Lonsdale and Trevor (No 3)

[2020] FamCA 1082

FAMILY COURT OF AUSTRALIA

LONSDALE & TREVOR (NO 3) [2020] FamCA 1082

FAMILY LAW – COSTS – Circumstances justifying an order – Where the father filed two Applications for Contravention – Where the mother seeks the father pay her costs on an indemnity basis – Where only one count of the first application was proven –  Where a detailed proposal was made to the father the afternoon prior to the last day of hearing – Where the father was wholly unsuccessful on the second application which was dismissed – Orders.

Kohan & Kohan (1993) FLC 92-340
Loomis & ML Lawyer (2016) FLC 93-731
Penfold & Penfold (1980) 144 CLR 311
Prantage & Prantage (2013) FLC 93-544
Re Wilcox; Ex parte Venture Industries Pty Ltd and Ors (No 2) (1996) 72 FCR 151

Family Law Act 1975 (Cth) ss 70NCB, 70NDC, 117, 117(2A)
Family Law Rules 2004 (Cth) rr 19.08, 19.18

APPLICANT: Mr Lonsdale

RESPONDENT: Ms Trevor

FILE NUMBER: ADC 2815 of 2015

DATE DELIVERED: 16 December 2020

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 21 October 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Litigant in person

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: Ms Tinning

SOLICITOR FOR THE RESPONDENT: Barnes Brinsley Shaw Lawyers

Orders

1. That within sixty (60) days of the date of this order the father do pay to the mother’s solicitors her costs fixed in the sum of SIX THOUSAND SEVEN HUNDRED AND THIRTY FIVE DOLLARS AND FIFTY FIVE CENTS ($6,735.55).

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 Lonsdale & Trevor 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 ADELAIDE

FILE NUMBER: ADC 2815 of 2015

Mr Lonsdale

Applicant

And

Ms Trevor

Respondent

REASONS FOR JUDGMENT

Introduction  

1. The parenting arrangements for B born in 2008 and C born in 2015 (collectively “the children”) were resolved by orders made 7 March 2018 and 28 August 2019.

2. On 13 January 2020 the father filed an Application for Contravention of the final orders and a further Application for Contravention on 22 April 2020.

3. Following a hearing on 14 and 20 August 2020 the Court found that Count 5 (paragraphs 44 and 45 of the contravention application filed 13 January 2020) was proven, however, the contravention application filed 22 April 2020 was dismissed.

4. The confirmed breach of orders was set down for hearing as to sentencing on 8 October 2020.

5. Whilst I considered that there should be no order as to penalty, I did put in place a variation of paragraph 4 of orders made 28 August 2019.

6. The respondent mother now seeks that the applicant father pay her costs, assessed on an indemnity basis, in the sum of $24,947.62.

The mother’s argument as to costs

1. The mother notes that the father’s Application for Contravention filed 13 January 2020 contains 25 counts.

2. On 27 April 2020 the father agreed to discontinue 18 of the counts which were then formally discontinued on 5 May 2020.  It was an agreed position that in respect of any counts that the father decided not to pursue, the mother would not seek costs.

3. Even though the Court found one of the remaining counts to be proven, the mother argues that on a percentage basis she should be entitled to 28 per cent of her costs in relation to the first contravention application up to 30 April 2020 and then 100 per cent of her costs thereafter.

4. Given that the father was unsuccessful in respect of the second contravention application, the mother claims 100 per cent of her costs.

5. The mother relies on an affidavit filed by her solicitor on 6 October 2020 which annexes the following documents:-

   (1)a signed costs agreement between the mother and BBS Lawyers dated 16 July 2019;

   (2)a spreadsheet setting out the calculation of the mother’s costs on an indemnity basis;

   (3)tax invoices from counsel; and

   (4)tax invoices from BBS Lawyers.

6. There is no challenge or issue raised in respect of the signed costs agreement nor as to the accuracy of the calculation of costs in the spreadsheet.

7. The father opposes whether the orders for costs should be made, but if so made then as to quantum.

Costs

1. Div 13A of Pt VII of the Family Law Act 1975 (Cth) (“the Act”) sets out the consequences of failure to comply with orders and other obligations that affect children.

2. Section 70NCB of the Act provides:-

   (1)The Court may make an order that the person who brought the proceedings (the applicant) pay some or all of the costs of another party, or other parties, to the proceedings.

