Kalan & Kalan
[2021] FedCFamC2F 345
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kalan & Kalan [2021] FedCFamC2F 345
File number(s): PAC 6635 of 2020 Judgment of: JUDGE MURDOCH Date of judgment: 9 November 2021 Catchwords: FAMILY LAW - application for costs where the Father seeks costs against the Mother - costs sought on an indemnity basis - where the Mother filed an interim application to re-litigate interim issues determined some four months prior - where the Father made offers of settlements to which no response was received - where the Mother withdrew her application on the first return date of the interim application - Mother ordered to pay Father’s costs on a party/party basis Legislation: Family Law Act 1975 (Cth) s 117. Cases cited: Penfold v Penfold [1980] HCA 4 Division: Division 2 Family Law Number of paragraphs: 39 Date of last submission/s: 22 October 2021 Date of hearing: 4 November 2021 Place: Parramatta Solicitor for the Applicant: Ms Godden Solicitor for the Respondent: Mr Dickson ORDERS
PAC6635 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR KALAN
Applicant
AND: MS KALAN
Respondent
ORDER MADE BY:
JUDGE MURDOCH
DATE OF ORDER:
9 NOVEMBER 2021
THE COURT ORDERS THAT:
1.That within 90 days the Mother is to pay the Father’s costs of an incidental to the Application in a Case filed by the Mother on 15 June 2021 fixed in the sum of $2,285.00.
2.The legal practitioners must provide a copy of the Central Practice Direction – Family Law Case Management dated 1 September 2021 to their clients and are requested to provide a copy to any unrepresented parties to the proceedings within 7 days.
3.Legal practitioners who are privately funded in these proceedings are to file and serve a Costs Notice in accordance with Rule 12.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 within 7 days.
THE COURT NOTES THAT:
A.The substantive proceedings are otherwise listed for further directions at 11:00 am on 17 December 2021.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Kalan & Kalan has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MURDOCH
These are financial and parenting proceedings. There are two children of the relationship, X born in 2013 and Y born in 2014 (“the children”.)
On 9 December 2020 the Father filed proceedings seeking interim and final orders. On an interim basis the Father sought Orders that in summary restrained the Mother from relocating the residence of the children from within 5 kilometres of Western Sydney and changing their enrolment from B School, together with Orders for specified time with the children.
The Mother, by way of her Response filed on 11 January 2021, sought Orders that she have sole responsibility for making decisions with respect to the children’s schooling and their living arrangements, that she be “permitted” to relocate the children from their place of residence in Suburb C, Western Sydney to a location on the Region D of New South Wales that was no more than a 30 kilometre radius from Town E together with Orders regulating the time the children spend with the Father.
Senior Registrar Tran made interim Orders subsequent to a defended hearing on 2 February 2021 that:-
(a)the children were to live with the Mother;
(b)regulated the time the children were to spend time with the Father;
(c)within 7 days the Mother was to re-enrol the children at B School;
(d)the Mother was to return the children to either their former residence at F Street, Suburb G in the state of New South Wales or a residence within 30 kilometres of the Western Sydney area; and
(e)the Mother was otherwise restrained from relocating the children’s residence outside of the Western Sydney area.
Four months later, on 15 June 2021, the Mother filed an Application in a Case seeking to re-litigate the same issues determined by the Court on 2 February 2021 by way of a discharge of some of the interim parenting Orders made that day, so that she be permitted to relocate the children to Town E and that they be enrolled at Town E Public School. The Mother did not apply to Review the Senior Registrar’s determination.
On 11 October 2021 the matter was listed in the Duty List before me. The Mother’s Application in a Case was withdrawn by consent. The Respondent Father’s solicitor made an oral application for costs. I directed by consent that:
(a)The Father to provide written submissions by 15 October 2021;
(b)The Mother (and Independent Children’s Lawyer if she wishes to do so ) file any written submissions in reply by 22 October 2021; and
(c)The issue as to costs would be determined in Chambers on 28 October 2021.
