Oswald and Oswald

[2015] FCCA 2189

FEDERAL CIRCUIT COURT OF AUSTRALIA

OSWALD & OSWALD [2015] FCCA 2189

Catchwords:
FAMILY LAW – Application for costs following Father discontinuing contravention application – considerations of expense of court resources in such circumstances and the impact also on the other party having to respond to large amount of material.

Legislation:

Family Law Act 1975, ss.117(1), (2) & (2A)

Federal Circuit Court Rules 2001, r.21.02(2)

Cases cited:
AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303
Penfold v Penfold (1980) 144 CLR 311
Stephens v Stephens (2011) 44 Fam LR 117; [2010] FamCAFC 172

Applicant: MR OSWALD

Respondent: MS OSWALD

File Number: CAC 745 of 2013

Judgment of: Judge Neville

Hearing date: 22 May 2015

Date of Last Submission: 22 May 2015 (written submissions)

Delivered at: Canberra

Oral reasons delivered: 24 July 2015

Written reasons delivered: 14 August 2015

REPRESENTATION

Counsel for the Applicant:

Solicitors for the Applicant: Phelps Reid

Counsel for the Respondent:

Solicitors for the Respondent: Elringtons

ORDERS

1. The Father is to pay the Mother’s costs in the fixed sum of $4500.00 within 60 days of the date of this order, or in a time frame otherwise agreed in writing.

IT IS NOTED that publication of this judgment under the pseudonym Oswald & Oswald is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT CANBERRA

CAC 745 of 2013

MR OSWALD

Applicant

And

MS OSWALD

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 24^th July very detailed oral reasons were delivered in relation to the Mother’s application for costs arising from an earlier Contravention Application brought, but discontinued, by the Father.  In more recent times, the Father’s solicitor has indicated that he might be considering an appeal in relation to the Court’s award of costs in the Mother’s favour; he requested written reasons to assist in those deliberations.  That indication/inquiry from the Father’s solicitor was not copied to the Mother’s solicitor.

2. Upon the receipt of the Father’s request for written reasons, my Chambers confirmed that the reasons sought would be provided.  Notwithstanding that confirmation, the Father’s solicitor has since made further inquiries of Chambers about access to a transcript and similar inquiries have been made to the Registry Manager.  All inquiries have been courteous but respectfully needless.  Having received notification from Chambers that written reasons will be provided that should have been the end of the matter.  No transcript is available other than that of the delivery of the oral reasons which is [now] the basis for the current written reasons.  The waste of Court resources in answering ongoing otiose inquiries should not have been necessary.  Much else could be said – but will not at this juncture.

3. What follows are the requested – and promised – reasons slightly revised from those that were delivered on 24^th July.

4. The current Application is one for costs as sought by the Mother which arises out of an earlier Contravention Application filed by the Father but which was later discontinued.  In general terms the matter started in July 2014.  The Contravention Application was filed on 17^th December 2014 and discontinued on 9^th April this year.

5. The Father’s Application was supported by an affidavit of just over 100 pages together with 48 further pages of annexures.  In that affidavit other alleged contraventions were set out but which were not pleaded in the Contravention Application.

6. At a directions hearing mention on 20^th February, the Father filed a further affidavit.  The Father’s solicitor sought to have the Application dealt with on that date.  The Application was listed for hearing on 18^th March.  On that date, after Counsel for the Mother and the solicitor for the Father made submissions, following which the Court made certain further observations, the Father was allowed time to re-consider his position.

7. On 27^th March, the Father’s solicitors withdrew; new solicitors for him came on to the record.  On 9^th April 2015, as earlier noted, the Father’s Contravention Application was discontinued.

The Mother’s Submissions

1. After setting out the history of the proceedings, the Mother said (in full, as per the written submissions, save for a reference to a copy of an annexed letter of settlement sent to the Father by the Mother’s solicitors dated 25^th February 2015):

   1) It is submitted that, having regard to all of the circumstances of the case, the Court should exercise its discretion to make an order as to costs. The Mother submits that such an order is justified having regard to the relevant considerations in section 117(2A) Family Law Act.

   A. Financial Circumstances [117(2A)(a), 117(2A)(b)]

   2)   The Mother submits that the Court ought to be satisfied that the Father has the financial capacity to meet the Order for costs sought.

   3)   The Father is employed fulltime with the (employer omitted) and on material available to the Court is capable of meeting a costs order in this matter. Moreover, the Full Court has stated in a recent case that “impecuniosity is no bar to an order for costs being made, where there are circumstances which otherwise justify such an order.” (Zau & Uong [2015] FamCAFC 73).

   4)   The Mother asserts that the Father’s taxable income is $156,536 (see paragraphs 51-56 of the Mother’s affidavit dated 11 February 2015 in relation to income assessment by the Child Support Agency).

   5)   Neither party is in receipt of Legal Aid.

   B. Father’s Conduct [117(2A)(c)]

   6)   The Father initiated an application which he subsequently discontinued some five months later. As a result, the Mother has incurred considerable, and unnecessary, legal expenses. The matter was returned for directions or interim hearing on 3 occasions, and significant legal work was undertaken on behalf of the Mother to meet not only the contraventions alleged in the Father’s Application but also the further contraventions alleged in the body of the Father’s lengthy Affidavit.

   C. Whether party wholly unsuccessful [117(2A)(e)]

   7)   The Father discontinued the application and therefore can be considered to have been wholly unsuccessful.

   8)   The imprecision of the orders entered by the parties by consent on 15 September 2014 should have been a factor properly considered by the Father and his solicitors in framing their Application.

   D. Settlement offer [117(2A)(f)]

   9)   The Mother has made an offer of settlement that was rejected by the father.

   10)    On 25 February 2015, the Mother made an offer to settle the interim matter. Those parts of the letter not relating to the Contravention Application have been redacted.

   11)    On 27 February 2015, the Father rejected the offer. Further invitations were extended to the Father to withdraw the Application so that the parties could negotiate on the substantive proceedings.

The Father’s Submissions

1. After setting out part of s.117 of the Family Law Act1975 (“the Act”) and referring to Part 13 of this Court’s Rules, the Father submitted as follows:

   1)   In relation to section 117(2A)(c) and (d) the submission of the Father is that he had an arguable case and was justified in filing the Application. The Mother admitted that she failed to comply with her obligation pursuant to Order 7 and 8 of the Consent Orders dated 15 September 2014 (“the Consent Orders”). Namely,

   2)   She failed to provide X with a mobile phone charged and with credit (for the period from the date of the Consent Orders and continuing until after the Father bought X a phone on his returning from deployment); See paragraph 14 and 16 of the Mother’s Affidavit filed 11 February 2015 (“the Mother’s Affidavit”).

   3)   She failed to provide Y with a mobile phone charged and with credit for the period November until 24 December 2014 (on her account a period of 7 weeks). See paragraph 4 of the Mother’s Affidavit.

   4)   That on occasion when the Father called the children were not made available to speak to the Father because they were helping make dinner, doing homework and getting ready for bed. See paragraph 24 d. of the Mother’s Affidavit.

   5)   The submission of the Father is that the unresolved issue for the court was whether or not the Mother had a reasonable excuse for failing to comply with her obligations pursuant to Order 7 and 8 of the Consent Orders. This issue was not fully tested or determined by the court.

   6)   In relation to section 117(2A)(e) the submission of the Father is that it cannot be concluded that he was wholly unsuccessful. He may or may not have been successful had the matter proceeded to a hearing. Ultimately there has been no determination as to the merits of the Application.

   7)   In relation to section 117(2A)(c) the submission of the Father is that the Father accepted Judge Neville’s initial view, provided to the parties’ solicitors in court on 18 March 2015, that the matter would require two days and that the Mother appeared to have a reasonable excuse for Contravening the Orders.

   8)   The submission of the Father is that he did not unduly prolong the matter. Following receipt of Judge Neville’s initial view the Father was required to engage, brief and instruct new solicitors due to the employment of Ms Curran by his previous solicitors. Thereafter the Father informed the court of his intention to discontinue the Application on 7 April 2015 and filed and served a Notice of Discontinuance on 9 April 2015.

   9)   The Father’s conduct prevented either party from incurring the cost of running a two day hearing which arguably would have required an instructing solicitor and counsel.

   10)    The Father should not be penalised for conducting himself in accordance with Judge Neville’s initial view.

   In the alternative

   11)    In the event that the court is minded to make an Order for the Father to pay the Mother’s costs the Father would seek that costs be reserved so that further relevant evidence can be adduced including but not limited to without prejudice offers of settlement between the parties (in relation to section 117(2A)(f)) and evidence as to the parties’ financial circumstances (in relation to section 117(2A)(a)).

   12)    It is noted that pursuant to Order 6 of the Orders dated 18 March 2015 the Mother’s costs of the Interim Hearing of the Contravention Application were reserved.

Outline of Principle

1. In addition to incorporating the terms of s.117, the Full Court in Stephens v Stephens set out basic principle regarding applications in relation to costs.[1] 

   [1] Stephens v Stephens (2011) 44 Fam LR 117; [2010] FamCAFC 172.

2. By reference to other authority, such as Penfold v Penfold, and various earlier Full Court decisions, the Full Court in Stephens noted, at [63],[2] that

   Section 117(2) of the Act provides that if, in proceedings under the Act, the court is of opinion that there are circumstances that justify it in doing so, it may, subject to sub-ss (2A), (4) and (5), and the applicable rules, make such order as to costs, whether by way of interlocutory order or otherwise, as it considers just.

   [2] Penfold v Penfold (1980) 144 CLR 311.

3. At [64], the Full Court also noted, again by reference to Penfold:

   “Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A).  As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.

4. Then at [65], the Full Court recorded the following comments by the High Court in Penfold:

   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.

5. And later in Stephens, at [66], the Court said: “… in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.”

6. In my view, it is also important to note comments by the High Court in relation to the conduct of proceedings and the use of public resources.

7. For example, in the now almost infamous AON Risk Services Australia Ltd v Australian National University (“AON v ANU”), French CJ said, for example, at [5], [23] and [24] (internal citations omitted, emphasis added):[3]

   [5] … the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account.

   [23] The Judicature Act Rules and their Australian offspring did not in terms make reference to the public interest in the expeditious dispatch of the business of the courts. The way in which proceedings progress has been left to the parties. This may be seen as an aspect of the adversarial system which is a dominant part of the common law inheritance of Judicature Act procedure. In this respect, however, the adversarial system has been qualified by changing practices in the courts directed to the reduction of costs and delay and the realisation that the courts are concerned not only with justice between the parties, which remains their priority, but also with the public interest in the proper and efficient use of public resources.

   [24] … Another factor which relates to the interests of the parties but transcends them is the waste of public resources and the inefficiency occasioned by the need to revisit interlocutory processes, vacate trial dates, or adjourn trials either because of non-compliance with court timetables or, as in this case, because of a late and deliberate tactical change by one party in the direction of its conduct of the litigation…

   [3] See AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175. In addition to the comments of French CJ cited, see also the general observations of Gummow, Hayne, Crennan, Kiefel and Bell JJ at [112] – [113].

8. More recently still, in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited, the High Court commented further on the proper use of court resources and the consequences when that does not occur by reference to the earlier comments in AON v ANU.  At [51], [56] and [57], the Court (French CJ, Kiefel, Bell, Gageler & Keane JJ) said (emphasis added):[4]

   [51] … It had been recognised some time ago by courts in the common law world that a different approach was required to tackle the problems of delay and cost in the litigation process. Speed and efficiency, in the sense of minimum delay and expense, are essential to a just resolution of proceedings. The achievement of a just but timely and cost-effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants...

   [56] … Parties continue to have the right to bring, pursue and defend proceedings in the court, but the conduct of those proceedings is firmly in the hands of the court.  It is the duty of the parties and their lawyers to assist the court in furthering the overriding purpose…

   [57] That purpose may require a more robust and proactive approach on the part of the courts. Unduly technical and costly disputes about non-essential issues are clearly to be avoided. However, the powers of the court are not at large and are not to be exercised according to a judge's individualistic idea of what is fair in a given circumstance.

   [4] Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303 (“Armstrong Strategic Management”).

9. In my view, there are justifying circumstances that warrant an order for costs as sought by the Mother in the current proceeding.  Those circumstances include (a) the very large volume of material filed by the Father, (b) a significant amount of the material so filed was unhelpful, while other parts were poorly drafted, (c) the consequent necessary labour and cost to respond to all of the Father’s disproportionately prolix material, and (d) the ultimate discontinuance of the proceeding.  These matters come readily within the parameters indicated by the High Court in AON v ANU and again in Armstrong Strategic Management. 

10. It is not necessary for the Court to comment on whether or not the Father was wholly unsuccessful (s.117(2A)(e)) because the justification circumstance for the costs order is not predicated on this ground.  Rather, it is founded on the matters noted earlier in the previous paragraph (and the reasons more generally), and in particular the application of the High Court principles in AON v ANU and in Armstrong Strategic Management.

11. A further and significant consideration is that the Mother made an offer to settle the matter in late February 2015, which included that there be no order as to costs.  That offer was rejected by the Father.

12. It is outlined in the Father’s submissions (at [11]) that costs be reserved to allow the Father time to adduce evidence in circumstances where the parties were earlier allowed time to provide written submissions, but the Father now seeks extra time to adduce further evidence.  Respectfully, (i) sufficient time and opportunity has already been given to both parties to provide submissions that their lawyers considered to be relevant to the Court’ decision regarding costs.  A yet further opportunity would only delay matters further, and have the parties incur further costs.  Procedural fairness has already been given to both sides and ample opportunity to provide submissions; (ii) further, additional offers of settlement are unlikely to alter the Court’s order because, as already noted, the grounds for the costs order do not turn specifically on any offer of settlement.  I have already outlined the reasons for the order for costs, not least on the basis of the application of High Court principle in AON v ANU.

13. In addition to the comments I have made, I should be taken to accept and adopt the submissions made on the Mother’s behalf.  She seeks an order for costs fixed in the sum of $5120.  Respectfully, having regard to the significant resources expended by everyone in the early days of the contest that was made unnecessarily more difficult because of the volume of material filed by the Father, in my view, the amount sought by the Mother is very modest.

14. Under the Rules of Court (and otherwise) the Court retains power to fix costs in the exercise of its discretion.[5] Having regard to the circumstances to which I have referred, the statutory considerations in s.117 and the submissions of the parties (which include reference to matters such as the Father’s income and the like), in my view, the costs payable by the Father to the Mother should be fixed in the sum of $4500.

    [5] See Federal Circuit Court Rules 2001, r.21.02(2).

15. Finally, by way of observation only: it is always a matter for parties how they spend their money.  One assumes (hopefully correctly) that the Father in this instance has (or will have) received advice that the costs of any appeal are very likely to significantly far exceed the very modest costs order made on 27^th July.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of Judge Neville

Date:       14 August 2015