KIDD & KIDD
[2014] FCCA 46
•24 January 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KIDD & KIDD | [2014] FCCA 46 |
| Catchwords: PRACTICE & PROCEDURE – Applicant does not need leave of the Court to make an application for costs in interlocutory proceedings. |
| Legislation: Family Law Act 1975 (Cth), s.117 Federal Circuit Court Rules 2001, rr.21.02, 21.15, 21.16, Sch. 1, Part 1 |
| Brown v Brown (1998) FLC 92-822 In the Marriage of Collins (1985) 6 Fam LR 1123; FLC 91-603 Fitzgerald (as Child Representative for A (Legal Aid Commission of Tasmania) v Fish and Anor (2005) 33 Fam LR 123 Jenson v Jenson (1982) FLC 91-263 Kidd & Kidd [2013] FCCA 684 Kidd & Kidd (No.2) [2013] FCCA 1101 Kidd & Kidd [2013] FCCA 1532 Kidd & Kidd [2013] FamCAFC 156 Latoudis v Casey (1990) 170 CLR 534 McAlpin and McAlpin (1993) FLC 92-411 Ohn v Walton (1995) 36 NSWLR 77 Penfold v Penfold (1980) 144 CLR 311 Robinson v Higginbotham (1991) FLC 92-209 Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2009) 241 FLR 1; (2011) FLC 93-466 |
| Applicant: | MR KIDD |
| Respondent: | MS KIDD |
| File Number: | SYC 5925 of 2012 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 9 December 2013 |
| Date of Last Submission: | 17 January 2014 |
| Delivered at: | Sydney |
| Delivered on: | 24 January 2014 |
REPRESENTATION
| Solicitor for the Applicant: | York Law |
| Counsel for the Respondent: | Mr Schonell SC |
| Solicitors for the Respondent: | Reid Family Lawyers |
ORDERS
The parties are to pay their own costs in respect of the Application in a Case filed on 13 June 2013.
The parties are to pay their own costs in respect of the Application in a Case filed on 13 August 2013.
The wife is to pay the husband’s costs of the Application in a Case filed on 20 September 2013 fixed in the amount of $2,494.00.
The wife is to pay the husband’s costs of this Application fixed in the amount of $1,500.00.
The wife is allowed six (6) months to pay.
IT IS NOTED that publication of this judgment under the pseudonym Kidd & Kidd is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 5925 of 2012
| MR KIDD |
Applicant
And
| MS KIDD |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application for costs by the husband, who is the Respondent to the substantive Application, in respect of:
a)An Application in a Case he filed on 13 June 2013;
b)an Application in a Case filed by the wife on 13 August 2013; and
c)an Application in a Case filed by the wife on 20 September 2013.
He also seeks the costs of his Application for costs.
The wife opposes those Applications.
Background
The husband filed an Amended Application in a Case on 13 June 2013 seeking an interim distribution of $110,000.00 from the proceeds of sale of the former matrimonial home. The Application was heard on 17 June 2013 and decided on 28 June 2013 (Kidd & Kidd[1]). Orders were made that the sum of $95,000.00 should be paid to the husband. It was further ordered that:
Any application for costs must be made within twenty-eight (28) days from the date of these orders by way of a written submission setting out the amount of costs sought and the basis upon which an order for costs is claimed and any submission in opposition to the application for costs is to be filed and served within a further period of fourteen (14) days.
[1] [2013] FCCA 684
The husband filed a written submission on 26 July 2013 in support of his application for costs.
On 31 July 2013 the wife filed an Application in a Case seeking orders that:
a)she should be granted leave to file a Notice of Appeal out of time;
b)the Orders made on 28 June 2013 should be stayed pending the outcome of the appeal; and
c)“That the hearing of all matters in these proceedings be listed before a Judge other than the Honourable[2]Judge Scarlett”.
[2] sic
The Application was heard and determined on 2 August 2013 (Kidd & Kidd (No.2)[3]. On that date I ordered that:
a)the Application in a Case was dismissed;
b)the time for compliance with Order (1) requiring payment of the sum of $95,000.00 was extended; and
c)the time for compliance with Order (3) requiring the filing of a written submission in respect of costs was extended for a period of 21 days.
