Koyroyshs & Koyroyshs (No. 2)
[2020] FamCA 1060
•11 December 2020
FAMILY COURT OF AUSTRALIA
Koyroyshs & Koyroyshs (No. 2) [2020] FamCA 1060
File number(s): SYC 2276 of 2016 Judgment of: HARPER J Date of judgment: 11 December 2020 Catchwords: FAMILY LAW – COSTS – Where the mother seeks costs against the father for a specified interlocutory period in relation to a particular Application in a Case – Where the father initially failed to disclose relevant information relevant to his Application – Where such conduct caused unnecessary delay in the proceedings – Where father made unsuccessful recusal application - Where the father’s financial circumstances are greater than that of the mother’s – Where factors justifying costs order in favour of mother established - Where costs were sought on an indemnity basis – Where no exceptional circumstances made out justifying indemnity or solicitor and client costs - Where costs in a fixed amount ordered to be paid Legislation: Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) rr 19.08, 19.18
Cases cited: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish and Anor (2005) 191 FLR 294
Harris & Dewell and Anor (No.2) (2018) FLC 93-863
Koyroyshs & Koyroyshs [2020] FamCA 626
Prantage & Prantage (2013) 49 Fam LR 197
Prantage & Prantage (Costs) [2014] FamCA 850
Worth & Worth (No.2) (2019) FLC 93-910
Number of paragraphs: 46 Date of hearing: 18 September 2020 Place: Sydney Counsel for the Applicant: Mr Campton SC Solicitor for the Applicant: Consort Family Law Counsel for the Respondent: Mr Batey of Counsel Solicitor for the Respondent: First Choice Family Lawyers ORDERS
SYC 2276 of 2016 BETWEEN: MS KOYROYSHS
Applicant
AND: MR KOYROYSHS
Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
11 DECEMBER 2020
THE COURT ORDERS THAT:
1.Within 28 days, the Respondent pay the costs of the Applicant for the period 11 April to 19 July 2019 fixed in the amount of $12,500.
2.The Application in a Case filed by the Applicant on 2 September 2020 be otherwise dismissed.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Koyroyshs & Koyroyshs has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
INTRODUCTION
The matter presently before me for determination is the Application in a Case of Ms Koyroyshs (“the mother”) filed on 2 September 2020 for an order that Mr Koyroyshs (“the father”) pay her costs of an interim Application in a Case filed by the father on 11 April 2018 (“April 2018 interim application”). The parenting aspect of the proceedings concern the child, B Koyroyshs, born in 2015 (“the child”).
Although I did not hear the April 2018 interim application, I did hear and determine the substantive proceedings on a final basis. The substantive proceedings, which involved both property and parenting disputes, were resolved following a five-day trial and the subsequent delivery of judgment on 6 August 2020: Koyroyshs & Koyroyshs [2020] FamCA 626 (“the primary judgment”).
Costs relating to the April 2018 interim application were reserved to the final hearing of the matter by Senior Registrar Campbell on 9 May 2019. The mother seeks her costs relating to that application be determined by me. The father seeks that her Application for costs be dismissed.
SHORT PROCEDURAL HISTORY
The history of the matter was outlined in great detail in the primary judgment (see [39]-[58]). It is necessary only to refer to some aspects relevant to the question of this application for costs.
On 18 April 2016, the father filed an Initiating Application in this Court. He sought both interim and final orders in relation to parenting and financial issues. On 11 April 2018, the father filed an Amended Initiating Application, Amended Notice of Risk and the April 2018 interim application. He sought that the child be removed from the mother’s care, that she thereafter live with him, and that she spend only supervised time with the mother for three hours each week. In the alternative, if the child was not removed, he sought an injunction preventing the mother from striking the child and additionally sought that the mother attend certain parenting courses. The basis of the orders claimed by the father were allegations that the mother had been physically abusing the child, based upon the father’s observations of marks and bruising as well as certain disclosures made by the child.
The mother wholly denied the allegations put forth by the father. She filed a Response to the April 2018 interim application on 14 May 2018, seeking the April 2018 interim application be dismissed.
