Salt and Salt (No 2)

[2020] FamCA 170

FAMILY COURT OF AUSTRALIA

SALT & SALT (NO. 2) [2020] FamCA 170

FAMILY LAW – PRACTICE AND PROCEDURE – Costs – meaning of wholly unsuccessful in the proceedings – significance of unfavourable fact finding in relation to conduct in the proceedings – where an order is made for the Father to pay 85 percent of the Mother’s costs on a party/party basis.

Family Law Act 1975 (Cth) ss 117(2A)
Family Law Rules 2004 (Cth) Ch 19.

Hawkins & Roe [2012] FamCAFC 77

I & I (1995) FLC 92-625

M v M (1988) 166 CLR 69

Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664

Penfold v Penfold (1980) 144 CLR 311

U v U (2002) 211 CLR 238

APPLICANT: Mr Salt

RESPONDENT: Ms Salt

FILE NUMBER: CAC 1754 of 2016

DATE DELIVERED: 20 March 2020

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Gill J

HEARING DATE: 13 March 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr R Hoult

SOLICITOR FOR THE APPLICANT: Infinity Legal

COUNSEL FOR THE RESPONDENT: Mr J Haddock

SOLICITOR FOR THE RESPONDENT: Dobinson Davey Clifford Simpson

Orders

1. The Father pay 85 per cent of the Mother’s costs of the parenting substantive proceedings on a party-party basis as agreed or as assessed.

2. The Father pay the Mother’s costs of the stay application on a party-party basis as agreed or as assessed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

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 r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 1754 of 2016

Mr Salt

Applicant

And

Ms Salt

Respondent

REASONS FOR JUDGMENT

Background

1. This application concerns the costs of the substantive hearing between the parties in relation to their child, and the costs in relation to an application for a stay pending appeal in relation to the orders made in respect of the child.

2. Proceedings were conducted between the parties in relation to property and child related matters from October 2016.  Although the parties were ultimately able to resolve the property dispute between them by consent, parenting arrangements fell to be determined at a final hearing taking place between 17 September 2018 and 21 September 2018 and on 6 November 2018.  Judgment was delivered on 18 December 2019.

3. The Mother seeks her costs of the parenting aspect of the proceedings be paid by the Father as agreed or as taxed.[1]

   [1] An apparent reference to assessment under the rules.

4. Subsequently the Father lodged an appeal and applied for a stay of those orders.  He was unsuccessful in the stay application and has since discontinued the appeal.  The Mother seeks that her costs in relation to the stay be met by the Father, again as agreed or as taxed.

5. The Father seeks that the applications for costs be dismissed and that the Mother pay his costs in respect of those applications.

Material relied upon regarding financial circumstances of the parties

1. The Mother relied upon the following:

   a)Application in a Case filed 14 January 2020;

   b)Affidavit filed 22 January 2020; and

   c)Submissions filed 12 March 2020.

2. The Father relied upon the following:

   a)Response to an Application in a Case filed 6 March 2020;

   b)Affidavit filed 22 February 2020; and

   c)Submissions filed 13 March 2020.

General principles relating to costs

1. Costs are governed by the operation of s 117 of the Family Law Act 1975 (Cth) which provides a starting point that each party should bear his or her own costs, unless circumstances are established, pursuant to ss 117(2) and (2A) that justify the making of a costs order.

2. In Hawkins & Roe[2] the majority of the Full Court, in identifying the underlying rationale for this starting point in relation to parenting cases, observed that:

   In proceedings involving children’s or parenting matters, the general rule is not often displaced. The rationale for this practice is that in such matters it is proper that parents are able to put their case in seeking orders which they believe to be in the best interests of their children. It hardly needs to be said that the nature of family court litigation in relation to children is quite different to a commercial dispute in the state or federal courts.

   [2]Hawkins & Roe [2012] FamCAFC 77.

3. Section 117 was dealt with by the High Court in Penfold v Penfold[3] where the plurality said:

   It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.

   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.

   [3] (1980) 144 CLR 311.

4. Those justifying circumstances are set out in s 117(2A). In I & I (No 2), the Full 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”.[4]  As indicated in Medlon & Medlon (No 6) (Indemnity Costs), no single factor takes precedence over any other factor. The trial judge is to exercise their discretion with regard to the weight that is afforded each factor under s 117(2A).[5]

   [4] I & I (1995) FLC 92-625 p. 82,277.

   [5]Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 (Strickland J).

5. Section 117(2A) is in the following terms:

   (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.

