MAGANO & MAGANO
[2020] FCCA 1418
•5 June 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MAGANO & MAGANO | [2020] FCCA 1418 |
| Catchwords: FAMILY LAW – COSTS – Consideration of Indemnity Costs – Applicant father convicted of rape and sexual assault of the Respondent mother – Application filed to intimidate the mother as a witness in criminal proceedings – Application had no prospect of success. |
| Legislation: Family Law Act 1975 (Cth), s.117 Federal Circuit Court Rules 2001, r.13.04A |
| Cases cited: Re Collins and the Victorian Legal Aid Commission (1984) FLC 91-508 Colgate Palmolive v Cussons (1993) 118 ALR 248 Preston v Preston [1982] 1 All ER 41 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd and Others (1988) ALR 398 at 401 Gersten v Minister for Immigration & Multicultural Affairs [2001] FCA 260 |
| Applicant: | MR MAGANO |
| Respondent: | MS MAGANO |
| File Number: | BRC 12500 of 2016 |
| Judgment of: | Judge Lapthorn |
| Hearing dates: | 11 February 2019 & 28 January 2020 |
| Date of Last Submission: | 10 February 2020 |
| Delivered at: | Brisbane |
| Delivered on: | 5 June 2020 |
REPRESENTATION
| Solicitors for the Applicant: | Davey Law |
| Solicitors for the Respondent: | Corney & Lind Lawyers |
ORDERS
That on or before 5 June 2021 the Applicant Mr Magano pay the Respondent Ms Magano, costs fixed in the sum of $50,000.
IT IS NOTED that publication of this judgment under the pseudonym Magano & Magano is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 12500 of 2016
| MR MAGANO |
Applicant
And
| MS MAGANO |
Respondent
REASONS FOR JUDGMENT
Introduction
I am asked to determine the respondent mother’s application for the applicant father pay her costs on an indemnity basis in relation to the parenting proceedings commenced by him on 20 October 2017. The father opposes the making of any order for costs. The parenting proceedings were resolved by way of final consent orders on 12 November 2019 which provided for the children to live with the mother and spend no time with the father and for the paternal grandmother to provide to the father biannual updates about the children received by email from the mother.
The parties met and married in 2012. They have three children, two of whom have special needs. X is seven years of age, Y is six and Z four. The parties separated on a final basis on 17 November 2015 and were divorced on 9 April 2017.
In 2016 the father was charged with four counts of rape, three counts of sexual assault and one count of attempted rape of the mother. His criminal trial commenced in 2017 and he was found guilty of two counts of rape and one count of sexual assault. He was sentenced to six years imprisonment but was released on parole in late 2019.
Procedural background
The father commenced the parenting proceedings upon filing his Initiating Application on 20 October 2017 just ten days prior to the commencement of his criminal trial. In that application he sought orders that would provide, on an interim basis, for the children to live with him and spend supervised time with the mother at a contact centre. By way of final orders he proposed that the children’s time with the mother be as agreed between them.
The mother filed her Response on 3 November 2017. She sought orders for her to have sole parental responsibility for the children, that they live with her and spend no time with the father. She also sought costs on an indemnity basis.
The paternal grandmother filed an Application in a Case on 23 November 2017 seeking to intervene in the proceedings and for the children to spend time with her each alternate Saturday and to have phone/skype time each Tuesday. I note that this application was filed after the father was sentenced to imprisonment.
On the first court date, 28 November 2017, the paternal grandmother was granted leave to intervene, a family report was ordered and costs were reserved. On the following court date an Independent Children’s Lawyer (ICL) was appointed and on 28 August 2018 his Honour Judge Coates made interim orders for the children to live with the mother and spend no time with either the father or the paternal grandparents and adjourned the matter for final hearing on a date to be advised. The matter was subsequently allocated a final hearing date of 11 February 2019. The father had not amended his application by that date.
Although the father was in prison he did not arrange for any representation or appearance at this hearing. The mother, paternal grandmother and ICL reached agreement in relation to the competing applications between the mother and paternal grandmother and I made orders by consent for the children to spend no time with the paternal grandmother and for the mother to email the paternal grandmother twice per annum a photograph of the children and a short update on the children and that the paternal grandmother be restrained from disclosing the mother’s email address to any other person. The paternal grandmother’s application was otherwise dismissed and the mother’s costs were reserved.
