Metaxas & Sargent (No 2)
[2022] FedCFamC1F 238
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Metaxas & Sargent (No 2) [2022] FedCFamC1F 238
File number(s): MLC 10093 of 2018 Judgment of: MCEVOY J Date of judgment: 13 April 2022 Catchwords: FAMILY LAW – COSTS – Circumstances justifying costs order – Where mother seeks indemnity costs against the father or alternatively costs on scale – Where the mother’s financial position is more parlous than the fathers – Where the father’s conduct prior to and during the trial put the mother to additional cost and inconvenience – Where the mother made an offer of settlement to the father on the day prior to trial – Where the final orders made differed to the mother’s offer in two key respects and so it cannot be said the mother did as well or better at trial – Where the circumstances are not so exceptional as to warrant an order for indemnity costs – Where an order for costs on scale is made – Where the scale under Sch 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) applies, not the scale under Sch 3 of the Family Law Rules 2004 (Cth) Legislation: Family Law Act 1975 (Cth) s 102NA and s 117
Family Law Repeal Rules2021 (Cth) sch 1
Family Law Rules 2004 (Cth) sch 3
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) sch 3 and r 12.17
Federal Circuit and Family Court of Australia, Practice Direction – Transitional Arrangements, 1 September 2021
Cases cited: Baum & Lokare (No 2) [2019] FamCA 292
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) Fam LR 123; [2005] FamCA 158
Hogan & Hogan (1986) FLC 91-704
I & I (No.2) (1996) FLC 92-62
In the Marriage of Kohan (1993) FLC 92-340; [1992] FamCA 116
Kelly & Kelly (No.2) (1981) FLC 91-108
Metaxas & Sargent [2022] FedCFamC1F 97
Moy & Pao [2022] FedCFamC1A 17
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Stasiuk & Guild [2021] FamCAFC 62
Wrenstead v Eades (2016) FLC 93-697; [2016] FamCAFC 46
Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: Division 1 First Instance Number of paragraphs: 40 Date of last submission/s: 18 March 2022 Date of hearing: On the papers Place: Melbourne ORDERS
MLC 10093 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SARGENT
Applicant
AND: MR METAXAS
Respondent
ORDER MADE BY:
MCEVOY J
DATE OF ORDER:
13 APRIL 2022
THE COURT ORDERS THAT:
1.Pursuant to rule 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), within 90 days of the date of these orders the father pay to a nominated bank account of the mother:
(a)the mother’s costs for the preparation of the final hearing for the period 25 March 2021 to 8 June 2021 in accordance with scale fixed in the amount of $10,639.65; and
(b)the mother’s costs of the final hearing for the period 9 June 2021 to 11 June 2021 in accordance with scale fixed in the amount of $9,647.45.
2.The father’s Response to an Application in a Case filed 18 March 2022 be 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 Metaxas & Sargent has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCEVOY J:
INTRODUCTION
On 3 March 2022 the Court made final orders and published reasons in the matter of Metaxas & Sargent [2022] FedCFamC1F 97 (“Metaxas”). Ms Sargent (“the mother”), has sought her costs of the proceedings pursuant to s 117(2) of the Family Law Act 1975 (Cth) (“the Act”) and r 12.17(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the 2021 Rules”). In an Application filed on 10 March 2022 she seeks orders that Mr Metaxas (“the father”) pay her costs of preparation for the final hearing and the final hearing itself, either on an indemnity basis or alternatively in accordance with scale.
For the reasons which follow there will be an order that the mother have her costs of preparation for the final hearing and her costs of the final hearing itself in accordance with scale under the 2021 Rules, fixed in the amounts of $10,639.65 and $9,647.45 respectively. These costs are to be paid within 90 days of the date of the order.
MATERIAL RELIED ON
The mother relied upon the following material:
(a)her Application in a Proceeding and affidavit in support filed and sworn 10 March 2022;
(b)brief submissions with respect to costs filed 10 March 2022;
(c)the Court’s reasons for judgment dated 3 March 2022;
(d)father’s financial statement filed 3 February 2021;
(e)father’s written submissions with respect to costs filed 23 July 2021;
(f)her affidavit filed and sworn 2 July 2021 and exhibits in support; and
(g)her written submissions with respect to costs filed 2 July 2021.
