Sinha and Sinha and Ors
[2015] FamCA 109
•27 February 2015
FAMILY COURT OF AUSTRALIA
| SINHA & SINHA AND ORS | [2015] FamCA 109 |
| FAMILY LAW – COSTS – Where the father and paternal grandparents instituted and pursued parenting proceedings and subsequently filed Notices of Discontinuance – Where the Mother seeks an order that the father and paternal grandparents pay her costs on an indemnity basis – Where the mother is an undischarged bankrupt – Where a portion of the legal fees the mother is seeking to have paid forms part of the debts that have been discharged by the bankruptcy – Where the mother has received confirmation from the Official Trustee in Bankruptcy that she will be entitled to retain any costs award – Where the mother was in receipt of legal aid funding for a portion of the proceedings for which she is claiming indemnity costs |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Cachia v Hanes (1994) 179 CLR 403 Kohan & Kohan (1993) FLC 92-340 McAlpin and McAlpin (1993) FLC 92-411 Nada & Nettle (Costs) (2014) FLC 93-612 Penfold v Penfold (1980) 144 CLR 311 Prantage & Prantage (2013) FLC 93-544 Stoian & Fiening(Costs) [2014] FamCA 944 |
| APPLICANT: | Ms N Sinha |
| FIRST RESPONDENT: | Mr S Sinha |
| SECOND RESPONDENT: | Ms H Sinha |
| THIRD RESPONDENT: | Mr L Sinha |
| FILE NUMBER: | BRC | 6156 | of | 2012 |
| DATE DELIVERED: | 27 February 2015 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | By way of written submissions filed 13 October 2014; 7 and 21 November 2014 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Coffs Coast Family Law |
| SOLICITOR FOR THE RESPONDENTS: | Robson & Oliver Solicitors |
Orders
It is ordered that:
Leave be granted to the mother to file her costs application out of time.
The father and the paternal grandparents are jointly and severally liable to pay the mother’s paid costs of the substantive proceedings which were not met by any legal aid commission (but not including the amount of $22,594 or any part of that sum “written off” in the mother’s bankruptcy) such costs to be agreed or, failing agreement, to be assessed on a party and party basis.
There be no order as to costs of this application.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sinha & Sinha and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 6156 of 2012
| Ms N Sinha |
Applicant
And
| Mr S Sinha |
First Respondent
And
Ms H Sinha
Second Respondent
And
Mr L Sinha
Third Respondent
REASONS FOR JUDGMENT
On 10 July 2012 the paternal grandparents, Mr S Sinha and Ms H Kaur Sinha, and the father, Mr L Sinha, initiated parenting proceedings pursuant to Part VII of the Family Law Act 1975 (Cth) (“the Act”) in the then Federal Magistrates Court against the mother, Ms N Sinha.
Those proceedings were subsequently transferred to this Court on 15 October 2012.
The father and paternal grandparents (collectively referred to as “the respondents”) participated in the parenting proceedings, with the assistance of legal representatives, until those legal representatives filed a Notice of Ceasing to Act on 25 January 2013.
In the reasons for judgment I delivered in this matter on 18 March 2014 I recorded the following relevant history concerning the progress of those proceedings, relevant to the conduct of the father and the paternal grandparents as applicants in the substantive proceedings and to the commensurate demands upon the mother as respondent at [7] to [12] and [15] of those reasons as follows:
7.The proceedings were mentioned before Registrar Brooks on 30 January 2013. None of the Applicants appeared on that occasion, but Registrar Brooks made orders for the matter to be listed for further directions on 27 February 2013 by telephone link and ordered that the parties be excused from attending if legally represented at the hearing.
8.On 27 February 2013 the Applicants appeared by telephone and orders were made for the matter to be adjourned for directions on 24 April 2013. The Applicants subsequently appeared by telephone at the following three directions hearings on 24 April 2013, 15 May 2013 and 28 August 2013.
9.On 18 September 2013 the matter came again before Registrar Brooks for directions. The Father appeared by telephone at that hearing but apparently left part way through the hearing. Registrar Brooks ordered that by 18 October 2013, the Applicants file and serve any amended Initiating Application and their affidavit of evidence in chief of each witness in support of their application and also file any affidavit in response by 10 January 2014. Registrar Brooks also made orders for each party to file other trial material. Following the making of those orders the paternal grandparents, as First and Second Applicant, each filed a Notice of Discontinuance on 13 November 2013. The Father failed to comply with the orders of Registrar Brooks of 18 September 2013 in relation to the filing of trial material.
10.On 22 January 2014 the matter was again listed before Registrar Brooks. On that occasion the Court attempted to contact the Father by telephone but he did not answer. There is a notation to that effect on those orders. Registrar Brooks made orders in the absence of the Father that the matter be listed for callover before me, as it happens, on 6 February 2014.
11.Pursuant to that order, the matter came before me at the callover on 6 February 2014. At that callover, in the absence of any appearance by the Father or a representative on his behalf, orders were made that the proceedings be adjourned to be heard and determined by me today and that the Mother have leave to have the matter proceed and the parenting orders she seeks heard and determined today on an undefended basis.
12.On 4 February 2014 the Father filed a Notice of Discontinuance wholly discontinuing his Initiating Application. I note in passing that in the Notice of Discontinuance the Father has incorrectly stated that the Initiating Application to be discontinued was filed on 15 October 2012. That was, in fact, the date on which the proceedings were transferred to this Court from the Federal Magistrates Court, but I am comfortably satisfied that the Father intended to refer to the Application which was originally filed on 10 July 2012. I also note in terms of history that on 19 November 2013, the Mother filed a contravention application and supporting affidavit which she subsequently discontinued on 6 February 2014 following the filing of the Father’s Notice of Discontinuance on 4 February 2014.
…
15.The Father has filed no material in these proceedings since his legal representative filed the Notice of Ceasing to Act on 25 January 2013. Since that time the Father has attended directions hearings before Registrar Brooks, as I have noted, in the context of it being self-evident that the Mother was seeking parenting orders be made pursuant to Part VII of the Act. Moreover, the Father attended interviews with the family consultant, [Ms E], on 16 July 2013 pursuant to orders and directions made by Registrar Brooks on 15 May 2013.
It can thus be seen that the father and the paternal grandparents instituted parenting proceedings against the mother on 10 July 2012 and kept those proceedings on foot for more than a year, and in the father’s case for more than 18 months.
The substantive parenting proceedings came before me on 18 March 2014. The respondents did not appear on that occasion and in the circumstances the matter proceeded on an undefended basis. In the event, I delivered ex tempore reasons for judgment that day and made final parenting orders in the terms sought by the mother.
Those orders provided for the three subject children, then aged between nine and four years, to live with the mother and for the mother to have sole parental responsibility. Orders were also made, in the terms sought by the mother, for the father to re-establish his time and communication with the children in accordance with a graduated scheme, with time initially being supervised at a contact centre increasing to time each alternate weekend.
The orders also contained specific provisions restraining the father from leaving the children in the unsupervised care of the paternal grandparents between 4.00 pm and 9.00 am; restraining the father from allowing the children to sleep in the paternal grandparents’ bedroom or in a bed occupied by them; and requiring that the paternal grandfather not have any unsupervised time with the children; and if the children are in his presence either the father or paternal grandmother must be present.
