Knight and Sullivan (No.2)
[2008] FMCAfam 55
•4 February 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KNIGHT & SULLIVAN (No.2) | [2008] FMCAfam 55 |
| FAMILY LAW – COSTS – Consideration of factors – financial circumstances – effect of legal aid grant to successful party – conduct of proceedings – applicant wholly unsuccessful – whether other relevant matters include conduct in separate but related proceedings. |
| Family Law Act 1975 (Cth) s.117(2A) Federal Magistrates Act 1999 (Cth) ss.3 and 42 Federal Magistrates Court Rules 2001 (Cth) rr.1.03, 4.01, 4.05, 13.11(1) & (4), 21.02(a) and Schedule 1 Legal Aid Commission Act 1979 (NSW) s.46(1) |
| Barker v Barker & Wade (1976) 13 ALR 123 BC Cairns, Australian Civil Procedure (Fourth Edition) (North Ryde: LBC Informatuion Services, 1996) |
Applicant: | MR KNIGHT |
| Respondent: | MS SULLIVAN |
| File Number: | SYC 4809 of 2007 |
| Judgment of: | Lucev FM (delivered by Scarlett FM) |
| Hearing date: | 30 November 2007 |
| Date of Last Submission: | 12 December 2007 |
| Delivered at: | Sydney (by telephone) |
| Delivered on: | 4 February 2008 |
REPRESENTATION
| Applicant | No appearance |
| Counsel for the Respondent: | Ms Kinghan |
| Solicitors for the Respondent: | Kinghan & Associates |
ORDERS
That the Applicant pay the Respondent’s costs in the sum of $4612.50, with twelve months to pay.
IT IS NOTED that publication of this judgment under the pseudonym Knight & Sullivan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 4809 of 2007
| MR KNIGHT |
Applicant
And
| MS SULLIVAN |
Respondent
REASONS FOR JUDGMENT
Introduction
On 30 November 2007 the Court delivered judgment in relation to an application filed by the Applicant Father on 22 August 2007.[1] That application sought to vary consent parenting orders made on 22 June 2006 and 14 March 2007. The outcome of the application turned on the rule in Rice and Asplund.[2] The Court concluded that:
“In conclusion, the Father has failed to establish any sufficient material change to warrant variation of the orders sought by him, and only in one very minor respect has he established a material change. In that respect the Court has come to the view that the material change is not sufficient to warrant variation of the orders.”
and ordered that the application be dismissed.
[1] K & S [2007] FMCAfam 1085 (“K & S”).
[2] In the Marriage of Rice and Asplund (1978) 6 Fam LR 570.
Because the Father was not able to attend the delivery of the Reasons for Judgment in K & S the Court ordered, when an application was made for costs by the Mother, that written submissions be filed in relation to costs. Only the Respondent Mother has filed submissions on costs.
Costs
The power to award costs in family law proceedings derives from s.117 of the Family Law Act 1975 (Cth).[3]
[3] “FL Act”.
The law concerning costs in family law proceedings was succinctly summarised in RNL & RHB,[4] as follows:
“The question of costs in family law proceedings is dealt with in s.117 of the Family Law Act. A judicial officer has a broad discretion in costs matters, and the Full Court has indicated that it will not ordinarily intervene unless the order is plainly unreasonable. Indeed, it has been held that the Court has an almost unlimited jurisdiction in relation to costs, although any costs orders must be just.
It is not the law that a costs order can only be made in “a clear case”. Thus, 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. Although the general rule is that each party shall bear his or her own costs, that general rule is expressed to be subject to s.117(2) and must yield whenever the judicial officer finds that there are circumstances justifying the making of the costs order.”[5]
[4] [2005] FMCAfam 520 (“RNL”).
[5] RNL at paras 169 and 170 per Walters FM. See also Barker v Barker & Wade (1976) 13 ALR 123 at 131 per Crawford J: “the court’s power to grant costs exists when it is of opinion in a case that there are circumstances that justify it in doing so.”
