JOHNSTON & PRITCHARD
[2015] FCCA 1095
•30 April 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JOHNSTON & PRITCHARD | [2015] FCCA 1095 |
| Catchwords: FAMILY LAW – Costs – quantum of costs – where substantive applicant wholly unsuccessful in proceedings – where previous applications dismissed – whether indemnity costs appropriate. |
| Legislation: Family Law Act 1975 (Cth), ss.117, 118 |
| Cases cited: Bixby & Bixby [2015] FCCA 816 Colgate Palmolive Co. v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225; 118 ALR 248 Johnston & Pritchard [2010] FMCAfam 942 Johnston & Pritchard [2011] FMCAfam 1082 Johnston & Pritchard [2013] FCCA 2418 Johnston & Pritchard [2014] FCCA 1996 In the Marriage of Kohan (1992) 16 Fam LR 245; (1993) FLC 92-340 Munday & Bowman (1997) FLC 92-784 Prantage & Prantage [2013] FamCAFC 105; (2013) 49 Fam LR 197; FLC 93-544 Rice & Asplund (1978) 6 Fam LR 570; (1979) FLC 90-725 Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd [1991] FCA 187 |
| Applicant: | MS JOHNSTON |
| Respondent: | MR PRITCHARD |
| File Number: | SYC 4591 of 2008 |
| Judgment of: | Judge Scarlett |
| Hearing date: | In Chambers |
| Date of Last Submission: | 31 October 2014 |
| Delivered at: | Sydney |
| Delivered on: | 30 April 2015 |
REPRESENTATION
| Applicant: | In person |
| Solicitors for the Respondent: | Paltos Milevski Family Lawyers |
ORDERS
The Applicant Mother is to pay the costs of the Respondent Father of the Mother’s Initiating Application filed on 31 January 2014 fixed in the sum of $19,357.60.
The Applicant Mother is to pay the costs of the Respondent Father for the preparation of submissions and supporting affidavit fixed in the sum of $2,200.00.
The Applicant Mother is allowed six (6) months to pay.
IT IS NOTED that publication of this judgment under the pseudonym Johnston & Pritchard is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 4591 of 2008
| MS JOHNSTON |
Applicant
And
| MR PRITCHARD |
Respondent
REASONS FOR JUDGMENT
Application
This is an application by the successful Respondent for a fixed amount of costs to be set arising out of a decision by Judge Coker in the substantive proceedings between the parties.
On 23 July 2014 His Honour handed down a decision in respect of an application by the mother to reopen parenting proceedings between the parties in which the mother’s application was dismissed with costs (Johnston & Pritchard[1]). The Orders made by His Honour were:
[1] [2014] FCCA 1996
(1) That the Mother’s Initiating Application filed 31 January 2014 be dismissed.
(2) That the Mother be restrained from initiating proceedings in relation to the parenting of the child X born (omitted) 2006, without leave of this Court previously given.
(3) That the Mother pay the Father’s costs of and incidental to these proceedings as may be agreed between the parties and, failing agreement, as follows:
(a) Within 28 days of there being an indication that agreement cannot be reached that submissions on the quantum of costs be filed by the Father and served on the Mother;
(b) The Mother file and serve submissions in response within 14 days thereafter; and
(c) The matter of costs be determined in Chambers.
The Respondent father filed written submissions and an affidavit in support on 31 October 2014. The Applicant mother has not filed any submission in reply.
The Issue to be Determined
The issue to be decided is not whether an order for costs should be made, because an order has already been made that the mother should pay the father’s costs, but the quantum of the costs that should be fixed by the Court.
The father seeks an order that the mother should pay his costs of the substantive proceedings in the sum of $19,357.60 and his costs of preparing his submissions and the supporting affidavit in the amount of $2,200.00.
In effect, the father is seeking his costs of defending the substantive application on an indemnity, or solicitor-client, basis.
Orders Sought
The father seeks the following orders:
1. That the Applicant Mother (“the mother”) pay the costs of the father of the mother’s Initiating Application (Family Law) filed 31 January 2014:
1.1 Fixed pursuant to Rule 21.02(2)(a) of the Federal Circuit Court Rules 2001 in the amount of $19,357.60;
1.2 Or in the alternative, fixed pursuant to rule 21.02(2)(a) of the Federal Circuit Court Rules 2001 in such amount as the Court determines.
2. In the event that Orders 1.1 or 1.2 are refused, costs as assessed.
3. Certify for Counsel pursuant to Rule 21.15 of the Federal Circuit Court Rules 2001.
4. The mother pay the father’s costs of preparation of these submissions and supporting Affidavit fixed pursuant to Rule 21.02(2)(a) of the Federal Circuit Court Rules 2001 in the amount of $2,200.
Background
The parties were married on (omitted) 2005 and separated on 15 April 2008. They were divorced on 9 July 2009.
There is one child of the marriage, X, who was born on (omitted) 2006.
