PARRIS & JOHNSTONE (No.2)

[2015] FCCA 3063

FEDERAL CIRCUIT COURT OF AUSTRALIA

PARRIS & JOHNSTONE (No.2) [2015] FCCA 3063

Catchwords:
FAMILY LAW – Costs – application for costs – party and party costs – indemnity costs – whether respondent should pay applicant’s costs – whether costs should be awarded on indemnity basis – whether appropriate to certify for counsel – where neither party wholly unsuccessful.

FAMILY LAW – Children – parenting orders – where applicant successful in obtaining order permitting him to take child out of Australia.

Legislation:

Family Law Act 1975 (Cth), ss.117, 117C

Federal Circuit Court Rules 2001, Rule 21.15, Sch.1, Part 1

Cases cited:
Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225; 118 ALR 248
In the Marriage of Kohan (1992) 16 Fam LR 245; (1993) FLC 92-340
PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL [2005] FamCA 158; (2005) 33 Fam LR 109
Penfold & Penfold (1980) 144 CLR 311; FLC 90-800
Pope & Pope (Costs) [2012] FamCA 655
Parris & Johnstone [2015] FCCA 2862
Prantage & Prantage [2013] FamCAFC 105; (2013) 49 Fam LR 197; FLC 93-544
Robinson & Higginbotham (1991) 14 Fam LR 559; FLC 92-209

Applicant: MR PARRIS

Respondent: MS JOHNSTONE

File Number: SYC 5372 of 2015

Judgment of: Judge Scarlett

Hearing date: Considered in chambers

Date of Last Submission: 5 November 2015

Delivered at: Sydney

Delivered on: 24 November 2015

REPRESENTATION

Applicant: No appearance

Solicitors for the Applicant: Pigdon Norgate Family Lawyers

Respondent: No appearance

Solicitors for the Respondent: S. Davitt Family Lawyers

ORDERS

1. The Respondent is to pay the Applicant’s costs of this Application fixed in the amount of $5,026.00 within three (3) months of the date of this Order.

IT IS NOTED that publication of this judgment under the pseudonym Parris & Johnstone (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 5372 of 2015

MR PARRIS

Applicant

And

MS JOHNSTONE

Respondent

REASONS FOR JUDGMENT

Application for Costs

1. This is an Application by the father for an order for costs against the mother arising out of an urgent hearing on 22 October 2015 of an Application by the father for orders permitting him to take the parties’ child X, aged 4 years, out of Australia for a holiday in the (country omitted). On 23 October 2015, I made Orders until further order that, in summary:

   a)the parties are to have equal shared parental responsibility for the child;

   b)the child is to spend time with the father from 15 December 2015 until 8 January 2016 and the father is permitted to take her to the (country omitted) during that time; and

   c)the father was to arrange for an amount of $200,000.00 to be deposited into the Trust Account of the mother’s solicitors as security for the child’s return to Australia[1].

   [1] Parris & Johnstone [2015] FCCA 2862

2. The father now seeks an order for his costs of the Application in the sum of $8,074.00.  

Submissions

1. The Application has been dealt with in chambers upon receipt of written submissions from the solicitors for both parties.

2. The Applicant father’s solicitor referred the Court to the relevant provisions of s.117 of the Family Law Act 1975 (Cth), including subsection 117(2A).

3. It was submitted that, when considering the financial circumstances of each of the parties to the proceedings, the Court should have regard to the fact that the Respondent mother is in a superior financial position to the father and has the personal capacity to pay the costs sought.

4. As to the conduct of the parties, the father’s solicitor submitted that her client had relied on an agreement between the parties set out in a Parenting Plan dated 28 October 2014, which would have permitted him to take the child to the (country omitted) for a holiday over Christmas provided sufficient notice and information were provided to the mother. However, the mother failed to provide her consent or to enter into any negotiations with the father (see Pope & Pope (Costs)[2]).

   [2] [2012] FamCA 655

5. Ms Schober, the father’s solicitor, submitted that the mother should be regarded as having been wholly unsuccessful in her application to prevent the father from travelling to the (country omitted) with the child. In any event, there is no requirement that a party seeking costs must be wholly successful in their application (Penfold & Penfold[3]).

   [3] (1980) FLC 90-800

6. As to offers of settlement, it was submitted that in the light of the mother’s concerns that the father would not return from the (country omitted), the father had proposed two forms of security, being:

   a)a bond in the sum of $10,000.00; and

   b)that the entirety of the funds in the parties’ joint bank account should be provided to the mother in the event that the father did not return with the child.

7. The father’s solicitor referred to the decision of Nygh J in Robinson and Higginbotham[4] where his Honour held that the purpose of paragraph (f) of s.117(2A) was to ensure that offers to settle, if made seriously, are considered seriously to ensure that the cost of litigation is avoided and the workload of the Court is lightened.

   [4] (1991) 14 Fam LR 559; FLC 92-209

8. It was also submitted that an offer of settlement does not need to be made in accordance with s.117C of the Family Law Act 1975 if it is to be taken into account (Harris & Harris[5]).

   [5] (1991) FLC 92-254

9. The father’s solicitor submitted that:

   …it is both appropriate and justified for the Court to make an order for costs against the Mother on the basis of the offers made by the Father. Had the Mother accepted the Father’s offer, or negotiated other terms of the Father’s proposed travel, the Father would not have been required to file an Application in a Case, avoiding the costs (both monetary and emotional) of the Application.

10. It was further submitted that the Father was required to cancel and reissue flight tickets for himself and the child at a cost in excess of $1,000.00 to his detriment.

11. The amount sought by way of costs is particularised at Annexure “A” of the Submission and is in the sum of $8,074.00, calculated at the rate of $340.00 per hour. That figure includes an amount of $1.023.00 for the preparation of the Application for Costs.

12. The mother’s solicitor, Ms Davitt, submitted that there are no circumstances that would justify the making of a costs order against the mother. In particular, she submitted that:

    a)The fact that the mother may be in a superior financial position than the father is not a relevant consideration in a parenting matter concerning the merits of an application by the father to take a child overseas;

    b)The Parenting Plan agreed between the parties was not signed by the parties and in any event does not refer any or every Christmas holiday period;

    c)The father’s offer of security of $10,000.00 was inadequate;

    d)The father’s offer with respect to the funds in the joint account was contained in his affidavit which was not served until 20 October (two days prior to the hearing) and was not a timely and genuine offer in the course of any negotiations between the parties;

    e)The father’s solicitors in their correspondence did not convey a conciliatory approach to exploring the issue in that they conveyed an inadequate offer of security and advised the mother that if she opposed the application the father would be seeking indemnity costs;

    f)It was reasonable for the mother to remain opposed to the father taking the child overseas;

    g)Neither party was wholly successful or unsuccessful in their applications to the Court; and

    h)The Table of costs provided by the father’s solicitors does not appear to make reference to Schedule 1 of the Federal Circuit Rules for costs in Family Law Proceedings.   

The law to be applied

1. The question of costs in proceedings under the Family Law Act 1975 is governed by the provisions of s.117 of the act. Subsection 117(1) contains a general statement that, subject to certain other considerations, each party to proceedings under the Act should bear his or her own costs. However, subsection 117(2) provides that if the Court is of opinion that there are circumstances that justify it in doing so, the Court may, subject to subsection 2A (relevantly) and the applicable Rules of Court, make such order for costs as the Court considers just.

2. Subsection 117(2A) provides that in considering what order (if any) should be made under subsection (2), the Court shall have regard to the matters set out in paragraphs (a) to (g) of the subsection.

3. If the Court decides that there are circumstances that justify it in making an order for costs, what must then be decided is the quantum, or amount of costs to be awarded. It is the usual case that where costs are awarded against a party they are awarded on a party and party basis. Costs would normally be awarded in accordance with the Court scale, which in this case is contained in Part 1 of Schedule 1 to the Rules.

4. Costs will only be awarded on an indemnity basis (also known as a solicitor-client basis) where there are unusual or exceptional circumstances (see Colgate Palmolive Co v Cussons Pty Ltd[6]; In the Marriage of Kohan[7]; Prantage & Prantage[8]).

   [6] [1993] FCA 536; (1993) 46 FCR 225; 118 ALR 248

   [7] (1992) 16 Fam LR 245; (1993) FLC 92-340

   [8] [2013] FamCAFC 105; (2013) 49 Fam LR 197; FLC 93-544

Consideration

1. I have considered the parties’ submissions and the matters to which the Court is required to have regard under s.117(2A) in deciding whether there are circumstances that justify the Court in making such order for costs as the Court would consider just.

2. It is unnecessary to specify the various paragraphs (a) to (g) of s.117(2A), as they have already been covered in the parties’ submissions, except to say that I have had regard to all of them, where relevant. It is settled law that there is nothing to prevent any one factor in s.117(2A) being the sole foundation for an order for costs (PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL[9]).

   [9] [2005] FamCA 158; (2005) 33 Fam LR 109

3. I agree with the mother’s submission that the parties’ financial circumstances are not a relevant consideration in this case. There has been no submission that either party is legally aided. There is nothing about the conduct of the parties to the proceedings in relation to the proceedings that indicates a failure of either party to conduct the proceedings in a proper manner. Both Ms Cantrall and Ms Reynolds of Counsel made succinct and accurate submissions as to the law to be applied and the salient points of their respective clients’ cases. Neither party failed to comply with a previous order of the Court.

4. The father’s submission that he was required to cancel and reissue flight tickets for the child and himself at a cost in excess of $1,000.00 seems to be of little if any relevance in deciding whether or not the Court should make an order for costs in his favour.

5. To my mind, the father’s contentions about the mother’s alleged failure to enter into settlement negotiations about the father’s proposal to take the child out of Australia carry little weight. All that was offered by the father prior to commencing proceedings was a surety of $10,000.00 to be held in his solicitors’ trust account in the event that the father failed to return the child to Australia.[10]  This was modified in a Minute of Proposed Orders tendered at the hearing by the father’s Counsel, Ms Cantrall, so as to provide that the father would deposit the sum of $10,000.00 into the mother’s solicitors’ trust account, which was slightly more realistic. However, in the decision at [31] I held that:

   The amount of $10,000.00 proposed by the father as security for the child’s return is inadequate.[11]

   [10] Letter from Applicant’s solicitors to Respondent’s solicitors dated 4 August 2015 at Annexure “F” to the Applicant’s affidavit of 15 October 2015

   [11] Parris & Johnstone [2015] FCCA 2862 at [31]

6. Whilst it is correct for the father to submit that he offered that the entirety of the funds in the parties’ Joint Account would be provided to the mother in the event that the father did not return to Australia, I was also critical at paragraph [32] of the decision of the arrangement proposed by the father:

   The arrangement proposed by the father in paragraph [124] of his affidavit is unsatisfactory, to my mind. There should be immediate access to a sum of money to provision the mother to commence legal proceedings if the father were to choose to retain the child in the (country omitted).[12]

   [12] Ibid at [32]

7. The conclusion to be drawn is that the father’s offers of surety were less than adequate and the mother was within her rights not to accept those offers when she did. 

8. The one factor to my mind that sways the balance in favour of the father is that he was successful in obtaining an order permitting him to take the child out of Australia for a holiday, albeit for a shorter period of time and by the provision of a significantly greater sum by way of surety. The case was about whether or not the father should be permitted to take the child out of Australia to the (country omitted) at all, and he was successful in that regard. The mother was unsuccessful.

9. What must now be decided is the quantum of costs to be awarded. The father is clearly claiming his costs on a solicitor-client or indemnity basis, but there is nothing exceptional or unusual which to my mind would justify a departure from the usual party and party basis. Although I note that the father’s solicitors stated in their letter to the mother’s solicitors of 4 August 2015 that they would “be seeking indemnity costs”, that is not a reason why the Court should allow costs on an indemnity basis.

10. Both the Applicant and the Respondent considered it necessary to brief counsel, and counsel conducted the matter in a succinct and appropriate manner. Whilst some may argue that this was a matter which could have been conducted adequately by a solicitor of some seniority and experience, I am prepared to certify for counsel under Rule 21.15, noting the issues which were argued.

11. Accordingly, I propose to allow the lump sum of $1,706.00 under Item 3 of Part 1, together with the daily hearing fee of $1,024.00 under Item 13 for the instructing solicitor and the daily hearing fee and advocacy loading amounting to $1,536.00 for Counsel. I will allow $278.00 for attending to take judgment on the following day and three hours at $278.00 per hour for the preparation of the costs submission. I will also allow the daily hearing fee of $278.00 for attending to take this judgment.

12. I propose to order, therefore, that the Respondent is to pay the Applicant’s costs fixed in the sum of $5,026.00. I will allow three months to pay.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:      24 November 2015