Marsh & Marsh

[2009] FMCAfam 1160

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MARSH & MARSH [2009] FMCAfam 1160

FAMILY LAW – Costs – applications for costs certificates under s.10 of the Federal Proceedings (Costs) Act 1981– hearing had not commenced in a real and litigious sense.

Federal Proceedings (Costs) Act 1981, ss.10(2), 10(3)

Coulson v Gosford Meats Pty Ltd (1985) 7 FCR 106
Cramer v Davies A38/1996 (11 December 1997)
Culkoff & Culkoff [2001] FamCA 792
Honan & Nourse(No.2) [2007] FamCA 1691
Kernot & Matson [2008] FMCAfam 819
Lindner, In the Marriage of (1985) FLC 91-638
Lummis & Lummis [2008] FMCAfam 1274
Morris; Morris v Maroudas, Re (1986) 66 ALR 699
Official Trustee in Bankruptcy; Forrest v Forrest, Re [2000] FCA 907
Palmdale Insurance Ltd, Re (1994) 122 ACTR 33
Perpetual Trustee Co (Canberra) Ltd v Lewis [1996] ACTSC 19
Redshaw, In the Marriage of (1989) 13 Fam LR 495
Rees & Shaw [2009] FMCAfam 178
Salah & Aharat [2008] FamCA 19
Ward v Schembri (2005) 33 Fam LR 546; [2005] FamCA 568
Wilhelm & Marla [2009] FamCAFC 58

Applicant: MS H MARSH

Respondent: MS E MARSH

File Number: SYC 2597 of 2007

Judgment of: Pascoe CFM

Hearing date: 3 November 2009

Date of Last Submission: 4 November 2009

Delivered at: Sydney

Delivered on: 11 November 2009

REPRESENTATION

Counsel for the Applicant: Mr Sweet

Solicitors for the Applicant: Stojanovic Solicitors

Counsel for the Respondent: Mr Cook

Solicitors for the Respondent: MG O'Callaghan & Associates

Independent Children’s Lawyer: Mr Hearl

Solicitors for the Independent Children’s Lawyer: Delaney Lawyers

ORDERS

1. The applications for costs certificates under s.10 of the Federal Proceedings (Costs) Act 1981 (Cth) are dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Marsh & Marsh is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYC 2597 of 2007

MS H MARSH

Applicant

And

MS E MARSH

Respondent

REASONS FOR JUDGMENT

The applications

1. This decision relates to applications for certificates pursuant to s.10 of the Federal Proceedings (Costs) Act 1981 (Cth) (‘the Act’).  The matter came before the Court on 3 November 2009 for a two day final hearing and was adjourned that day to a date in February 2010.  The Applicant submitted that a certificate should be issued because the final hearing was “rendered abortive” by reason of the Court “being unable to continue with” the proceedings in the absence of a family report and/or up-to-date expert evidence.  Alternatively, it was argued that for the same reasons, the hearing was discontinued and a new hearing listed through no neglect, default or improper act of the parties.

The proceedings

1. On 15 July 2008 I made interim orders in this matter that the child [X] born [in] 2001 live with the Applicant grandmother and spend time with the Respondent mother on a gradual basis (provided the mother meet certain pre-conditions).  There was extensive discussion at trial as to whether final or interim orders should be made in this matter.  An expert’s report was prepared for the trial.  I found that the interests of justice and in particular the best interests of the child, would not be served by making final orders.

2. Given the various uncertainties in the case which went to the decision to make interim orders, I re-listed the matter for mention a year later on 14 July 2009, to assess the progress of the parties.  During the mention, I specifically asked both parties whether a family report (and implicitly an updated expert’s report) would be required.  Both parties indicated that up-to-date reports were not required and certainly were not essential.  I agreed to proceed on the basis the parties seemed to be quite capable of reaching some agreement and no particular new issues were raised.

3. When the matter came before me on 3 November 2009, I expressed concern to the parties about certain developments that had taken place since the mention on 14 July 2009.  There was conflicting evidence as to various issues in dispute especially the mother’s drug rehabilitation and use of Methadone.  Further, new evidence was adduced about Mr F’s daughter, [Y], moving into the mother’s and Mr F’s home, the effect of this on the dynamics within the home, and the relationship between [X] and Mr F.  There was also a lack of evidence as to the relationship between [X] and her half-brother [Z]. In addition, the Independent Children’s Lawyer indicated that he was unable to make any recommendations as to appropriate orders.  I was of the view that objective evidence would be required in this matter and ordered a family report, and an updated expert’s report on limited matters. 

