Pardij and Girskina (formerly Pardij) (No.2)

[2008] FamCA 81

FAMILY COURT OF AUSTRALIA

PARDIJ & GIRSINKA (FORMERLY PARDIJ) (NO. 2) [2008] FamCA 81

FAMILY LAW – COSTS

Family Law Act 1975 (Cth)

Penfold and Penfold (1980) FLC 90-800

APPLICANT: MR PARDIJ

RESPONDENT: MS GIRSINKA (Formerly PARDIJ)

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLF 778 of 2006

DATE DELIVERED: 19 February 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: BY WAY OF WRITTEN SUBMISSIONS

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: BY WAY OF WRITTEN SUBMISSIONS

SUBMISSIONS RECEIVED FROM

THE APPLICANT: IN PERSON

THE RESPONDENT: O’CONNOR SRAJ LAWYERS

THE INDEPENDENT CHILDREN’S LAWYER: SEPTIMUS JONES & LEE

Orders

1. That on or before 31 May 2008, the husband pay towards the wife’s costs, the sum of $17,900.

2. That on or before 31 May 2008, the husband pay towards the costs of the Independent Children’s Lawyer, the sum of $7135.

3. That all other applications be otherwise dismissed and all proceedings be removed from the list of cases awaiting a hearing.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Cronin delivered this day will for all publication and reporting purposes be referred to as Pardij & Girskinga (formerly Pardij).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 778  of 2006

MR PARDIJ

Applicant

And

MS GIRSINKA (formerly PARDIJ)

Respondent

REASONS FOR COSTS JUDGMENT

1. On 10 January 2008, I made final orders (which were subsequently amended under Rule 17.02 of the Family Law Rules 2004 in relation to a slip) and delivered reasons for judgment.

2. Under the orders, submissions in relation to costs were to be delivered by 4.00pm on 31 January 2008 and served on the other party in addition to which, replies to those submissions were to be completed and delivered by 15 February 2008.  I ordered that any issue as to costs be determined in chambers and I now propose to do so.  I have received submissions from each party.

3. The written submission on behalf of the husband which is not an application but effectively a reply, is dated 18 January 2008 in the form of a letter.  It appropriately canvasses the matters that assist in my determination. 

4. In the letter of the husband to which I have just referred, he closed by saying that after considering what he had written, he sought permission for an adjournment to allow more time to respond properly once applications had been served upon him.  He said he was not in a position to respond for health reasons and made clear that he was travelling to India hoping to be back by the end of March or as soon as he was able to return to work.  In material provided to me in December 2007, it was said he was returning to India to marry.

5. He had filed a Notice of Address for Service and the orders that I made provided for service of documents upon him.  The orders I made on 10 January 2008 were quite clear and specific about the costs question and in my view, it would not be appropriate to delay the matter or adjourn it as suggested by the husband.  The indefinite nature of his travelling to India would make it difficult to conclude this case in circumstances where my orders were quite precise.  That is particularly relevant in circumstances where the orders provided for all parties to exchange submissions.  Knowing that, it is incumbent upon the husband to ensure that he has access to whatever address he is using for the service of documents.

6. The Independent Children’s Lawyer applied for costs either for the whole or just part of the hearing.  She sought that only the husband pay costs but that they be either from the date of her appointment or more generously, from the conclusion of a mention that I had of the matter in December 2007.  No order for costs was sought against the wife.

7. The husband’s submission was effectively put on the basis of anticipating an application for costs and hence to resist it.  However, he did not seek costs against any other party and having regard to the findings that I made in the reasons for judgment, he could not do so.

8. The wife seeks costs totalling $18,399.40 being:

   (a)costs that were reserved by Mushin J in respect of an application for contravention brought by the husband on 20 August 2007;

   (b)costs of $2860 which I specifically fixed on 19 December 2007; and

   (c)the costs of the period for 2 January to 4 January inclusive for the wife’s attendance at the final hearing.

9. It is therefore to be noted in respect of item (c) above, the wife has adopted a similar position to that of the Independent Children’s Lawyer in not seeking the costs for the whole of the hearing.

10. The wife’s costs are effectively preparation for various hearings and counsel’s fees.

11. Although there is no specific breakdown of the costs claimed by the solicitor, I can conclude from the calculations and using Schedule 3 to the Family Law Rules, that the amounts are within the appropriate range set out in the rules. Counsel’s fees for the final hearing appear to have been determined at the rate of $2398 per day whereas the Rules provide for a maximum of $2301.25. Notwithstanding that the amount claimed is marginally in excess of the scale, there is no basis in this case for me to use anything other than the scale.

12. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out that each party to proceedings shall bear his or her own costs. That however is subject to sub-sec (2). Section 117(2) says:

    If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) 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.

13. The provision makes it clear that there have to be circumstances justifying a departure from the principal rule that each person shall bear their own costs. If it is determined that there should be such a departure, then the provisions of s 117(2A) become relevant. That particular provisions reads:

    In considering what order (if any) should be made under subsection (2), the court shall have regard to:

    (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.

14. To avoid any doubt, s 117(3) makes a very clear provision for an Independent Children’s Lawyer to make an application for costs.

15. Section 117(4) is a mandatory provision that says that a court must not make an order relating to the costs of the Independent Children’s Lawyer if one of the parties is a recipient of legal aid or in the view of the Court, a party would suffer financial hardship if they had to bear a proportion of the costs of the Independent Children’s Lawyer.

16. In this case, I am advised that neither party was the recipient of a grant of legal aid. 

17. Accordingly, the questions of the application for the costs by the Independent Children’s Lawyer and of the wife are two different considerations.

18. The first issue however relates to the question of whether or not the circumstances justify a departure from the fundamental principle that each party pays their own costs.  The case proceeded over three days in November and had to be adjourned part-heard because of the lack of time to complete it.  During those days, the husband attended without legal representation.  On 19 December 2007, there was an appearance by all parties at a mention of the case which was precipitated by the husband attending upon and obtaining legal representation.  An examination of the correspondence relating to that period of time shows that the husband was seeking to adjourn the proceedings beyond the date fixed and written submissions were then prepared by his then lawyers.  On 19 December 2007, the husband was represented by counsel.  There are two significant things to be said about that particular appearance.  First, the husband’s counsel announced that the husband was not applying for an adjournment and counsel for the wife and the Independent Children’s Lawyer indicated that that was the first they had known of that change of approach.  The second and probably more important issue, was that I indicated to the husband’s counsel the difficulties that I foresaw for the husband in continuing to seek an order for equal shared parental responsibility as well as an equal sharing of time.  Counsel for the husband indicated that he had read the transcript and understood what I was talking about.  After the discussion, I fixed and reserved the wife’s costs of $2860.

19. On 20 December 2007, the Independent Children’s Lawyer wrote to the solicitors for the husband, and I quote:

    We were advised by Counsel for the Independent Children’s Lawyer that his Honour Justice Cronin again yesterday indicated that given the state of the evidence currently before the Court, he would not be ordering either equal shared parental responsibility or that the child […] spend equal time between her parents.  The Independent Children’s Lawyer supports that view for the same reasons as expressed by the Court.

    The Independent Children’s Lawyer then went on to suggest to the husband that he should reconsider his position as he opened it to the Court.

20. Notwithstanding that suggestion from the Independent Children’s Lawyer, the husband proceeded.  He attended on the resumed hearing date without legal representation.  On the morning of the resumed hearing, a Notice of Address for Service of the husband was filed and a Notice of Ceasing to Act was filed on behalf of his previous lawyers.

21. The husband in his written submission said that he was happy for the trial to be terminated at that time because he did not want to waste the Court’s time as well as other people’s time and money but it was on the basis that I then made a decision.  I said I was not prepared to do that without hearing all of the evidence upon which I was required to determine the case.  Alternatively, the parties could reach some consensus but the husband was not prepared to do that.  I had made some clear indications of the dilemma I saw for the husband when the matter was before me in December in addition to which, the husband had legal representation to discuss the issues.

22. In her written submission about the final hearing, the wife complained that the husband had unnecessarily endeavoured to reopen old matters when the hearing resumed on 2 January 2008 and had unnecessarily extended cross-examination of the wife at the adjourned hearing date because those matters had been canvassed in the November hearing dates.  The wife’s submission went on to say:

    The Applicant Husband was invited by both Counsel for the Wife and the Independent Children’s Lawyer to consider Minutes of Consent Orders drafted by Counsel for the ICL with a view to possible settlement.  The Applicant Husband declined until Thursday 3 January 2008 when negotiations broke down.

23. It must also be said that at the point where the matter was mentioned in December, the family consultant had not given evidence and when that occurred, the husband’s cross-examination of her indicated to me that his position was unchanged from the way he had commenced the case.  As the husband said in his written submissions, he could not sign consent orders in terms of the wife’s proposal because he did not believe it was in the best interests of the child.

24. The wife pointed to the fact that the husband’s final submissions were extended and prolix requiring the wife to have the matter stood down to enable her to give instructions prior to the presentation of her final submissions on 4 January.  It must be kept in mind that when the matter was originally listed, it was suggested that the case would take no longer than four days and it is asserted by the wife that the husband’s approach to the litigation had unnecessarily extended the hearing.

25. In Penfold and Penfold (1980) FLC 90-800 the High Court of Australia commented on s 117 saying:

    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". (at p315)

    14. Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent (1970) 92 WN (NSW) 503, at p 505 ). Accordingly, 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. (at p316)

26. Accordingly, I find that this is a case in which the circumstances justify the making of an order subject to the matters to which I shall now turn.

27. The husband says that he was intending to have a barrister represent him at the final trial but was advised the parties could not claim their costs for final hearing in children’s matters.  He said that because of not having any money, he decided to appear in person.  In his view, the only question of costs arose as a result of 19 December and the days of hearing subsequent to that.  As for 19 December, he made it clear that he did not see that there was any need to appear in court to have the matter mentioned.

28. Before contemplating whether an order should be made however, I turn to the provisions of s 117(2A).

29. The Independent Children’s Lawyer in a helpful submission summarised the position.  The husband gave evidence that he was employed full-time and a statement of financial circumstances filed in April 2006 showed an annual salary of $111,800 per annum.  In contrast, the wife was on maternity leave, supported by her present husband. 

30. According to the Independent Children’s Lawyer, neither party was in receipt of a grant of legal aid.

31. The Independent Children’s Lawyer pointed to the fact that extensive material had been filed by both parties but in particular the husband.  It was certainly difficult to condense the husband’s material and much of it was repetitive but I would not criticise him for that save that it required the Independent Children’s Lawyer and the wife, significant amounts of time and hence costs to read that material and prepare any necessary response to it.

32. In relation to the question of a party being wholly unsuccessful, the Independent Children’s Lawyer observed and I agree, the husband must be seen to have been wholly unsuccessful.  The position that he adopted was untenable.  I made significant reference to that in my reasons for judgment and in particular, his position was untenable subsequent to reading the family consultant’s report.  Right up to the commencement of the trial, the husband’s position had not altered and the Independent Children’s Lawyer submitted that she would not support the husband in the position that he had adopted.  Most importantly, on 19 December, I had pointed out the difficulties he faced yet he pressed on.

33. According to the Independent Children’s Lawyer, at all times, costs were an issue about which the husband was warned. 

34. The husband’s position in submissions was that he could not afford to pay costs “at the moment”.  He had had to borrow $10,000 from a credit card company to pay for the solicitor and whilst I have serious concerns about how much money was spent having regard to what was done, that is not a matter that affects my decision.  The husband also pointed to the fact that he had significant debts such as HECS and CGT as a result of a sale of a home and that he ultimately ended up with virtually nothing from the property settlement.  However, as the husband says in his submission, the only asset that he had was his job and he is currently unable to perform that because of the devastation he feels, not because of the determination of the Court but the family break-up and separation from his daughter.  Just where his remarriage fits into all of this eludes me.  However, those are matters that certainly indicate that once he has got on with his life, he should be able to improve his financial circumstances significantly. 

35. The Independent Children’s Lawyer made the observation that costs could be ordered after taking into account all of the matters to which I have just referred for the period from the date of the appointment.  However, I am conscious of the fact that the husband was entitled to at least test the wife’s evidence, she being not entirely frank in her evidence so to that extent, some of the first three days was not entirely wasted but in my view, having regard to the Independent Children’s Lawyer’s recommendation, there was little basis for the husband to continue beyond the adjourned date in November.

36. It was unreasonable for the husband to simply turn up on 19 December and say that he was no longer seeking an adjournment if that indication had not been given to the other parties particularly in circumstances where he was represented by lawyers.  The husband’s position about new evidence as a basis to bring the matter back to the court was also unreasonable having regard to the nature of the issues that the husband through his solicitors wanted ventilated.  The inconvenience to which the husband put the Independent Children’s Lawyer and the wife, is a sufficient basis to warrant an order for costs for that day.  The fact that the position was made very clear at a time when he was legally represented and then chose to proceed, warrants an order for costs for those days.

37. It is appropriate therefore that the husband pay the wife’s costs for the period subsequent to the adjourned date of the hearing including the costs that I reserved on 19 December.

38. An order for costs is a discretionary matter and I propose to fix those costs for the wife in respect of that period.  I propose to order that the husband pay $17,900 by 31 May 2008.

39. The position of the Independent Children’s Lawyer is different. Section 117(4)(b) requires that a court not make an order for costs of the Independent Children Lawyer if it considers that a party to the proceedings would suffer financial hardship in having to contribute towards those costs. Whilst the husband has currently something of a hiatus in his capital position and may not be earning an income at the moment because of his perceived health difficulties, the reality is that he has a significant earning capacity and given the appropriate time to gather his life together, there is no reason why he should not be in a position to make a contribution and that is the course of action I propose to make. Accordingly, again in the exercise of my discretion, I propose to make an order that the husband pay $7135 being the costs of the Independent Children’s Lawyer, such sum to be paid by 31 May 2008.

I certify that the preceding Thirty Nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate:  Elizabeth Hore

Date:  19 February 2008