[3] [2013] FCCA 1101
On 5 August 2013 the wife sought leave from the Full Court of the Family Court to appeal out of time.
On 13 August 2013 the wife filed an Application in a Case seeking orders for:
a)a stay of the Orders made on 28 June 2013 pending the outcome of the Application for leave to Appeal;
b)that the hearing of all matters should be listed before another Judge; and
c)that the wife’s solicitor should be permitted to uplift a certain document.
The Application was heard on 21 August 2013 and decided on 23 August 2013 (Kidd & Kidd[4]. On that date I made orders:
a)granting the stay;
b)permitting the wife’s solicitor to uplift the document;
c)vacating the hearing dates of 27 and 28 February 2014;
d)transferring the proceedings to the Family Court of Australia; and
e)reserving the parties’ costs.
[4] [2013] FCCA 1532
On 9 September 2013 Ainslie-Wallace J heard the appeal for an extension of time in which to lodge an appeal. On 9 October 2013 her Honour dismissed the dismissed the application, with costs (Kidd & Kidd[5]).
[5] [2013] FamCAFC 156
On 20 September 2013 the wife filed an Application in a Case seeking an order for costs against the husband in respect of the proceeding arising out of her Application in a Case filed on 13 August 2013.
However, on 5 November 2013 the wife filed a Notice of discontinuance in respect of the Application in a Case.
On 14 November 2013 the husband filed an Application in a Case seeking orders for costs and leave to file an application out of time.
Orders Sought
The husband stated in his submission filed on 26 July 2013 that he seeks an amount of costs in the sum of $10,000.00 in respect of the interim Application decided on 28 June 2013. The total costs are calculated at $12,100.00, inclusive of counsel’s fees, made up as follows:
a)Counsel’s fees in appearing at the Interim hearing: $4,400.00
b)Costs previously paid to Mr Batey of Counsel: $3,300.00
c)Solicitors’ costs of preparation of affidavit material, Amended Application and attending on hearing: $4,400.00
Total $12,100.00
However, as mentioned above, the amount sought has been “rounded down” to $10,000.00.
In his Application in a Case filed on14 November 2013, the husband seeks the following orders:
1. That to the extent necessary, leave be granted to the Husband to file this Application for costs against the wife in respect of the Wife’s Application in a Case filed in this Honourable Court on 13 August 2013.
2. That the wife pay the husband’s costs of and incidental to:
2.1 the Wife’s Application in a Case filed 13 August 2013;
2.2 the Wife’s Application in a case filed 20 September 2013.
3. That the Court assesses the Husband’s costs in relation to order 2 hereof in the sum of $9,100 with the wife to pay the said sum within 30 days for[6] the date of these Orders.
[6] Sic – of?
4. That the Wife pay the Husband’s costs of and incidental to this Application in a Case.
The Application is supported by an affidavit sworn by the husband on 14 November 2013.
In his submission of 23 December 2013, the husband seeks an order for costs in respect of the wife’s Application in a Case filed on 13 August 2013. He seeks an order that it was reasonable to engage Counsel in respect of the hearing of that Application.
The husband also seeks an order for costs in respect of the wife’s Application in a Case filed on 20 September 2013, but later discontinued.
In addition, he seeks an order for his costs of the Application for Costs in the sum of $1,500.00.
There is no Application for costs in respect of the wife’s earlier Application in a Case filed on 31 July and heard on 2 August 2013. When the Application was dismissed on 2 August, the parties’ costs were reserved but no application has been made in respect of that matter. The wife’s solicitor stated in the Wife’s Submissions on Costs that the husband’s costs were paid separately by the wife’s solicitor.
The wife discontinued her Application in a Case filed on 20 September 2013. In her Response filed on 28 November 2013, she seeks the following orders:
1. The Husband’s Application in a Case filed 14 November 2013 be dismissed.
2. There be no order for costs in relation to the Wife’s:
a. Application in a case filed 13 August 2013;
b. Application in a Case filed 20 September 2013.