This case

1. The parties relied upon three of the considerations listed at s 117(2A) being s 117(2A)(a), (c) and (e).

2. The Father also observed that these needed to be considered in the light of what was a complex suite of facts and factors that required multiple experts to give evidence in the proceedings.

The financial circumstances of the parties

1. Both parties addressed this issue.  The Father accepts that he is in a superior financial position to the Mother. 

2. That is not to suggest that the Mother is without financial resources.  She has savings of $155,000, an income of approximately $1,144 per week.  At the trial, it was disclosed that she has a tertiary education in psychology.

3. The Father sets out his asset position at [22] of his affidavit,[6] making the point that there are limitations and issues associated with liquidity.  He has limited cash, $965,000 in stock holdings with his employer (subject to restrictions in disposal), retirement and superannuation provisions of approximately $960,000, life insurance, and a number of debts.  Although he cites a child support debt of $350,000, it should be recognised that this is his estimate of what he will pay through to 2032, as opposed to a current debt.  He has a salary of approximately $295,000 per annum, more than five times that of the Mother’s current salary.  However, he has experienced cash flow problems for a number of years, which is perhaps unsurprising in the light of the litigation engaged in.

   [6] Father’s affidavit filed 22 February 2020.

Whether any party to the proceedings has been wholly unsuccessful

1. This was, perhaps, the most contentious of the matters argued, and requires some consideration of what is meant by the term “wholly unsuccessful in the proceedings.”

2. It is first necessary to pay close attention to the orders pursued by each party.  The orders sought by each party represented the relief each said was in the child’s best interests.  The first measure of either success, or conversely, of a lack of success, is against the orders pursued by a party.

3. In measuring against the orders sought by the parties, it is necessary to consider what “wholly unsuccessful” means in the context of the particular characteristics of litigation in relation to children in this jurisdiction.  It has been frequently observed that such litigation is not strictly inter partes.[7]  For example, the Court, subject to the requirements of procedural fairness, is able to impose orders that reflect a result sought by neither party, where such is in the best interests of the children.[8]  This may result in a circumstance where, although a party does not receive the relief he or she sought, that party, nonetheless could not be considered to be wholly unsuccessful, in that he or she successfully resisted the relief sought by the other party.

   [7]M v M (1988) 166 CLR 69 at 76; U v U (2002) 211 CLR 238 [166]–[174].

   [8]U v U (2002) 211 CLR 238.

4. The Father correctly pointed out that the criteria is not the success of one party, but rather that a party has been wholly unsuccessful.

5. The Father asserted that, as he was successful in respect of a number of the factual matters pursued by the Mother, he should not be considered to be wholly unsuccessful. 

6. The preferable view is that success, or rather, lack of success, is measured against the relief sought, rather than the pursuit of individual factual issues.  The proceedings are directed to the orders that are in the child’s best interests.  A party’s pursuit in the proceedings is of particular articulated orders that the party asserts are in the child’s best interests. 

7. Obtaining such orders is a mark of success in the proceedings.  Failure to obtain such orders equates to a lack of success in the proceedings.  That does not necessarily equate to a complete lack of success.  Where, however, not only has a party not obtained the orders that party seeks, but has also failed to ameliorate the orders sought by the opposing party in the first party’s favour, the lack of success then becomes a complete lack of success.  Obtaining a number of factual findings in a party’s favour does not alter the party’s success in the pursuit of orders, and hence in the proceedings.

8. To assess success and lack of success it is therefore necessary to consider the positions taken by each of the parties.  Their precise positions are set out in the annexure to these reasons, as are the orders that were ultimately made.

9. The Father’s position was that the parties have equal shared parental responsibility for the child.  The Father sought that the child live with the Mother from Sunday at 6pm to Friday at 6pm and with the Father from Friday at 6pm to Sunday at 6pm.

10. The Mother sought, at the commencement of the trial, sole parental responsibility for the child and that the child live with her.[9] The Mother additionally sought that the Father spend time with the child for a period of up to three hours on four separate occasions each calendar year, with such time to be supervised by Z Contact Centre or an agreed equivalent professional supervision agency.  

    [9] Exhibit M1. 

11. The Mother obtained precisely the orders that she sought.  There was no amelioration of those in the Father’s favour.

12. The Father was wholly unsuccessful in the proceedings.

13. That, however, does not necessarily render the Father’s success in relation to a number of the factual issues pursued by the Mother as irrelevant to the question of costs.  It is a matter relevant to the conduct of the proceedings.

The conduct of the parties in the proceedings

1. Both parties gave some emphasis to this consideration, both as a justification for costs, and in resistance to a costs order.

