Wilton and Wilton
[2016] FCCA 1123
•13 May 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| WILTON & WILTON | [2016] FCCA 1123 |
| Catchwords: FAMILY LAW – Application for costs following summary dismissal of a child support application – where the respondent seeks indemnity costs against the applicant and his solicitor – consideration of the factors in s.117(2A) – where father was wholly unsuccessful – consideration of the conduct of the father and his solicitor – where proceedings were commenced in the state Magistrates’ Court. |
| Legislation: Family Law Act 1975 ss.117(1), 117(2), 117(2A) Federal Circuit Court Rules 2001 rr.21.02, 21.07 |
| Cases cited: Lilley & CSR & Ors (SSAT Appeal) [2010] FMCAfam 378 |
| Applicant: | MR WILTON |
| Respondent: | MS WILTON |
| File Number: | DGC1120/2007 |
| Judgment of: | Judge Williams |
| Hearing date: | 6 April 2016 |
| Date of Last Submission: | 15 April 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 13 May 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Bacon, Solicitor |
| Solicitors for the Applicant: | Manby & Scott |
| Counsel for the Respondent: | Ms Tulloch |
| Solicitors for the Respondent: | JH Legal |
ORDERS
The applicant father pay the respondent mother’s costs of and incidental to the proceedings fixed at $6761.00 within 28 days.
IT IS NOTED that publication of this judgment under the pseudonym Wilton & Wilton is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
DGC 1120 of 2007
| MR WILTON |
Applicant
And
| MS WILTON |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for costs by the respondent mother, resulting from the summary dismissal of the applicant father’s Initiating Application filed on 23 October 2015 in the Magistrates’ Court of Victoria at Melbourne (“Magistrates’ Court”).
Background
The parties were married on … 1984 and separated on 20 October 2001. There are two children of the marriage, Ms A born on … 1996, currently aged 20 and [X] born on … 1999 and currently aged 17.
The applicant father is aged 58 and is employed as a professional with the Employer. In his financial statement filed 23 October 2015 he deposes to an income of $106,000 per annum. The respondent mother is aged 53 years and is employed as a part time public servant at Employer in Suburb B. Her affidavit sworn 15 December 2015[1] states that her income is $38,000 per annum.
[1] paragraph 2 of the affidavit of the mother sworn 15 December 2015
On the 23 February 2004 Final Property Orders were made by consent before Her Honour, as she was then, Federal Magistrate Hartnett.
On 23 October 2015 the applicant father filed an Initiating Application in the Magistrates’ Court at Melbourne. In support of that application he filed an Affidavit and a Financial Statement both sworn on 23 October 2015.
On 17 December 2015 the respondent mother filed a Response to the Initiating Application. In support of that Response she filed an Affidavit and a Financial Statement both sworn on 15 December 2015. Paragraph 2 of the final orders sought in the Response were as follows:
“Pursuant to Section 17A of the Federal Circuit Court Act, 1999 the Court summarily dismiss the Initiating Application filed 23 October 2015.”
On 21 January 2016 the applicant father’s Initiating Application was listed in the Magistrates’ Court at Melbourne. On that day orders were made, inter alia, transferring the proceeding to this Court.
On 5 April 2016 the matter was listed before me in the Duty List. The respondent mother sought to proceed with her application for summary dismissal of the Initiating Application of the applicant father.
On 5 April 2016 I heard the submissions of the solicitor for the applicant father Mr Bacon, and Counsel on behalf of the mother, Ms Tulloch. I reserved my Judgment and on 6 April 2016, orders were made dismissing the applicant father’s Initiating Application and oral reasons were delivered.
At the conclusion of my reasons, Counsel for the respondent mother sought to pursue an application for costs. However, as the matter was listed in a busy Duty List, I was unable to hear the costs submissions, and made orders providing for the respondent mother to file and serve her written submissions as to costs within seven days, and the applicant father to file and serve his written submissions in relation to costs within a further seven days.
The respondent mother filed her submission as to costs on 11 April 2016 and the applicant father filed his submission as to costs on 15 April 2016.
Costs proposals of the parties
The respondent mother seeks the following orders
a)the father and Mr Simon Bacon of Manby and Scott Lawyers jointly and severally are to pay the mother’s costs of and incidental to the mother’s response to initiating application filed on 17 December 2015, on an indemnity basis;
b)The father and Mr Simon Bacon have leave to apply to seek orders as to the apportionment of the costs to be paid by each of them, on terms that the mother shall not be a party to any such proceedings;
c)such further and other orders as this Honourable Court deems appropriate
The applicant father opposes any application for costs made by the respondent mother.
