Arias & Grasso (No 4)
[2024] FedCFamC2F 1837
•18 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Arias & Grasso (No 4) [2024] FedCFamC2F 1837
File number(s): NCC 4198 of 2021 Judgment of: JUDGE CARTY Date of judgment: 18 December 2024 Catchwords: FAMILY LAW – COSTS – De Facto property proceedings – Where respondent de facto husband continued to deny allegations of physical family violence until confronted with criminal history – Where respondent refused reasonable offer or compromise – Where respondent’s conduct of the trial increased the costs of the applicant
FAMILY LAW – COSTS – Where relevant factors considered – Where court satisfied that there are circumstances which justify a costs order
FAMILY LAW – COSTS – Applicant seeks indemnity costs – Where settled practice is to order costs on a party and party unless there is an exceptional, unusual or extreme circumstance.
FAMILY LAW – COSTS – Party and party costs – Costs awarded in a fixed amount calculated in accordance with Scale
Legislation: Family Law Act 1975 (Cth) ss 44, 90SM, 117
Federal Circuit and Family Court of Australia Act 2021 ss 190, 191
Federal Circuit and Family Court of Australia (Family Law) Rules 2021, rr 1.04, 6.01, 12.17, sch 1, sch 3
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 sch 1
Cases considered: Arias & Grasso [2022] FedCFamC2F 47
Arias & Grasso (No 2) [2022] FedCFamC2F 1191
Arias & Grasso (No 3) [2024] FedCFamC2F 452
Bant & Clayton (Costs) [2016] FamCAFC 35; (2016) 56 Fam LR 31
Colgate Palmolive Co & Anor v Cussons Pty Ltd (1993) 118 ALR 248
Fitzgerald & Fish [2005] FamCA 158
Garrod & Davenport [2021] FamCA 276
In the Marriage of Kohan (1992) 16 FamLR 245; (1993) FLC 92-340
In the Marriage of Munday & Bowman (1997) 22 Fam LR 321
Medlon & Medlon (No 6) (Indemnity Costs) [2015] FamCAFC 157; (2015) FLC 93-664
Pascoe & Larsen (No 2) [2022] FedCFamC1A 126
Penfold and Penfold [1980] HCA 4; (1980) 144 CLR 311
Stanford & Stanford (2012) 247 CLR 108
Division: Division 2 Family Law Number of paragraphs: 66 Date of last submission/s: 17 July 2024 Date of hearing: On the papers Place: Newcastle Solicitor for the Applicant: Baker Love Lawyers The Respondent: Self Represented ORDERS
NCC 4198 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS ARIAS
Applicant
AND: MR GRASSO
Respondent
ORDER MADE BY:
JUDGE CARTY
DATE OF ORDER:
18 DECEMBER 2024
THE COURT ORDERS THAT:
1.The respondent will pay the applicant’s costs in the property proceedings on a party and party basis fixed in the sum of $34,015.
2.The respondent will pay the applicant’s costs in the Application in a Proceeding filed on 9 May 2024 fixed in the sum of $3,142.
3.Payment by the respondent of the amounts due to the applicant pursuant to Order 1 and Order 2 hereto will be made within 14 days of the date of this order, or upon settlement of the sale of the real property situate at G Street, Suburb H in the State of New South Wales, whichever date occurs later.
4.The application for costs and the response is otherwise dismissed.
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.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE CARTY
INTRODUCTION
On 11 April 2024, after a defended de facto property hearing lasting three days, I delivered reasons for judgment[1] pursuant to which I ordered, inter alia, that the respondent husband Mr Grasso (“the respondent”) will pay to the applicant wife Ms Arias (“the applicant”) the sum of one hundred and ten thousand, and thirty eighty dollars ($110,038).
[1] Arias & Grasso (No 3) [2024] FedCFamC2F 452
On 9 May 2024 the applicant filed an Application in a Proceeding seeking an order that the respondent pay her costs of and incidental to the parenting proceeding. The respondent opposes the application for costs and seeks that the application be dismissed.
For the reasons provided herein, I am satisfied that circumstances justify an order that the respondent pay the applicant’s costs on a party and party basis in a fixed sum.
BACKGROUND
In this background, statements of fact are to be construed as findings, unless otherwise stated.
The parties commenced cohabitation in late 1999. They never married. Their de facto relationship broke down finally in February 2010. By the time of the hearing the parties had lived separately for more than 13 years. The only child of the de facto relationship was born in 2000, and she was almost 23 years old at the date of hearing.