   (2)The court must consider making an order under subsection (1) if:

   (a)the applicant has previously brought proceedings in relation to the primary order or another primary order in which the applicant alleged that the respondent committed a contravention of the primary order or that other primary order; and

   (b)on the most recent occasion on which the applicant brought proceedings of the kind referred to in paragraph (a), the court before which the proceedings were brought:

   (i)was not satisfied that the respondent had committed a contravention of the primary order or that other primary order; or

   (ii)was satisfied that the respondent had committed a contravention of the primary order or that other primary order but did not make an order under section 70NBA, 70NDB, 70NDC, 70NEB or 70NFB in relation to the contravention.

3. In circumstances where a contravention is established but there is a reasonable excuse for the contravention, s 70NDC of the Act enables the Court to make an order that the person who brought the proceedings pay costs in a manner similar to that as prescribed in s 70NCB.

4. The mother seeks an order for her costs arising out of the Applications for Contravention and that they be assessed on an indemnity basis.

5. Sub-rule 19.08(3) of the Family Law Rules 2004 (Cth) (“the Rules”) provides:-

   A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement in relation to those costs and, if so, the terms of the costs agreement.

6. The method of calculation of costs is referred to in sub-r 19.18(1) of the Rules which provides:-

   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.

7. Sub-rule 19.18(3) of the Rules provides that, in making an order, 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.

8. In considering what orders should be made, if any, in respect of the respondent’s costs, s 117(2A) of the Act requires the Court to have regard to the following:-

   (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.

9. Accordingly, I consider that I have a wide discretion in respect of matters relating to a potential costs order.

Should a costs order be made?

1. Section 117 of the Act provides that unless there are justifying circumstances pursuant to s 117(2), each party to proceedings under the Act should bear their own costs.

2. Penfold & Penfold (1980) 144 CLR 311 stands for the proposition that the Court must make a finding of “justifying circumstances”[1] as a preliminary consideration to the making of an order.

   [1]Penfold & Penfold (1980) 144 CLR 311 at 315

3. I am obliged to have regard to the matters as set out in s 117(2A) of the Act.

The financial circumstances of each of the parties

1. The Court was not provided with any significant evidence as to the financial circumstances of each of the parties.  It is known that both parties are employed but beyond a finding that the mother is not easily able to accommodate the legal fees incurred by her, similarly the father’s circumstances are such that he could ill-afford the costs order as sought by the mother.

2. The financial circumstances of each of the parties is but one of the factors that need to be considered.

3. I am not able to determine that there is a disparity in the financial resources of the parties which may have been a factor in support of an order for costs.  Equally, an inability on the part of the father to meet an order is not automatically a barrier to an order for costs being made.[2]

   [2]Loomis & ML Lawyer (2016) FLC 93-731

Whether any party to the proceedings was in receipt of assistance by way of Legal Aid?

1. The father has at all times been a self-represented litigant.  The mother was not in receipt of a grant of Legal Aid.

The conduct of the parties to the proceedings in relation to the proceedings

1. It could not be said that the father exacerbated the proceedings or that they were frivolous or vexatious.

2. Whilst the first Application for Contravention initially contained 25 counts, the father was prepared to discontinue 18 counts and proceed to hearing on the remaining 7 counts.

3. The father complains that significant Court time was lost at the commencement of the proceedings resulting from the mother’s application pursuant to s 102NB of the Act and her failure to advise the Court prior to the commencement of the hearing that she did not wish to be in the same room if she was to be cross-examined by the father.

4. The mother argues that costs should be awarded in her favour because the father utilised the first Application for Contravention to resolve an area of contention between the parties namely, their inability to agree when school holidays should be deemed to commence.

5. The mother refers to her Application in a Case, filed 13 February 2020, wherein she seeks a variation of the orders made 28 August 2019 that would better particularise the time and enable the parties to determine with certainty when the school term ends and the school holidays commence.

6. In summary, the mother contends that the proceedings were never about contravention of orders but only about variation of orders.  The mother points to the father’s concession that it was never his intention to seek a penalty arising out of any proven contraventions.

7. Accordingly, the mother considers that whilst the father’s Application for Contravention could not be considered as vexatious or frivolous, it was in all the circumstances unnecessary.

Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court?

1. It is self-evident that the father alleged that the mother was in breach of orders that he considered justified proceeding with the remaining seven counts.

2. The mother’s position at the commencement of the hearing was that she denied she had breached the order in respect of Counts 1, 2 and 7 but she did admit a breach in respect of Counts 3 to 6 inclusive but claimed she had a reasonable excuse for doing so.

