Welk & Anor & Welk

[2017] FamCA 1089

FAMILY COURT OF AUSTRALIA

WELK AND ANOR  & WELK [2017] FamCA 1089

FAMILY LAW – APPEAL – From a court of summary jurisdiction – Where the appellants appeal against an order made against them by the local court to pay the respondent’s costs arising from the respondent’s successful recovery order application – Where the circumstances of the case do not justify a costs order – Appeal allowed.

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

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 FamLR 123
Harris v Caladine[1991] HCA 9; (1991) 172 CLR 84
Kohan & Kohan (1993) FLC 92-340
Penfold v Penfold [1980] HCA 4; (1980) 144 CLR 311
Prantage & Prantage (2013) FLC 93-544
Yunghanns v Yunghanns (2000) FLC 93-029

FIRST APPLICANT: Mr A Welk

SECOND APPLICANT: Ms Welk

RESPONDENT: Mr B Welk

FILE NUMBER: LEC 199 of 2017

DATE DELIVERED: 20 December 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Carew J

HEARING DATE: 19 December 2017

REPRESENTATION

COUNSEL FOR THE FIRST AND SECOND

APPELLANT:

Mr Mason

SOLICITOR FOR THE FIRST AND SECOND

APPELLANT:

James McConvill And Associates

SOLICITOR FOR THE RESPONDENT: Somerville Laundry Lomax

the court orders

1. That the Application in a Case filed by the Respondent on 1 August 2017 be dismissed.

2. That the appeal be allowed.

3. That there be no order as to costs.

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 Welk and Anor & Welk 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 BRISBANE

FILE NUMBER: LEC 199 of 2017

Mr A Welk

First Appellant

Ms Welk

Second Appellant

And

Mr B Welk

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. This is an appeal against a costs order made in a court of summary jurisdiction on 5 May 2017 for the appellants to pay the respondent’s costs fixed in the sum of $12,000. The respondent while not filing a cross-appeal nevertheless seeks to replace the order made in the court of summary jurisdiction with an order for indemnity costs in the sum of $17,922.30.

2. The costs order was made after a contested hearing conducted ‘on the papers’ for a Recovery Order brought by the respondent against the appellants in relation to his daughter, C born in 2008.

background

1. The appellants are the parents of the respondent. The first appellant is a general medical practitioner and 57 years of age. The second appellant is 58 years of age and not employed. She and the first appellant separated after a long marriage but continue to live under the same roof.

2. The respondent is 30 years of age and a teacher. He earns about $52,000 per annum according to his affidavit filed 1 August 2017 although I note that in support of the application for costs in the local court it was submitted that his income was $70,000 per annum. His wife, Ms D, is currently on unpaid maternity leave. They commenced a relationship in April 2015 and married in 2016. The respondent and Ms D now have a child together who is 12 months old. Ms D’s has three other children aged 14, 13 and 11.

3. Unfortunately, the child has had an unsettled life. She was removed from the care of her mother at birth and placed into foster care before being placed into the joint care of the appellants and the respondent at about 11 weeks of age.  

4. On 30 July 2009 an order was made by the Family Court at Lismore in proceedings between the respondent and the child’s mother providing for the respondent to have sole parental responsibility for the child and for her to live with him. That order was made by consent. At the time the order was made the respondent was in a de facto relationship. In 2010 his relationship broke down and the child again commenced to live with the appellants.

5. The child’s mother has not been present in her life at all.  

6. The appellants contend that the child lived with them from 2010 until 2015 without the respondent. This is contested by the respondent who maintains that he also lived with the appellants during much of that time sometimes with another partner and sometimes on his own. It is not in contention that the appellants have assumed significant care of the child from time to time.

7. It is common ground that the respondent has historically had a problem with alcohol abuse. He ceased drinking in 2013 and began attending Alcoholics Anonymous meetings.

8. Despite criticisms made by the respondent of the appellants’ interference in his life, he concedes that they have provided “extensive financial support” to him over the years including assisting him and his wife to obtain a home in which he and his wife and family lived rent free until recently. The home in which they were living was jointly owned between the respondent, his wife and an entity owned by the first appellant. It was subject to a mortgage securing the first appellant’s financial interest of about $500,000. Recently, the respondent’s and his wife’s interests were purchased by the first appellant and they each received a payment of $35,000. The respondent contends that he has less than $30,000 remaining from that payment.

9. The appellants have had concerns from time to time about the respondent’s reactions to stressful situations and how those reactions impacted on the child. For example, they had a concern about his physical discipline of the child on occasions describing the presence of bruising on her bottom. While the respondent does not admit to there being a basis for that concern he is reported to have conceded to the family report writer on 18 July 2017 that he had smacked the child too hard on one occasion.

