Rohnan and Rohnan
[2010] FMCAfam 1091
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ROHNAN & ROHNAN | [2010] FMCAfam 1091 |
| FAMILY LAW – Application for adjournment – summary dismissal – application for costs. |
| Family Law Act 1975, ss.4, 44, 74, 79, 117 Federal Magistrates Court Rules 2001, r.21.02 |
| Allen v Allen [2007] FamCA 1018 Arman v Arman [2009] FamCA 8 Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225; (1993) 118 ALR 248 In the Marriage of Kohan (1992) 112 FLR 151; (1992) 16 Fam LR 245; (1993) FLC 92-340 In the Marriage ofRichardson (1999) 26 Fam LR 523 In the Marriage of Whitford (1979) 24 ALR 424; (1978) 35 FLR 445; (1979) 4 Fam LR 754; (1979) FLC 90-612 MacKenzie and MacKenzie (1978) 4 Fam LR 374; (1978) FLC 90-496 Munday & Bowman (1997) 22 FLR 321 Sindall & Taryn (2009) FamCAFC 108 Yunghanns v Yunghanns (2000) 26 Fam LR 331, (2000) FLC 93-029; [2000] FamCA 681 |
| Applicant: | MS ROHNAN |
| Respondent: | MR ROHNAN |
| File Number: | SYC 2056 of 2010 |
| Judgment of: | Monahan FM |
| Hearing date: | 12 August 2010 |
| Date of Last Submission: | 12 August 2010 |
| Delivered at: | Sydney |
| Delivered on: | 12 August 2010 |
REPRESENTATION
| Counsel for the Applicant: | None |
| Solicitors for the Applicant: | None |
| Counsel for the Respondent: | Mr Lloyd |
| Solicitors for the Respondent: | Champion Legal |
ORDERS
The initiating application filed 7 April 2010!Unexpected End of Formula is dismissed.
The Applicant pay the Respondent’s costs fixed in the sum of $5,950.00 to be paid within three (3) months of the date of these Orders.
AND THE COURT NOTES THAT:
(A)The Applicant was called outside of Court at 2:00pm today and there was no response to the call.
(B)Pursuant to rule 16.05(2)(a) of the Federal Magistrates Court Rules 2001, the Court may vary or set aside a judgment or order made in the absence of a party.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of Federal Magistrate Monahan delivered this day will for all publication and reporting purposes be referred to as Rohnan & Rohnan.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 2056 of 2010
| MS ROHNAN |
Applicant
And
| MR ROHNAN |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter was commenced by way of an application filed by
Ms Rohnan (“the wife”) on 7 April 2010 seeking various property and maintenance orders on a final and interim basis. The application was opposed by Mr Rohnan (“the husband”) in his response filed 22 June 2010.
The husband is seeking the summary dismissal of the wife’s application today. The wife’s application contains a request for interim orders to allow leave for her applications under ss.74 and 79 of the Family Law Act 1975 (“the Act”) to continue out of time. Interestingly, she does not seek such leave in respect of her final orders sought.
Background
The parties commenced cohabitation in 1993 and married in July 1997. They separated in February 2003 and a decree nisi for dissolution of marriage was made in October 2004 at the Federal Magistrates Court at Parramatta, which became absolute in November 2004.
These proceedings came before me initially on 7 June 2010. On that occasion the wife was represented by her then solicitor, Mr Frakes from Watts McCray and Mr Lloyd of counsel appeared for the husband. On that occasion I agreed to adjourn the matter for mention to enable the husband to file responding material.
When the matter came before me again on 28 June 2010, Mr Frakes again appeared for the wife and Mr Lloyd again appeared for the husband. On that occasion I made orders adjourning the matter to 28 July 2010 for mention and for hearing of the husband’s interim application for summary dismissal.
On 20 July 2010 the wife’s solicitors, Watts McCray, filed a notice of withdrawal as lawyer.
When the matter returned before me on 28 July 2010, the husband was represented by his solicitor, Mr Jamieson, and the wife did not appear or cause representation for herself on the day. On that occasion I made orders adjourning the matter to 12 August 2010 (today) at 2:00pm for mention and for hearing of the husband’s interim application seeking summary dismissal.
Submissions on adjournment request by wife
The matter returned before me today and Mr Lloyd again appears for the husband. The wife has not appeared, nor caused legal representation for herself. However, the wife did forward a letter to my chambers dated 2 August 2010 which was received by my chambers on 11 August 2010 (yesterday). I read the contents of that letter into the transcript at the commencement of the hearing this afternoon.