The issues historically agitated in the proceedings centred upon allegations that the paternal grandfather had sexually assaulted the mother. The father and the paternal grandparents historically were adamant in their denials of those allegations. The mother also made allegations that the father was domestically violent towards her during and post the relationship. The father denied those allegations historically. Obviously, in the circumstances described neither the paternal grandparents nor the father sought to pursue any denials at a contested trial.
Whilst some specific references will be made to the ex tempore reasons for judgment (referred to here for convenience as “the substantive reasons”) in what follows, the substantive reasons as a whole need to be read in conjunction with these reasons for a complete understanding of these reasons, and are incorporated for that purpose.
By an Application in a Case filed on 15 July 2014 the mother seeks orders that leave be granted for her costs application to be filed out of time and that pursuant to s 117(2) of the Act, that the respondents pay her costs on an indemnity basis fixed in the amount of $49,245.46.
On 10 September 2014 Registrar Brooks made directions orders for the filing of response material and written submissions. The mother’s submissions were filed on 13 October 2014 and her submissions in reply and case outline, listing the material relied upon in support of the application, were filed on 21 November 2014. The joint written submissions for the first and second respondent grandparents, along with the written submissions for the third respondent father, were both filed on 7 November 2014 and their joint case outline, listing the material relied upon in opposing the application and their orders sought, was filed on 21 November 2014.
Pursuant to their joint case outline the respondents seek orders that the mother’s Application in a Case be dismissed; that leave not be granted to the mother to file her application out of time; and that there be no order in respect of costs, on an indemnity or any other basis.
The complicating features of this costs application are:
a)the mother is currently an undischarged bankrupt, having filed for bankruptcy on 2 May 2013;
b)a portion of the legal fees that the mother is seeking to recover though the costs order form part of the debts which have been discharged by her bankruptcy;
c)the mother has received written confirmation from the Official Trustee in Bankruptcy that the trustee considers any costs order made in relation to the parenting application to be a personal order and as such the mother will be entitled to retain the benefit of any costs order and it will not be paid to the trustee or her creditors; and
d)the mother was in receipt of a grant of legal aid which funded part of the mother’s legal costs of the proceedings for which she is claiming costs.
Objections to material
At the outset of her submissions in reply (filed 21 November 2014), the solicitor for the mother raises an objection to the respondents’ filing of, and reliance on, an affidavit sworn by the respondents’ solicitor, Mr G, of Robson & Oliver Solicitors which was filed on 7 November 2014.
The solicitor for the mother has also objected to all references to the affidavit of Mr G as contained in the written submissions of the first and second respondent grandparents, and the written submissions of the third respondent father.
It is contended on behalf of the mother that the directions orders made by Registrar Brooks on 10 September 2014 do not provide for the filing of any affidavit material, beyond that of the respondent grandparents, which was to be filed by 17 September 2014. The mother’s solicitor maintains that all parties were legally represented at the mention on 10 September 2014 and upon enquiries by Registrar Brooks as to whether any further affidavit material was to be filed, all parties confirmed that no other affidavits were to be filed.
The affidavit in question details the attempts made by Mr G to obtain disclosure of various documents from the mother, which documents are outlined in the notations to the orders made on 10 September 2014 which read as follows:
2.The Respondents have sought the Applicant produce documents related to this application including, but not limited to:
(a)Copies of all accounts issued by any legal services provider that relate to these proceedings, the amounts being claimed and/or the orders sought;
(b)Copies of all documents related to any amounts received by the Wife in relation to any grant of legal aid she may have received.
(c)Copies of all documents related to her bankruptcy including the list of any creditor who claimed any amount related to the provision of legal services to the Wife which might be related to this application.
3.The Wife has agreed to provide all the documents sought as soon as practicable and prior to her filing her written submissions.
I am satisfied that the affidavit of Mr G ought be allowed to be relied upon by the respondents, mainly for the following reasons:
a)the mother’s material is silent as to any prejudice she may suffer if the affidavit is allowed to be filed out of time;
b)in light of the limited evidence before the Court provided by the mother (as will be further discussed) regarding the extent of the mother’s legal aid funding and bankruptcy status, the probative value of the affidavit outweighs the prejudice that the mother may suffer as a result of the late filing of the affidavit; and
c)had the mother fully explained in her own material, as she ought to have done, the issues addressed by Mr G then there would not have been any need for the affidavit.
Application filed out of time
As earlier noted, on 18 March 2014 I made final parenting orders in this matter following an undefended hearing. The mother’s application for costs orders was not filed until 15 July 2014.
Pursuant to r 19.08 of the Family Law Rules 2004 (Cth) (“the Rules”) a party may apply for a costs order by filing of an Application in a Case within 28 days after the final order is made. I also note that pursuant to r 10.11(4) a party may also apply for an order for costs within 28 days after the filing of a Notice of Discontinuance by the other party.
The inconsistency between these two rules was highlighted in the respondents’ written submissions. However such inconsistency is immaterial in the circumstances of this case as, on application of either rule, it is not disputed that the mother filed her application for costs well outside the prescribed time limit.
Pursuant to r 1.14 of the Rules a party may apply for an extension of time to make an application for costs, even if the prescribed time limit has passed. Further, r 1.12 enables the court to dispense with compliance with any of the Rules. In doing so, the court must consider, inter alia, the administration of justice; whether the application has been promptly made; whether
non-compliance was intentional; and the effect that granting relief would have on each party.
In Rayburn & Pritchard (2014) FLC 93-573 the Full Court discussed the law in relation to extensions of time. At [55] their Honours referred to the decision of O’Ryan J in KLD & SCVG [2009] FamCAFC 56 wherein his Honour summarised the law in relation to time limits. Their Honours said:
55.In KLD & SCVG [2009] FamCAFC 56 O’Ryan J explained the law applicable to an application to extend time in the following passage, which was cited with approval by the Full Court in the unreported decision of Kite & Kite [2010] FamCAFC 107 at [46]:
36. Rule 1.14 of the Rules deals with the shortening or extension of time. Rule 1.14(1) provides that “[a] party may apply to the court to shorten or extend a time that is fixed under these Rules or by a procedural order”. Rule 1.14(2) provides that “[a] party may make an application under subrule (1) for an order extending a time to be made even though the time fixed by the rule or order has passed”. However, there are “no preconditions to the exercise of power” to extend time: see Strudwick v Baker Johnson (1996) FLC 92-683 per Lindenmayer J at 83,098. The Rules do not set out what matters are to be considered in relation to an application for leave to do something out of time.
37. However the discretion to extend time although unfettered will not be exercised automatically. In Gallo v Dawson (1990) 93 ALR 479 McHugh J said at 480 “[t]he grant of an extension of time… is not automatic…” and citing the decision of McInerney J in Hughes vNational Trustee Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262 said “[t]he discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties”. The discretion to extend time is given for the purpose of enabling the court to avoid an injustice and the court must determine whether justice as between the parties is best served by granting or refusing the extension sought. In The State ofQueensland v J L Holdings Pty Ltd (1997) 189 CLR 146 Dawson, Gaudron and McHugh JJ said at 154: “…case management is not an end in itself. It is important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim”.