3. The Husband pay the wife’s costs of and incidental to the Husband’s Application in a Case filed 14 November 2013.
The Application is supported by an affidavit affirmed by the wife on 28 November 2013.
Evidence and Submissions
In his affidavit of 14 November, the husband deposed that his solicitors were served with a copy of the Notice of Discontinuance on 5 November, discontinuing the Application in a Case filed on 20 September. He stated that he was about to finalise reviewing his affidavit and sign his Response when the Notice of Discontinuance was received.
The husband claimed in his affidavit that the proceedings and his original application seeking an interim were simple matters and the wife should have consented:
The wife’s conduct in defending the application and then lodging or attempting to lodge an appeal from the orders made was aimed at frustrating the process before this Honourable Court and to ultimately cause the hearing dates to be vacated. The wife has been successful in achieving her ultimate goal of having these proceedings delayed. I say that her application for His[7] Honour to recuse himself was without merit and was aimed at again frustrating the process and delaying the conclusion of these proceedings.[8]
[7] With respect, I do not think that this pronoun should be capitalised.
[8] Affidavit of Mr Kidd 14.11.2013 at paragraph [14]
The wife denies these allegations at paragraph [6] of her affidavit, saying:
As to paragraph 14 of [Mr Kidd]’s affidavit, whilst I am advised by my solicitors that the allegations contained in that paragraph are not admissible, I strongly deny the suggestions contained that my conduct in relation to these proceedings has lacked bona fides or has been for the ulterior purpose of delaying proceedings. Further, in respect of the appeal and the application for recusal, these applications only arose as a result of the conduct of [Mr Kidd]’s counsel at the hearing on 17 June 2013 in handing, without notice, my conciliation conference document to the Honourable[9]Judge Scarlett, as deposed to in Fiona Reid’s affidavit filed 20 September 2013.[10]
[9] Judges of the Federal Circuit Court are not entitled to be referred to as “the Honourable”. A judge of this Court should be referred to as Judge X or his or her Honour Judge X.
[10] Affidavit of Ms Kidd 28.11.2013 at [6]
I have not formed the view that the wife’s applications have been brought for the purpose of frustrating the proper progression of the matter or for any other improper purpose.
In his submissions, the husband refers the Court to the following authorities:
a)Penfold v Penfold[11] at 315-316;
b)Latoudis v Casey[12] per Mason CJ at 543; per McHugh J at 567;
c)Ohn v Walton[13] per Gleeson CJ at 79;
d)Fitzgerald (as Child Representative for A (Legal Aid Commission of Tasmania) v Fish and Anor[14] at 130;
e)Robinson v Higginbotham[15] per Nygh J at 78,417[16];
f)Jenson v Jenson[17];
g)McAlpin and McAlpin[18]; and
h)Brown v Brown.[19]
[11] (1980) 44 CLR 311
[12] (1990) 170 CLR 534
[13] (1995) 36 NSWLR 77
[14] (2005) 33 Fam LR 123
[15] (1991) FLC 92-209
[16] Wrongly cited in submission
[17] (1982) FLC 91-263
[18] (1993) FLC 92-411
[19] (1998) FLC 92-822
The wife, in her written submissions filed on 17 January 2014, referred the Court to the decision of the Full Court of the Family Court in In the Marriage of Collins[20], where it was held by Evatt CJ, Pawley and Barblett JJ:
There is no doubt that s 117 of the Family Law Act confers a broad discretion on the court in regard to costs. The discretion is to be exercised having regard to the primary rule that each party bears his or her own costs. This rule negates any principle that costs should follow the event or that the husband should bear the costs of the wife in matrimonial proceedings. Under the Act, costs will, in general, lie where they fall.[21]
[20] (1985) 9 Fam LR 1123; FLC 91-603
[21] (1985) 9 Fam LR 1123 at 1128; FLC 91-603 at 79,877, cited in Wife’s Submissions on Costs page 12, paragraph [11]
The Wife submitted that, having regard to the relevant considerations under subsection 117(2A) of the Act, the circumstances do not justify the Court departing from the general rule that the parties should bear their own costs. Accordingly, it is submitted that no order as to costs should be made in relation to either the Applications of 13 August or 20 September.
