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Pettit & Anor & Fairs & Anor (No.4) [2018] FCCA 1062 (3 May 2018)

Last Updated: 7 June 2018

FEDERAL CIRCUIT COURT OF AUSTRALIA

PETTIT & ANOR & FAIR & ANOR (No.4)


Catchwords:
FAMILY LAW – Costs – the Respondents’ application the Applicants pay their costs of parenting proceedings – where the Applicants were wholly unsuccessful in their applications brought by them – where the proceedings were necessitated by the actions of the Applicants in undermining the Respondents’ parenting and re-engaging the children in the parental conflict.

HELD – Orders made for the Applicants to pay $30,000 of the Respondent’s party/party costs.


Legislation:
Family Law Act 1975 (Cth), s.117

Cases cited:
D & D (Costs) (No 2) [2010] FamCAFC 64; (2010) FLC 93-435


First Applicant:
MR PETTIT


Second Applicant:
MS PETTIT

First Respondent:
MS FAIRS

Second Respondent:
MR FAIRS

File Number:
MLC 6856 of 2014

Judgment of:
Judge Bender

Hearing date:
Not applicable

Date of Last Submission:
Not applicable

Delivered at:
Melbourne

Delivered on:
3 May 2018


REPRESENTATION

Counsel for the Applicant:
Not applicable

Solicitors for the Applicant:
Self-represented

Counsel for the Respondents:
Not applicable

Solicitors for the Respondents:
Pearce Webster Dugdales

Counsel for the Independent Children's Lawyer:
Not applicable

Solicitors for the Independent Children's Lawyer:
Schetzer Constantinou

ORDERS

(1) The Applicants pay the Respondents’ costs of the proceedings finalised on 20 October 2016 in the sum of $30,000.00.

IT IS NOTED that publication of this judgment under the pseudonym Pettit & Anor & Fairs & Anor (No.4) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 6856 of 2014

MR PETTIT

First Applicant

MS PETTIT

Second Applicant

And

MS FAIRS

First Respondent

MR FAIRS

Second Respondent


REASONS FOR JUDGMENT

(As Corrected)

Introduction

  1. In this matter I handed down judgment on 20 October 2016 in relation to the parties’ applications for parenting orders.
  2. On 16 November 2016 the Respondents to the parenting proceedings, being the Mother and the Step-Father (“the Respondents”) filed an Application in a Case seeking an order that pursuant to section 117 of the Family Law Act 1975 (Cth) (“the Act”) the Applicant Father and the Applicant Step-Mother (“the Applicants”) pay their costs arising from the proceedings determined on 20 October 2016.
  3. The Application in a Case seeking an order for costs is supported by:
  4. The Applicants to the parenting proceedings filed a Response to the Application in a Case on 28 November 2016 in which they sought the Respondents’ costs application be dismissed, “simpliciter”, that in the alternative the application be dismissed as vexatious pursuant to section 102QB of the Act, a declaration that the Respondents are vexatious litigants pursuant to Part XIB of the Act, that a copy of these orders be transmitted by the Court to the appropriate Attorney-General, that the Respondents be restrained from filing additional unsupported, unfounded applications against the Applicants and all parties be responsible for their own costs related to these matters.
  5. The Response filed on 28 November 2016 was supported by:
  6. The determination of the costs application has been delayed by events subsequent to the filing of that application including an appeal lodged by the Applicants to the 20 October 2016 orders which was subsequently abandoned by them, an urgent recovery order application issued in April 2017 when the parties’ child [X] ran away from the Respondents’ home and a contempt application against the Applicants which followed [X]’s subsequent recovery which was heard in March 2018.
  7. At the conclusion of the contempt proceedings on 16 February 2018, the parties’ Counsel made brief oral submissions on this outstanding costs application so that it could be finalised.
  8. Counsel for the Applicants did not seek to pursue any of the orders sought in the Applicants’ Response to an Application in a Case filed 28 November 2017 other than the costs application be dismissed.