The view of s.117(1) and (2) set out in RNL is in large part drawn from the discussion in the majority decision in Penfold v Penfold.[6]
[6] (1980) 144 CLR 311 at 315 per Stephen, Mason, Aickin and Wilson JJ; with Murphy J expressing a similar view at 317 (“Penfold”); and followed in Re JJT & Ors; Ex parte Victoria Legal Aid (1998) 195 CLR 184, [1998] HCA 44, CLR at 191 per Gummow J, HCA at para 11 per Gummow J; and whilst not expressly followed, certainly expressed in similar terms in CLR at 219 per Hayne J and 225 per Callinan J, HCA at paras 91-92 per Hayne J and para 125 per Callinan J (“JJT”).
In JJT s.117(2A) was commented on by a number of the Justices of the High Court. Kirby J (albeit in dissent) said that s.117(2A):
“express[ed] criteria to which the Court must have regard in considering what order (if any) it should make under s.117(2). All but one of the paragraphs of sub-s. (2A) relate to the circumstances of a party. However, the closing paragraph, par. (g) is expressed in the most ample terms”[7]
while Hayne J said that:
“The list of matters set out in sub-s. (2A) to which the Family Court is directed to have regard in making orders under s.117(2) indicates clearly that the subject matter of the orders to be made under s.117(2) is the costs which a person may be ordered to pay another as indemnity for that other’s liability for professional fees and out of pocket expenses reasonably incurred in the litigation, that is, “costs” as that expression is ordinarily understood in the law”[8]
and Callinan J said that:
“Subsection 117(2A) provides a catalogue of the matters to which the Family Court may have regard if an order different from that contemplated by s.117(1) is to be made. All of these matters, except for the last, are matters expressly concerned with the conduct and circumstances of the parties. The last could hardly however, be expressed in wider terms”.[9]
[7] JJT CLR at 198 per Kirby J, HCA at para 37 per Kirby J.
[8] JJT CLR at 220 per Hayne J, HCA at para 98 per Hayne J.
[9] JJT CLR at 225 per Callinan J, HCA at para 126 per Callinan J.
Costs – consideration of factors
In determining whether to order costs the Court must consider the relevant s.117(2A) factors.[10] In so doing, the Court may make an order on the basis of one or a combination of factors.[11]
[10] In the Marriage of I and I (No 2) (1995) 22 Fam LR 557 at 558 per Nicholson CJ, Ellis and Buckley JJ.
[11] In the Marriage of SH and P Brown (1998) 23 Fam LR 349 at 353 per Kay J, referred to in C & C (No 2) [2007] FMCAfam 54 at para 12 per Pascoe CFM (“C & C (No 2)”).
Section 117(2A)(a) – Financial circumstances of each party
No financial statement was filed by either party, and there is generally very limited information about the financial circumstances of each party.
It does not however appear to be in dispute that both parties are pensioners supporting children reliant on social welfare payments.[12]
[12] Father’s Affidavit sworn 22 August 2007 at para 3 “I am also a pensioner with two teenagers”. Both the Father and the Mother obtained an exemption from payment of Court fees as Pensioner Concession Card holders: see “Application – Exemption form. Payment of court fees” on the Court file for each of them.
The Father asserted at hearing that the increased cost of vehicle repairs, fuel and services has affected his financial position, but no particulars were given.[13]
[13] Father’s Affidavit sworn 30 October 2007, document “b” at para 6.
The Father also asserted that various legal proceedings since December 2006, in which he had been involved and had engaged barristers and solicitors, and which had involved “over 30 court appearances”, had “taken a heavy toll…financially”, such that he now had to represent himself in proceedings.[14] Once again, no particulars were given.
[14] Father’s Affidavit sworn 30 October 2007, document “b” at para 3.
The most that can be said based on the financial information provided is that both parties are pensioners supporting children and not in particularly good financial circumstances.
This factor, of itself, is probably neutral in an assessment as to whether to award costs in these proceedings. It may however be relevant when considered with other factors, or, if an order for costs is made, in relation to time for payment.