The competing applications between the mother and father were adjourned to 9 April 2019 for directions or a possible undefended hearing. The father was ordered to file an Amended Initiating Application setting out the final orders he sought and a supporting affidavit or in the event he intended to withdraw from the proceedings he was to file a Notice of Discontinuance. The mother’s costs in relation to the proceedings with the father were reserved.
On 15 March 2019 the mother filed an Application in a Case seeking orders for costs against the Intervener fixed in the sum of $30,000 and against the father in the sum of $20,000.
Pursuant to my orders, the father filed an Amended Initiating Application on 21 March 2019 seeking final orders that the children live with the mother and spend no time with him whilst he was incarcerated and the mother provide him with quarterly updates of the children including photos, school reports, heath reports, general updates and any written document from the children.
The father appeared by telephone from gaol at the April mention and by consent between the parents I ordered for the children to live with the mother and for her to have sole parental responsibility. I listed the remaining parenting matters between the parents for final hearing on 11 June 2019. I also heard and dismissed the mother’s application for costs against the paternal grandmother.
On 31 May the parties jointly wrote to Chambers advising that they had reached final agreement on parenting matters save for the issue of costs. The agreement included for the paternal grandmother to provide photos and updates of the children to the father and other members of the paternal family. However as the paternal grandmother was no longer a party to the proceedings, the parties jointly submitted that the previous orders made 11 February and 9 April 2019 be discharged and one order issue which incorporated the previous final order. I vacated the June hearing date and adjourned the matter to Chambers to await the signed terms. The signed terms were received in Chambers 25 June 2019 however they were not accompanied by the requisite form in accordance with rule 13.04A of the Federal Circuit Court Rules 2001. That form was not received until 12 November 2019 and I made the final consent orders that day.
These consent orders provided:
1.That all existing Orders be discharged.
2.That the children, X born in 2013, Z born in 2015 and Y born in 2014 (“ the children”) live with the mother.
3.That the Mother have sole parental responsibility for the children.
4.That the Paternal Grandmother spend no time with the children.
5.That the Father spend no time with the children.
6.That the Mother, twice annually, provide to the Paternal Grandmother, via email to an email address nominated by the Paternal Grandmother;
(a)A photograph of the children: and
(b)A couple of sentences about the children that may include:
i.The status of the children’s health and education: and
ii.Highlights of the children’s year such as the children’s interests, activities or achievements for the previous year.
7.That the Paternal Grandmother provide to the father, within 14 days of receipt of same, the information provided to her by the Mother (with the exception of the Mother’s email address) pursuant to paragraph 6 herein;
8.That the Paternal Grandmother and Father are at liberty to provide the information provided by the Mother pursuant to paragraph 6 herein to the extended paternal family (with the exception of the Mother’s email address).
9.That the Paternal Grandmother is restrained from providing the email address of the Mother to any other person, and must take reasonable steps to ensure that such email address is not available to any other person.
The parties agreed that the issue of costs could be done on the papers and I ordered each party to file written submissions addressing the issue of costs and adjourned the matter to Chambers.
In addition to his written submissions, the father also filed and sought to rely on an affidavit and financial statement filed on 17 December 2019. The mother filed submissions on 26 November 2019. I listed the matter for a phone mention on 28 January 2020 where the mother did not object to me reading the father’s affidavit and financial statement. I also queried the mother about her submissions filed 26 November as they were dated 9 April 2019 and appeared to rely on documents that did not relate to the costs issue. The solicitor for the mother realised she had erroneously uploaded the wrong version of her submissions. I directed her to upload her submissions by close of business that day and for the father to file short submissions in reply by 7 February 2020. He did so on 10 February 2020.
Documents relied on
In support of her case the mother relied on:
a)Her Outline of Submissions filed 28 January 2020;
b)Her Response filed 3 November 2017;
c)Her Application in a Case filed 15 March 2019;
d)Her affidavit filed 16 January 2019; and
e)The affidavit of her solicitor, Fiona Gaye Manderson, filed 11 March 2019.
