Melson & Divjak (No 2)

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Melson & Divjak (No 2) [2023] FedCFamC1F 134

File number: MLC 6164 of 2018
Judgment of: CARTER J
Date of judgment: 10 March 2023
Catchwords:  FAMILY LAW – COSTS – where indemnity costs are sought - where there are no exceptional circumstances such that it would be appropriate to make an indemnity costs order – where there are no circumstances that justify departing from the usual rule that each party bear his or her own costs save in relation to the application for a Recovery Order – costs ordered in an amount fixed  
Legislation:

Family Law Act 1975 (Cth) s 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Cases cited:

Anison and Anison (2019) FLC 93-908

Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225

D & D (Costs) (No. 2) (2010) FLC 93-435

Kohan and Kohan (1993) FLC 92-340

Limousin & Limousin (Costs) [2007] 38 Fam LR 478

Munday v Bowman (1997) FLC 92-784

Rice & Asplund (1979) FLC 90-725

Yunghanns v Yunghanns (2000) FLC 93-029
Division: Division 1 First Instance
Number of paragraphs: 65
Date of last submissions: 20 February 2023
Date of hearing: 6 December 2022
Place: Melbourne
Solicitor for the Applicant  Mr Michael Lipschutz
The Respondent Litigant in person
Counsel for the Independent Children’s Lawyer Mr Doug McLeod
Solicitor for the Independent Children’s Lawyer Victoria Legal Aid

ORDERS

MLC 6164 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR MELSON

Applicant
AND:

MS DIVJAK
Respondent

INDEPENDENT CHILDREN'S LAWYER

order made by:

CARTER J

DATE OF ORDER:

10 March 2023

THE COURT ORDERS THAT:

1.The mother pay the sum of $3,300 to the father by way of costs in relation to the Application in a Proceeding filed on 5 December 2022.

2.The Application in a Proceeding filed on 16 December 2022 in relation to costs 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).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 the pseudonym Melson & Divjak has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

JUSTICE CARTER:

INTRODUCTION

  1. Final orders were made in this matter on 6 December 2022. Those orders finalised the parties’ parenting dispute. By way of an Application in a Proceeding filed 16 December 2022, the applicant father (“the…

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Details
Case
[2023] FedCFamC1F 134
Decision Date

CaseChat Overview and Summary

In Melson & Divjak (No 2), the mother contested the father's application for costs under Section 117(2A) of the Family Law Act 1975 (Cth). The dispute arose from a history of allegations of sexual abuse against the father by the children, which were investigated and found to be unsubstantiated. The case involved complex family law issues, including the allocation of parental responsibility and the living arrangements for the children. The father's application for costs followed a lengthy and contentious final hearing that resulted in orders for the children to live with the father, with the mother's time initially suspended to allow for a smooth transition.

The central legal issue was whether the exceptional circumstances outlined in Colgate-Palmolive Company v. Ormsby justified the father's application for costs. This involved assessing the financial situation of both parents, the mother's impecuniosity, and the impact of any costs order on her ability to fulfill the court-ordered requirements, such as professional supervision and psychological support. The court had to balance the financial disparity between the parties and the mother's need to meet the costs associated with the court's orders.

The court found that the mother's financial situation, including her unemployment and the expenses related to professional supervision and psychological support, warranted a cautious approach to any costs order. The mother's lack of paid employment and her reliance on the father's financial assistance for her living arrangements suggested that a costs order could adversely affect her ability to provide for the children's needs. Consequently, the court decided not to make a costs order against the mother, considering the potential impact on the children's wellbeing.

The final orders of the court did not impose any costs on the mother, reflecting the court's consideration of her financial circumstances and the need to protect the children's welfare. The decision underscored the importance of ensuring that the children's best interests and wellbeing are prioritized, even in the context of a costs application.