Section 117(2A)(b) – Legal Aid assistance
The Father was not legally aided for the proceedings. The Mother was legally aided, and in written submissions says:
a)the Legal Aid Commission has paid $2294.00 for her costs;
b)she has made a compulsory contribution of $75.00; and
c)the cost of the submissions on costs and telephone appearance to take the costs judgment will be about $400.00.
The Mother being granted legal aid is not an impediment to the making of a costs order in her favour. It is but one factor to be considered.
In PJ & NW[15] the mother was legally aided, whilst the father was a pensioner with significant debts.[16] The father was wholly unsuccessful in the proceedings, which were appeal proceedings.[17] The father’s appeal was said to have little merit, being directed to matters of weight given to evidence in a discretionary judgment.[18] The father was ordered to pay the mother’s costs.[19]
[15] [2005] FamCA 162.
[16] PJ & NW at paras 57-58 per Bryant CJ, Holden and May JJ.
[17] PJ & NW at para 62 per Bryant CJ, Holden and May JJ.
[18] PJ & NW at para 62 per Bryant CJ, Holden and May JJ.
[19] PJ & NW at para 63 per Bryant CJ, Holden and May JJ.
In the Marriage of Williams[20] the husband was ordered to pay the wife’s costs, the Family Court observing that:
“nor, in this case, will s.117(2A)(b) be interpreted so that the taxpayer will pay the costs of the wife … under the legal aid certificate.”[21]
[20] [1993] FamCA 101 (“Williams”).
[21] Williams at para 6 of Judgment of Barblett DCJ (each Judgment in Williams is individually numbered and numbering begins anew with each Judgment). No detailed discussion or consideration was otherwise given to s.117(2A) in the Judgments in Williams. The approach is not dissimilar to that adopted in cases involving the costs of a child representative (then so called) where the Family Court has often held that the costs of the child representative ought be met from the funds of the parties, or a party, financial circumstances permitting, rather than being met by the taxpayer through legal aid funding: see, for example, Re David (No 2) Costs (1998) 23 Fam LR 139 at 144 per Nicholson CJ, Lindenmayer and Buckley JJ; In the Marriage of AR and DJ Telfer (1996) 20 Fam LR 619 at 621 per Lindenmayer J (“Telfer”).
The fact that a person is in receipt of legal aid “is not by itself a barrier to the award of costs” and to “refuse to make an order for costs on the sole ground that a party is legally aided would be a gross injustice to the party”.[22] Although said in circumstances where the Family Court ordered a wife in receipt of legal aid to pay a husband’s costs,[23] the principle expounded is equally applicable where a party in receipt of legal aid seeks a costs order in its favour.
[22] In the Marriage of Schwarz (1985) 10 Fam LR 235 at 239 per Barblett, Bell and Ngyh JJ (“Schwarz”).
[23] Schwarz at 239 per Barblett, Bell and Ngyh JJ.
In Conroy v Conroy[24] the terms of the legal aid grant were that the wife was obliged to pay over any costs awarded to the Legal Aid Committee. The Supreme Court of the Australian Capital Territory noted that a wife suing a husband in the character of a pauper was not able to recover costs the wife is not liable to pay.[25] This was based on the principle that pauper ought not make a windfall profit by pocketing an award of costs where the pauper had incurred no costs.[26] Nevertheless, the Supreme Court awarded costs to the wife after considering whether it was appropriate that the husband “be able to transfer … responsibility to the taxpayer because his wife is legally aided” in circumstances where any award of costs to the wife would have to be paid over to the Legal Aid Committee.[27]
[24] (1976) 2 Fam LR 11,223 (“Conroy”).
[25] Conroy at 11,228 per Connor J. The Latin phrase “in forma pauperis” is used in Conroy.
[26] Conroy at 11,228 per Connor J.
[27] Conroy at 11,228 per Connor J.
In these proceedings the Court understands that any costs awarded to the Mother will effectively be offset against, and therefore reduce the amount of, legal aid payable.[28] In those circumstances if the Court comes to the view, having regards to other factors under s.117(2A), that the Father ought to pay the Mother’s costs, then this factor would fall in favour of an order for the Father to pay those costs, especially because it transfers liability from the taxpayer to the party that caused those costs to be incurred.