Background

  1. The whole of the background to the parties’ parenting proceedings is set out in paragraphs [1]-[53] of the judgment of 20 October 2016 and will not be repeated here. Those paragraphs should however be read to give the context to this application.
  2. Briefly, the Father filed an Initiating Application on 23 May 2016 seeking orders that the children of he and the Mother, [X] born (omitted) 2001 (“[X]”) and [Y] born (omitted) 2003 (“[Y]”), live with him and spend alternate weekends, half school holidays and special occasions with the Mother.
  3. The Father also filed a contravention application and a contempt application against the Mother alleging breaches of the parenting orders made by consent on 6 October 2015 which had provided for [X] and [Y] to live with the Mother, that there be a six month period of no time between [X], [Y] and the Father and thereafter [X] and [Y] spend alternate weekends, half school holidays and special occasions with the Father.
  4. On 14 June 2016 the Mother filed a Response seeking the Father’s application be dismissed, that she have sole parental responsibility for [X] and [Y], they live with her and spend no time with the Applicants.
  5. When the matter came before the Court for the first time on 16 June 2016, orders were made joining the Step-Mother as the Second Applicant and the Step-Father as the Second Respondent. All time between the Applicants and [X] and [Y] was suspended on an interim basis.
  6. The final orders made on 20 October 2016 provided inter alia that the Respondents have sole parental responsibility for [X] and [Y], that [X] and [Y] live with them and that the Applicants, their servants and agents be restrained from spending time with or communicating with [X] and [Y]. The Father’s contravention and contempt applications were dismissed.
  7. The Respondents submit that given the conduct of the Applicants that gave rise to the application before the Court, the extraordinary expense they have been put through by the litigation and that the Applicants were wholly unsuccessful in their application, there should be an order the Applicants pay their costs of the proceedings.

The Law

  1. Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides:
  2. Section 117(2) provides that:
  3. If the Court is satisfied that there are circumstances that justify it doing so, it has the discretion to depart from the usual expectation that each party bear their own costs and make such orders as to the payment of costs as it considers just.
  4. The Court is guided by section 117(2A) of the Act as to the matters which it can take into account when determining whether to make a costs order. Any one, or a combination of those matters, can be matters that will persuade the Court to make a costs order. Those matters are as follows:
  5. I will consider each of the section 117(2A) subsections where relevant.

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

  1. The Mother is employed as a (occupation omitted) at (employer omitted) earning $1,496 per week. The Step-Father is employed as an (occupation omitted) and earns $2,200 per week.
  2. The Respondents own their own home in (omitted) valued at approximately $450,000. It is encumbered by way of a $340,000 mortgage.
  3. It is the evidence of the Respondents that they have spent approximately $275,000-$320,000 on the entirety of the litigation between themselves and the Applicants and that in order to do so they have drawn down on their mortgage to the maximum possible extent, incurred extensive credit card debts and have borrowed monies from relatives such that they have personal loans and credit card debts totalling $75,000.
  4. The Father is employed as the (occupation omitted) for (employer omitted). He earns approximately $110,000 per annum. The Step-Mother undertakes home duties and is not in receipt of an income.
  5. The Applicants own their own home in (omitted) which has a value of approximately $300,000 and is encumbered by way of a $200,000 mortgage. The Applicants recently borrowed $100,000 to purchase new vehicles for each of them.
  6. The Applicants have three children of their own relationship. All their children have been diagnosed with Autism Spectrum Disorder which requires the regular support of health professionals such as psychological support, occupational therapy and group therapy. It is the Applicants’ evidence that the costs of these appointments can range from $120-$190 per appointment per child and their attendance at these appointments range from weekly to fortnightly depending on their requirements. It is the Applicants’ further evidence that two of their children require orthodontic work which will cost them approximately $12,750.
  7. It is the Applicants’ evidence that both have been diagnosed with ADHD and Reactive Depression and Generalised Anxiety Disorder, which also requires psychiatric intervention and medication, the costs of which are predominantly met from the income of the Father.
  8. It is the Applicants’ evidence that due to Court proceedings they owe approximately $200,000 in outstanding loans which are being paid back on a fortnightly basis.
  9. It is the Applicants’ evidence that as a single income family with special needs children, any order for costs would be an incredible burden which would financially cripple the family.

