M and M
[2004] FMCAfam 550
•9 March 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| M & M | [2004] FMCAfam 550 |
| FAMILY LAW – Children – contact. PRACTICE AND PROCEDURE – Costs – circumstances justifying order – assessment of costs – where applicant discontinues shortly before an interim hearing – whether costs should be awarded on an indemnity basis. |
Family Law Act 1975 (Cth), s.117(2A)
Rice and Asplund (1978) 6 Fam LR 570; (1979) FLC 92-415
Colgate Palmolive v Cussons Pty. Ltd (1993) 46 FCR 225
Kohan and Kohan (1993) FLC 92-340
| Applicant: | K J M |
| Respondent: | D C M |
| File No: | PAM 4223 of 2003 |
| Delivered on: | 9 March 2004 |
| Delivered at: | Parramatta |
| Hearing Date: | 9 March 2004 |
| Judgment of: | Scarlett FM |
REPRESENTATION
| The Applicant: | Appeared in person |
| Solicitors for the Respondent: | Mr Tiyce Adams & Partners |
ORDERS
I order that the applicant is to pay towards the respondent's costs of these proceedings in the sum of $2150, and I allow six months to pay.
I require a transcript of my reasons, including the submissions by the applicant and the submissions in reply.
The matter is removed from the list.
FEDERAL MAGISTRATES |
PAM 4223 of 2003
| K J M |
Applicant
And
| D C M |
Respondent
REASONS FOR JUDGMENT
The application before the Court today is an application by the respondent for an order for costs against the applicant in respect of proceedings relating to the children of the parties.
The applicant on 10 February filed a notice of discontinuance of her application, and of her amended application. At that stage the matter was listed for an interim hearing on the afternoon of Monday,
16 February.
It is a matter where there had been a number of previous Court appearances, initially by the solicitors for the parties and then by counsel. The matter had commenced in the Local Court at New South Wales at W, and was transferred to the Parramatta Registry of this Court and came before me.
The respondent made it clear that the application by the mother was not only opposed but that a threshold question of the test in the case of Rice v Asplund (1978) 6 Fam LR 570, and (1979) FLC 92-415 would be argued. It is the respondent's contention that the applicant had not shown a sufficient change of circumstances to warrant reopening the parenting proceedings.
This was quite clearly a live issue and there is no doubt that the applicant and her then legal advisers were aware of it. What did happen prior to the hearing on 16 February, as I said, was that the applicant sought to discontinue her proceedings and indeed it appears that she has parted company with her solicitors.
Notwithstanding that, the respondent seeks an order for his costs to be met, not just on a party and party basis but on an indemnity basis. He submits that the circumstances of this case are such that it is appropriate to make what is actually a very unusual order, certainly in this jurisdiction.
In support of the proposition, Mr Tiyce for the respondent has referred me to the decision of the Federal Court in Colgate Palmolive v Cussons Pty Limited (1993) 46 FCR 225, a decision of Sheppard J. She has also produced copies of a costs agreement with his client, and copies of memoranda of costs, not only from his firm but from the solicitor previously acting, Mr Burke of Christopher Edwards and Co.
The amount that he sought was $5064.20. Mr Tiyce has also referred the Court to the fact that when the respondent's response was filed at the Local Court at W, it was made clear in that response that costs would be sought by the respondent and on an indemnity basis.
In looking at the question of indemnity costs I am referred to the commentary to the CCH publication, Family Law and Practice, where it is said that the ordinary rule is that where the Court orders the cost of one party to be paid by another party, the order is for the payment of those costs on a party and party basis, and there is a reference to the decision of Kohan and Kohan (1993) FLC 92-340, where it was held that the Court should not depart lightly from the ordinary rules relating to costs between party and party, and the circumstances justifying departure should be of an exceptional kind.
In the case of Colgate Palmolive v Cussons Pty Limited (1993) 46 FCR 225, to which I have previously referred, Sheppard J stated that there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice, and his Honour quoted a number of examples.
The most relevant one which has been referred to me is where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases, the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts.