I indicated that for reasons of procedural fairness I would treat the letter as a request for an adjournment by the wife and I invited Mr Lloyd to address the Court on that issue. The Court has an implied power to adjourn proceedings when it is necessary to do justice between parties. The Court’s discretion indeed is wide. It should take into account the reasons for the adjournment, any period of delay in making the application including the Court’s own time constraints, any prejudice or disadvantage to the other party which cannot be compensated by way of costs including, if necessary, security for costs, but the fundamental consideration is to do justice between the parties.
The wife’s letter states her reasons for the adjournment. In summary, she seeks an adjournment because:
a)she asserts that she is unable to raise sufficient funds to be properly represented; and
b)she is engaged in child support proceedings with the United Kingdom Child Support Agency.
In his submission, Mr Lloyd asked the Court to decline the adjournment request and allow the husband’s application for summary dismissal to proceed. His submissions may be summarised as follows:
a)the wife was aware that these proceedings were on for hearing today;
b)she was aware that the summary dismissal application was adjourned on the last occasion because of a non-appearance;
c)she was formerly represented by a specialised family law firm until recently and there is no proper evidence that supports an assertion that she cannot afford proper legal representation;
d)there is evidence that she is currently holidaying with her partner and children in Portugal. In that respect let me note text message evidence attached to the husband’s affidavit filed in Court today which I am satisfied was forwarded to the wife by email under a cover letter from the husband’s solicitor dated 10 August 2010; and
e)the husband denies any knowledge of any child support proceedings currently in the United Kingdom or problems regarding his payment of child support.
Given the available evidence, I am satisfied that the wife’s application for adjournment should be refused and consequently the husband should be at liberty to proceed with his summary dismissal action today.
Submissions on summary dismissal request by husband
At the commencement of his submissions Mr Lloyd identified a number of paragraphs of the wife’s affidavit that were the subject of challenge. They were paragraphs:
a)27.1 on the basis of it being argumentative;
b)28 and 30 on the basis of them being conclusions;
c)32 and 33 on the basis of them being a statements of belief only;
d)35 on the basis that it is a conclusion and contains hearsay;
e)37 on the basis that it’s not evidence, but in the nature of a submission; and
f)38, 39, 40, 41 and 46 on the basis of relevance.
Having considered this, I am satisfied, in the absence of contrary submissions, that this evidence should be excluded.
Mr Lloyd also made submissions in regard to the issues of hardship. He pointed to the major deficiencies in the wife’s financial statement whereby she has either, through error or otherwise, claimed greater personal expenditure than her own evidence discloses. In other words, much of her expenses claimed relate to child maintenance expenses. She also has the financial support, and discloses the financial support, of a partner.
Mr Lloyd also took the Court to the husband’s affidavit material that the wife has not chosen to formally respond to. The husband asserts that following separation the wife received approximately 75 percent of the then available matrimonial property pool. In summary, Mr Lloyd argued that the wife has not just failed to prosecute her case, but has provided insufficient or little evidence to support her reasons for the delay in commencing these proceedings or the hardship that she may suffer.
The law
The Court has the necessary inherent power to summarily dismiss or permanently stay particular proceedings. This power should be exercised with caution. Its usual application is where the proceedings are considered to be an abuse of process in that they do not disclose a reasonable cause of action. That is where the Court is satisfied that the application is doomed to fail as distinct from weak or unlikely to succeed. It is not a preliminary trial of the action. These principles have been extensively discussed in a number of cases.
If appropriate, leave may be granted to amend an application rather than dismiss it. Section 44(3) of the Act provides that where a divorce order or equivalent has taken effect, proceedings of a kind referred to in paragraphs (c), (caa), (ca) or (cb) of the definition of matrimonial cause in s.4(1) of the Act shall not be instituted except by leave of the Court in which the proceedings are to be instituted or with the consent of both the parties to the marriage, after the expiration of 12 months from the date the divorce order took effect. In this case that would be in November 2005.
The consequence of s.44(3) is that property and spousal maintenance proceedings should be commenced within 12 months of a divorce order taking effect. The reason for this provision is not surprising, given the civil nature of these proceedings before this Court. Nevertheless, s.44(4) provides that leave may be granted to commence proceedings out of time in cases of hardship.
