Toohey & Dantes (No 2)
[2022] FedCFamC1F 140
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Toohey & Dantes (No 2) [2022] FedCFamC1F 140
File number(s): SYC 6702 of 2019 Judgment of: HARPER J Date of judgment: 14 March 2022 Catchwords: FAMILY LAW – COSTS – Mother’s application for indemnity costs of interim application for recusal – Whether the father’s recusal application had no reasonable prospects of success – Factors to be taken into consideration in making order for costs – Where the mother seeks that the father pay her costs on an indemnity basis – Financial circumstances of parties – Order for costs fixed in the amount of $1,500 Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.13(1) and r 12.17
Cases cited: Colgate-Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225; [1993] FCA 801
D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64
Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; [1988] FCA 364
Hadlow & Davis (No 2) [2020] FamCA 925
Harris & Dewell (No 2) [2018] FamCAFC 180
Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48
Kohan & Kohan (1992) 112 FLR 151; [1993] FLC 92-340
Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCa 1178
Medlon v Medlon (No 3) [2015] FamCAFC 37
Medlon & Medlon (No 6) (Indemnity Costs) (2015) 54 Fam LR 1; [2015] FamCAFC 157
Moorcroft & Moorcroft (2020) 60 Fam LR 361; [2020] FamCAFC 83
Nagel & Clay (2020) 60 Fam LR 550; [2020] FamCA 326
PBF v TRF (2005) 191 FLR 294; [2005] FamCA 158
Prantage & Prantage (Costs) [2014] FamCA 850
Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175; [1993] FCA 115
Division: Division 1 First Instance Number of paragraphs: 45 Date of last submission/s: 10 December 2021 Date of hearing: On the papers Place: Sydney Solicitor for the Applicant: Santone Lawyers The Respondent: In person ORDERS
SYC 6702 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS TOOHEY
Applicant
AND: MR DANTES
Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
14 MARCH 2022
THE COURT ORDERS THAT:
1.Within 60 days, Mr Dantes (“the father”) pay Ms Toohey’s (“the mother”) costs of and incidental to his Application in a Proceeding filed 15 October 2021 and the mother’s submissions on costs filed 10 December 2021, the subject of this judgement, fixed in the amount of $1,500.
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 the pseudonym Toohey & Dantes has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
The substantive proceedings in this matter concern the parenting dispute between the applicant mother, Ms Toohey (“the mother”) and the respondent father, Mr Dantes (“the father”).
There is one child of the relationship, X (“the child”) born in 2016 and presently 5 years of age.
BACKGROUND
On 15 October 2021, the Father filed an Application in a Proceeding (“recusal application”) seeking the following:
1.That his Honour Judge Harper recuse himself from presiding over SYC6702/2019.
2.That the case management Judge allocate an alternate Judge to preside over SYC6702/2019, and that Judge not be the same Judge as is presiding over SYC2265/2014.
3.That SYC6702/2019 be set down for final hearing of 7 days in 2022 and that a timetable for evidence preparation be set.
4.That the requirement for a single expert report be dispensed with.
These orders were opposed by the mother and ICL. The mother set out her response to the father’s application in a Response to an Application in a Proceeding filed on 4 November 2021.
The father in these proceedings in also the respondent in other parenting proceedings (SYC2265/2014) which are listed before me for hearing commencing on17 October 2022. For a short period I took the approach of listing both proceedings at the same time. However, as explained later in these reasons, these proceedings are now in the docket of another judge of this Court.
The application came before me on 8 November 2021. The ICL and mother maintained their opposition. I point out here that the proceedings came into my docket in July 2021. By November 2021, greater resources had become available in the Court. I invited the father to consider withdrawing his application if the proceedings were transferred to another judicial officer. After hearing from the parties, I made orders dismissing the application, after the father agreed he would not press it. I also heard submissions concerning the father’s proposed Orders 3 and 4, but refused to make them.
The mother sought an order for costs of the father’s recusal application. I made orders that the father and mother file written submissions as to costs. These procedural orders related only to the father’s recusal application.
On 5 December 2021 the father filed an affidavit (“the affidavit”) which included his submissions in relation to the costs.
The father, who was self-represented, appeared to think he should address in his submissions a costs application in respect of his review of a decision of Senior Judicial Registrar Hayward made 2 June 2021. The father filed this application for a review on 27 June 2021 (“review application”). However, this judgment does not deal with any question of costs relating to that application for review. As at 8 November 2021, as the father himself submitted, the application had not been heard, there had been no decision and no one had made any application for costs relating to it. This judgment deals only with the mother’s application for costs of the recusal application.
However, there was a relevant connection between the recusal application and the review application in the sense that the review application had been listed for hearing on 18 October 2021, and the recusal application was filed the Friday before on 15 October 2021. As a result, the review application could not be heard on 18 October 2021 and both applications were stood over to 8 November 2021 on which date, as already noted, the father agreed not to press the recusal application.
The review application has since been determined by Rees J.
On 10 December 2021, the mother filed her written submissions (“the submissions”).
