Wolter and Wolter (No 2)

[2015] FamCA 582

FAMILY COURT OF AUSTRALIA

WOLTER & WOLTER (NO 2) [2015] FamCA 582

FAMILY LAW – COSTS – Between parties – Where the mother was previously successful in her application for a recovery order of the child – Where the mother has applied for costs on an indemnity or party/party basis – Where relevant factors under s 117 of the Family Law Act 1975 (Cth) considered – Where principles underlying an award for indemnity costs considered – Where order made for costs on a party/party basis.

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) rr 19.08, 19.18

Colgate-Palmolive Company and Colgate-Palmolive Pty Limited v Cussons Pty Limited [1993] FCA 536

D & D (Costs) (No. 2) [2010] FamCAFC 64

Fennessy & Gregorian [2009] FamCAFC 44

Limousin & Limousin [2007] FamCAFC 1178

PBF as Child Representative for AF (Legal Aid Commissioner of Tasmania) & TRF & LKL (2005) 33 Fam LR 123

Penfold v Penfold (1980) 144 CLR 311.

Yunghanns & Ors & Yunghanns & Ors & Yunghanns [2000] FamCA 681

APPLICANT: Ms Wolter

RESPONDENT: Mr Wolter

FILE NUMBER: SYC 5747 of 2009

DATE DELIVERED: 23 July 2015

PLACE DELIVERED: Parramatta

PLACE HEARD: Sydney

JUDGMENT OF: Foster J

HEARING DATE: 30 April 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Watkins

SOLICITOR FOR THE APPLICANT: Shipton & Associates

COUNSEL FOR THE RESPONDENT: Litigant in person

Orders

1. That the father pay the mother’s costs of and incidental to the application in a case filed on 24 February 2015 on a party/party basis, as agreed between the parties within 21 days from this date or as assessed, within 21 days of agreement or assessment.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Wolter & Wolter (No 2) 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 PARRAMATTA

FILE NUMBER: SYC 5747 of 2009

Ms Wolter

Applicant

And

Mr Wolter

Respondent

REASONS FOR JUDGMENT

1. The application for determination is an application by the mother for an order for costs consequent upon orders made on 30 April 2015 in respect to her Application in a Case filed on 24 February 2015.

2. The background to the application is briefly set out in the Reasons for Judgment delivered on 30 April 2015 (Wolter & Wolter [2015] FamCA 338) as set out below:

   The Recovery Order

   2. These are proceedings primarily under the provisions of section 67U of the Act which empower the Court to make a recovery order such as the Court thinks proper. In determining whether to make a recovery order, section 67U is governed by the provisions of section 67V, which relevantly provides:

   In deciding whether to make a recover order in relation to a child, a court must have regard to the best interests of the child as the paramount consideration.

   3.        The primary application for determination is the mother’s application in a case filed on 24 February 2015.  In that application, she sought an order that a recovery order issue requiring the return of the child, [M], born … 2004, to her and an order for costs as against the respondent father. 

   4.        The mother sought other orders that are not relevant for the purposes of the determination today.  The mother’s application came before the Principal Registrar on 21 April 2015. On that date, the Principal Registrar heard and determined the mother’s application for a recovery order in the father’s absence and made the following orders:

   (1)          The Father return the child [M] born … 2004 (“Child”) to the Mother within 48 hours of being served with a copy of this order.

   (2) Pursuant to Section 67Q of the Family Law Act 1975 a Recovery Order issue addressed to the Marshal of the Family Court of Australia and to all Officers of the Australian Federal Police and to all Officers of the Police Forces of all the States and Territories of Australia.

   (3)          Such persons are authorised and directed to find and recover the child and for that purpose, to stop and search any vehicle vessel or aircraft and to enter and search any premises or place in which there is, at any time, reasonable cause to believe the child may be found.

   (4)          The child is to be delivered to the care of the Mother at the address agreed to between the person executing the Recovery Order and the Mother.

   (5)          Such Recovery Order lie in the Registry until such time as the Father fails to deliver the child to the Mother.  The Warrant shall issue upon the Mother informing the Registry by filing an Affidavit stating the breach of the Orders.

   (6)          A Recovery Order shall issue forthwith upon the Mother filing an affidavit setting out details of the Father’s failure to return the child including the date on which the Father was to have returned the child, the date upon which demand was made for the return of the child and that the child has not been returned confirming that the Father has retained the child or not made the child available to the Mother in accordance with the Orders dated 21 December 2012.

   (7)          The Applicant’s costs are reserved.

