ZANGARI & FERREIRO

[2020] FCCA 1390

FEDERAL CIRCUIT COURT OF AUSTRALIA

ZANGARI & FERREIRO [2020] FCCA 1390

Catchwords:
FAMILY LAW – COSTS – Application for costs on an indemnity basis – scale costs ordered.

Legislation:

Family Law Act 1975 (Cth), s.117

Federal Circuit Court Rules 2001 (Cth), r.21.02

Cases cited:

Cochrane & Cochrane [2012] FMCAfam 984

Colgate Palmolive Co & Anor v Cussons Pty Ltd (1993) 46 FCR 225

Collins & Collins (1985) FLC 91-603

Edmunds & Edmunds (No. 3) [2018] FCCA 542

Kohan & Kohan (1993) FLC 92-340

Latoudis v Casey (1990) 170 CLR 534

Mortimer (Jnr) & Mortimer (Snr) [2016] FCCA 2763

Penfold & Penfold (1980) 144 CLR 311

Sala & Habner (No.2) [2018] FCCA 2738

Wrensted & Eades [2016] FamCAFC 46

Yount & Forney [2019] FCCA 3307

Applicant: MS ZANGARI

Respondent: MR FERREIRO

File Number: PAC 2379 of 2018

Judgment of: Judge Obradovic

Hearing date: 7 April 2020

Date of Last Submission: 5 May 2020

Delivered at: Parramatta

Delivered on: 5 June 2020

REPRESENTATION

Counsel for the Applicant: Mr Lloyd

Solicitors for the Applicant: WM Lloyd & Associates

Counsel for the Respondent: Ms Haughton

Solicitors for the Respondent: John Spence & Associates

ORDERS

1. Within 28 days the respondent father is to pay the costs of the applicant mother in the amount of $2,987.

IT IS NOTED that publication of this judgment under the pseudonym Zangari & Ferreiro is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 2379 of 2018

MS ZANGARI

Applicant

And

MR FERREIRO

Respondent

REASONS FOR JUDGMENT

1. On 25 November 2019 the Court made final parenting orders in respect of the parties’ two children. Those orders provided for the children to live with the mother and to spend time with the father in accordance with a regime set out in those orders.

2. On 3 April 2020, the mother by way of an Application in a Case, sought orders for the recovery of the children in circumstances where the children were not returned to live with the mother in accordance with the final orders made on 25 November 2020.

3. The Application in a Case was listed at short notice before the Court at 9.30am on 7 April 2020.

4. The mother was represented by her solicitors and the father by Counsel instructed by his solicitors. 

5. The father had, after being served with the Application in a Case, filed a Response to the Application in a Case on 6 April 2020, and an Amended Response to the Application in a Case on 7 April 2020. No leave had been granted to the father to file the Amended Response. Both parties had filed Affidavits.

6. In any event, on the morning of the urgent listing, the father agreed to return the children to the mother’s care at 6pm that day. Such a concession was made by the father after the matter had been called on and after the matter was stood in the list for the purpose of the father providing instructions to his legal representatives.

7. Ultimately, after noting that the father had agreed to return the children to the mother, the Court with the consent of the parties, dismissed all outstanding applications. The father’s agreement to the return of the children as sought by the mother (albeit no orders were made reflecting this) meant that the matter concluded earlier in the day than it might otherwise have.

8. The resolution of the Application in a Case was followed by an oral application for costs by the mother against the father. In respect of that oral application, each party subsequently filed submissions, Financial Statements and the mother also filed a tender bundle.

9. The mother now seeks costs on an indemnity basis in the amount of $9,457.80.

The Law[1]

[1] It was disappointing to see a verbatim “cut and paste” of an extract of a judgment of this court included in the mother’s submissions as to costs without any acknowledgment as to the source of such material. The summary of the relevant law which is included in these Reasons for Judgment does not originate from the father’s submissions filed 5 May 2020 , rather it is a summary which has been included in various earlier judgments of this Court. See for example: Mortimer (Jnr) & Mortimer (Snr) [2016] FCCA 2763; Edmunds & Edmunds (No.3) [2018] FCCA 542 and Yount & Forney [2019] FCCA 3307

1. The principles in respect of costs orders in family law proceedings are well known. The starting position with respect to costs, as set out in s117 of the Act is that, subject to subsection 117(2), each party to proceedings under the Act shall bear his or her own costs.