In support of his case, the father relied on:
a)His Outline of Submissions filed 17 December 2019;
b)His Submissions in Reply filed 10 February 2020;
c)His Affidavit filed 17 November 2019;
d)His Financial Statement filed 17 November 2019; and
e)Orders dated:
i)11 February 2019;
ii)9 April 2019; and
iii)12 November 2019.
Legal Approach
Ordinarily each party to proceedings under the Family Law Act would bear his or her own costs.[1] However if the court is of the view that there are circumstances justifying a costs order the court may make such order as it considers just.[2]
[1] Section 117(1)
[2] Section 117(2)
In determining whether to make such an order the court is required to have regard to a number of the factors set out in section 117(2A).
Financial circumstances of each of the parties
The mother is reliant Centrelink benefits and is a full time university student due to complete her studies this year. She is the sole carer for the three young children. Two have special needs: Y has been diagnosed with Autistic Spectrum Disorder and Pervasive Developmental Disorder, and X has been diagnosed with non-accidental shaking injury and Autistic Spectrum Disorder.
The mother married Mr A in late 2018. Mr A works as a health care worker. His two children, aged 10 and 8, spend alternate weekends and half the school holidays with them.
Prior to his incarceration, the father was in full time employment as a Professional and had been with the same employer since 2015. Upon his release from prison, he obtained full time employment as a customer service officer earning $961 per week and has weekly expenditure of $712. His assets include $577 in the bank, a car worth $2,000 and $16,515 in superannuation. He gave evidence of having a number of loans: a personal loan with a credit union with a balance of $18,517 for his costs associated with domestic violence proceedings; $122,464 borrowed from his parents for legal fees and $1,000 borrowed from his sister. Whilst the father annexed evidence of his wage, he did not provide any evidence to corroborate the loans. The father does not pay any child support and has not contributed financially towards the children since separation.
The father submitted that there was no evidence as to the mother’s overall financial position. The mother addressed this in part:
212.I do not want Mr Magano or the paternal grandparents to have any information about me or my circumstances, and for that reason, unless the Court requires it, I do not intend to file a Financial Statement in this matter.
Notwithstanding that position, she gave the following evidence:
a)prior to her marriage to Mr A:
210.… I struggled to pay for basic necessities for the children and … particularly given the children have special dietary requirements that are more expensive. I have gone without meals as I am unable to afford the children’s special food, food for me and our other expenses.
At times, I am unable to pay for X to attend his psychiatrist as regularly as I would like … as I am unable to afford for both children to attend a private psychiatrist.
b)The mother and Mr A’s combined income still qualifies them for Centrelink benefits and rent assistance and that:
211.… Although there is a little more money in our joint budget, finances are still tight, and there is only a small amount of leeway in our budget (amounting to less than $50 per week).
In the circumstances of this case I consider the mother’s position to be appropriate and understandable. I am satisfied that she has given sufficient evidence to enable me to determine the application.
The mother also gave evidence that she had borrowed funds to pay her legal costs for these proceedings. The father argued that there was no evidence as to the particulars surrounding the funds advanced by her parents including whether it was to be repaid, nor that there was any evidence as to the consequences to the mother if a costs order was not made. Ironically he too did not file any evidence to corroborate his claim to have loans or the terms of their repayment.
The father submitted he has limited financial resources and that as he needs to re-establishes himself following his release from prison, such as moving out of his parents’ home and finding his own accommodation, a costs order would place him “in significant financial hardship and distress where he will be unable to re-establish himself post his release from prison”.
The mother made the following submission:
7.12.6 Although the Father would likely need to make payment arrangements for the payment of any costs order, he does have the means to service such arrangements from his employment. Even if not immediately able to pay costs, the Court would be aware that an Order for costs would allow an opportunity to seek to recover costs ordered at a later date if necessary. It is respectfully submitted that the Mother should have that opportunity.
The law is well settled that impecuniosity is not a bar to the making of a costs order. I am satisfied that neither party is in a strong financial position. I accept the mother has had to rely on Centrelink benefits and has not been receiving child support from the father. I also accept that although the father has a job he has to re-establish himself after his period of imprisonment.
