Abano & Abano (No 2)

Case [2024] FedCFamC1F 630

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Abano & Abano (No 2) [2024] FedCFamC1F 630

File number(s): DUC 403 of 2021
Judgment of: HARPER J
Date of judgment: 18 September 2024
Catchwords:

FAMILY LAW – COSTS – Where leave was refused for the wife to join the father of the husband as second respondent in the substantive proceedings on the basis on equitable claims – Where the father seeks costs against the wife with respect to her equity suit – Where the wife made four attempts to plead a case against the father which increased his costs – Where the wife was wholly unsuccessful – Where the wife rejected an offer of settlement – Costs ordered in favour of the father to be paid as agreed or assessed – Indemnity costs not justified. 

FAMILY LAW – JURISDICTION – The Court as one of law and equity, pursuant to s 9(1)(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) – Whether the equitable claims brought by the wife, not under the Family Law Act 1975 (Cth) (“the Act”) but in the accrued jurisdiction of the Court, lay outside the operation of s 117 of the Act and costs should follow the “event” – Authority of the Court to decide claim to equitable relief – Where an exercise of the Court’s accrued jurisdiction becomes a “matrimonial cause” within paragraph (f) of the definition in s 4 of the Act as other proceedings “in relation to” the s 79 proceedings between the spouse parties – Where the wife’s invocation of s 78 and s 90AE of the Act to declare property interests against the father has the appropriate nexus to the spousal matrimonial cause – Costs to be determined according to s 117 of the Act.

Legislation:

Family Law Act 1975 (Cth) Pts VIII, VIIIAB, ss 4, 78, 79, 90AE, 117

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 9(1)(b), 43, 44

Civil Procedure Act2005 (NSW) s 98

Uniform Civil Procedure Rules 2005 (NSW) r 42.1

Cases cited:

Abano & Abano [2024] FedCFamC1F 331

Akbar & Gandega [2023] FedCFamC1A 174

Atkins & Hunt [2017] FamCAFC 131

C Pty Ltd and ors & PGW As Liquidator of S Pty Limited (in liq) (2011) FLC 93-485; [2011] FamCAFC 231

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

Fencott v Muller (1983) 152 CLR 570; [1983] HCA 12

Hampton & Farley (No 3) (2013) 52 Fam LR 366; [2013] FamCA 890

Harris & Dewell and Anor (No. 2) (2018) FLC 93-863; [2018] FamCAFC 180

Higginbotham & Robinson (1991) FLC 92-209; [1991] FamCA 5

Jones & Markham [2010] FamCA 1026

Kennon v Spry (2008) 238 CLR 366; [2008] HCA 56

Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116

Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCA 1178

Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157

Moorcroft & Moorcroft (2020) 60 Fam LR…

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Details
AGLC
Abano & Abano (No 2) [2024] FedCFamC1F 630
Case
[2024] FedCFamC1F 630
Decision Date

CaseChat Overview and Summary

The case of Abano & Abano (No 2) involved a dispute between Ms Abano and Mr C Abano, with Mr Abano also being named as the father of Mr C Abano. The wife sought to join the father in the substantive proceedings, pursuing equitable claims. The court was tasked with deciding whether the wife's claims lay outside the operation of section 117 of the Family Law Act 1975 (Cth) and whether the court had the authority to grant equitable relief. Additionally, the court had to determine the appropriate basis for awarding costs to the father, including whether indemnity costs were justified.

The court found that the wife's conduct in pursuing her claims against the father, which included multiple attempts to formulate her case and a failure to identify coherent issues in dispute, was unsuccessful and materially increased the father's costs. The court considered the wife's rejection of a settlement offer and the lack of reasonable prospects in her joinder application. The court held that the wife's actions justified an order for costs in the father's favour. However, the court found that indemnity costs were not warranted, as such awards are exceedingly rare and require exceptional circumstances. Instead, the court ordered that the wife pay the father's costs on a party and party basis, as agreed or assessed.

The court concluded that the exercise of the accrued jurisdiction by the wife, in relation to the spousal proceedings, constituted a "matrimonial cause" within the meaning of the Act. As a result, costs were to be determined according to section 117 of the Act. The court further held that the wife's invocation of sections 78 and 90AE of the Act to declare property interests against the father had the appropriate nexus to the spousal matrimonial cause. Consequently, the court determined that the father was entitled to costs.