4. As a result of my decision to adjourn the matter until 23 February 2010, counsel for the Applicant sought a certificate pursuant to s.10 of the Act.

5. Following the making of the application for a certificate pursuant to s.10 of the Act, oral submissions in support of that application were made by counsel for the Applicant.

6. Counsel for the Respondent, Mr Cook, and the Independent Children’s Lawyer, Mr Hearl, also made applications for a certificate pursuant to s.10 of the Act.

7. Leave was given by the Court for counsel for the Applicant to file supplementary written submissions in support of the application for a certificate pursuant to s.10 of the Act within forty eight (48) hours.

8. Submissions indicate the applications are made under both sub-ss.(2) and (3) of the Act.

The Law

1. Section 10 of the Federal Proceedings (Costs) Act 1981 provides as follows:

   Costs certificates—incomplete proceedings

   (1)  This section applies to the High Court, the Federal Court, the Family Court, the Federal Magistrates Court and a court of a Territory.

   (2)  Subject to this Act, where any proceedings in a court to which this section applies are rendered abortive by reason that the person, or a person before whom the proceedings are being conducted dies, resigns, or is removed or dismissed from, his or her office, suffers a protracted illness or otherwise becomes unable to continue with, or to give judgment in, the proceedings, the court may, on the application of a party to the proceedings, grant to that party a costs certificate in respect of the proceedings.

   (3)  Subject to this Act, where:

   (a)  the hearing of any proceedings in a court to which this section applies is discontinued and a new hearing is ordered;

   and

   (b)  the discontinuance and new hearing are not attributable to the neglect, default or improper act of any party to the proceedings;

   the court may, on the application of a party to the proceedings, grant to that party a costs certificate in respect of the proceedings.

   (4)  The certificate that may be granted under subsection (2) or (3) by a court to a party to proceedings that have been rendered abortive or the hearing of which has been discontinued, as the case may be, is a certificate stating that, in the opinion of the court, it would be appropriate for the Attorney‑General to authorize a payment under this Act to that party in respect of such part as the Attorney‑General considers appropriate of any costs incurred by that party in relation to those proceedings.

   (5)  A reference in this section to proceedings in a court includes a reference to proceedings by way of an appeal to that court.

2. In Salah & Aharat [2008] FamCA 19, Stevenson J said of sub-s.(2):

   The intention of this subsection seems to be to address situations where a hearing is rendered abortive due to the judicial officer’s becoming physically unable or legally prevented from completion and delivery of judgment.

   This interpretation is supported by a reading of the subsection as a whole, and guidance from the maxim ejusdem generis also known as the ‘class rule’.

3. In relation to the meaning of ‘discontinued’ and ‘aborted’, the case law on this area has offered “something of a divergence of views about the interpretation of S.10 [sic] and the ambit of its application” (Culkoff & Culkoff [2001] FamCA 792). I consider the various authorities below.

‘Discontinued’ - the wide interpretation

1. Recently, Coleman J in Wilhelm & Marla [2009] FamCAFC 58, granted a costs certificate where on the day of the hearing his Honour transferred the matter to a full bench. His Honour noted that: “The Court accepts that the issue of cost certificates in this case involves a liberal interpretation of s 10(2) of the Act. In so doing it is not without precedent…”

2. In looking at the wide interpretation, the following reportable cases concern the granting of a costs certificate under the section. 

3. In theMarriage of Lindner (1985) FLC 91-638 (‘Lindner’), related to a property application which was set down for hearing but due to the non-replacement of a retired judge, only one of two matters could be heard that day. Counsel announced their appearances and gave sufficient facts to enable the judge to determine which matter should have priority.  The other matter was given priority and the parties in Lindner were given leave to approach the registrar for a new hearing date.  Although Purdy J called the matter only for mention, his Honour stated that:

   The enactment is obviously designed to enable litigants to recoup costs through no fault of their own and which would otherwise be thrown away.  This being so, I feel the court should be loath to adopt a construction which will defeat this purpose.

   Hence, I feel it right to conclude that a case has commenced to a state capable of discontinuance when counsel have announced their appearance on a day notified to the parties unequivocally as a date for hearing.