In respect of the Application by the Husband for costs of the Application of 13 August, it is submitted that the Application is out of time, bearing in mind the requirements of Sub Rule 21.02(1)(b), which provides that an application for an order for costs may be made within 28 days after a final decree or order is made.
Any application for costs ought to have been brought by 20 September 2013. The circumstances do not justify the grant of an extension of time under Sub Rule 21.02(1)(c), as the Husband has provided no reasonable explanation for the delay in filing his application for costs.
It is submitted that:
The Husband’s Application In respect of the 13 August Application appears to be an afterthought, and the Court ought not to entertain exercising its discretion to grant an extension of time to file the application in those circumstances.[22]
[22] Wife’s Submissions on Costs page 4, paragraph [14D]
The Wife also draws the Court’s attention to the financial circumstances of the parties, a matter to which the Court shall have regard under s.117(2A)(a) of the Act. It is submitted that the Wife’s income has decreased due to decreases in interest rates and changes in bank policy. The wife has also received a demand from Centrelink requiring her to repay an amount of overpaid Parenting Payment amounting to $2,505.38 by 22 January 2014.
It is submitted that the Wife’s financial situation is precarious whilst the Husband has a significantly greater income.
In dealing with the conduct of the parties to the proceedings in relation to the proceedings, the Wife’s Submissions on costs state at paragraph [17]:
Further, in respect of the Wife’s Application in a Case filed 31 July 2013 and the mention on 2 August 2013, the Wife’s solicitor offered to pay personally, and has in fact paid, the Husband’s costs on an indemnity basis (which the Husband does not mention in his submissions).[23]
[23] Ibid at [17]
It is submitted that the wife was substantially successful in her Application of 13 August, in that the Court:
a)stayed the Orders of 17 June 2013, with the exception of an interim order for payment of $30,000.00;
b)transferred the matter to the Family Court, “having the effect that Judge Scarlett would not hear the matter going forward”[24]; and
c)permitted the Wife’s solicitor to uplift the Wife’s Conciliation Conference document from the Court file.
[24] Wife’s Submissions on Costs page 6 at [19]
It is further submitted that the wife’s lack of success on the Application for leave to appeal out of time is a separate question and does not bear on the issue of costs in respect of the 13 August Application.
The wife submits that her solicitor made an offer to settle the matter on 7 August 2013 an offer to settle the costs issues on the basis of a payment of $95,000.00 and a joint application by the parties to transfer the matter to a different Judge. A copy of the letter, marked “Without Prejudice Save As to Costs”, is annexed to the affidavit of Fiona Reid, the wife’s solicitor, of 20 September 2013. In the letter, an offer was made in these terms:
1) That the Orders made by Judge Scarlett on 28 June 2013 stand. My client has signed the bank form pursuant to her obligation which can be provided to you forthwith. Obviously, then, she will abandon her Appeal.
2) That your Application for Costs with regard to the proceedings of 17 June 2013 be withdrawn. I confirm that my offer to pay your client’s wasted costs of the mention on Friday, 2 August 2013, remains.
3) That we agree to have the matter transferred to a different Federal Circuit Court Judge.
There were other matters referred to in the letter that are not relevant to the question to be decided here.
This offer was not accepted by the husband, but, if it had been, the parties would have effectively have been placed in the same position as they are currently.
It is further submitted, for the same reasons in respect of the earlier Application, that the wife should not be required to pay the husband’s costs of the 20 September Application:
…whilst the 20 September Application was subject of a Notice of Discontinuance, any costs expended by the Husband in responding to the 20 September Application are not costs “thrown away”, as presumably those documents form the basis of the Husband’s Application.[25]
[25] Ibid at [21]-[22]
The wife also takes issue with the quantum of the costs sought by the husband, particularly with the amount of $9,100.00, for which no justification has been provided other than the assertion that this was the amount sought by the wife in her Application of 20 September.
