KAPPEL & CARLSSON (No.2)
[2018] FCCA 2973
•24 October 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KAPPEL & CARLSSON (No.2) | [2018] FCCA 2973 |
| Catchwords COSTS – Judge’s discretion – whether rare or exceptional circumstances are a precondition to awarding costs on an indemnity basis – key authorities considered – applicant’s impecuniosity not a reason for refusing to award costs. |
| Legislation Family Law Act 1975, ss.117(2), (2A) |
| Cases cited Fountain Selected Meats (Sales)Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 202 |
| Applicant: | MR KAPPEL |
| Respondent: | MS CARLSSON |
| File Number: | MLC 11185 of 2013 |
| Judgment of: | His Honour Judge Wilson |
| Hearing date: | 23 August 2018 |
| Date of Last Submission: | 31 August 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 24 October 2018 |
REPRESENTATION
| Applicant: | In person |
| Solicitors for the Applicant: | None |
| Counsel for the Respondent: | Ms M E Agresta |
| Solicitors for the Respondent: | Lampe Family Lawyers |
| Counsel for the Independent Children's Lawyer: | Ms S Buchanan |
| Solicitors for the Independent Children's Lawyer: | Trapski Family Law |
ORDERS
The applicant pay the respondent’s costs of this proceeding on an indemnity basis fixed in the sum of $26 233.90.
Order 1 hereof is stayed until 23 November 2018.
IT IS NOTED that publication of this judgment under the pseudonym Kappel & Carlsson (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 11185 of 2013
| MR KAPPEL |
Applicant
And
| MS CARLSSON |
Respondent
REASONS FOR JUDGMENT
Introduction
On 24 August 2018 I held over the question of costs, inviting the parties to file submissions on point. The applicant chose not to file submissions, instead filing a notice of appeal from my orders. The respondent filed submissions seeking an order for the payment of costs in the sum of $26,233.90, being her costs on an indemnity basis.
Synopsis
In my view, an order should be made in the terms sought by the respondent. I make an order for the payment of indemnity costs in the sum of $26,233.90. Such an order is made for the following reasons.
In this court
First, the applicant was wholly unsuccessful in this case. Unless and until an appellate court sets aside my orders, they stand with the consequence that the father is to have no time with the children. A complete failure in a proceeding is specifically provided for as one basis for enlivening my power to make a costs order for the purposes of s 117(2A) of the Family Law Act (“Act”).
Second, in my earlier judgment I held in effect that there was no proper basis for bringing the proceeding. It was forlorn and doomed to fail. But, as a result of bringing the proceeding, the mother was put to very considerable expense. Ms Agresta of counsel submitted that the expense in legal fees was $26,233.90. There is ample authority for the proposition that commencing or continuing a proceeding in wilful disregard of known facts or established law is a basis for ordering indemnity costs, as was held in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd,[1] in J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (No 2)[2] and in Colgate-Palmolive Co v Cussons Pty Ltd.[3] There is other authority for the proposition that the making of allegations that ought never have been made or the undue prolongation of the case by groundless contentions will also support an order for the payment of costs on an indemnity basis as was held by Davies J in Regatta Developments Pty Ltd v Westpac Banking Corporation[4] and by Sheppard J in Colgate-Palmolive.[5]
[1] [1988] FCA 202
[2] [1993] FCA 70
[3] (1993) 46 FCR 225
[4] (1993) 40 FCR 511
[5] Op. cit.
Here, the applicant commenced this proceeding having no proper basis for doing so. It was purely speculative and amounted to the applicant doing little more than “rolling the dice” in an ambitious attempt to achieve a position that the mother had quite properly rebuffed. His prospects of obtaining orders for time with his children were extremely unlikely when he commenced this proceeding by reason of –
a)the applicant’s absence in the children's lives for a sustained period;
b)the applicant having made no attempt to contact the children for a very long time;
c)the mother having been the sole carer for a substantial period; and
d)the significant amount of family violence in this litigation.
That is not to say that a litigant with a dubious case should never agitate it in court. But a litigant with the dubious case should commence or continue with such a dubious case only if fully cognisant of the risk of a costs order being visited upon him or her.
Ms Agresta brought to my attention a decision of the Family Court of Australia to the effect that an order for the payment of costs is a rarity and should only be made when exceptional circumstances are found to exist. I disagree. The family law jurisdiction does not stand outside of mainstream jurisprudence administered in the Commonwealth courts throughout Australia. Cases under the Act attract cost considerations by reason of the elements of s 117(2A). Nowhere in s 117(2) or s 117(2A) is there expression of the concept that indemnity costs orders should only be made in exceptional circumstances.
To the contrary.
Section 117(2) proceeds on the basis that the court may make such costs orders as the court considers just where the court is of the opinion that there are circumstances that justify the making of such an order. The making of a costs order is subject to the considerations in, among other sections, sub‑ss 117(2) and 117(2A). But the threshold point is that, in the absence of legislation forbidding the making of a costs order, the court is entitled to make a costs order, the only issue being the basis on which those costs are to be paid.
The usual position is that costs are ordered to be paid on a party and party basis. In Colgate-Palmolive, Sheppard J traced the evolution of the learning on point. There, his Honour distilled the collection of propositions of fact and law that enable a court, acting properly in the exercise of its unfettered jurisdiction, to make a costs order, to order their payment on an indemnity basis. While it was true that Sheppard J’s distillation was unique to that time, it catalogued a very large number of authorities on point. By no means was the point undecided by 1993 that indemnity costs could be ordered. For that matter, Shepherd J referred to the settled practice for centuries in England, it being an entrenched practice in Australia, that costs were ordinarily ordered on a party and party basis but even as long ago as 1887, in the Chancery case of Andrews v Barnes,[6] the Court of Appeal spoke of the discretionary power to award costs as between solicitor and client “as and when the justice of the case might so require”. Importantly, over a century ago there was nothing to suggest that indemnity costs orders were rare or should be made only when exceptional circumstances existed. Expressed in such extremist terms, that has never been the law.
[6] (1887) 39 Ch D 133
The circumstances in which indemnity costs may be ordered were catalogued by Sheppard J. Yet his Honour said as follows –
It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for the payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge…
A litigant’s impecuniosity is not a reason for refusing to make a costs order on a particular basis. The basis for the making of the order and the factual matrix surrounding a person’s ability to meet such an order are two different things. Whether or not the applicant is impecunious, whether he can meet in order for the payment of $26,233.90 or whether he could be assisted in paying that sum (if so, by whom and by when) all fell beyond the factual arena of this litigation.
Litigants in the family law arena should be treated no differently to other litigants before this court where legislation empowers a judge to make a costs order and established authorities make statements of principle about the basis on which such a costs order can be properly made.
Conclusion
In the circumstances, having regard to the power conferred upon me by s 117(2) and s 117(2A) of the Act, as well as decided cases which I have mentioned above, an order for the payment of indemnity costs in the sum of $26 233.90 is appropriate in the circumstances of this case. I make that order and I grant a stay of 30 days.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of his Honour Judge Wilson
Date: 24 October 2018
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