Knill and Beckett - [2018] FamCA 212

FAMILY COURT OF AUSTRALIA

KNILL & BECKETT

[2018] FamCA 212

FAMILY LAW – COSTS

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) rr 15.55, 15.56

Quickley v Pelissier [2016] FamCAFC 124

APPLICANT:

Mr Knill

RESPONDENT:

Ms Beckett

INDEPENDENT CHILDREN’S LAWYER:

Mrs A Evans

FILE NUMBER:

CAC

712

2016

DATE DELIVERED:

6 April 2018

PLACE DELIVERED:

Canberra

PLACE HEARD:

Canberra

JUDGMENT OF:

Gill J

HEARING DATE:

In Chambers

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Howard

SOLICITOR FOR THE APPLICANT:

Neilan Stramandinoli Family Law

SOLICITOR FOR THE RESPONDENT:

Phelps Reid Lawyers

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER:

Evans Family Lawyers

Orders

The mother shall pay the costs of the father in relation to her application for leave to adduce evidence from Dr K as agreed, or failing agreement, as assessed, within fourteen days of the agreement or assessment.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Knill & Beckett has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 712 of 2016

Mr Knill

Applicant

And

Ms Beckett

Respondent

REASONS FOR JUDGMENT

The applicant father seeks costs, in particular indemnity costs, following the refusal of leave for the mother to rely upon an affidavit and report prepared by Dr K (see judgment and reasons delivered on 15 December 2017 refusing leave). The refusal of leave centred primarily on there being a lack of significant disparity between the evidence of Dr K regarding the mother’s mental health and the evidence of the Single Expert appointed in this matter, Dr L, regarding the mother’s mental health.
Dr K previously prepared a report that was relied upon in the proceedings between the parties in the Federal Circuit Court. An application for leave was foreshadowed by the respondent mother on 16 December 2016 and again foreshadowed on 25 May 2017. On those two occasions orders and notations in relation to the issue of leave were made as follows:
Orders dated 16 December 2016
IT IS NOTED THAT
5.The mother will seek to rely upon evidence from [Dr K], psychiatrist.
6.The mother will need to obtain leave to rely upon [Dr K’s] evidence, such leave to be sought following the release of Dr L’s report.
…
15.In addition to dealing with the s 128 certificate the question of leave, if sought, in relation to [Dr K] ought to be dealt with.
Orders dated 25 May 2017
IT IS NOTED THAT
7.The applicant father no longer presses his application for a s 128 certificate.
8.The respondent mother may still seek leave to rely on [Dr K’s] report.
Ultimately, an affidavit annexing a further report prepared by Dr K was filed by the mother on 1 November 2017 in accordance with the general timetable set out for the filing of trial material. No application for leave to rely upon Dr K accompanied the filing of that affidavit, and no application for leave was made following the release of the report by Dr L on 30 August 2017.
Complaint is made by the father that the report prepared by Dr K, which must have been available to the mother prior to the affirming of the affidavit by Dr K on 9 October 2017, was not served within seven days of receipt of the report in accordance with r 15.55. The father also complains as to a breach of r 15.56, thereby requiring him to make specific requests as to the basis upon which Dr K was retained. The obligations regarding expert reports as contained in the Rules should not be ignored. They are there to facilitate the proper conduct of proceedings regarding children and to safeguard the integrity of expert evidence in the proceedings.
The proceedings between the parties had been listed for further directions to occur on 7 December 2017. Counsel for the mother sent written submissions to Chambers (without the consent of the parties and without a request from the Court) seeking leave be granted to rely upon Dr K’s report. Those submissions were sent shortly before the commencement of the directions hearing. On short notice the father responded to those orally at the directions hearing through his counsel. With the agreement of the parties, despite the matter being listed for directions, the question of whether leave ought be granted was argued and, as noted above, was refused.
The father argues that the mother’s misconduct resulted in an interim hearing, that she ignored the need for an application for leave, and that the father’s affidavit was wrongly provided to Dr K.
Pursuant to the Rules, leave is not required to file the evidence, but to tender or to adduce it. The directions provided that an application for leave ought be made after the filing of the report by Dr L, in order to provide for a timely identification of the scope of the evidence at trial. The failure to do so left the father in a position of uncertainty as to that scope of material. The failure of the mother to file an application in a case seeking leave, but to deal with the matter by sending written submissions to chambers, was an inappropriate way to deal with the question of leave and left the father in the position of having to make ready to deal with the application at extremely short notice.
The application was then able to be dealt with at the same time as the matter was otherwise listed for directions.
It may be observed that while the manner in which the leave question came to be listed was inappropriate, it did not result in an extra listing of the matter. Ultimately if the mother was to seek to rely upon the evidence of Dr K, the application would need to be dealt with. That is, the failure to apply for leave in a timely manner did not result in additional costs being incurred.
