McGowan & Hahn (No 3)
[2025] FedCFamC1F 78
•13 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
McGowan & Hahn (No 3) [2025] FedCFamC1F 78
File number: PAC 2445 of 2018 Judgment of: CHRISTIE J Date of judgment: 13 February2025 Catchwords: FAMILY LAW – Cost Orders- Where an applicant seeks to depart from the principle that each party bear their own costs – Where jurisdictional issues preclude the application of the respondent – Where the respondent seeks time to pay. Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia Act 2021(Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Colgate-Palmolive Co v CussonsPty Ltd (1993) 46 FCR 225
Hogan and Hogan (1986) FLC 91-704
McGowan & Hahn [2024] FedCFamC1F 418
Prantage & Prantage (2013) FLC 93-544
Division: Division 1 First Instance Number of paragraphs: 45 Date of last submissions: 31 January 2025 In Chambers: 13 February 2025 Place: Sydney Counsel for the Applicant: Mr Finch (direct brief) Respondent: Litigant in Person ORDERS
PAC 2445 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR MCGOWAN
Applicant
AND: MS HAHN
Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
13 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The respondent mother pay to the applicant father the amount of $8,354 as follows:
(a)On 1 March 2025 and the first of each of the following 22 months the sum of $350;
(b)On 1 February 2027 the sum of $304.
2.The Application in a Proceeding filed 22 July 2024 is otherwise dismissed.
3.The Response to an Application in a Proceeding filed 13 January 2025 is otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym McGowan & Hahn has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
On 24 June 2024 I made final parenting orders in this matter.
On 22 July 2004 the applicant father filed an Application in a Proceeding seeking costs of the final hearing accompanied by an affidavit.
On 1 August 2024 I dismissed an application by the respondent mother seeking a stay of the final parenting orders.
On 15 November 2024 this Court sitting in its Appellate division dismissed an Appeal filed by the mother.
On 13 January 2025 the respondent mother filed a Response to the Application in a Proceeding (“Response”) and affidavit.
CONSIDERATION
I begin by observing that the usual rule provides that each party bear his or her own legal costs. The usual rule may be displaced by one or more of the matters listed in s 117(2A) of the Family Law Act.
The applicant seeks indemnity costs in the first instance.
The matters the applicant relies upon to depart from the usual rule are the conduct of the respondent and the fact that she has been wholly unsuccessful in her application.
Even if the applicant establishes that one of the matters in s 117(2A) is demonstrated it does not follow that there will be a departure from the usual rule, it merely enlivens the discretion to depart from the usual rule. Costs may be ordered if “just in all the circumstances”: Hogan and Hogan (1986) FLC 91-704.
The applicant acknowledges that the financial circumstances of the parties are a relevant consideration. Notwithstanding the financial responsibility which the applicant has for the child the evidence allows me to find that he is in a stronger financial position than the respondent. I accept, however, that impecuniosity itself is not a bar to the making of a costs order.
Conduct
The applicant’s submissions say “[t]he mother’s conduct was reprehensible during the entire proceedings to the father and third parties.” This submission raises the question as to what s 117(2A) means when it uses the expression conduct. It is worthwhile setting out the precise words of the statute:
(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 particulars, discovery, inspection, directions to answer questions, admission of facts, production of documents and similar matters;
(emphasis added)
What arises is that the conduct is not conduct at large but conduct in relation to the proceedings. The examples given do not limit the conduct which can be taken into account provided it is “in relation to the proceedings”.
To the extent that the submissions on behalf of the applicant speak about conduct in respect of third parties it is not clear that this can have any relevance to consideration of apportionment of legal expenses as between the parties.
A distinction needs to be drawn between conduct which may be regarded as subjectively or even objectively unpleasant, distasteful or rude and conduct which has the effect of increasing the costs of litigation.
The respondent raised issue about the applicant’s conduct in her affidavit material – but I am not persuaded (in light of then ultimate outcome) that her complaints are relevant to the costs issue. In contrast, the manner in which the mother engaged in the trial, as discussed below, was productive of additional cost.
Wholly unsuccessful
The respondent sought an order that the parties’ daughter X live with her, that she have sole parental responsibility and that X spend supervised time with the applicant. The final orders provided that X live with the applicant, that he have sole parental responsibility and that X spend supervised time with the respondent (which may become unsupervised at the applicant’s election after X turns 12). The respondent was in a very real sense wholly unsuccessful.
Financial circumstances
The father is in full time paid employment. He has full time care of X. He does not receive child support. He is able to share expenses with his partner. He has another dependent. While his income is significant I accept that his expenses are equal to (if not in excess of) his income.
The mother’s evidence is that she has been in receipt of Centrelink benefits since March 2023.
The mother’s affidavit material asserts that she was owed arrears of child support prior to the making of final orders. The father disputes this. There is no independent document from the Child Support Agency establishing arrears. I am unable to make the finding the mother seeks.
A costs order was made by this Court sitting in its Appellate division on 15 November 2024. That order requires the respondent to pay the appellant $16,455.
The final orders dated 24 June 2024 oblige both parties to share equally in the ongoing costs of fortnightly supervision.
The mother’s financial position speaks strongly against the making of a costs order against her but as already identified mere impecuniosity is not a bar. Having had regard to the relevant matters in s 117(2A) I am of the opinion that there are circumstances justifying a modest costs order.
I am obliged to deal with the applicant’s contention that there should be an order for indemnity costs.
In Colgate-Palmolive Co v CussonsPty Ltd (1993) 46 FCR 225 at 233 (“Colgate-Palmolive”), Sheppard J stated:
4.…The tests have been variously put. The Court of Appeal in Andrews v Barnes (39 Ch D at 141) said the court had a general and discretionary power to award costs as between solicitor and client “as and when the justice of the case might so require”. Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston ([1982] 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo: “the categories in which the discretion may be exercised are not closed”. Davies J expressed (at 6) similar views in Ragata.
