Saarinen & Saarinen (No 4)
[2024] FedCFamC1F 490
•22 July 2024
FEDERAL CIRCUIT AND
FAMILY COURT OF AUSTRALIA (DIVISION 1)Saarinen & Saarinen (No 4) [2024] FedCFamC1F 490
File number(s): BRC 9679 of 2020 Judgment of: HOGAN J Date of judgment: 22 July 2024 Catchwords: FAMILY LAW – COSTS –Where the Applicant made an application for costs – Where the Respondent was wholly unsuccessful at the final hearing – Where the Court is not persuaded there are exceptional circumstances – Where costs are awarded on a party and party basis in a fixed amount Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
D & D Costs (No. 2) (2010) FLC 93-435; [2010] FamCAFC 64
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116
Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCA 1178
Nada & Nettle (Costs) (2014) FamCAFC 207; [2014] FamCAFC 207
Yunghanns & Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: First Instance Number of paragraphs: 30 Date of last submission/s: 24 June 2024 Date of hearing: Determined in Chambers upon receipt of written submissions Place: Brisbane Counsel for the Applicant: Ms Brereton Solicitor for the Applicant: Leyden Legal by way of written submissions filed 13 June 2024 Respondent: Litigant in person by way of written submissions filed 24 June 2024 ORDERS
BRC 9679 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SAARINEN
Applicant
AND: MR SAARINEN
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
HOGAN J
DATE OF ORDER:
22 JULY 2024
THE COURT ORDERS THAT:
1.Pursuant to s 117(2) of the Family Law Act 1975 (Cth), the Respondent pay the Applicant’s costs of and incidental to the Initiating Application filed 23 July 2020, as amended on 1 December 2020, 2 December 2020, 9 July 2021 and 10 December 2021 and the Amended Amended Initiating Application filed 18 November 2022, with such amount to be fixed in the sum of $70,355 and to be paid by the Respondent to the Applicant by no later than 5 September 2024.
IT IS NOTED THAT:
A.There is no Court known by the name “Federal Circuit and Family Court of Australia”.
B.The design of the seal affixed to this order issued by the Federal Circuit and Family Court of Australia (Division 1) has been determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Saarinen & Saarinen has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
On 17 May 2024, for the reasons delivered that day, I made orders finalising the parenting proceedings commenced by Initiating Application filed on 23 July 2020 and dismissing an Application for Review filed on 14 March 2024 by Mr Saarinen (the Respondent). The orders also made provision for the parties to apply for an order for costs.
By Application in a Proceeding filed 13 June 2024, Ms Saarinen (the Applicant) sought an order be made that:
(a)within thirty days, the Respondent pay her costs of the proceedings fixed in the amount of $75,000; or alternatively
(b)the Respondent pay her costs of the proceedings, with the same to be assessed on the indemnity basis; or alternatively
(c)the Respondent pay her costs of the proceedings, with the same to be assessed on a party and party basis.
Whilst the written submissions filed in support of the application[1] advance only alternatives (a) and (b) above, I have proceeded on the basis that alternative (c) has not been abandoned by the Applicant and remains her fall-back position. The submissions made on her behalf included, in essence, that the Court would be persuaded that:
(a)the circumstances justify the making of an order for costs; and
(b)such order for costs should be made on the indemnity basis (or, alternatively on the party and party basis); and
(c)the Respondent’s case for orders requiring the children to move from City B to live with him in Brisbane was wholly without merit and had no prospects of success, but the Respondent nevertheless persisted; and
(d)the Respondent had been wholly unsuccessful in his attempt to obtain orders in the terms he sought and in fact obtained orders less favourable than he would have obtained had he accepted offers made by her prior to the trial; and
(e)irrespective of the basis on which the costs are to be assessed, the Court should fix the costs so as to enable the Applicant to avoid the costs associated with the assessment process, the amount fixed should be $75,000 and the Respondent should be required to pay that to her within thirty days.
[1] Sealed 13 June 2024.
On 24 June 2024, the Respondent filed a Response to an Application in a Proceeding. I have proceeded on the basis that he opposes the making of any order as to costs.
In arriving at the determination that I am persuaded that the circumstances justify the making of an order that the Respondent pay the Applicant’s costs on the party and party basis and fixing the same in the amount of $70,355, I have taken the contents of the written submissions filed on behalf of each of the parties into account.
PRINCIPLES
The starting point in relation to costs under the Family Law Act 1975 (Cth) (“the Act”) is that each party bears their own costs.[2] However, if it is of the opinion that there are circumstances that justify it in doing so, the Court may, subject relevantly to s 117(2A) of the Act, make such order as it considers just.[3] In considering what order, if any, as to costs should be made, the Court must have regard to the matters set out in s 117(2A) of the Act.