Section 117 of the Act sets out the default position that each party bears their own costs, subject to circumstances justifying otherwise. The precondition to making an order for costs is the finding that there are circumstances justifying the making of an order for costs. Once these are found, the default position yields to the court's discretion to award costs as it considers just. The relevant considerations to assess the circumstances are set out at s 117(2A) as follows:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
a.the financial circumstances of each of the parties to the proceedings;
b.whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
c.the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
d.whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
e.whether any party to the proceedings has been wholly unsuccessful in the proceedings;
f.whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
g.such other matters as the court considers relevant.
The particular matters identified by the parties in this matter as tending toward and against an order for costs being just are the financial circumstances of the parties, the conduct of the parties in respect of the litigation, whether the proceedings were necessitated by a failure to comply with previous directions and whether a party was wholly unsuccessful.
The mother’s affidavit and financial statement set out difficult financial circumstances. The father’s material does not speak to similar difficulties being experienced by him, although it may be expected that the cost of undertaking proceedings such as these is highly burdensome for both parties. While the father was critical of the mother’s assertions as to various amounts spent by her on the proceedings the discrepancies, if sustained, do not detract from a difficult overall picture. While this matter does not constitute a bar to the making of a costs order, it remains a relevant consideration.
The conduct of the proceedings, and failure to comply with directions has been identified above. These do not appear to have resulted in an increase in the cost of the proceedings over what they would have cost had there been compliance. They have, however, increased the burden of the proceedings on the father and contributed to the disorderly resolution of matters.
In relation to the application for leave to receive evidence from Dr K the mother has been wholly unsuccessful. This last matter justifies the departure from the general rule.
Costs were, however, sought on an indemnity basis. This application was misconceived. Exceptional circumstances are required before there is to be a departure from costs being awarded on a party-party basis. The principles to be applied in relation to indemnity costs are neatly set out by the Full Court in Quickley & Pelissier:[1]
We then turn to consider whether costs should be awarded on a party/party or indemnity basis.
In Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 at 256, Sheppard J referred to the "settled practice" that where a court orders one party to pay another party's costs, the order is for costs to be paid on a party/party basis. His Honour also said "there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice" at 257.
In an appropriate case the court has a discretion to order costs on an indemnity basis. An order made in the exercise of that discretion is a very great departure from the normal approach and the circumstances justifying the departure should be of an exceptional kind (Kohan and Kohan (1993) FLC 92-340).
In the recent case of Madin & Palis (Costs) [2016] FamCAFC 25 this Court made reference to the increasing number of applications for indemnity costs and said at [23]:
Finally, we take the opportunity to observe that in so far as the appellant sought an order for indemnity costs, applications for such costs should only be made, and such costs will only be ordered, in the most extreme cases. This is particularly so having regard to the fact that the primary rule in this jurisdiction is that each party should pay their own costs.
[1]Quickley v Pelissier [2016] FamCAFC 124 at [120].
Taking into account all of the factors identified by the father, the extreme circumstances that might justify such a “very great departure” from the usual rule are not present. The lack of success, the non-compliance with directions and the direct communication with chambers do not amount to such and the application for costs to be paid on an indemnity basis should be refused.
This refusal detracts from the notion that it is just to make an order that the mother pay the father’s costs of his costs application. In that application she has not been wholly unsuccessful, and has had to meet the misconceived application for indemnity costs. The s 117(2A) considerations do not point to a justification to depart from the general rule that each party will bear his or her own costs in relation to the costs application.
Further, insofar as the mother will pay the costs of the father, they will be restricted to those costs attributable to the application for leave and no other. This means that the mother will not be required to pay the costs of the father where they relate to the directions obtained on that same day, or otherwise relate to the preparation of the case.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 6 April 2018.

Associate:

Date: 6 April 2018