In the case of MacKenzie and MacKenzie (1978) 4 Fam LR 374; FLC 90-496, Strauss J observed:
“The very purpose of subsection (4) of section 44 is to enable the Court to grant leave to institute proceedings in order to avoid hardship. The Court should exercise this power liberally, but only if it is satisfied that hardship would be caused to an applicant or a child of the marriage if he or she were barred from making a claim for maintenance or relating to property. As against this, the Court cannot ignore the policy underlying s44(3) which is that ordinarily proceedings should be commenced within one year from the date of the divorce order.”
His Honour then went on to state that a Court should exercise their leave power liberally. A similar view was expressed by the Full Court in the 1979 case of In the Marriage of Whitford (1979) 4 Fam LR 754, 24 ALR 424. Their Honours considered that the meaning of “hardship” in s.44(4) is akin to such concepts as hardship, severity or substantial detriment. The Full Court then held that what is required must be something more burdensome than any predictable detriment and stated:
“We consider that in sub-s 44(4) the word should have its usual, though not necessarily its most stringent, connotation. It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense. As a general proposition it might be said the inability of an applicant to pursue a claim which in the circumstances of the applicant or the child of the marriage is trifling, generally will not cause hardship. Similarly where the costs of the applicant will have to bear himself or herself about such or more than what the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted. But otherwise we find no warrant in either sub-s 44(3) or sub-s 44(4) for saying that the right to an entitlement lost must be a substantial one.”
Both the Family Court of Australia and the Federal Magistrates Court of Australia have considered the exercise of this discretion in a number of cases, generally ending with a favourable result for a party seeking leave. Nevertheless, in the case of In the Marriage ofRichardson (1999) 26 Fam LR 523, the Family Court refused leave to an application by a wife who had waited nearly 20 years post-divorce to commence proceedings for a property settlement. Justice Millane held that the wife had not shown that if leave were granted she would be likely to succeed in an application under s.79 of the Act. Consequently it could not be said that there would be hardship to her if leave were not granted.
Decision regarding summary dismissal
Having considered the material before me, I am satisfied as to the following:
a)The wife has failed to prosecute her claim vigorously;
b)The wife has shown further disrespect to this Court by not attending today’s hearing;
c)There is evidence before this Court that the wife is presently holidaying with her family; and
d)Based on the evidence before me, the wife’s application is indeed doomed to fail because I am not satisfied she has:
a)adequately explained her reasons for delaying the commencement of these proceedings; or
b)(more importantly) demonstrated hardship.
On the evidence before me, I am not satisfied that her claims under either ss.74 or 79 would succeed. Consequently, the wife’s application filed on 7 April 2010 is dismissed.
Given this result, the husband seeks costs on an indemnity basis.
Husband’s costs application
Broadly speaking, in cost applications the Court is required to consider two matters. Firstly, whether a costs order should be made and, if so, secondly, how much should the costs order be for. The Federal Magistrates Court has power to order costs “at any stage in a proceeding”, pursuant to r.21.02 of the Federal Magistrates Court Rules 2001 (“the Rules”).
In family law matters, this Court needs to consider s.117(1) of the Act which states the principle that each party shall bear their own costs or shall pay their own costs. The exception to that rule is contained in s.117(2) of the Act where the Court finds that there is justification for departing from the principle. This exception is subject to the matters referred to in s.117(2A) of the Act. Before going any further, it is important to point out, using the words of Cronin J in the recent case of Arman v Arman [2009] FamCA 8 at paragraph 16:
“That costs are not intended as some form of punishment for litigating, but rather to act as a compensation for the party who has had to participate when they properly ought not to have been there.”
Now returning to s.117(2A) of the Act, it states:
“(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.”
It is clear that in the proceedings before me the husband relies on a number of the paragraphs arising in s.117(2A) of the Act. I make the following comments:
·Section 117(2A)(a) – the financial circumstances of each party: in this matter I note that I have the benefit of the wife having filed a financial statement in these proceedings.
·Section 117(2A)(b) – whether any party is in receipt of assistance by way of legal aid: that does not appear to be applicable in this case.
·Section 117(2A)(c) – the conduct of the parties in these proceedings; and s.117(2A)(d) - whether the proceedings were necessitated by the failure of a party to comply with Court orders: I note the comments that I had previously outlined this afternoon in respect of the wife’s non-attendance in these proceedings and her failure to properly prosecute her case.