Legal Aid
Neither party was in receipt of a grant of legal aid.
The conduct of the parties to the proceedings
The mother invited the Court to find that these proceedings were commenced for the “purposes of intimidating her and seeking to gain an advantage in the criminal proceedings in which she was a witness, and further perpetrating domestic violence upon her”. The father denied these assertions noting that in August 2017, three months prior to his criminal trial, he had attempted to commence these proceedings but his documents were requisitioned and not filed.
B Law Firm represented the father at the domestic violence hearing between the parties as well as in his criminal proceedings. The three day criminal trial in relation to the father’s rape and sexual assault charges, in which the mother gave evidence, commenced in 2017. The mother gave evidence that the parties were aware of the date of the criminal trial by at least 13 June 2017. The father said that he became aware of the dates for his criminal trial on or around 18 May 2017.
The father commenced these proceedings by filing his Initiating Application on 20 October 2017. Six days later, B Law Firm emailed the mother’s solicitors and her former solicitors:
…
We act for Mr Magano.
Please advise if you accept service of Court documents.?
Our client is seeking full custody of his 3 children.
…
At 10am the following day the mother’s solicitors advised they had instructions to accept service and advised that they do not accept service by electronic means. At 4.54pm that day B Law Firm responded:
…
We act for Mr Magano.
Thank you for you [sic] letter dated 27/10/2017.
the next court event for this matter is 2017 at 9.30am at Level 1, Commonwealth Law Courts, 119 North Quay, Brisbane. Qld. 4000.
We confirm we have sent you the Sealed Application and 2 Subpoenas today, 27/10/2017 via express post No # ...4.
Our client is seeking:-
Final Orders sought: 1. The children live with the Father. 2. The children spend time with the Mother as agreed between the parents.
Interim or procedural orders sought: 1. The children live with the Father. 2. The Mother have supervised contact with the children at a Contact Centre in Brisbane for up to 2 hours each weekend.
…
In correspondence dated 7 November 2017 B Law Firm advised the mother’s solicitors that they only acted for the father in his criminal matters and had limited instructions to assist with the service of the parenting proceedings. They further advised that they were acting for the paternal grandmother in relation to the parenting proceedings.
The father invited the Court to:
“draw the inference that the documents were unlikely to be provided to the mother until after she had given evidence as the documents were only received by her solicitors that day, at the earliest. Therefore it is submitted the mother could not have been intimidated about giving evidence in the criminal proceedings” as “the mother was not made aware of the proceedings until after she gave evidence in the criminal proceedings”.
Whilst service pursuant to the Federal Circuit Court Rules was effected at the earliest on the day the criminal proceedings commenced, it was nonetheless made known to the mother’s solicitors by email the Thursday prior to the criminal trial’s commencement that these proceedings had been commenced. Further on the following day, that is, the Friday before the criminal trial, the solicitors were advised by email of the orders the father would be seeking including a change of residence on both a final and interim basis.
I accept the submission made by the solicitor for the mother that she had an obligation to bring the content of these emails to the attention of the mother. I am satisfied that the mother would have been aware that the father was “seeking full custody of his 3 children” prior to the commencement of the criminal proceedings.
The father said that he had previously attempted to commence proceedings by providing instructions to his solicitor in or about April 2017 and his solicitor attempted to file the court documents in August 2017 but they were requisitioned and therefore not filed. He asserted that in addition to the documents being requisitioned, his solicitor at the free community legal service that he was seeing suffered a heart attack and “[t]hat again, set my application back with respect to the timing of the documents being filed.” Whilst I accept the ill health of the legal practitioner he was seeing would have caused some delay it does not explain the length of the delay. The evidence provided by the father suggest the solicitor became ill in September 2016 some eleven months prior to the eventual filing of the application or nine months prior to the first attempt at filing the application.
The mother submitted:
It is difficult to conceive of any circumstance that would lead a man to take no steps (during a period of at least 18 months) to spend time with his children, including not responding to offers to spend time from his wife, and then on the eve of his standing trial for rape, determine that it was necessary to urgently file and serve an application alleging mental instability on the part of the Mother, and seeking that the children live with him.
