Paxton & Child Support Registrar (Costs)

[2016] FamCAFC 158

FAMILY COURT OF AUSTRALIA

PAXTON & CHILD SUPPORT REGISTRAR & ANOR (COSTS) [2016] FamCAFC 158

FAMILY LAW – COSTS – Where the Child Support Registrar sought costs of the applicant’s unsuccessful application for leave to appeal child support orders – Where the parties were ordered to file written submissions – Where the applicant was wholly unsuccessful – Where the applicant’s conduct and the nature of the proceedings justify an order for costs – Where the fixed amount of costs sought is reasonable – Applicant to pay costs of the Child Support Registrar in a fixed sum by way of instalments.

Family Law Act 1975 (Cth), s 117
Tribunals Amalgamation Act 2015 (Cth)

Family Law Rules 2004 (Cth), r 19.18

Hendy v Deputy Child Support Registrar & Anor (2001) 27 Fam LR 641
Laurie & Child Support Registrar [2009] FamCAFC 183
Paxton & Child Support Registrar and Anor [2015] FamCAFC 121
Paxton & Child Support Registrar and Anor [2016] FamCAFC 116

APPLICANT: Mr Paxton

FIRST RESPONDENT: Child Support Registrar

SECOND RESPONDENT: Ms Lafferty

FILE NUMBER: PAC 6065 of 2011

APPEAL NUMBER: EA 145 of 2012

DATE DELIVERED: 18 August 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Ryan, Aldridge & Austin JJ

HEARING DATE: Heard by way of written submissions: filed by the first respondent on 20 July 2016 and the applicant on 25 and 29 July 2016.

LOWER COURT JURISDICTION: Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE: 4 October 2012

LOWER COURT MNC: [2012] FMCAfam 1181

THE APPLICANT: In person

SOLICITOR FOR THE FIRST RESPONDENT: Australian Government Solicitor

THE SECOND RESPONDENT: No appearance

Orders

1. The applicant shall pay the first respondent’s costs of and incidental to the applicant’s dismissed application for leave to appeal, in the sum of $12,734 inclusive of GST, subject to the provisions of Order 2 hereof.

2. The costs shall be paid by the applicant to the first respondent as follows, in default of which the entire balance will immediately fall due:

   (a)Six payments of $2,000 by monthly instalments, the first payment of which shall be paid within one month of the date of these orders; and

   (b)       A final payment of $734 within one month thereafter.     

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Paxton & Child Support Registrar and Anor (Costs) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 145 of 2012
File Number: PAC 6065 of 2011

Mr Paxton

Applicant

And

Child Support Registrar

First Respondent

And

Ms Lafferty

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. On 1 July 2016, this Court dismissed the applicant’s application for leave to appeal against orders made by the Federal Magistrates Court (as the Federal Circuit Court then was) in relation to a dispute over child support. Orders were then made reserving the Registrar’s application for costs against the applicant (Paxton & Child Support Registrar and Anor [2016] FamCAFC 116).

2. Procedural orders provided for the parties to file and serve, within given time periods, the evidence and submissions upon which they wished to rely in order that the Registrar’s costs application could be determined in chambers.

3. These are the reasons determining that application.

The application

1. At the conclusion of the hearing of the parties’ applications for leave to appeal and cross-appeal, the Registrar foreshadowed he would seek costs against the applicant calculated on an indemnity basis.

2. Instead, the Registrar now seeks a costs order on a party/party basis, quantified in the amount of $12,734.61, or such other amount as the Court considers appropriate.

The evidence

1. The Registrar relied upon the affidavit of the AGS lawyer representing the Registrar in these proceedings, which was filed on 20 July 2016.

2. The applicant relied upon his affidavit filed on 29 July 2016.

Discussion

1. The provisions of s 117 of the Family Law Act 1975 (Cth) (“the Act”) apply. The Registrar should bear his own costs of the proceedings unless the Court is of the opinion that circumstances justify an order for costs. In determining what costs order, if any, should be made, the Court must have regard to the factors prescribed by s 117(2A) of the Act.