4. In Coulson v Gosford Meats Pty Ltd (1985) 7 FCR 106 (‘Coulson’), the parties appeared for trial on the date set but were advised that no judge was available to hear it. The parties were advised that the matter would be put into a list for directions for a future date.  Justice Gray found that:

   The first question which arises is whether the hearing can properly be said to have been “discontinued”, within the meaning of the section.  Although, in a sense, the hearing had not actually begun, it had been specially fixed for a particular date, time and place, and it did not proceed at the appointed time, on the appointed date, at that place, or at all.  In those circumstances I have no hesitation in holding that the hearing was discontinued, within the meaning of that word as used in s. 10(3).

5. His Honour also said:

   Indeed, in circumstances where the failure of the hearing to continue seems to have been the result of the problems which have arisen as to the availability of judges of the Court, it might seem to be an unjust result if the parties were put to expense when a provision such as this exists in the Act.

6. Following the decision in Coulson, In the matter Re Palmdale Insurance Ltd (1994) 122 ACTR 33 (‘Palmdale’) which also involved a matter where no judge was available at trial, Higgins J considered authority to the contrary but preferred the approach by Gray J because:

   It seems to me that the view expressed by Gray J is to be preferred. Section 10(3) is intended to provide compensation to a party deprived of a hearing and put to the expense of a new hearing due not to the default of any party but the failure of the court system or other adventitious cause whereby a hearing has to be aborted and recommenced. That abortion may be at the very outset of the hearing or part-way through. The explanatory memorandum circulated prior to the passage of the FP(C) Act reveals that the purpose of s10(3) was to empower a court to issue a certificate under the Act where proceedings are rendered abortive or discontinued through no fault of any party. That intent seems consistent with the approach taken by Gray J.

7. Although the matter involved no appearances given, his Honour makes comments as to such situations:

   It is necessary to consider what meaning should be attributed to the term "discontinuance". The context in which it appears requires that it be a consequence of the "discontinuance" that a "new hearing" is ordered. It must, therefore, be concluded that it is not intended that s10(3) will be applied where a matter is adjourned part-heard. There the hearing has been interrupted but not terminated. No "new hearing" would be required. On the other hand, nothing in s10(3) specifies the extent to which the hearing must have proceeded before termination in order that it may be regarded as having been "discontinued" so as to require a "new hearing".

   Coulson and Lindner certainly support the view that only a listing of a matter for hearing is required where the parties attend expecting the matter to proceed in order for there to then be a hearing which is capable of discontinuance. If the only proposition dealt with is a successful application for adjournment, the adjournment to a further date for hearing can be regarded as the ordering of a "new hearing" following the discontinuance of the hearing which otherwise would, but for the adjournment, have proceeded.

8. Palmdale was applied by Miles CJ in Perpetual Trustee Co (Canberra) Ltd v Lewis [1996] ACTSC 19 to grant a costs certificate where a matter was listed for hearing with several other matters in accordance with ordinary practices but due to the priority of the matter in the list, it had only been called on and could proceed no further that day.

9. Although not explicitly referring to the above authorities, Burr J in Honan & Nourse(No.2) [2007] FamCA 1691 granted a costs certificate under s.10(3) where his Honour, when the matter first came before him, considered the question of his disqualification from presiding on the matter and made orders to that effect. His Honour noted that: “Quite simply the proceedings should not have been listed for hearing before me and were so as a result of administrative error or oversight”.

‘Discontinued’ - the narrow interpretation

1. The other line of authority where costs certificates were not granted due to a more narrow interpretation begins in my opinion with ReMorris; Morris v Maroudas (1986) 66 ALR 699 (‘Morris’).  In that matter the respondents were not aware of the hearing as they had not received the Court’s notification.  The respondents became aware of the hearing only three days before the hearing and on the day of the hearing sought an adjournment which was granted.  Justice Muirhead said:

   The adjournment I granted was not a discontinuance of the hearing of the application. The hearing had not commenced. Nor did I order a “new hearing” as a hearing had neither been conducted nor initiated. I simply postponed the hearing to a later date.

   In my opinion sub-s (3) as is the case with sub-s (2), seeks to grant relief to litigants whose liability for costs is increased by reason of the fact that a hearing on foot is aborted by circumstances not contributed to by fault or neglect of any party to the proceedings. It is in my view an extension to the relief granted in sub-s (2) which is more specific in setting out the circumstances. It may for instance be referable to cases where the sickness or death of counsel intervenes under circumstances which require a discontinuance of the hearing which is under way at the time — probably a rare event — but one which as a matter of justice may persuade a court in the interests of justice to recommence the hearing de novo. It may also apply to disruption of a hearing or interference with the court's capacity to continue the hearing by external causes.