The April 2018 interim application came before Senior Registrar Campbell on 17 May 2018. At this hearing, the father resiled from his allegations of risk, stating that “there is no issue of risk in this case any longer”: Judgment of Senior Registrar Campbell dated 4 December 2018, paragraph [13]. As a result, he did not press his Application for a change of residence, however did press orders in relation to the time he spent with the child.
The question of the time the father would spend with the child was adjourned to 7 June 2018.
When the matter came back before Senior Registrar Campbell on 7 June 2018, it became clear that the father had failed to disclose material facts in seeking a change of residence; in particular, he failed to disclose that NSW Police had previously investigated his concerns and had determined that the child was not at risk. The hearing was adjourned to allow the father time to file an affidavit explaining his change in position on 17 May 2018 and his failure to disclose the information he had received from the NSW Police. The father filed an affidavit on 9 July 2018
The April 2018 interim application returned before the Senior Registrar on 19 July 2018. The father then made an oral application for Senior Registrar Campbell to disqualify himself. Senior Registrar Campbell dismissed this application in a judgment delivered on 4 December 2018: Judgment of Senior Registrar Campbell dated 4 December 2018.
The April 2018 interim application was not finalised until 9 May 2019, when Senior Registrar Campbell ordered a change in the parenting arrangements, which included orders for the child to live with the mother and spend time with the father on Tuesdays and Thursdays and overnight on Saturday each alternate weekend. It is unnecessary to set out further details of the orders for the purposes of this judgment, except to note that by Order 11, the Senior Registrar dealt with costs in the following terms; “[t]hat the costs of all parties are reserved to the final hearing of the matter”.
Judgment in the substantive proceedings was delivered on 6 August 2020
On 2 September 2020, the mother filed a Notice of Appeal in the Full Court of the Family Court of Australia. Currently, that appeal remains pending.
On the same day, the mother filed her Application in a Case in relation to costs. This judgment deals with that application.
ORDERS SOUGHT AS TO COSTS
By her costs Application the mother sought the following;
1.That pursuant to s. 117(2) of the Act, the [father] shall pay the costs of the [mother] associated with these proceedings as agreed or as assessed such amount calculated from 19 December 2016 to 6 August 2020.
2.That the [father] shall comply with Order 1 herein within 30 days of such an amount being agreed in writing between the parties or within 30 days of the completion of an assessment of costs.
3.That the [father] shall pay the costs of the [mother] associated with the father’s application in a case filed on 11 April 2018 up to and inclusive of 19 July 2018 on indemnity basis.
4.That the [father] shall comply with Order 3 herein within 30 days of the orders.
5.That in order to facilitate orders 1 and 2 here, Order 33 of Orders made 6 August 2020 shall be suspended so far as it relates to the release of funds to the [father].
By the father’s Response filed 11 September 2020, the father sought that “Orders 1, 2, 3, 4 and 5 of the [mother’s] Application in a Case filed 2 September 2020 be dismissed”.
The mother’s costs application was listed for an interim hearing on 18 September 2020. At the hearing the mother sought much more limited relief than that specified in her Application in a Case. According to a Minute of Orders Sought attached to her Case Outline, the mother sought:
1.That the relief sought in prayers 1, 2 and 5 in the [mother’s] application in a case filed 2 September 2020 be withdrawn.
2.That within 7 days, the [father] pay to the [mother], the [mother’s] costs of an incidental to the [father’s] application in a case filed 11 April 2018 up to and including 19 July 2018:
a. In the sum of $32,148; or, in the alternative
b. In the sum of $25,000 (solicitor client in accordance with scale); or in the third alternative
c. In a sum as assessed or agreed on a solicitor and client basis from the date of assessment or agreement.
The mother’s costs application was therefore confined to the period in the proceedings between 11 April and 19 July 2018.
THE LEGAL PRINCIPLES
In proceedings to which the Family Law Act 1975 (Cth) (“the Act”) applies, the starting point is that each party shall bear his or her own costs: s 117(1). If, however, the court is of the opinion that there are justifying circumstances the Court may make such order as to costs and security for costs as the Court considers just: s 117(2).
When considering what, if any, order for costs should be made, the Court must have regard to the factors set out in s 117(2A). I have considered them and it is unnecessary to set them out in full.