2. The discretion to award costs is a broad discretion.[2]

   [2]  see for example Collins & Collins (1985) FLC 91-603.

3. The High Court held in Penfold & Penfold[3] that it is necessary for the Court to make a finding of justifying circumstances as an essential preliminary to the making of an order for costs. The Court is not required to specify the circumstances which justify the making of such an order.

   [3] (1980) 144 CLR 311

4. As long as there is an essential preliminary finding that there are justifying circumstances to make a costs order, there is no additional or special onus which the Applicant needs to establish for an order for costs. It is not the law that a costs order can only be made in what has been described as a ‘clear case’. [4]

   [4] See in general the comments made by the Full Court in Wrensted & Eades [2016] FamCAFC 46 and in particular where the Full Court approved the comments of the judge below at [103]

5. In Latoudis v Casey[5] the High Court stated as follows:

   … in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of an unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.”[6]

   [5] (1990) 170 CLR 534

   [6] Referred to in the context of family law proceedings by Judge Kemp in Cochrane & Cochrane [2012] FMCAfam 984 at [17]

6. In determining what order, if any, should be made under s117(2) the Court must have regard to the prescriptive but non-exhaustive list of considerations in sub-section (2A).

7. Rule 21.02(2) Federal Circuit Court Rules2001 provides that in making an order for costs the Court may set the amount of costs; or set the method by which the costs are to be calculated; or refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules.

8. The Court has the power to order costs on an indemnity basis.[7]  The principles in respect of indemnity costs orders are also well known[8], and in essence may be summarised as follows:

   a. the application of the ordinary well-settled rule of costs being ordered on a party and party basis will usually result in the amount received by the successful party falling short of a complete indemnity;

   b. some special or unusual feature of the case must, in the circumstances, warrant departure from the well-settled practice of awarding costs on a party and party basis including an imprudent refusal of an offer of compromise; and

   c. even if facts exist to justify the making of an indemnity costs order, such an order need not necessarily be made because costs are always in the discretion of the court. ^[9]

   [7] See for example: Kohan & Kohan (1993) FLC 92-340; Latoudis v Casey (1990) 170 CLR 534.

   [8] See generally Sheppard J in Colgate Palmolive Co and Anor v Cussons Pty Ltd (1993) 46 FCR 225

   [9] Sala & Habner (No. 2) [2018] FCCA 2738 at [3]

Determination

1. Pursuant to the final orders made in November 2019, the children were due to spend time with the father from after school on Friday 27 March 2020 to before school on Monday 30 March 2020.

2. In correspondence which had passed between either the parties themselves or through the parties’ solicitors, in late March and including on 1 April 2020, the father made it known to the mother that he had concerns for the children’s health and safety, due to the COVID-19 pandemic, which at that point in time had resulted in the children’s school strongly recommending that all students remain at home and continue their learning remotely.

3. The father made suggestions to the mother to vary the time provided for in the orders due to the pandemic and the changed circumstances which the children were facing. The mother’s response (before the father retained the children) was that she would not consent to any variation and that the father ought to bring an application if he sought to vary the orders. The mother’s responses included the following:

   Thank you for your email and suggestions in dealing with the current crisis. I understand and take note of your concerns.

   …

   Any changes to current court orders will need to be negotiated through family court and not via email correspondence.

4. This was said in the same email where the mother wrote:

   … Thus the children’s time with you will proceed as follows:

   1) Current court orders remain the same

   2) You will collect the children from McDonalds (sic) Suburb A (sic) Friday, 27th  March at precisely 4pm. (This will allow travel time)

   3) The children will be returned to McDonalds (sic) Suburb A (sic) on Monday 30th of March at precisely 4pm

   4) Current court orders will remain the same and exchange for the following weeks will the conclusion of Term 1 will follow the new routine until such a time as school resumes in Term 2 or the new orders need to be met (sic), which can be renegotiated to better align the new orders in future.