2. The Mother’s contentions centred on the factual matters that the Father was unsuccessful in relation to.  While he denied particular matters in relation to the possession of child exploitation material and internet ‘chats’, adverse findings were made against him in relation to these central matters.  The Mother says that his denial of matters where he was unsuccessful added to the expense of the proceedings.

3. Conversely, the Father identifies that the Mother was unsuccessful in relation to a number of the factual issues that she pursued, and that her pursuit of those matters both increased the cost of the proceedings, but also meant that, in regards to his success in relation to these factual matters, that he could not be regarded as wholly unsuccessful.

4. The Father also complained as to a failure on the part of the Mother to make an offer to settle the proceedings.[10]  Given the disparity between the parties’ positions throughout the proceedings, this is not a matter that was open to be resolved by compromise.

   [10]Family Law Act 1975 s 117(2A)(f).

Discussion

1. The three matters identified by the parties each favour departure from the starting point that each party bear his or her own costs, in favour of the Mother.  Of those factors, it is the fact that the Father was wholly unsuccessful in the proceedings that, in this case, is pivotal in reaching the conclusion that he should pay the Mother’s costs in these proceedings.  While it may be accepted, as was said in Hawkins & Roe[11] that the general rule is not often displaced, the complete lack of success is an adequate reason to displace the rule here, particularly where it is buttressed by other factors that also support that departure.

   [11] [2012] FamCAFC 77 [14].

2. A question remains as to the terms of the order.  Some complaint was made by the Father as to the lack of specificity as to how the costs by the Mother were incurred, or as to the extent of the costs.  He also objects to the evidence identifying the costs incurred.  The Mother seeks an order for the taxation (or rather, assessment) of the costs (if not agreed), which would necessarily provide the mechanism by which it could be determined what costs were necessarily incurred.  The Rules that govern such proceedings provide appropriate mechanisms for the resolution of such disputes as to quantum.[12]

   [12]Family Law Rules 2004 (Cth) Ch 19.

3. The Mother made clear her position, as identified above, that the costs should be restricted to the child-related dispute, and so the orders should reflect such.

4. As noted above as to the conduct of the proceedings, the Father, although wholly unsuccessful in the proceedings, faced allegations of fact made by the Mother, a number of which were found in his favour, or in relation to which no findings were made.  In his submissions in relation to costs, the Father identifies 36 such matters.  It may be observed that, in relation to a number of these matters, while they might not have assisted in determining that the Father has a sexual attraction to children, they remained of significance in assessing the vulnerability of the child to the Father.[13]  That is, a number retained some relevance in the determination of the issues against the Father.

   [13]Salt & Salt [2019] FamCA 978 [159].

5. While the Mother did not accept that there should be a reduction in her costs by virtue of these matters, she accepted that such a course is available to the Court.  Together, the fact-finding matters call for a reduction in the portion of costs for which the Father should be liable.  Taking a global view of the place they held in the trial of the proceedings, they call for a 15 per cent reduction in the costs liability of the Father, as agreed or assessed.

The stay

1. As noted, the Father applied for a stay pending appeal.  He was wholly unsuccessful in relation to this aspect of the proceedings.  The Father should be liable for the costs of the Mother, again as agreed or assessed.

Conclusion

1. Orders will be made for the Father to pay 85 per cent of the Mother’s costs of the trial on a party/party basis as agreed or as assessed, and to pay the Mother’s costs of the stay application on a party/party basis as agreed or as assessed.

2. Given his lack of success, the Father’s application for the costs of this application is refused.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 20 March 2020.

Associate: 

Date:  20 March 2020

Orders sought by the parties

Minute of Orders sought by the Mother[14]

[14] Mother’s Final Minute of Orders, tendered 17 September 2018, exhibit M1.

1. That the Mother have sole parental responsibility for the child H (“the child”), born … 2014.

2. That notwithstanding Order 1 above, the Mother inform the Father of any major long-term decision in relation to the child’s health, education or religion as soon as practicable.

3. That the child live with the Mother.

4. That the Father spend time with the child for a period of up to three hours on four separate occasions each calendar year, with such time to be supervised by Z Contact Centre or an agreed equivalent professional supervision agency, at dates and times to be agreed, and failing agreement on the second Saturday in March, June, September and December from 10:00am to 1:00pm.

5. For the purpose of Order 4 above, the Father will meet the costs for such supervision.

Orders sought by the Mother[15]

[15] Mother’s Amended Response to Final Orders, filed 14 February 2018.