[2] Family Law Act 1975 (Cth) s 117(1).
[3] Family Law Act 1975 (Cth) s 117(2).
Consequently, the first question to be determined is whether the circumstances of the current proceedings justify departing from the statutorily prescribed starting point of each party bearing their own costs.
The Applicant was represented by privately engaged lawyers during the course of the proceedings. The Respondent was self-represented for the majority of the same, although he had the benefit of legal representation at the trial as a consequence of the application of the Family Violence and Cross-Examination Scheme.
It was not suggested on behalf of the Applicant that the proceedings disposed of by the order made on 17 May 2024 were necessitated by the failure of either party to comply with previous orders.
The parties’ respective financial circumstances[4]
[4] Family Law Act 1975 (Cth), s 117(2A)(a).
The Applicant’s gross weekly income is about $1,164; she has assets said to be valued at $342,000 (gross) and debts of $36,433; her entitlement to superannuation is currently in the amount of $92,719; she has not received any payment of child support for the children from the Respondent since August 2018 and has been responsible for meeting all of the children’s costs, other than those met by him when they are in his care. The Respondent has an outstanding child support debt, as at mid-February 2024, in the amount of $9,030.02.
The Applicant’s total legal costs, inclusive of the costs of Counsel, are $102,960.59. She has met her legal cost from income and by using a redraw facility available to her on her home loan.
The Respondent’s evidence included that he is not employed; he is financially supported by his partner and is the primary carer for their young child; he has no assets. Where it is otherwise determined to be just, his impecuniosity is not, of itself, necessarily a bar to the making of an order that he pay the Applicant’s costs.[5]
Whether any party has been wholly unsuccessful;[6] the conduct of the parties in relation to the proceedings and other relevant matters[7]
[5]See, for example, D & D (Costs) (No 2) (2010) FLC 93-435; Nada & Nettle (Costs) (2014) FamCAFC 207.
[6] Family Law Act 1975 (Cth), s 117(2A)(e).
[7] Family Law Act 1975 (Cth), s 117(2A)(c) and (g).
The Respondent was wholly unsuccessful in the proceedings – he failed to obtain orders for equal shared parental responsibility for the major long-term issues relating to the children or that the children live with him in Brisbane.
It was submitted on behalf of the Applicant that the Respondent’s conduct unreasonably prolonged the proceedings in that he:
(a)initially sought an order that she be required (contrary to her wishes) to relocate to live in Brisbane; and
(b)initially persisted with assertions about the conduct of the maternal grandparents, before abandoning, at trial, the previously sought orders restraining them from spending time with the children (and noting that the same were not accepted to be substantiated) – which conduct put her to the expense associated with responding to the same; and
(c)made a number of allegations or assertions which were unsubstantiated by expert or corroborative evidence – for example, that the children were the subject of parental alienation; that the children were not receiving adequate health care and the Applicant had mismanaged their psychological health and wellbeing; that the Applicant suffered from Munchausen-by-proxy; that the educational and other opportunities available to the children in Brisbane were superior to those available to them in City B; and
(d)asserted that the Applicant suffered from an anxiety disorder which hampered functional decisions making, was the subject of the controlling influence of the maternal grandparents and had deliberately obstructed his involvement in the children’s healthcare and had acted deliberately to reduce his parental capacity and/or influence; and
(e)filed affidavits which contained a large amount of irrelevant, inadmissible and at times incoherent material which nevertheless required her to incur the costs associated with having her legal representatives read the same to determine whether any of the contents were relevant to the issues in dispute in the proceedings.
I generally accept the thrust of these submissions.
Whether an offer to settle the proceedings was made in writing and the terms of the same[8]
[8] Family Law Act 1975 (Cth), s 117(2A)(f).
The Applicant made two offers to resolve the proceedings before the trial – namely, as conveyed in correspondence dated 13 October 2022 and in correspondence dated 18 October 2022. I generally accept the submissions made on behalf of the Applicant[9] to the effect that, had he consented to orders being made in the terms proffered on these occasions, the Respondent’s position would have been superior to that which has been the consequence of the orders made to resolve the proceedings.
[9]“Application for Costs – Respondent Mother’s Written Submissions” sealed 13 June 2024 at paragraphs 53 to 56 inclusive.
FURTHER DISCUSSION
By virtue of the combination of:
(a)the Respondent’s complete lack of success it the proceedings; and
(b)the manner in which the Respondent conducted the proceedings, including the content of the affidavits relied upon; and
(c)the Respondent’s failure to accept any of the offers made by the Applicant to resolve the proceedings prior to the trial,
I consider that the circumstances here justify the making of an order that the Respondent pay the Applicant’s costs of and incidental to the proceedings (other than in relation to the Application in a Proceeding for which an order for costs in the amount of $5,000 has already been made) and that it is just that he do so.