I accept the mother’s submissions. Even accepting the father’s submission that he tried to file an application in August there can be little doubt his application was aimed at unsettling the mother. When he first tried to file his application he was aware of the date for the criminal trial. He knew the mother would be giving evidence in that trial. He must also have known, given he had been receiving legal advice, that he had little to no chance of being able to alter the living arrangements of the children on an interim basis given the length of time the children had been living with the mother and the nature of the charges he was facing. There can be no other reasonable explanation as to his actions in filing the application as drafted other than to intimidate the mother. Even if he was not so motivated when he initially attempted to file the application, his actions in again submitting the application for filing a little over a week before the criminal trial clearly smacks of an attempt to intimidate the mother.
At the time of filing the Initiating Application the children were aged four, three and two and the father had not seen them for over 18 months nor had he taken up offers by the mother for him to spend supervised time with them. The father did not seek orders for the children to spend time with him. He sought orders on an interim basis for a change of residence in which the children would live with him and spend supervised time with the mother for up to two hours each weekend in the knowledge that she had always been their primary carer and that in the coming weeks he faced the possibility of a significant period of imprisonment. Which is what came to pass. Five weeks prior to the first return date of 28 November 2017 the father was sentenced to six years imprisonment with an eligible parole date in 2019 but he did not amend the orders sought until a month after the date of the final hearing on 11 February 2019.
Notwithstanding his incarceration, and having appeared by telephone on previous court dates, the father failed to make an application to the Court for him to appear by telephone or to be brought to Court for the final hearing and had failed to comply with orders to file his trial material.
The mother submitted:
… he took no steps in the matter beyond seeking to attend court appearances …
Whilst undoubtedly, being in jail posed unique difficulties in preparation of and filing of material, it is respectfully submitted that the fact that the Father has taken the step of filing material demonstrates that he was always able to do so should he choose to – he simply chose not to participate in these proceedings or to not take steps to progress his Application.
In addressing the criticism that he had unnecessarily prolonged these proceedings he said it took him “several months to adjust to being incarcerated, I had no legal advice and limited ability to arrange same.” He further deposed that he was “severely physically and sexually assaulted in prison” which took him many months to overcome.
Whilst I accept that the father would have experienced a number of difficulties associated with his imprisonment which would have contributed to some delay it does not adequately address the extent of the delay. Further the proceedings where commenced prior to his incarceration with little to no prospect of success in relation to the orders sought by him. Further the application was maintained after his sentencing when he had absolutely no prospect of obtaining an order for the children to live with him.
Whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court.
There were no previous parenting orders in place prior to the filing of the father’s application and therefore this consideration is not relevant.
Whether any party has been wholly unsuccessful
In relation to the father’s amended application he was wholly unsuccessful in seeking that the children spend no time with him only whilst incarcerated. The mother conceded that the father was partly successful in relation to obtaining updates in relation to the children but submitted that the success was modest as he was seeking quarterly updates. The father had also sought the mother provide him with copies of the children’s health records and school reports – the father was wholly unsuccessful in this regard. The final orders reached between the parents was an extension of the final consent orders reached between the mother and the paternal grandmother in that the paternal grandmother was permitted to provide the biannual email updates she receives from the mother to the father.
The mother submitted that I should have greater regard to the father’s Initiating Application filed 20 October 2017 in which he was wholly unsuccessful as that was the application before the Court for the majority of the proceedings including at the final hearing and was the position the mother had to respond to for over 17 months. She submitted further that the father was unsuccessful in all respects when one considers his application was amended after the date of the final hearing. I accept her submissions in this regard.
Consideration of offers made in writing
Prior to the final consent orders reached in May 2019, neither party made an offer to settle the proceedings. However the mother submitted that prior to these proceedings commencing, she had on 20 April 2016 offered the father supervised time and weekly phone or video calls however no response was received from him. A month after the father was charged, the mother’s solicitors on 8 July 2016 followed up on their offer but received no reply. At Court for the divorce hearing on 8 March 2017, the mother’s solicitor again sought a response from the father in regards to the mother’s offer. The father acknowledged receipt of the offers and replied that he would “be in touch” but nothing further was received until the email exchange with B Law Firm on the eve of the father’s criminal trial advising that the father had commenced these proceedings.