On 17 December 2021 the applicant filed an application initiating property proceedings, after she had discovered that the respondent was preparing to sell a real property at Town F, which had been purchased during the de facto relationship, in his sole name. Throughout the course of the property proceeding, the applicant consistently sought a final property order that the respondent pay her a sum of money which would cause a distribution of the net property of the parties or either of them in the proportion of 65% to the applicant and 35% to the respondent.
On 11 January 2022 the respondent filed a Response to Initiating Application, seeking a final order that the proceeds of sale of the Town F property be distributed to him, and that the applicant pay his costs.
On 24 January 2022, following a contested interlocutory hearing, the applicant’s application for an injunction to restrain the respondent from disbursing the proceeds of sale of the Town F property was dismissed.[2]
[2] Arias & Grasso [2022] FedCFamC2F 47
On 1 September 2022, following a contested interlocutory hearing, the Court granted leave to the applicant to proceed out of time with her application for adjustment of interests in property.[3]
[3] Arias & Grasso (No 2) [2022] FedCFamC2F 1191
On 22 February 2023 the applicant filed an Amended Initiating Application seeking a final order that the respondent pay her $285,000, and that the parties discharge a mortgage over a property at Suburb M, and that otherwise the parties be solely entitled to, and liable for, property and liabilities currently in their possession or control.
On 9 March 2023 the respondent filed an Amended Response, seeking effectively the same orders sought in his Response filed on 11 January 2022 to dismiss the wife’s application.
The final hearing of the property matter proceeded over three days on 17 & 18 April and 23 June 2023. Both parties were represented at the hearing by Counsel instructed by a solicitor.
At the final hearing, the respondent relied on the High Court decision in Stanford & Stanford (2012) 247 CLR 108 and contended that the court would not be satisfied that it was just and equitable to alter the interests of the parties in property. He maintained his position that the application ought to be dismissed.
On 11 April 2024 the Court made final property orders and delivered reasons. In summary the Court determined that:
(1)The pool of property had an agreed net value of $1,135,204.
(2)It was just and equitable to make an order pursuant to s.90SM of the Family Law Act 1975 (Cth) (“the Act”) altering the interests of the parties in the property.
(3)The applicant’s contributions during the relationship were made in arduous circumstances due to family violence perpetrated upon her by the respondent.
(4)The applicant’s contributions following the breakdown of the relationship were significantly superior to those made by the respondent, due to the applicant caring for the child with no practical or child support provided by the respondent.
(5)An adjustment of 15% in favour of the respondent on account of the relevant matters in s.90SM(4)(e) of the Act was appropriate.
(6)It was just and equitable to make an order to re-distribute the property to achieve the applicant’s entitlement assessed at forty-five per centum (45%) and the respondent’s entitlement assessed at fifty-five per centum (55%).
The respondent was ordered to pay the applicant $110,038 within 42 days of the orders, failing which his property at Suburb H was to be sold and the payment to the wife made with interest.
It is common ground that the respondent has not made the payment to the applicant and that he has sold the Suburb H property.
DOCUMENTS READ
In support of her application for costs the applicant relies upon:
(a)Application in a Proceeding filed 9 May 2024.
(b)Her Affidavit filed 8 May 2024.
(c)Her Financial Statement filed 1 July 2024.
(d)Written Submissions filed 1 July 2024.
The respondent relies upon:
(a)His written submissions filed 24 June 2024, which include a summary of invoices and receipts relating to his legal costs, and a summary of his purported financial position including his current and future living expenses.
In addition to the documents identified above I have had regard to the following further documents:
(a)Costs Notice filed on 21 June 2023 for the applicant.
(b)Costs Notice filed on 22 June 2023 for the respondent.
(c)My reasons for decision in the substantive property matter.[4]
[4] Id.
Orders sought
The applicant seeks the following orders:
(1)On whichever date occurs later between:
(a)the settlement of the sale of the property G Street, Suburb H (Folio Identifier …); or
(b)within 14 days of the date of these Orders:
the Respondent must pay the Applicant’s costs of these proceedings fixed in the sum of $89,330.10 on the following basis:
(i)From 9 December 2021 to 8 April 2022 on a party/party basis in the sum of $11,942.50;
(ii)From 9 April 2022 to 11 April 2024 on an indemnity basis in the sum of $77,387.60.
(c)In addition, the Respondent must pay the Applicant’s costs of and incidental to this Application in a Proceeding pursuant to the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021, Schedule 1 (Item 3) fixed in the sum of $3,142.