2. Morris was followed in In the Marriage of Redshaw (1989) 13 Fam LR 495 (‘Redshaw’) by Mullane J.  The parties could not proceed on the listed date as there was no available judge to hear their matters. Both parties sought on the day of hearing for an adjournment of the trial date. No certificates were granted because there had been no commencement of hearing.  Justice Mullane stated:

   I agree with Muirhead J that the expression “discontinuance” requires that there have been a commencement of the hearing…In my view the hearing in this matter did not commence.  I do not agree with the suggestion that there can be a discontinuance of a hearing when there has been no appearance before the court and nothing which could be called a commencement.

3. Redshaw was applied by Halligan FM in Lummis & Lummis [2008] FMCAfam 1274 on similar facts.

4. Although Morris was not followed by Palmdale in 1994, Morris was followed in Culkoff & Culkoff (supra) by Moore J where the parties could not proceed on the listed date due to the unavailability of a judicial officer.

5. In Re Official Trustee in Bankruptcy; Forrest v Forrest [2000] FCA 907 (‘Forrest’), the Registrar was unavailable to conduct the examination due to being ill and the parties were provided with a new date.  Justice Kiefel followed the decision of Morris to find that the section did not apply to adjournments:

   The question which the application raises is whether the section applies to proceedings which are adjourned at the outset, as distinct from those which are substantially undertaken and then discontinued because of some problem which renders their continuance impossible or undesirable.

   ….

   The word "discontinuance" has a well established meaning with respect to court proceedings. It conveys something having commenced and then ceasing prior to its conclusion. As the title to the section notes, the proceedings are `incomplete'. That is not the same as the adjournment of proceedings, which may be stood over prior to or after commencement. An important practical distinction between the two is that discontinued proceedings are likely to involve the incursion of costs which are entirely wasted, because the proceedings have to be started again afresh.

6. Although the above line of cases have been applied in matters where there was no availability of a judicial officer and thus no appearances given at the bar, Morris has continued to be applied in matters where the parties have given appearance and there has been a decision on the adjournment application, contrary to the authority in Palmdale.

7. Ward v Schembri (2005) 33 Fam LR 546 applied Morris to a similar fact scenario where the applicant in the matter was not aware of the hearing and by happenstance the applicant’s solicitor was in Court for another matter on the same day the matter was returnable.  The matter was adjourned to a future date. With respect to the meaning of ‘discontinuance’ Guest J in that matter disapproved of Lindner and preferred the line of reasoning in Redshaw, Morris and Forrest as his Honour was of the view the hearing had not plainly commenced.

8. His Honour referred to the purpose of the legislation to provide monetary relief to litigants against costs inevitably incurred when a hearing is discontinued and not attributable to the neglect default or improper act of any of the parties.  However, his Honour was also of the view that it was proper to take into account the protection of public funds and the case management practices such as listing primary and reserve cases.  With such considerations, his Honour found that:

   The provision of a certificate pursuant to the Act is a benefit provided by the statute, but on conditions and in circumstances whereby a hearing has been “discontinued”. It is plain that, for such an event to occur, it must have commenced, in my view, in a real and litigious sense, and not just by way of mention by reason of a prior supervening event or discussion arising from judicial availability.

9. Ward v Schembri (supra) was referred to in the more recent decision of Sexton FM in Kernot & Matson [2008] FMCAfam 819. In that matter her Honour refused to grant a certificate under the section in circumstances where the parties were of the view that it was unlikely the matter could be contained within the three days allocated and her Honour had indicated that the matter would not commence unless it could be heard within the time allocated. The matter was transferred to the Family Court for a four day trial. Her Honour considered that the hearing had not commenced and therefore could not have been discontinued or aborted.

Discussion

1. I am not of the view that sub-s.(2) applies in this matter as the meaning of “or otherwise becomes unable to continue with, or to give judgment in, the proceedings” is constrained by the preceding clauses: see above at [11]. In this matter the Independent Children’s Lawyer put forward that the substantive hearing proceed and that at the end of the two day period I could then make a determination on whether a family report would be required. I am of the view that the lack of a family report or updated expert’s report would not fall into the category of reasons found in sub-s.(2). In this matter I was able to commence with the proceedings, but did not do so due to a decision as to the proper case management of the matter which did not become an issue until affidavits were filed.

2. However, a more preliminary and central question arises in both the application of sub-ss.(2) and (3) namely, whether the proceeding/hearing had ‘commenced’ and therefore could be discontinued.

