Pascoe & Larsen (No 2)
[2022] FedCFamC1A 126
•16 August 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Pascoe & Larsen (No 2) [2022] FedCFamC1A 126
Appeal from: Pascoe & Larsen [2021] FedCFamC2F 529 Appeal number(s): NAA 78 of 2021 File number(s): WOC 655 of 2021 Judgment of: MCCLELLAND DCJ Date of judgment: 16 August 2022 Catchwords: FAMILY LAW – APPEAL – COSTS – Where the appellant has been wholly unsuccessful – Where an offer of settlement was made but particulars were not provided to the Court – No basis for indemnity costs – Appellant to pay costs of the respondent and the ICL relating to the appeal Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 12.13, 12.17
Cases cited: Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432
Colgate-Palmolive Company and Anor v Cussons Pty Limited (1993) 46 FCR 225; [1993] FCA 801
Cross & Beaumont (2008) 39 Fam LR 389; [2008] FamCAFC 68
D & D (Costs)(No 2) (2010) FLC 93-435; [2010] FamCAFC 64
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123; [2005] FamCA 158
Hitch & Hitch (2012) 47 Fam LR 603; [2012] FamCAFC 124
Idoport Pty Limited v National Australia Bank Limited & Ors [2007] NSWSC 23
Munday v Bowman (1997) FLC 92-784
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Phillips & Hansford [2020] FamCAFC 28
Prantage v Prantage (Costs) [2014] FamCA 850
Robinson & Higginbotham (1991) FLC 92-209; [1991] FamCA 5
Stoian v Fiening (Costs) [2014] FamCA 944
Number of paragraphs: 32 Date of last submission/s: 17 June 2022 Date of hearing: On the papers Place: Sydney The Applicant: Litigant in person Solicitor for the Respondent: Broun Abrahams Burreket Solicitor for the Independent Children's Lawyer: Venus & Smart ORDERS
NAA 78 of 2021
WOC 655 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR PASCOE
Applicant
AND: MS LARSEN
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
MCCLELLAND DCJ
DATE OF ORDER:
16 AUGUST 2022
THE COURT ORDERS THAT:
1.The appellant father pay the costs of the respondent mother of and incidental to the appellant’s Amended Notice of Appeal filed 15 December 2021 within 28 days of those costs being agreed or assessed.
2.The appellant father pay the costs of the Independent Children’s Lawyer in the fixed sum of $4,150 within 28 days.
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 Pascoe & Larsen has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ:
INTRODUCTION
By orders made on 13 May 2022, I dismissed an appeal brought by the appellant father from parenting orders made by a judge of Division 2 of the Federal Circuit and Family Court of Australia. Essentially, those orders provided for the parties’ child to continue living with the respondent mother in Sydney and to spend time with the appellant father both in City A and in City B. The orders dismissing the appeal included an order permitting the respondent mother and the Independent Children’s Lawyer (“ICL”) to file such submissions in respect to costs as were considered appropriate, with such submissions to be filed within 14 days of the date of the orders. The appellant father was permitted to file and serve written submissions in reply within 14 days of the filing of the respondent mother or ICL’s submissions.
Such an application was duly filed by the respondent mother on 27 May 2022, that is, within the 14 days set out in the orders dismissing the appeal. However, the application for costs made by the ICL was not filed until 2 June 2022. While outside the time specified in the orders of 13 May 2022, it was nonetheless filed within the 28 day period specified in r 12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). Accordingly, I will, in these reasons, consider both the respondent mother’s application for costs and also the costs sought by the ICL. The father filed his reply to the respondent mother and ICL on 17 June 2022.
RELEVANT LEGAL PRINCIPLES
The issue of costs in respect to proceedings under the Family Law Act 1975 (Cth) (“the Act”) is to be determined in accordance with s 117 of the Act. That section relevantly provides that:
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(2)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), (4A), (5) and (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.
(2A)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.
The general rule, as set out in s 117(1) of the Act, is that each party to the proceedings shall bear his or her own costs. This is, however, subject to s 117(2) of the Act which provides that, if the Court is satisfied that there are circumstances justifying it, the Court may make an order as to costs as it considers just. Beyond the “essential preliminary” consideration of those matters set out in s 117(2A) of the Act, there is no “additional or special onus” on the applicant for the Court to make an order for costs: Penfold v Penfold (1980) 144 CLR 311 at [13].
In considering whether it is appropriate and just to make an order for costs in favour of a party, it is unnecessary for the Court to be satisfied in respect to each and every factor set out in s 117(2A) of the Act,[1] nor does any factor set out in that section have priority over another: Prantage v Prantage (Costs) [2014] FamCA 850 at [12].
[1] Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at [41].
CONSIDERATION
It is convenient to address each of the matters set out in s 117(2A) to the extent that I have considered them relevant to the determination that I have made to award costs in favour of the mother.
The parties’ respective financial circumstances
The appellant father refers to his Financial Statement filed in the proceedings and contends that he is unable to meet his own legal costs, let alone the costs of the respondent mother. He further contends that his employment as a creative artist and music producer has been adversely affected by the COVID-19 pandemic and that “if costs [are] ordered against [the appellant] this will adversely impact upon [his] ability to provide necessities for [himself and his children], as [he] would not be able to meet the costs of food, electricity and other fixed expenses.”
The appellant father’s Financial Statement is attached as Annexure C to his written submissions filed 17 June 2022 and indicates that his personal expenditure exceeds his income and that his liabilities exceed the value of his property.
I accept that the appellant father’s income may have been adversely impacted by the COVID-19 pandemic, however, it was the appellant father who chose to file an appeal against interim parenting orders in circumstances where the primary judge, in Order 14, granted leave to the parties “to file a further interim application in relation to parenting proceedings for [the child] in the event that the parties has [sic] a report from a joint expert providing information relevant to consideration of s 60CC(3)(h) and s 61F of the Family Law Act 1975.”
Further, although the appellant father was self-represented at the appeal, he had managed to engage the services of senior counsel to provide advice to him.
In any event, in Cross & Beaumont (2008) 39 Fam LR 389 at [60], the Full Court held that financial incapacity to pay a costs order is not a barrier to the making of such an order where the conduct of the party may warrant a costs order being made.
In this matter, I am satisfied that there are other conditions set out in s 117(2A), to which I refer, which justify an order for costs being made in favour of both the respondent mother and the ICL.
Receipt of assistance by way of legal aid by either party
Neither party is in receipt of legal aid.
Conduct of the parties in relation to the proceedings
The respondent mother contends that she presented the appellant father with an opportunity to resolve the matter but the appellant father rejected the offer, which resulted in the parties incurring the legal costs associated with the appeal. The respondent mother did not, however, provide particulars in respect to the offer, including when it was made and the nature of the offer. In that respect, it has been determined that subsection (c) is focused on the conduct of the parties as litigants: Hitch & Hitch (2012) 47 Fam LR 603. While the appellant father’s submissions, with respect, lacked focus at times, that was in my opinion more reflective of the fact that he was self-represented rather than being wilfully obstructive of the expeditious determination of the proceedings.
Whether the proceedings were necessitated by a party’s failure to comply with previous orders
The appellant father contends that his initial commencement of proceedings occurred as result of the respondent mother unilaterally moving from City A in New South Wales to City B. It has been accepted that the respondent mother did, in fact, unilaterally move to Sydney contrary to the objections of the appellant father. Those facts have, however, previously been considered by the Court and the appeal was not necessitated by the respondent mother’s conduct in that respect, but rather, by the appellant father being discontent with the parenting orders made by the primary judge.
Whether any party has been wholly unsuccessful in the proceedings
In Robinson & Higginbotham (1991) FLC 92-209 at 78,417, Nygh J stated that the concept of being wholly unsuccessful is “a situation in which the proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed.”
In this matter the appellant father was wholly unsuccessful in that his appeal has been dismissed. This is relevant to my decision to award costs in favour of both the respondent mother and the ICL.
Whether an offer has been made in writing to settle the proceedings
The respondent mother contends that she has previously made an offer to the appellant father to resolve these proceedings, however neither party has referred the Court to the terms of that offer for the purpose of considering this costs application.
Such other matters as the Court considers relevant
It is relevant that these proceedings relate to an appeal against interim parenting orders in circumstances where, as I have noted, the primary judge granted liberty to the parties to seek a variation of those parenting orders upon obtaining an expert report. This is again relevant to my decision to award costs in favour of both the respondent mother and the ICL.
SHOULD COSTS BE ORDERED ON AN INDEMNITY BASIS?
The respondent mother has sought an order that costs be ordered on an indemnity basis. However, there is, in my opinion, no reasonable basis for that application.
The Full Court, in D & D (Costs)(No 2) (2010) FLC 93-435, conducted a useful review of authorities dealing with the issue of indemnity costs in the following terms at [26]–[28]:
In Limousin & Limousin (Costs) [2007] 38 Fam LR 478, the Court reviewed the authorities in relation to indemnity costs. Reference was there made to the judgment of the Full Court in Kohan and Kohan (1993) FLC 92-340. It was recorded at 79,614 (citations omitted) in which it was said that:
“The intent of s 117(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) [1983] 2 NSWLR 354]; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534; Hobartville Stud v Union Insurance Co (1991) 25 NSWLR 358 at 368–70.
Indemnity costs orders are still an exception in this and other jurisdictions.
The Court in Limousin (supra) also referred to the judgment of Shephard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 upon which learned Counsel for the Wife relies in support of the present application. Shephard J said in Colgate-Palmolive (supra) (at 256):
“2. The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis ...
3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it ...
4. In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course ...”
Reference was made to the later decision of the Full Court of Yunghanns v Yunghanns (2000) FLC 93-029 in which is [sic] was said (at 87,471, par 31):
“It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.”
In Munday v Bowman (1997) FLC 92-784 at 84,660, Holden CJ drew from the decision of Sheppard J in Colgate-Palmolive Company and Anor v Cussons Pty Limited (1993) 46 FCR 225 in providing some examples of circumstances that might warrant the exercise of discretion to award indemnity costs, including:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] FCA 202; [1988] 81 ALR 397.)
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra).
(c)Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v Westpac Banking Corporation (unreported Federal Court, 5 March 1993)).
(e) An imprudent refusal of an offer to compromise [Medlon No. 6 (supra)].
The respondent mother further refers to the decision of the Full Court in Phillips & Hansford [2020] FamCAFC 28 as follows at [35]–[37]:
Indemnity cost orders are made only in exceptional cases.
Whilst the categories of cases in which indemnity cost orders may be awarded are not closed, it is accepted that such orders may be ordered where a case was pursued with “wilful disregard of known facts or clearly established law” and where there has been “an imprudent refusal of an offer to compromise”.
In relation to the first category, it has been said that indemnity costs may be awarded where “the applicant properly advised, should have known that he had no chance of success” and where “a party persists in what should on proper consideration be seen to be a hopeless case”.
(Citations omitted)
The respondent mother contends that the appellant father held wilful disregard of the known facts and clearly established law such that, properly advised, the appellant father should have known that he had no chance of success.
While, clearly, the appellant father’s application had considerable challenges, there is no basis, in my view, for contending that the application had “no chances of success”. The case does not otherwise fall within the exceptional categories for which courts have ordered the payment of indemnity costs.
AMOUNT OF COSTS
In the alternative to costs being awarded on an indemnity basis, the respondent mother has sought an order for costs to be paid in a fixed sum amount.
Rule 12.17 of the Rules sets out the methods of calculating costs. These include 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 Limited v National Australia Bank Limited & Ors [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;…
iv.the gross sum “can only be fixed broadly having regard to the information before the Court”;…
(Citations omitted)
Consistent with those principles, it has been determined that where a Court orders a party to pay costs, it may be appropriate for the Court to fix a lump sum. By doing so, the Court can avoid further delay and inconvenience being occasioned by the requirement to tax a bill: Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432 at [51].
The difficulty in awarding costs in a fixed sum amount in this case is that the respondent mother’s costs have been quantified on an indemnity basis, or at least at an hourly rate that significantly exceeds that which is provided for in the costs schedule to the Rules. In those circumstances, it is not possible to determine what is a logical, fair and reasonable fixed sum amount for costs as assessed on a party/party basis.
The orders in this matter will therefore be for the appellant father to pay the costs of the respondent mother of and incidental to the father’s Amended Notice of Appeal filed 15 December 2021 within 28 days of those costs being agreed or assessed.
The ICL has, however, provided a schedule setting out costs incurred at the appropriate scale. I am satisfied that those costs are logical, fair and reasonable and will order the appellant father to pay the costs of the ICL in the sum of $4,150 within 28 days of the date of these orders.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland. Associate:
Dated: 16 August 2022
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