POISAT & POISAT

[2013] FamCA 160

FAMILY COURT OF AUSTRALIA

POISAT & POISAT [2013] FamCA 160

FAMILY LAW – COSTS – Application made for indemnity costs or in the alternative party and party costs – application of principles espoused in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 and Kohan and Kohan (1993) FLC 92-340 – Where there are no circumstances justifying an order for indemnity costs – Where it is not appropriate to depart from the ordinary rule that each party to the proceedings should bear his or her own costs – Application dismissed

Family Law Act 1975 (Cth) s 117(2A).

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248
D & D (Costs) No 2 (2010) FLC 93-435
Kohan and Kohan (1993) FLC 92-340
Rice and Asplund (1979) FLC 90-725

APPLICANT: Ms Poisat

RESPONDENT: Mr Poisat

FILE NUMBER: SYC 768 of 2012

DATE DELIVERED: 14 March 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGEMENT OF: Rees J

HEARING DATE: 11 March 2013

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Watts McCray

COUNSEL FOR THE RESPONDENT: In Person

Orders

IT IS ORDERED

1. That the application of the wife for costs filed 10 December 2012 be dismissed.

IS NOTED that publication of this judgement by this Court under the pseudonym Poisat & Poisat has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 768 of 2012

Ms Poisat

Applicant

And

Mr Poisat

Respondent

REASONS FOR JUDGEMENT

background

1. Before the Court is an application for costs arising out of parenting proceedings in which judgement was delivered on 16 November 2012. In the present proceedings Ms Poisat (“the wife”) applies for an order that Mr Poisat (“the husband”) pay the costs of the substantive proceedings.

2. The substantive proceedings related to parenting of two children then aged 12 years and eight years. On 10 September 2010 by consent, final orders were made in relation to the parenting arrangements for the children.

3. On 14 February 2012, the husband filed an application to vary the parenting orders seeking, inter alia, orders that the children spend equal time with him and with their mother and seeking orders in relation to the children’s schooling.

4. The wife filed an Application in a Case seeking an order that the husband’s application be dismissed pursuant to the principles in Rice and Asplund (1979) FLC 90-725. That application was listed for hearing on 26 September 2012.

5. At the time the husband’s substantive application was filed there was between the parties a significant issue to be determined in relation to the secondary schooling of the oldest child. The wife wanted the child to attend a Catholic college and the husband wanted the child to attend a State high school. There was a dispute between the parties about whether or not the children should be brought up primarily in the wife’s faith, Catholicism, as the wife would prefer or in a combination of the Catholic faith and the Anglican faith which the husband would prefer and there was a dispute about whether or not it would be in the child’s best interest to attend a single sex school or a co-educational school.

6. The orders which had been made by consent provided a mechanism for the parents to reach agreement in relation to schooling but were silent as to religious upbringing. In relation to the children’s schooling, the orders, which are set out in full at paragraph 22 of the judgment in the substantive proceedings, provided a mechanism for the parties to make nominations and attend mediation but, at the time when the matter was set down for hearing, the parties had been unable, using the formula, to come to an agreement.

7. When the matter came before the Court for hearing on 26 September 2012, the schooling issue was still unresolved.

8. After the commencement of the submissions of the parties in relation to the Rice and Asplund application the Court was informed that the parties had been given appointments for the preparation of a Family Report and they jointly applied to adjourn the hearing of the Application in a Case to make an attempt, through the process of the preparation of the Report, to reach an agreement. The parties further agreed that, if they were unable to resolve their differences, the Family Report would come into evidence before me when the hearing resumed in relation to the Application in a Case on 13 November 2012. The Report was released on 9 November 2012 and when the matter came before the Court again on 13 November 2012 the parties informed the Court that an agreement had been reached in relation to schooling for the older child. Thus the only matter which remained to be considered was the Application in a Case.

9. Ultimately the Application in a Case was successful and the husband’s application to vary the consent orders made in 2010 was dismissed.

10. Now before the Court is the wife’s application that the husband pay her costs of and incidental to the proceedings, which the husband opposes.

indemnity costs

1. The application of the wife was for indemnity costs or, in the alternate, party and party costs.

2. The Full Court considered the principles to be applied in relation to an application for indemnity costs in D & D (Costs) No 2 (2010) FLC 93-435 and said:

   26. In Limousin & Limousin (Costs) [2007] 38 FamLR 478, the Court reviewed the authorities in relation to indemnity costs. Reference was there made to the judgement 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.