3. I accept counsel’s submission that Redshaw and Lummis & Lummis (supra) are distinguishable on the basis that because the judicial officer was not available, there were no appearances and thus no hearing could commence.  However, the more narrow interpretation is still supported in the current circumstances by Morris and later authorities such as Ward v Schembri (supra) where the judicial officer was available and the parties did give appearances from the bar table.

4. It appears that an underlying difference between the narrow and wider interpretations is the weight given to the aim of providing monetary assistance to litigants where costs are incurred through no fault of their own and the need to protect public funds.  Additionally, Forrest alluded to the distinction with regards to costs between a matter where substantive proceedings have not commenced (including where the parties are called on for mention or determination of an adjournment) and where it has substantively commenced but has been rendered abortive/discontinued and a hearing de novo needs to be instituted.

5. Counsel referred to the comments of Kirby J in Cramer v Davies A38/1996 (11 December 1997) which related to ss.6 and 8 of the Act:

   The general objective of the Act is remedial. It has been expressed as one designed to ensure that where errors of law occur in courts of law, which are not the fault of the parties but by definition the fault, if of anybody, of the administration of justice, the burden of costs which is invariably substantial should not fall upon the parties but should fall upon the community generally through laws such as the Act…Given the remedial nature of the Act, a narrow construction of its language would defeat the attainment of its objectives.

6. In my view, the aim referred to by Kirby J is of a remedial nature where “errors of law occur in courts of law” (although referring to appeals).  I note however that Higgins J in Palmdale included “other adventitious cause” in addition to any fault of the court system as a cause of the discontinuance of a proceeding. 

7. I am of the opinion that what is relevant in this matter is the reason for the hearing not proceeding was based squarely on the need for further evidence as to issues which are central to a decision in the case and which arose subsequent to the mention in July.  Put simply, it was a case management option open to the Court demanded by the issues raised in the evidence.  The Applicant and Respondent attended the mention and were aware that no family report or updated report was ordered at the mention, when the matter was set down, on the basis of the facts at that time.  If the Court had commenced the hearing but had to adjourn part-heard for a family report, in my view, this may have been more costly to the parties than the course adopted. 

8. In particular, I am of the view that the nature of the reason in this matter did not relate to any error of law including in the administration of justice.  The issue was one raised in the new evidence filed.  Although this may be characterised as an “adventitious cause”, I am of the view that it was not so for the purposes of the section because the need for an updated family report came from the evidence and not because of an external source to the case.

9. In looking at the authorities, I am of the view that what occurred in this matter was more akin to a postponement or adjournment of the final hearing rather than the discontinuance of a hearing which has already commenced.  The proceeding on the day commenced with the question of whether a family report would be necessary.  I am of the view that the hearing had not commenced in a “real and litigious sense”: Ward v Schembri (above).  

10. In that regard, I find that this matter is very similar to Kernot & Matson (supra) because both matters were able to commence but the Court made a case management decision on the matter. Her Honour in Kernot & Matson (supra) could have commenced the matter and adjourned part-heard (although I note there was another issue regarding her disqualification). I note that in this matter, the Independent Children’s Lawyer in this case raised the question of whether a family report would be necessary. 

11. Additionally, I am supported in the view that it is similar to an adjournment because the Respondent, although ready to proceed, expressed the view that postponing the hearing to obtain the updated family report was a better option. 

12. I distinguish the two recent matters raised in written submissions where costs certificates were granted, on the basis that the hearings had substantially commenced and were discontinued:

    a)In Salah & Aharat (supra) the matter was discontinued when the Judicial Registrar disqualified himself. However, this only occurred after outline of the issues were given and the Judicial Registrar had stated some views in the matter, albeit preliminary views. 

    b)In Rees & Shaw [2009] FMCAfam 178, the matter had been previously part-heard and adjourned so that an updated family report could be prepared. On the adjourned date, Henderson FM found that the evidence of the family report writer could not be relied upon due to a reasonably held apprehension of bias.

13. It is unfortunate that in this matter the hearing could not commence and the parties may need to pay the costs of briefing counsel for a final hearing and attending court on 3 November 2009. However, in my view the hearing had not ‘commenced’ for it to be ‘aborted’ or ‘discontinued’ and therefore the circumstances of this matter do not fall within the relevant provisions of the Act.

Conclusion

1. I find that no cost certificates should be granted and the applications are to be dismissed.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Pascoe CFM

Associate:  TH Nguyen

Date:  11 November 2009