1. That the Mother have sole parental responsibility for the child Jonathon (“the child”), born … 2014

2. That notwithstanding Order 1 above, the mother inform he father of any major long term decisions in relation the child’s health, education or religion.

3. That the child live with the mother

4. That unless otherwise agreed in writing between the parties, the father spend time with the child for period of up to three hours, each alternate weekend on Saturday supervised by an independent supervising agency as may be available in the Australian capital Territory from time to time

5. That the operation of Order 4 above be suspended on the Easter long weekend and should Christmas Day fall on a Saturday

6. For the purpose of Order 4 above, the father shall pay for such supervision.

Orders sought by the Father[16]

[16] Father’s Initiating Application, filed 27 October 2016.

1. That the mother and father have equal shared parental responsibility for the child H Salt born on 9 September 2014 ("the child").

2. That the child live with the mother from Sunday at 6pm to Friday at 6pm and with the father from Friday at 6pm to Sunday at 6pm.

3. That the father's time with the child be suspended from 6:00 p.m. on the Saturday before Mother's day until 6:00 p.m. on Mother's day;

4. That the child spend time with the father:

   (a)        At Christmas:

   (i)In even years, from 5:00 p.m. on Christmas eve until 12:00 noon Christmas day; and

   (ii)In odd years, from 12:00 noon Christmas day until 5:00 p.m. Boxing day.

   (b)        During the Easter long weekend:

   (i)In even years from noon on Good Friday until 12:00 noon Easter Saturday; and

   (ii)In odd years from 12:00 noon Easter Saturday until 6pm Easter Monday.

   (c)        Such further and other times as may be agreed between the parties.

1. That changeover take place at the father's home, with the mother delivering the child to the father's home at the commencement of his time with the child and the father delivering the child to the mother's home at the conclusion of his time with the child.

2. That each parent encourage and facilitate telephone communication between the child and the other parent whilst the children is in their care as requested by the children but no less frequently than once every 3 days.

3. That each parent keep the other informed of their current residential address, mobile and landline telephone numbers and any available email addresses and advise the other parent of any change thereto within 7 days of such change.

4. That in the event of childhood illness or emergency the parent with whom the child is with contact the other parent forthwith to inform them.

5. That each of the parties, their servants and agents be hereby restrained by injunction from:

   (a)        Abusing, insulting, belittling, rebuking, or otherwise denigrating the other party and

   (b)Discussing these proceedings or the contents of any documents filed in or intended for use in these proceedings to, with or in the presence or hearing of the child and from permitting any other person to do so.

6. That both parents be permitted to liaise directly with the child's school and sporting bodies to receive school notices, information, newsletters, school reports, school photographs and any other necessary information about the child's progress.

7. That each party is at liberty to attend at the said child's school for the purposes of any function or activity that the parents are invited to.

8. That both parents be permitted to attend any medical appointments for the child.

9. That the parents do all acts and things so as to facilitate the issue of a passport for H born … 2014 ("the child") and facilitate the renewal thereof.

10. That the child be permitted to travel internationally with the mother and father.

11. That the parties' facilitate the other parent's international travel with the child or for the child (no more than four times per year) provided the parent provide the other parent with:

    (a)        Their intended departure and return date;

    (b)Proposed makeup time should the non-travelling parent's time with the child is disrupted (if required) and;

    (c)        Contact details for the child whilst the child is away.

Justice Gill Orders 18 December 2019

1. The Mother has sole parental responsibility for the child H (“the child”), born … 2014.

2. That notwithstanding Order 1 above, the Mother shall inform the Father of any major long-term decision in relation to the child’s health, education or religion as soon as practicable following the making of such decision.

3. That the child live with the Mother.

4. That the Father spend time with the child for a period of up to three hours on four separate occasions each calendar year, with such time to be supervised by Z Contact Centre or an agreed equivalent professional supervision agency, at dates and times to be agreed, and failing agreement on the second Saturday in March, June, September and December from 10:00am to 1:00pm.

5. For the purpose of Order 4 above, the Father will meet the costs for such supervision.

6. It is noted that the transcript of the proceedings as conducted on 17 September 2018, and Exhibits M3-M6, M8-33, M36 and F2 are held securely in the Canberra Registry of the Family Court of Australia on the basis that they contain child exploitation material which may be unlawful to possess.

7. It is ordered that no person is to access or uplift the material referred to above without the leave of a Judge or Registrar of the Family Court of Australia.

8. Notwithstanding the preceding order the material referred to above may be returned to the Australian Federal Police following the expiration of all relevant appeal periods.