Whether any party to the proceedings has been wholly unsuccessful in the proceedings?

1. The mother argues that whilst the Court found Count 5 to be proven, the concession by the father that it was not his intention to ever seek a penalty supports a finding that despite the proven count, the father has been wholly unsuccessful.

2. For his part, the father argues that his application was met with considerable success.  Count 5 was proven and the mother admitted the breach alleged in Counts 3 to 6 which were ultimately not to be proven by reason of reasonable excuse.

3. Whilst there is some initial attraction to the mathematical assertion of the mother that a formula should be applied in favour of the mother as to 28 per cent of her costs incurred up to 30 April 2020 and then 100 per cent thereafter, I am not satisfied that it represents a proper basis for determining whether a costs order should be made.  There might be some utility in such an approach when considering quantum, but not in respect of the primary step of determining whether an order for costs should be made.

4. It could not be said that the father was wholly unsuccessful.  It is a relevant consideration that the mother admitted a breach in respect of Counts 3 to 6.  It could not be said that the father was unreasonable in pursuing those counts.

Whether either party to the proceedings has in accordance with s 117C or otherwise made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer?

1. The terms of any settlement or offer must be clear and readily able to be understood.

2. Exhibit “18” is a letter forwarded to the father from the mother’s solicitors on 14 April 2020.

3. The letter of offer specifically deals with the remaining seven counts and proposes a resolution on the following basis:-

   We write to propose on a without prejudice basis, that the above-mentioned counts be resolved by way of an Order in terms of paragraph 3 of the Orders sought by our client in her Application in a Case (that also includes a minor amendment to refer to the DECS term and pupil free days) and all Applications otherwise be dismissed.

   We confirm that paragraph 3 is as follows:

   1.That by way of further and better particularising paragraph 4 of the Orders made on 28 August 2019, the following be inserted as paragraph 4(c):

   “for the purposes of the calculation of the school holiday period, the school holidays shall commence on the Friday of the last week of the term in accordance with the DECS calendar (irrespective as to whether either or both of the children are attending a DECS school) and any pupil free days that occur at the end of the school term shall be deemed to form part of the school term.  In the event the children conclude the school term on different weeks, on the Friday of the last week of the term of the child who finishes last, with such period to conclude at 3:00pm on the day prior to the commencement of school”[3]

   (Original emphasis)

   [3] Exhibit “18” page 2.

4. The offer as promoted by the mother was that the remaining seven counts should be discontinued but on the basis that the parties agree a variation to paragraph 4 of orders made on 28 August 2019 which would resolve the outstanding uncertainty.  The offer was rejected by the father.

5. Exhibit “19” comprises communication passing between the father and the mother’s solicitor, with respect to a further offer of settlement.

6. By email dated 19 August 2020 the father advised the mother’s solicitor that he was seeking legal advice in regards to a proposed minute of order sent by email dated 19 August 2020, but in any event sought some makeup time comprising two extra overnight periods with the children.

7. The father’s further response on 19 August 2020 sought to canvas matters beyond the scope of the discussion.

8. The father, by implication, rejected the mother’s proposal as set out in the draft minute of order because it did not contain a provision for make up time.

Any other relevant consideration?

1. On 21 October 2020, by application of s 70NBA of the Act, I varied paragraph 4 of orders made 28 August 2019. The variation effectively incorporated the mother’s proposal that the school holidays would be deemed to commence on the Friday of the last week of school term, but added a further sub-paragraph which suspends the father’s periodic time pursuant to paragraphs 3 and 5 of orders made 7 March 2018 either in whole or in part in respect of such portion of the time as shall coincide with any school holiday period as now defined.

Conclusion

1. Whilst there is some force in the argument that the correspondence from the mother’s solicitor, dated 19 August 2020, constitutes an offer that in the circumstances should have been accepted by the father, the difficulty is that it occurred after the first day of hearing and was forwarded to the father in the afternoon of the day before the resumption of hearing on 20 August 2020.  I have regard to the father’s initial response of 27 April 2020 to the mother’s initial proposal dated 14 April 2020.  A more comprehensive but belated response was sent by email on 19 August 2020. Nonetheless the more detailed proposal, as contained in the draft minute of order, was provided to the father in the afternoon prior to the last day of hearing on 20 August 2020.

2. In the circumstances, I consider that no order of costs should be made in favour of the mother and each should bear their own costs.