This is the determination of the Father’s application for costs.
The Father filed written submissions on 20 October 2021 referring to an Affidavit filed by the Father’s legal representative on 7 October 2021. I have read this Affidavit and the Father’s Financial Statement filed on 6 May 2021.
The Mother filed written submissions on 22 October 2021. I have read the Mother’s Financial Statement filed on 30 June 2021.
In his written submissions filed on 20 October 2021 the Father seeks a maximum costs order pursuant to Rules 12.10 and 12.11 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”). This is a misunderstanding of Rules 12.10 and 12.11. These Rules allow a party to seek at any time during the proceeding an order specifying the maximum costs as between party and party that may be recovered in a proceeding. It is not an Order for costs pursuant to section 117 of the Family Law Act1975 (Cth) and Part 12.5 of the Rules.
The object of the ability of a party to seek such a maximum costs Order is to support the overarching purpose of the Court as identified in sections 190 and 191 of the Federal Circuit and Family Court of Australia Act2021, Rule 1.04 of the Rules together with the Core Principles contained within the Central Practice Direction – Family Law Case Management that the Court is to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible. Rule 12.08 requires that the legal costs incurred in a proceeding must be fairly, reasonably and proportionally incurred and to their amount in the circumstances of the proceeding. Further, Core Principles 7 and 8 imposes obligations on parties and their legal representatives to take a sensible and pragmatic approach to litigation and “applications should only be brought before the Court if they are reasonably justified on the material available.”
In circumstances where the Father’s submissions are supported by way of an Affidavit of the Father’s legal representative deposing that the Father incurred “costs of $3,800 plus GST on an indemnity basis” and anticipating that a further “$1,000.00 plus GST for a 2 hour appearance on 11 October 2021” will be incurred, I have proceeded on the basis that the Father seeks the Mother pay the Father’s costs thrown away on an indemnity basis.
The Mother resists any Order as to costs and in the event that costs be ordered, resists an order that such costs be on an indemnity basis.
The Mother submits as a preliminary issue that a costs order cannot be made in this matter with respect to her withdrawing her Application in a Case filed on 15 June 2021 as the effect of Orders made by the Court on 23 July 2021 that determined an Application in a Case filed by the Independent Children’s Lawyer as to the identity of the Court expert wherein “all outstanding interim Applications are otherwise dismissed” dismissed also the current Application before the Court – that is, the Father’s oral application for costs made on 11 October, 2021 with respect to the Mother’s Application in a Case filed on 15 June 2021.
That submission does the Mother’s legal representative little credit. It is self-evident nonsense to contend that an Order made on 23 July 2021 determined the Mother’s interim application to vary interim orders that was maintained and prosecuted by her up until the 11 October 2021 and determined an oral application for costs made some 3 months after the Order made on 23 July 2021.
The Mother’s current application was listed after the determination on 23 July 2021. At no stage prior to the current written submissions as to costs did the Mother advise the Father, the Independent Children’s lawyer or the Court that it was their view or understanding that the Mother’s current application had been dismissed by the Court on a summary and ex parte basis when determining a costs issue relating to a prior interim application. The solicitor for the Mother when appearing before me on 11 October 2021 advised the Court that he had obtained instructions that the Mother wished to withdraw her application. Clearly, the submission made by the solicitor for the Mother that the Mother’s Application had been summarily dismissed by me in Chambers without affording the Mother any natural justice was contended only after the Father’s oral application for costs was made on 11 October 2021. This contention has no merit and in my view is disingenuous.
Section 117(1) of the Family Law Act 1975 (Cth) provides that each party to proceedings shall bear their own costs. Section 117(2) states that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may make such order as to costs as the Court considers just. The matters relevant to determining what order, if any, should be made for costs are set out in section 117(2A).
Although s117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, the High Court in Penfold v Penfold [1980] HCA 4 said that an applicant for costs does not bear any additional or special onus.