In the alternative to Order 1:
(2)On whichever date occurs later between:
(a)the settlement of the sale of the property G Street, Suburb H (Folio Identifier …); or
(b)within 14 days of the date of these Orders:
the Respondent pay the Applicant’s costs of and incidental to these proceedings fixed in the sum of $69,976.60 on the following basis:
(i)Such costs are on a party/party basis;
(ii)Such costs to be payable from 9 April 2022 to 11 April 2024.
(c)In addition, the Respondent must pay the Applicant’s costs of and incidental to this Application in a Proceeding pursuant to the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021, Schedule 1 (Item 3) fixed in the sum of $3,142.
In the alternative to Order 1 or 2:
(3)That the Respondent pay the Applicant’s costs of these proceedings as Ordered by this Court.
The respondent seeks an order that the application be dismissed. Apart from the complaints he makes about certain findings, against which he did not appeal, the respondent’s primary submission is that he is an aged pensioner who is in poor health and that he would experience financial hardship if he was ordered to pay the costs of the applicant.
The costs application has been determined on the papers, with no appearances required by or on behalf of either party.
LEGAL PRINCIPLES
In the exercise of the court’s discretion whether to make an order for costs, the relevant starting position is Section 117(1) of the Act which provides:
(1) Subject to subsection (2)…each party to proceedings under this Act shall bear his or her own costs.
Section 117(2) of the Act provides:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
In a joint judgment of Stephen, Mason, Murphy, Aiken and Wilson JJ in the High Court of Australia in Penfold and Penfold [1980] HCA 4; (1980) 144 CLR 311 at p 315-316 their Honours observed:
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the subsection is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case"
The court is required to consider whether there are justifying circumstances to make an order as to costs. Section 117(2A) of the Act provides that when considering what order, if any, should be made under subsection (2) the court shall have regard to the following matters:
(a) the financial circumstances of each of the parties to the proceedings;
(b) 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;
(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;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) 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
(g) such other matters as the court considers relevant.
No one factor in s.117(2A) of the Act prevails over any other factor in that section. The weight to be attributed to the relevant factors is a matter for the court in the exercise of discretion.[5] There is nothing to prevent any factor in s.117(2) from being the sole foundation for a costs order.[6]
[5] Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157 at [24]; (2015) FLC 93-664.
[6] PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL [2005] FamCA158
WHAT ORDER IF ANY WILL BE MADE UNDER S.117(2) OF THE ACT
Section 117(1) of the Act expresses a general rule that each party bears their own costs in a proceeding under the Act however, as the plurality observed in Penfold and Penfold (supra), sub-s. (1) is expressed to be subject to sub-s. (2) and must yield if I find that in this particular case there are circumstances justifying the making of an order for costs.
The applicant bases her claim for costs on the respondent’s approach to the property proceeding, including his conduct in the proceeding, his lack of success, and his imprudent refusal of an offer of compromise. I will consider each factor in the subsections in s117(2A).
The financial circumstances of each party to the proceedings
The applicant is aged in her early 60’s and lives in a property at Suburb M which she owns jointly with her eldest daughter. The applicant is employed as a community worker, and she estimates that her weekly earnings are $1,614 before tax. The applicant shares her home with her two daughters, who are 32 and 23 years old respectively, and her eldest daughter’s partner who is 33 years old. The eldest daughter and her partner earn income and contribute $250.00 per week to household expenses for the benefit of the applicant. The applicant’s fixed weekly expenses amount to $719. She has $895 each week at her disposal to meet her discretionary expenditure.
The applicant’s property, including super, has a net value of about $327,854, after she pays her legal costs which remain outstanding in the sum of $41,964. She has not yet received the property settlement payment from the respondent, but when that payment is made the respondent will hold property with a net value of about $437,892.
The respondent did not file a Financial Statement in the costs proceeding. There is no current evidence of his financial circumstances. With the help of his adult son Mr T, the respondent has provided written submissions, which attach a schedule of his income and expenses.
The respondent is 79 years old. Until recently, he was living in the property he owned at Suburb H. He has recently sold the Suburb H property. The respondent submits that the proceeds of sale of the Suburb H property will be $600,000, although he provided no evidence of this. I accept that the respondent will have to pay agents fees and legal costs of sale. It is not clear from his submissions whether $600,000 represents the net proceeds of sale after payment of outgoings. Pursuant to the final property orders made on 11 April 2024, the respondent is required to pay the applicant $110,038 along with interest from the date of default.
Doing the best I can with the information before me, it appears that after the respondent has paid the applicant her entitlement pursuant to the final property orders, he will retain in the vicinity of $483,000 from the sale of the Suburb H property.