The parties entered into Final Consent Orders in respect of the child on 8 December 2008.
On 27 July 2010 the mother filed a further Application for Parenting Orders.
On 4 August 2010 Her Honour Federal Magistrate Walker[2] made Interim Parenting Orders providing that:
a)The child was to live with the mother;
b)The child was to spend time with the father;
c)The mother was to attend upon her psychiatrist to obtain a report as to her emotional well-being and compliance with medication; and
d)An Independent Children’s Lawyer was to be appointed (Johnston & Pritchard[3]).
[2] Later Judge Walker
[3] [2010] FMCAfam 942
On 12 October 2011, after a hearing that took six hearing days, Walker FM made Final Parenting Orders providing that the child should live with the father and spend time with the mother (Johnston & Pritchard[4]).
[4] [2011] FMCAfam 1082
On 11 December 2012 the mother filed a further Application, seeking to vary the Orders made on 12 October 2011.
The Application came before Altobelli FM[5], who heard submissions on 13 February 2013 and dismissed the Application on the basis that the mother had not shown a sufficient change in circumstances to justify the parenting matters to be re-litigated, applying what is known as the rule in Rice & Asplund[6] (Johnston & Pritchard[7]).
[5] Now Judge Altobelli
[6] (1978) 6 Fam LR 570; (1979) FLC 90-725
[7] [2013] FCCA 2418
His Honour ordered that:
(1) The Mother’s Initiating Application filed 11 December 2012 seeking interim and final orders in relation to parenting be summarily dismissed.
Less than a year later, on 31 January 2014, the mother filed a further Application, again seeking to vary the parenting Orders. This application was heard by Judge Coker on 18 July 2014.
On 23 July 2014, His Honour dismissed the Application and made the other incidental Orders referred to above, including the order that the mother should pay the father’s costs (Johnston & Pritchard[8]).
[8] [2014] FCCA 1996
The Father’s Submissions
The father filed a written submission and an affidavit in support on 31 October 2014. The mother has not filed any submission or affidavit.
In his Submission, the father has put to the Court that an order for costs in the sum of $19,357.60, which includes Counsel’s fees, is warranted because of:
a)The history of the applications made by the mother;
b)The ultimate dismissal of the mother’s Application; and
c)The sum of $19,357.60 represents an indemnity to the father for the costs he has incurred in the proceedings.
The father has submitted that the circumstances that justify an order for costs on an indemnity basis arise from paragraphs (c) and (e) of subsection 117(2A) of the Family Law Act 1975 (Cth):
a)the conduct of the parties to the proceedings in relation to the proceedings (s.117(2A)(c); and
b)whether any party to the proceedings has been wholly unsuccessful in the proceedings (s.117(2A)(e).
It was submitted that the father had been wholly successful in his application that:
a)the mother’s Initiating Application should be dismissed;
b)the mother should be restrained from initiating further proceedings in relation to the parenting of the child without leave of the Court; and
c)the mother should pay the father’s costs.
In support of his application for costs on an indemnity basis, the father relies on the following authorities:
a)Munday & Bowman[9];
b)In the Marriage of Kohan[10]; and
c)Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd[11].
[9] (1997) FLC 92-784
[10] (1992) 16 Fam LR 245
[11] [1991] FCA 187
The submission is that whilst the rule is that costs are usually awarded on a party and party basis, in exceptional circumstances a court may award costs on a solicitor-client or indemnity basis.
In Tetijo Holdings v Keeprite[12], French J held at [22]:
When, in an individual case, there is evidence of particular misconduct on the part of a party that causes loss of time to the Court and to other parties then an order for solicitor-client costs and/or costs to be paid forthwith may be made.
[12] supra
It is submitted that the circumstances in these proceedings are of an exceptional kind so as to justify costs on an indemnity basis and the father relies on the following:
a)the history of the prior applications made by the mother, with the latest application being filed less than 12 months after the mother’s prior application was summarily dismissed by Altobelli FM;
b)the number of affidavits filed by the mother in the proceedings, being four in total;
c)the father was put to the expense of responding to the mother’s further application;
d)the father was put to the expense of obtaining a transcript of the last occasion when the matter was heard by Altobelli FM;
e)the mother issued subpoenas despite being restrained under the orders made on 13 February 2013 from inspecting any subpoenas issued by her on or after 11 December 2012; and
f)the father was put to the expense of filing objections to the subpoenas issued by the mother in these proceedings.
It was submitted on behalf of the father that it was appropriate to retain Counsel to advise and appear at the hearing on 18 July 2014.
Costs in Family Law Proceedings
It is the usual case that where costs are ordered against a party they are ordered on a party and party basis. Costs will normally be ordered in accordance with the Court scale, which in this case is contained in Part 1 of Schedule 1 of the Rules (Bixby & Bixby[13]).
