Pen & Vun (No. 2)
[2021] FamCA 442
•2 July 2021
FAMILY COURT OF AUSTRALIA
Pen & Vun (No. 2) [2021] FamCA 442
File number(s): PAC 3665 of 2018 Judgment of: FOSTER J Date of judgment: 2 July 2021 Catchwords: FAMILY LAW – COSTS – where application for costs made by the wife after husbands nullity application dismissed– where wife was in receipt of a grant of legal aid – where the husband was wholly unsuccessful in his application – where appropriate to order husband to pay costs on a party/party basis until the grant of legal aid and thereafter on a legal aid rate basis limited to the sum paid by Legal Aid and to be repaid to Legal Aid. Legislation: Family Law Act 1975 (Cth) s 117, 1172), 117(2A)
Family Law Rules 2004 (Cth) r 19.18(1)
Cases cited: Beach Petroleum NL v Johnson (No. 2) (1995) 135 ALR 160
Pen & Vun [2021] FamCA 294
Collins & Collins (1985) FLC 91-603
Greedy & Greedy (1982) FLC 91-250
Hawkins & Roe [2012] FamCAFC 77
Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Luadaka & Luadaka (1998) FLC 92-830
Parke & the Estate of the Late A Parke (2016) FLC 93 748
Penfold v Penfold (1980) 144 CLR 311
Number of paragraphs: 28 Date of last submission/s: 10 June 2021 Date of hearing: 8 and 9 April 2021 Place: Parramatta Solicitor for the Applicant: Mr Sant of Longton Legal Solicitor for the Respondent: Ms Gok of SS Lawyers Pty Ltd ORDERS
PAC 3665 of 2018 BETWEEN: MR VUN
ApplicantAND: MS PEN
Respondent
ORDER MADE BY:
FOSTER J
DATE OF ORDER:
2 JULY 2021
THE COURT ORDERS THAT:
1.The applicant husband pay the respondent wife’s costs of and incidental to his application for declaration of nullity with such costs:
(a)to be on a party/party basis as assessed up to the date of the grant of Legal Aid to the wife; and
(b)costs thereafter assessed on a Legal Aid rate basis with such costs limited, if applicable, to the sum paid by Legal Aid NSW to the wife’s solicitors pursuant to her grant of legal aid, and with the quantum of such costs as assessed to be paid by the husband to Legal Aid NSW.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Vun & Pen has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
FOSTER J:
On 13 May 2021 the husband’s application for a declaration of nullity in relation to the marriage ceremony between him and the respondent wife on … September 2014 was dismissed.
Subsequent to the dismissal of the nullity application the respondent wife made application for an order that the husband pay her costs of and incidental to the application for nullity.
The application as to costs proceeded by way of written submission and upon completion of those submissions judgment was reserved to chambers on 17 June 2021.
These reasons assume familiarity with the primary reasons for judgment delivered 13 May 2021: Pen & Vun [2021] FamCA 294.
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to the proceedings shall bear his or her own costs.
That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.
Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: Penfold v Penfold (1980) 144 CLR 311.
The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They are as follows:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party has legal aid and the terms of any grant of aid;
(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 answers, 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.
In Collins & Collins (1985) FLC 91-603 (at 79,877), the Full Court described the discretion conferred by s 117 as being a “broad” one and held that the factors set out in s 117(2A) are not to be read in a restrictive way.
The Full Court in Hawkins & Roe [2012] FamCAFC 77 said:
17.With respect to the application of the section, in Penfold v Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:
1.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".
2.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). 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.
(footnotes omitted)
18.The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:
… A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. 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.
In Greedy & Greedy (1982) FLC 91-250 and Luadaka & Luadaka (1998) FLC 92-830, the Full Court made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters.
The provision relating to the calculation of costs is set out in r 19.18(1) of the Family Law Rules 2004 (Cth) (“the Rules”) which states:
Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a) of a specific amount;
(b)as assessed on a particular basis (e.g. lawyer and client, party/party or indemnity);
(c) to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
It was said in Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 at [162] that the purpose of the rule enabling an order for costs in a specific amount, without formal assessment or taxation is, commonly with other courts, to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”.
In Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 the Court said at [10] that the Court must act judicially, but that does not mean that it must exercise the power to award a lump sum in any “scientific or formulaic manner”.
Murphy J observed in Parke & the Estate of the Late A Parke (2016) FLC 93‑748 at [130]:
If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court”… The process does not “by its very nature … envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place” …
The applicant wife seeks an order for costs on an indemnity basis. The law in relation to indemnity costs is well settled.
The wife filed her submissions as to costs on 27 May 2021, with the husband’s submissions in response filed 10 June 2021.
Otherwise, in support of the wife’s application for costs she relied upon the affidavit of Melissa Gok, solicitor, who had carriage of the matter on behalf of the wife pursuant to a grant of legal aid. Ms Gok gives evidence that on legal aid rates costs were incurred in the total sum of $15,775.50. It is readily apparent from the detailed schedule as to costs provided that some of the attendances billed are not directly related to the prosecution of the defence to the husband’s application for declaration of nullity. Otherwise, the solicitor adduces evidence as to the costs incurred by the wife through her former solicitors in relation to the application for declaration of nullity in the further sum of $11,244.
It is trite to say that in circumstances where there is a grant of legal aid, the solicitors acting are not entitled to charge the client any fees over and above their entitlement pursuant to the grant of legal aid. Accordingly, any order for costs would facilitate a reimbursement to legal aid of costs paid by Legal Aid NSW to the wife’s solicitors.
In substance, the wife asserts correctly that the husband was wholly unsuccessful in his application for the declaration as sought. Otherwise, it is further contended that the husband, on the basis of the evidence adduced by him, properly advised should have been well aware that his application for declaration of nullity was likely to fail. Otherwise, the hearing was protracted by reason of the husband adducing into evidence matters which were not relevant to the issue of nullity but arose in the context of the parties’ relationship overall.
In response, the husband seeks an order that the general rule remain in that the parties pay their own costs of and incidental to the application for declaration of nullity. In the alternative, the husband concedes that in the event that a costs order is to be made it should be made on a party/party basis only with quantum to be assessed in the usual way.
Otherwise, the husband seeks an order that the solicitor for the wife appear before the Court to show cause why she should not be referred to the Professional Conduct Committee of the Law Society of New South Wales.
It must be said that should the husband seek a referral of the wife’s solicitor for what he asserts to be good reason, there is no reason why he cannot make a professional conduct complaint directly to the Law Society of New South Wales himself or through his solicitors.
As to the relevant considerations, there is little evidence before the Court as to the parties’ financial circumstances. The husband asserts that he is on Centrelink benefits but objective documents, including his assertion as to significant funds lent to the wife, result in the Court having significant reservations as to what he contends to be parlous financial circumstances. There is little evidence as to the financial circumstances of the wife save that she is in receipt of a grant of legal aid, with the community thus being put to the expense of funding her response to the husband’s application for declaration of nullity.
As said, the wife is in receipt of a grant of legal aid.
The husband’s application for declaration of nullity was dismissed and he was thus wholly unsuccessful in the proceedings.
In all the circumstances, it is appropriate that the general rule that each party pay their own costs be displaced and it is proper in the above circumstances that justify a departure from that rule that there be an order that the husband pay the wife’s costs of and incidental to the application for declaration of nullity on a party/party basis as assessed.
Orders will be made accordingly.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Foster. Associate:
Dated: 2 July 2021
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