Shepherd and Stevenson - [2016] FamCAFC 52

FAMILY COURT OF AUSTRALIA

SHEPHERD & STEVENSON

[2016] FamCAFC 52

FAMILY LAW – APPLICATION IN AN APPEAL – COSTS – Where the appellant sought an extension of time in which to file an appeal – Where the appeal lacked merit – Where the application was dismissed – Where the respondent seeks costs from the appellant – Whether costs should be awarded on a party and party basis or an indemnity basis – Where the circumstances do not justify the award of costs on an indemnity basis – Where the appellant is ordered to pay the respondent’s costs as agreed or in default on a party and party basis.

Family Law Act 1975 (Cth) s 117

Family Law Rules 2004 (Cth)

Carpenter & Carpenter [2014] FamCAFC 100
Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FLR 225
Kohan & Kohan (1993) FLC 92-340
Lenova & Lenova (Costs) [2011] FamCAFC 141
Yunghanns v Yunghanns (2000) FLC 93-029

APPELLANT:

Mr Shepherd

RESPONDENT:

Ms Stevenson

FILE NUMBER:

SYC

6311

2011

APPEAL NUMBER:

146

2015

DATE DELIVERED:

14 April 2016

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Aldridge J

HEARING DATE:

1 October 2015

LOWER COURT JURISDICTION:

Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE:

29 July 2015

LOWER COURT MNC:

[2015] FCCA 2038

REPRESENTATION

THE APPELLANT:

In person

COUNSEL FOR THE RESPONDENT:

Mr Blackah

SOLICITOR FOR THE RESPONDENT:

Miller Goddard Solicitors

Orders

Mr Shepherd is to pay the costs of Ms Stevenson of the Application to extend time filed on 3 September 2015 and of her Application for costs, as agreed or in default of agreement as assessed on a party and party basis.

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

THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 146 of 2015
File Number: SYC 6311 of 2011

Mr Shepherd

Appellant

and

Ms Stevenson

Respondent

REASONS FOR JUDGMENT

On 9 November 2015 I dismissed the Application of Mr Shepherd (“the father”) who had sought an extension of time in which to file an appeal. I made directions for the parties to make submissions as to costs in writing.
On 4 December 2015 Ms Stevenson (“the mother”) filed written submissions prepared by her counsel and an affidavit from her solicitor. In those submissions she sought an order that the father pay her costs of the application and that those costs be assessed on an in indemnity basis.
The father did not file any submissions.
In dismissing the father’s application for an extension of time, I found that he had provided an acceptable explanation for not filing the notice of appeal within time but also found that the appeal was so lacking in merit that it was likely to be futile. Thus, I found the interests of the mother and the public interest required the application to be dismissed. This judgment should be read in conjunction with those reasons and I will not repeat what was said there.
I note that the order which the father sought to appeal, and for which an extension of time to appeal was sought, was a costs order made against the father in parenting proceedings.
Applications for costs are governed by s 117 of the Family Law Act 1975 (Cth). Each party is to bear his or her own costs unless the Court is of the opinion that the circumstances justify a different order. In considering whether to make such an order the court is to have regard to the matters set out in s 117(2A).
The mother did not address any submissions or evidence to the financial position of the parties.
The father did not adduce any evidence of his financial position before me or before Judge Kemp who made the costs order from which the father sought to appeal.
As to the father’s financial position, in the judgment of 9 November 2015 I said:
48.It was submitted by the father that, if the order was left to stand, he would suffer an injustice in that he does not have the funds to meet the costs order and he would become a bankrupt. He submitted that this would be to the detriment of his ability to parent both the children of the parties’ relationship and the child of his subsequent marriage. Again there was no evidence as to the father’s financial position to support that submission. However, accepting that the father was impecunious, this would not have been determinative of the costs application. Impecuniosity is, of itself, no bar to a costs order being made.
Impecuniosity is not of itself a bar to a costs order because otherwise an impecunious party could litigate with impunity: Lenova & Lenova (Costs) [2011] FamCAFC 141 at [12].
As far as I am aware neither party is in receipt of legal aid.
The mother did not assert that the father’s application arose from any failure to comply with the previous orders of the court or that there was a relevant offer of settlement.
The mother submitted that the father had been completely unsuccessful because his application was dismissed. She also submitted that the father’s conduct in pursuing the application, which completely lacked merit, justified a costs order in her favour.
I am of the opinion that the father should pay the mother’s costs. His application was wholly unsuccessful. The several grounds of appeal could not succeed – in the main because there was an absence of evidence to support the ground or because the ground relates not to the costs judgment but to the primary parenting decisions from which there was no appeal. Such a judgment is also quintessentially discretionary from which appeals are rarely successful in the absence of an error of principle. There was no such error here. Further, that application arose only because he did not file a notice of appeal within the time prescribed by the Family Law Rules. He was therefore seeking indulgence from the Court arising from his failure to lodge an appeal within the prescribed time. There is no reason why the mother should have to bear her own legal costs of that application.
The question, then, is whether those costs should be assessed on a party and party basis or on an indemnity basis.
Orders for the payment of costs assessed on an indemnity basis are made only in exceptional cases. In Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FLR 225, Sheppard J said at p 233-34:
… 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 discontinued 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 […] and an award of costs on an indemnity basis against a contemnor […]. Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. 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. (Citations omitted)
The exceptional nature of an indemnity costs order has been emphasised by this court on a number of occasions including Kohan & Kohan (1993) FLC 92-340 at 79,614; Yunghanns v Yunghanns (2000) FLC 93-029 at 87,470 and Carpenter & Carpenter [2014] FamCAFC 100 at [132].
I am not satisfied that the proposed appeal of the husband was so lacking in merit that its pursuit of it by way of the application to extend time justifies an order for indemnity costs. As I have said, the father had a reasonable excuse for not commencing the appeal in time. While I found that the appeal lacked merit and was likely to be futile, it was not exceptionally so.

Costs

The appropriate order is that the father is to pay the mother’s costs of the Application to extend time filed on 3 September 2015, including the costs of the cost application, as agreed, or in default of agreement as assessed.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 14 April 2016.

Associate:

Date: 14 April 2016