[13] [2015] FCCA 816
Costs will only be ordered on an indemnity basis where there are unusual or exceptional circumstances (see Colgate Palmolive Co v Cussons Pty Ltd[14]; In the Marriage of Kohan[15]; and Prantage & Prantage[16]).
[14] [1993] FCA 536; (1993) 46 FCR 225; 118 ALR 248
[15] (1992) 16 Fam LR 245; (1993) 92-340
[16] [2013] FamCAFC 105; (2013) 49 Fam LR 197; FLC 93-544
Conclusions
In my view, one has only to consider His Honour’s judgment in the substantive application to find a justification for the award of costs on an indemnity basis.
At paragraph [48] of the judgment, His Honour said:
As is, I hope, obvious from the comments that I have made in relation to this particular matter, I am absolutely satisfied that there is no basis upon which the court could properly find that there has been a substantial or significant change in circumstances that would in any way warrant the enormous upheaval in the lives of both parties but much more significantly this little boy, to facilitate the reopening and reconsideration of the parenting arrangements with regard to the child.[17]
[17] [2014] FCCA 1996 at [48]
His Honour went on to say:
53. I am not satisfied that the mother’s application in relation to this matter is frivolous or vexatious but what I am satisfied is that it, if you like, examples a stance taken on the part of the mother which is to the effect, that she will continue to bring applications in relation to the parenting of the child X, until she achieves what she seeks.
54. To do so, of course, would specifically give rise to a concern that the father is put to expense, perhaps unnecessarily, but far more significantly, that X becomes embroiled in continued litigation which may or may not have any prospects of success. To that end, I am satisfied therefore that it is in the best interests of this little boy and appropriate that the mother should be restrained from initiating further proceedings, in relation to the parenting of the child X, without the leave of the court. I am satisfied that that is an order in the best interests of the child and precludes the father from having to deal with an application until a court has first found that it is satisfied that it is appropriate for proceedings to be the subject of further consideration.[18]
[18] Ibid at [53]-54]
The Court further held at [57]:
The mother’s application therefore with regard to some form of retrospective determination, be it by way of appeal by another means or otherwise, is without merit…[19]
[19] [2014] FCCA 1996 at [57]
This is clearly an exceptional case. The very fact that the Court not only found the mother’s application to be without merit but made an order restraining the mother from bringing a further application without leave clearly shows that this is a case where costs should be calculated on an indemnity basis rather than on a party and party basis.
The father’s affidavit annexes copies of:
a)the costs agreement between himself and his solicitors;
b)the costs agreement between the father’s solicitors and Mr Ladopoulos of Counsel; and
c)the tax invoices from Auscript for a copy of the transcript of the hearing before Judge[20] Altobelli.
[20] As His Honour now is
The father’s solicitors’ costs and disbursements (including GST) amount to $15,576.81. Counsel’s fees amount to $3,200.00. The fee for the transcript of the earlier hearing was $580.79.
This comes to a total of $19,357.60. My examination of the costs and disbursements claimed show that they are reasonable and appropriate in the circumstances.
The mother did not agree. On 11 September 2014 she forwarded an email to the father’s solicitor, Mr Paltos, in which she said:
I have received your invoice. I would like your client to agree to pay his own legal costs if I do not appeal Judge Coker’s decision.
Clearly there has been an injustice in Judge Coker’s decision as per the Rice and Asplin[21] rule, and clearly your invoice is excessive and I would dispute that figure anyway.[22]
[21] sic
[22] Affidavit of Mr Pritchard 29.10.2014 Annexure “E”
There has been no appeal lodged. The mother’s suggestion that the father should pay his own costs appears to ignore the fact that the Court has already made an order for costs against her. The matter to be decided is not whether, but how much.
I propose to order that the mother pay the father’s costs in the amount claimed, namely $19,357.60.
The father also seeks an order for his costs of this Application in the sum of $2,200.00. Clearly, he must succeed, as he has been successful and the mother has been wholly unsuccessful.
The amount of $2,200.00 has been calculated in accordance with the scale. It is not sought that this amount should be calculated on an indemnity basis, nor would it be appropriate to do so. The father’s application for costs has been decided in chambers without any need for appearance by either party. The only appearance that will be necessary is for the attendance to take the judgment under Item 9 of the Schedule and the applicable daily hearing fee under Item 13, a total of $556.00.
I have previously calculated an appropriate amount for a costs application to be decided in chambers by reference to the Court scale at $2,262.00.[23] However, as the father has sought the amount of $2,200.00 only, that is the amount I will allow.
[23] Bixby & Bixby (Costs) [2015] FCCA 816 at [58]
Orders
I propose to order that the mother should pay the father’s costs of the substantive Application in the sum of $19,357.60 and his costs of the application to set the quantum of costs in the sum of $2,200.00, a total of $21,557.60.
This is a substantial amount to be paid, and I propose to allow the mother time to pay. She has not provided any details of her financial circumstances, but I will allow six months to pay the costs.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 30 April 2015
8
2