It is well-settled that no one factor in s 117(2A) has priority, nor must more than one factor be satisfied, rather any one factor may be sufficient: Prantage & Prantage (Costs) [2014] FamCA 850, [12]; Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish and Anor (2005) 191 FLR 294; (2005) 33 Fam LR 123; [2005] FamCA 158, [41].
The mother relied upon Family Law Rules 2004 (Cth), r 19.18 to argue also that the Court should order costs in a specified amount to avoid any further expense in undertaking an assessment. Rule 19.18 is in the following terms:
(1) The court may order that a party is entitled to costs:
a) of a specific amount;
b) as assessed on a particular basis (eg lawyer and client, party/party, or indemnity);
c) to be calculated in accordance with the method stated in the order; or
d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
…
(2) If costs are payable under the Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party/party basis.
(3) In making an order under subrule (1), the court may consider:
a) the importance, complexity or difficulty of the issues;
b) the reasonableness of each party's behaviour in the case;
c) the rates ordinarily payable to lawyers in comparable cases;
d) whether a lawyer's conduct has been improper or unreasonable;
e)the time properly spent on the case, or in complying with pre-action procedures; and
f) expenses properly paid or payable.
DISCUSSION
The financial circumstances of the parties
The earning capacity of the parties is discussed at [285]-[291]. I found that both parties have future earning capacity, although that would be impacted by the COVID-19 pandemic. I found that the father “clearly has greater financial resources than the mother”: the primary judgment, [303].
The conduct of the parties
The mother relies on the conduct of the father in prosecuting the April 2018 interim application. She expands upon this point in her Affidavit dated 2 September 2020. In essence, her argument is that the father made baseless allegations about her posing a risk to the child. The mother argues that the father made his Application for the child to live with him and spend only supervised time with the mother when he knew, but failed to disclose to the Court, that the NSW Police had investigated his claims of abuse and determined that no evidence of abuse had been found. As already noted, the father abandoned his allegations on 17 May 2018.
In the father’s affidavit of 9 July 2018, he claims that he made reports and had the mother investigated following marks he had found on the child, as well as disclosures she had made. On 7 February 2018, well prior to the filing of the April 2018 interim application, the father received an email from a Detective within NSW Police, copied to the mother, advising that the police investigation resulted in a finding that the child’s injuries were accidental.
The father states that, subsequent to the police email, he found further marks on the child. He says that he instructed his solicitor to issue a number of subpoenas to obtain further documents in relation to his claims which he anticipated would be tendered at the interim hearing. Upon inspecting the material produced, however, the father says he formed the view that he was no longer concerned about risk, as the material “ameliorated” his fears: father’s affidavit filed 9 July 2018, at [9]. Consequently, he instructed his solicitors to withdraw his allegations of risk.
The mother argues that the father conducted himself inappropriately, as he knew or ought to have known through his representatives that “an onus rested upon him to disclose all relevant matters for the purposes of [his Application]”: mother’s Case Outline dated 18 September 2020, p. 4. She claims that failing to disclose the original email indicating that there was no findings of risk by the NSW Police could have led to a miscarriage of justice.
Wholly Unsuccessful
I am not satisfied that the father was “wholly unsuccessful” on the April 2018 interim application. After 19 July 2018, it remained on foot and eventually resulted in modified parenting orders in May 2019.
The father’s recusal application is in a different category. It was dismissed. The father did not appeal. I accept the father was wholly unsuccessful in his recusal application.
Other relevant factors
The father, through his Case Outline filed on 16 September 2020, suggests that the mother is “well out of time” for any Application for costs in relation to the proceedings before Senior Registrar Campbell: father’s Case Outline filed 16 September 2020, p. 10 [29]. He suggests that bringing such Application so far out of time poses significant disadvantages to him.
I do not accept this argument. As pointed out above, on 9 May 2019, Senior Registrar Campbell ordered that “the costs of all parties are reserved to the final hearing of the matter” in relation to the April 2018 interim application.
Rule 19.08(2) provides that an application for costs may be made:
(a) at any stage during a case; or
(b) by filing an Application in a Case within 28 days after the final order is made.
The reservation of costs to the final hearing by the Senior Registrar makes sub-paragraph (b) of Rule 19.08(2) applicable. The mother filed her application for costs within time.