Legal principles
Section 117(1) of the Family Law Act1975 (“the Act”),states, subject to the provisions of s.117(2), that the general rule in proceedings in this court, is that each party to proceedings, shall each bear his or her own costs.
Section 117 (2) of the Act provides as follows:
If, in proceedings under this act, the court is of the opinion that there are circumstances that justify it in doing so, the court may subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Section 117(2A) of the Act provides, that in considering what order (if any) should be made for the payment of costs, the court shall have regard to the following matters:
(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.
In the Marriage of I (No 2) (1995) FLC 92-625, the Full Court said that the relevant matters in s.117(2A):
“…must all be taken into account and/or balanced in order to determine whether the overall circumstances justified the making of an order for costs”
The opening paragraph of the costs submissions of the applicant father refers to a decision of Reithmuller FM (as His Honour then was) in the matter of Lilley & CSR & Ors (SSAT Appeal) [2010] FMCAfam 378. That decision is referred to, purportedly in support of the proposition that the courts have traditionally been reluctant to make costs orders in child support cases.
The parties to that matter were Mr Lilley as appellant, Child Support Registrar as first respondent and Social Security Appeals Tribunal as second respondent, and Ms Logan as third respondent. The costs of aspect of the case was an application by the Child-Support Registrar.
At paragraph [19] of Lilley, His Honour refers to the circumstances giving rise to the involvement of the Child-Support Registrar in an appeal from a decision of the Social Security Appeals Tribunal.
[19] In this case the agency appeared only because orders were sought against the agency pursuant to claims of negligence on the part of the agency causing harm, with claims the damages yet to be quantified. I have previously made rulings that such a claim is inappropriate to join to an appeal from the SSAT and, that to the extent that such extraneous claims are brought, they should be struck out. Had those claims not been added to the appeal, the child support agency would have attended and simply sought leave to withdraw from the proceedings. The claims, it seems to me, were misconceived, as was the proposal that they be joined to the appeal.
The facts of Lilley are very specific and are quite clearly distinguishable from, and have no relevance to, the facts of this matter.
Section 117(2A) (a) the financial circumstances of each of the parties
As to the financial circumstances of the applicant father, the respondent mother’s costs submissions address this issue[2], however, the applicant fathers submissions do not.
[2] at paragraph 3.3.1 of the respondent mother's submissions re-costs, dated 8 April 2016
The applicant father’s financial position is apparent from his Financial Statement sworn 23 October 2015. He deposes to an average weekly income of $2040[3] and a weekly personal expenditure of $2365[4]. In addition to his personal income, the household income is supplemented by the income of his wife, Ms Wilton, who earns $1300 per week income and the income of his stepson, Mr D, who earns $900 per week.[5] I note that the applicant father deposes in his financial statement that “Ms Wilton and I pool resources”.[6]
[3] at part B financial summary, paragraph 2A
[4] at part B financial summary, paragraph 2B
[5] at part B, paragraph 17 of the applicant/fathers Financial Statement
[6] at part F, paragraph 18 of the applicant/fathers Financial Statement
In terms of capital assets, the applicant father deposes to having a 50% share of a property situated at Property E, the value of which he estimates as $250,000,[7] which is subject to a mortgage of $150,000,[8] shares valued at $17,000. He also deposes to superannuation entitlements of $380,000, although he does not particularise the nature of his superannuation interest.[9]
[7] at part I paragraph 35 of the applicant/fathers financial statement
[8] at part K, paragraph 46 of the applicant/fathers financial statement
[9] at part J paragraph 45 of the applicant/fathers financial statement
As to the financial circumstances of the respondent/mother the respondent mothers costs submissions address this issue[10], however, the applicant fathers submissions do not.
[10] at paragraph 3.3.1. of the respondent/ mother's submissions re-costs, dated 8 April 2016
The respondent mother’s financial position is apparent from her Financial Statement sworn 15 December 2015. She deposes to an average weekly income of $1051 and a weekly personal expenditure of $1352. In addition to her personal income, the household income is supplemented by the income of her daughter Ms A, aged 19, who earns approximately $100 per week and the income of [X] who earns approximately $41 per week.[11]
[11] at part B paragraph 17 of the respondent/mother's financial statement
In terms of capital assets, the respondent mother deposes to owning a property situated at Property F, the value of which she estimates as $410,000.[12] She deposes to a liability of a personal loan of $79,000.[13] She also deposes to superannuation entitlements of $270 673.