5.Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152 evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 ay 724 (Court of Appeal); Crisp v Kent (SC(NSW)(CA), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
In Prantage & Prantage (2013) FLC 93-544 the majority (Thackray and Ryan JJ, with whom Murphy J agreed) held that the principles set out by Sheppard J in Colgate-Palmolive were applicable to costs applications in this Court.
This was complex and lengthy litigation concerning parenting. The final reasons for judgment were critical of the respondent’s conduct but did not conclude that she had engaged in litigation for an ulterior purpose or that she had deliberately prolonged the litigation to gain an advantage. The proceedings required judicial determination and I am not satisfied that the particular facts and circumstances of this case warrant the making of an order for indemnity costs.
It follows that I need to consider what costs order would be “just” in the circumstances of this case.
The cross-examination and re-examination of the mother was lengthy. The mother commenced to give evidence on the afternoon of the second day of the trial and concluded re-examination on the morning of the fifth day of trial in a trial which took place over six days. As the submissions on behalf of the applicant identify, the manner in which the respondent gave evidence lengthened the hearing: see reasons McGowan & Hahn [2024] FedCFamC1F 418 at [10] – [22].
The father’s affidavit evidence says his total costs of the final hearing were $26,960.
Rule 12.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 provides that:
(1) The court may order that a party is entitled to costs:
(a)of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
(2)If costs are payable under the Family Law Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party and party basis.
(3) In making an order under subrule (1), the court may consider the following:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c)the rates ordinarily payable to lawyers in comparable proceedings;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre action procedures;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
In the circumstances of this case, which has involved lengthy litigation it is appropriate to order costs in a fixed sum. Doing the best I can having regard to the above findings it is just to make an order that the mother pay the father’s costs of the hearing in part. Given my conclusions about its having been protracted because of the mother’s conduct the father should have costs of 2 days for solicitor and counsel at scale.
Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 provides an hourly rate for the work of a solicitor. Allowing 7 hours for a day at the rate prescribed $276.33) the total amount for 2 days is $3,868.20. Counsel’s costs as per the schedule at the lowest rate would be $2,242.76 or a total of $4,485.52 for 2 days. The total amount is $8,354.
The mother’s Response said that in the event that costs were ordered she be permitted to pay in instalments over the next two years. The evidence establishes that this would be appropriate and I propose to make orders to facilitate same. Accordingly, she should pay the amount of $350 per month and a final instalment of $304.
Issues in Mother’s Response
In the mother’s Response to the father’s Application in a Proceeding seeking costs the respondent sought alternate relief.
Costs order in favour of Independent Children’s Lawyer (“ICL”)
A party may make an application for costs following the making of final orders within 28 days of the final orders or otherwise with leave of the Court. The applicant made such an application in time. The Respondent did not file a Response until 13 January 2025. In her Response the respondent sought the following orders:
1.That within 60 days the Applicant pay unpaid child support for the following periods:
a)$5,376.75 for the period of 1 March 2023 to 21 July 2023
b)$444.67 for the period of 22 July 2023 – 9 September 2023
c)$7,299.58 for the period 10 September 2023 – 16 January 2024
d)$5,193.91 for the period of 17 January 2024 – 21 April 2024
e)$3,037.10 for the period 22 April 2024 – 23 June 2024.
2.That Order 18 from 24 June 2024 Orders to pay $9,625 costs for Independent Children’s Lawyer be reversed.
3.If costs are awarded to the applicant, the order allows payments to be made over a more reasonable time, such as two years, given my financial hardship, and subject to gaining employment, the period of payment to be reduced.
As regards paragraph [2] of the mother’s Response – I made a final order on 24 June 2024. That final order included order [18] which reads:
Within 30 days the mother to pay the ICL costs in the sum of $9,625.
The Notice of Appeal filed by the mother on 22 July 2024 purported to appeal all orders. No submissions were directed to the costs order in favour of the ICL on appeal and the appeal was dismissed.
As the primary judge who made the original costs order my jurisdiction is exhausted and the respondent’s application must be dismissed.
Further, the application before the court was as between the applicant father and respondent mother. The relief the mother seeks is as against the ICL who is not a party to this application.
The application in respect of the ICL costs must be dismissed.
Child support issues
At paragraph [1] of the mother’s Response to Application in a Proceeding she sought the following orders:
1.That within 60 days the Applicant pay unpaid child support for the following periods:
a)$5,376.75 for the period of 1 March 2023 to 21 July 2023
b)$444.67 for the period of 22 July 2023 - 9 September 2023
c)$7,299.58 for the period 10 September 2023 - 16 January 2024
d)$5,193.91 for the period of 17 January 2024 - 21 April 2024
e)$3,037.10 for the period 22 April 2024 - 23 June 2024.
A substantive issue concerning enforcement of child support cannot be raised in response to a properly instituted costs application. There is an issue with jurisdiction.
Section 132 of the Federal Circuit and Family Court of Australia Act 2021 provides:
(1)The Federal Circuit and Family Court of Australia (Division 2) has original jurisdiction:
…
(d)as is conferred on the Court, or in respect of which proceedings may be instituted in the Court, by:
(i) the Child Support Assessment Act 1989; or
(ii) the Child Support (Registration and Collection) Act 1988.
Further, s 50 of the Federal Circuit and Family Court of Australia Act 2021 provides:
(1)A person must not institute family law or child support proceedings (other than appellate proceedings) in the Federal Circuit and Family Court of Australia (Division 1).
It follows that I do not have jurisdiction to hear and determine the relief sought by the respondent in paragraph [1] and it should be dismissed.
I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 13 February 2025
0
6
3