(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

  1. It is submitted on behalf of the Respondents that the conduct of the Applicants in immediately re-engaging in the undermining of the parenting by the Mother and the Step-Father and actively re-embroiling [X] and [Y] in the parental conflict, necessitated the further litigation.
  2. It is clear from the findings made in the judgment of 20 October 2016 that the Court was satisfied that upon resumption of time between [X], [Y] and the Applicants after a period of six months when they did not spend time with the Applicants in order to break the pattern of undermining that had existed prior to the orders being made in October 2015, the Applicants immediately recommenced that behaviour.
  3. Because of their complete lack of insight as to the impact that behaviour has on the psychological and emotional wellbeing of [X] and [Y] and because the Court formed the view that the Applicants were so lacking in insight into their behaviours that they would be unable to change them, orders were made that they spend no time with [X] and [Y].
  4. It is submitted on behalf of the Applicants that it was the conduct of the Mother that was the cause of the litigation in that she sent an email on 2 May 2016 to the Father advising of her decision to stop all time between the Applicants, [X] and [Y] and then stated:
  5. It is the submission of the Applicants that they would never have returned to Court had the Respondents not withheld [X] and [Y] in April 2016 in breach of the then parenting orders.

(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

  1. It is the submission of the Respondents that the Applicants’ failure to comply with the orders made 15 October 2015 and in particular their failure to comply with the requirements to not denigrate them, taking [X] and [Y] to medical practitioners in the face of the Mother having sole parental responsibility for medical matters when there was not a medical emergency and their continued involvement of [X] and [Y] in the parental dispute is what led to the proceedings that came before the Court for which the costs order is sought.
  2. It is the Applicants’ submission that the Respondents’ failure to comply with the orders that [X] and [Y] spend time with them is what necessitated them having to bring an application to this Court.

(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings

  1. There is no doubt that the Applicants were wholly unsuccessful in their application.
  2. Paragraphs [439] to [454] of the judgment handed down on 20 October 2016 set out the Court’s findings and reasons for the orders made for [X] and [Y]’s future living arrangements and why the Applicants were wholly unsuccessful in their application.
  3. Both the contravention application and contempt application filed by the Father on 23 May 2016 were dismissed on the basis that the Court was satisfied that the Mother had a reasonable excuse for the failure to comply with the orders for time to take place between [X], [Y] and the Applicants on the basis of the real risk of emotional and psychological harm that [X] and [Y] would suffer if time were to continue.

(g) such other matters as the Court considers relevant

  1. At the conclusion of the contempt application, the parties’ Counsel each made very brief submissions on the question of this costs application.
  2. Counsel for the Respondents purported to argue that this Court should take into account the subsequent matters that arose after the delivery of the judgment when determining whether a costs order should be made as sought by the Respondents.