Conclusion as to whether a costs order should be made
I am satisfied that this is a case where there should be a departure from the usual rule and a costs order made. For the reasons discussed above I am satisfied that the father’s application was, from its inception, designed to intimidate the mother as the primary witness in his criminal trial and/or as a means of perpetrating further family violence upon her.
However even if I am wrong in that conclusion, I remain satisfied that a costs order should issue given my findings that the father had no prospect of success in his application to change the living arrangements for the children. As a consequence the mother has been put to the expense of responding to his application. This was aggravated by the father’s failure to file a Notice of Discontinuance. In my view it would be unjust to the mother if she is left not only with a favourable outcome but also a significant bill for her legal costs.[3]
[3] See Re Collins and the Victorian Legal Aid Commission (1984) FLC 91-508
Should an indemnity costs order be made
Having determined that it is appropriate to make a costs order I now turn my mind to whether that order should be by way of an indemnity costs order as sought by the mother. In Colgate Palmolive v Cussons[4] Sheppard J considered the jurisprudence in relation to the question of costs and confirmed the long standing practice is that such orders are to be on a party and party basis. His Honour held that the court must not make an order on another basis unless the circumstances of the case warrant it departing from the usual practice. In exercising its discretion the court would look to the particular facts and circumstances of the case and consider whether there is “some special or unusual feature in the case to justify the court in departing from the ordinary practice.”[5]
[4] (1993) 118 ALR 248
[5] Preston v Preston [1982] 1 All ER 41
The mother’s costs are said to be $80,961.22. It was submitted by the mother that an order for costs at scale would be calculated at $28,433.20 which is considerably less than what she is required to pay under her costs agreement with her solicitor.
The father submitted that the mother had contradicted her position in respect of the quantum of costs sought. In her Response filed 3 November 2017 the mother sought costs against the father on an indemnity basis yet in her Application in a Case filed 15 March 2019 she sought costs against the father fixed in the amount of $20,000. In the later application the mother also sought an order that the Intervener pay $30,000 in costs. That part of her application was dismissed on 9 April 2019. The father’s submissions were incorrect when he referred to that part of the application being dismissed by consent as it was dismissed after hearing argument. In any event the father argued that the mother was now double dipping in seeking all of her costs against him despite the costs associated with answering the Intervener’s application being dismissed. I am satisfied that there is some merit in the father’s submission. There would be some overlap in the preparation of the different cases run by the grandmother and the father. That however does not take away from the fact that the father instituted proceedings doomed to fail and failed to bring his application to a timely end leaving the mother to incur significant legal costs.
In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd and Others[6] Woodward J of the Federal Court held:
I believe that it is appropriate to consider awarding “solicitor and client” or “indemnity” costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, 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 or the clearly established law.
[6] (1988) ALR 398 at 401; See also Gersten v Minister for Immigration & Multicultural Affairs [2001] FCA 260
In exercising my discretion I have taken into account the father’s commencement and maintenance of the proceedings when they were without merit; my findings as to his likely motivation in bringing the proceedings when he did; and the delay in finalising the proceedings as a consequence of his failure to engage in the proceedings. In relation to the latter of those considerations, I have taken into account some delay was inevitable given his incarceration but have concluded that that alone did not preclude him from more timely action. For those reasons I am satisfied that an order for costs at scale would not do justice to the mother in the circumstances of this case.
In determining the quantum of costs I have had regard to the potential double dipping by the mother in that some of her fees would have been incurred in answering the Intervener’s application and in which the mother’s costs application has been dismissed. I have also taken into account the financial circumstances of each of the parties. I am satisfied that the father would not currently be in a position to meet a significant costs order but as I have previously indicated the jurisprudence is clear: impecuniosity is not a bar to a costs order. In all of the circumstances I am satisfied that an appropriate costs order should be in the sum of $50,000 and should be paid within twelve months.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Judge Lapthorn
Associate:
Date: 5 June 2020
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