[12] at part I paragraph 35 of the respondent/ mother’s financial statement
[13] part K paragraph 50 of the respondent/mothers financial statement
The respective financial statements of the parties indicate that neither party are particularly affluent, however, the applicant father’s household clearly has significantly more income on a weekly basis, than the respondent mother’s household.
Section117(2A) (b) whether any party is in receipt of legal aid
There is no evidence before me that either party is in receipt of legal aid.
Section 117(2A)(c) The conduct of the parties to the proceedings in relation to the proceedings
The respondent mother in her costs submissions asserts that the conduct of both the father and his legal representative, Mr Simon Bacon, should both be taken into account on the issue of costs.[14] The applicant father’s costs submissions attempt to justify the manner in which the proceedings were conducted by the respondent, and or his lawyer.
[14] paragraph 3.3.4 of the respondent mothers cost submissions
The respondent mother refers to four relevant issues, namely:
(1)the application was filed without any proper legal or evidentiary basis and never had any reasonable prospect of success
(2)the application should not have been issued in the Melbourne Magistrates Court, as this resulted in respondent/mother incurring additional legal expenses
(3)the failure of the father to promptly disclose his increased income, arising from a promotion in … 2016.
(4)the involvement of the lawyer in a matter, Aish v Greco [2014] FCCA 2283, (“Aish”) which was summarily dismissed by His Honour Judge Burchardt. The unsuccessful applicant father sought orders in virtually same terms as the orders sought in this matter.
The applicant father raises the following relevant issues:
(1)the failure of the respondent mother to produce for inspection financial documents, which she was required to produce pursuant to the rules;
(2)the purported justification of the evidentiary basis of the applicant fathers case;
(3)the choice of forum; and
(4)the involvement of Mr Bacon in Aish.
I now turn to the relevant issues raised by the parties, in their respective costs submissions.
Firstly, the issues raised by the respondent mother:
(1)I agree with the submission that the application had no evidentiary basis, and accordingly I summarily dismissed the application. My reasons for doing so were provided orally at the time orders were made;
(2)It would have been more prudent to have commenced proceedings in this court, which would have obviated the need for an appearance on 21 January 2016. If the proceedings had been commenced in this court, then the summary dismissal application could have been determined on the first return date of the Initiating Application. As to the necessity to transfer the proceedings to this court, after obtaining an order in relation to adult child maintenance of Ms A, I refer to paragraph 39 hereof. Again, I express my utmost surprise that the father persisted with the transfer of his Initiating Application to this court when he had already secured the order he sought in relation to maintenance of Ms A. If it were truly his main objective to secure the adult child maintenance order, then no plausible explanation has been provided by the applicant father as to why he chose to pursue the application in this court and thus incur substantial legal fees for himself. It goes without saying, that in doing so, the respondent wife has likewise been forced to incur significant legal expenses in opposing the application. As referred to in the submissions of the respondent wife,[15] the legal fees incurred by both parties are completely disproportionate to any benefit which the applicant father may have achieved by pursuing his application. This is a most regrettable situation;
(3)I have no evidence about the untimely provision of evidence of the father’s income, arising from his promotion in 2016, other than a statement in the costs submissions of the respondent mother[16] and annexure F to the costs submissions of the respondent mother, being the letter dated 30 March 2016 from the respondent mother’s solicitors to the applicant father’s solicitors.
(4)I do not consider that the involvement of Mr Bacon in Aish is relevant to the conduct of the applicant father in this matter. The matter of Mr Bacon’s conduct is considered at paragraphs 56 to 61 hereof.
[15] at paragraph 13 of the respondent/wife's cost submissions
[16] paragraph 3.3.4.4 of the respondent/mother's costs submissions
Secondly, the issues raised by the applicant father.
(1)There was no application by the solicitor for the applicant father to adjourn the proceedings, pending production of documents by the respondent mother. The respondent mother had the applicant father’s financial statement on 15 December 2016 where she deposes to her financial circumstances. In any event, a summary dismissal application is determined on the basis of the applicant’s evidence, taken at its highest.[17]
(2)The cost submission of the applicant father attempts to raise further justification for the evidence relied upon by the applicant/father. This was the evidence on which the summary dismissal application was determined.