5. It appears the mother herself was unilaterally imposing changes to the orders, albeit to the benefit of the father which would see the children spending more time with him. Namely, instead of being returned to the mother’s care at the commencement of school on a Monday morning the mother proposed that the children remain with the father until the conclusion of the school day.

6. The father wrote to the mother again on Friday 27 March 2020,

   To ensure predictability and certainty for both children at this time, I reiterate my suggestion that we care for the children in our individual homes on a week-on and week-off basis until the COVID-19 pandemic is over and the children return to their regular schooling…

7. The father’s proposal for week about time is illogical in the way it is phrased. If his concerns about the children’s safety were as stated in his correspondence, then it would have been logical for him to propose that he care for the children during the working week or that the mother work from home. The proposal was self-serving, particularly given that it was in line with the father’s application for final orders prior to the parties’ entering into consent orders in November 2019.

8. The mother confirmed in an email dated 27 March 2020 sent one hour after the father’s email was sent earlier that day that the children were to be returned to her at 3pm on 30 March 2020.

9. The children were not returned to the mother’s care on Monday, 30 April 2020.

10. On 31 March 2020, prior to commencing proceedings, the mother through her solicitors, wrote to the father through his solicitors, and requested that the children be returned by 5pm on 1 April 2020. The father was put on notice that if the children were not returned the mother would be filing an application on an urgent basis seeking a recovery order for the children. The mother also put the father on notice that she would seek to rely on her solicitor’s letter dated 31 March 2020 on the issue of costs. The father did not comply with this request.

11. The submissions relied upon by the father include the following concessions:

    The father was in breach of the orders in relation to the time he was to spend with the children during the school term.[10]

    The father consented to returning the children… It is conceded that does amount to a situation where the applicant was successful[11].

    [10] Paragraph 45 of Respondent Father’s Costs Submissions filed 5 May 2020

    [11] Paragraph 46 of Respondent Father’s Costs Submissions filed 5 May 2020

12. The Court is satisfied that there are circumstances justifying a costs order and having regard to the s117(2A) matters that a costs order ought to be made:

    a)The mother has limited financial means. She is employed as a teacher’s aide and also receives government benefits.

    b)The father’s income has been affected by the pandemic, but he appears to be eligible for the JobKeeper allowance. The father has registered for a release of his superannuation while he is without work, but has not yet applied for such funds.

    c)The proceedings were commenced because of the father’s breach of Court orders, and refusal to return the children to the mother’s care. While ultimately there was an agreement reached between the parties, this was done of the first return date of the mother’s application subsequent to the matter being called on and after the mother had retained legal representation and expended moneys in respect of the application. The mother was successful in obtaining the outcome which she sought by way of her application. Due to the way the matter was ultimately dealt with neither party was strictly speaking “wholly unsuccessful”.

    d)The mother through her solicitors wrote to the father in an effort to resolve the dispute prior to commencing proceedings, requesting that the children be returned to her care. Instead of returning the children, the father proposed that he keep them in his care until the start of the school holidays, which was a further 9 days away. This would have meant that the children would not have seen the mother for a period of two weeks.

13. While the father’s conduct in retaining the children might be viewed as opportunistic, particularly in light of the mother’s clear indication that she expected the children to be returned to her care, the Court does not find that the father’s conduct was such as to warrant an indemnity costs order.

14. The Court assesses the costs in accordance with Schedule 1 of the Federal Circuit Court Rules2001 as follows:

    a)Item 3: interim or summary hearing as a discrete event. Both:

    i)$1,867; and

    ii)the daily hearing fee mentioned in item 13 that applies to the hearing

    b)Item 13: hearing fee. For half a day hearing: $1,120.

15. Costs are assessed at $ 2,987. Such costs are to be paid within 28 days.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Obradovic

Associate:

Date: 5 June 2020