   (8)          The Application in a Case filed on 24 February 2015 is adjourned to a Judicial Duty List at 10.00am on 30 April 2015.

   5.        It was noted that the respondent father was called outside the courtroom on 21 April 2015 and there was no appearance by or on his behalf. 

   6.        Subsequent to the orders made by the principal registrar, a copy of the orders made on 21 April 2015 was served by the solicitors for the mother on the father by email.  Attached to the mother’s affidavit sworn on 28 April 2015 is a copy of that email correspondence.  The email correspondence to the father from the mother’s solicitors is in the following terms:

   We enclose herewith, by way of service on you, a copy of Orders made in the Family Court on 21 April 2015.  You will note that these include a Recovery Order which requires you to return M to the mother within 48 hours of service of these Orders on you. 

   We confirm that if you return [M] to school at 9:00am on Tuesday, 28th April 2015, this is sufficient compliance with Order 1 of the Orders of 21 April 2015. 

   In the event that you thereafter take or retain [M] at times or on days which she is to live with the mother pursuant to the Orders of 21 December 2012, our client will seek the assistance of the police in returning [M] to her mother in accordance with the provisions of Orders of 21 April 2015.

   7.        The mother gives evidence that she and the father are prohibited from attending on the grounds of the [B School] by reason of an Enclosed Lands Act order obtained by the school as against them, presumably as a consequence of their ongoing conduct in or about the precincts of the school and both parents are required to collect the children from the school office at 3:00pm. 

   8.        The father’s time with the children [M] aged 10, and twins [C] and [A] aged 7 pursuant to the current orders during school term is from after school on Thursday until the commencement of school on Tuesday in each alternate week.

   9.        The mother attended at the school on 28 April 2015 to collect the three children, as provided for in the current orders.  It appears that all three children were at school that day, the father having delivered the children to the school at the commencement of the school day, as required by orders of 21 December 2012. 

   10.      The mother spoke to the youngest two children and also to the deputy principal of the school as the whereabouts of [M] were not known.  The father telephoned the mother’s mobile at 3:21pm.  Thereafter, she rang again at 3:22pm.  He did not answer.

   11.      The mother left a voicemail informing him that she was there to pick up the child from school and inquiring as to whether the child was with the father.  At 3:24pm, the mother received an SMS message from the father’s phone which said:

   Hi mum, I am with dad as I want to be with him.

   12.      Clearly, the child has not been returned to the mother’s care, as provided for in the orders. 

   13.      The sole issue for determination, in the context of the present matter before the Court today, is whether the recovery order should issue.  The orders made by the Principal Registrar make it plain that it should. The children have been residing with their parents in accordance with orders made in December 2012, now for over two years. 

   14.      The father and mother, it appears, both make complaint, one against the other in relation to various breaches of those orders.  That is only reflective of the ongoing conflictual relationship between them.

   15.      However, the orders made by the Principal Registrar are clear.  The child has not been returned to the mother in accordance with the orders made by the Principal Registrar and, indeed, she remains in the care of the father, as he concedes today, although the child presently is at school.  It is appropriate that the recovery order issue in accord with orders previously made.

3. Orders were made on 30 April 2015 in the following terms:

   As to the Application in a Case filed on 24 February 2015:

   (1)          The recovery order made on 21 April 2015 issue forthwith for a period of 12 months.

   (2)          So as to facilitate the implementation of the recovery order, the Father be restrained from attending at, upon or near the school premises attended by all three children except for the purposes of implementing changeovers as provided for in orders made on 21 December 2012.

   (3) The above order is an order made for the protection of the children pursuant to section 68B of the Act to which a power of arrest without warrant will attach pursuant to the provisions of 68C of the Act.

   (4)          In the event that the Associate in Chambers is notified by the Mother’s legal representative that the subject child has been returned to her care at the close of the school day today, and notwithstanding the recovery order has issued a request will be made for the recovery order in those circumstances not to be executed except in circumstances where the Father again retains the child or children contrary to the provisions of the orders made on 21 December 2012.

   (5)          The Mother’s costs of this application are reserved and in the event of any application for costs the Mother file and serve any written submissions within one month from today’s date and that the Respondent Father file and serve any written submissions in response within 14 days thereafter and thereafter judgment is reserved.

Costs

1. Written submissions have been received from both parties.

2. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to the proceedings shall bear his or her own costs.

3. That principle is, however, subject to the discretion afforded to the trial judge in subsection (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.

4. Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: see Penfold v Penfold (1980) 144 CLR 311.

