Wipp and Wipp (No. 2)

[2008] FamCA 1081

FAMILY COURT OF AUSTRALIA

WIPP & WIPP (NO. 2) [2008] FamCA 1081

FAMILY LAW – COSTS

Family Law Act 1975 (Cth)

APPLICANT: Ms Wipp

RESPONDENT: Mr Wipp

FILE NUMBER: CSC 80 of 2007

DATE DELIVERED: 10 December 2008

PLACE DELIVERED: Cairns

PLACE HEARD: Cairns

JUDGMENT OF: Moore J

HEARING DATE: 1 December 2008

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Miller Harris Lawyers

COUNSEL FOR THE RESPONDENT: Ms Benson

SOLICITOR FOR THE RESPONDENT: Cameron Price Lawyers

Orders

1. The wife’s application for costs filed 1 September 2008 is dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Wipp & Wipp is approved pursuant to s121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT CAIRNS

FILE NUMBER: CSC80 of 2007

MS WIPP

Applicant

And

MR WIPP

Respondent

REASONS FOR JUDGMENT

Applications

1. The mother of the parties’ children [applicant] seeks costs of and incidental to proceedings before the Federal Magistrates’ Court on 8 July 2008 and to proceedings in this Court on 29 July 2008 which concluded by judgment and orders made 4 August 2008.  She asks that those costs be paid on an indemnity basis or, alternatively, on a party/party basis.  The children’s father [respondent] asks that her application be dismissed but he seeks the costs of meeting her costs claim. 

The law

1. The issue is governed by the provisions of s 117 of the Family Law Act 1975. Sub-section 117(1) establishes the general rule that each party to proceedings is to bear his/her own costs but s 117(2) permits the Court to make such order as it considers just if it is of the opinion that there are justifying circumstances. In considering what order (if any) should be made regard is to be had to the matters referred to in s 117(2A). They are:

   ‘(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.’

Further background

1. The background is set out in the judgment delivered 4 August and need not be repeated here although it may be useful to elaborate some of the developments in the litigation:

   (a)The father commenced the proceeding by filing an application in the Federal Magistrates Court on 12 March 2008 when [generally expressed] he sought orders to vary the earlier consent orders of 17 October 2007 by extending the time the children would be in his care as well as other orders related to the children’s names.  It is apparent he had corresponded with the mother beforehand about problems he perceived in the consent arrangements but this did not receive a response until he filed his application [see transcript 16 June 2008 from page 7]. 

   (b)The matter came before the learned Federal Magistrate on 16 June – not for the first time as the transcript of proceedings that day indicates.  The mother filed a response that day seeking the dismissal of the father’s application, she also sought an order restraining the father from initiating further proceedings with respects to the children without first seeking leave of a court, and she sought costs including indemnity costs.  The father’s counsel handed to the learned Federal Magistrate on that day a Minute of Orders then being sought by the father [it became exhibit 2] which his counsel described as related to ‘the place of changeover and the travel arrangements for changeover’.  There appears to have been some confusion over whether the matter had been set for an interim or final hearing on that day [page 6 transcript].  Whatever the case, the father’s counsel suggested the matter could be dealt with on a final basis by submissions [page 10 transcript].  The mother’s legal representative sought the dismissal of his application, referring to Rice and Asplund although this was not developed, and if this was not done then the mother sought an interim, not final, determination [page 13 transcript]. 

   (c)Interim orders were the upshot, varying the earlier consent orders and obliging the mother in effect to deliver the children to the father’s residence.  At the same time the Federal Magistrate set the matter for final hearing on 1 August.  The mother filed an appeal from that order and also sought a stay, later abandoned. 

   (e)The matter came back before the Federal Magistrate on 8 July.  It was listed at the instance of the father who sought an adjournment of pending proceedings because of his mother’s sudden ill health and his wish to travel the next day to Melbourne to be with her and his family.  Openly expressing suspicion about the veracity of what was being put to the Court by the father, the mother opposed the adjournment.  Indeed, the father says her earlier refusal to agree to it left him no option but to have the matter listed [page 4 transcript].  At the same time he filed an amended application – related to the responsibility for travel, the time for collection by him, and changeover arrangements – and his counsel told the Court his material had been prepared and was ready to file but that had not yet occurred [page 3 transcript]. 