The father relied upon the following material:
(a)his Response to Application in a Proceeding filed 18 March 2022;
(b)brief submissions with respect to costs filed 18 March 2022;
(c)the Court’s reasons for judgment dated 3 March 2022;
(d)Independent Children’s Lawyer’s (“ICL”) Outline of Case filed 8 June 2021;
(e)his Outline of Case filed 2 June 2021; and
(f)his financial statement filed 3 February 2021.
ORDERS SOUGHT BY THE PARTIES
The mother seeks costs on an indemnity basis in the fixed sum of $11,901.57 for the period 25 March 2021 to 8 June 2021 relating to the preparation of the final hearing, as well as in the fixed sum of $15,365 for the period 9 June 2011 to 11 June 2021, that being the final hearing itself.
In the alternative, the mother seeks costs on scale in the fixed sum of either $10,335.19 (calculated in accordance with Sch 3 of the Family Law Rules 2004 (Cth) (“the 2004 Rules”) or $10,636.65 (calculated in accordance with Sch 3 of the 2021 Rules) for the period 25 March 2021 to 8 June 2021 relating to the preparation of the final hearing. She also seeks her costs of either $12,421.54 (in accordance with the 2004 Rules) or $12,802.85 (in accordance with the 2021 Rules) for the period of the final hearing. She seeks that the costs be paid within 60 days.
The father’s primary position is that there should be no order for costs at all. Alternatively, if costs are awarded against him on a scale basis, the father seeks that the costs are awarded in the fixed sum of $8,988.99 (in accordance with the 2004 Rules) for the period of 25 March 2021 to 8 June 2021 relating to the preparation for the final hearing, as well as $8,559.52 (in accordance with the 2004 Rules) for the period of the final hearing. Were a costs order to be made he would seek that the costs be paid within 120 days of the date of the order.
THE EVIDENCE
The mother filed an affidavit in support of her Application dated 10 March 2022. Her position in substance is that the father’s conduct is such as to justify a departure from the usual rule in s 117(1) of the Act that each party pay their own costs. She relies on her financial position relative to his, and the attempts she made to compromise the proceedings.
The father’s position is that the usual rule in s 117(1) of the Act should prevail. Amongst other matters he purports to rely on the parties’ respective financial positions, and an argument that the conduct of the mother in the proceedings has been unsatisfactory.
Financial position of parties
The mother claims that her financial position is more parlous than that of the father. She is currently unemployed and has commenced studying a tertiary degree which will take approximately six years to complete. She is on government support and receives social security payments, as well as a small amount of tax benefit and rental assistance. She owns 50 per cent of one property, in which her equity is approximately $92,000. Whilst the mother is hoping to gain casual employment in the near future, she estimates that she will only be able to earn around $24,000 per annum. Additionally, she notes that the father is in arrears of $19,35.28 with respect to child support payments owing to her.
The mother contends that the father’s financial position is significantly better than hers. She notes that he appears to have had stable employment since at least 2018 and that his provisional annual income for 1 July 2022 until 18 December 2022 is estimated to be $180,392, while her provisional income for this same period is $24,269. Further, she notes that he owns six properties, which she estimates have the capacity to bring in approximately $3,000 of rental income per week, and in which she says the father’s own evidence suggests his equity is at a minimum $2,060,000. The mother submits that the father’s equity is in fact around $4.3 million.
The father submits that his financial position is not as strong as the mother suggests. He says that he had limited capacity to work and earn wages from 2017 to 2019. In 2017 he says that he did not work so that he could be the child primary carer while the mother continued to work. He says that in 2018 and 2019 he was only able to work for 9 months and 6 months respectively, due to his police record. The father was also legally aided during the trial, although it is to be noted that this was pursuant to a s 102NA order and was not means tested.
The father also contends that his investment properties have remained mostly empty due to the COVID-19 pandemic, meaning that he has not received much rental income whilst still needing to meet the associated expenses. He notes that the value of all the properties he owns is accurately included in his financial statement filed 3 February 2021 at $3,713,200. Additionally, the father notes that the mother has not filed her financial statement in accordance with the orders of 28 October 2020. He says that the parties’ financial positions cannot be compared and should not be taken into consideration when determining the question of costs.
Conduct of the parties at trial
The mother submits that there should be a departure from the usual position by reason of the credibility and conduct of the father during the final hearing. She notes that he was frequently argumentative and hostile, whereas she was found by the Court to be a truthful witness. She further contends that the father did not run a reasonable case at trial.
The father says that the mother’s actions caused significant delays to the trial, and contributed to the February 2021 hearing date being adjourned to June 2021. He says that she failed to book a required supervisor session on 14 February 2021 and also refused to pay the cancellation fees until an Application in a Case was brought by him in relation to this, thus causing unnecessary delays.
As will be apparent from the Court’s reasons for judgment in Metaxas, the mother’s observations about the father’s conduct at the trial are accurate. The father’s behaviour both prior to the trial and during the course of the trial put the mother to additional cost and inconvenience. As was found, his evidence was lacking in credibility. The father’s observations about the mother’s conduct are substantially without foundation.
Attempts to settle
The mother attempted to settle the matter with the father prior to the final hearing in a letter of offer dated 8 June 2021. The substance of this offer was that the child could spend supervised time with the father on six occasions per year. No age or time limit was put on this offer of supervised time.
The mother submits that the final orders made by the Court on 3 March 2022 were not significantly better than her offer of 8 June 2021. She says that the final orders made are closer to the orders she proposed than those proposed by the father. She submits that the orders the Court made are essentially in the terms of her offer of 8 June 2021.
The father says that the mother’s offer of 8 June 2022 was materially different to the resolution he proposed, which closely aligned to the proposals of the ICL at the time. Thus the father says that it would not have been logical for him to accept the mother’s 8 June 2021 offer.
Basis for claiming indemnity costs
The mother submits that an order for costs should be made on an indemnity basis by reason of the father’s refusal to compromise (demonstrated both in the final hearing and in his refusal to accept the mother’s offer prior to trial) as well as his continual pursuit of a case with no merit. The father’s position is that the circumstances are not sufficiently exceptional to justify an award of indemnity costs.
Legal fees incurred
The mother’s total legal fees incurred in the period for which she now seeks indemnity costs comprise:
(a)$11,901.57 for the period of 25 March 2021 to 8 June 2021; and
(b)$15,365 for the period of 9 June 2021 to 11 June 2021.
Under Sch 3 of the 2004 Rules, the mother calculates her legal costs incurred to be:
(a)$10,335.19 for the period of 25 March 2021 to 8 June 2021; and
(b)$12,421.54 for the period of 9 June 2021 to 11 June 2021.
Alternatively, the mother calculates her legal costs incurred under Sch 3 of the 2021 Rules to be:
(a)$10,636.65 for the period of 25 March 2021 to 8 June 2021; and
(b)$12,802.85 for the period of 9 June 2021 to 11 June 2021.
Taking exception to certain of the mother’s calculations, the father calculates these same costs (under Sch 3 of the 2004 Rules) to be:
(a)$8,988.99 for the period of 25 March 2021 to 8 June 2021; and
(b)$8,559.52 for the period of 9 June 2021 to 11 June 2021.
It will be necessary to return to the issue to the mother’s calculations.
It is to be noted that the sum of $10,636.65 for the period of 25 March 2021 to 8 June 2021 reported in the mother’s Application does not align with the sum reported in her submissions where the costs are broken down into individual amounts. I am satisfied that the correct total for this period should be $10,639.65, as reported in her submissions dated 10 March 2022.
THE STATUTORY REGIME AND RELEVANT PRINCIPLES
The general rule under the Act of course is that parties to proceedings shall each bear their own costs, unless there are circumstances which justify the court departing from that general rule: s 117(1) of the Act.
Subject to the requirement that any costs order must be just, the court has a broad discretion in relation to costs: Kelly & Kelly (No.2) (1981) FLC 91-108; Hogan & Hogan (1986) FLC 91-704; I & I (No.2) (1996) FLC 92-62. Section 117(2) of the Act provides that if, in proceedings under the Act, the court is of the opinion that there are circumstances that justify it in doing so, the court may, subject to ss 117(2A), 117(4), 117(4A), 117(5) and 117(6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Accordingly, a party seeking that the court make a costs order must establish that the justice of the case requires an order for costs by reference to the non-exhaustive list of statutory considerations set out in s 117(2A) of the Act before such an order is made: Baum & Lokare (No 2) [2019] FamCA 292 at [10] (“Baum”); Penfold v Penfold (1980) 144 CLR 311 at 315 (“Penfold”). However as McClelland DCJ observed in Baum, (citing Penfold), “it is not the case that a costs order can only be made in what has been described as a ‘clear case.’” In Wrenstead v Eades (2016) FLC 93-697 at [15] the Full Court reiterated this position, noting that as long as there is an essential preliminary finding that there are justifying circumstances to make a costs order, there is no additional or special onus which the applicant needs to be establish in order to obtain an order for costs. In relation to the conduct of a party to the proceedings, see also Baum at [18].
Any one, or any combination, of the considerations in s 117(2A) of the Act can be matters on the basis of which the court could make a costs order. Whilst the considerations must be taken into account, there is nothing to prevent any factor being the sole foundation for an order for costs being made: Baum at [11]; Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) Fam LR 123 at [41].
If a costs order is to be made, the usual approach of the court is that it will not lightly depart from the ordinary rules relating to costs between party and party. An order for costs on an indemnity basis is only made in exceptional circumstances: In the Marriage of Kohan (1993) FLC 92-340 (“Kohan”); Yunghanns v Yunghanns (2000) FLC 93-029 at [30]; Stasiuk & Guild [2021] FamCAFC 62; Moy & Pao [2022] FedCFamC1A 17 at [29]. In relation to the power of the court to make orders for indemnity costs, the Full Court in Kohan observed at 79,614 as follows:
[T]he Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind. See Degmam v. Wright (No. 2) “(supra); Wentworth v. Rogers (No. 5) (1986) 6 NSWLR 534; Hobartville Stud v. Union Insurance Co. (1991) 25 NSWLR at 368 to 370.
Indemnity costs orders are still an exception in this and other jurisdictions.
DETERMINATION
Indemnity costs
In all of the circumstances I do not consider that an award of indemnity costs in the mother’s favour would be appropriate. While the final parenting orders of 3 March 2022 were made in the terms substantially proposed by the mother, her letter of offer of 8 June 2021 proposed a settlement which differed to the final orders made in two key respects. First, the father was allowed an additional three supervised visits per year for special occasions. Secondly, these supervised visits are only to occur until the child attained the age of 12 years. It cannot be said, therefore, that the mother did as well or better at the trial than she had offered prior to the commencement of the trial. Notwithstanding aspects of the father’s conduct prior to and during trial, I am satisfied that the circumstances are not sufficiently exceptional to warrant an indemnity costs order.
Costs on scale
However, I accept the mother’s submission that in relation to the preparation for the final hearing and the final hearing itself, there is justification for a departure from the usual rule that the parties shall bear their own costs. I am satisfied that the conduct and attitude of the father prior to and during trial left much to be desired: s 117(2A)(c) of the Act. The Court’s reasons for judgment of 3 March 2022 describe aspects of the father’s conduct which were less than satisfactory. Additionally, I accept that the mother’s financial position is more parlous than the father’s, and that s 117(2A)(a) and s 117(2A)(b) of the Act should not stand in the way of a costs order in her favour.
Insofar as the applicable rules of the Court are concerned, the 2004 Rules were repealed by Sch 1 of the Family Law Repeal Rules2021 (Cth), with the 2021 Rules coming into effect from 1 September 2021. As the current Application was lodged by the mother on 10 March 2022, after the 1 September 2021 transitional date, the 2021 Rules are of application. See also the Federal Circuit and Family Court of Australia, Practice Direction – Transitional Arrangements, 1 September 2021 at [1.4].
Turning then to the father’s challenges to the mother’s costs on scale, I am not satisfied that his complaint in relation to undertaking title searches is made out. Nor do I consider, however, that much turns on the point. Accordingly, I am prepared to accept the mother’s stated costs incurred on this activity.
Secondly, the father challenges the mother’s costs on scale on the basis that the Family Report only consists of 9,568 words rather than 18,512 words, as the mother claims. However, there are two Family Reports issued in the matter, one dated 10 September 2020, and the other dated 20 May 2021. Together they amount to approximately 19,115 words. I am satisfied that both Family Reports would have needed to be read in conjunction with one another and as such, I accept the costs stated by the mother as incurred in this activity.
Finally, the father challenges the mother’s costs on scale on the basis of the amount attributable to her counsel. He says that counsel for the mother should be categorised as ‘junior counsel’, rather than ‘senior counsel,’ and the claimed costs should be reduced accordingly. The mother’s position is that her counsel is sufficiently senior to justify the upper end of the range. The mother’s counsel is junior counsel, so this scale ought to be applied. However, the experience of counsel for the mother is such that I am satisfied that the upper range of the ‘junior counsel’ scale would be appropriate. The costs set out in the Court calculation column in the table below, based on Sch 3 of the 2021 Rules, rather than Sch 3 of the 2004 Rules, are the costs to which the mother is entitled for her counsel’s fees.
RELEVANT PERIOD SPECIFIC WORK UNDERTAKEN 2021 FAMILY COURT SCALE: NUMBER AND AMOUNT DIFFERENCE Mother calculation Court calculation 25 March 2021 to
8 June 2021Barrister expenses: appearance fee (hearing 31 May 2021) Item 203: Attendance at hearing (less than 3 hours) = $450 Item 203: Attendance at hearing (less than 3 hours) = $450 Nil Meeting with client in preparation for final hearing Item 201 at $424.49 per hour. Total for 1.5 hours = $636.73 Item 201 at $424.49 per hour. Total for 1.5 hours = $636.73 Nil Total barrier expenses for this period $1,086.73 $1,086.73 Nil 9 June 2021 to 11 June 2021 Three days appearance at final hearing (9 June 2021 to 11 June 2021) Item 204: Other hearings or trials per day at $3,092.44 = total $9,277.32. Item 204: Other hearings or trials per day at $2,040.64 = total $6,121.92 (applying the upper end of the junior counsel scale) $3,155.40 Preparation for one day Item 201: Chamber work at $424.49 per hour. 8 hours of preparation total = $3,395.92 Item 201: Chamber work at $424.49 per hour. 8 hours of preparation total = $3,395.92 Nil Total barrier expenses for this period $12,673.24 $9,517.84 $3,155.40 TOTAL BARRISTER EXPENSES $13,759.97 $10,604.57 $3,155.40
Therefore, the mother’s costs on scale for the period of 25 March 2021 to 8 June 2021 should remain at $10,639.65, being the sum of the individual amounts claimed in the mother’s brief submissions dated 10 March 2022. However, the mother’s costs on scale for the period of 9 June 2021 to 11 June 2021 should be reduced by $3,155.40 in accordance with the above table, and so her total costs awarded for this period should be in the sum of $9,647.45 (being $12,802.85 less $3,155.40).
Insofar as the mother seeks to have her costs paid within 60 days and the father says that he should have 120 days, it is not apparent why any longer period to pay should be granted to the father. Nonetheless, he may have a further 30 days and there will be an order that these amounts be paid within 90 days.
CONCLUSION
There will accordingly be an order that the mother have her costs in accordance with scale as specified in accordance with the 2021 Rules, being $10,639.65 for the period 25 March 2021 to 8 June 2021 and $9,647.45 for the period of 9 June 2021 to 11 June 2021.
These costs must be paid within 90 days of the date of the orders, to a nominated bank account of the mother.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McEvoy. Associate:
Dated: 13 April 2022
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