   27. The Court in Limousin (supra) also referred to the judgement 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 ...

   28. Reference was made to the later decision of the Full Court of Yunghanns v Yunghanns (2000) FLC 93-029 in which is 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.

   29. As was the case in Limousin (supra), the following passage from the Judgement of Shephard J in Colgate-Palmolive (supra) is instructive (at 257):

   ... it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152 evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (SC(NSW)(CA), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records).

3. Nothing in the submissions on behalf of the wife points to circumstances such as those set out in Colgate-Palmolive, or analogous thereto such as to justify an order for indemnity costs.

SECTION 117(2A)

1. The matter falls to be determined pursuant to the provisions of s 117(2A) of the Family Law Act 1975 (Cth).

2. In her affidavit in support of her application, the wife gave no information at all in relation to her financial circumstances. The husband did not file an affidavit setting out the evidence upon which he sought to rely but rather sought to make submissions in relation to his financial circumstances. Accordingly there was no admissible evidence of the husband’s financial circumstances and no evidence at all of the wife’s financial circumstances.

3. Neither of the parties was in receipt of a grant of Legal Aid.

4. There was nothing in the conduct of the parties which would warrant comment. Each of them properly pursued their applications.

5. The proceedings were not necessitated by the failure of either party to comply with previous orders although it might be said that, because they were unable to agree in relation to future arrangements for the schooling of the older child, the proceedings came about in part because of the manner in which the parties consent orders had been drafted. However neither of them could be held responsible for those difficulties.

6. The wife relied heavily upon her assertion that the husband had been wholly unsuccessful in the proceedings. I do not accept that submission. The husband and the wife, in the course of the proceedings and only days before the resumption of the hearing, were able, with the assistance of the Family Consultant, to resolve the very important issue of schooling for the older child.

7. The fact that the husband’s application to revisit the parenting arrangements for the children was ultimately rejected is not determinative. In parenting proceedings it is common that the position for which one parent contends is unsuccessful but that does not mean that the case which was put forward by that parent lacked merit or was unarguable. Such decisions are often finely balanced as the judgement in the substantive proceedings demonstrates.

8. The husband tendered a bundle of correspondence containing settlement negotiations between the parties which demonstrate that by 22 August 2012 the entirety of the issues between them in relation to the children seemed to be resolved. Unfortunately after that date the parties stepped back from what had seemed to be a concluded agreement.

9. Nothing in the matters which have been set out persuades me that it is appropriate in this case to depart from the ordinary rule that each party to the proceedings should bear his or her own costs.

husband’s submissions

1. The husband in his written submissions relied upon a passage from the judgement of the Full Court in Stephens & Stephens and Anor (Enforcement) (Costs) [2010] FamCAFC 172, in support of his contention that it would be rare for the court to make a costs order in a parenting case. The judgement is not authority for that proposition.

2. The Full Court, considering the application of s 117 in applications for costs said:

   112. We also observe that in McDonald and McDonald (1994) FLC 92-508 Mushin J said at 81,271:

   In the first instance it is important to note that the principal proceedings concerned questions of custody. As between the parties in the strict sense of that word, it is rare for an order for costs to be made in such proceedings. Circumstances such as a totally unmeritorious case on one side, an attempt to vary a custody order which does not establish a prima facie case, the withholding of evidence, the giving of false evidence and like matters are common bases for such an order. However, where no factor of this type exists, there would usually need to be a significant disparity in financial circumstances between the parties before a costs order were made.

3. That was the passage on which the husband relied in his submission.

4. However, the Full Court went on to say:

   In I and I (No 2) (1995) FLC 92-625 the Full Court (Nicholson CJ, Ellis and Buckley JJ) referred to what Mushin J said in McDonald and said at 81,277:

   With respect to Mushin J, we see nothing in the provisions of s.117 to justify the approach to the question of costs in custody or any other proceedings suggested by him. The matters to which he referred are matters which, in an appropriate case, would be taken into account in determining whether the circumstances justified the making of an order for costs in a particular case. However, whether such matters exist or not, the other relevant matters referred to 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. The financial circumstances of the parties is but one of those matters and those circumstances must be taken into account whether or not there is a very significant disparity in financial circumstances between the parties.(emphasis added).

5. The husband’s submission that the Full Court approved or adopted the passage from the judgement of Mushin J set out above is therefore rejected.

conclusion

1. The wife’s application for costs will be dismissed.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgement of the Honourable Justice Rees delivered on 14 March 2013.

Associate: 

Date: 14/03/2013