[28] The power to do so presumably arising from s.46(1) of the Legal Aid Commission Act 1979 (NSW).
Section 117(2A)(c) – The conduct of the parties to the proceedings
In considering the conduct of the parties to “the proceedings” the Court is limited to their conduct in these proceedings. The Mother’s submissions pressed various issues associated with the Father’s conduct in other related but separate proceedings in which the parties were or are involved. However, the limitation of this factor to “the proceedings” means that the parties conduct in other proceedings cannot be considered under s.117(2A)(c). Consideration of the parties conduct in other proceedings is discussed below in relation to s.117(2A)(g).
Matters which warrant consideration under this factor include “pleadings” and “particulars”. Formal pleadings and particulars are not an ordinary feature of family law proceedings in this Court, and, as here, proceedings are generally initiated by an application and accompanying affidavit.[29] It is to those initiating documents that the Court looks for what might normally be contained in pleadings and particulars, making due allowance for:
[29] Federal Magistrates Court Rules 2001 (Cth) rr. 4.01 and 4.05 (“FMC Rules”).
a)the different nature and format of the initiating documents; and
b)the intended manner of operation of this Court, which has been expressed to be as follows:
“Reading together the objects of the F[ederal] M[agistrates] Act in s.3, the mode of operation in s.42, and having regard to the objects of the FMC Rules in r.1.03, it is apparent that the Court is intended to operate in a manner:
(a) as informal as possible in the exercise of judicial power;
(b) which is not protracted in its proceedings;
(c) which resolves proceedings justly, efficiently and economically;
(d) uses streamlined procedures; and
(e) avoids undue delay, expense and technicality.”[30]
[30] Goodall v Nationwide News Pty Ltd [2007] FMCA 218 at para 21 per Lucev FM.
Even allowing for the factors set out in the preceding paragraph, and having proper regard to the Father being a self-represented litigant, it seems to the Court that the conduct of the proceedings by the Father fell significantly short of what might properly be required of a self-represented litigant to found an application to vary earlier but relatively recent consent orders. That is of course reflected in the Court’s dismissal of the application and the conclusion reached and set out above.[31] A close examination of the Reasons for Judgment in K & S reveal that on almost all of the alleged changes in material circumstances, the Father either:
a)led no evidence;[32]
b)led evidence which revealed no material or sufficient change;[33]
c)failed to provide any, or any sufficient, particulars of relevant matters (such as his financial position, and public and private transport arrangements);[34]
d)failed to make apparent what order was sought in relation to a particular issue/s;[35]
e)led evidence on matters of no relevance, or no relevance to any order sought;[36] or
f)made an assertion of changed circumstance wholly inconsistent with earlier consent orders signed by him and his solicitor, and then only after “a very significant delay” of sixteen months.[37]
[31] See para 1 above.
[32] K & S at paras 12, 13, and 16 per Lucev FM.
[33] K & S at paras 8 and 13 per Lucev FM.
[34] K & S at paras 10 and 11 per Lucev FM.
[35] K & S at para 15 per Lucev FM.
[36] K & S at paras 17 and 18 per Lucev FM.
[37] K & S at para 19 per Lucev FM.
The Court considers that the Father’s conduct of the proceedings fell significantly short of what might have been properly required, and is a factor which weighs heavily in favour of an award of costs to the Mother.
The conduct of the proceedings by the Mother was properly responsive to the application and affidavit of the Father, and as the Court’s order and Reasons for Judgment in K & S demonstrate, the Rice and Asplund rule argument was properly made and put by the Mother.
Section 117(2A)(d) – Failure to comply with previous orders
This is not a relevant factor in the present circumstances.
Section 117(2A)(e) – Whether any party wholly unsuccessful in the proceedings
The Father has been wholly unsuccessful in these proceedings. The reasons why are obvious from the Reasons for Judgment in K & S and from paragraph 23(a)–(f) above, and those reasons establish that it was the Father’s failure to establish a case, and in particular to put any, or any sufficient, evidence before the Court as to his claims, that led to his being unsuccessful in the proceedings.