Mr Tiyce for the respondent seeks to persuade the Court that this is such a case.
First of all I will look at the question of whether an order for costs should be made, and then and only then should the Court decide the amount of such costs.
I am certainly of the view applying the principles set out in s.117(2A) of the Family Law Act that this is a suitable matter for an order for costs. The applicant commenced these proceedings, there were a number of appearances in Court. There was a considerable amount of preparation for an interim hearing, and the applicant was aware that the very basis upon which her application to reopen parenting proceedings was commenced would be the subject of a serious challenge by reference to the rule in Rice and Asplund.
She had been made aware of the liability for costs, or the potential liability for costs, from the beginning. What in effect she has done is commence these proceedings. They have spent a fair amount of time in Court, and then shortly before an interim hearing was to be argued relating to that very issue the applicant has discontinued the proceedings and has in effect walked away.
What would be put, of course, is that parties just cannot commence proceedings, run up costs and then just walk away from these proceedings without having to face some penalty. I would have to find that the circumstances justifying the departure to be of an exceptional kind.
Having read the material and being aware of the issues, I am not satisfied that it can be said that the applicant commenced and insisted in carrying on a completely hopeless case, nor does it appear to me that I can draw a presumption that the action was commenced or continued for some ulterior motive, or even because of some wilful disregard of the known facts.
I will now reconsider this matter on the basis of the submissions that I have heard. One of the matters that I have to take into account under
s.117(2A) is the financial position of the parties and whether either party is in receipt of legal aid. Certainly the applicant has made it clear that she has gone into debt as far as her own costs are concerned, that she still has some debt, and she has now given me a rundown showing that her pay is heavily committed as far as her own accommodation is concerned and payment of child support as well as other issues.
As she has pointed out, it is necessary for her to have a house because she does have the children for contact, and if she were living as an entirely single and childless person quite clearly she would have less of a demand for accommodation and may well be able to obtain accommodation that is significantly less expensive than the house that she considers that she is obliged to pay for.
These are relevant matters.
Mr Tiyce for the father has put to me that other issues raised by the applicant relating to negotiations with his client about contact arrangements are not relevant to this argument and I accept that this is so.
I have considered all these matters. I have considered the submission on behalf of the respondent that this is still a matter that is appropriate for an order for costs, to give a clear message to litigants as he pointed out, that they must think before commencing proceedings and must not carry on proceedings which are unlikely to succeed. That is a submission that has been put quite strongly, even if not quite in those words.
I am of the view that proceedings have taken up a fair amount of Court time and have involved a fair amount of work, and the applicant has discontinued those proceedings because the harsh reality was she ran out of money. It was not her intention to run the proceedings for any ulterior motive.
I accept the fact that her motivation in doing so was purely to obtain a parenting order which would hopefully result in the children living with her.
In all the circumstances, however, I am still of the view that an order for costs is appropriate. I am not satisfied that it is a matter for indemnity costs, as I did not consider that sufficient grounds had been shown for indemnity costs, and indeed on having heard her I am more than ever convinced that the proceedings were not commenced for an ulterior motive, or continued for an ulterior motive, but fuelled purely by her desire to have more time with her children.
It is not a matter where indemnity costs are appropriate.
I have also, as I have said, when given further financial information about the applicant which indicates that her financial situation is parlous, and she is looking at altering her working situation in the Royal Australian Air Force so that she can re-muster as a clerk and give her more regular hours so that she can spend more appropriate time with the children, that that will have some financial impact on her.
My calculations of the costs according to the Federal Magistrate Court's rules, which whilst less than the indemnity costs sought by the respondent would still have reached the sum of $4360. Had the applicant not appeared and presented to me evidence about the conduct of the proceedings and her own financial situation, I would have given serious consideration to have made a costs order in that amount.
Now that I have had the opportunity of hearing the applicant's submissions I am persuaded that is not an appropriate amount to make, although I am still of a view that there should be some payment towards the respondent's costs.
I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Associate: A. Coutman
Date: 1 October 2004
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