5. The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They relevantly, in these proceedings, relate to the following:

   (a) The financial circumstances of each of the parties to the proceedings;

   (b) Whether any party has legal aid and the terms of any grant of aid;

   (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 answers, 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.

6. There is nothing to prevent any one factor being the sole determinant for an order for costs: see PBF as Child Representative for AF (Legal Aid Commissioner of Tasmania) & TRF & LKL (2005) 33 Fam LR 123.

7. Financial circumstances: Subsequent to property orders made on 21 December 2012 both parties have received proceeds of sale of various properties. Notwithstanding contentions by the father as to the manner in which the orders were implemented there is no suggestion that the financial circumstances of each of the parties would be a disentitling factor in relation to the application costs.

8. Legal aid: This is not a relevant consideration.

9. The conduct of the parties to the proceedings in relation to the proceedings: This is not a relevant consideration.

10. The failure of a party to the proceedings to comply with previous orders of the Court: As is clear from the Reasons for Judgment delivered on 30 April 2015 and set out above, the primary application was made as a consequence of the father’s conduct in breach of final orders as to parenting. Initially his conduct resulted in the orders made on 21 April 2015. His subsequent conduct in disregard of his obligations under the final parenting orders necessitated the present primary application for the subject recovery order to issue. His compliance with his obligations under the parenting orders would have obviated the necessity of the present primary application.

11. Wholly unsuccessful: The father opposed the issue of the recovery order and in that regard he was wholly unsuccessful.

12. An offer in writing: In substance the father was informed by the mother’s solicitors that his further disregard for his obligations under the parenting orders would result in the mother seeking the assistance of the police in returning the child to her care.

13. Other matters: There are no other relevant considerations.

14. By reason of the considerations referred to above the mother is entitled to her costs of and incidental to her application filed on 24 February 2015. It is usual practice for an order for costs to be made on a party/party basis.

15. The application for costs is made seeking an order for indemnity costs or otherwise costs on a party/party basis.

16. Provisions of the Family Law Rules 2004 (Cth) (“the Rules”), particularly rule 19.18, provides for the method of calculations of costs. That rule provides as follows:

    The court may order that a party is entitled to 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.

17. The rule further provides, in subparagraph (3), that:

    In making an order under subrule (1), the court may consider:

    (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.

18. The Court has jurisdiction in its discretion to make an order for costs on an indemnity basis and the purpose of such an award is to more fully or even wholly repay to a party all, or at least the majority, of their legal costs and disbursements and charges incurred in the proceedings.

19. The category of cases in which an award of an indemnity costs order may be appropriate are not closed and the Full Court of the Family Court observed in Yunghanns & Ors & Yunghanns & Ors & Yunghanns [2000] FamCA 681 at [31]:

    It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such order is sought.

20. More recently, the Full Court has considered indemnity costs in Limousin & Limousin [2007] FamCAFC 1178, Fennessy & Gregorian [2009] FamCAFC 44 and D & D (Costs) (No. 2) [2010] FamCAFC 64.

21. Otherwise, the principles underlying an award for indemnity costs have been classically summarised by Sheppard J in Colgate-Palmolive Company and Colgate-Palmolive Pty Limited v Cussons Pty Limited [1993] FCA 536 where he, in summary, said at [24]:

    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 a party and party basis. …

    3.        This has been the 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 payment of costs on some basis other than the party and party costs. The circumstances of the case must be such as to warrant the Court in departing from the usual course. …

22. Sheppard J identified some of the circumstances which may warrant the exercise of the discretion to aware indemnity costs and they included:

    a)False and irrelevant allegations of fraud;

    b)Misconduct that causes a loss of time to the Court and other parties;

    c)Where the proceedings were commenced or continued for an ulterior motive;

    d)The undue prolongation of a case on groundless contentions; and

    e)Wilful disregard of known facts and clearly established law. 

23. Rule 19.08 relevantly provides:

    Order for costs

    (1)A party may apply for an order that another person pay costs.

    (2)   An application for costs may be made:

    (a)  at any stage during a case; or

    (b)by filing an Application in a Case within 28 days after the final order is made.

    (3)A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement in relation to those costs and, if so, the terms of the costs agreement.

24. Notwithstanding the application by the wife for indemnity costs the wife has failed to inform the Court if she is bound by a costs agreement in relation to those costs and, if so, the terms of her costs agreement with her solicitors. Accordingly the application for indemnity costs regrettably must fail.

25. There will be an order that the father pay the mother’s costs of and incidental to the Application in a Case filed on 24 February 2015 on a party/party basis as agreed between the parties or as assessed.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 23 July 2015.

Associate: 

Date:  23 July 2015