Szekely & Szekely (No 3)
[2024] FedCFamC2F 227
•23 February 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Szekely & Szekely (No 3) [2024] FedCFamC2F 227
File number(s): NCC 68 of 2022 Judgment of: JUDGE KEARNEY Date of judgment: 23 February 2024 Catchwords: FAMILY LAW – Costs – should a costs order be made relating to protracted substantive proceedings – type and quantum – where conduct of the mother supported the overarching purpose and conduct of the father did not – failure to comply with previous orders including those for costs - satisfied that party and party costs should be paid by father – compensatory and justified Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 190, 191
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) Sch 1
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Ch 12
Cases cited: Alston & Alston [2021] FedCFamC1A 96
Browne & Green [2002] FamCA 791; (2002) 29 Fam LR 428; (2002) FLC 93-115
Cassidy v Murray [1995] FamCA 91; (1995) 19 Fam LR 492; (1995) FLC 92-633
Colgate-Palmolive Company v Cussons Pty Limited [1993] FCA 536; (1993) 46 FCR 225
Cross & Beaumont [2008] FamCAFC 68; (2008) 39 Fam LR 389
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish [2005] FamCA 158; (2005) 33 Fam LR 123
In the Marriage of Dickson (No 2) [1999] FamCA 768; (1999) 25 Fam LR 79
Ingles & Ingles [2019] FamCA 514
Kohan and Kohan (1992) 16 Fam LR 245; (1993) FLC 92-340
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; (1990) 97 ALR 45
Limousin v Limousin (Costs) [2007] FamCa 1178; (2007) 38 Fam LR 478
Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157; (2015) 54 Fam LR 1; (2015) FLC 93-664
Munday v Bowman (1997) 22 Fam LR 32; FLC 92-784
Nada and Nettle (Costs) [2014] FamCAFC 207
Pavlic & Pavlic (No 2) [2023] FedCFamC1A 97
Penfold v Penfold [1980] HCA 4; (1980) 5 Fam LR 579; (1980) FLC 90-800
Pennisi & Pennisi [1997] FamCA 39; (1997) 22 Fam LR 249; (1997) FLC 92-774
Prantage & Prantage (Costs) [2014] FamCA 850
Sfakianakis & Sfakianakis [2019] FamCAFC 54; (2019) 59 Fam LR 419
Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447
Yunghanns v Yunghanns [2000] FamCA 681; (2000) 26 Fam LR 331; (2000) FLC 93-029
Division: Division 2 Family Law Number of paragraphs: 61 Date of hearing: Determined on the papers Place: Newcastle Solicitor for the Applicant: self-represented Solicitor for the Respondent: self-represented ORDERS
NCC 68 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS SZEKELY
Applicant
AND: MR SZEKELY
Respondent
ORDER MADE BY:
JUDGE KEARNEY
DATE OF ORDER:
23 FEBRUARY 2024
THE COURT ORDERS THAT:
1.Pursuant to r 1.31 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Div 1 Rules’), as may be applicable, the applicant, MS SZEKELY (‘the mother’) is relieved from the effects of r 8.15(3)(e) of the Div 1 Rules and item 7, Table 2.1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) so as to permit her to read and rely upon any annexures to her respective affidavits.
2.The respondent, MR SZEKELY (‘the father’) is relieved from the effects of r 8.15(3)(e) of the Div 1 Rules and item 7, Table 2.1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) so as to permit him to read and rely upon any annexures to his respective affidavits.
3.Pursuant to r 1.33 of the Div 1 Rules the father is permitted to rely upon his late-filed Affidavit of Service filed 14 February 2024.
4.By 22 March 2024, the father shall pay the costs of the mother fixed in the sum of $13,608.27 (‘the sum’), with such payment to be made in accordance with mother’s written direction which can be communicated electronically to the father via the email address specified in his service address …@...
