Monette & Monette (No 3)
[2024] FedCFamC1F 786
•20 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Monette & Monette (No 3) [2024] FedCFamC1F 786
File number: ADC 2811 of 2021 Judgment of: MCCLELLAND DCJ Date of judgment: 20 November 2024 Catchwords: FAMILY LAW – COSTS – Where the mother seeks costs from the father on an indemnity basis – Where the father seeks an order that each party should bear their own cost – Where the father abandoned his Initiating Application – Where the Court is not satisfied there are exceptional circumstances warranting indemnity costs – Consideration of s 117(2A) of the Family Law Act 1975 (Cth) – Where the matter did not proceed to a final determination by the Court – Where the father has a superior financial position to the mother – Father to pay costs incurred by the mother on a party/party basis. Legislation: Family Law Act 1975 (Cth) ss 60I, 65DAAA, 69ZK, 117
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 68
Family Law Rules 2004 (Cth) r 19.18 (repealed)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) sch 1, r 12.17
Children and Young People (Safety) Act 2017 (SA) s 41
Cases cited: Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (No 2) [2018] FCAFC 112
Baumann & Rushbrooke (No 2) [2017] FAMCA 293
Brook & MacKenzie Pty Ltd v EL-Gra Engineering Pty Ltd (2015) 331 ALR 535; [2015] FCA 1495
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123; [2005] FamCA 158
Hunter v Roberts (No 2) [2019] NSWCA 235
I and I (No 2) (1995) FLC 92-625; [1995] FamCA 80
Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116
Mineralogy v National Native Title Tribunal [1998] FCA 1700
Monette & Monette (No 2) [2024] FedCFamC1F 481
Prantage & Prantage (Costs) [2014] FamCA 850
Stoian v Fiening (Costs) [2014] FamCA 944
Division: Division 1 First Instance Number of paragraphs: 41 Date of last submissions: 8 October 2024 Date of hearing: Determined on the papers Place: In Chambers Counsel for the Applicant: Ms O’Connor SC Solicitor for the Applicant: Eastern Legal Counsel for the Respondent: Mr Morris Solicitor for the Respondent: Alex Mandry Legal Group ORDERS
ADC 2811 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MONETTE
Applicant
AND: MR MONETTE
Respondent
ORDER MADE BY:
MCCLELLAND DCJ
DATE OF ORDER:
20 NOVEMBER 2024
THE COURT ORDERS THAT:
1.Mr Monette pay Ms Monette’s costs of and incidental to his Initiating Application filed on 7 August 2024, on a party/party basis, assessed at scale, within 28 days of being agreed or assessed.
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 the pseudonym Monette & Monette has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ:
INTRODUCTION
This application is brought by Ms Monette (“the mother”) seeking orders that Mr Monette (“the father”) pay her costs of and incidental to the Initiating Application, seeking a variation in parenting orders, filed by the father on 7 August 2024. Costs are sought on an indemnity basis.
The mother’s costs application is made in circumstances where the father’s application was discontinued shortly after it was filed and, as a result, the matter did not proceed to a final determination by the Court.
BACKGROUND
On 23 July 2024, Berman J made final parenting orders. Relevantly to this application, those orders provided that the parties have shared parental responsibility for the children; the mother have sole parental responsibility for major issues relating to the medical health of the children; and the children live with the mother and that the father spend time with the children, with such time to increase gradually.
On 26 July 2024, the Department for Child Protection (“the DCP”) visited each parent and issued a Removal of a Child or Young Person Notice pursuant to s 41 of the Children and Young People (Safety) Act 2017 (SA) (“s 41 Notice”). The effect of the s 41 Notice was that the children would not be spending time with the father in accordance with the orders of Berman J.
On 7 August 2024, the father filed an Initiating Application. That Application sought the variation of the final orders made by Berman J on 23 July 2024 pursuant to s 65DAAA of the Family Law Act 1975 (Cth) (“the Act”).
On 15 August 2024, the parties – both represented by counsel – appeared before Berman J for the first return of the matter. Shortly thereafter, on 28 August 2024, the father filed a Notice of Discontinuance.
The mother now seeks her costs on an indemnity basis, in respect to the father’s abandoned Initiating Application, in the sum of $30,431.50. The father contends, firstly, that there is no reason to depart from the general rule set out in s 117(1) of the Act that parties should bear their own costs and, secondly, that the amount sought by the mother is “grossly excessive” (father’s written submissions filed on 30 September 2024, paragraph 2).
The parties consented to the Court’s proposal to determine the mother’s costs application on the papers, and subsequently submitted written submissions as directed by Orders dated 9 September 2024.
LEGAL PRINCIPLES
Section 117(2) of the Act provides that, if the Court is satisfied that there are circumstances justifying it, the Court retains a discretion to make such order as to costs as it considers just.
In determining whether it is appropriate and just to award costs to a party, all relevant factors outlined in s 117(2A) of the Act must be considered and balanced to establish if the overall circumstances warrant such an order (I and I (No 2) (1995) FLC 92-625 at 82,277). This does not mean that a single factor cannot be decisive, nor does any factor have precedence over another (Prantage & Prantage (Costs) [2014] FamCA 850 at [12], citing Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123). Ultimately, it is up to the presiding judicial officer to determine the importance of each factor.
CONSIDERATION
The following are what I consider to be the relevant s 117(2A) considerations.
Financial Circumstances (s 117(2A)(a))
Justice Berman set out the parties’ respective financial positions in his judgment Monette & Monette (No 2) [2024] FedCFamC1F 481. By way of summary:
652The [father] is employed as a manger in his family’s business and has an average weekly income of about $2,000 per week. I have found that his employment is secure and as time passes it is likely that he will take on higher duties which will necessarily command a higher level of income.
653The financial circumstances of the [mother] are dependent upon a government benefit of $373 per week together with child support paid in the sum of $423.37 per week resulting in a total income of $796 per week. In addition, I accept that the [mother’s] expenses are supported by assistance provided by the maternal grandparents in particular, by providing rent free board and some further benefit for nappies, groceries and other expenses.
…
667If the mid to long term future is considered, the [father’s] financial security is significantly superior to that of the [mother’s].
Another factor that I have had regard to is that the former matrimonial home is currently advertised for sale pursuant to the final orders. The mother contends, at paragraphs 17–18 of her affidavit filed 3 September 2024, that she cannot pay her legal fees until the former matrimonial home sells, and she obtains a property settlement sum pursuant to the final orders.
I accept that while the mother will have some difficulty in meeting her legal fees in the immediate future, she will have that capacity once the former matrimonial home is sold.
Accordingly, this consideration has not influenced my decision.
Conduct of the Parties (s 117(2A)(c))
The mother contends that it was entirely inappropriate for the father to request the matter be listed before Berman J for its first return as his Honour was clearly in conflict (mother’s Case Outline filed 3 September 2024, paragraph 15).
To exacerbate matters, according to the mother’s case, the father failed to inform the Court of ongoing proceedings in the Youth Court and his undertaking not to seek time with the children.
Additionally, the mother contended that:
·The father gave no notice to the mother before filing his Application.
·The father’s Application was vexatious and should have been discontinued at the first return date.
·The father’s Application was brought with “a wilful disregard of the known facts, or for some ulterior motive or with groundless contentions” (mother’s written submissions filed 24 September 2024, paragraph 11(m)).
In his written submissions filed on 30 September 2024, the father refutes the mother’s claims that he had an ulterior motive in commencing his s 65DAAA Application or that he was attempting to “deep-pocket” her (paragraph 8). He submitted that such serious allegations must be supported by a firm evidentiary basis beyond mere conjecture. There is, with respect, substance in the father’s submission on that issue.
However, a matter that does give me concern and which has influenced my decision, is that, by email dated 26 July 2024, the mother’s solicitors wrote to the father noting events that had occurred on that day. As earlier mentioned, officers of the DCP attended the mother’s home and issued her with the s 41 Notice, and, according to the mother’s understanding, officers of the department also had a similar communication with the father. In that email, the solicitors for the mother explained why, under those circumstances, the father could not spend time with the children on 27 and 28 July 2024, in accordance with the orders of Berman J.
The father acknowledged his awareness of that email, dated 26 July 2024 stating, at paragraph 8 of his affidavit filed on 17 September 2024, that he did not respond to it because he “disputed the claim that [his] time with [the] children could not proceed on 27 and 28 July 2024 pursuant to the orders made by Justice Berman on 23 July”.
Rather than responding to that correspondence, the father instructed his legal advisers to reinitiate proceedings with an Initiating Application being signed by the father on 30 July 2024 and filed on 7 August 2024.
The Family Law Act, the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), and the Federal Circuit and Family Court of Australia Central Practice Direction – Family Law Case Management, 1 May 2024 (“the Central Practice Direction”) specify that, other than in limited circumstances, parties are expected to make a genuine effort to resolve matters in dispute prior to commencing proceedings (see s 60I(1) of the Act; Sch 1, Pt 2, r 1(1) of the Rules; and par 4.3 of the Central Practice Direction).
The Court is required to have regard to a party’s failure to comply with the practice and procedure provisions of the Court in determining an application for costs (s 68 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCOA Act”), by reference to the “overarching purpose”).
Whilst I acknowledge that the father sought an exemption from his obligation to comply with the requirements of s 60I of the Act in the Genuine Steps Certificate he filed on 7 August 2024, his reasons for doing so do not withstand scrutiny. Firstly, he referred to allegations of child abuse or family violence, or risk of child abuse or family violence. He did so in the context where no such risk was found to be present in the case of the mother in Berman J’s judgment dated 23 July 2024. Indeed, his Honour concluded at [590] of his reasons that not only do the children have “the advantage of remaining in the primary care of the [mother]” but also, his Honour had “confidence in the [mother’s] ability to care for the children’s special needs”, particularly noting their “close emotional attachment” to her. Secondly, while the father explained the reason for the delay in filing his application for a period of seven days as being the Registry’s initial rejection of his Application as a result of a prohibition pursuant to s 69ZK of the Act (father’s affidavit filed on 17 September 2024, paragraphs 10–11), there was nothing preventing the father from communicating his intention to commence proceedings with a view to the parties engaging in discussions in the intervening period. Lastly, his claim that he would be unduly prejudiced if required to make a genuine effort to resolve the matters in dispute is not otherwise particularised.
If the father had made a genuine attempt to resolve the matter prior to commencing proceedings, it would have brought forward the discussions that occurred in the following weeks that ultimately led to the discontinuance of the father’s Initiating Application.
Accordingly, I find that the father’s conduct in commencing proceedings without complying with s 60I of the Act or the practice and procedure provisions of the court (as defined in s 68(4) of the FCFCOA Act), justifies an order for costs in favour of the mother.
Wholly Unsuccessful (s 117(2A)(e))
Both parties accept that an order for indemnity costs should only be made in exceptional circumstances. In that respect, in Kohan and Kohan (1993) FLC 92-340, their Honours in the Full Court observed at 79,614:
The intent of s117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the Court may make such order as the Court considers just. As we have pointed out, the Court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges. By O. 38 r. 2, the provisions of O. 38 apply to costs ordered to be paid or taxed, and costs payable or to be taxed between solicitor and client. O. 38 r. 7 makes provision for the allowance of additional amounts for complexity, difficulty or novelty and special skill, knowledge or responsibility. Consequently, the 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.
I have earlier indicated why I am unable to find on the basis of evidence presented that the father commenced these proceedings for an ulterior purpose. The only other basis upon which it has been contended that an order for indemnity costs is justified is that the proceedings were wholly without merit.
The difficulty I have in determining that issue, however, is that the proceedings were discontinued prior to consideration of the merits of the application.
It is generally accepted that when deciding whether to make an order for costs in cases where an application has not been determined on its merits, it is inappropriate to predict the outcome of the proceedings (Brook & MacKenzie Pty Ltd v EL-Gra Engineering Pty Ltd (2015) 331 ALR 535 at [23], citing Mineralogy v National Native Title Tribunal [1998] FCA 1700 at [11]).
In my decision of Baumann & Rushbrooke (No 2) [2017] FAMCA 293, I outlined the relevant authorities, as follows:
29In Re Minister of Immigration & Ethnic Affairs; Ex Parte Lai Quin, McHugh J said:
“In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily the power is exercised after a hearing on the merits and as a general rule a successful party is entitled to his or costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits however, the court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.”
30 In Lai Quin, McHugh J further said:
“If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases. (references omitted)”
31One of the authorities referred to by McHugh J in Lai Quin was the decision of Hill J in Australian Securities Commission v Aust Home Investments Limited & Ors wherein his Honour said:
“It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial; … This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (references omitted)”
(Footnotes omitted)
Having regard to those authorities, on the basis of the material presented to me, I am unable to make a determination that the father’s application was wholly without merit.
On that basis, I decline the mother’s application for an order for indemnity costs. I will subsequently set out why information before me is insufficient to enable me to determine costs on a lump sum basis.
Offers in Writing (s 117(2A)(f))
On 29 August 2024, the mother’s solicitors sent a letter to the father’s solicitors making a Calderbank offer that their client pay $25,000. That offer remained open until 4 September 2024. No response was received to the letter.
The father contends that in circumstances where the letter was “functionally meaningless” (father’s written submissions filed 30 September 2024, paragraph 10), in the sense that it offered no significant compromise and it was unreasonable to expect the father to pay all of the mother’s legal fees, the letter should bear no weight.
In circumstances where the mother’s offer was based on the father paying her costs on an indemnity basis and considering I have not made such an order, I do not find it to have been imprudent on the part of the father to reject the mother’s offer (see Hunter v Roberts (No 2) [2019] NSWCA 235 at [9]; Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (No 2) [2018] FCAFC 112 at [7] (Nicholas, Yates and Beach JJ)).
QUANTIFICATION OF COSTS
Rule 12.17 of the Rules sets out the methods of calculating costs. These include, for example, the Court fixing a specific amount for costs (r 12.17(1)(a)) or an order for the costs to be assessed on a particular basis (r 12.17(1)(b)).
In Stoian v Fiening (Costs) [2014] FamCA 944 at [91], Kent J endorsed the principles for applying a rule equivalent to r 12.17, when referring to r 19.18 of the now repealed Family Law Rules 2004 (Cth), as adumbrated by Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [9]. Those principles include:
i.the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation;
ii.the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable;
iii.the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available;
iv.a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place;
v.the gross sum “can only be fixed broadly having regard to the information before the Court”;
vi.nevertheless the power to award a gross sum must be exercised judicially, and after giving the parties an adequate opportunity to make submissions on the matter;
vii.in terms of the necessity for the approach taken to be logical, fair and reasonable, Von Doussa J, put the matter as follows:
“On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary “fail safe” discount on the cost estimates submitted to the Court…”
(Emphasis in original, citations omitted)
The difficulty I have in this case is that the mother has not provided me with information that enables me to make a determination of what her reasonable costs are assessed on a party/party basis according to scale. In those circumstances, I am unable to determine an amount that is “logical, fair and reasonable”.
ORDER
Accordingly, I order that the father pay the costs of the wife on a party/party basis assessed in accordance with the relevant scale or as agreed.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland. Associate:
Dated: 20 November 2024
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