Melton & Hurley (No 2)
[2017] FamCA 759
•25 September 2017
FAMILY COURT OF AUSTRALIA
| MELTON & HURLEY (NO 2) | [2017] FamCA 759 |
| FAMILY LAW – COSTS – Where the applicant father made an application for costs against the respondent mother – Where the mother opposes the application for costs – Where the mother in response seeks her costs of the father’s application for costs to be paid by the father – Where the father submits the conduct of the mother warrants an order for costs – Where the father failed to produce any evidence that legal costs were incurred in the amount claimed or at all – Where the Court was not persuaded to make an order in this case – Where the applications for costs are dismissed. | |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) | |
| Cachia v Hanes [1994] 179 CLR 404 Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 FamLR 123 Hawkins & Roe [2012] FamCAFC 77 I and I (No 2) (1995) FLC 92-625 at 81,277 | ||
| APPLICANT: | Mr Melton | |
| RESPONDENT: | Ms Hurley |
| INDEPENDENT CHILDREN’S LAWYER: | Arlene Gomes |
| FILE NUMBER: | BRC | 503 | of | 2013 |
| DATE DELIVERED: | 25 September 2017 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Carew J |
| HEARING DATE: | In chambers |
REPRESENTATION
| FOR THE APPLICANT: | Self-represented |
| SOLICITOR FOR THE RESPONDENT: | Rice Naughton McCarthy |
Order
(1)The applications for costs are dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Melton & Hurley (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 503 of 2013
| Mr Melton |
Applicant
And
| Ms Hurley |
Respondent
REASONS FOR JUDGMENT
This is an application for costs arising out of a contested parenting trial heard by me over five days in April 2017. Judgment was delivered on 25 May 2017.
Mr Melton filed an Application in a Case on 21 June 2017 in which he seeks an order that Ms Hurley pay his costs of and incidental to the proceedings and that his costs be paid on an indemnity basis or alternatively on a standard basis.
On 27 June 2017 I made the following order in chambers:
1)In the event that the parties are unable to agree in writing within 21 days of today what costs Order, if any, might be made regarding the costs of and incidental to the Initiating Application filed by the father on 22 December 2014:
2)Each party file within a further 14 days written submissions in respect of that issue; and
3)Unless either party otherwise therein contends to the contrary, that issue be determined in chambers without the necessity of further appearance by either party.
4)In the event that the parties reach agreement in writing on the issue of costs, they be at liberty to file jointly, minutes of consent via e-mail to the Associate to Justice Carew.
According to Ms Hurley’s submissions she did not receive a copy of the order made in chambers until 18 July 2017 and was not served Mr Melton’s Application for costs until 27 July 2017. I note that on the face of the Application in a Case the hearing is stated to be ‘in chambers’.
Mr Melton had not filed any submissions to support his application although in his Application he did file an affidavit in which he stated among other things:
… I seek costs, and directions to allow time to file a detailed affidavit and further material in respect of this, such as argument and submissions.
No further material had been filed by Mr Melton despite my order for that to occur.
Ms Hurley filed a Response to the Application in a Case on 1 August 2017 supported by an affidavit and submissions. She resists the Application for costs and cross-applies for her costs of the Application filed 21 June 2017.
On 11 August 2017 the matter was listed before me for further mention and I made the following further order:
1)The Applicant Father file and serve any further affidavit material in support of his application for costs filed on 21 June 2017 and written submissions in support of that application within 7 days of today (18 August 2017).
2)That the Respondent Mother file and serve any further material in response within a further 7 days (25 August 2017).
The father did not file any further affidavit material but did file written submissions on 18 August 2017 in which he purported to rely upon the reasons for judgment delivered 25 May 2017; transcript of proceedings and all material filed in the case.
The mother filed further submissions on 25 August 2017.
How costs applications are determined
In this jurisdiction parties are generally required to bear their own costs.[1] However, where justifying circumstances exist, s 117(2) of the Family Law Act 1975 (Cth) (“the Act”) empowers the Court to make such order for costs as the Court considers just.