This factor weighs in favour of an award of costs to the Mother.
Section 117(2A)(f) – Offers
This does not appear to be a relevant factor in the present circumstances.
Section 117(2A)(g) – Other matters
Section 117(2A)(g) has been variously described as being:
a)“all encompassing” and an “independent source of discretion and its effect is not limited by the particular matters set out in the previous paragraphs”;[38] and
b)a provision which “could hardly … be expressed in wider terms”.[39]
[38] Telfer at 621 per Lindenmeyer J, relied upon (but slightly, but not materially, misquoted) in C & C (No 2) at para 58 per Pascoe CFM.
[39] JJT CLR at 225 per Callinan J, HCA at para 126 per Callinan J.
Because paragraph (g) of s.117(2A) is not limited to “the proceedings” as paragraphs (a)-(f) are, and because of the width of its expression, it follows that, in an appropriate case, this Court might be able to consider the conduct of the parties in other related proceedings in determining whether to make a costs order.
The Mother submits that:
a)the Father is a vexatious litigant who will continue to issue proceedings against the Mother; and
b)a costs order in these proceedings may curb the Father’s tendency to institute further proceedings, thereby reducing the burden on the Mother, and on the taxpayer.
For this Court to declare a person a vexatious litigant requires the Court to make findings under r.13.11(1) of the FMC Rules that the Applicant has habitually, persistently and without reasonable grounds instituted other vexatious proceedings in another Australian court.[40] It also requires an application in proper form,[41] and not a one line adjunct in a submission on costs.
[40] See Horvath v Commonwealth Bank of Australia [2001] FMCA 35 and Yap ChengSee v Granich & Associates [2008] FMCA 27 for examples of cases where r.13.11 has been considered.
[41] FMC Rules, r.13.11(4).
The fact that these proceedings are the third set of proceedings in relation to parenting orders within eighteen months is a little unusual. However, on the face of the record the first two culminated in consent orders, and whilst in the Mother’s written submissions there is a very brief complaint about the circumstances culminating in the orders made on 22 June 2006, namely that the Father was constantly complaining and threatening litigation, there is no similar complaint about the circumstances of the orders made on 14 March 2007. Thus, it is only the current proceedings which have required the Court to determine the parenting issues, and although they were determined against the Father in K & S on the basis of the application of the rule in Rice and Asplund[42] such Judgments are not unusual in this Court.[43]
[42] In the Marriage of Rice and Asplund (1978) 6 Fam LR 570.
[43] For example, the Court as presently constituted delivered two other Judgments involving the application of the rule in Rice and Asplund in November 2007: see SPS & PLS [2007] FMCAfam 907 and K & P [2007] FMCAfam 961.
The Mother also complains of contravention proceedings brought by the Father on 14 March 2007, the nature and outcome of which was not disclosed in the written submissions, and of further contravention proceedings which are listed for hearing in Sydney on 11 February 2008. Suffice to say that it will be a brave court which makes a finding that a person is a vexatious litigant on the basis of proceedings the nature and outcome of which are not disclosed and further proceedings which are not yet heard.
If the Father were to persist in making applications which are as unmeritorious as the application in the current proceedings then there may come a time when an application to have him declared a vexatious litigant might have a sound basis. But that time is not now.
In the circumstances, the Father’s conduct in other related, but separate, proceedings does not, on the basis of the material before the Court on this occasion, constitute a basis for the award of costs against him.
Costs ought not be awarded to curb the tendency of a party to litigate. Whilst they may practically have that effect in certain cases, costs are neither a bonus to a successful party nor a penalty to an unsuccessful party. Rather, they are compensation to the successful party for the liability for solicitors professional costs incurred in conducting proceedings.[44]
[44] BC Cairns, Australian Civil Procedure (Fourth Edition) (North Ryde: LBC Informatuion Services, 1996) at 601 and cases there cited. The Court notes that indemnity costs were not sought.