2. In asserting his entitlement to a costs order, the Registrar relied upon the applicant’s apparent capacity for payment (s 117(2A)(a)), aspects of the applicant’s conduct of the proceedings (s 117(2A)(c)), the fact the applicant was wholly unsuccessful (s 117(2A)(e)), and the nature of the proceedings (s 117(2A)(g)).

3. In his written submissions filed on 29 July 2016, the applicant largely refuted the Registrar’s arguments with simple denials. He contended the Registrar’s submissions were unfounded and without merit, for which reason no costs should be ordered against him in favour of the Registrar.

4. Curiously, the applicant additionally contended:

   …Rather [the Registrar] should pay [his] entire costs after a full accounting of them.

5. There was no basis for consideration of such an order. Only the Registrar’s costs of the proceedings were reserved, and only then in respect of the applicant’s failed application for leave to appeal. In respect of the Registrar’s failed application for leave to cross-appeal, an order was made that there be no order as to costs.

Applicant’s financial circumstances

1. So far as the evidence goes, there is no dispute that the applicant:

   (a)enjoys sole proprietary interest in the home he occupies, which is encumbered by mortgage securing a debt of approximately $173,000 (the current value of the property is unknown, so his current net equity in the property is also unknown); and

   (b)receives income of $2,760 per fortnight in the form of a life-long pension due to his past service at a tertiary institution, of which he uses $1,205 per month to service the mortgaged debt (so, net of mortgage payments, his income equates to about $4,775 per month).

2. The applicant did not depose to his liability for any other debts. His former credit card debt was subsumed within the balance of the mortgaged debt.

3. No evidence was adduced and no submission made about it, but we impute the applicant was not in receipt of a grant of legal aid (s 117(2A)(b)), since he was self-represented at the hearing.

4. We do not accept the applicant’s submission that:

   Capacity to pay is not relevant.

5. His financial capacity is relevant because the Act expressly directs attention to his financial circumstances. It could not be said the applicant is affluent, but he is not penurious. In isolation, his financial circumstances are not such as to warrant a costs order against him, but nor are they such as to preclude a costs order against him if other considerations would justify such an order.

Applicant’s conduct of the proceedings

1. The proceedings determined by the Court’s orders on 1 July 2016 were in fact commenced years before in November 2012.

2. By reason of the applicant’s failure to comply with the Family Law Rules 2004 (Cth) (“the Rules”), the proposed appeal was deemed abandoned in September 2013, but he thereafter applied to re-instate it.

3. The Registrar wrote to the applicant in October 2013 warning of the asserted lack of merit in the proposed appeal, inviting the applicant to desist from it, and foreshadowing an application for indemnity costs if the appeal (but, more accurately, the application for leave to appeal) was pressed and dismissed. The applicant replied in November 2013 rejecting the invitation to desist and asserting the Registrar was “the antithesis of a model litigant”.

4. Ryan J later heard and allowed the applicant’s application to re-instate the proposed appeal (Paxton & Child Support Registrar and Anor [2015] FamCAFC 121), following which the Registrar wrote to him in similar terms as before, but the applicant again rebuffed him saying “[t]here will be no settlement”.

5. As the hearing in June 2016 approached, the applicant amended his proposed grounds of appeal a second time, but the amended grounds still betrayed his misunderstanding of the appellate process (at [34]). The applicant also filed three applications in an appeal over several months before the hearing, all of which were dismissed, either because they would make no difference to the outcome or because they were misconceived (at [26]-[27]).

6. During the life of the proceedings before this Court, in all, the applicant filed or served eleven sets of written submissions, all of which had to be considered and refuted by the Registrar.

7. As it transpired, the applicant’s application for leave to appeal and the many submissions made in support of it were misguided and unsound. The Registrar was put to considerable expense to understand and explain that to be so. The applicant should not have been so cavalier as to reject out of hand the invitations made by the Registrar in October 2013 and July 2015 to abandon the proposed appeal without costs consequences. A party cannot litigate with impunity regardless of his chances. That was particularly so in this case, since the applicant was warned by his own lawyers in 2011 and 2012 that his underlying action, which became the subject of the appeal, had little or no chance of success (at [13], [16]).