[1] Section 117(1) Family Law Act 1975 (Cth)
In the exercise of that discretion regard must be had to the factors set out in s117(2A) of the Act, so far as they are relevant.
Those factors are as follows:
a)the financial circumstances of each of the parties to the proceedings;
b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
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 pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
g)such other matters as the court considers relevant.
No one factor has more weight than any other nor is it necessary for more than one factor to be present.[2]
[2] see Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 FamLR 123 at 130
When discussing the subparagraphs in s 117 the High Court in Penfold v Penfold[3] said:
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in “a clear case”.
[3] [1980] HCA 4; (1980) 144 CLR 311 at 315
When considering what specific order to make, Rule 19.18 of the Family Law Rules 2004 (Cth) (“the Rules”) empowers the Court to make an order:
a)of a specific amount;
b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
c)to be calculated in accordance with the method stated in the order; or
d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
In considering what specific order should be made the same Rule provides that the Court may consider any of the following factors:
a)the importance, complexity or difficulty of the issues;
b)the reasonableness of each party's behaviour in the case;
c)the rates ordinarily payable to lawyers in comparable cases;
d)whether a lawyer's conduct has been improper or unreasonable;
e)the time properly spent on the case, or in complying with pre-action procedures; and
f)expenses properly paid or payable.
The term ‘costs’ is not defined in the Act but the Dictionary to the Rules provides that:
Costs means an amount paid or to be paid for work done by a lawyer, and includes expenses.
The term ‘expenses’ is also defined in the Dictionary to the Rules:
Expense means an amount paid to a third party, other than a lawyer, for work done in a case or services provided for a party.
In Stephens& Stephens[4] the Full Court observed:
67. We also observe that in Re JJT; Ex parte Victoria Legal Aid[1998] HCA 44; (1998) 195 CLR 184 the majority of the High Court (Gaudron, Gummow, Hayne and Callinan JJ, Kirby J dissenting) held that s 117(2) of the Act referred to costs in the conventional sense and thus to the payment by one party to litigation of money by way of a partial indemnity for professional legal fees and expenses actually incurred by another party in the course of the litigation: see Hayne J at 219. An order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature. Costs are not a penalty or damages: Latoudis v Casey[1990] HCA 59; (1990) 170 CLR 534 per Melton CJ at 543 and McHugh J at 567; Ruddock and Ors v Vadarlis and Ors(2001) 188 ALR 143 per Full Court of the Federal Court at [12] and Brott and Joachim [2006] FamCA 256; (2006) FLC 93-259 per Full Court (Holden, Warnick and Boland JJ) at 80,403-404.
[4][2010] FamCAFC 172; (2010) 44 Fam LR 117
A self-represented litigant may be able to recover certain out of pocket expenses incurred in relation to the conduct of the proceedings. The Full Court in Oscar & Traynor[5] reviewed a number of authorities and noted the following:
[5][2008] FamCAFC 158 and see also the High Court decision Cachia v Hanes [1994] 179 CLR 404
85. There has been considerable case law since Cachia v Hanes, much of which is unreported, dealing with claims for recovery of “expenses” as “costs”. Those expenses which have been found to be properly recoverable include:
a. court fees (see, for example, the discussion of the Full Court in B and P [2000] FamCA 392 at [50]; and also the Family Law Regulations 1984, reg 11(6)(b));
b. transcript costs, on the basis that they cannot also be claimed as costs in connection with the trial (see, for example, the discussion of the Full Court in W (deceased) and W and Ors [2004] FamCA 319 at [41]);
i.expenses for serving documents (see, for example, Winter v Fleeton[2002] WASCA 73 at [23]);
a.freedom of information fees (see, for example, Pittwater Council v Bolitho[2007] NSWLEC 355 at [159]);
b.fees for searching registers, such as an ASIC search fee (see, for example, Re Sullivan and Department of Industry, Science and Technology(1998) 51 ALD 767 at [45]);
c.appeal book binding (see, for example, Winter v Fleeton[2002] WASCA 73 at [23]);
d.disbursements incurred by a litigation guardian (see, for example, Step v Northern Territory [2007] NTCA 6; (2007) 20 NTLR 141); and
e.incidental expenses in relation to photocopying, postage and telephone and facsimile transmissions (see, for example, Shephard v Blueberry Farms of Australia (Corindi) Ltd [2001] FMCA 2; (2001) 162 FLR 339 at [66]; Cary v Owners of Strata Plan No. 7241[2002] FMCA 18).
