Telito & Glass (No 2)
[2024] FedCFamC2F 841
•2 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Telito & Glass (No 2) [2024] FedCFamC2F 841
File number(s): SYC 955 of 2024 Judgment of: JUDGE MURDOCH Date of judgment: 2 July 2024 Catchwords: FAMILY LAW – COSTS – Application for the Respondents to pay the Applicants’ costs of an Application for Review - where the Application for Review was wholly unsuccessful – where reasons for the SJR’s judgment were reserved and never delivered – where it is submitted that receiving reasons may have discharged the need for a Review and may have assisted the parties in reaching further agreement – where exercising a delegated judicial function carries with it an obligation to act judicially and provide reasons - where SJR failed to act in accordance with the delegated judicial function – where costs sought by the applicants are not sufficiently particularised – orders made for the respondents to pay a proportion of the applicants’ costs as assessed at scale Legislation: Family Law Act 1975 (Cth) ss 117(1), 117(2)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rule 1.04, 12.13, 12.17
Cases cited: Bell Lawyers Pty Ltd v Pentelow (2019) 372 ALR 555
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225
Kohan & Kohan (1993) FLC 92-340
Latoudis v Casey (1990) 170 CLR 534
Lenova & Lenova (Costs) [2011] FamCAFC 14
Northern Territory v Sangare (2019) 265 CLR 164
Penfold & Penfold (1980) FLC 90-800; [1980] HCA 4
Division: Division 2 Family Law Number of paragraphs: 44 Date of last submission/s: 28 June 2024 Date of hearing: 2 July 2024 Place: Sydney Solicitor for the Applicants: Pinnacle Lawyers Solicitor for the Respondents: Caldwell Martin & Cox ORDERS
SYC 955 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR TELITO
First Applicant
MS TELITO
Second Applicant
AND: MS GLASS
First Respondent
MR GLASS
Second Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
JUDGE MURDOCH
DATE OF ORDER:
2 JULY 2024
THE COURT ORDERS THAT:
1.Within 28 days the respondents pay the applicants’ costs of and incidental to the Application for Review fixed in the sum of $3,000 inclusive of GST.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MURDOCH
INTRODUCTION
These are proceedings concerning the parenting arrangements for three-year-old X.
The applicants in the substantive proceedings are X’s aunt and uncle. The respondents are X’s biological parents.
X came into the care of the applicants in 2021, shortly after his birth and subsequent to his release from hospital. From this time the applicants were X’s primary carers. The time he spent with the respondents is disputed.
On 6 January 2024 the respondents unilaterally removed X from his primary carers and the applicants commenced proceedings on 14 February 2024 seeking his return. The respondents did not allow X to spend any time with the applicants upon their retention of him. They unilaterally changed his name from “X Telito” to “X Glass” on his Birth Certificate.
Orders were made on a defended basis on 14 March 2024 by a delegated Judicial Officer that X was to be returned to live with the applicants immediately, failing which a recovery order would be issued. Pursuant to such orders X was to live with the respondents in a two-week cycle as follows: -
·In week one: 10:00am Saturday to 5:00pm Sunday; and
·In week two: 10:00am to 5:00pm on Saturday.
Whilst Orders were made by the Senior Judicial Registrar on this date, the parties agree that the reasons for such orders were reserved.
The respondents filed an Application for Review on 4 April 2024 of the interim orders (“the Review Application”). Such Review Application sought orders that X live with the respondents and spend time with the applicants each alternate weekend from 10am Saturday to 4pm Sunday. The applicants also sought that the Review Application be dismissed together with an injunctive order to be made restraining the parties from referring to the child as other than “X”.
Both parties were represented by Counsel when the Review Application was heard on 18 April 2024. The reserved reasons of the Senior Judicial Registrar had still not been provided by this date. It appears that no reasons have ever been provided.
Judgment was delivered on 24 April 2024 and orders made dismissing the Review. An order was made as sought by the applicants restraining the parties from addressing or referring to the child by any name other than X Telito and directions made with respect to the filing of any costs application.
By way of Application in a Proceeding filed on 7 May 2024 the applicants seek costs in relation to the unsuccessful Review (“the costs application”) fixed in the sum of $8,257.30. The respondents oppose any costs order being made.
Neither party has objected to the disposition of the costs dispute on the papers in chambers.
I have read the following documents relied upon the applicants:-
·Application in a Proceeding filed 7 May 2024;
·Financial statement of the first applicant filed on 7 May 2024;
·Financial statement of the second applicant filed on 7 May 2024;
·Costs Notice of Pinnacle Lawyers filed on 7 May 2024; and
·Written Submissions of the applicants filed 7 May 2024.
I have read the following documents relied upon by the respondents:-
·Response to an Application in a Proceeding filed 28 June 2024;
·Affidavit of the first respondent filed 28 June 2024;
·Written Submissions of the respondents filed 28 June 2024;
·Financial Statement of the first respondent filed 3 April 2024; and
·Financial Statement of the second respondent filed 3 April 2024.
I have also read my judgment and orders of 24 April 2024 and the Costs Notice of the respondents filed on 7 May 2024.
THE LAW
Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to proceedings shall bear their own costs subject to subsection (2), which states that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may make such order as to costs as the Court considers just.
Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, Penfold & Penfold (1980) FLC 90-800; [1980] HCA 4 states that there is no additional or special onus on the applicant who seeks the costs order.
Subsections 117(2A)(a) to (g) of the Act set out the matters that must be taken into account in determining whether to exercise the Court’s discretion and make a costs order. No one factor must be present, and no particular factor has more or less weight than any other. There may however be a dominant or outstanding feature that makes an order for costs appropriate.
It is a basic principle that an order for costs is compensatory and is not to be used to punish a party: Latoudis v Casey (1990) 170 CLR 534. Costs are awarded by way of indemnity; not as compensation for lost earnings or as a reward for a litigant's success: Bell Lawyers Pty Ltd v Pentelow (2019) 372 ALR 555 at [33].
The ordinary rule is that an order for costs is calculated on a party/party basis, and to depart from that rule and award indemnity costs, exceptional circumstances must be demonstrated: Kohan & Kohan (1993) FLC 92-340, at 79,614.
CONSIDERATION
The financial statements filed by each of the applicants depose that the applicants are in receipt of a total household weekly gross income of $2,350 and have fixed weekly expenses of $1,536. The first applicant deposes she is the sole registered proprietor of the parties’ home that has a value of $300,000 and her 25% share of the mortgage is $47,500. The circumstances giving rise to this situation is not explained. The first applicant has superannuation entitlements to the value of $18,870. It appears that the property and financial resources of the applicants are modest.
The applicants have accrued legal fees of $20,050 to date inclusive of the Review hearing. Such fees will be paid from the applicants’ savings and “readily available funds.” [1]It is uncontested that the second applicant borrowed the sum of $5,000 from her mother and family friends to fund the legal costs of the Review Application.
[1] Applicants’ Cost Notice filed 7 May 2024.
The financial statements filed by each of the respondents depose that they have a total weekly household income of $3,056 and fixed expenses of $2,231. The respondents are the sole registered proprietors of a home with an estimated value of $870,000. Each of the respondents has listed a mortgage in both their names of $435,000. As it is not completed, it is unclear as to whether the respondents are each deposing as to their 50% share of such loan being $435,000 or whether the total amount of such loan is $435,000. Whilst it was submitted on behalf of the respondents that they owe significant sums to family members who have assisted them with lump sum payments towards legal fees, this is not deposed to in any Financial Statement, nor is it alluded to in their Costs Notice.
In any event, I am satisfied that the respondents could meet an order for costs though, as has been made clear by Lenova & Lenova (Costs) [2011] FamCAFC 14, modest, or even poor, financial circumstances are not determinative of the issue.
Neither party is in receipt of Legal Aid funding and both parties were supported by private instructors and counsel at the Review hearing.
The rules of the court should be taken into account when the court is exercising its discretion as to costs: see Northern Territory v Sangare (2019) 265 CLR 164 at [25]. Parties have a mandatory obligation pursuant to r 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 to conduct proceedings in a manner consistent with the overarching purpose of the court, being the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible. I am not of the view that the conduct of the parties has been outside the scope of what is expected of regular litigation.
The proceedings have not been necessitated by the failure of a party to the proceedings to comply with previous orders of the Court.
The Review brought no change to orders in the respondents’ favour and in fact further orders were made in accordance with the relief sought by the applicants that the child be known only by his birth name. Accordingly, the respondents were wholly unsuccessful with respect to the Review Application.
On the evidence before me, there were no offers between the parties to settle the matter prior to the hearing of the Review Application.
The respondents’ submissions are not without merit that:
5.The Senior Judicial Registrar did not ever publish a Judgment following the making of his Orders, despite indicating he would do so. This would have assisted both parties significantly in understanding the reasons for his decision and may have assisted the parties to reach further agreement about the living and care arrangements of the child.
6.The Respondents applied to review the decision in circumstances where they were unsure of the reasons for judgment. They were also unsure as to any findings of fact made by the Senior Judicial Registrar as to the child’s living arrangements between May 2021 and January 2024. [2]
[2] Written submissions of the Respondents filed 28 June 2024.