The mother relies upon and refers to the following:
(1)Section 117 of the Family Law Act 1975 (Cth) (”the Act”).
(2)Hadlow & Davis (No 2) [2020] FamCA 925 at [70].
(3)Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225.
(4)Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397..
(5)Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175.
The father relied wholly upon his affidavit.
THE LAW
Section 117(1) of the Act provides that, subject to subsection (2), “each party to proceedings under this Act shall bear his or her own costs”. Subsections (2) and (2A) are in the following terms:
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of the Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2) the court shall have regard to:
(a) The financial circumstances of each of the parties to the proceedings;
(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) The conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer;
(f) Such other matters as the court considers relevant.
It follows, that while s 117(1) of the Act provides, as a starting point, that in family law proceedings each party bears his or her own costs, the Court may make a costs order in favour of a party where there are circumstances justifying such an order (Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) r 12.13(1)).
It is well settled that no one factor in s 117(2A) of the Act has priority, nor must more than one factor be satisfied; rather, any one factor may be sufficient; Prantage & Prantage (Costs) [2014] FamCA 850 at [12], PBF v TRF (2005) 191 FLR 294 at [41]. It is a matter of weight that is accorded to each relevant factor in the trial judge’s discretion: Medlon & Medlon (No 6) (Indemnity Costs) (2015) 54 Fam LR 1, per Strickland J.
The Full Court in Moorcroft & Moorcroft (2020) 60 Fam LR 361 upheld that indemnity costs orders are awarded only in exceptional circumstances (Kohan & Kohan (1992) 112 FLR 151; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; D & D (Costs) (No 2) (2010) FLC 93-435.
The mother relied upon s 117(2A) subsections (a), (c), (e), and (f) of the Act as set out herein at paragraphs [21]–[31] and [32]–[36].
The question is whether the mother has established any circumstances justifying a departure from the position that each party pay their own costs, for a costs order in her favour. The second question is whether there are circumstances justifying a costs order on an indemnity basis.
SECTION 117(2A) CONSIDERATIONS
Section 117(2A)(a) – the financial circumstances of each of the parties
The mother submits that she is unemployed, and has had to borrow substantial amounts of money from her parents in order to pay the legal costs associated with the proceedings thus far.
The mother contends that the father also has access to substantial sums of money that he has loaned to entities controlled by his parents and therefore has the financial means to pay costs as sought.
The father submits that the mother has sufficient financial resources to fund her legal costs associated with this application and the proceedings. He said the mother is supported by her wealthy family and engages with a private law firm and senior counsel which he cannot afford.
The father submits in the affidavit in respect of his financial situation, that he cannot meet the costs for the following reasons:
(1)He receives Jobkeeper pension payments;
(2)He has had early access to super;
(3)He has minimal savings;
(4)He is in receipt of partial legal aid for related matters;
(5)He is a self-represented litigant because he cannot afford representation;
(6)He has a court filing costs exemption;
(7)He has previously been exempted from ICL costs and is in no position to pay for those costs at any time.
(8)The legal costs between the parties are commensurate with the filed costs notices.
Clearly both parties claim to be impecunious. On the sparse evidence available, I am unable to form a sensible view about the competing claims by each that the other was lent money by or loaned money to extended family. However, impecuniosity is no bar to adverse costs orders being made, even if the assertions of the father about his financial position are accepted (Hadlow & Davis (No 2) [2020] FamCA 925 at [70]).
Section 117(2A)(c) – the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
Both parties made wide ranging claims about the other parties’ conduct generally in the proceedings. The conduct relevant for this judgment is limited, in my view, to conduct in connection with the recusal application.
The father served the recusal application at 4.29pm on 15 October 2021, seeking a listing on the next business day, being 18 October 2021, when the review application was listed. The mother submits that the late service of the recusal application resulted in significant costs being incurred. The mother instructed her solicitors to brief counsel at short notice. In the event, on 18 October 2021 the father was unprepared to proceed which resulted in the adjournment to 8 November 2021. The mother argues, and I accept, this wasted costs, but in relation to the father’s review application.
The mother also submits that the father continued with his recusal application although it was without any merit and throughout the proceedings he has wasted the Court’s time and resources.
The father submits in the affidavit that he has acted in good faith and with the best interests of the child at all times throughout the proceedings. I accept this may be generally what he perceives as his motivation, but of itself it does not justify any particular conduct at all, or, specifically, conduct in relation to the recusal application.
The father further submits that the mother has failed to comply with disclosure and accuses the mother of an array of different fraudulent activities conducted by both her and her solicitors. I am unable to accept these submissions, since they are not obviously relevant, and are serious allegations unsupported by any persuasive evidence.
Section 117(2A)(d) – whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
The father submits that the mother has failed to comply with orders made by his Honour Judge Smith. He does not specify which orders the mother has not complied with and does not provide any evidence about the alleged non-compliance. On any view, his recusal application could not be said to have been necessitated by any failure of the mother to comply with court orders.
Section 117(2A)(e) – whether any party to the proceedings has been wholly unsuccessful in the proceedings
The mother submits that the father was “wholly unsuccessful”, because the recusal application was dismissed. The father submits in the affidavit that his applications have been “almost entirely successful”.
I do not accept the submission of either party in this regard. It is true that practical factor resulted in the Court being in a position to proffer an outcome which rendered the father’s recusal application unnecessary. It may be said that the outcome was consistent with part of the relief sought by the father in his recusal application, which means in my view he was not “wholly” unsuccessful. But he did not succeed in the sense he demonstrated the usual principles of apprehended bias should be applied. Nor were Orders 3 and 4 made. On the other hand, and for the same reasons, it could not be said the mother was wholly unsuccessful. Indeed, on balance she achieved substantial success, but not total success.
Section 117(2A)(f) – whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer
The mother contends that her solicitors wrote to the father on 2 November 2021 inviting him to withdraw the recusal application. The father nevertheless pressed on with his application which proceeding to hearing on 8 November 2021.
The father made the general assertion in his affidavit that he has made offers to settle, negotiate, and mediate. He gave no detail or other evidence in support of his assertion. There was no evidence, in particular, that he made some proposal to resolve his recusal application before 8 November 2021.
The mother’s offer was an invitation to total capitulation, but if accepted by the father he would have avoided any risk as to costs. It was to his benefit for that reason.
Section 117(2A)(g) – other relevant matters
It was the tenor of the wife’s submissions that the father persisted with a recusal application that was without merit. I agree there is force in this submission. To the extent it was apparent from his material, the father’s recusal application had no reasonable prospect of success, bearing in mind the applicable test is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide: Johnson v Johnson (2000) 201 CLR 488. In the well-known decision of Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337, the High Court held that the test of apprehended bias requires satisfaction of a two-step process. First, the identification of what it is said might lead a decision-maker to decide a case other than on its legal and factual merits and, secondly, there must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The relevant reasonable apprehension is not that of, and is not determined by, the subjective perceptions of any party to the proceedings: Nagel & Clay (2020) 60 Fam LR 550 at [137] at [52] I accept that there was no argument about these questions, but the father’s material raised no arguable basis in my view which could satisfy these well-known tests.
Although the father argued he acted at all times in the best interests of the child, in connection with a recusal application, this could only indirectly be the case. Whatever the outcome of the recusal application, the child could be affected in only the most tangential way. I infer it is more likely that the father brought the recusal application more for his own perceived forensic benefit.
CONCLUSION ON JUSTIFYING CIRCUMSTANCES
I am satisfied that, in the circumstances, despite his possible impecuniosity, the conduct of the father persisting with an application which had no reasonable prospect of success after being invited to withdraw the application with no risk as to costs, justifies a costs order against him: Medlon v Medlon(No 3) [2015] FamCAFC 37.
It is therefore justified that the mother receive a costs order in her favour.
INDEMNITY COSTS
The mother submits the Court should consider making an order for indemnity costs, citing the authorities set out above, particularly the well-known decision in Colgate-Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225.
The award of indemnity costs in this Court has regularly been called a significant departure from the normal standard, is rare and requires something exceptional: Harris & Dewell (No 2) [2018] FamCAFC 180, the full Court said at [23]–[25]:
In Kohan and Kohan, the Full Court held, in applying the principles expounded by Sheppard J in Colgate-Palmolive, that an order for indemnity costs represents a “very great departure from the normal standard”. In the later decision of the Full Court in Prantage & Prantage, Thackray and Ryan JJ referred to Kohan and other authorities in the Full Courts of both this Court and the Federal Court of Australia as well as the state appeal courts. Their Honours concluded (at [86]) that the “usual rule” continued to apply in respect of awards of costs in this Court notwithstanding the Full Court accepting that the difference between party/party costs and a party’s actual costs has continued to grow significantly.
That proposition also derives support from what Callinan J said in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation. His Honour said that an order for indemnity costs should “be exceedingly rare, as they have a tendency to encourage extravagance and put the quantum of legal fees beyond the effective scrutiny of the courts and their taxing officers”.
The rarity of an order for indemnity costs can also be seen illustrated by the comments of Lindgren J in NMFM Property Pty Ltd v Citibank Ltd (No 2), referred to by their Honours in Prantage (at [102] – [103]). Lindgren J said that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation.”
(Footnotes omitted)
The recusal application is but one interlocutory application among many in these proceedings. While the number of interlocutory applications is regrettable, there is nothing in the circumstances which make the recusal application relevantly exceptional, so as to justify indemnity costs.
The father should pay the wife’s costs of the recusal application on a party and party basis. Often such an order should be followed by an assessment. But here the mother gave evidence that she incurred $3,646.50 inclusive of GST on an indemnity basis. This amount does not warrant the additional time and expense of an assessment process.
I consider it is in the interests of both parties for the Court to exercise its discretion to fix an amount for costs under r 12.17 of the Rules. I will exercise the Court’s discretion to fix a lump sum. This is in the interest of all parties. I will order the father to pay the wife’s costs fixed in the amount of $1,500 within 60 days.
I certify that the preceding forty-four (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 14 March 2022
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