·Section 117(2A)(e) – whether either party to the proceedings has been wholly unsuccessful in these proceedings: clearly the wife’s application has been wholly unsuccessful in these proceedings.
·Section 117(2A)(f) - whether either part has made an offer in writing, etc: I have no evidence before me in relation to that factor.
·Section 117(2A)(g) - any other relevant matter: I note that there have been four separate Court attendances to date and on two occasions where the wife has failed to attend or obtain any appropriate legal representation.
Decision regarding costs
Having regard to the matters referred to in s.117(2A) of the Act, I find it appropriate in the circumstances to make an order for costs in favour of the husband. Consequently I will now have to consider the issue of quantum.
As previously stated, s.117(2) of the Act empowers the Court to make such orders as to costs as the Court considers just. Unless the Court otherwise specifies, costs are paid on a “party/party” basis. The husband’s counsel has asked for costs to be ordered on an “indemnity” basis.
Party/party costs are costs necessarily incurred and paid at a reasonable rate. The Rules incorporate a schedule of costs as a guide to party/party costs in family law proceedings. Party/party costs would not ordinarily cover all the legal costs incurred by a party.
Solicitor/client costs are ordered when the Court intends that the costs cover all the legal costs reasonably incurred by that party. When a costs agreement is involved, the charges that may be imposed on the other party are subject to the requirement of reasonableness. Regulation 21.02 of the Rules allows the Court to refer the costs for taxation under Chapter 19 of the Family Law Rules 2004 (“the Family Law Rules”). The Taxing Officer can exercise discretion in determining whether all or only some of the work completed by the lawyers should be included in the final bill of costs. The test is necessary and reasonable. Interestingly, indemnity costs are not defined in the Rules. In the Family Law Rules indemnity costs are defined in the explanatory guide to those rules as follows:
“An entitlement to costs, including costs under a costs agreement for all costs incurred, other than costs that are unreasonable in amount or that have been incurred unreasonably.”
In the recent case of Sindall & Taryn (2009) FamCAFC 108, in dealing with an indemnity costs application, O’Ryan J stated at paragraphs 148 to 149 that:
“It is well established that 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.”
His Honour was referring to the cases of In the Marriage of Kohan (1992) 112 FLR 151; (1992) 16 Fam LR 245; (1993) FLC 92-340 and Yunghanns v Yunghanns (2000) 26 Fam LR 331, FLC 93-029. His Honour goes on:
“In Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225, 118 ALR 248, Sheppard J stated that there should be some “special or unusual feature of the case to justify the Court in departing from ordinary practice.” The mere evidence of facts and circumstances capable of warranting an order for costs on an indemnity basis does not mean that the Court is obliged to exercise the discretion to make such an order as costs ultimately remained to be exercised in the discretion of the Court, having regard to the factors in s.117(2A) of the Act.”
The authorities in family law cases are very clear that indemnity costs will only be made in exceptional cases. In a case of Allen v Allen [2007] FamCA 1018, Boland J stated at paragraph 126:
“The power to make an indemnity costs order in an appropriate case is recognised.[1] The principles which apply to the making of an indemnity costs order are not limited to cases where fraud or collateral purpose is established against one party. What is required is that some particular facts or circumstances of the case in question warrant the making of an order for a payment of costs other than on a party/party basis.[2] Generally the departure from ordinary rules relating to costs will require exceptional circumstances.”[3]
[1] Yunghanns v Yunghanns (2000) FLC 93-029 at paragraph 31
[2] Per Sheppard J in Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 at 233, (1993) 118 ALR 248 at 257.
[3] Munday & Bowman (1997) 22 FLR 321
Decision regarding quantum
Having considered the submissions and the evidence before me, I am not persuaded the circumstance in this case fall into the exceptional category which would justify costs being awarded on the basis other than party/party. Consequently the husband’s costs are to be calculated in accordance with schedule 1 of the Federal Magistrates Court Rules.
Following submissions from counsel I am satisfied that an amount claimed in the sum of $5950 is reasonable and I will allow that amount in full.
I am obliged to consider an issue of time to pay, even in the absence of the wife being present. So in the absence of submissions from the wife, on the issue of time to pay, in the circumstances I will give her three (3) months to pay the costs referred to in this order.
I reserve the right to settle the reasons for my decision.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Monahan FM
Date: 19 October 2010
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