Rule 12.13 of the Rules provides that the Court may make an order for costs on its own initiative or on the application of a party. Rule 12.13(4) mandates that 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 and if so, the terms of such costs agreement. In circumstances where this evidence is not before the Court, the Father’s application for indemnity costs must fail. In any event, for the reasons below I am not satisfied that there are exceptional circumstances in this case that would warrant an order for indemnity costs.
Thus the remaining question to be determined is whether the Mother should pay the Father’s costs thrown away on a party/party basis.
Turning now to the relevant considerations:
Financial Circumstances of the Parties
The evidence contained in the Mother’s Amended Financial Statement filed 30 June 2021 indicates that she is in receipt of an income of $1,853.66 inclusive of child support paid by the Father. I find it unusual that the Mother’s income and expenditure on a weekly basis is matched to the cent. The Mother submits that “she has no surplus income that she can divert to pay costs.” The Mother’s evidence is that she has assets to the value of $7,376.85 and superannuation interests valued at $71,714.41.
The Father’s Financial Statement filed 6 May 2021 deposes that the Father is in receipt of an income of $950 per week. His recorded expenditure is $853 per week. He deposes he has assets valued at $120,766.00 and superannuation interests to the value of $44,194.00.
Neither party is impecunious. Both parties’ financial circumstances are modest. This factor in a consideration as to costs is materially neutral.
I am satisfied that Wife’s financial circumstances are not so constrained as to weigh against the orders of costs.
Whether either party is in receipt of a grant of legal aid
Neither party is in receipt of a grant of legal aid.
The conduct of the parties during the proceedings
The sole reason of the listing in the duty list on 11 October 2021 was as to the prosecution by the Mother of her Application in a Case filed on 15 June 2021.
The Father was put to the expense of filing a Response and an Affidavit in support to that Application that he filed on 7 October 2021. He sought that the Mother’s application be dismissed.
The Mother was put on notice by way of correspondence from the Father’s legal representatives dated 17 June 2021 and 6 October 2021 that costs would be pressed on an indemnity basis in relation to the Mother’ application.
Not only was the Father put to the expense of responding to the Mother’s application but he was further put to the expense of attending Court on 11 October 2021. It would have been appropriate for the Mother’s solicitor so as to mitigate the costs of the Father and the Independent Children’s Lawyer to advise of the Mother’s change in position regarding her application and to offer to appear at Court on 11 October 2021 by consent.
I find that this factor weighs significantly in the Father’s favour in an exercise of the costs power.
Whether a party has been wholly unsuccessful
The Mother withdrew her Application. She was wholly unsuccessful. I find that this factor weighs in favour of a costs order in favour of the Father.
Offers of Settlement
The Father filed an Affidavit of his solicitor on 7 October 2021 which annexes the correspondence prior to the listing of the matter before the Court on 11 October 2021:
(a)letter dated 17 June 2021 from the Father’s solicitor to the Mother’s solicitors inviting the Mother to withdraw her Application without cost implications;
(b)Letter from the Father’s solicitor to the Mother’s solicitor dated 6 October 2021 repeating the assertion that the Mother’s case was without merit and putting the Mother on notice that costs would be sought.
The Father’s evidence is, and I find, that no response was received to any of the correspondence.
If the offer of settlement dated 17 June 2021 had been accepted by the Mother, the Father would not have been put to the expense of preparation of a response and supporting affidavit and an attendance at Court. I find that this work undertaken by him, in the circumstances, was wholly unnecessary, generating unnecessary costs.
I find that this factor alone justifies an order for costs in favour of the Father.
Any other matter to consider
The Mother submits that her role as the primary carer of both subject children is relevant to the issue of costs. The Mother does not outline in her submissions how an order of costs would impede her ability to care for the children. I give this submission little weight.
CONCLUSION
I am satisfied that the Mother should pay the Father’s costs of and incidental to the Application in a Case filed on 15 June 2021 in accordance with Items 3 and 13 of the scale as set out in Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021.
Orders will be made accordingly.
I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Murdoch. Associate:
Dated: 9 November 2021
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