The court made specific orders for the wife to pay the father's costs from 21 September 2022 to 3 June 2024, excluding certain dates, on a party and party basis as agreed or assessed. The wife was also ordered to pay the father's costs from 20 November 2023 and the costs of the father's application for costs determined by these orders. The assessment of these costs was to take place no earlier than 28 days after the determination of these proceedings by final orders.

Orders

Orders of the court

DUC 403 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS ABANO

Applicant

AND:

MR C ABANO

Respondent

MR ABANO

Third Party

ORDER MADE BY:

HARPER J

DATE OF ORDER:

18 SEPTEMBER 2024

THE COURT ORDERS THAT:

1. The Applicant Wife (“wife”) pay the Third Party’s (“father”) costs with respect to her claims against and application to join the father for the period from 21 September 2022 to 3 June 2024 excluding his costs of 19 and 20 November 2023 on a party and party basis as agreed or assessed.

2. The wife pay the father’s costs pursuant to cost orders of 20 November 2023 on a party and party basis as agreed or assessed.

3. The wife pay the father his costs of his application for costs determined by these orders on a party and party basis as agreed or assessed.

4. No assessment of costs in accordance with these orders shall take place earlier than 28 days after the determination of these proceedings by final orders.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The father argued that he made an offer to settle on 10 October 2022, on the basis that the wife withdraw her claims against him, with notification that he would seek indemnity costs.CONCLUSION ON JUSTIFYING CIRCUMSTANCES I find that the conduct of the wife in attempting and failing to formulate a case over at least four iterations, which materially increased the father’s costs, the fact she was wholly unsuccessful in her joinder application because her claims lacked reasonable prospects of success, and her rejection of the offer of settlement are relevant factors. I am satisfied these factors justify an order for costs in the father’s favour. The question thus remains the basis on which costs should be awarded.INDEMNITY COSTS The father argues that the circumstances are such that the Court should award indemnity costs in his favour. The award of indemnity costs in this Court has regularly been called a significant departure from the normal standard, rare, and requires something exceptional. In Harris & Dewell and Anor (No. 2) (2018) FLC 93-863, the Full Court said: 23. In Kohan and Kohan, the Full Court held, in applying the principles expounded by Sheppard J in Colgate-Palmolive, that an order for indemnity costs represents a “very great departure from the normal standard”. In the later decision of the Full Court in Prantage & Prantage, Thackray and Ryan JJ referred to Kohan and other authorities in the Full Courts of both this Court and the Federal Court of Australia as well as the state appeal courts. Their Honours concluded (at [86]) that the “usual rule” continued to apply in respect of awards of costs in this Court notwithstanding the Full Court accepting that the difference between party/party costs and a party’s actual costs has continued to grow significantly.24. That proposition also derives support from what Callinan J said in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation. His Honour said that an order for indemnity costs should “be exceedingly rare, as they have a tendency to encourage extravagance and put the quantum of legal fees beyond the effective scrutiny of the courts and their taxing officers”. 25. The rarity of an order for indemnity costs can also be seen illustrated by the comments of Lindgren J in NMFM Property Pty Ltd v Citibank Ltd (No 2), referred to by their Honours in Prantage (at [102] – [103]). Lindgren J said that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation.”(Footnotes omitted) The father argues that indemnity costs are justified given the wife's joinder application had no reasonable prospects of success, was wholly unsuccessful and should not have been made. The father adverts to four additional reasons for indemnity costs:(1)That the wife imprudently refused the father's offer to withdraw.(2)That the wife unreasonably involved the father in the spousal property proceedings and did not provide coherent identification of the issues in dispute against the father. (3)That the wife litigated in a manner that caused unnecessary cost, delay and wasted court time. The father specifically points to the wife's multiple iterations of her points of claim unreasonably extending his involvement in proceedings for almost two years and requiring further time and money to review. (4)That the wife was provided multiple indulgences by the Court to frame her case and yet the ultimate result was dismissal of her application in its entirety.

Ratio Decidendi

Legal Principle Established

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