Walter and Walter (No 2)

[2014] FamCA 660

FAMILY COURT OF AUSTRALIA

WALTER & WALTER (NO 2) [2014] FamCA 660

FAMILY LAW – COSTS

Family Law Act 1975 (Cth)

Penfold v Penfold (1980) 144 CLR 311
Prantage v Prantage [2013] FamCAFC 105

APPLICANT: Ms Walter

RESPONDENT: Mr Walter

FILE NUMBER: MLC 6449 of 2010

DATE DELIVERED: 15 August 2014

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 14 August 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Puckey

SOLICITOR FOR THE APPLICANT: Taussig Cherrie Fildes

COUNSEL FOR THE RESPONDENT: Mr Strum

SOLICITOR FOR THE RESPONDENT: Susan Snyder

Orders

1. That the wife pay the husband’s costs fixed in the sum of $2350 arising out of the wife’s review application filed 23 June 2014.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Walter & Walter 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 MELBOURNE

FILE NUMBER: MLC 6449  of 2010

Ms Walter

Applicant

And

Mr Walter

Respondent

REASONS FOR JUDGMENT

1. Subsequent to making orders on 15 July 2014 transferring the proceedings instituted by the wife on 29 April 2014 to the Federal Circuit Court, the practitioners for the wife sought a relisting before me to have a matter “clarified”.

2. As it transpired, time overcame the clarification problem as the case has now been listed before Judge Hartnett in the Federal Circuit Court next Monday 18 August 2014.  Despite that, I think it important to record this “clarification” issue.

3. In addition to that, the husband sought costs of the proceedings which culminated in the orders referred to in paragraph 1 above.

Background

1. The husband and wife have been involved in parenting litigation for some years. The courts’ file is contained in 5 volumes. Virtually all of that history is found in the Federal Circuit Court proceedings.  There, a trial of seven days culminated in orders being made by Judge Hartnett on 6 June 2012.

2. The proceedings referred to in paragraph 1 above sought to revisit the 2012 orders. This time however, the wife filed her application in this Court. At a hearing before Registrar Mestrovic on 13 June 2014 at which both parties were represented by experienced counsel and over the opposition of the wife, orders were made transferring the application of the wife to the Federal Circuit Court.  The Registrar also made an order for costs against the wife.

3. On 23 June 2014, the wife filed a review application concerning all of the orders made on 13 June. When the matter was heard by me on 2 July, the only issue that was argued was the transfer even though the costs order was still there.

4. On 15 July, I dismissed the review application and simply transferred the proceedings to the Federal Circuit Court. It is important that I record that I did not vacate or discharge the Registrar’s orders. Whilst it was said by the wife that the lack of the formal vacation or discharge of the order of the Registrar went to the issue of costs, in my view the order I made must be seen to have superseded the Registrar’s order and for it to be the only relevant one based upon the dismissal of the review application of the wife.

The Registrar’s costs order

1. The Registrar ordered the wife to pay the husband’s costs fixed at $1500. That order was contemplated in the review application but as I earlier said, it was not a matter that was mentioned let alone the subject of any discussion. The issue on the day was the transfer question.

2. In my view, as I was only asked to determine the transfer issue, the wife cannot now revisit that issue. As I dismissed the wife’s application, her objection to the costs order cannot now be litigated. That costs order must stand.

The clarification point

1. The Registrar had not only ordered a transfer to the Federal Circuit Court but also added to that order the following words:

   and (the application be) listed on 18 August 2014 at 9.45 am before Judge Hartnett.

2. I said that it was not appropriate that this Court dictate who or how the matter was to be heard. That should be the case even if (as it appears here) the Registrar was aware how the case could be listed in that court.

3. Having received the orders of 15 July, the wife contacted the Registry to see what the next step would be.

4. Mr Puckey of counsel for the wife said that the registry had two orders which were inconsistent with each other. He was referring to my order simply transferring the proceedings and the Registrar’s order fixing the matter before Judge Hartnett. He said the inconsistency resulted in the registry listing the matter on 18 August before Judge Hartnett indeed as the Registrar had noted on her order. Having now looked at the file, I do not accept the description put by Mr Puckey to be entirely correct.

5. My orders were published on 15 July. On 18 July, the solicitors for the wife wrote to the Registrar (quite properly) seeking an abridgment of time to enable an expeditious hearing of what the wife saw as an urgent parenting problem. The Court record shows that the request was placed before a registrar who deemed that “insufficient urgency” had been “demonstrated”. It was the registrar who then directed the matter to be listed on 18 August. I am unable to tell whether that “time slot” had come about because of it having been the subject of Registrar Mestrovic’s order on 13 June or it was just that it was the next available listing date. Needless to say, the counter staff then issued the wife’s application to that date. The presiding judge on that day is shown in the court record as Judge Hartnett. Whether that is coincidental or not I do not know and it would seem that it no longer matters.

6. Thus, the matter now lies with her Honour and this Court has nothing further to do with it. I am making no orders about that matter nor is it necessary that there be any clarification because the orders I made were clear even if there was some interest in my remarks about what was the appropriate transfer order.

Costs

1. Because the husband sought costs of the proceeding before me (as he was entitled to do under the Family Law Rules), I determined that the issue should be heard on the papers.  Mr Strum of counsel for the husband had prepared a written submission but agreed with Mr Puckey that I should hear the wife’s response orally. That occurred.

2. It was submitted by the husband that the two relevant matters under s 117(2A) of the Act were the conduct of the wife and that she had been wholly unsuccessful. The husband sought $4,450 and set out how that was calculated.

3. The conduct issue was put on the basis that the wife had previously litigated in the Federal Circuit Court and that twice now, this Court had said that was the appropriate court.

4. The success issue was that the wife had wholly failed and that as the review was akin to an appeal, the wife should pay the costs.

5. Counsel for the wife submitted that the wife had issued appropriately because she had a legislative right of choice and there were going to be arguments of the type that I dealt with in rejecting her application. Whilst conceding that the wife had not been successful, it was observed that the hearing time element was short and both counsel had been otherwise engaged that day.

6. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that in proceedings in this Court, each party shall bear their own costs unless there are justifiable circumstances to depart from that principle.

7. In Penfold v Penfold (1980) 144 CLR 311, the plurality said:

   Sub-section 117(2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order.

8. Whilst it is therefore not critical to point to something that justifies a departure from the main principle in s 117, as this is an exercise of discretion, I think it is better if the Court’s thinking is as transparent as possible. In any event, even if the Court felt there was a justifiable circumstance, an order cannot be made unless the provisions of s 117(2A) are met.

9. I accept that the wife had every right to bring her application in this Court but she then faced the prospect of  having to face the arguments that she did which are reflected in paragraphs 2, 9, 11, 12, 13, 16, 18, 28, 30, 31, 32, 34, and particularly 35 and 39 of the reasons I gave on 15 July.

10. Having run the arguments before the registrar and lost, she reviewed that decision as she was entitled. There is no right of appeal against an order of a court to transfer or not to transfer but the wife was able to have that second “bite” by virtue of the review power. Again, she cannot be criticised for exercising her legitimate right but it is the matters in paragraph 24 above that in my view justify a departure from the no costs principle.

11. It must immediately be said that costs are not intended as a punishment but rather a compensation for the litigant who has had to participate in the process (often unhappily) only to be vindicated in some way. Here, the husband took the transfer point at the earliest opportunity and was supported by the outcome of the registrar’s determination and that was ultimately upheld by me. In my view, he should not have been put through that process.

12. Having said that however, I do not consider that the wife’s approach can be considered conduct to be criticised as set out in s 117(2A)(c).

13. The two issues in s 117(2A) are set out above. I have to consider all of the matters (so far as they are relevant) and this case, neither party contended that there were issues other than the two.

14. Section 117(2A)(c) is only concerned with the conduct of the parties “in relation to the proceedings”. It is addressing a multitude of problems that litigants cause each other and the courts. I think it is directed at either the situation where a litigant deliberately obfuscates and prevaricates in such a way that the other party’s costs are unnecessarily incurred or unwittingly so incurred by virtue of refusing to contemplate and address the efficacious process of the proceedings. In this case, the wife has obviously been aware of the problem because they are issues set out in the rules of the Court but she also had the opportunity to consider those matters in consultation with the registrar in the directions hearing. Albeit she exercised her right, the wife must have contemplated the problem and took the chance.

15. The wholly unsuccessful point was hard to argue for the wife. She had tried and failed and was back to where she started. Leaving aside the fact that she has incurred costs, the husband’s position was acknowledged as always being known and she must have understood that he was incurring costs.

16. In my view, those two s 117(2A) factors must favour the husband.

17. Counsel for the husband sought costs which had been calculated on the basis of what he had incurred. There is nothing out of the ordinary in this case of the nature discussed in Prantage v Prantage [2013] FamCAFC 105. It would not be appropriate for me to depart from the scale here.

18. All parties asked me to avoid the obvious stress and further costs of a taxation assessment and there is much sense in that.

19. Using the methodology of the husband’s lawyers but not the contractual arrangements for which the husband is responsible, I have calculated the costs at $2350.00. An order will be made accordingly.

I certify that the preceding Thirty Four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 15 August 2014.

Associate:

Date:  15 August 2014