Finally, the wife submits that if the Court is minded to make a costs Order against her:
any such costs Order provide for payment of those costs to occur at the conclusion of these proceedings, given that presently the Wife would only be able to pay such costs out of the sale proceeds of the former matrimonial home, and doing so would further diminish the amount of interest received on the same, thereby further jeopardising her ability to meet rental payments for herself and the children.[26]
[26] Wife’s Submissions on Costs page 8 at [26]
Conclusions
Rule 21.02 deals with Orders for Costs:
(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of costs; or
(b) set the method by which costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.
As the various Applications in a Case are interlocutory proceedings and final orders have not been made, Rule 21.02 does not require leave of the Court and the Application for costs is within time.
The wife in her submissions has quoted a passage from the judgment of the Full Court of the Family Court in In the Marriage of Collins[27]. That decision concerned an appeal from the decision of the trial judge that the Legal Aid Commission of Victoria should pay the husband’s costs on the basis that the Legal Aid Commission had been funding the wife throughout the proceedings which involved an application that the trial judge found was completely without merit.
[27] supra
The appeal was successful because the Legal Aid Commission was not a party to the proceedings and there had been no application by the husband for an order against either the wife’s solicitors or the Commission.
In the course of their decision, their Honours said:
There is no doubt that s 117 of the Family Law Act confers a broad discretion on the court in regard to costs. The discretion is to be exercised having regard to the primary rule that each party bears his or her own costs. This rule negates any principle that costs should follow the event or that the husband should bear the costs of the wife in matrimonial proceedings. Under the Act, costs will, in general, lie where they fall.[28]
[28] (1985) 9 Fam LR 1123 at 1128; FLC 91-603 at 79,877
This is the passage quoted in the Wife’s Submissions on Costs. However, their Honours went further and said:
Nevertheless, in deciding whether the circumstances justify an order for costs, there is a broad discretion to be exercised, having regard to the factors set out in sub-s (2A) so far as relevant. These factors which were inserted into the Act in 1983 are not to be read in a restrictive way, however, the discretion remaining a broad one; Penfold (1980) 28 ALR 213; [1980] FLC 90-800 quoted in Mallet v Mallet (1984) 9 Fam LR 449; [1984] FLC 91-507 (by Wilson J).[29]
[29] Ibid
I have taken all these matters into account.
Subsection 117(2) of the Family Law Act 1975 (Cth) provides that if the court is of opinion that there are circumstances that justify it in doing so, the Court may subject to subsection (2A), inter alia, make such order as to costs as the Court considers just.
Subsection 117(2A) sets out a list of matters to which the Court should have regard in considering what order, if any, should be made under subsection (2).
The financial circumstances of the parties are set out in their affidavits. The husband earns approximately $6,000.00 per week and it is conceded that he has a greater earning capacity than the wife. He pays child support in the sum of $640.00 per week, down from $1,000.00 per week.
The wife is in receipt of an income that is significantly lower than that conceded by the husband. Her rent is being paid from the interest on the parties’ joint interest bearing account, which contains the balance of proceeds of sale of the former matrimonial home, less the amount of $95,000.00 ordered to be paid by the Court. Each party has incurred considerable legal expenses.
Neither party is in receipt of a grant of legal aid.
The conduct of the parties to the proceedings in relation to the proceedings is a relevant factor under s.117(2A)(c).
The husband’s Application in a Case filed on 13 June 2013 was an application for interim property orders to defray anticipated legal costs, often known as a Strahan & Strahan application.[30] Contrary to the husband’s assertion that the application was a simple matter to which the wife should have consented, it was open to the wife to defend the Application as she did. I note that Senior Counsel for the wife told the Court that “matters of this type were rarely defended”[31], this was not such a case because the husband had not been able to show that:
a)there was a likelihood of an order being made in the husband’s favour equal to or more than the amount sought;
b)there would be no prejudice to the wife if such an order were made; or
c)there had been a full and frank financial disclosure.
[30] Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2009) 241 FLR 1; (2011) FLC 93-466
[31] Kidd & Kidd [2013] FCCA 684 at [19]
As it turned out, the wife was unsuccessful and the husband was successful, although he did not receive the amount of $110,000.00 that he sought. Rather, an order was made that he should receive the lesser sum of $95,000.00.
Whilst in hindsight, the parties would have done better to settle the application, it appears to me that the husband’s claim was not unreasonable in all the circumstances and the wife had an arguable case to defend the Application. It just turns out that she was unsuccessful.
Subsection 117(1) of the Act provides that subject to subsection (2) and other sections not relevant here, “each party to proceedings under this Act shall bear his or her own costs”. The case was argued on the papers over a period of a couple of hours and a decision was made a little while later. In my view, there are no circumstances that, in my opinion, justify an order for costs. The parties should pay their own costs of this Application.
Unfortunately, matters went downhill from there. The wife decided to appeal and sought leave to appeal out of time. The original Application in a Case, filed on 31 July 2013, and heard on 2 August, was misconceived, as I made clear in the ex tempore decision handed down that day.[32] In retrospect, it is inexplicable why such an obviously flawed Application was brought to the Court. It was doomed to failure.
[32] Kidd & Kidd (No.2) [2013] FCCA 1101
As I said at [8]:
I will be more than willing to hear any such application that is made once the various defects that I have identified have been rectified.[33]
[33] Ibid at [8]
An Application in a Case, in somewhat better form, was filed on 13 August 2013. Whilst the wife had filed an Application for Leave to Appeal, which was missing from the earlier Application, the application that I should disqualify or recuse myself from hearing further proceedings formed the basis of the proposed Appeal. It will be noted that I considered the disqualification grounds and rejected them at paragraphs [45] and [51] of my judgment.[34]
[34] Kidd & Kidd [2013] FCCA 1532 at [45]&[51]
I refused to disqualify myself but, having formed the view that the way the parties had chosen to litigate the matter thus far indicated that the final hearing would be likely to take in excess of four days rather than the allocated two days, I applied the Protocol in force between this Court and the Family Court and transferred the matter to the Family Court.
I chose to stay the earlier orders, conditional on the interim payment of a sum of $30,000.00, and left it to the Full Court of the Family Court to decide the Application for Leave to Appeal on its merits. As it turned out, Ainslie-Wallace J found that there were none.[35]
[35] Kidd & Kidd [2013] FamCAFC 156 at [51]
Overall, the husband was successful on his original Application, although not as successful as he might have wished. The wife was not successful. Although she eventually received a conditional stay of the earlier orders after a disastrous first start, she was entirely unsuccessful on her Application for Leave to Appeal.
However, the costs of the wife’s unsuccessful Application for leave to Appeal have already been dealt with. It is a separate question that does affect the matters to be decided.
What is significant, however, is the written offer of settlement made by the wife in her solicitor’s letter of 7 August 2013. The Court is required to have regard to whether either party to the proceedings has made an offer in writing to the other party to settle the proceedings and the terms of any such offer (s.117(2A)(f)). It appears to me that this offer was capable of acceptance by the husband and, if he had accepted the offer, the Application of 13 August 2013 need not have been made.
I regard this as a most persuasive piece of evidence and I am satisfied that the wife should not be required to pay the husband’s costs of that Application. The parties can pay their own costs.
The wife brought an Application in a Case on 20 September 2013, seeking an order that the husband should pay her costs of the Application of 13 August 2013. In my view, that application never had any great prospects of success, noting the Orders that were made and those that were rejected. What is surprising is that it took the wife until 5 November to discontinue the application, when the decision of the Full Court had been handed down on 9 October, almost a month earlier.
The husband describes in his submission at paragraph E details of written offers of settlement which did not lead to a settlement. It appears that the wife rejected the husband’s offers in respect to costs. I have no details of the offers made, so I am unable to decide whether the wife’s refusal to accept any offer of settlement was imprudent or not.
I am not persuaded that the wife deliberately attempted to frustrate the orders of 28 June 2013 or attempted to force the husband to deplete the funds he was awarded under those Orders. She has certainly been the unsuccessful party compared to the husband. What has happened is that her case, in which she is the Applicant, will not proceed in this Court in February. Her case will proceed in the Family Court at some stage in the future and will most likely take significantly longer than the two days originally allocated. I have no doubt that the matter could not be concluded in four days. It may take a week. This will cost both parties a lot of money.
It is not for me to speculate why the wife chose to proceed with the Applications that she did. She has at all times been represented by lawyers who are experienced in this jurisdiction and it is reasonable to assume that she received realistic and sensible legal advice. If the wife chose not to follow the advice that she was given but instructed her lawyers to proceed regardless, they would have been obliged to follow her instructions.
It appears to me that the wife should, in all the circumstances, be ordered to pay the husband’s costs of:
a)The Application in a Case filed on 20 September 2013 and discontinued; and
b)This Application.
The Rules also allow for the Court to set the amount of the costs (r.21.02(a)). In my view, that is the preferable course, as it will be quicker and less expensive than referring the costs for taxation.
Costs are usually assessed on a party and party basis. There is no reason for costs to be assessed on any other basis. Costs will be assessed in accordance with the scale provided in Part 1 of Schedule 1, which applies to family law proceedings and general federal law proceedings.
The husband submits that the Court should certify for counsel to appear on the hearing of the Application in a Case filed on 13 August 2013. The hearing took place on 21 August, when Senior Counsel appeared for the wife and Mr Tockar of Counsel appeared for the husband.
However, as the parties are to pay their own costs there is no need for the Court to certify for Counsel.
The application in a Case filed by the wife on 20 September 2013 was returnable on 2 December. However, it was discontinued on 5 November 2013, some four weeks less one day after the decision of the Full Court was handed down on 9 October. In retrospect, it was an appropriate step to take, as by then it was clear that the Application would have had no chance of success. Fortunately, it was discontinued well before the return date. Thus, there was no need for an appearance.
However, the husband deposed in his affidavit that his solicitors had prepared his Response to the Application in a Case and his supporting affidavit, and he was about to finalise reviewing his affidavit and sign the Response when his solicitors were advised on 7 November that the Application was to be discontinued.
Rule 13.01 allows for the filing of a notice of discontinuance, which should be filed at least 14 days before the day fixed for the final hearing of the application. The wife complied with that rule.
However, Rule 13.02 provides that if a party discontinues an application, or part of an application, another party in the proceeding may apply for costs. The husband’s application for costs was filed on 14 November 2013, so his application was made within the time limit of 28 days allowed by Sub rule 13.02(2).
In my view, the proper figure for costs is that provided by Item 1 of Part 1 of Schedule 1, namely $2,494.00. No daily hearing fee applies as the Application was discontinued prior to the return date.
The wife is to pay the husband’s costs of the Application in a Case filed on 20 September 2013 in the sum of $2,494.00.
Finally, the husband seeks his costs of this Application in the sum of $1,500.00. That is well below the fee provided by the scale and I am satisfied that I should fix costs in that amount. I note that an order for costs is intended to compensate a party and not punish the other party (see Latoudis v Casey[36] at 543 per Mason CJ, 567 per McHugh J[37]).
[36] (1990) 170 CLR 534
[37] His Honour’s name is misspelled in a footnote to the husband’s submission.
The wife is to pay the husband’s costs of this Application in the sum of $1,500.00.
Time to Pay
One reason why a Court should have regard to a party’s financial circumstances under s.117(2A)(a) is to determine a fair and just amount of time for a party to pay the costs ordered. The total amount payable amounts to $3,994.00. I have taken into account the wife’s financial circumstances and note that there are proceedings shortly to take place in the Family Court which will no doubt involve her in some expense by way of legal costs. However, that situation applies to the husband as well.
Whilst I am not persuaded that the wife should not be required to pay the costs until the conclusion of the proceedings, I consider it proper to allow a reasonable amount of time to pay, noting the financial pressures on her set out in her Submission. I will allow six months to pay the costs.
I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Date: 24 January 2014
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