86. There are, of course, also many cases in which a litigant has been awarded costs relating to the legal advice obtained in preparation for a hearing, although they did not have legal representation at the hearing itself.
87. Expenses which have been held not to be recoverable include:
a.travelling costs (see, for example, the discussion of the Full Court in W (deceased) and W and Ors (supra at [49]); and also Farquar and Farquar (No 2) [2008] FamCA 682; Cachia v Hanes (supra) at p 417);
b.parking costs (see, for example, H & H[2006] FamCA 257 at [9]); and
i.meals (see, for example, Maronis Holdings Ltd v Nippon Credit Australia Ltd[2002] NSWSC 838 at [14]).
A court will not lightly make an order for costs to be paid on an indemnity basis. There would need to be some circumstance of an exceptional nature to justify that course.[6]
[6] Kohan & Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; Yunghanns v Yunghanns (2000) FLC 93-029
The Full Court in Prantage & Prantage[7] discussed the meaning of ‘indemnity costs’ and said:
16. Before discussing the merit of the appeal, we should state our understanding of the meaning of the expression “indemnity basis”.
17. Although the Explanatory Guide to the Family Law Rules 2004 (“the Rules”) is not formally part of the Rules, we accept as accurate its definition of “indemnity basis” when applied to a costs order as being:
an entitlement to costs , including costs under a costs agreement, for all costs incurred, other than costs that are unreasonable in amount or that have been incurred unreasonably.
[7][2013] FLC 93-544
the father’s submissions
In his written submissions Mr Melton seeks an order that Ms Hurley pay his legal costs:
1)Fixed in the amount of $69,482; or in the alternative
2)To be assessed on an indemnity basis; or in the further alternative
3)To be agreed and if not agreed within 14 days to be taxed on the ordinary scale of costs set out in schedule 3 of the Act.
In his written submissions Mr Melton relies on the following matters as justifying a costs order in his favour:
a)Ms Hurley has conducted a “nasty, malicious and dishonest campaign” since their child was born and has attempted to obtain money from him by threat and to prevent the child from having a meaningful relationship with him;
b)Ms Hurley gave evidence during the trial that she was employed part time on a salary of $26,000 but had managed to pay $250,000 in her own legal costs;
c)Reliance cannot be placed on her evidence of impecuniosity given the credit findings made against her in proceedings in this Court and in the Magistrates Court at Suburb II;
d)Ms Hurley was not in receipt of legal aid;
e)She was wholly unsuccessful in the proceedings;
f)The credit findings against Ms Hurley and the impact of her behaviour on the child;
g)The failure of Ms Hurley to comply with court orders.
Mr Melton provides a schedule of the costs sought as follows:
Solicitor O’Sullivans Law Firm (amount billed to date and understated)
$22,322
Counsel GN Gunn
$39,600
Wages foregone
$5,400
Costs of Ms L supervision
$2,160
Total
$69,482
His schedule is not supported by any evidence.
the mother’s submissions
Ms Hurley resists any order for costs and relies on the following matters:
a)Mr Melton has not provided any evidence to support his claim that he has incurred legal costs e.g. no invoice, retainer, bank statement, receipt;
b)Mr Melton was self-represented as and from 14 December 2016 and as a consequence could not be said to have incurred legal costs in relation to the substantive preparation for trial or at the trial;
c)There is no basis for the father to seek ‘costs’ for foregone wages or reimbursement for supervision fees;
d)It is rare to make a costs order in parenting proceedings;
e)No criticism can be made of Ms Hurley’s conduct during the course of the proceedings. Her case was presented appropriately by her legal representatives;
f)It cannot be said that Ms Hurley’s case was vexatious within the meaning of s 102QB; without merit given the findings as to the strength of the relationship and dependence of the child on Ms Hurley [326] of the Reasons for Judgment; the maternal grandmother being a significant person in the child’s life [327]; the difficulty inherit in the parenting decision [324]; the ambiguous evidence from the experts as to the appropriate outcome; the ICL did not detail her position until the conclusion of the trial;
g)The proceedings were not necessitated by a failure by Ms Hurley to comply with previous orders;
h)Ms Hurley is of limited means and a costs order would require her to sell her unit;
i)It is not the purpose of an indemnity costs order or indeed any order to send a “condign message”.
Ms Hurley includes in her written submissions that she has had to bring a Contravention Application since the conclusion of the proceedings. I do not regard that as a relevant matter in considering this costs application.
Ms Hurley deposes to having incurred legal costs of approximately $250,000 in the proceedings. In meeting those costs Ms Hurley states that she has:
a)Exhausted any savings she had;
b)Borrowed monies against her unit property, including to meet credit card debt;
c)Relied upon loans from her brother and sister and their respective families which she intends to repay;
d)Been assisted by her parents who had access to their superannuation entitlements; and
e)As a consequence suffered significant economic and emotional stress.
No separate submissions are made in relation to Ms Hurleys’ application for costs against the father.
discussion
Although self-represented Mr Melton has a right to seek an order for legal costs actually incurred by him in the preparation of his case or for certain out of pocket expenses. He is not entitled to recover loss of wages while attending court or fees associated with supervision of his time with his daughter.
While I accept that a costs order may rarely be made in a parenting matter[8] any suggestion that there might be some extra hurdle to overcome in a costs application arising out of parenting proceedings is contrary to authority.[9]
[8]Hawkins & Roe [2012] FamCAFC 77
[9]I and I (No 2) (1995) FLC 92-625 at 81,277
As to the financial circumstances of each party, Mr Melton was working full time as a painter at the time of the trial and his de facto partner was working full time as a teacher aide. Ms Hurley was working part time as a medical receptionist although there does not appear to be any reason why she could not work full time. She deposes to having incurred significant legal costs and to owing family members for money lent to her for that purpose.
It is of course well established that impecuniosity is not, of itself, a bar to a costs order.[10]
[10]Lenova & Lenova (Costs) [2011] FamCAFC 141
Neither party was in receipt of legal aid for the proceedings.
Mr Melton represented himself but contends that he has spent about $98,000 on legal costs and could not afford legal representation at trial. Unfortunately, no evidence was provided to support his assertion that he has incurred any legal costs.
In the course of rejecting Ms Hurley’s claim that Mr Melton posed an unacceptable risk of harm to the child I made a number of findings against the mother, including:
a)The mother has used the child in the process of proving her case not caring what impact this might have on the child;
b)The mother has turned on those who do not support her allegations;
c)The mother provided information to professional witnesses that was unreliable, exaggerated or untrue;
d)The mother embarked upon a mission to manufacture evidence against the father and in the process emotionally abused the child;
e)The mother embarked on a campaign to remove the father from the child’s life;
f)The mother’s claim that she held a genuine belief that the father had sexually abused the child was rejected;
g)The mother exposed the child to repeated investigations in order to gather evidence against the father;
h)The mother’s enmity of the father took priority over the best interests of the child.
While those findings might support a costs order being made I am ultimately not persuaded to make an order in this case. Mr Melton has failed to produce any evidence that legal costs were incurred in the amount claimed or at all. In the absence of making an order for a specified sum the parties would have to engage in further court proceedings to have a quantum determined. I do not consider that further litigation should be encouraged.
I do not propose to make an order that the father pay the mother’s costs of responding to his application for costs.
Accordingly I propose to dismiss the applications for costs.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 25 September 2017.
Associate:
Date: 25 September 2017
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