The conclusions that the circumstances justify the making of an order that the Respondent pay the Applicant’s costs of and incidental to the proceedings and that it is just that he do so, do not determine the basis upon which the costs ordered to be paid should be calculated.
Well-known authority makes it clear that, unless there are exceptional circumstances, an order for costs should be made on the party and party basis and I accept that to order costs to be paid on an indemnity basis is something which is a “very great departure” from the “normal standard” in this and other jurisdictions.[10]
[10]See D & D Costs (No. 2) (2010) FLC 93-435; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; Yunghanns v Yunghanns (2000) FLC 93-029; Kohan & Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 per Sheppard J.
The submissions made on behalf of the Applicant emphasised that the Court would be persuaded, because of the considerable efforts made by the Applicant to try to resolve the proceedings before trial and the terms of such offers and the consequent cost to her of being engaged in the trial which followed (particularly where her financial circumstances are modest) that it is just to make an order that would see her compensated for the costs to her of the litigation, via an order for costs on the indemnity basis.
Whilst others may disagree, I am not persuaded that the circumstances here are exceptional or otherwise of such a nature as to justify the Court departing from the usual basis on which costs are ordered to be paid.[11]
[11]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; In the Marriage of Kohan (1993) FLC 92-340; Yunghanns & Yunghanns (2000) FLC 93-029; Limousin & Limousin (Costs) (2007) 38 FamLR 478.
Consequently, I consider the order as to costs which is just is an order which will require the Respondent to pay the Applicant’s costs of and incidental to the proceedings, as commenced by Initiating Application filed on 23 July 2020 and amended thereafter (save, as has already been indicated, in relation to the Application in a Proceeding for which an order for costs has already been made), on the party and party basis.
I am also persuaded that it is just that I make an order fixing the amount to be paid by the Respondent by way of costs. I arrive at this conclusion having regard to the communications which have already passed between the Respondent and the Applicant’s solicitor and having regard to the content of the submissions prepared by the Respondent in opposing this application for a costs order against him. I consider that being required to participate in the assessment process would unjustifiably result in the Applicant incurring additional costs.
I am easily persuaded that fixing the amount to be paid by the Respondent is the best way to limit future exchanges between the parties and to minimise any further cost to which the Applicant may be put.
As I appreciate it, the charges by the Applicant’s solicitor total $65,780. Given that the Applicant’s solicitor’s name appears on the firm’s letterhead under a heading “Solicitors/Directors” and there are other names which appear under the heading of “solicitors”, it seems more likely than not that, according to the relevant Costs Agreement, his work has been charged out at the rate applicable for Directors (namely, $400/hr) rather than the rate applicable for solicitors ($300/hr) – consequently, the amount charged represents about 164.5 hours of time. Given my conclusion that the circumstances do not justify an order for costs being made on an indemnity basis, the application of the hourly rate of $276.33 provided by Part 1 of Schedule 3 to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (the Rules) gives the amount of $45,456.29.
I have determined that it is just that this amount be further discounted by 20 per cent to reflect that:
(a)the hourly rate of $276.33 applies only to work done or services provided after 1 January 2023 and some of the work done and services provided to the Applicant predate this; and
(b)some of the Applicant’s costs would inevitably include solicitor and own client costs, which would not be allowed on an assessment of costs on the party and party basis.
For these reasons then, I fix the amount of costs, insofar as they relate to work done or services provided to the Applicant by her solicitor, in the amount of $36,365.03. I am easily satisfied that such amount represents costs that are fair, reasonable and proportionate to the issue in dispute in the proceedings.
The total amount Counsel have charged the Applicant is $35,530 (exclusive of those costs which relate to the order for costs which has already been made). I consider that it was reasonable that she engaged Counsel to appear on her behalf. The hourly rates charged by Counsel are either below the hourly rates permitted by Part 2 of Schedule 3 to the Rules or fall within the range permitted. Consequently, save for discounting the specific cost associated with the preparation of final submissions ($1,540) – which I consider should more properly be regarded as falling within the costs of preparing for the final hearing – I am satisfied that the total amount of $33,990 was a fair, reasonable and proportionate expense necessarily incurred by the Applicant in the proceedings.
For the reasons expressed, I fix the costs payable by the Respondent to the Applicant in the amount of $70,355.
Whilst the Applicant sought that the Respondent be required to pay the amount ordered within thirty days, I consider that it is just and appropriate that he be accorded forty-five days within which to make the required payment.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 22 July 2024
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