38. In OP v HM [2002] FamCA 454 the Full Court (per Kay, Coleman and Rose JJ) at 19 said that whilst there is a broad discretion the fundamental issue is whether an extension of time will enable the Court to do justice between the parties. Their Honours explained that this is “normally shown by the applicant demonstrating that there are adequate reasons which explain the delay, that there is a substantial issue to be raised on the hearing of the application, and that no hardship or injustice will be caused to the respondent which cannot be compensated by orders as to costs or otherwise”: see also McMahon and McMahon (1976) FLC 90-038 at 75,144, and Tormsen and Tormsen (1993) FLC 92-392 at 80,017.
39. Various authorities have established that in order to determine whether compliance with the Rules would work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences to the parties of the grant or the refusal of the extension of time: see Gallo v Dawson (supra) per McHugh J at 480-1; Lawecki & Marcel Kalfus & Co (1985) FLC 91-644; Prowsev Prowse (1995) FLC 92-557 at 81,568-81,573 but in particular at 81,572-3; Morrison v Morrison (1995) FLC 92-573 at 81, 674; and more recently OP v HM (supra).
40. However, the Full Court (Lindenmayer, Baker and Rowlands JJ) observed in Prowse v Prowse (supra) at 81,572: “[h]owever, whilst it is no doubt correct to identify those matters as ‘factors’ to be considered, and even as ‘the usual considerations’, we believe that it would be an error to elevate those ‘factors’ or ‘considerations’ into an exclusive code within the confines of which the court’s discretion to extend time must be exercised”. In other words, it is important to recognise that although the factors set out in various cases are “normally shown” by a successful applicant for an extension of time they should not confine the broad discretion: Hill v Hill [2007] FamCA 1657 (Unreported, O’Reilly J, 1 November 2007) at 13.
Further, in Clivery & Conway [2007] FamCA 1435 the Full Court (May, Thackray and O’Reilly JJ) also discussed the well known principles in relation to extensions of time at [13] to [17]:
13.The principles in relation to extensions of time provided by Rules were discussed by McHugh J in Gallo v Dawson (1990) 93 ALR 479. Although his Honour was there considering an application for leave to appeal out of time, it is accepted that the principles he discussed are relevant to all applications for leave to extend time limits provided by Rules.
14.The principles emerging from Gallo v Dawson may be summarised as follows:
·The grant of an extension of time is not automatic.
·The object is to ensure that Rules which fix times do not become instruments of injustice.
·Since the discretion to extend the time is given for the sole purpose of enabling the Court to do justice between the parties, the discretion can only be exercised upon proof that strict compliance with the Rules will work an injustice upon the applicant.
·When determining whether the Rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time.
·When considering an application for extension of time in which to file an appeal or an application, it is necessary also to consider the prospects of success of that appeal or application.
15.The High Court also had occasion to discuss time limits fixed by Rules of Court in FAI v Southern Cross (1988) 77 ALR 411. In that case the Court was concerned with a rule not dissimilar to Rule 1.14 of the Family Law Rules 2004. Wilson J, with whom Brennan, Deane and Dawson JJ agreed, said at 417:
The plain meaning of these words is very wide. The court may extend “any time” fixed by “any . . . order” and may do so as well after as before the time expires and even though the application to extend is not made until after the time has expired. As Baggallay LJ said in Carter of the analogous English rule, it gives “very full discretionary power; indeed, I can hardly imagine a more extended discretion” … It is a remedial provision which confers on a court a broad power to relieve against injustice.
16.The principles governing applications for leave to extend time have also been stated by this Court on many occasions. In one of the first published decisions of the Court, Evatt CJ said in McMahon v McMahon (1976) FLC 90-038 at 75,144:
The general principles governing applications for leave to extend time are established by a number of cases. In summary, the applicant must show that there are adequate reasons which explain the delay; that there is a substantial issue to be raised on appeal; and that no hardship or injustice is caused to the Respondent which cannot be compensated by orders as to costs or otherwise.
17.As was pointed out in Tormsen and Tormsen (1993) FLC 92-392 at 80,018, the principles referred to in McMahon are factors to be taken into account, rather than legislative directions.
Thus, applying the relevant considerations it is necessary to consider whether there are adequate reasons to explain the mother’s delay in filing her costs application; whether the respondents are prejudiced by the late filing of the mother’s application; and the extent to which the mother would be prejudiced if she were not allowed to file her application out of time. Overall, the discretion ought be exercised in favour of an extension of time if that is necessary to do justice between the parties.
Adequate reasons for delay?
At [9] to [14] of her affidavit filed in support of her application, the mother sets out her reasons for filing her application out of time. Relevantly, at [9] the mother deposes: [1]
At the final hearing of this matter on 19 March 2014 I instructed my Legal Aid solicitor that I intended to ask for an order for costs at the conclusion of the matter. That solicitor said words to the following effect to me:
“When you are in the court I am the only person who will be saying anything. You do not speak. You do not ask for costs.”
Although I had written out a statement to read to the judge about the costs I had incurred before I became legally aided I did not feel able to speak up after what the solicitor had said to me.
(Original emphasis)
I note the mother incorrectly refers to the final hearing having taken place on 19 March, rather than 18 March.
[1] Mother’s affidavit filed 15 July 2014 [9].
On the mother’s version she initially believed, based on her research, she had 28 days from the time the final orders were made to bring an application for costs. However, after seeking legal advice the mother was informed that she was to bring an application for costs within 28 days of the respondents filing their Notice of Discontinuance. The mother maintains that she was not advised of this by her solicitor at the time the respondents discounted their applications.
The mother deposes that she filed for bankruptcy on 2 May 2013. Following the conclusion of the proceedings, on 21 and 30 April 2014 the mother contacted the Australian Financial Security Authority (“AFSA”) to enquire whether she needed the authority of the Official Trustee in Bankruptcy (“the Official Trustee”) to pursue a costs application.
By letter dated 14 May 2014, Mr I, Assistant Director for the Official Trustee, AFSA, wrote to the mother seeking further details regarding her proposed legal action. It appears the mother sent further correspondence by way of email to AFSA on 2 June 2014, however such correspondence has not been provided to the Court.
By email dated 16 June 2014 Mr K, Team Leader of Insolvency and Trustee Services, AFSA, responded to the mother’s email of 2 June 2014 and informed her that the Official Trustee had no objection to the mother seeking costs orders. Annexure D to the mother’s affidavit filed 15 July 2014 is a copy of the response email dated 16 June 2014, wherein Mr Rappoport advises the mother:
… I can confirm that the Official Trustee does not regard itself as the proper plaintiff in the proposed action for costs orders in relation to the family law proceedings (application for parenting orders). As you would be aware, an action for parenting orders is a personal right and therefore does not vest in a bankruptcy trustee. In our view, any application for costs relating to litigating that personal right would also not vest in the trustee (in this case as after-acquired property). This means that the Official Trustee has no objection to you seeking these orders and that you would be able to keep any costs subsequently awarded.
I am satisfied that there are adequate reasons for the mother’s delay for these reasons:
a)in light of evidence referred to, I find that the mother was not aware that she was able to file her application for costs until she received such correspondence from the Office of the Official Trustee on 16 June 2014;
b)it is on that basis I find that the mother’s delay was not intentional and there are adequate reasons for the mother’s delay in filing her application until such time as she received approval from the Official Trustee to institute costs proceedings on her own behalf. Shortly thereafter, the mother filed her application on 15 July 2014.
Prejudice
The respondents’ written submissions go to considerable lengths to highlight the amount of time that has passed between the filing of the mother’s application for costs and the making of final orders on 18 March 2014, being some 91 days; as well as the time between the filing of the mother’s application and the respondents filing their respective Notices of Discontinuance, being some 244 days in the case of the paternal grandparents, and 161 days in the case of the father.