5.The mother’s application in a proceeding for costs is otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE KEARNEY
INTRODUCTION
Following judgment being pronounced finalising a protracted parenting and property dispute, the mother seeks an indemnity costs order against the father of over $37,000. The father opposes the application. It is uncontroversial that as part of my judgment, several adverse observations were made about the father’s conduct. What, if any, costs order should I make?
Out of respect for each person’s gender and social status, other than parties, persons will be identified by their surnames and where possible there will be an avoidance of the use of gendered pronouns.
The issues in dispute are:-
(a)Should a costs order be made against the father relating to the substantive proceedings pertaining to a parenting and property dispute (‘the substantive proceedings’)?
(b)If a costs order should be made - what type and for how much?
The proceedings involve a costs dispute invoking:
(a)section 117 of the Family Law Act 1975 (Cth) (‘the Act’);
(b)sections 190 and 191 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘the Court Act’);
(c)Chapter 12 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Div 1 Rules’);
(d)Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) (‘the Div 2 Rules’).
Unless otherwise specified, a reference to a rule will be a reference to the Div 1 Rules and a legislative reference will be a reference to the Act.
The applicant to the costs proceedings is MS SZEKELY (‘the mother’) and the respondent is MR SZEKELY (‘the father’).
It is common ground that on 2 November 2023 I pronounced judgment (‘the judgment’) about the substantive proceedings which in summary included orders (‘the final orders’) providing for:
(a)The mother to have sole parental responsibility for the children;
(b)The children to live with the mother and spend regular time with the father;
(c)The sale of B Street, Suburb C (‘Suburb C’) with the mother to receive 60% of the sale proceeds[1] and the father to receive 40%;[2]
(d)The mother declared to have the sole right, title and possession to D Street, Suburb E (‘Suburb E’);
(e)The equal division between the parties of any joint bank accounts;
(f)The transfer of an item of property with negligible value to the father; and
(g)Declarations about the parties retaining their currently held property and/or superannuation entitlements.
[1] Subject to various calculations including an unquantified CGT liability.
[2] Subject to various calculations including an unquantified CGT liability.
As part of that same judgment, I also made orders to facilitate a process should either party wish to prosecute a costs application.
Following compliance with those procedural orders, further procedural orders were made on 22 January 2024 to firstly satisfy the Court about the service of the parties’ material upon each other and secondly to allow them to be heard insofar as them each being permitted to file an Outline of Case document. Both parties filed evidence supporting service of their document(s) on the other but only the mother filed an Outline of Case document. As foreshadowed in previous orders, the matter has now come before me in chambers.
The evidence before me consisted of:
(a)The judgment;[3]
(b)The application in a proceeding filed by the mother on 30 November 2023;
(c)The affidavit of Ms Szekely filed 30 November 2023 (‘the mother’s affidavit’) including annexures ‘A’ to ‘G’ for which I have exercised my discretion and dispensed with the effect of r 8.15(3)(e)[4] and permitted to be read as part of the mother’s affidavit;
(d)The financial statement of Ms Szekely filed 30 November 2023 (‘the mother’s financial statement’).
(e)The response to application in a proceeding filed by the father on 14 December 2023;
(f)The affidavit of Mr Szekely filed 14 December 2023 (‘the father’s affidavit’) including annexures ‘A’ to ‘HH’ for which I have exercised my discretion and dispensed with the effect of r 8.15(3)(e)[5] and permitted to be read as part of the father’s affidavit;
(g)The affidavit of service filed by the mother on 9 February 2024;
(h)The affidavit of service filed by the father on 14 February 2024[6] for which I exercised my discretion pursuant to r 1.33(2)(f) and allowed the father to rely upon because, when reflecting on the overarching purpose, it went only to the uncontroversial fact that the mother was served in time with the father’s responding material and caused no prejudice to the mother;
(i)The outline of case filed by the mother on 16 February 2024.
[3] For ease of reference, paragraphs from the judgment will be prefaced with “J” followed by the numerical or alphabetical paragraph descriptor.
[4] Rule 1.31.
[5] Rule 1.31
[6] Filed late – see order 2 (b) made 22.01.2024.