   (f)In the course of exchanges, his Honour offered to hear the matter the following morning before the flight to Melbourne but the father’s counsel declined to take this up by reason of the father’s distress over his mother’s illness.  In the result, orders were made vacating the ‘stay application and trial listed on 9 July 2008’, suspending the orders of 16 June, reinstating the orders of October 2007, and the ‘stay application and trial’ were adjourned for hearing to 29 July.  Costs were reserved in light of the suspicion the mother entertained about the veracity of the circumstances put by the father to the Court.  I heard the matter on 29 July and delivered judgment on 4 August.  

Submissions - grounds

1. Mr Keogh for the applicant directs his submissions to the parties’ respective financial circumstances, the conduct of the father, and the outcome of the proceedings; that is to say, reliance is placed on paragraphs (a), (c) and (e) of ss (2A). 

2. As for their financial circumstances, in written submissions it is pointed out that the applicant has the primary care of the parties’ two young children, it is said she receives only a ‘minimal’ amount of child support from the respondent, she works two jobs to properly provide for the children, and she receives government assistance to supplement her earnings.  It is also said that the respondent is a sub-contractor with opportunity to earn a substantial income, it is alleged he has avoided his child support obligations, and he has a child support arrears debt of $5,000.  In further submissions there was tendered a document from the Child Support Agency putting the child support arrears in excess of $12,000. 

3. In reply, counsel for the respondent, Ms Benson, submits the child support arrears are the subject of dispute in the Child Support Agency and the debt alleged arose at an earlier period when, so it is said, the parties were living together.  That there is an active dispute about it is not challenged.  Otherwise, the respondent deposes to earning a little over $500 per week net from which he supports his partner who was injured in a car accident earlier this year and their infant child.  It is said that he is presently paying $427 per month in child support. 

4. Of course enforcement of any debt properly owing by reason of child support arrears is for the Child Support Agency.  It is difficult here to place weight on what is said to be a relatively substantial debt owing by the respondent when that debt is being disputed with the proper authority and it is alleged to have come about during a time the parties were living together.  Being a disputed fact about which there could be no finding, it could not be seen here as favouring one party or the other. 

5. As for the conduct factor, it is submitted for the applicant that on 8 July the father failed to accept the Federal Magistrate’s invitation to hear the matter the following morning before the foreshadowed flight to Melbourne, but he sought a later date which eventually saw the matter transferred to this Court for hearing on 29 July. 

6. As for the outcome, the applicant submits that the respondent was wholly unsuccessful and his application was dismissed by the orders dated 4 August 2008.  The respondent, on the other hand, views the outcome differently; that is, he was not wholly successful but nor was his application completely dismissed in that he succeeded in what he sought about the time for collection to account for his work commitments and orders also allowed another responsible adult assist him in the collection and return of the children. 

7. To the extent further submissions raised other matters necessary to be noted, this can be said.  First, there could be no inference to the effect that the father’s application filed in March 2008 was motivated by anything other than what he asserted as its basis.  As his counsel correctly pointed out, he had directed correspondence to the mother about issues as he saw them before instituting the proceedings and he outlined what those issues were in his supporting affidavit filed at the time.  Secondly, the mother’s suspicions or scepticism about what was put to the learned Federal Magistrate on 8 July to support the adjournment application have to be seen as groundless.  Exhibit 6 establishes the respondent’s travel to Melbourne preceding his mother’s death in late July. 

Conclusion - merit

1. Weighing the merits of their positions one against the other, ultimately I can find no justifying circumstances for a costs order and therefore no reason to depart from the general position which requires each party to pay his/her own costs.  In coming to that conclusion I have taken into account their respective financial circumstances, what has been said of conduct, and the outcomes. 