10. In late September 2015 the child commenced to live with the respondent and his wife Ms D and her three children.

11. It is common ground that since 2016 the child has maintained a very close relationship with the appellants and the extended paternal family although the respondent contends that the second appellant’s intrusion into his role as a parent to the child became obsessive and that his role as the child’s father was repeatedly undermined.

12. The respondent also contends that his sister, Ms E, a general medical practitioner, has colluded with the second appellant in orchestrating a situation where they intended that the child would be permanently removed from his care.

13. On 10 April 2017 the respondent planned to visit the beach with Ms D and the children in their household, including the child. The child refused to go and said that she and the second appellant had arranged an outing together. The respondent concedes that he became very agitated and upset. He smacked the child and told her to pack all her belongings and told her that she was going to live with the second appellant. The appellants contend that upon arrival at their home the respondent was in ‘a heightened state’ and was yelling at the child about her not wanting to live with him and stating that she could live with the appellants.

14. The following day the respondent confirmed his intention for the child to live with the appellants stating in a text message - “[the child] doesn’t want to live with us or be part of a family that loves her, with conditional love. We tried to encourage this behaviour but she still doesn’t want to do things that a normal child would want to do. If you think that her life will be better off at your house then that’s fine.” He followed up with a further text message - “I’m more than happy to sign any legal document that you’re trying to get”. The respondent then delivered the child’s bed and mattress to the appellant’s home.

15. On 15 April 2017 the respondent left a telephone message for the child to call him which she did. The father told the child that he wanted her to return to live with him and that he intended on coming to collect her. The respondent’s sister, Ms E, interjected and said that was not going to happen. The respondent nevertheless attended at the appellants’ home.

16. The respondent announced to the child, the appellants and Ms E that he was removing the child. The first appellant expressed his objection. The respondent informed the child that the only people who did not think he was a good and safe father were the appellants and Ms E. An altercation then occurred between the respondent and Ms E when he noticed her filming him with her phone. He threw her phone out the window. The police were called and the father was removed from the premises.

17. The child was a witness to what all agree was a very unpleasant event. The father was charged with assaulting Ms E and a temporary protection order was made in favour of Ms E and the child. The assault charge was later dropped or dismissed and the application for a protection order by Ms E was also dismissed.

18. The respondent’s lawyer wrote to the appellants on 19 April 2017 requesting the return of the child to the respondent relying upon the 2009 order. There was no suggestion that the parties attend mediation. The respondent’s lawyer later telephoned the first appellant and requested that the child be returned. The respondent then sought an urgent recovery order.

19. On 21 April 2017 the matter came before the local court in F Town and an adjournment was granted to enable the appellants to prepare their response and an order was made for the child to spend time with the respondent until the matter returned to court on 27 April 2017.

20. On the morning of the 27 April 2017 the respondent proposed that the child be returned to him but continue to spend time with the appellants.

21. A recovery order was made on 27 April 2017 and the child returned to the respondent. On 5 May 2017 the appellants were ordered to pay the respondent’s costs fixed in the sum or $12,000. The reasons provided for that decision were:

    a)The respondent was wholly successful;

    b)The appellants had acted unreasonably in failing to return the child when requested;

    c)The appellants had acted in a way that actively undermined the respondent’s role as a parent and were complicit in making the child’s behaviour worse in the respondent’s home;

    d)The appellants had not instituted any proceedings seeking to vary the 2009 parenting order;

    e)The respondent had no option but to file an application seeking a recovery order;

    f)The respondent made an offer to settle the matter.

22. The appellants commenced proceedings in the Federal Circuit Court on 4 May 2017 initially seeking an order that the child live with them. Shortly after they filed an amended application seeking a shared care arrangement where the child lived with the respondent but spend significant time with them.

23. A family report was obtained and an order made on 22 August 2017 that the child spend two nights per fortnight with the appellants and holidays.

24. On 22 July 2017 Registrar Coutts listed the appeal against the costs order for hearing on 19 December 2017. A notation to the order records the intention of the respondent to file an application for security for costs in respect of the appeal. An application for security for costs was filed on 1 August 2017 but was not pressed at the hearing on 19 December 2017.

appeal

1. This is an appeal from a decree of a court of summary jurisdiction made pursuant to s 96 of the Family Law Act 1975 (Cth) (“the Act”). The hearing of the appeal is a hearing de novo but I have received into evidence a considerable body of evidence relied upon in the proceedings in the court of summary jurisdiction together with a transcript of those proceedings and additionally more recent affidavits and a family report.

2. In hearing the appeal this Court may make such decrees as it considers appropriate including a decree affirming, reversing or varying the decree the subject of the appeal (see ss 96(4)(b)). A ‘decree’ is defined in s 4 of the Act and means a decree, judgment or order.

how costs’ applications are determined

1. In this jurisdiction parties are generally required to bear their own costs (see s 117(1) of the Act). However, where justifying circumstances exist, s 117(2) of the Act empowers the Court to make such order for costs as the Court considers just.

2. In the exercise of that discretion regard must be had to the factors set out in s 117 (2A) of the Act, so far as they are relevant.

3. Those factors are as follows:

   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. No one factor has more weight than any other nor is it necessary for more than one factor to be present. ^[1]   

   [1] see Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 FamLR 123 at 130

5. When discussing the subparagraphs in s 117 the High Court in Penfold v Penfold [2] said:

   It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.

   Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in “a clear case”.

   [2] [1980] HCA 4; (1980) 144 CLR 311 at 315

6. When considering what specific order to make, Rule 19.18 of the Family Law Rules 2004 (Cth) (“the Rules”) empowers the Court to make an order:

   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.

7. In considering what specific order should be made the same Rule provides that the Court may consider any of the following factors:

   a)the importance, complexity or difficulty of the issues;

   b)the reasonableness of each party's behaviour in the case;

   c)the rates ordinarily payable to lawyers in comparable cases;

   d)whether a lawyer's conduct has been improper or unreasonable;

   e)the time properly spent on the case, or in complying with pre-action procedures; and

   f)expenses properly paid or payable.

8. A court will not lightly make an order for costs to be paid on an indemnity basis. There would need to be some circumstance of an exceptional nature to justify that course.[3]   

   [3] Kohan & Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; Yunghanns v Yunghanns (2000) FLC 93-029

9. The Full Court in Prantage & Prantage[4] discussed the meaning of ‘indemnity costs’ and said:

   16. Before discussing the merit of the appeal, we should state our understanding of the meaning of the expression “indemnity basis”.

   17. Although the Explanatory Guide to the Family Law Rules 2004 (“the Rules”) is not formally part of the Rules, we accept as accurate its definition of “indemnity basis” when applied to a costs order as being:

   an entitlement to  costs , including  costs  under a  costs agreement, for all  costs  incurred, other than  costs  that are unreasonable in amount or that have been incurred unreasonably.

   [4](2013) FLC 93-544

discussion

1. As this is a hearing de novo the appeal proceeds as though it were an original hearing of the application for costs.[5]

   [5]Harris v Caladine[1991] HCA 9; (1991) 172 CLR 84

2. The respondent was successful in his application for a recovery order but that is only one matter of relevance to a determination of this application. Costs do not follow the event in this jurisdiction.

3. It is conceded by the appellants that they are in a superior financial position to that of the respondent. There is no issue that they can afford to meet a costs order.

4. I do not regard the proceedings to have been necessitated by the failure of a party to comply with a previous order in circumstances where the provisions of the 2009 order does not seem to be a true reflection of the history of the child’s care on any version.

5. The offer made to the appellants was made on the morning of 27 April 2017 when all costs had been incurred yet it did make provision for the return of the child to the father and for her to spend ongoing time with the appellants which has ultimately been the outcome.

6. In this case, it is not contentious that the child came into the care of the appellants as a result of the respondent’s own actions. He confirmed his decision in writing that he wanted the child to live with the appellants and delivered all of her possessions to them. Five days after delivering her to the appellants in circumstances where, on his own description his demeanour does him little credit, he demanded the child’s return. Knowing that there was no agreement to her being returned, he nevertheless attended at the appellant’s home whereupon a most distressing altercation occurred in front of the child. None of the adults present acted in a way that prioritised the child’s best interests.

7. Subsequent to that event the father sought the return of the child through the intervention of his solicitor. The father sought to rely upon the 2009 order. No request for mediation was made. In my view that would have been the most sensible course in the circumstances. The appellants have a long history of supporting the respondent both financially and emotionally and importantly a long history of supporting the child. The respondent felt undermined by the appellants and his feelings may be entirely justified but those are not matters than can be determined on the basis of untested evidence. There was no circumstance of urgency yet the next step embarked upon by the respondent was to apply for a recovery order. His application, as noted, was successful.

8. The circumstances of this case do not, in my view, justify a costs order and I propose to allow the appeal and set aside the order made that the appellants pay the respondent’s costs.  

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 20 December 2017.

Associate:

Date:  21 December 2017