(3)In relation to appropriate choice of forum I refer to my comments at paragraph 34 (2) hereof.
(4)In relation to the involvement of Mr Bacon in Aish I refer to my comments at paragraph 34 (4) hereof.
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
[17]Lindon v The Commonwealth (no 2) (1996) 70 ALJR 541 at paragraph 256
The proceedings were not necessitated by the failure of either party to comply with previous orders.
Section 117(2A)(e) whether a party to the proceedings has been wholly unsuccessful
The cost submissions of the respondent mother state that the father has been wholly unsuccessful in the proceedings.[18] The applicant father’s cost submissions assert that the applicant was not wholly unsuccessful in the proceedings. I do not accept that submission of the applicant father, for the following reasons:
[18] at paragraph 3.3.to.1 of the respondent mother' s costs submissions
The submissions state:
“At paragraph 37 of his affidavit filed 23rd of October 2015 the applicant explains that before these proceedings were instituted, the respondent threatened in writing that she intended to seek adult child maintenance from the applicant for the child Ms A.”
Of all the factors in this case that was probably the single biggest influence upon the applicant when he made his decision to commence litigation.
Orders were made in the case on 21 January 2016, declaring that the respondent had no entitlement to adult child maintenance regarding Ms A.”
The applicant father’s submissions are entirely correct, when reference is made to the orders of 21 January 2016 in the Melbourne Magistrates court. If it was the primary objective of the applicant father to resolve the issue of any application for adult child maintenance for Ms A, then this was achieved by virtue of paragraph 1 of the orders of Magistrate, Mr Capell, of 21 January 2016. It is difficult to understand, why the applicant father sought to transfer to this court, the extant Initiating Application, if his primary purpose had already been achieved in the Melbourne Magistrates Court.
The summary dismissal of the orders sought by the applicant father in his Initiating Application, which was transferred to this court , cannot be seen as anything other than the applicant father being wholly unsuccessful, in that part of the preceding which was to be determined by this court.
In fact, the statement that it was the applicant father’s primary purpose to achieve a resolution of the adult child maintenance issue is a factor relevant to the conduct of the applicant father.
Section 117(2A) (f) whether either party to the proceedings has made an offer in writing to settle the proceedings and the terms of any such offer
The costs submissions of the respondent mother address the various written offers of settlement made by her. The cost submissions of the applicant father do not address the issue of written offers of settlement.
According to the mother’s costs submissions, various offers of settlement were made by both parties between 12 November 2015 and 31 March 2016.[19]
[19] Paragraphs 2.2, 2.9, 2.11 and 2.12 of the respondent mothers costs submissions
On 12 November 2015 the solicitors for the respondent mother forwarded a letter to the solicitor for the applicant father inviting the applicant father to withdraw his initiating application, and that an application for summary dismissal would be made, and indemnity costs would be sought from that date.[20]
[20] annexure a of the respondent mothers cost submissions
On 30 March 2016 the solicitors for the respondent mother forwarded a letter to the solicitors for the applicant father proposing resolution of the proceedings.[21] That letter is a “Calderbank” letter and proposes that the proceedings be settled on the basis that the applicant father pay child support for [X] in the sum of $1268.83 per calendar month until he completes his secondary education, which is $50 per month less than the current child-support assessment.
[21] annexure E of the respondent mothers cost submissions
On 31 March 2016 the solicitors for the applicant father called and email to the respondent mothers solicitors proposing a counter offer to settle.[22] That email proposes that the applicant father to pay child support for [X] up to $940 per month.
[22] annexure of the respondent mothers cost submissions
On 31 March 2016 solicitors for the respondent mother forwarded a letter to the solicitor for the applicant father.[23] that letter rejects the proposal of the applicant father and invites him to avail himself of the review and appeal processes of the agency and the relevant appeals tribunal. It also stated that the correspondence would be produced on the question of costs.
[23] annexure H of the respondent mothers cost submissions
It is abundantly clear from the correspondence passing between the solicitors between 15 November 2015 and 31 March 2016 that the applicant father was put on notice that an application for costs would be made in the event the father’s extant application in this court was unsuccessful. As early as 15 November 2015, he was invited to withdraw the proceedings in this court and pursue the relevant administrative review process. It is evident from the correspondence referred to in this judgement that the ultimate objective of the applicant father in pursuing proceedings in this court was to negotiate a reduced monthly child-support liability for [X]. This is in stark contrast with the statements of the applicant father’s objective in his costs submissions, which are referred to at paragraph 34 (2) hereof.