Orders

Orders of the court

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Background

Background to the litigation

The mother opposes any order be made for costs. BACKGROUND Final orders made by McEvoy J on 19 August 2021 (“the 2021 final orders”) provided that X and Y born 2017 (“the children”), live with the mother and that the father spend time with the children in accordance with the regime set out in the orders. The orders were made largely by consent. In late 2021, the mother raised allegations that the father had sexually abused the children while in his care. The children were then interviewed by the Sexual Offences and Child Abuse Investigation Team (“SOCIT”) on in late 2021 and, at the mother’s request, for a second time in early 2022. No further action was taken as no disclosures were made by the children to SOCIT. During this period, the father filed a Contravention Application on 2 March 2022 due to a number of alleged contraventions by the mother. That Contravention Application filed on 2 March 2022 was subsequently withdrawn, as it became apparent a contravention hearing would not provide an appropriate forum to ventilate the issues in dispute. Further, both parties were seeking substantial and significant changes be made to the 2021 final orders. I note that the mother initially asserted she had a reasonable excuse not to provide the children to the father in accordance with court orders as he had subjected them to abuse. In those circumstances, the mother filed an initiating application seeking that the father have supervised time with the children on the basis she then said he presented an unacceptable risk to the children. The father in his response sought inter alia sole parental responsibility, and a change of residence. The matter was originally listed for a final hearing on 29 August 2022. However the mother and children contracted COVID-19 and the hearing was adjourned to 5 September 2022. The matter proceeded before me on 5 September 2022. It ran for four days. At the commencement of the final hearing, the mother resiled from her affidavit of 29 August 2022 and no longer asserted that the father was an unacceptable risk to the children. She instead sought the parties return to the care regime for the children as provided in the 2021 final orders. Orders were made by me on 2 December 2022, pursuant to which the children were to live with the father. The mother’s time was initially suspended, to enable the children to move into the father’s care without that process being disrupted. The children’s time with their mother was due to resume at the end of February 2023. The mother did not appeal my orders. The father’s Application in a Proceeding filed 5 December 2022 sought a recovery order in relation to the children. The children were due to be in the father’s care on 2 December 2022, being the day the final orders were made. However, the father was not well that day, and unbeknownst to the court the father had allowed the children to remain in the mother’s care. Over the course of the weekend the parties exchanged text messages in which the father sought the children come into his care on Monday 5 December 2022.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The father maintains that these matters equate to exceptional circumstances as understood in Colgate-Palmolive Company. THE CONSIDERATIONS PURSUANT TO SECTION 117(2A) The father is engaged in employment in his sister’s business, earning a modest income. He is a co-owner of a property in Suburb FF together with his sister and mother. At trial, the mother was employed as a scientist. She was earning $165,000 per annum. However, the mother said she only held that paid position for four months, before taking unpaid leave in around mid-2022 to concentrate on these proceedings. She said that since late 2022 she has been unemployed. The mother’s annexure containing her Centrelink Employment Separation Certificate confirms that her employment ceased in late 2022. In her written submissions the mother said she lives in a flat in Suburb Q, purchased by her father, but held in her name, on trust, although it also appeared from her oral submissions that it was her property and she had to pay her father. In her written submissions, the mother said she pays a nominal amount of $300 per week to her father in rent, and that she is in rental arrears in regard to these payments. The quantum of alleged rental arrears was not clarified. In her oral submissions the mother asserted the value of the Suburb Q property has fallen since its purchase in 2021. She said between the amount owing on the mortgage of approximately $250,000 and the amount of $70,000 contributed by her father towards the purchase (which she said she must repay) there is minimal equity in the property. She further said that she must begin making repayments to her father by way of five lump sum payments of $14,000 commencing in July 2023. She said she did not have the financial resources to meet that obligation. It was implicit in those submissions that the property is not being held on trust for her father. The mother did not adduce evidence to support any of these assertions regarding the property in her name. As observed her written and oral submissions regarding ownership of that property did not seem easily reconcilable. Impecuniosity is, of course, not necessarily a bar to a costs order being made. However, in my view I must take into account that the mother has been required to meet the costs of professional supervision pursuant to the orders I made on 2 December 2022. Additionally, she was ordered to engage with an appropriately qualified psychologist at her expense with a view to her being assisted to understand the reasons behind the orders I made, and the potential impact of the repeated abuse allegations on the children’s sense of safety and security, and the impact on them as a result of experiencing disruptions to, and the undermining of their relationship with their father. In circumstances where the mother does not appear to be in paid employment, I have some concerns that a costs order would impact on her ability to meet the costs of supervision or her ability to meet the costs of psychological support. If those matters are not attended to, this could have an impact on the children’s wellbeing.