There is therefore no other relevant matter under s.117(2A)(g) which founds the basis for an award of costs against the Father.
Costs – final consideration and quantum
The costs incurred by the Mother in this matter were incurred by reason of the Father instituting and conducting the proceedings in a manner which resulted in him being wholly unsuccessful. Having considered all the s.117(2A) factors as set out above, but in particular having regard to the s.117(2A)(c) and (e) factors, and the s.117(2A)(b) factor in so far as the taxpayer ought to be protected from having legal aid funds expended defending an application of such little merit, the Court considers that the circumstances justify the making of a costs order against the Father.[45]
[45] FL Act, s.117(2).
Costs are to be assessed in accordance with Schedule 1 of the FMC Rules. The Respondent is therefore entitled to:
a)a Stage 1 amount of $1500.00 plus the daily hearing fee for a short mention of $205.00 for the first attendance before the Court (constituted by Altobelli FM) on 24 October 2007 - $1705.00;
b)a Stage 5 amount of $3195.00 for preparation of a one day matter;
c)a Stage 6 amount of $750.00 for a half day hearing on 26 November 2007 (the actual hearing was shorter than a half day);
d)a further Stage 6 amount of $205.00 for the taking of judgment on 30 November 2007 and the explanation of orders.
There was no application or submission concerning disbursements, and the Court notes that both parties were exempt from the payment of Court fees.[46]
[46] See footnote 12 above.
On the basis set out above the Mother would be entitled to costs in the sum of $5855.00 for the hearing and taking of judgment on 26 and 30 November 2007 respectively. However, that is based on preparation for a one day matter under Stage 5. Although the Court’s orders listing this matter for hearing on the Rice and Asplund rule issue specify a day for hearing only,[47] it is clear that the argument on this point would never have gone beyond a half day, and did not do so. In those circumstances it is appropriate to set an amount of costs under r.21.02(a) of the FMC Rules to more accurately reflect the preparation required,[48] which the Court will consider to be a half day matter. Using the Stage 5 amount as the basis for calculation the Court will therefore fix an amount of $1597.50 for preparation in lieu of the Stage 5 amount. Therefore, costs in the sum of $4257.50 for the hearing and taking of judgment on 26 and 30 November 2007 will be ordered.
[47] There were two sets of orders: first, on 24 October 2007 the Court (constituted by Altobelli FM) having heard from the Father in person and from Ms Kinghan, Counsel/solicitor for the Mother, ordered that the matter be adjourned to 28 November 2007 at 9.30am for hearing on the Rice and Asplund rule issue only; and, second, on 5 November 2007 the Court (constituted by Altobelli FM) in Chambers and without appearances from the parties, ordered the hearing on 28 November 2007 at 9.30am be vacated, and the matter be adjourned to 26 November 2007 at 9.30am for hearing, but still on the Rice and Asplund rule issue only.
[48] VDAT v Minister for Immigration (No 2) [2003] FMCA 166 at para 10 per McInnis FM.
The Mother will also be entitled to costs for the successful costs application. A sum will be set under r.21.02(a) for the preparation of written submissions on costs. The written submissions are very short: six paragraphs and less than a typed page in length (excluding Court headings) and address factual matters only, making no express reference to the s.117(2A) factors or any relevant cases. In the circumstances the Court will set a sum of $150.00 as appropriate for the preparation of the written submissions on costs. The Mother is also entitled to an additional further Stage 6 amount of $205.00 for the taking of this judgment and the explanation of orders. Costs in the sum of $355.00 for the written submissions on costs and taking of costs judgment today will be ordered.
Therefore, total costs in the sum of $4612.50 will be ordered to be paid by the Father (the applicant) to the Mother (the respondent).
Having regard to the financial circumstances of the Father it is appropriate that he be given an extended time to pay, and the Court has determined that that he should have up to twelve months to pay the costs.
There will therefore be an order that the Father pay the Mother’s costs in the sum of $4612.50, with twelve months to pay.
I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate:
Date: 4 February 2008
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