However, the respondents’ written submissions are silent as to any prejudice that might be suffered as a result of the late filing of the mother’s application. Further, the respondents have not provided any evidence in their affidavit material which satisfies me that they would suffer an injustice if the mother’s application were allowed to be filed out of time. I infer from the absence of any positive claims, that there is no significant prejudice that would be suffered by the respondents if the mother has leave to file her application out of time.
The mother has explained the lengthy delay in bringing this application. Should the mother be precluded from filing this application she would suffer an injustice and be denied the opportunity to pursue her application for costs, which I find she has intended to pursue since the conclusion of the parenting proceedings.
In any event, I find that any prejudice that may be suffered by the respondents in the late filing of the application is outweighed by the injustice the mother would suffer if she were precluded from bringing this application.
Discretion to extend time
I am in all the circumstances satisfied that in order to do justice between the parties the mother’s application for an extension of time ought be granted.
The mother’s application for costs
The mother submits that there are circumstances justifying a departure from the “primary rule” as expressed in s 117(1) that each party to proceedings under the Act shall bear his or her own costs of the substantive proceedings.
Section 117(2) of the Act provides that in proceedings under the Act, if the Court is satisfied that there are circumstances that justify it in doing so, the Court may, subject to s 117(2A) of the Act, make such Order as to costs as the Court thinks just.
In Penfold v Penfold (1980) 144 CLR 311 (“Penfold”), the High Court held that s 117(1) is not paramount to s 117(2) and that as s 117(1) is expressed to be subject to s 117(2), the former must yield whenever a judge determines in a particular case that there are circumstances that justify making an Order.[2]
[2] See also Mallet v Mallet (1984) 156 CLR 605 (Wilson J).
It is clear from the decision of the High Court in Penfold, and indeed in other decisions of this Court, including of the Full Court, that s 117(2) requires a finding of justifying circumstances as an essential prerequisite to the making of an order. The matters which might justify the making of a costs order are potentially extensive (s 117(2A)(g)) but must include regard being had to a number of matters specified in s 117(2A)(a)-(f) of the Act.
Moreover, to establish justifying circumstances, it is not necessary that a party establish what might be termed extraordinary or exceptional circumstances.[3] There merely needs to be the existence of circumstances which justify an order in favour of the party seeking an order for costs.
[3] See Penfold v Penfold (1980) 144 CLR 311 (Stephen, Mason, Aitkin and Wilson JJ).
Consideration of the matters identified in s 117(2A) may yield the conclusion that not only are there justifying circumstances for the usual costs order to be made, that is, party and party costs; but circumstances which justify an exercise of discretion to make the very great departure from that norm by ordering costs on an indemnity basis.[4]
[4] See Kohan & Kohan (1993) FLC 92-340 and Prantage & Prantage (2013) FLC 93-544.
Justifying circumstances
Put simply, the circumstances, on the mother’s submission, which justify an order for costs in her favour are that:[5]
She [the mother] did not commence the proceedings. She complied with the orders of the court throughout the proceedings. Her conduct throughout the proceedings are [sic] not questionable. She, or her legal representative, attended all mentions of the matter and filed documents as required by the courts directions. She attended at the court for the final hearing. The Grandparents and the Father did not.
Through her lawyer the Mother sent Letters of Offer which were not accepted, and that were more favourable to the Grandparents and Father than those made by the court at the undefended hearing. On that basis alone the Grandparents and Father directly caused the Mother unnecessary expense.
[5] Mother’s submissions filed 13 October 2014 [6]-[7].
Further, as will be discussed below, it is the mother’s contention that these circumstances necessitate the making of such an order on an indemnity, rather than party and party basis.
Financial circumstances of each party (s 117(2A)(a))
As earlier noted, the mother is currently an undischarged bankrupt, having filed for bankruptcy on 2 May 2013. In the material relied upon in support of this application, the mother provides little to no evidence as to her current employment status or salary. I note that in her affidavit filed in support of her costs application, the mother lists her “usual occupation” as being a teacher’s aide, however does not provide any details as to whether she is currently employed as such and what, if any, income she is receiving.
However in circumstances where the mother is an undischarged bankrupt and there are statutory limits under the bankruptcy legislation upon her
asset-holding and income-earning it can readily be inferred that the mother’s financial position is not strong.
The mother submits “… it is more likely than not that the respective financial circumstances of the parties, including those of the Husband, and the unchallenged assets of the Grandparents, permit them to meet a costs order and justify the Mother having the benefit of such an order.” [6]
[6] Mother’s submissions filed 13 October 2014 [15].
The evidence provided by the mother as to the respondent grandparents’ financial circumstances is not disputed, that is, that the respondent grandparents own several items of real property and their total assets “would be in excess of $1,000,000.”[7] Thus, it is clear that the respondent grandparents are in a superior financial position to that of the mother and have the capacity to meet the costs order sought by her.
[7] Mother’s affidavit filed 15 July 2014 [18].
The third respondent father submits that he does not have the capacity to meet a costs order, particularly not in the amount sought by the mother. In terms of his financial resources, the father gives evidence that he is currently unemployed and is financially dependent on his current wife. At present, the father lives with his wife in a property owned by her, subject to a mortgage in her name. The father maintains his only asset is a motor vehicle, the value of which is unknown, and he has liabilities, in the form of credit card debts totalling approximately $14,000.[8]
[8] Third Respondent father’s submissions filed 7 November 2014 p 5.
To support her contention that the respondents have the capacity to meet the costs order sought, the mother refers to the fact the respondents were able to pay their solicitors in the substantive proceedings, MBT lawyers, in full being a total of $31,508.55.[9] The mother submits that should be taken as “a positive indication” that the respondents are not impecunious and have the capacity to pay the costs sought by the mother.[10]
[9] Third Respondent father’s affidavit filed 9 September 2014 [69].
[10] Mother’s submissions filed 13 October 2014 [14].
It is submitted on behalf of the respondents in their respective written submissions “… that such a finding would be speculative and against public policy for a person to be penalised for paying for legal services rendered before being compelled to do so by law.”[11] I note the mother’s contention, as contained in her submissions in reply, that the respondents capacity to pay their legal bills is merely to be taken as “an indication that they have funds” necessary to meet the costs order sought.[12]
[11] First and Second Respondents’ submissions filed 7 November 2014 p 5; Third Respondent father’s submissions filed 7 November 2014 p 5.
[12] Mother’s submissions in reply filed 21 November 2014 p 7.
The mother also relies on the fact that the respondent grandmother and the father have the capacity for overseas travel to advance her position that the respondents have the capacity to meet the costs order she seeks.[13]
[13] Mother’s submissions filed 13 October 2014 [15].
The final orders made on 18 March 2014 provide for the children to live with the mother and for her to have sole parental responsibility for them. As was highlighted in the substantive reasons (at [41]), the father pays very limited child support and has chosen to absent himself from the lives of the children for a significant period. Although the final orders provided for the father to have time with the children, it appears he has not availed himself of such. By virtue of these circumstances, the financial responsibility to provide for the children has fallen squarely upon the mother.
On the mother’s evidence, she and the children currently reside in rental accommodation in Town C and she is reliant on Centrelink payments to support the children. The mother deposes that she does not envisage that the father “… will ever declare a sufficient income to be liable to pay child support for the children.”[14]
[14] Mother’s affidavit filed 13 October 2014 [16].
