Costs ordered against mother for witness failure

Costs ordered against mother for witness failure

Costs

10. Section 117 of the Act sets out the default position that each party bears their own costs, subject to circumstances justifying otherwise. The precondition is the finding that there are circumstances justifying the making of an order. Once these are found, the default position yields to the court’s discretion to award costs as it considers just. The relevant considerations to assess the circumstances are set out at s 117(2A) as follows:

In considering what order (if any) should be made under subsection (2), the court shall have regard to:

1. the financial circumstances of each of the parties to the proceedings;
2. 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;

100. 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;

4. whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
5. whether any party to the proceedings has been wholly unsuccessful in the proceedings;
6. 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
7. such other matters as the court considers relevant.

11. The particular matters identified by the parties in this matter as tending toward and against an order being just are the financial circumstances of the parties, the conduct of the parties in respect of the litigation, whether the proceedings were necessitated by a failure to comply with previous directions and whether a party was wholly unsuccessful.
12. The mother’s affidavit and financial statement set out difficult financial circumstances. The father’s material does not speak to similar difficulties being experienced by him, although it may be expected that the cost of undertaking proceedings such as these is highly burdensome for both parties. While the father was critical of the mother’s assertions as to various amounts spent by her on the proceedings the discrepancies, if sustained, do not detract from a difficult overall picture. While this matter does not constitute a bar to the making of a costs order, it remains a relevant consideration.
13. The conduct of the proceedings, and failure to comply with directions has been identified above. These do not appear to have resulted in an increase in the cost of the proceedings over what they would have been had there been compliance. They have, however, increased the burden of the proceedings on the father and contributed to the disorderly resolution of matters.
14. In relation to the application for leave to receive evidence from Dr K the mother has been wholly unsuccessful. This last matter justifies the departure from the general rule.
15. Costs were, however, sought on an indemnity basis. This application was misconceived. Exceptional circumstances are required before there is to be a departure from costs being awarded on a party-party basis. The principles to be applied in relation to indemnity costs are neatly set out by the Full Court in Quickley & Pelissier:^[1]

We then turn to consider whether costs should be awarded on a party/party or indemnity basis.

In Colgate Palmolive Co and Another v Cussons Pty Ltd [1993] FCA 536; (1993) 118 ALR 248 at 256, Sheppard J referred to the “settled practice” that where a court orders one party to pay another party’s costs, the order is for costs to be paid on a party/party basis. His Honour also said “there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice” at 257.

In an appropriate case the court has a discretion to order costs on an indemnity basis. An order made in the exercise of that discretion is a very great departure from the normal approach and the circumstances justifying the departure should be of an exceptional kind (Kohan and Kohan (1993) FLC 92-340).

In the recent case of Madin & Palis (Costs) [2016] FamCAFC 25 this Court made reference to the increasing number of applications for indemnity costs and said at [23]:

Finally, we take the opportunity to observe that in so far as the appellant sought an order for indemnity costs, applications should only be made, and only be ordered, in the most extreme cases. This is particularly so having regard to the fact that the primary rule in this jurisdiction is that each party should pay their own costs.

16. Taking into account all of the factors identified by the father, the extreme circumstances that might justify such a “very great departure” from the usual rule are not present. The lack of success, the non-compliance with directions and the direct communication with chambers do not amount to such and the application for costs to be paid on an indemnity basis should be refused.
17. This refusal detracts from the notion that it is just to make an order that the mother pay the father’s costs of his costs application. In that application she has not been wholly unsuccessful, and has had to meet the misconceived application for indemnity costs. The s 117(2A) considerations do not point to a justification to depart from the general rule that each party will bear his or her own costs in relation to the costs application.
18. Further, insofar as the mother will pay the costs of the father, they will be restricted to those costs attributable to the application for leave and no other. This means that the mother will not be required to pay the costs of the father where they relate to the directions obtained on that same day, or otherwise relate to the preparation of the case.