Conclusion

  1. It is strongly submitted on behalf of the Applicants that any order that they pay costs would financially cripple them and potentially see them and the three children who are dependent upon them, “out on the street”.
  2. Both the Respondents and the Applicants depose to the enormous financial burden the litigation has placed upon them and the crippling debt levels both now endure as a result of that litigation.
  3. It is the Respondents’ submission that the litigation for which they are seeking costs would have been completely unnecessary if, upon resumption of time between the Applicants, [X] and [Y], the Applicants had focussed on spending time with [X] and [Y] rather than doing what they did, which was to immediately resume their ongoing vendetta to prove the Mother and the Step-Father as unworthy parents and to actively undermine the relationship [X] and [Y] have with them.
  4. The Applicants argue that the only reason for the litigation was the decision of the Respondents to cease all time between them and [X] and [Y].
  5. Whilst technically the Applicants’ argument as why the litigation recommenced is correct, the clear findings of the Court were that the behaviour of the Applicants were such that any time between them and [X] and [Y] would be so psychologically and emotionally damaging that it had to cease.
  6. It was for this reason that the contravention application and contempt application brought by the Father alleging breaches of the orders by the Respondents were dismissed.
  7. The Applicants were wholly unsuccessful in all applications they brought before the Court.
  8. The Applicants’ subsequent behaviours which gave rise to the recovery order and contempt proceedings are not factors this Court can take into account when considering whether a costs order should be made in relation to the proceedings that predates those behaviours.
  9. Whilst the Applicants plead impecunity, they have recently borrowed $100,000 in order to purchase new cars for themselves. Such borrowing does not support a claim of impecunity.
  10. Further, the case law is quite clear that a party’s lack of financial resources is not a barrier to a costs order being made.[1]
  11. For the reasons set out in the judgment delivered on 20 October 2016, I am satisfied these proceedings came into being as a result of the behaviour of the Applicants, not of the Respondents.
  12. The Applicants were totally unsuccessful in the proceedings before the Court.
  13. I am therefore satisfied that this is a matter where the Court should depart from the usual expectation of section 117(1) of the Act that each party pay their own costs and that having considered the matters set out under section 117(2A), it should exercise its discretion pursuant to section 117(2) and make an order that the Applicants pay all or some of the Respondents’ costs of the proceedings commenced by way of the Initiating Application filed by the Applicants on 23 May 2016.
  14. Counsel for the Respondents submitted that any order the Applicants pay the Respondents’ costs should be on an indemnity basis. It was submitted that if the Respondents were successful in their application for costs, the question of the quantum of the costs should be adjourned to enable the Respondents to file affidavit material to comply with the Full Court’s requirements for the making on an indemnity costs order.
  15. This application has been on foot for some 18 months and the Respondents have had more than adequate time to place any further material they seek to rely upon before the Court. Further, in all material filed by them in relation to this application to date, they make it clear that they are seeking costs on a party/party basis only. I am therefore not persuaded that the Applicants should be permitted at this very late stage to further delay this application by making a last minute application for indemnity costs. The costs to be paid by the Applicants will be on a party/party basis.
  16. Having determined that the Respondents’ costs of the proceedings should be paid by the Applicants on a party/party basis, reference to the Federal Circuit Court Rules 2001 (Cth) shows those costs to be:
Event
Costs Item
Amount
“The Father issues application on 23 May 2016 returnable on 16 June 2016...”
Item 2: Initiating or opposing an application which includes interim orders ... up to the completion of the first hearing date
$2,704.00
“On 16 June 2016, the substantive application ... was heard ... by Judge Bender, who made various orders ... and otherwise adjourned the hearing for a full trial on 20 July 2016...”
Item 3: Interim or summary hearing – as a discrete event
$1,801.00
Item 12: Advocacy loading (half day hearing)
$1,621.50
Item 13: Daily hearing fee (half day hearing)
“20-22 July 2016 the full trial of this matter ... took place...”
Item 7: Preparation for final hearing – 2 day matter
$6,937.00
Item 8: preparation for final hearing – each additional hearing day after the second day
Item 12: Advocacy loading (full day hearing – 3 days)
$9,729.00
Item 13: Daily hearing fee (counsel for a full day hearing – 3 days)
Item 13: Daily hearing fee (solicitor for a full day hearing – 3 days)
$6,486.00
“On 15 August 2016, application to re-open the case was made. This was returnable before ... Judge Bender on
22 August 2016.”
Item 2: Initiating or opposing an application which includes interim orders ... up to the completion of the first hearing date (includes hearing fee)
$3,785.00
“On 22 August 2016 ... Judge Bender heard the re-opened case and adjourned it for further hearing on24 August 2016 to allow for a critical witness for the Applicants to testify before the Court”
Item 12: Advocacy loading (half day hearing)
$1,621.50
Item 13: Daily hearing fee (half day hearing)
24 August 2016 hearing
Item 12: Advocacy loading (half day hearing)
$1,621.50
Item 13: Daily hearing fee (counsel for a half day hearing)
Item 13: Daily hearing fee (solicitor for a half day hearing)
$1,081.00
“20 October 2016, Her Honour pronounced final orders and published a 122 page “Reasons for Decision” to the parties”
Item 9: Final hearing costs for attendance of solicitor at hearing to take judgment and explain orders (includes hearing fee)
$588.00
TOTAL:
$37,975.50

Should the Applicants pay the entirety of the Respondents’ party/party costs?

  1. Section 117(2) of the Act provides that the Court may make such orders as to costs as the Court considers just.
  2. It was submitted on behalf of the Applicants that any orders for costs would financially cripple them and more relevantly impact on their capacity to care for their three children.
  3. Because of the impact on the Applicants’ three children of a costs order by this Court, the amount of the Respondents’ party/party costs payable by the Applicants shall be reduced by $7,975.50.
  4. Accordingly an order will be made that the Applicants pay the Respondents’ costs of the proceedings finalised on 20 October 2016 in the sum of $30,000.00.

I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of Judge Bender

Date: 3 May 2018


CORRECTIONS:

  1. Reasons for Judgment: Page 13, Paragraph 61 third line delete “37,975.50” and insert “$30,000.00”.

[1] D & D (Costs) (No 2) (2010) FLC 93-435

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