Rickards & Rickards

[2007] FamCA 321

FAMILY COURT OF AUSTRALIA

RICKARDS & RICKARDS [2007] FamCA 321

FAMILY LAW  - APPEAL – Costs – Discontinuance – The father discontinued an application relating to children in the Federal Magistrates Court – The mother then brought an application for costs arising from this discontinuance – The Federal Magistrate made a costs order of $14,191 in favour of the mother based on a request from counsel which set out a bill in taxable form incorrectly prepared in accordance with the Family Law Rules and calculated on an indemnity basis – The Federal Magistrate did not fall into error by focusing on the parties’ income disparity in making the costs order, however, the Federal Magistrate was under an obligation to make an order in accordance with the Federal Magistrates Court scale for the calculation of party-party costs – There were no appropriate circumstances here to go outside the normal party-party costs basis –– The parties agreed to allow the appeal in part and reduced the quantum of costs to $7,500 in favour of the mother

FAMILY LAW - Costs of the appeal – As each party had some success in the proceedings and some culpability in terms of responsibility for the manner in which the Federal Magistrate fell into error, it was not appropriate to depart from the general rule under s 117(1) that parties bear their own costs – No costs order made.

Family Law Act 1975 (Cth)

APPELLANT: MR RICKARDS

RESPONDENT: MS RICKARDS

FILE NUMBER: MLM 2584 of 2005

APPEAL NUMBER: SA 1 of 2007

DATE DELIVERED: 12 April 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Kay J

HEARING DATE: 12 April 2007

LOWER COURT JURISDICTION: Federal Magistrates Court

LOWER COURT JUDGMENT DATE: 18 December 2006

LOWER COURT MNC: [2006] FMCAfam 726

REPRESENTATION

COUNSEL FOR THE APPELLANT: DR ALEXANDER

SOLICITOR FOR THE APPELLANT: KENNEDY GUY

COUNSEL FOR THE RESPONDENT: MR HOULT

SOLICITOR FOR THE RESPONDENT: MAHONYS

Orders

1. That the appeal be allowed.

2. That order 1 of the orders made by O'Dwyer FM on 18 December 2006 be varied by substituting the figures $7500 for the sum of $14,191.00 therein appearing, such sum to be paid on or before 11 May 2007.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Kay delivered this day will for all publication and reporting purposes be referred to as Rickards and Rickards.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

Appeal Number: SA 1 of 2007
File Number: MLM 2584 of 2005

MR RICKARDS

Appellant

And

MS RICKARDS

Respondent

REASONS FOR JUDGMENT  

1. This is an appeal against a Federal Magistrate's costs order that was made upon the discontinuance of proceedings. I heard this appeal sitting as a single judge of the Family Court pursuant to arrangements made under s 94AAA(3) of the Family LawAct 1975 (Cth) (“the Act”).

2. The parties are the parents of two children.  A dispute had arisen between them concerning the ongoing education of each of the children.  The parties were unable to resolve that dispute and the father issued some proceedings in which he sought some relief relating to each of the children. 

3. Before the first return day in the Federal Magistrates Court, an agreement was reached in that the mother conceded the father's position in relation to one of the children but the matter continued onwards in relation to the other child. 

4. Eventually the father conceded the position in relation to the other child and filed a notice of discontinuance. The mother then brought an application for costs in accordance with the provisions of rule 13.02 of the Federal Magistrates Court Rules that provides that if a party discontinues an application or part of an application, either party in the proceedings may apply for costs.

5. On 18 December 2006 O'Dwyer FM heard submissions from each of the parties and then ordered that the father pay the mother's costs in a sum fixed in excess of $14 000 based upon a request that had been made by the counsel for the mother and supported by an affidavit from her solicitors setting out a bill in taxable form.  That bill appears to have been prepared in accordance with the scale prescribed by the Family Law Rules which, I comment, has no application to proceedings in the Federal Magistrates Court and which on the face of it appeared to be calculated on an indemnity basis, certainly not on a party-party basis.