In light of the mother’s current status as an undischarged bankrupt, and on what only can be described as limited evidence with respect to the parties’ financial circumstances, it cannot be disputed that the respondents, particularly the respondent grandparents, are in a superior financial position to that of the mother. Although the father may not be in a good financial position, insofar as the limited evidence available to me indicates, his financial position is also superior to that of the mother who has care of the parents’ three children and appears to be primarily reliant on Centrelink payments. In any event impecuniosity is not of itself a barrier to a costs application or order if the circumstances overall dictate that an order should be made.
Further, with respect to the father’s financial position it is relevant to note that, based on authorities such as McAlpin and McAlpin (1993) FLC 92-411 (“McAlpin”), in circumstances where a party has minimal or no assets, the court is entitled to take account of any support or backing of third parties, such as their family or friends, in deciding whether to make an order for costs.
In McAlpin the wife appealed, inter alia, a costs order requiring her to pay two thirds of the husband’s taxed costs on a party and party basis. In that case the wife had no assets, however appeared to have the financial support of her father and her religious organisation, the extent of support which was unknown, during the substantive parenting proceedings. The husband had been represented by legal aid and had minimal assets. The issue on appeal was whether an order for costs can be made against a party who has no property and little income in circumstances where there are either members of their family or some organisation supporting them throughout the litigation and if so, under what circumstances.
The Full Court (per Nicholson CJ and Maxwell J – Baker J dissenting) found that the court’s jurisdiction to order costs under s 117 of the Act is unlimited and can include an order for costs against a third party; or against an impecunious party to the proceedings (in that case the wife) in contemplation that the order for costs might be met by a person other than the impecunious party. However, it was also observed that such an approach should be taken with great caution.[15] Nicholson CJ and Maxwell J made the following observations with respect to the concept of “financial circumstances” at p 80,212-3:
So far as the argument that his Honour should not have made an order because of the wife’s impecuniosity is concerned, it should be noted that s 117(2A)(a) refers to the financial circumstances of a party, which is a broader concept than assets and income and, in our view, extends beyond the usual concept of financial resources, at least to encompass the sort of financial support which the wife received in this case.
It is apparent that the wife precipitated the proceedings in this case and that in doing so, she was clearly relying on financial support from her family and from other friends. There is nothing particularly unusual about this situation in family law proceedings and indeed, in many cases, parties would be unable to proceed with litigation, given the paucity of legal aid funds, without this sort of support.
We do not think however, that the position of the other party to such litigation should be overlooked in such circumstances and in particular, that the apparent impecuniosity of a person receiving such support should be capable of being used as a shield against a costs order where it is otherwise appropriate for one to be made.
[15] McAlpin and McAlpin (1993) FLC 92-411 (Nicholson CJ and Maxwell J at p 80,216).
Further, the Full Court found that in deciding whether to exercise the discretion to make a costs order, the court may take into account that costs have been incurred which fall onto the community, through legal aid.[16]
[16] McAlpin and McAlpin (1993) FLC 92-411 (Nicholson CJ and Maxwell J at p 80,212).
Consequently this Court, while noting the father’s limited financial capacity, is entitled to take into account the prospect that any costs order against him may be met by his parents or other family members. Further, the Court is also entitled to take into account whether the community, through legal aid, or the mother from her own limited resources, should be required to bear the costs burden, when the respondents ultimately discontinued the proceedings.
As already noted, the mother is currently an undischarged bankrupt having filed for bankruptcy on 2 May 2013.
In my judgment, the relative financial circumstances of each party do not stand in the way of a costs order being made in the mother’s favour, if overall that result is dictated.
Amount of costs
An issue in these proceedings is that part of the legal fees the mother is seeking to have paid by the respondents form part of the debts that have been discharged by her bankruptcy.
At [43] of her affidavit filed 15 July 2014 the mother provides a breakdown of the total costs sought by her in this application, being a total of $49,245.46, as follows:
Legal costs for FWO paid $23,976.60
Legal cost for FWO still to be paid $20,723.74
Accommodation and travel to Brisbane $ 545.12
Legal costs for this cost application $ 2,000.00
Legal costs for attendance in
Brisbane if required for this application $2,000.00
Annexure B to the mother’s supporting affidavit filed 15 July 2014 is a Matter Enquiry Transaction Report from Fishburn Watson & O’Brien Lawyers dated 2 July 2014, which covers the period from 31 October 2011 to 9 May 2013.
The unpaid legal costs of $20,723.74, referred to in the mother’s costs breakdown, is consistent with the amount noted as being “written off” in the transaction report. The transaction report records the “total invoices” as being $44,700.34. Thus, in subtracting the costs written off from the total invoices, the $23,976.60 the mother deposes as being paid legal costs is also consistent with the transaction report.
A copy of the mother’s “Notification of Bankruptcy – Debtors Petition” dated 2 May 2013 is annexure B to the affidavit of Mr G filed 7 November 2014. Pursuant to that notice the mother’s bankruptcy petition will be discharged on 3 May 2016. Attached to the notice is a list of creditors which have been discharged by the bankruptcy. Of the four creditors listed therein, three have been redacted. The only remaining item is the sum of $22,594.00 owing to, “Fidhbrn Watson & Brich”. I infer this is in fact a reference to Fishburn Watson O’Brien.
The bankruptcy notice raises two issues:
a)First, there is an inconsistency between the discharged debt on the notice of $22,594 and the amount the mother deposes to as being the amount of her unpaid legal fees of $20,723.74.
b)Second and more importantly, the bankruptcy notice is evidence of the fact that a debt of $22,594, owing by the mother to Fishburn Watson O’Brien has been discharged.
As to the first issue, it is unclear why there is an inconsistency between the discharged debt recorded on the notice of $22,594 and the amount of $20,723.74 which the mother deposes is the sum of her unpaid legal fees. The evidence before me does not provide an explanation as to this inconsistency; suffice to note that the latter amount is consistent with that recorded as being “written off” in the transaction report attached to the mother’s affidavit and one may infer that is where this figure came from. However, for reasons which will become clear below, the inconsistency is immaterial as the mother is unable to claim any costs for her unpaid legal fees, in whatever sum they may be.
Regarding the second issue, there is clear evidence before me that a debt owing by the mother to Fishburn Watson O’Brien of $22,594 has been discharged by virtue of her bankruptcy. On that basis alone, I find that the mother cannot recover costs for the portion of her unpaid legal fees as the debt no longer exists.
I note the mother’s evidence that she feels “… very guilty about not paying the account to FWO and would ask the court to consider this amount [$20,723.74] in the cost order as the amount was caused to be owed by the applicant’s unsuccessful litigation.”[17] However, I reiterate that on the evidence the mother has received written confirmation from AFSA that the Official Trustee considers any costs order made in relation to a parenting application to be a personal order and as such the mother will be entitled to retain the benefit of any such order and it will not be paid to the Official Trustee or her creditors. This means that even if an award was made to the mother which incorporated a sum for her unpaid legal costs, there is no obligation upon her to repay those costs to Fishburn Watson O’Brien as the debt has been discharged.
[17] Mother’s affidavit filed 15 July 2014 [42].
In what I can only infer is an attempt by the mother to describe another circumstance justifying an order for costs in her favour, the mother contends in written submissions (at [18]) that should she obtain full time employment before the expiration of the bankruptcy petition, and her income exceeds “a certain threshold”, the Official Trustee in Bankruptcy will require her to repay the full amounts owing by her, including the sum owing to Fishburn Watson O’Brien.[18] That may be so. However, this argument is irrelevant to the issue of costs as, on the mother’s own evidence to which I have already referred, AFSA have advised the mother (by way of their email dated 16 June 2014) that any award she may receive in these costs proceedings arises from a personal right and as such the mother would be entitled to retain it.
[18] Mother’s submissions filed 13 October 2014 [18].
Mother in receipt of grant of legal aid (s 117(2A)(b))
In deciding whether to make an order for costs in favour of a party who was represented in the proceedings by Legal Aid, it is relevant to take into account the fact that the costs may otherwise be borne out of the finite resources of legal aid if an order were not made (see Telfer and Telfer (1996) FLC 92-688, as approved in McAlpin and McAlpin (1993) FLC 92-411; Re David (Costs) (1998) FLC 92-809; Burns & Grint (Costs) [2014] FamCAFC 161).
Over the course of the substantive proceedings the mother received funding from Legal Aid New South Wales (“Legal Aid NSW”) and Legal Aid Queensland.
An issue raised by the respondents is the fact that the mother was in receipt of funding from Legal Aid NSW, with the assistance of Fishburn Watson O’Brien, for at least part of the proceedings for which she is claiming indemnity costs.
The evidence as to the extent of the mother’s legal aid funding is extremely limited. However, based on what evidence is available I conclude the following series of events occurred:
a)on 8 September 2011 the mother signed a costs agreement with Fishburn Watson O’Brien, a copy of which is annexure A to the mother’s affidavit filed 15 July 2014;
b)Fishburn Watson O’Brien represented the mother from September 2011 until 20 March 2013 when they filed a Notice of Ceasing to Act, at which time the mother became self-representing;
c)during the period the mother was represented by Fishburn Watson O’Brien the mother received a grant of funding from Legal Aid NSW, which grant was effective from 27 September 2012, for the purpose of a legal aid conference.[19] The legal aid conference was scheduled for 14 October 2013, however the respondents did not attend (as evidenced by the s 60I certificate annexed to the mother’s affidavit);[20]
d)during the period the mother was represented by Fishburn Watson O’Brien the mother requested further legal aid (by way of application received on 22 November 2012) however that application was refused by way of letter from Legal Aid NSW dated 11 December 2012;[21]
e)the mother was self-represented from 20 March 2013 until 31 October 2013 when she received a grant of funding from Legal Aid Queensland;
f)Legal Aid Queensland filed a Notice of Address for Service on behalf of the mother on 4 November 2013;
g)the mother was subsequently represented by Legal Aid Queensland from 4 November 2013 until the conclusion of final hearing on 18 March 2014.
[19] Mother’s submissions in reply filed 21 November 2014 p 7; Affidavit of Mr G filed 7 November 2014 – Annexure D Letter from Legal Aid NSW dated 3 October 2012.
[20] Mother’s affidavit filed 15 July 2014 [29] and Annexure I – s 60I Certificate dated 14 October 2013.
[21] Affidavit of Mr G filed 7 November 2014 – Annexure E Letter from Legal Aid NSW dated 11 December 2012.
The Respondent father contends the mother was in receipt of legal aid funding, through Legal Aid NSW from at least 4 October 2012, with assistance of Fishburn Watson O’Brien, to February/March 2013.[22]
[22] Third Respondent father’s submissions filed 7 November 2014 p 5.
On the mother’s version, she received funding from Legal Aid NSW for the purpose of a legal aid conference which the respondents refused to attend. The mother submits that Legal Aid NSW refused her subsequent application for further funding of the proceedings.
On the father’s evidence, at the outset of the proceedings his then solicitor made various enquiries of the mother’s then solicitor pursuant to s 34(6) of the Legal Aid Commission Act 1979 (NSW), as to whether the mother was receiving legal aid funding. Section 34(6) provides that as soon as practicable after the commencement of proceedings, a solicitor acting for a legally aided person should give notice to the other parties of the fact they are acting for that person.
The father maintains no response was received from the mother’s then solicitor, Ms Leckie of Fishburn Watson O’Brien.
Following the filing of the mother’s costs application, the respondents’ solicitor has made further attempts to ascertain the period for which the mother was in receipt of funding from Legal Aid NSW through Fishburn Watson O’Brien from the mother’s current solicitor, Ms Tanner of Town C Law.
The respondents received two letters in response to this request, copies of which are annexures D and E to the affidavit of Mr G filed 7 November 2014.
Annexure D is a letter from Legal Aid NSW dated 3 October 2012, approving the mother’s application for funding. Pursuant to the terms of that letter, the mother was assigned Kelli Leckie of Fishburn Watson O’Brien as her solicitor; the legal aid grant was to be effective from 27 September 2012 (and it is noted Legal Aid NSW would not pay for any legal costs incurred prior to that date); and the work to be covered by that grant was for representation at a legal aid family law conference; preparation of consent orders and/or a parenting plan after the conference; as well as reasonable disbursements and the fee for a FDR chairperson at the conference, to the costs cap of $12,000.
Annexure E is a letter from Legal Aid NSW to the mother dated 11 December 2012 refusing the mother’s application for extension of legal aid which application was received on 22 November 2012. It is noted in the letter that the reason for their refusal was because the proceedings were to be litigated in a court outside of New South Wales, and funding was the responsibility of the Legal Aid Commission in the state in which the action is to be taken.
Based on those letters, the respondents maintain that the mother was granted legal aid from 3 October 2012 until at least 22 November 2012. The respondents submit it is on this basis and pursuant to s 41 of the Legal Aid Commission Act 1979 (NSW) that any costs incurred during her grant from Legal Aid NSW, “… was incurred improperly and no order (in respect of the current application) should be made in relation to such costs.”[23]
[23] First and Second Respondents’ submissions filed 7 November 2014 p 6; Third Respondent father’s submissions filed 7 November 2014 p 6.
Section 41 of the Legal Aid Commission Act 1979 (NSW) provides:
(1) Despite any Act or law to the contrary, a private legal practitioner is not entitled to charge or recover from a legally assisted person any amount:
(a) by way of costs in respect of work assigned by the Commission to the private legal practitioner on behalf of that person, or
(b) by way of disbursements incurred on behalf of that person in connection with that work,
except with the approval of the Commission.
(2) A provision of any agreement (whether in writing or not and whether entered into before or after the commencement of this section):
(a) under which the operation of this section is excluded, modified or restricted, or
(b) which has the effect of excluding, modifying or restricting the operation of this section,
is void.
The mother contends that the respondents’ submission in this regard “is nonsense”. It is submitted on behalf of the mother that “… it is not a requirement of all legal practitioners that once they receive a funding for a legal aid conference that they are then bound to continue representing a client through to and including a final hearing and the possible incurring of Barrister’s fees etc because they have a legal aid grant for a conference.”[24]
[24] Mother’s submissions in reply filed 21 November 2014 p 7.
I agree. The evidence before me is that the mother was granted funding for the purpose of a family law legal aid conference with the respondents. Therefore, in applying the above section, Fishburn Watson O’Brien would not be able to charge or recover from the mother any amount for costs or disbursements incurred in association with that conference, except with the approval of the Commission.
The mother entered into a costs agreement with Fishburn Watson O’Brien on 8 September 2011 and it appears they continued to act for the mother until they filed a Notice of Ceasing to Act on 20 March 2013. Thus, aside from the work covered by the legal aid grant for the purpose of the conference, Fishburn Watson O’Brien were entitled to charge the mother for work that fell outside the scope of that funding.
However, the mother provides no evidence as to how much funding was paid by Legal Aid NSW to Fishburn Watson O’Brien for the purpose of the Legal Aid Conference; all that is known is that the grant was capped at $12,000.
As noted earlier, to support her breakdown of costs incurred with Fishburn Watson O’Brien, the mother has annexed to her affidavit a Matter Enquiry Transaction Report dated 2 July 2014. I note that this report does not identify what proportion of the mother’s legal fees were paid by Legal Aid NSW (as opposed to the mother personally) or details of the work for which the invoiced amounts relate to.
In this regard I note the observations made by the Full Court in McAlpin:
… it has, so far as we are aware, always been the policy of Legal Aid Commissions to require legally assisted persons to seek costs where they have been successful in litigation. It is thus extremely difficult to determine what the present relevance of a person being legally aided otherwise has in determining the question as to whether costs should be awarded. It may be that it is legitimate to take the fact that costs have been incurred which fall on to the community in the form of Legal Aid Commissions as his Honour did, as a relevant factor. Again however it seems to us that if a litigant is entitled to costs, then he or she should receive them regardless of whether the litigant or the Legal Aid Commission has incurred them. (per Nicholson CJ and Maxwell J in McAlpin and McAlpin (1993) FLC 92-411 at p 80,212)
(Emphasis added)
Conduct of the parties to the proceedings (s 117(2A)(c))
I note that the mother raises arguments with respect to the impost upon her as a result of the respondents initiating proceedings in the Brisbane Registry of the then Federal Magistrates Court, rather than in the Lismore Registry (as the relationship took place in Town C) as being a circumstance justifying an order for costs, which costs include $545.12 in personal travel and accommodation expenses.[25]
[25] Mother’s submissions filed 13 October 2014 [11].
For reasons which will be discussed below, the mother is unable to claim the cost of her travel expenses and thus I need not take this point any further. I should record that this argument is rendered otiose by the fact that the matter was ultimately transferred to this Court due to allegations of sexual abuse, and thus the proceedings were required to be heard by this Court in Brisbane.
The mother also contends that the behaviour of the respondents was “obstructionist and disrespectful to the legal system” and they have taken no responsibility for their conduct in the proceedings, while the mother readily participated in the proceedings and complied with court orders.[26] It is unnecessary for present purposes to delve into the various allegations made by the mother with respect to the respondents’ conduct, suffice to note that the pertinent conduct in this case is the fact that the respondents instituted proceedings and subsequently chose to discontinue their Initiating Application.
[26] Mother’s submissions filed 13 October 2014 [16]-[17].
The father and the paternal grandparents elected to initiate formal parenting proceedings and joined together in so doing. Serious allegations were raised by the mother which were central to the children’s best interests in terms of parenting orders to be made. The father and the paternal grandparents pursued the proceedings and the patenting orders they respectively sought long after these were raised but ultimately did not seek to pursue their respective denials at a contested trial. However, that position was only reached when the trial was becoming imminent. Moreover, as reflected in the history of the proceedings outlined above, there were significant failures by the father and the paternal grandparents to properly participate in case management processes prior to their discontinuance of the proceedings.
Conduct of the father and the paternal grandparents in this respect is thus a factor weighing in favour of the mother’s application.
Whether either party to proceedings has made a settlement offer in writing to the other party and the terms of the offer (s 117(2A)(f))
The mother made two settlement offers to the respondents during the proceedings, both of which were rejected. The mother contends that both offers to settle contained terms more favourable to the respondents than the final orders made on 18 March 2014.
On 11 October 2012 the mother caused her then solicitor, Ms Leckie of Fishburn Watson O’Brien, to send to the solicitor for the respondents’ draft consent orders. A copy of those orders is annexure J to the mother’s affidavit filed 15 July 2014.
Those orders provided, in summary, for the parents to have equal shared parental responsibility for the children, for the children to live with the mother and spend time with the father each alternate weekend and for half of the school holidays. Further, the proposed minutes of consent provided that if the father was unable to spend time with the children during the times mentioned above, the paternal grandparents were able to spend time with the children from 9.00 am to 4.00 pm on the Sunday which fell on the alternate weekend or week of the school holidays that the father would have seen the children. Specific provisions were contained in the proposed orders regarding the children’s sleeping arrangements, that is, the parents were each restrained by injunction from allowing the children to sleep in a bed or bedroom occupied by the paternal grandparents or any other adult third party.
On 30 January 2013 the mother’s solicitors sent a further offer of settlement to the respondents. A copy of that offer is annexure K to the mother’s affidavit of 15 July 2014. Pursuant to those proposed orders, the parents were to have equal shared parental responsibility and the children were to live with the mother. I record that the final provision of those proposed orders required that the mother, father and paternal grandparents were to ensure that whilst the children were in their care the children have their own room in which to sleep, and no third party except the mother and father were permitted to occupy the children’s beds.
The respondents submit that the primary reason these offers were not accepted was due to the provisions regarding the children’s sleeping arrangements. On the respondents’ evidence, “it is common for children of Indian families, and for the subject children in particular, to have no ‘fixed’ bed to sleep in each night, rather they sleep in various beds with various family members.”[27] I do not accept that in the circumstances of this case and the allegations raised any cultural considerations legitimately stood in the way of such orders being implemented.
[27] First and Second Respondents’ submissions filed 7 November 2014 p 7; Third Respondent father’s submissions filed 7 November 2014 p 7.
The respondent father also makes reference to correspondence emailed to him by the mother’s solicitor on 2 April 2012 attaching a letter dated 28 March 2012 containing proposed interim consent orders. A copy of that letter is annexure A to the father’s affidavit filed 9 September 2014. I note that while the father deposes the proposed orders were to be made as “interim orders”, there is no reference in the letter to the orders being made on an interim basis.
Annexures B and C to the father’s affidavit are his responses to the mother’s proposed orders, wherein the father seeks that changes be made to the time the children are to spend with the father during the school holidays and that the restriction not to leave the children in the care of the respondent grandparents be removed.
As will be further discussed, the final orders as ultimately made on an undefended basis, cannot be characterised as more favourable to the respondents or any of them than the terms upon which the mother offered to resolve the proceedings. This is clearly a factor in favour of the mother’s application.
Whether any party wholly unsuccessful (s 117(2A)(e))
It is fair to conclude that the father and the paternal grandparents can be taken to have been wholly unsuccessful in the proceedings by virtue of their each filing a Notice of Discontinuance; and the mother ultimately obtaining orders in the terms she sought.
Further, I note that in the case of the paternal grandparents, the final orders made were less favourable to them than the orders proposed by the mother on 11 October 2012, as the final orders made no provision for time or communication between the children and paternal grandparents; and also provide for various injunctions restraining the father from leaving the children in the unsupervised care of the paternal grandparents overnight and from sleeping in the same room as the paternal grandparents; and requiring that the paternal grandfather have no unsupervised time with the children.
Further, in terms of time and communication with the father, the final orders provide for time to initially be supervised on a gradually increasing basis leading to alternate weekends and school holiday time, while the mother’s proposal of 11 October 2012, did not provide for such a regime. Further, both proposals put forward by the mother allowed for equal shared parental responsibility between the parents, while the final orders provide for the mother to have sole parental responsibility for the children.
Overall, this too is a factor weighing in favour of a costs order being made for the mother.
Conclusions
Balancing all the circumstances to which I have referred, I am satisfied that within the meaning of s 117(2) there are justifying circumstances for an order for costs in favour of the mother. The question then is the basis upon which the order is to be made.
The usual order for costs as between parties to litigation is that the costs order is made on a party and party basis. Here the mother seeks an order for costs on an indemnity basis fixed in the sum of $49,245.46.
It is recognised in numerous authorities such as Kohan & Kohan (1993) FLC 92-340 and Prantage & Prantage (2013) FLC 93-544 that to order costs on an indemnity basis represents a very great departure from the ordinary rule and there needs to be circumstances that justify the making of an order on that basis as compared to costs being ordered on a party and party basis.
In my judgment, the circumstances here, whilst justifying an order for costs, do not justify an order for costs on an indemnity basis. The respondents’ conduct does not place this case in the category where it can be said to be exceptional within the meaning of Kohan & Kohan and like authorities, nor in combination with any other relevant considerations is there justification for an order for costs on an indemnity basis.
Costs of this application
The mother has not succeeded in obtaining an order for indemnity costs as she pursued on this application. However the mother has succeeded in obtaining costs orders and whilst the respondents have been unsuccessful in resisting an order for costs they have succeeded in avoiding an order on an indemnity basis as sought by the mother.
The mother deposes that her costs of this application are $2,000, as contained in her breakdown of costs at [43] of her affidavit filed 15 July 2014.
I note that in responding to this application the respondents have jointly incurred costs totalling either $7,500[28] or $7,975.[29]
[28] Based on the evidence in the First and Second Respondents’ submissions filed 7 November 2014 p 12; Third Respondent father’s submissions filed 7 November 2014 p 13.
[29] Based on the evidence in the Affidavit of Mr G filed 7 November 2014 [9].
The respondents rely on the mother’s own evidence to support their submission that the mother should bear her own costs of this application as it was the advice of the mother’s lawyer at the final hearing and the mother’s “ignorance of the rules of court” that led to the filing of the current application, not the conduct of the respondents.[30]
[30] First and Second Respondents’ submissions filed 7 November 2014 p 10; Third Respondent father’s submissions filed 7 November 2014 p 10.
Further, the respondents contend that it was with the consent of the parties that this application be dealt with in chambers without oral submissions, as is reflected in Notation 1 to the orders made on 10 September 2014. The respondents refer to the case of Nada & Nettle (Costs) (2014) FLC 93-612 by way of example, to support their contention that it is “common knowledge” that having an application heard by written submissions “incurs greater time, trouble and expense for litigants”.[31]
[31] First and Second Respondents’ submissions filed 7 November 2014 p 10; Third Respondent father’s submissions filed 7 November 2014 p 10.
In Nada & Nettle (Costs) the Full Court merely observed that following the conclusion of the hearing of the appeal in that case, they offered the parties the opportunity to make submissions on costs to save them “… the time, trouble and expense of making those submissions after judgment was delivered.”[32] Obviously enough, that was a case where the parties were already present in Court for the purpose of hearing the appeal. That is clearly distinguishable from the present case, where the parties have not attended Court for the hearing of this costs application, and thus that argument is irrelevant.
[32] Nada & Nettle (Costs) (2014) FLC 93-612 [4] (May, Ainslie-Wallace & Austin JJ).
In my judgment in circumstances where the mother pursued an order for indemnity costs it would not be just in these circumstances for the mother to have her costs of obtaining the costs orders that are to be made. In the circumstances I am satisfied that it is just that an order be made for each party to bear that party’s own costs of this costs application. Conversely, the respondents have avoided an indemnity costs order but have failed in their applications for the mother not to be granted an extension of time and in their opposition to any costs order being made.
Whether costs should be fixed or assessed
There would be an obvious benefit to all parties, in terms of achieving finality and avoiding for the parties yet further significant expense, delay and inconvenience, if the costs ordered were in a fixed amount.
In Stoian & Fiening(Costs) [2014] FamCA 944 I recently considered r 19.18(1)(a) of the Rules which provides for costs to be fixed and the principles relevant to the application of that rule.
I am not satisfied in this case that the Court can arrive at an appropriate fixed sum on the materials available because the mother has not provided evidence as to what proportion of costs has been met by legal aid funding.
As earlier noted, at [43] of her affidavit filed 15 July 2014 the mother provides a breakdown of the total costs sought by her in this application, being a total of $49,245.46, as follows:
Legal costs for FWO paid $23,976.60
Legal cost for FWO still to be paid $20,723.74
Accommodation and travel to Brisbane $ 545.12
Legal costs for this cost application $ 2,000.00
Legal costs for attendance in
Brisbane if required for this application $2,000.00
At the outset I record that the parties were not required to attend in Brisbane for the purpose of this application and as such, the $2,000 estimated by the mother for attendance in Brisbane must be excluded on this ground alone; and in the event the mother is not to receive a costs order for this application.
Further and in any event, authorities such as Cachia v Hanes (1994) 179 CLR 403 and Casley & Casley (Costs) (2010) FLC 93-449 at [40]-[41] make it clear that travelling expenses are not recoverable as out of pocket expenses or disbursements in legal proceedings by litigants in person.
In Cachia v Hanes (1994) 179 CLR 403 the High Court considered the meaning of the words “costs” and “disbursements” and the nature and extent of costs that might be awarded to a litigant, who was not a lawyer, for preparing and conducting his or her own case. In that case the High Court determined that for the purposes of the act and rules there being considered, costs did not include time spent by a litigant, who was not a lawyer, in preparing and conducting his or her case. The costs are confined to money payable or liabilities incurred for professional or legal services. The High Court’s decision in Cachia has since been applied by the Full Court of this Court in Casley & Casley (Costs) (2010) FLC 93-449.
As such, the mother is unable to claim the $545.12 expended by her for her accommodation and travel to Brisbane for the substantive proceedings and she would also be unable to claim any travel or accommodation expenses she would have incurred had she been required to attend Court for this application. Thus, excluding the $545.12 expended and the estimated $2,000 of travel expenses, this brings the total amount of costs sought by the mother to $46,700.34 on an indemnity basis.
As earlier discussed, the mother is unable to claim costs for her unpaid legal fees as this debt was discharged by her bankruptcy. Therefore, subtracting the $20,723.74 claimed by her for unpaid legal costs from $46,700.34 leaves the sum of $23,976.60, being the amount of the mother’s paid legal costs.
What remains unknown is how much of the $23,976.60 paid legal costs were funded by the mother personally and how much were paid on her behalf through legal aid funding. This being an issue that is raised by the respondents.
Therefore as I have limited the amount of costs to those actually paid to Fishburn Watson O’Brien by or on behalf of the mother, I find that the respondents should be ordered to pay the mother’s costs to be agreed or, failing agreement to be assessed on a party and party basis, such costs not to include any costs “written off” by that firm.
I certify that the preceding one hundred and thirty-two (132) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 27 February 2015.
Associate: LH
Date: 27 February 2015
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