As the High Court reminds me in Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447 at [62]:
62... A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
The father’s affidavit consisted of 167 pages. Much of the father’s evidence was not relevant to the question of costs but instead appeared to be directed towards a rejection of the judgment. Because the hearing was conducted in chambers and the parties did not get an opportunity to consider this legal aspect;[7] rather than further delaying an outcome and putting the parties to more expense and inconvenience, I will instead read the evidence but the weight I may place on same will be constrained by its relevance to the issues at hand.
[7] ss 55 & 56 Evidence Act 1995 (Cth).
I turn now to those issues.
Should a costs order be made against the father relating to the substantive proceedings pertaining to a parenting and property dispute (‘the substantive proceedings’)?
The mother sought the making of a costs order against the father.
Having considered the submissions of the parties, I am satisfied that I should make a costs order against the father. Considering the legislative framework, my reasons for doing so are set out below.
There is a rebuttable presumption in the family law jurisdiction that each party bear their own costs provided the Court is satisfied that it is “just” to do so: s 117(1) & (2) of the Act. When this section was promulgated, it was suggested that this presumption was to encourage persons to settle their differences[8]… a noble ideal indeed.
[8] Explanatory Memorandum, Family Law Bill 1974 (Cth)
In a bid to reinforce the importance of the efficient, cost-effective and equitable management of the Court’s caseload (and the inherent benefits to families in need to do so), parties and their lawyers can face costs orders if the Court is satisfied that there has been a failure to comply with the duty to conduct proceedings in a way that is consistent with the overarching purpose: ss 190 & 191 of the Court Act.
For ease of reference, I set out (in part) the relevant section of the Court Act below –
Section 190 – Overarching purpose of civil practice and procedure provisions
(1)The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:
(a)According to law; and
(b)As quickly, inexpensively and efficiently as possible.
Note 1: see also paragraphs 5(a) and(b).
Note 2:The Federal Circuit and Family Court of Australia (Division 2) must give effect to principles in the Family Law Act 1975 when exercising jurisdiction in relation to proceedings under that Act.
(2)Without limiting subsection (1), the overarching purpose includes the following objectives:
(a)the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 2);
(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c)the efficient disposal of the Court's overall caseload;
(d)the disposal of all proceedings in a timely manner;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute
(3)The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.
I have a broad discretion in exercising the costs jurisdiction including that I do not have to find a clear case to make out a costs order pursuant to s 117(2) of the Act: Penfold v Penfold [1980] HCA 4; (1980) 5 Fam LR 579; (1980) FLC 90-800 at pp 75,053-75,054.
The High Court of Australia in Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; (1990) 97 ALR 45 (‘Latoudis v Casey’) at [13] stated as follows:
...in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.
I have considered all the s 117(2A) matters but for the sake of efficiency, I will reflect only on those that had a significant bearing in relation to the parties’ circumstances and the decision to be made.
The financial circumstances of the parties
The mother’s evidence identifies that her expenses exceed her income and that despite the father having an assessed child support of liability of $147.30 per week, she receives no such assistance from him.[9]
[9] See generally the mother’s financial statement and the mother’s affidavit at paragraph [40] & [52].
The father’s financial circumstances suggest that he too is in a precarious financial position. For example, as was made clear from the judgment, most of the father’s assets are held within a property in Country F and as such I allowed a dispensation from the effect of my property adjustment award in favour of the mother so to ensure that the father will at least receive $10,000 from the sale of Suburb C. The father says he still owes $10,000 to the Australian Taxation Office.[10] The father also speaks of how to live with little income and then discloses how he does not buy coffee or prepared food.[11]
[10] The father’s affidavit at paragraph [67] and annexure ‘P’.
[11] The father’s affidavit at paragraph [136].
Costs are meant to be compensatory not punitive: Latoudis v Casey at [13] and Cassidy v Murray [1995] FamCA 91; (1995) 19 Fam LR 492; (1995) FLC 92-633; (‘Cassidy v Murray’) at [35].
Impecuniosity is not a bar to a costs order being made: Cross & Beaumont [2008] FamCAFC 68; (2008) 39 Fam LR 389 at [60] and Nada and Nettle (Costs) [2014] FamCAFC 207 at [11].
It is apparent that given the father’s circumstances, any order for costs is unlikely to be easily met by the father. Conversely a failure by the mother to receive the “fruits” of any judgment would not be a just outcome either because her contended unnecessarily incurred expenditure would not be compensated.
Legal aid
Pursuant to s 102NA, from April 2023 the mother was in receipt of a grant of aid. Between January 2022 and up to securing legal aid in April 2023, the mother privately funded the family law dispute between herself and the father. The father’s evidence is silent on this point, but certainly at the trial, the father rejected the need for legal representation and indeed sought to discharge the previous order made pursuant to that legislative provision.
The conduct of the parties including the effect of the overarching purpose
At paragraph 19 of the judgment, I said this –
19.It was uncontroversial that:
(a)Despite an order made on 22 March 2022 for the father to immediately surrender the children’s passports to the Court, the father failed to do so until after a Court order on 15 September 2022.
(b)The father has failed to comply with procedural orders of this Court aimed at ensuring the proceedings can be determined in accordance with the overarching purpose, including non-compliance with orders about disclosure and trial preparation.
(c)The father has failed to comply with requests and directions made by various statutory bodies including from authorised officers of the Child Support Registrar and the Administrative Appeals Tribunal.
(footnotes omitted)
More specifically as to the father’s conduct and its impact on case management (and/or costs for the mother incurred as a result) I note that:
(a)As part of the judgment, $3,305.80 in costs orders are to be deducted from the father’s share of the proceeds of sale of Suburb C consisting of costs orders made against the father on 22 August 2022 ($2,000) and 15 September 2022 ($1,178) with default interest;
(b)As a result of the father’s non-disclosure and non-compliance with orders of the Court, the financial conciliation conference on 2 November 2022 did not proceed and the mother’s costs were reserved;
(c)At the trial, the father unsuccessfully argued against a call by the mother for financial records regarding an entity of which he has control, causing some delay and inconvenience to the progress of the trial that day;
(d)As part of the judgment, I observed the father’s continuing failure to make proper disclosure.[12]
[12] J-177.
Aside from the father’s poor conduct being relevant pursuant to s 117(2A)(c), I am also satisfied that aspects of his conduct are relevant to s 117(2A)(g) and, in particular, his obligation to conduct proceedings in accordance with the overarching purpose.
As I said earlier, the father’s affidavit in response to the mother’s application for costs amounted to 167 pages of which the majority had no relevance to my determination. Within the document he:
(a)Disparages the mother for acting dishonestly and misleading the Court and also her former lawyer as acting unethically and probably unlawfully either before or during the substantive proceedings;[13] and
(b)Complains about the judgment, seeks to review the conduct of the proceedings (including disparaging the expert witnesses), seeks to adduce fresh evidence to justify his views and ends by requesting a stay and appeal.[14]
[13] The father’s affidavit at paragraphs [11], [12] and [107] to [121].
[14] The father’s affidavit at paragraphs [13], [15] to [66], [68] to [106] and [146] to [166].
Overall, the tenor of the father’s conduct (as exemplified by his evidence) was argumentative, irrelevant, and sought to perpetuate rather than narrow or resolve the costs issue which was the only issue before me for determination. By the father’s conduct in the preparation of his responding material, the ability for me to efficiently use judicial resources was highly challenging.
Offers made and the overarching purpose
The finding I need to make is whether a party who has served a written offer prior to determination of an issue that was rejected by the other party, has obtained a result that is no less favourable to them than the terms of that offer.
Section 117C sets out the framework about what constitutes an offer of settlement for the purposes of s 117(2A)(f). Part 4.2 of the Div 1 Rules prescribes the difference between an “open” and “without prejudice” offer and how to make/accept/withdraw an offer.
On 10 January 2022[15] the mother caused an application for consent orders and minute of orders to be forwarded to the father which the mother says reflected the informal agreement reached between the parties for –
(a)The mother to re-finance the family home at Suburb E and pay the father $151,860;
(b)The father to retain Suburb C;
(c)The father to receive into his superannuation interest $54,127 from the mother’s superannuation interest;
(d)The parties to otherwise retain all property they currently own, control or have possession of and to indemnity each other for any existing liabilities.
[15] See paragraph [36] of the mother’s affidavit and annexure ‘D’ which contains the minute of proposed consent orders (incorrectly referred to as annexure E at [36]).
The mother says that the proposal represented an equal distribution (presumably about the Australian property as no mention is made about the father’s property in Country F).
On 22 January 2022, the mother proposed parenting orders for the allocation of equal shared parental responsibility, the children to live with the mother, the children to spend five (5) nights a fortnight with the father as well as various other ancillary orders. The correspondence proposes the parties sign a consent order.[16]
[16] See paragraph [37] of the mother’s affidavit and annexure ‘D’ (incorrectly referred to as annexure E at [37]).
On 31 January 2022, the mother sends a “without prejudice save as to costs” offer[17] to the father rejecting his offer and (in summary) making the following offer:
(a)The mother to re-finance the family home at Suburb E and pay the father $149,994;
(b)The father to retain Suburb C;
(c)The father to receive into his superannuation interest $54,127 from the mother’s superannuation interest;
(d)The parties to otherwise retain all property they currently own, control or have possession of and to indemnify each other for any existing liabilities.
[17] See annexure ‘D’ of the mother’s affidavit
This offer was kept open for seven (7) days after which it was to be taken as withdrawn.
Whilst the earlier two proposals were not explicitly identified as “without prejudice” offers, all three proposals they were sufficiently precise to support the making of a costs order.[18] Further I am satisfied that all three (3) documents show compromise on the part of the mother because had the father acceded, either the parenting and/or property adjustment dispute would have been resolved by consent and not by way of contested litigation.[19]
[18] Brady at [38]
[19] Full Court (Austin, Williams and Howard JJ) in Pavlic & Pavlic (No 2) [2023] FedCFamC1A 97 at [14].
However, offers must be seen in the context of the case, with consideration given to the offeree’s knowledge of the situation to which the offer relates.[20] The evidence before me does not allow me to form a view that upon receiving any of the mother’s proposals that the father would have been able to effectively assess the strength of their position in respect to the prospective litigation. This is mainly because I am unsure of what disclosure the mother did or needed to make about the parenting issue and secondly it was unclear to me how much the father knew about the mother’s financial circumstances in order to assess his position.[21]
[20] See for example Pennisi & Pennisi [1997] FamCA 39; (1997) 22 Fam LR 249; at pp 259-260 (‘Pennisi’) and Browne & Green [2002] FamCA 791; (2002) 29 Fam LR 428; (2002) FLC 93-115 at [57] where the Full Court observed that the failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it a proper consideration, is something to which very significant weight indeed ought normally be given. (my emphasis)
[21] See for instance Alston & Alston [2021] FedCFamC1A 96 (‘Alston’) at [102]; Pennisi at pp 259-260.
Overall, s 117(2A)(f) is not triggered.
That said, the documents are relevant[22] in my determination, if nothing else because they demonstrate the mother attempting to make a genuine effort to negotiate with a view to trying to avoid litigation[23] which reflects conduct supporting the overarching purpose.[24] The father’s reaction– speaking of his “entitlements as a father to have an equal parenting time” regime and his determination to “fight this case not only because of myself, but on half (sic) of all fathers that (sic) their parenting rights have been stripped away from them based on false accusations and misconception” [25] is an anathema to the overarching purpose. That is because the aim is to focus on resolving the parties’ issues (and not those of the broader community) according to law and as quickly, inexpensively, and efficiently as possible.
[22] Section 117(2A)(g).
[23] Kay J in In the Marriage of Dickson (No 2) [1999] FamCA 768; (1999) 25 Fam LR 79 (‘Dickson No 2’) at p 80.
[24] Sections 190 & 191 of the Court Act.
[25] See paragraph [37] of the mother’s affidavit & annexure ‘D’.
From the face of the documents there is no doubt that had agreement been reached on any of the terms offered by the mother (which ultimately were far more favourable to the father than the final orders), the disputes between the parties would have been resolved without the protracted litigation that they have subsequently had to endure.[26]
[26] Kay J in Dickson No 2 at p 80 and Berman J in Ingles & Ingles [2019] FamCA 514 at [61].
Conclusion as to justifying circumstances
There were a number of s 117(2A) factors that were adverse to the father’s case, although no single factor has priority and rather, one factor alone may be sufficient.[27]
[27] For instance, Prantage & Prantage (Costs) [2014] FamCA 850, Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157; (2015) 54 Fam LR 1; (2015) FLC 93-664 at [24] and Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish [2005] FamCA 158; (205) 33 Fam LR 123 at [41].
Weighing up the evidence and the submissions, in the exercise of my discretion, I am satisfied that it is just for me to make a costs order to compensate the mother primarily because:
(a)The father has failed (on multiple occasions) to comply with orders of this Court causing additional Court events to be held and also putting the mother at additional cost in repeatedly asking for disclosure or payment of outstanding costs orders[28] when the father was aware of his obligations;[29]
(b)The father’s conduct during the proceedings and in responding to the application for costs has been an anathema to the overarching purpose;
(c)The mother can ill afford to meet her legal costs;
(d)Impecuniosity is no barrier to the making of a costs order.
[28] See for example, correspondence from the mother’s solicitor to the father contained within annexure ‘B’ of the mother’s affidavit.
[29] See for example, the father’s signed Undertaking as to Disclosure (filed 23.6.22) at annexure ‘B’ of the mother’s affidavit.
On what basis and what quantum should the father pay the mother’s costs?
The mother contends for an indemnity costs order fixed in the sum of $37,110.89, payable within 30 days of the Order being made. The father seeks for the dismissal of the application.
Rule 12.13 permits the Court to make an order for costs including as to the due date for payment and on an indemnity basis (provided certain evidence is before the Court). I am satisfied that the mother has complied with r 12.13(4).[30]
[30] See Meares Law Costs Disclosure and Costs Agreement at exhibit ‘E’ of the mother’s affidavit.
The mother sets out within exhibit ‘E’ to her affidavit various tax invoices issued by her former lawyer, a tax invoice from a process server disclosing three (3) attempts to serve the father and what appears to be a schedule of the invoices issued by the mother’s former lawyer as well as a total ($35,642.62). Pausing there, the scheduled total ($35,642.62) is different to the mother’s claim for indemnity costs ($37,110.89).
The tax invoices include costs for events and/or periods of time which are reflected in costs orders already made on 14 August 2022 for $2,000 (see for example tax invoice 1167) and 15 September 2022 for $1,178 (see for example tax invoice 1176).
It is unclear whether the father challenges the quantum because it is excessive or not, but certainly his evidence seeks to cast aspersions on whether the mother and/or her former lawyer have acted ethically (without any solid foundation provided).[31]
[31] See the father’s affidavit under the heading “Conduct Rules and Ethics”.
In applying Chapter 12 of the Div 1 Rules, the Court may apply the scale of costs in Schedule 3 to those Rules or the scale of costs in Schedule 1 to the Federal Circuit and Family Court of Australia (Division2) (Family Law) Rules 2021 (‘the Div 2 Rules’): r 4.01 Div 2 Rules
As articulated by the Full Court in Sfakianakis & Sfakianakis [2019] FamCAFC 54; (2019) 59 Fam LR 419 (‘Sfakianakis’) at [10], the language of s 117(2) of the Act permits the Court to fashion an order in the context of the circumstances before it, such that an order for partial indemnity or a particular period are possibilities as well as for a “special costs order” being a fixed sum that is neither on a party and party basis or on an indemnity basis.
In the accepted decision of the Federal Court of Colgate-Palmolive Company v Cussons Pty Limited [1993] FCA 536; (1993) 46 FCR 225 (‘Colgate-Palmolive’) at [233]-[234], various examples of justifying circumstances were elucidated. In Munday v Bowman (1997) FLC 92-784 at 84,660, Holden CJ essentially summarised the Colgate-Palmolive examples including at 84,660 sub-paragraph (c) - Evidence of particular misconduct causing loss of time to the court and to other parties: see Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (Fed C of A, French J, 3 May 1991, unreported).
If I intend to make a costs order, I should not depart lightly from the ordinary rules relating to costs between party and party and that the justifying circumstances should be of an exceptional kind.[32]
[32] Munday v Bowman, Kohan and Kohan (1992) 16 Fam LR 245; (1993) FLC 92-340 at 79,614; Limousin v Limousin (Costs) [2007] FamCa 1178; (2007) 38 Fam LR 478.
The categories of circumstances which may enliven the discretion to make a special costs order are not closed - and through the prism of s 117(2) of the Act - may be made whenever the particular facts and circumstances warrant it: Sfakianakis at [12] and insofar as indemnity costs are concerned, Yunghanns v Yunghanns [2000] FamCA 681; (2000) 26 Fam LR 331; (2000) FLC 93-029 at [31].
I am not satisfied that the circumstances of this case are so exceptional as to warrant an indemnity costs order or a special costs order. However, I am satisfied that party and party costs should be paid by the father pursuant to Schedule 1 of the Div 2 Rules, excluding:
(a)For those events to which costs orders already apply - 22 August 2022 and 15 September 2022; and
(b)For those events that post-date the mother’s receipt of legal aid – from April 2023.[33]
[33] See Lucev FM in Knight & Sullivan (No 2) [2008] FMCAfam 55 at [19] who confirmed the principle that a pauper ought not make a windfall profit by pocketing an award of costs where the pauper had incurred no costs.
My calculation of those costs is set out in Table 1 below.
Table 1 – Mother’s party and party costs as per applicable Schedule 1 Div 2 Rules
Item
Description
Amount ($)
1
Initiating or opposing an application up to the completion of the first court date on 07.02.2022 including a short mention fee as per item 13(a)
(a) $2,357 ;
and
(b) $321
4
Summary hearing as a discrete event (interlocutory hearing before a Senior Judicial Registrar on 11.03.2022)
$1,964
10
Attendance at hearing on 22.03.2022 to take judgment and explain orders
(a) $321 ;
and
(b) $321
6
Attend other dispute resolution (half-day parenting dispute resolution event on 12.05.2022) including preparation
$1,964
4
Procedural hearing (compliance and readiness) on 01.07.2022- as a discrete event
$1,964
5
Conciliation conference event (02.11.2022) including preparation
$1,964
4
Procedural hearing (compliance and readiness) on 16.12.2022- as a discrete event
$1,964
16
Reasonably incurred disbursements – G Pty Ltd process service fees (19 & 25.01.2022)
$468.27
TOTAL
$13,608.27
As there was no evidence upon which I could otherwise assess whether disbursements claimed within the various tax invoices forming part of exhibit ‘E’ were reasonably incurred, I am unable to make any further adjustment for such matters as photocopying.
Accordingly, I am satisfied that the quantum of $13,608.27 is fair, reasonable and proportionate[34] and that the father should be given one (1) calendar month to pay.
[34] Rule 12.08.
Informed by the circumstances of this case, in the exercise of my broad discretion I assess that it would be just, fair, reasonable, and proportionate to assess the mother’s costs at $13,608.27 and that the father should be given four (4) weeks to pay that sum.
I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kearney. Associate:
Dated: 23 February 2024
0
18
4