Normally, in civil jurisdictions, costs follow the event. That is, if a party is wholly successful, the other party will be liable for its costs (on a party-party basis). This is not so in the Family Law jurisdiction, as the recent Full Family Court of Australia in Warren & Child Support Registrar (‘Warren‘) illustrates.
The case is also illustrative of some other notable fundamental principles, namely:
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a party’s liability for child support is a debt due to the Commonwealth, not the other ‘spouse’ (or of course former spouse as the case may be); and
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there is always a presumption (which is of course rebuttable) that when a decision is appealed, it is correct until the appellant demonstrates an appealable error.
Costs Under the Family Law Act (Cth) 1975 (‘the Act’)
s 117 of the Act is the source of power in the Family jurisdiction in which to award costs. Notably, s 117(1) says):
(1) Subject to subsection (2)…each party to proceedings under this Act shall bear his or her own costs.
Thus the default position in Family Law matters is that the Family Court is, in general practice, a ‘no-costs’ jurisdiction.
Having said that, the Court has a discretion under s 117(2) to award costs, having to take into account such things in s 117 (2A), for example, as the financial circumstances of the parties (and whether they were legally aided), their conduct, whether they were in breach of orders, wholly unsuccessful, their conduct, and ‘any other matters that the court considers relevant’ (s 117 (2A(g))).
This is a very broad discretion indeed. The High Court has held (in Penfold v Penfold [1980] HCA 4 at [14]):
‘[s117(2)] does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent (1970) 92 WN (NSW) 503, at p 505 ). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
In Warren, the Appellant Father was wholly unsuccessful in his case against the Child Support Registrar (‘CSR‘). Unsurprisingly, the CSR sought costs, and, less surprising, the Appellant resistant.
The Full Court took a very measured view in light of the dicta in Penfold. Their approach is noteworthy, and, with respect, shows a great degree of procedural fairness (perhaps taking into account that the Appellant was ‘in-person’). It said at [36]:
‘Beyond asserting that it would be “unfair, unjust and inequitable to impose costs” on the appellant in his “endeavour to offer the children access to himself”, the appellant merely asserted that he “lives carefully on a very limited potential retirement income”.
As is not in doubt, the appellant’s challenge to the decision of the learned Federal Magistrate has been wholly unsuccessful and totally misconceived, as was his appeal to the Federal Magistrates Court. Those circumstances, to which regard can properly be had pursuant to the provisions of s 117(2) of the Act, provide a compelling basis for forming the opinion required by s 117 of the Act.
The Court is, however, also obliged to consider financial circumstances in the course of determining the costs application. Nothing placed before this Court by the appellant provides a basis for concluding that his financial circumstances are such that the Court should decline to exercise the discretion to make a costs order against him.’
At this stage of the Court’s reasoning, it would appear likely for it to award costs against the Appellant. But the Court continued [at 39]:
‘The Court will however order that the appellant have leave to file and serve submissions in opposition to the making of a costs order against him and a verified financial statement disclosing his assets and liabilities, income and fixed expenditure. A period of 21 days in which to file any such submissions and/or affidavit of financial circumstances would be reasonable in the circumstances.
In the event that any further submissions and/or evidence of financial circumstances filed by the appellant may be likely to disincline the Court to make a costs order against him, the Court will advise the CSR who may then make further submissions with respect to costs.’
This is an approach markedly different from that countenanced in Penfold.
Child Support is a Debt to the Commonwealth
In Warren the Appellant complained that the Wife was not involved in the proceedings. The Court explained [at 4]:
The appellant’s former wife took no part in the proceedings either before the learned Federal Magistrate, or in this Court. Although the appellant took issue with his former wife’s failure to participate in the proceedings, his concerns in that regard are misconceived. As is not in doubt, the appellant’s liability for child support is a debt due to the Commonwealth, and only enforceable and recoverable by it, through the CSR (see section 30 of the Child Support (Registration and Collection) Act 1988 (Cth). The appellant’s former wife’s non-participation in the proceedings could in no way advance his appeal to this Court. Nor could it have advanced his appeal to the Federal Magistrates Court.
In terms of general appelate principles, the Court was in no doubt that at [6] that:
‘there is a presumption that the decision of the Court below was correct (see Australian Coal & Shale Employee’s Federation & The Commonwealth [1953] HCA 25; (1953) 94 CLR 621). As is also not in doubt, in order to be successful in this Court, the appellant must demonstrate appealable error. What is capable of constituting appealable error is not in doubt as the High Court made clear in House v The King [1936] HCA 40;(1936) 55 CLR 499,and has re-affirmed on numerous occasions since.’
Although the Full Family Court did not expressly state this ‘doubtless principle’ they were no doubt (in my mind at least :)) referring to the famous dicta in House v The King where the majority of Dixon, Evatt and McTiernan JJ said:
‘The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.’
In Warren the Court, ‘anxious to avoid giving the appellant any basis for impugning its determination of his appeal by relying upon material or evidence which was not before this Court’ (at [9]) was clear [at 26]:
‘Nothing to which this Court has been referred establishes that any finding of fact made by the learned Federal Magistrate with respect to this topic was not reasonably open to her. Nor has any conclusion reached by her Honour in reliance upon those findings of fact been shown to have been other than reasonably open to her. This Court has not been referred to any evidence which, if accepted, would render problematic any finding of fact made or conclusion reached by the learned Federal Magistrate…’
Thus on all questions (save for costs, as explained above) the Appellant in Warren failed.
Marc Testart, Principal Family Lawyer
Melbourne Family Law 