A Senior Judicial Registrar is required to act judicially in exercising that delegated function, notwithstanding a party having a right to review any order made by way of an original hearing. Absent the consent of the parties, that conferred judicial function carries with it an obligation to give sufficient reasons to properly expose the process grounding the decisions made so that a party knows their case has been heard and understood, even if they were unsuccessful. Failure to give reasons is akin to acting arbitrarily. The Senior Judicial Registrar in this matter failed to act judicially, denying this fundamental entitlement to the parties.
I reject the Respondent’s submission that no circumstances exist in this matter to justify a costs order “given the highly unusual nature of the proceedings involving their biological child being retained by another couple.” [3] This was not a matter whereby a child was unilaterally retained by another couple. It is uncontested that the applicants were the primary carers of X for a period of some 2 years prior to his unilateral retention by the respondents. There was no evidence that X was at risk in the applicants’ household; the respondents themselves proposed overnight time should orders be made that X live with them.
[3] Ibid, paragraph 15.
Both the application seeking a change in X’s living arrangements prior to a final hearing and the Application for Review was ill advised and appeared to be borne of the respondents’ own wants rather than what was in X’s best interests. The Application for Review sought to again shift the parenting arrangements in the absence of expert opinion and pending a final hearing, notwithstanding the potential disruption to the child’s wellbeing and stability.
Weighing all of the above considerations I am satisfied that, as between the parties, there are circumstances that justify a departure from the usual provision of s 117(1) of the Family Law Act 1975 (Cth) that each party bear their own costs.
QUANTIFICATION OF COSTS
The applicants seek their costs be paid in a fixed sum totalling $8,257.30.
Rule 12.17 states that the court may order costs:-
·of a specific sum;
·as assessed on a particular basis;
·to be calculated in accordance with a method determined by the court;
·or as assessed in accordance with Schedule 3 of the Rules. In circumstances where this schedule is applicable to proceedings in Division 1 of the court, this court may apply the scale of costs at Schedule 3 or the scale of costs at Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) (“the Division 2 Rules”).
In contrast to the sum sought by the applicants for the Review Application, the applicant aunt’s affidavit deposes that the Review Application “cost us a total of $7,700.” [4] Attached to the Affidavit is a single invoice of the applicants’ lawyers dated 7 May 2024 which renders an account in the sum of $7,700 comprising two single line entries only: -
·“23/04/2024 Attending to review hearing at FCFCOA $3,000”; (and $300 GST); and
·Under the heading disbursements “23/04/2024 Review hearing at FCFCOA $4,000” (and $400 GST).
[4] Paragraph 13 of the Affidavit of the First Applicant filed 7 May 2024
The Costs Notice filed by the solicitors for the applicants on 7 May 2024 does not assist. It merely records that the costs incurred by the applicants “to date” total $8,800 with “Counsel Fees, filing fees, translation fees etc” totalling the sum of $10,250.00.
There is no evidence to support a finding that the costs incurred by the applicants for the Review Hearing was $8,257.30. It is difficult to understand that this was the costs incurred when the Costs Notice filed at a later date asserts that the total costs to 7 May 2024 is $8,800.00.
There is no particularisation of the composition of the sum charged to the applicants by way of their invoice dated 7 May 2024 of $7,700.00 as would occur by the provision of an itemised bill. In any event, it appears that the applicants are seeking costs be paid by the respondents on an indemnity basis.
Rule 12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) provides that the Court may make an order for costs on its own initiative or on the application of a party. Rule 12.13(4) mandates that a party applying for an order for costs on an indemnity basis must inform the Court if the party is bound by a costs agreement and if so, the terms of such costs agreement. In circumstances where this evidence is not before the Court, the apparent application for indemnity costs must fail. In any event, for the reasons set out above I am not satisfied that there are exceptional circumstances in this case that would warrant an order for indemnity costs: Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225.
Given the lack of an evidentiary foundation to determine the basis and reasonableness of the costs incurred by the applicants in the sum of $7,700 I am satisfied that it is fair and reasonable to apply the scale as set out in Schedule 1 of the Division 2 Rules for the applicants’ solicitors’ fees.
Item Description Amount (including GST) 3 Initiating or opposing an application for interlocutory orders (including an interim hearing) that is not otherwise described in item 1 or 2 (a) $2,093.62; and
(b) $1,255.75 (the daily hearing fee for a half day hearing)14 Advocacy loading $627.88 Total $3,977.25
Having regard to all of the considerations above, including the failure to provide reasons by the Senior Judicial Registrar, I am satisfied that it is reasonable for the respondents to pay a proportion of the applicants’ costs at scale fixed in the sum of $3,000.
No orders were sought with respect to the costs of the costs’ application and as such no orders will be made. In any event, there is no reason to depart from s117(1) of the Act such that each party will bear their own costs in that regard.
The application for costs will otherwise be dismissed.
I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Murdoch. Associate:
Dated: 2 July 2024
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