almost wholly unsuccessful, in the proceedings; and

c)the offers made by the parties as discussed above.

60As I observed when discussing the law above, the apparent inability of a party to pay costs is not a bar to a costs order being made. It is, however, a factor to be taken into account and balanced when considering whether the overall circumstances justify the making of a costs order. I have given careful consideration to the husband's financial circumstances. I have also considered the wife's financial circumstances in comparison with the husband's financial circumstances. I am satisfied, however, that the other relevant factors clearly, and significantly, outweigh the husband's asserted inability to meet a costs order – or, more accurately, to meet a costs order which would require him to pay in excess of approximately $10,200. In all the circumstances it would be unjust and unfair for the Court to fail to make an order for costs in the wife's favour.

Form of costs order

61As explained above, the "default" method for assessing costs is on a party/party basis. Although it is unusual for this Court to make orders on any other basis, it has power to do so if the circumstances dictate such an approach.

62The wife does not seek an order for indemnity costs. Before making such an order, the court would have to be satisfied that the circumstances justifying the departure from the ordinary rule relating to costs between parties (namely, that costs are to be assessed on a party/party basis) are exceptional in nature. Indeed, indemnity costs amount to a very great departure from the usual basis upon which costs are assessed. To the extent that may be relevant, I am not persuaded that an order for indemnity costs would be appropriate in the present case.

63The husband submits that, in the event of the Court being satisfied that there are circumstances which justify the making of a costs order, the evidence "does not allow such an assessment to be made judicially": husband's costs submissions at [23]. As I have indicated, Chapter 19 of the Rules deals with the subject of costs between parties in family law proceedings. Rule 19.18 sets out various bases upon which costs may be assessed and the method of calculation of costs. Rule 19.34 sets out the principles that are to be applied by a registrar when assessing costs payable pursuant to a costs order.

64To the extent that the husband submits that costs in the present proceedings are governed by the Legal Practitioners (Family Court of Western Australia) Report 2012 and the Legal Practitioners (Family Court of Western Australia) Determination 2012 set out in the schedule to the Report, he is clearly incorrect. The determination applies to the remuneration of legal practitioners, clerks and paralegals in respect of advice given by legal practitioners in or for the purposes of proceedings or potential proceedings before this Court. Its purpose, however, is to determine a scale of fees applicable to the work of legal practitioners, clerks and paralegals in this Court on a legal practitioner/client basis. Where costs are to be assessed on a party/party basis, the itemised scale of costs contained in Schedule 3 of the Family Law Rules 2004 (Cth) applies.

65Although Rule 19.18(1)(b) provides that the Court may order that a party is entitled to costs as assessed on a "lawyer and client" basis (in other words, legal practitioner/client basis), Murphy J in Prantage & Prantage (2013) FLC 93-545 argued persuasively that such an option does not exist and that the rules provide for only two options – being costs on a party/party basis and costs on an indemnity basis. The other members of the Full Court in Prantage (Supra) (Thackray and Ryan JJ) seemed to accept that costs can indeed be assessed on a "lawyer and client" basis, and added that it would ordinarily be appropriate for a judge to consider awarding costs on such a basis before awarding costs on an indemnity basis.

66I discussed this subject in Baker & Darzi [2013] FCWA 84, including the approach taken by the plurality and by Murphy J in Prantage (Supra). I observed that the precise manner in which costs awarded on a "lawyer and client" basis are to be assessed is not as clear as it could be and are determined – in the circumstances of that case – that to order costs to be assessed on such a basis would be likely to condemn the parties to a protracted dispute regarding the assessment principles that should adhere.

67I accept the husband's submissions to the effect that I should not attempt to assess the quantum of costs in the present case. It is sufficient that I have determined that an order for costs on a party-party basis is appropriate. The quantum of costs can be assessed by a Registrar in the usual manner.

68Although the wife sought that the husband pay her costs from the date of the conciliation conference, I see no reason to limit her entitlement to that time frame. Clearly, the proceedings were commenced by the wife because the parties were unable to reach agreement prior to that time. It is artificial and unnecessary to exclude the period prior to the conciliation conference from the costs assessment process.

69The orders that I propose to make are as follows:

a)Subject to (b) below, the husband must pay the wife's costs of and incidental to the proceedings on a party/party basis ("the wife's costs").

b)In the event of the parties failing or refusing to agree the quantum of the wife's costs within 21 days from the date of these orders, the wife's costs be assessed by a Registrar pursuant to Chapter 19 of the Family Law Rules 2004 (Cth).

I certify that the preceding [69] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate