Secco and Reid (No.2)
[2019] FCCA 2594
•20 September 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SECCO & REID (No.2) | [2019] FCCA 2594 |
| Catchwords: FAMILY LAW – COSTS – Order for costs sought in parenting application – whether justifying circumstances to make an order for costs whether costs should be ordered on an indemnity basis – Court not satisfied that an order for costs on an indemnity basis should be made – Court satisfied that there are justifying circumstances for making an order for costs with respect to the trial – each party to bear his or her own costs with respect to the costs application. |
| Legislation: Family Law Act 1975, ss.117, 117(1), 117(2), 117(2A) |
| Cases cited: Tamaniego & Tamaniego (Costs) [2011] FamCAFC 30 Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another [2005] FamCA 158; (2005) 33 FamLR 123 |
| Applicant: | MS SECCO |
| Respondent: | MR REID |
| File Number: | CAC 1283 of 2008 |
| Judgment of: | Judge Tonkin |
| Hearing date: | 20 June 2019 |
| Date of Last Submission: | 25 July 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 20 September 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Howard |
| Solicitors for the Applicant: | Robinson McGuiness |
| Solicitors for the Respondent: | Mills Oakley |
ORDERS
The respondent pay the applicant’s costs in the sum of $32,498.75 within 90 days of the date of these orders.
With respect to the costs application each party shall pay his or her costs.
IT IS NOTED that publication of this judgment under the pseudonym Secco & Reid (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAC 1283 of 2008
| MS SECCO |
Applicant
And
| MR REID |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for costs filed on 17 April 2019 with respect to a parenting matter. The respondent filed a response on 21 May 2019 seeking the application be dismissed.
Orders sought
The applicant sought an order that the respondent pay the applicant’s costs in an amount as agreed or assessed within 30 days calculated as follows:
(a)for the period 7 June 2017 to 9 July 2018 as agreed or assessed; and
(b)$69,792 by way of indemnity costs representing 100% of solicitor/client costs incurred by the applicant between 10 July 2018 and the completion of the final hearing; and
(c)$305 representing the final hearing costs for attendance of the applicant’s solicitor to take judgment and explain the orders.
In the alternative:
The applicant sought an order that the respondent pay to the applicant $40,902.50 by way of costs within 30 days calculated as follows:
(a)$37,737.50 representing the final hearing costs incurred by the applicant as follows:
(i)Preparation for five day hearing at $9,725;
(ii)Daily hearing fee for five days (for solicitor) at $11,205; and
(iii)Daily hearing fee for five days plus advocacy loading (for Counsel) at $16,807.50
(b)$2,860 being the disbursement expenses incurred by the applicant for the cost of the experts attendance; and
(c)$305 representing the final hearing costs for attendance of the applicant’s solicitor to take judgment and explain the orders.
The respondent sought that the application be dismissed and that the applicant pay the respondent’s costs of the application in a case on an indemnity basis as agreed or taxed. In the alterative the applicant pay the respondent’s costs of the application in a case on a party party basis as agreed or taxed.
Documents relied on
The applicant relied on affidavits filed on 17 April 2019 and 17 June 2019 and written submissions. The respondent relied on an affidavit filed on 21 May 2019 and written submissions.
Background
The parties’ child X was born on … 2005. The parties were in a relationship from 2005 until separation in January 2008. The applicant has a child from a previous relationship now 19 years old. The parties have been engaged in litigation in relation to their only child since he was 3 years and 2 months old. X is now 14 years. Final parenting orders were made by consent on 16 December 2009. The orders provided for the parties to have equal shared parental responsibility and for the child to live with the applicant and spend time with the respondent five nights a fortnight.
Following an application brought by the mother to vary those orders, on 13 December 2013 Judge Henderson suspended the orders in part and permitted the mother and child to live in City A, Country B for a specified period during the applicant’s overseas posting and for the respondent to spend time with the child.
On 7 March 2017 the applicant filed an application seeking to extend the suspension of the 16 December 2009 orders to allow her and the child to remain in City A, Country B until 3 July 2017. The respondent filed a response on 17 March 2017 seeking the immediate return of the child to Australia and for sole parental responsibility and for the child to live with the father. In addition on 20 March 2017 he made an application that the mother be dealt with for contempt. The matter was transferred by me from the Federal Circuit Court to the Family Court.
On 24 March 2017 Justice Gill made orders causing the child to be returned to Australia by 26 April 2017 and thereafter reinstated orders 4 to 14 of the final parenting orders made on 16 December 2019.
The child was returned to Australia on 24 April 2017 with the applicant. On 1 May 2017 she returned to City A, Country B where her older child was completing her studies. She agreed that X would remain in Australia in his father’s care during this period. Whilst in City A, Country B the applicant had no contact with X and in 7 June 2017 she filed an application in a case seeking orders that X live with her in accordance with the 2009 consent orders.
On 7 June 2017 the respondent filed an application in a case seeking sole parental responsibility, that X live with the father and spend no time with the mother.
On 11 July 2017 Justice Gill made interim orders that the parties have equal shared parental responsibility and X live with his parents on a week about basis.
In November 2017 Justice Gill dealt with the contempt application and held the applicant to be in contempt. He found that the applicant had “flagrantly breached orders requiring her to return the child to Australia at the end of her posting.”
On 9 February 2018 the applicant was sentenced to a period of good behaviour for 24 months with security of $5,000. The matter was transferred back to the Federal Circuit Court.
The hearing of the matter before me commenced on 16 April 2018. It continued for two days and on 17 April 2018 interim orders were made by consent for X to live with his parents’ week about and attend upon a psychologist for therapeutic counselling with the costs shared equally.
The matter continued over a further three hearing days from 24 to 26 September 2018. Final submissions were made on 15 November 2018. Judgment was delivered on 20 March 2019.
During the hearing each party sought an order for sole parental responsibility. The applicant sought an order that the child live with her and spend time with the respondent from after school Thursday until before school on Monday, school holiday time with the respondent and orders for communication and overseas travel inter alia.
The respondent sought an order that the child live with him and spend no time nor communicate with his mother or sister in addition to injunctions restraining and both the mother and her daughter from a previous relationship from approaching the child or attempting to approach the child, from attending at the child’s school or place of residence and from communicating with the child by any means inter alia.
Final parenting orders were made by me on 20 March 2019 for the parties to have equal shared parental responsibility, for the child to live with the mother and spend time with the father during school term from after school Thursday until before school Monday each alternate weekend, for half the school holidays and on special days. Orders were made for the child to communicate with the father when in the mother’s care and for overseas travel inter alia. No orders were made restraining the mother or her daughter from spending time or communicating with X.
Principles in relation to costs
Pursuant to section 117 of the Family Law Act 1975 (Cth) (“the Act”):
“s.117 (1) Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(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.
In Tamaniego & Tamaniego (Costs) [2011] FamCAFC 30 (24 February 2011) O’Ryan J (as he then was) conveniently set out the applicable principles with respect to costs applications. He said at [19] - [22]:
“19. Section 117(2A) of the Act provides that in considering what order (if any) should be made under s 117(2), the court shall have regard to the matters set out in paragraphs (a) to (g). In Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another [2005] FamCA 158; (2005) 33 Fam LR 123 the Full Court (per Kay, Warnick and Boland JJ), referring to s 117(2A), said at 130:
‘A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s117 is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
20. As to the relationship between s 117 (1) and s 117 (2) of the Act in Penfold v Penfold [1980] HCA 4; (1980) 144 CLR 311 Stephen, Mason, Aickin and Wilson JJ said at 315:
‘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 ss. (1) is expressed to be subject to ss. (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. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s 117 (2) in “a clear case” (emphasis added)
21. As to the nature of the hearing of an application pursuant to s.117 of the Act their Honours said at 315-16:
‘Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent [(1970) 92 W.N. (NSW) 503, at p. 505]). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
In Stephens & Stephens & Ors (Enforcement) (Costs)[2010] FamCAFC 172 (9 September 2010) the Full Court observed at paragraph 67:
‘We also observe that in Re JJT; Ex parte Victoria Legal Aid [1998] HCA 44; (1998) 195 CLR 184 the majority of the High Court (Gaudron, Gummow, Hayne and Callinan JJ, Kirby J dissenting) held that s.117 (2) of the Act referred to costs in the conventional sense and thus to the payment by one party to litigation of money by way of a partial indemnity for professional legal fees and expenses actually incurred by another party in the course of the litigation: see Hayne J at 219. An order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature. Costs are not a penalty or damages: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 per Mason CJ at 543 and McHugh J at 567; Ruddock and Ors v Vadarlis and Ors (2001) 188 ALR 143 per Full Court of the Federal Court at [12] and B & J [2006] FamCA 256; (2006) FLC 93-259 per Full Court (Holden, Warnick and Boland JJ) at 80,403-404.’”
In Wrensted & Eades [2016] FamCAFC 46 the Full Court with Bryant CJ, Finn and Strickland JJ presiding did not accept the position taken by the majority (comprising May and Ainslie-Wallace JJ) in Hawkins & Roe [2012] FamCAFC 77 where the majority had said at [147] as follows:
“Whilst the categories of occasions when costs may be ordered is (sic) not limited the occasions on which such an order should be made in a parenting dispute should have some particular features. Where there is a complete absence of preparedness to compromise in the face of unambiguous expert evidence, where false allegations are made or where one party is clearly motivated by self - interest rather than the best interests of a child then a judge may well conclude that there are circumstances justifying an order for costs.”
Rather the Full Court in Wrensted (supra) said at [98] – [99], [102] and [103] said:
“The examples given by the majority of circumstances in which a costs order may be made and their statement that in such circumstances ‘a judge may well conclude that there are circumstances justifying an order for costs’ does not fetter the wide discretion reposing in the trial judge as long as they are seen as examples rather than requirements. However if the majority in Hawkins & Roe by the use of the words ‘the occasions on which such an order should be made in a parenting dispute should have some particular features’ were intending to indicate that certain features need to be present before a costs order can be made, we respectfully disagree. The wide discretion in s117 (2) of the Act and lack of distinction between categories of family law cases (including the lack of distinction between parenting and property cases) would in our view render such a conclusion plainly erroneous, place a fetter on discretion which does not have a legislative basis and require us to depart from that conclusion (Nguyen v Nguyen 169 CLR 245 at 268 – 270; Gett & Tabet (2009) ALR 504 at [261] – [301] especially at [294]; Green v The Queen; Quinn v The Queen [2011] HCA 49; (2011) 244 CLR 462 per Heydon J at [84] and [85]; F Firm & Ruane and Ors (2014) FLC 93 – 611 at [163].”
I intend to follow the decision of the Full Court in Wrensted (supra). There is no legislative basis to fetter the exercise of discretion when determining whether to make an order for costs. There is no distinction between parenting and property cases. There is no requirement on a trial judge to find that there are any certain or particular features of a parenting case nor do parenting cases fall into any special category when considering whether to make a costs order in a parenting case.
The applicant is seeking costs on an indemnity basis. Shepherd J in Colgate-Palmolive v Cussons Pty Ltd (1993) 118 ALR 248 having reviewed relevant authorities summarised the applicable principles with respect to costs at [24] as follows:
“[24] It seems to me that the following principles or guidelines can be distilled out of the authorities to which I have referred:-
1. The problem arises in adversary litigation, i.e. litigation as between parties at arm's length. Different considerations apply where parties may be found to be entitled to the payment of their costs out of a fund or assets being administered by or under the control of a trustee, liquidator, receiver or person in a like position, for example a government agency or statutory authority.
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. …. In many cases the result will be that the amount recovered by the successful party under the Order will fall short of (in many cases well short of) a complete indemnity.
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. ….. The Court of Appeal in Andrews v. Barnes (39 Ch D at 141) said the Court had a general and discretionary power to award costs as between solicitor and client “as and when the justice of the case might so require.” Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v. Preston ((1982) 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice…..
5. Notwithstanding the fact that that is so, 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 ….. evidence of particular misconduct that causes loss of time to the Court and to other parties ….. the fact that the proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law ……….. the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions ………an imprudent refusal of an offer to compromise ………. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice.”