The application for contravention filed 22 april 2020

1. The Court had little difficulty in dismissing the second contravention application.

2. I consider that the father was wholly unsuccessful and there is no mitigating circumstance that would speak against an application for costs in favour of the mother.

Quantum

Indemnity costs

1. The explanatory guide to the Rules has been accepted by the Court as an accurate definition of “indemnity basis”; namely:-

   An entitlement to costs, including costs under a costs agreement, for all costs incurred, other than costs that are unreasonable in amount or that have been incurred unreasonably.

2. The discussion of the Full Court in Prantage & Prantage (2013) FLC 93-544 (“Prantage”) is of assistance in determining whether and in what circumstances an order for indemnity costs should be made. The Full Court referred extensively to the decision of Kohan & Kohan (1993) FLC 92-340 (“Kohan”) in which it was noted that whilst there was nothing in the Act which in any way “inhibits” a consideration of indemnity costs, the following is said in Kohan at 79,605:-

   it is fundamental to the exercise of that discretion in the Family Court that the Judge should not only understand that such an order is a very great departure from the normal standard, but also that the Judge should know what the terms of the agreement are, to what extent it exceeds the parameters set by the scale and what its likely impact will be on the financial position of each of the parties. This impact is a relevant matter to which the trial Judge should have had regard, when considering the financial circumstances of each of the parties to the proceedings under s 117(2A)(a), or perhaps even more as a relevant matter under paragraph (g). The degree to which a costs agreement departs from the established norm and the actual financial significance of such a departure may itself be a reason for not ordering costs on an indemnity basis.

1. In Re Wilcox; Ex parte Venture Industries Pty Ltd and Ors (No 2) (1996) 72 FCR 151, Cooper and Merkel JJ said at 156:-

   The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.

   The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of the courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.

2. In Prantage the Full Court said at 87,209:-

   97. In our view, once it is recognised that ensuring access to justice is one of the key objectives of the “usual rule”, the claimed increasing disparity between scale costs and those being charged by lawyers becomes as much an argument against the awarding of indemnity costs as it is in favour of costs being ordered on that basis.

   98. With respect to the trial Judge, we are not convinced that there is a great deal of difference between current “commercial realities” and those prevailing at the time Kohan was decided. It should be noted that the costs agreement in Kohan provided for a rate of payment three times in excess of the scale. However, even if there have been changes in the market place for legal services, we are not persuaded that this should have any impact on the application of the “usual rule”, which seeks to balance competing public policy considerations.

3. The matters raised by the father were relatively routine.

4. At paragraph 87 of the reasons for judgment delivered 29 September 2020,[4] I accepted that the father’s concern and his hypervigilance that the children continue to be identified by his surname was a reasonable position for him to adopt.  The evidence however did not support a finding that the mother had contravened the order.

   [4] See Lonsdale & Trevor [2020] FamCA 825.

5. In those circumstances and whilst I am alive to the matters raised in Prantage which highlighted the disparity between scale costs and those charged on a solicitor/client basis, I consider that to order indemnity costs would constitute a “very great departure from the normal standard”.[5]

   [5]Prantage & Prantage (2013) FLC 93-544 at 87,205 [79].

6. There is however some difficulty in separating the costs that properly pertain to each of the contravention applications.

7. Given that the contravention application was filed on 22 April 2020 it is reasonable to have regard to the itemised schedule of costs in terms of solicitor’s fees as and from 30 April 2020.

8. By reference to the schedule at Annexure “B” to the affidavit of the mother’s solicitor filed 6 October 2020, the solicitor’s fees that can reasonably be attributed to the proceedings, but in particular the dismissed Application for Contravention is $9,114.53.

9. The mother’s solicitor has an hourly charge-out rate of $462.  The scale is $251.50.

10. On that basis the total hours undertaken are approximately 20 hours.  I propose to adjust the allowable hourly rate to a notional sum of $300 per hour, resulting in solicitor’s fees in the sum of $6,000.

11. There were two applications.  I propose to allow one half of the sum of $6,000 namely, $3,000 by way of solicitor’s fees properly incurred in respect of the dismissed Application for Contravention.

12. In respect of counsel fees, I propose to allow one day at $2,500 and chambers work in preparation for the hearing on the basis of three hours at $411.85, being a total sum of $1,235.55.

13. Accordingly, the total costs payable to the mother will be $6,735.55.

Conclusion

1. I make orders as appear at the commencement of these reasons.

I certify that the preceding seventy one (71) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 16 December 2020.

Associate: 

Date:  16 December 2020