Section 117 (2A) (f) any other matters the court considers relevant
Any other relevant matters are set out in this judgement.
Conclusion
I have considered and taken into account all of the relevant matters in s.117(2A) of the Act and I am satisfied that there are a justifying circumstances, to depart from the general rule that each party shall bear his or her own costs.
My reasons are referred to in this judgment, and in particular the manner in which the applicant father chose to conduct the proceedings. Specifically, the choice of forum in which the proceedings were initiated which led to considerable additional costs being incurred by both parties and the relief sought in the context of the subsequent statement in the applicant father’s cost submissions. In addition, the correspondence between the parties over a number of months, namely November 2015 until March 2016, wherein the applicant father was clearly put on notice as to the possible cost consequences of his conduct demonstrate an attitude of total disregard of the possible consequences.
Furthermore, the applicant father was wholly unsuccessful in the proceedings in this court, which I summarily dismissed.
It is these reasons that I conclude that an order for costs is appropriate in this matter.
Costs sought personally from the applicant father’s solicitor
The respondent mother, in her cost submissions, seeks that I make an order that Mr Bacon, the solicitor for the applicant father, be personally responsible, together with the applicant father, for payment of her costs.
Rule 21.07 of the Federal Circuit Court Rules2001 provides as follows:
Rule 21.07 ORDER FOR COSTS AGAINST LAWYER
21.07 (1) [Considerations] The Court or a Registrar may make an order for costs against a lawyer if the lawyer, or an employee or agent of the lawyer, has caused costs:
(a) to be incurred by a party or another person; or
(b) to be thrown away;
because of undue delay, negligence, improper conduct or other misconduct or default.
The cost submissions of the respondent mother refer to two authorities: Dunwell & Dunwell (Indemnity Costs Against a Lawyer) [2012] FamCA 337; and Limousin v Limousin [2008] FamCA 315.
At paragraph [215] of Dunwell , Le Poer Trench J refers to the many authorities on this issue, by citing a decision of McColl JA in the NSW Court of Appeal, Lemoto v Able Technical Pty Ltd & Ors [2005] NSWCA 153. Paragraph [92] of Lemoto provides a comprehensive summary of conduct of a solicitor, which would give rise to an order for costs personally against a solicitor.
I have considered the facts of this matter, and in particular the involvement of Mr Bacon in other cases, where his conduct has been called into question, as referred to in the costs submissions of the respondent mother[24] and the authorities referred to in paragraph 58 hereof. Whilst the manner in which the proceedings were conducted was less than satisfactory, from the respondent mother’s perspective, it does not, in my view, warrant an order for costs personally against the solicitor.
[24] paragraph 14 of the respondent/mothers cost submissions
Accordingly, I do not propose to order any costs personally against Mr Bacon. It is a matter for the applicant father whether he wishes to address the conduct of his solicitor, in the appropriate forum.
Quantum
The respondent mother seeks that I make an order that the applicant husband pay her costs on an indemnity basis.
Rule 21.02 of the Federal Circuit Court Rules2001 provides:
21.02(2) In making an order for costs in a proceeding, the court may:
(a) set the amount of costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.
In Prantage & Prantage [2013] FamCAFC 105, the Full Court at paragraphs [76] to [86], comprehensively reviewed the issue of indemnity costs in the Family Court, and settled authority as applied in other superior Courts in Australia.
The cost submissions of the respondent mother referred me to Medlon & Medlon (No.6) (Indemnity Costs) [2015] FamCAFC 157. The facts of that case can be distinguished, from this case. The conduct of the litigant in Medlon, being a legal practitioner, included making serious allegations about Counsel for the other party, without any basis. The conduct was far more extreme and reprehensible, than the conduct complained of in this matter.
Whilst I am satisfied that the factual circumstances of this matter justify a departure from the general rule that each party should bear his or her own costs, applying the principles set out by the Full Court in Prantage, I am not satisfied that these circumstances warrant an order for indemnity costs.
Having considered the competing arguments in relation to the application of the father, the relevant factors which I am required to consider pursuant to s.117(2A) of the Act and having regard to the available evidence of the financial circumstances of both parties, I propose to make an order that the father pay the mother’s costs of the proceeding, in accordance with the scale of costs provided by the Rules of this Court.
I certify that the preceding sixty seven (67) paragraphs are a true copy of the reasons for judgment of Judge Williams
Date: 13 May 2016
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