2. In particular, I do not find what occurred on 8 July as justifying the exercise of discretion in the applicant’s favour.  Certainly the listing and court appearance was for a purpose related to the respondent seeking an ‘indulgence’ and that tends to tip towards him paying the costs involved.  Yet it was based on compassionate grounds and costs associated with the listing and argument that afternoon arose from the applicant’s refusal to agree to it, despite being told of the circumstances.  Her scepticism is an obvious indicator of the complete lack of trust between them; nonetheless, costs were the consequence when the more objective approach would have been to agree to it and so avoid the costs.  Added to that, the scepticism aired to the Court on that afternoon was repeated here – it was submitted there is no evidence he did travel to Melbourne the following day or at all - which was put to rest as an issue with the tender of his travel itinerary along with a copy of his mother’s funeral notice.  Her suspicions, therefore, have to be seen as groundless then and now.  The merit of the argument is not advanced by the observation that the respondent declined the Federal Magistrate’s offer to hear the matter the following morning; it hardly makes any difference to the costs incurred on the afternoon of 8 July but in any event his position was not unreasonable given the circumstances he was confronting at the time. 

3. As for the hearing on 29 July, the outcome was not a complete success or complete failure for either.  They both presented positions that reflected change over the period since the litigation started in March.  The father did not pursue the name orders he began with; the mother did not pursue the injunction to restrain further proceedings without leave of the Court.  The father succeeded in achieving an extension of the time he is required to collect the children; the mother succeeded in achieving the proviso she proposed late in the proceedings about the children’s after school care with a registered child care provider.  I made the orders about a responsible adult assisting the father with travel to obviate possible further dispute if he were to lose his licence on the drink driving charge.  Consideration of outcomes, their conduct or their financial circumstances do not justify an order for costs in my opinion. 

4. I should also acknowledge a submission which was put to support the claim for indemnity costs; namely, the respondent had failed to provide material from which the Court could determine a change in circumstances consistent with Rice and Asplund sufficient to warrant variation of the earlier consent orders.  However, the fact is that no Rice and Asplund decision had been made early in the litigation and the matter was fully prepared when listed before me for hearing on 29 July.  So one sound rationale for the Rice and Asplund approach had by then been defeated and not to consider the matter on its merits at that point would have been pointless, especially since the issues were neither complex nor time consuming.  The submission also overlooks the fact that orders were made varying the October 2007 orders. 

5. The application will be dismissed.  However, for completeness I should say something about the claim for costs on an indemnity basis. 

6. The applicant’s submissions refer to the power of the Court under s 117 to make ‘any’ order for costs including an order on indemnity or party/party basis.  That is beyond contention.  Reference is also made to some of the authorities relevant to the exercise of discretion involved, including Colgate Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 and the judgment of Shepherd J who saw ‘some special or unusual feature for features in the case to justify a departure’ from the more regular basis of party/party costs.  Nor is that in doubt.  The judgement has been referred to and cited with approval in this Court in a large number of cases.  The relevant passages from his Honour’s judgment are these:

   "2. The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis…

   3. This has been a settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of Court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it …

   4. In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course.

   … there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at p 8) in Tetijo, 'the categories in which the discretion may be exercised are not closed'."

7. The Full Court in Kohan v Kohan (1993) FLC 92–340; (1992) 16 Fam LR 245 added to the discussion in this passage:

   "We are of the opinion that in an appropriate case, the Court has a discretion to order costs on an indemnity basis and that such costs may be ordered, where they have been incurred under a costs agreement which departs from the usual scale of costs. However, it is fundamental to the exercise of that discretion in the Family Court that the Judge should not only understand that such an order is a very great departure from the normal standard, but also that the Judge should know what the terms of the agreement are, to what extent it exceeds the parameters set by the scale and what its likely impact will be on the financial position of each of the parties. This impact is a relevant matter to which the trial Judge should have had regard, when considering the financial circumstances of each of the parties to the proceedings under s117(2A)(a), or perhaps even more as a relevant matter under paragraph (g).  The degree to which a costs agreement departs from the established norm and the actual financial significance of such a departure, may itself be a reason for not ordering costs on an indemnity basis."

8. No doubt evidence was presented of the applicant’s costs agreement with her solicitors with this in mind. 

9. But even if I had found circumstances to justify an order for costs I could not find in this case anything remarkable or exceptional so as to put it into the category of case that would attract costs on an indemnity basis. 

10. Finally, it remains to address the claim for costs of the costs application which can be disposed of briefly.  While the costs claim has been dismissed, success of itself does not lead inexorably to the favourable exercise of discretion and in this case is counter-balanced in any event by consideration of the applicant’s financial circumstances and the level of her own costs.  I can find no justifying circumstances; it will be dismissed. 

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Moore

Associate: 

Date: