Weerasinghe and Tamasine

[2018] FamCA 296

FAMILY COURT OF AUSTRALIA

WEERASINGHE & TAMASINE [2018] FamCA 296

FAMILY LAW – PRACTICE AND PROCEDURE – Application for costs – where the father’s Application for Contravention was wholly unsuccessful – where there is a significant disparity in the income of the parties – where the father acknowledged that the child would be unlikely to spend time with him even if his Application for Contravention was successful – order made that the father pay the wife’s costs as agreed and absent agreement to be assessed by a Registrar in accordance with Chapter 19 of the Family Law Rules 2004 on a party/ party basis

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Brown & Brown (1998) FLC 92-822
Colgate–Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Kohan & Kohan (1993) FLC 92-340
Medlon & Medlon (No. 6) (Indemnity Costs)(2015) FLC 93-664
Robinson & Higginbotham (1991) FLC 92-209

Stephens & Stephens (2010) 44 Fam LR 117

APPLICANT: Mr Weerasinghe

RESPONDENT: Ms Tamasine

FILE NUMBER: MLC 8742 of 2014

DATE DELIVERED: 8 May 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATE: Written Submissions in Chambers

REPRESENTATION

SOLICITOR FOR THE APPLICANT: MST Lawyers

SOLICITOR FOR THE RESPONDENT: Mills Oakley

Orders

1. The father pay the mother’s costs of and incidental to his Application for Contravention filed 9 March 2017 such costs to be as agreed and in default of agreement to be assessed on a party/party basis by a Registrar in accordance with Chapter 19 of the Family Law Rules 2004 (Cth).

2. The wife’s application for costs arising out of or incidental to the father’s Application for Contravention filed 9 March 2017 be otherwise dismissed and removed from the list of cases awaiting hearing.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Weerasinghe & Tamasine has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8742  of 2014

Mr Weerasinghe

Applicant

And

Ms Tamasine

Respondent

REASONS FOR JUDGMENT

1. On 18 July 2017 I made orders dismissing the father’s Application for Contravention filed 9 March 2017 after having found that the mother had a reasonable excuse for contravening final parenting orders made by consent on 20 June 2016.

2. On that date, I also made orders for the filing of written submissions in support of any application with respect to the costs of and incidental to the father’s Application for Contravention. On 16 August 2017 the mother filed submissions seeking an order that the father pay her costs on an indemnity basis in the sum of $41,287.05. In the alternatives, the mother seeks the father pay the sum of $25,483.13 in accordance with the Schedule 3 Scale of Costs in the Family Court Rules 2004 (Cth) (“the Rules”) or failing that, costs as agreed and in default of agreement as assessed on a party/party basis.

1. The father filed a submission in reply to the mother’s application for costs dated 4 September 2017.

Legal Principles

1. Subsection 70NDC(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that if the Court does not make an order pursuant to s 70NDB of the Act it may make an order that the person who brought the contravention proceedings pay some or all of the costs of another party to the proceedings. Whilst there are circumstances in which the Court must consider making an order, they are not relevant in this case.

2. The general rule in proceedings in this Court is that parties to those proceedings each bear their own costs unless there are circumstances which justify the Court departing from that rule (ss 117(2) of the Act).

3. In determining what (if any) order should be made the Court must have regard to the following matters pursuant to ss 117(2A) of the Act:

   (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 any party to the proceedings has been wholly unsuccessful in the proceedings;

   (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; and

   (g) such other matters as the court considers relevant.

4. The Court’s discretion is broad and although the Court must consider all of the matters in s 117(2A) as Kay J said in Brown & Brown (1998) FLC 92-822 not one of the matters in ss 117(2A) takes precedence over another and one factor may be enough.

Discussion

1. The mother relied upon the following matters in support of her case that the father should be required to pay her costs:

   ·the disparity in the financial circumstances of the parties;

   ·the misleading conduct of the father in relation to the proceedings;

   ·that the father has been wholly unsuccessful in his application; and

   ·the father’s refusal to accept offers to engage in therapeutic intervention.

Section 117(2A)(a) of the Act: The financial circumstances of each of the parties to the proceedings

1. Subsection 117(2) makes it clear that the Court can depart from its usual position that “each party bears its own costs where there are circumstances that justify it in doing so (emphasis added)”. The mother submits that the disparity in the parties’ financial circumstances is such as to justify a departure from the general rule that each party should bear their own costs and that the father’s financial circumstances are such that he would have the capacity to meet the order for costs sought by the mother.

10. The father works full time as a health professional and the mother works part time as a freelance consultant. The most recent financial statement filed by the father on 1 December 2015 disclosed an income of $658,892 per annum. The mother’s financial statement filed on 1 December 2015 disclosed income of $85,176 per annum.

11. The father concedes that he earns a significant income as a health professional. However, he submits that the mother received significant assets as a consequence of the final property orders made 22 December 2015 and that the Court should have regard to the substantial periodic and non-periodic child support the mother receives for the children of the marriage.   

12. While there is a significant disparity in the income of the parties, I am satisfied that the financial circumstances of the parties are such that their financial circumstances alone would neither justify the making of an order nor militate against an order. 

Section 117(2A)(b) of the Act: Whether any party to the proceedings is in receipt of assistance by way of legal aid

13. Neither the father nor the mother was in receipt of legal aid.

Section 117(2A)(c) of the Act: The conduct of the parties to the proceedings in relation to the proceedings

14. Although I am satisfied that as submitted by counsel for the mother the father had omitted matters which I ultimately found to be of relevance in reaching my decision, the father was not legally represented and I did not find that the father had either knowingly or intentionally mislead the Court. I am not satisfied that these omissions of themselves would justify the Court making an order for costs.  

15. Also, as submitted on behalf of the father, although he bears the onus of proving that the mother has contravened the orders, the mother bears the onus of establishing that she had a reasonable excuse for doing so.

16. Counsel for the mother also submits that the Court should have regard to the fact that the father initiated proceedings in the Federal Circuit Court, rather than this Court and this caused the mother to incur further unnecessary expenses. Although I am satisfied that this may also be attributable to the fact that he was not legally represented, I am also mindful that it would have added to the costs incurred by the mother in defending the father’s application in circumstances where that application was ultimately unsuccessful.

Section 117(2A)(e) of the Act: Whether any party to the proceedings has been wholly unsuccessful in the proceedings;

17. The father concedes that his Application for Contravention was wholly unsuccessful.  While costs do not follow the event in this Court, in this case I have had regard to the fact that the matters based upon which I concluded the mother had a reasonable excuse were largely undisputed. Significantly in my view although the father’s case was that the mother was alienating the child from him, he also conceded that he had received the letter from the child’s therapist describing the child and in particular his description of the child as having very strong and well-articulated reasons why he should not be required to spend time with the father. The fact the father’s application was wholly unsuccessful in that context, is in my view a significant factor in my determination as to whether the father should be required to pay the mother’s costs of and incidental to the Application for Contravention.

18. It is also the case that the father insisted on proceeding with his application notwithstanding that he acknowledged that even if the orders were to remain in force, the child would be unlikely to spend time with him.   

Section 117(2A)(f) of the Act: 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;

19. In Robinson & Higginbotham (1991) FLC 92-209 Nygh J outlined the intent of s 117(2A)(f) in relation to settlement offers:

when one looks at paragraph (f) it is quite clear that the purpose of that provision is to ensure that offers to settle, if made seriously, are considered seriously, to ensure that the cost of litigation is avoided, the workload of this Court is lightened, and one other consideration is certainly that a party with greater wealth is not placed in a position whereby he or she can wear out the other by simple attrition.

20. The mother submits that her solicitors wrote to the father twice inviting him to withdraw his Application for Contravention and instead engage in therapeutic intervention in order to improve the relationship between him and the child. I am satisfied those offers were a genuine attempt by the mother to resolve the dispute without having to resort to litigation.

21. Although the father submits that he had a reasonable expectation that therapeutic intervention would not occur in the absence of Court orders, there is no evidence of him having offered to withdraw his application if such orders were to be made.  

22. Are There Circumstances In This Case Justifying An Order For Costs?

23. Having considered the relevant factors in ss 117(2A) of the Act, I consider that there are circumstances in this case that justify an order for costs being made. The purpose of contravention proceedings is to ensure compliance with the orders of the Court. That is of particular significance in this case given the father’s decision to pursue his application in the face of the letter from the child’s therapist as to the well-articulated views of the child and his concession that the child would be unlikely to spend time with him, even if the orders were to remain in force. I propose to accede to the mother’s application that that father should pay her costs of and incidental to his Application for Contravention filed 9 March 2017.

Indemnity Costs

24. Having concluded that the father should pay the mother’s costs of the application there remains the issue of the quantum of those costs.

25. At this stage, it is important to emphasise the point that was made in Stephens & Stephens (2010) 44 Fam LR 117. The Full Court in that case said at paragraph 67 that “an order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature. Costs are not a penalty or damages.” If costs are awarded by the Court, it is not with the intention to punish the father, but rather to do justice between the parties.

26. The mother seeks an order that the father pay her costs on an indemnity basis. Although there is no dispute that the Court has the discretion to order indemnity costs, it is also well settled, as articulated in Kohan & Kohan (1993) FLC 92-340 at page 79,614 (“Kohan”) that the Court “…should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind”.

27. Counsel for the mother’s referred me to the decision of Colgate–Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (“Colgate”) in which Sheppard J observed that there should be some “special or unusual feature in the case to justify the Court in departing from the ordinary practice”. His Honour, in summary, gave the following examples:

·the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;

·misconduct that causes loss of time to the Court and to other parties;

·proceedings commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law;

·the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;

·an imprudent refusal of an offer to compromise; and

·an award of costs on an indemnity basis against a contemnor.

28. The mother also relied upon the decision of Strickland J in Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664 (“Medlon”) in support of her submission that the father’s Application for Contravention was an application which the father should never have brought as, even on his own case, there was never any likelihood of success.

29.  Whilst there is some force in the submission that the father’s application even on his own case had little or no prospect of success, in my view that does not make it an application of the “exceptional” kind envisaged by the Full Court in Kohan such as to justify a departure from the ordinary rule that costs be paid on a party/party basis.  In all of the circumstances I do not propose to accede to the mother’s application that the father pay her costs on an indemnity basis.

Conclusion

30. Rule 19.18(1) of the Family Law Rules 2004 (Cth) (“the Rules”) provides that the Court may make an order for costs:

(a)      of a specific amount;

(b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);

(c)to be calculated in accordance with the method stated in the order; or

(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.

31. The mother in this case seeks an order for costs on a party/party basis in the sum of $25,485.13. Although counsel for the mother attached a schedule of costs based upon Schedule 3 of the Rules and although my preference, if at all possible, would be to fix the amount of costs to be paid, I cannot based upon that schedule, determine whether or not the costs claimed were reasonably necessary for the attainment of justice or proportionate. In these circumstances I propose to make an order that in the absence of agreement the father pay the mother’s costs as assessed on a party/party basis.

I certify that the preceding thirty one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 8 May 2018.

Associate: 

Date:  8 May 2018