6. Although the quantum issue was not addressed by counsel in the course of submissions before the Federal Magistrate, in the course of discussion today in this appeal I made it clear that I was of the view that the Federal Magistrate was still under an obligation to make an order in accordance with the rules of court that provide a scale for the calculation of party-party costs, particularly rule 21.10.  It provides that unless the court otherwise orders, a party entitled to costs in proceedings is entitled to costs in accordance with Part 1 of Schedule 1 and disbursements properly incurred.

7. Whilst there is scope for the court to order outside the realms of the scale, I would adopt the view of Scarlett FM in Gaudry (No 2) (2004) FLC 93-203 at 79,308; 33 Fam LR 346 at 348 where the Magistrate appears to approve a submission that had been made:

   A court should not lightly depart from the ordinary rules relating to costs between party and party.  The circumstances justifying any departure should be of an exceptional kind.

8. This is in accordance with rules that have been well stated in a number of decisions of the Full Court of the Family Court, not the least of which is JEL v DDF(No 2) (2001) FLC 93-083; 28 Fam LR 119 where the Full Court at pars 62 and 63 draw attention to the decision of Kohan (1993) FLC 92-340 and a decision of Colgate-Palmolive Company & Anor v Cussons Pty Ltd (1993) 46 FCR 225 that:

   The ordinary rule is that, where the Court orders the costs of one party to litigation be paid by another party, the order is for payment of those costs on the party and party basis...

9. It seems to me that if there is to be a departure from the ordinary course, there needs to be appropriate circumstances present and the departure needs to be explained by the judicial officer creating such a departure. 

10. There were no apparent appropriate circumstances in this case, nor was there any attempt by O’Dwyer FM to explain why he was choosing to go outside of the normal party-party basis. 

11. The parties have now agreed in any event that, as a result of the discussion that occurred before lunch, orders should be made which allow the appeal in part and reduce the quantum down to $7500. 

12. The appellant had sought to argue that the Federal Magistrate had failed to pay attention to other aspects of the submissions that would have made it inappropriate for any costs order to be made.  It is quite clear from the decision of the Full Court in Brown (1998) FLC 92-822; 23 Fam LR 349 that a court, when applying s 117 of the Act which governs the issue of costs, is obliged to have regard to the relevant matters set out in s 117(2A); that is, all of the relevant matters and not just some of them. However, it is up to the judicial officer to determine which of the features of the case become the dominant ones, and as the court said in Brown's case, par 17:

    In many cases there will be an outstanding feature of the case that makes an order for costs appropriate, a feature which so dominates the scene that it can outweigh any of the other s 117(2A) considerations. In those cases the Court may readily infer that the trial Judge has given appropriate consideration to the aspects of s 117(2A) but in the shadow of each of the required aspects has appropriately determined that overwhelmingly the case demands an order for costs to be made…

13. In this case the Federal Magistrate clearly identified that the single event that determined that a costs order should be made was the disparity in the income of the parties.  That disparity had been identified at the bar table without any objection from counsel on behalf of the father who had raised a disparity in capital in favour of the mother.  The Magistrate thought that the income disparity was so great that it justified a costs order.  In my view the appeal, insofar as it challenged that approach, was doomed to failure.

14. The mother has sought an order for costs in the proceedings before me.  The father has asked that each party bear their own costs.  It seems to me that each party has had some success in the proceedings.  The father sought to have the costs order discharged in its entirety, the mother sought to uphold it and the result that has been achieved has been something other than what each party had sought. 

15. It seems to me that there is some culpability in a formal sense, and I do not mean that in any negligence sense or inappropriate behaviour sense, but each of the parties has been somewhat responsible for the manner in which the Federal Magistrate ultimately fell into error and in the circumstances I am not satisfied that it is appropriate to depart from the general rule under s 117(1), so there will be no order for costs of the appeal.

I certify that the preceding Fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kay

Associate: 

Date:  17 April 2007