The applicant was wholly unsuccessful

1. The applicant’s application for leave to appeal against the orders of the Federal Magistrates Court failed entirely. The Court found the applicant’s proposed grounds of appeal had no chance of success and it would have been futile to grant leave to appeal (at [47]).

2. The applicant submitted that we could not find he had been wholly unsuccessful in the proceedings until his now pending application for special leave to appeal from our orders made on 1 July 2016 is determined by the High Court, but that submission is rejected. The orders we made necessarily determine that he was wholly unsuccessful, which orders will stand unless disturbed by the High Court.

Nature of the proceedings

1. The appeal proceedings before this Court were essentially conducted between the applicant and Registrar. Ms Lafferty remained a party, but her involvement was minimal (at [6]). Consequently, as has been observed in other cases of like nature (Hendy v Deputy Child Support Registrar & Anor (2001) 27 Fam LR 641 at 667-668; Laurie & Child Support Registrar [2009] FamCAFC 183 at [124]-[125]), the proceedings may be properly characterised as a civil cause between the Commonwealth and a citizen rather than a matrimonial cause between spouses or a domestic cause between partners, in which event an argument for departure from the ordinary rule established by s 117(1) of the Act will likely be stronger.

2. The force of that argument has been enhanced by enactment of the Tribunals Amalgamation Act 2015 (Cth), which relevantly now provides for the AAT to review the Registrar’s decisions and for appeals therefrom to now be directed to the Federal Court, which appeals are not subject to any provision like s 117 of the Act. Now, in appeal proceedings which follow that new appellate path, costs will commonly follow the event.

3. The Registrar, funded as he is by the public purse, ought not have to bear the costs of reasonably defending his position against an unreasonable attack.

Conclusions

1. The Registrar has established entitlement to a costs order in his favour against the applicant. That conclusion follows from the complete lack of merit in the proposed appeal, the way in which the application for leave to appeal was prosecuted (such as by rejecting the Registrar’s reasonable invitations to compromise and by criticising the Registrar as the antithesis of a model litigant without valid grounds), and the unreasonably high cost of the proceedings to the public purse if there is no form of recompense. The applicant’s modest financial circumstances do not, of themselves, militate against that outcome.

2. That leaves for consideration the nature of the costs order to be made. As earlier noted, the Registrar sought that his costs be quantified in the exact sum of $12,734.61 inclusive of GST.

3. The Registrar’s lawyer deposed how the Registrar actually incurred costs and disbursements totalling in excess of $43,000, referrable only to defence of the applicant’s failed application for leave to appeal, excluding any costs pertinent to prosecution of his own failed application for leave to cross-appeal. That figure was computed in accordance with rates negotiated and agreed between the Registrar and AGS. The lesser amount sought was computed by reference to the lesser rates prescribed under Schedule 3 to the Rules.

4. The modesty of the Registrar’s claimed costs is evident from the applicant’s admission that:

   The [Registrar’s] claim is a mere fraction of my actual costs.

5. The Court is permitted by the Rules (r 19.18(1)(a)) to order the payment of costs in a specific amount. We are satisfied the amount sought by the Registrar is proper and reasonable and we are therefore prepared to quantify the costs in that (rounded) amount so as to avoid the delay and expense of a further dispute between the parties over assessment of the costs.

6. The Registrar acknowledged, in his written submissions, willingness to accept payment of the costs by way of instalments over “a reasonable period”. In recognition of the applicant’s financial circumstances, the orders will provide for the costs to be paid by monthly instalments of $2,000, in default of which the entire balance will immediately fall due for payment.

I certify that the preceding thirty five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ryan, Aldridge & Austin JJ) delivered on 18 August 2016.

Associate:

Date:  18 August 2016