In addition, the father suggests that the schedule of fees provided in support of the Application for costs does not provide him with details which would allow him to assess the reasonableness or otherwise of the fees claims: father’s Case Outlined filed 16 September 2020, p. 10 [30]. While there is some force in this argument, since I propose to make an order for a fixed amount, as discussed below by reference to party/party costs, I am not persuaded this creates any prejudice to the father.
INDEMNITY COSTS
The mother seeks orders on a descending scale. Her scale commences with what would constitute an indemnity costs order, followed by a solicitor and client order, then costs on a party/party basis. Rule 19.18(2) provides for assessment on a party/party basis in the absence of any order to the contrary.
A claim to an award of costs on a basis higher than party/party costs raises additional considerations. In this jurisdiction indemnity costs are considered to be a very great departure from the normal standard of costs and before making an indemnity costs order, the Court should be apprised of a range of information, such as the extent of the retainer agreements of the successful party exceed the parameters of the scale of costs set by the Court: Prantage & Prantage (2013) 49 Fam LR 197; [2013] FamCAFC 105 at [77]-[79]; Harris & Dewell and Anor (No.2) (2018) FLC 93-863; [2018] FamCAFC 180 at [23]-[26]. Exceptional circumstances need to be demonstrated: Worth & Worth (No.2) (2019) FLC 93-910; [2019] FamCAFC 126 at [9]. Solicitor and client costs are to be approached in the same way.
The commencement or continuation of proceedings in wilful disregard of known facts or clearly established law is recognised as a basis for awarding indemnity costs: J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA) Branch (No 2) [1993] FCA 70; (1993) 46 IR 301; Colgate Palmolive Company and Anor v Cussons Pty Limited [1993] FCA 536; (1993) 46 FCR 225 at 233-234.
CONCLUSION
The purpose of costs orders is not punitive but compensatory.
I am satisfied that making an interim application for a significant change in parenting orders, on the basis of allegations of abuse which the father knew were unsubstantiated after a police investigation is conduct for which the father can be criticised. So is the failure to disclose the result of the police investigation. The evidence suggests the father should have been more careful before using the allegations as a basis for his application. But the father withdrew his allegations of risk in the mother’s care on 17 May 2018. He did not pursue them. I am not satisfied he wilfully disregarded known facts.
The father’s conduct in making allegations against the mother but failing to properly disclose the police findings in relation to those allegations caused the Court to grant the father opportunity to file evidence explaining this conduct. In this sense, the father’s failure to disclose caused an adjournment of the April 2018 interim application from 7 June 2018 to 19 July 2018, which I accept would have involved costs to the mother over and above her legal costs if the April 2018 interim application had simply been finalised on 7 June 2018.
I am satisfied the father’s conduct is likely to have caused the mother to incur unnecessary costs between 11 April and 17 May 2018. On the evidence before me I am unable to identify how those costs could be separated out from necessary or reasonable costs.
The hearing of the April 2018 interim application on 19 July 2018 became overtaken by the father’s recusal application, in which he was ultimately wholly unsuccessful.
All these factors in combination persuade me that a costs order should be made in the mother’s favour in relation to the April 2018 interim application between 11 April and 19 July 2018.
I am not satisfied any basis for an award of costs in excess of party/party costs has been established. I accept the father’s submission that there is nothing in the circumstances which is exceptional in the relevant sense.
The mother also argued that in the circumstances the Court should fix an amount of costs in accordance with Rule 19.18(1)(a) to avoid further expenditure by the parties. I accept this submission. The limited nature of the mother’s application for costs suggest strongly that the Court should dispose of the application without the need for the further expense of an assessment. The purpose of Rule 19.18 and equivalent rules includes avoidance the expense, delay and aggravation involved in litigation arising out of taxation and where the Court can be confident that the approach taken to estimate costs is logical, fair and reasonable: Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23; Stoian & Flemming (Costs) [2014] FamCA 944
Fixing an amount for costs is unavoidably arbitrary to some extent. The mother has provided evidence of her legal fees in the period 11 April to 19 July 2018 on an indemnity and solicitor and client basis. There is no evidence of likely party/party costs on an assessment. Taking account of the evidence I will order the father’s to pay costs fixed in the sum $12,500.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 11 December 2020
0
11
2