The Full Court in Prantage v Prantage [2014] FamCA 850 endorsed Shepherd J’s approach in Colgate Palmolive (supra) when considering an application for indemnity costs.
Issues
(a) Whether an order should be made that each party bear his or her own costs; or
(b)Are there circumstances justifying the making of an order for costs; and
(c) Should a costs order be made on an indemnity basis.
Discussion
The starting point under the Act is that each party bears their own costs. The court, however, has a broad discretion to make orders for costs if “the court is of opinion that there are circumstances that justify it in doing so”. The court is required to take into account the factors set out in section 117(2A) in determining what, if any, order for costs to make.
(a) the financial circumstances of each of the parties to the proceedings
The applicant deposed that she spent $153,441.61 in solicitor/client costs up to and including the final hearing. She was represented by Armstrong Legal from early 2017 until August 2017 and again between December 2017 and February 2019. She represented herself between August 2017 and December 2017. She annexed her costs agreements. She deposed that the proceedings had a significantly negative impact on her.
She said at the commencement of the proceedings she owned a property in Town U with an estimated value of $950,000 and mortgage of $406,064. In addition she had received a redundancy of $123,012 (taken in February 2017) and had savings of $8,769. She was unemployed between 1 March 2017 and July 2018. During this period she received an Employer V pension of $1,583.52 net per fortnight. She travelled from City A, Country B to Canberra to spend time with the child at a cost of $8,000. This was the period that the respondent removed the child from the ACT and she and the child’s sister spent no time with X during this period.
The applicant said she was required to pay child support from May to July 2017 during the period the respondent did not facilitate the applicant spending time By August 2017 she said she had expended all her redundancy funds. She received a tax refund of $13,156 and used this to finalise payment to her lawyers in November 2017.
She then attempted to re-finance her mortgage but was unsuccessful. Further credit card applications and personal loan applications were refused. So in March 2018 due to not being able to meet her mortgage repayments she was granted financial hardship relief by ING until September 2018. She borrowed funds of $9,240 to meet her share of Dr T’s report.
She said due to legal fees and financial support for her daughter in Country W, she sold her home for $944,750. She received net proceeds of sale of $417,475. She paid some debts and was left with $359,000. In January 2019 she gave her daughter $330,000 by way of an advanced inheritance to fund the cost of her university degree which she estimated to be $142,650. She moved into rental accommodation and is paying $2,587 per month. On 6 July 2018 she secured a two year part time employment contract and commenced work on 10 July 2018. Her salary is $61,562. She has been advised that her current position has been made redundant and she expects to receive $5,919 gross in redundancy payment. She continues to receive a pension of $682.77 per week.
The respondent said he had incurred $209,203.10 in legal costs from 20 January 2017 to 21 October 2018. He incurred a further $11,833.16 from 22 October 2018 and paid Counsel $17,600 for the conduct of the trial. He owns a property in Suburb Z he estimated is worth between $900,000 and $950,000. The Suburb Z property has a mortgage of $600,028. In addition he owns an investment property in Suburb AA purchased for $265,000 with a mortgage of $273,802 which is rented for $400 per week. He has $249 in savings and a credit card balance of $2,589. He owns shares worth $74,949 and superannuation entitlements not specified. He is employed full time as a professional on $85,232.
The respondent asserted that the applicant had deliberately divested herself of $330,000 in circumstances where she claims she is in dire financial circumstances. He asserted that she has had sufficient funds to travel extensively and frequently. He claimed that in the past the applicant had earned between $95,000 and $110,000 p.a. and when in City A, Country B $200,000. He also claimed she had received $25,000 from her daughter’s father in financial support. He asserted that there was no proper basis for the mother being unemployed between 1 March 2017 and 9 July 2018.
I take into account the parties financial position. I find that the applicant gave her daughter the bulk of the remainder of her net proceeds of sale leaving her in a precarious financial position and that it is apparent that at least $150,000 was in excess of what was required to support her daughter. I find that the applicant works only part time and will soon be without employment. I find that the respondent is in a superior financial position and has secure full time employment. I take into account the parties respective financial positions including the disparity in their income, property and financial resources.
(b) whether any party to the proceedings is in receipt of legal aid and, if so, the terms of the grant of that assistance to that party
Though it was argued by the respondent that the applicant was at one time in receipt of legal aid, the applicant’s Counsel denied that to be the case. I accept that evidence and the submission by Counsel for the applicant that this is not a relevant factor in this matter.
(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
Much has been said about the conduct of the proceedings. I note that when the matter was first before the Federal Circuit Court it was transferred to the Family Court. Justice Gill heard and determined the interim proceedings, the application for the mother to extend the child’s stay in City A, Country B and the father’s application for the immediate return of the child and subsequent contempt proceedings. Those matters were not before me and I note that no costs orders are sought with respect to that aspect of the proceedings.
The respondent is critical of the applicant’s conduct of the case with respect to her objection to the production of documents under subpoena and opposition to the expert providing answers to questions. He argued that was an attempt to stifle the production of valuable evidence. I disagree. The first matter relates to the earlier proceedings before the Family Court. The second matter relates to a request by the respondent for the expert to answer questions. The applicant argued that the request was not in accordance with Federal Circuit Court Rules. In any event this issue did not unduly delay the proceedings.
I note that the parties entered into interim orders by consent following the part heard hearing on 17 April 2018. There was no unnecessary delay of the trial and in my view the matter was conducted by Counsel as expeditiously as possible. Both Counsel were well prepared during cross examination and accommodated the Court splitting the case over two periods in April and September 2018 in an attempt to bring the proceedings to an end. I am unable to make any adverse finding with respect to the parties conduct of the case before me.
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
As indicated the contempt proceedings and the parties competing applications for the return of the child to Australia were not matters before me and no costs orders are sought with respect to proceedings in the Family Court. The respondent argued that the applicant had consistently breached Court orders. No finding to that effect was made by me. The respondent failed to facilitate the child spending time with his mother and sister in July 2017 however no contravention of orders was brought by the applicant. The high level of acrimony between these parties was in my view the reason they continued to litigate over the child.
Litigation in parenting matters is frequently due to the fact one or other parent has a fixed belief about the other parent sometimes as a result of past experience, hurt, distrust or dislike. That view becomes entrenched and parents become unwilling or unable to compromise losing all objectivity regarding what is likely to be in a child’s best interests. Given the intense emotion involved in parent child relationships, parents readily get caught up in litigation recklessly spending exorbitant amounts of money continuing to fight, oblivious to the negative impact their engagement in conflict is having on their child, themselves or other family members caught up in the dispute. The destructive nature of their conflict and financial cost is likely to have a sobering effect once judgment is delivered.
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings
I accept the submission by Counsel for the applicant that the respondent has been wholly unsuccessful in the proceedings. As early as June 2017 he sought an order for sole parental responsibility, for the child to live with him and spend no time and not communicate with his mother or sister. Save for interim orders made in April 2018 the respondent did not alter his position. At the conclusion of the proceedings final orders were made for the parties to have equal shared parental responsibility and for the child to live with the mother. No restraints were made on the mother and the child’s sister spending time and/or communicating with the child. I take this into account in determining whether to make an order for costs.
(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
The family report was released on 8 July 2018. The applicant made a clear and concise offer of compromise on 10 July 2018. The applicant offered to compromise the proceedings and consent to final parenting orders for equal shared parental responsibility, the child to live with the mother and live with the father each alternate weekend from after school Friday until before school Monday, for half of all school holidays and on special days and for the child to communicate with the father at any time in accordance with his wishes and orders for overseas travel as agreed inter alia. I am satisfied that had the respondent accepted the offer both parties would have been in a better financial position, avoiding the costs of the continuation of the trial.
The respondent did not respond to the offer and I find he failed to respond at his peril. I accept that the respondent achieved a result that provided him with more time as a consequence of my orders however he made no response to this offer at all. I place significant weight on the applicant’s offer of compromise and the respondent’s failure to make any reasonable attempt at compromise. I take into account however that the applicant at trial continued to seek an order for sole parental responsibility.
Regarding the subsequent offers made by the applicant I do not accept that the respondent was required to draw any inference that the applicant was implicitly seeking an order for equal shared parental responsibility. An offer in its terms should be precise absent any ambiguity and capable of being accepted in its terms.
I take into consideration that the application moved on by the applicant during the trial was in the main successful save for the order for parental responsibility. She sought an order for the child to live with her and spend time with the respondent regularly during school terms, school holidays, on special days and for overseas travel. I take that into account in determining whether an order for costs should be made.
(g) such other matters as the Court considers relevant
I take into account that this was a complex matter requiring the assistance of Dr T as expert. I do not accept that the outcome of the proceedings was predictable. The respondent held a fixed belief that the applicant had caused the deterioration in his relationship with the child from April through to late June 2018 and onwards. The evidence in this respect required testing.
I reject the respondent’s argument that he was justified in seeking orders for no time between the child and his mother and his sister in reliance on the position taken by the ICL at trial and comments by Dr T during the trial. The final parenting orders were not the subject of an appeal and in my view it was inappropriate for the respondent to look behind the judgment in making submissions as to costs.
I have considered each party’s comprehensive submissions and affidavits filed. I am satisfied that there are justifying circumstances for making an order for costs having regard to the parties differing financial circumstances, the fact that the respondent was wholly unsuccessful and the fact that had the respondent failed properly to consider the offer made by the applicant on 10 July 2018 and made no reasonable attempt to compromise and respond to that offer.
Indemnity costs
Counsel for the applicant argued that the respondent steadfastly refused to engage or countenance any position other than his proposal at trial and as such an order for costs should be made on an indemnity basis.
Though the categories for making an order for costs on an indemnity basis are not closed, the discretion to make an order for costs on an indemnity basis has been exercised in circumstances where allegations of fraud have been made knowing the allegations to be false, where there has been deliberate misconduct by a party that causes loss of time, where proceedings have been commenced and/or continued for an ulterior motive, or where proceedings have continued in wilful disregard of known facts or established law or a case has been unduly prolonged. None of those features were apparent in the instant case.
Counsel for the applicant argued that the respondent’s obstinate refusal to engage in the negotiation process was a basis for making an order for costs on an indemnity basis. He referred to the fact that the respondent had maintained his position that the child should spend no time nor communicate with his mother and sister from about June 2017. This is not correct. In April 2018 the parties consented to interim orders for the child to spend time with each parent notwithstanding the child’s behavioural difficulties and his (then) refusal to spend time with his father.
The applicant argued that the respondent’s refusal to engage in an FDR conference and respond to the applicant’s offers subsequent to 10 July 2018 entitled the applicant to an order for costs on an indemnity basis.
I am not persuaded that the respondent’s lack of engagement after 10 July 2018 is a basis for making an order for costs on an indemnity basis. As indicated this was a complex parenting matter. The respondent held a fixed view about the applicant that she was capable of manipulating the child and that she was the cause of the child’s disruptive behaviour and unwillingness to spend time with the respondent. This evidence required testing. Dr T in his report raised a number of concerns regarding the applicant’s conduct and features of her personality (though later retracted during cross examination). That evidence required testing. The outcome of the proceedings was not as clear cut as the applicant would contend. Further the applicant at trial continued to seek an order for sole parental responsibility which was not made. In addition the orders made by the Court provided the respondent with more time with the child during school terms than was sought by the applicant.
I am not satisfied that an order for costs should be made on an indemnity basis. I am satisfied however there are circumstances justifying the making of a costs orders as discussed above. Given the complexity of the matter I intend to allow for the costs of preparation of hearing at $9725, disbursement expenses of $2860 and attendance to take judgment at $305. I intend to discount the hearing fees by 30% given that the parties entered into interim consent orders on 17 April 2018 and the offer of compromise was made on 10 July 2018.
I order that the respondent pay the applicant’s costs in the amount of $32,498.75 within 90 days.
With respect to costs sought regarding the application for costs I order that each party shall bear his or her own costs.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Judge Tonkin
Date: 20 September 2019
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