The respondent is in receipt of an aged pension. He is in poor health. At the property hearing I found that the respondent suffers from a range of health issues, and the applicant conceded that he has no capacity to work and earn an income. I accept that the respondent’s income is modest, and that his needs include his attendance at a specialist clinic for treatment of a medical condition, at a cost of $120.00 weekly.
The respondent must now arrange alternative accommodation for himself, and he submits that he will have to pay rent in the sum of about $685 each week. Due to his ill health and age, the respondent may require care in the short to medium term. There is no information before the court as to the likely cost of care for the respondent.
I consider that when the applicant receives the payment from the respondent pursuant to the final property orders, she will be in a superior financial position to him, because she is younger, has a job, and she has the benefit of sharing accommodation with her older daughter and sharing expenses.
Notwithstanding the relatively modest financial circumstances of the respondent, I am satisfied that the respondent has the capacity to meet an order for costs from the proceeds of the sale of the Suburb H property.
Whether the parties are in receipt of legal aid
It appears that neither party was in receipt of a grant of Legal Aid for the proceedings.
The conduct of the parties to the proceedings in relation to the proceedings
I accept the applicant’s submission that the respondent’s conduct in the proceeding is a relevant consideration.
Rule 6.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Family Law Rules”) casts a positive duty on each party to give full and frank disclosure of all information relevant to the proceeding in a timely manner. That duty of disclosure applies from the start of the proceeding and continues until the proceeding is finalised.[7] Furthermore, the overarching purpose of Family Law practice and procedure provisions is to facilitate the just resolution of disputes according to law as quickly, inexpensively, and efficiently as possible.[8] Parties are required to conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.[9]
[7] The Family Law Rules: Rule 6.01(2)
[8] S.190 Federal Circuit and Family Court of Australia Act 2021.
[9] S.191 Federal Circuit and Family Court of Australia Act 2021; The Family Law Rules: Rule 1.04(2)
The respondent expressly denied the applicant’s allegations of family violence and he was persistent in his attempts to shift responsibility for his violent conduct onto her. He expressly denied assaulting the applicant, even though he had been convicted of an assault upon her. In my view, the respondent’s conduct in the property proceeding has involved a significant departure from his obligations under the Federal Circuit and Family Court of Australia Act 2021 and the Family Law Rules. By failing to admit the truth of the allegations made by the applicant, the respondent has put the applicant to the additional expense of proof and prolonged the trial, which increased the costs of the applicant.
This factor weighs heavily in favour of the applicant’s application for costs.
Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
There is no evidence that the proceedings were necessitated by the failure of either party to comply with previous orders of the court. This subsection is not enlivened.
Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The concept of costs following an event in litigation in common law courts has no application under the Act, where the power to award costs is entirely statutory. The term “wholly unsuccessful” refers to a situation in which proceedings have been unsuccessful rather than an application.[10] It is the outcome of the proceedings which is important.
[10] Bant & Clayton (Costs) [2016] FamCAFC 35; (2016) 56 Fam LR 31.
I accept the applicant’s contention that the respondent was wholly unsuccessful in the proceedings. He cannot reasonably submit otherwise. In his Amended Response to Initiating Application filed on 9 March 2023 the respondent sought an order that the proceeds of the sale of his property at Town F be distributed to him and that the applicant pay his costs. At the trial the respondent sought to persuade the court that the application ought to be dismissed pursuant to s.90SM(3) of the Act, on the basis that it was not just and equitable to make a property settlement order.
Contrary to the position advanced by the respondent, the court concluded that it was just and equitable to make an order for property adjustment pursuant to s. 90SM of the Act and ordered that the respondent pay the applicant $110,038.
I am satisfied that the respondent was wholly unsuccessful in the proceedings.
Whether any party has made an offer in writing
On 7 April 2022 the respondent made an offer to settle in writing, which was not accepted by the applicant. The respondent’s offer was in the following terms:
(1)That he pays the applicant the sum of $50,000.
(2)That the application otherwise be dismissed.
(3)That each party bear their own costs of and incidental to the proceedings.
(4)That the parties execute a Deed releasing each other from any further claims as to property settlement and/or spouse maintenance.
On 8 April 2022 the applicant made an offer to settle in writing, which was not accepted by the respondent. The applicant’s offer was in the following terms:
(1)That within 7 days of orders being made, the respondent pay the applicant the sum of $100,000.
(2)That each party thereafter retain all assets and liabilities in their name.
(3)That each party pay their own costs.
In the respondent’s written submissions, he notes that between 12 April 2022 and 22 February 2024 he paid legal fees amounting to $104,516. Plainly, had the respondent accepted the applicant’s offer made on 8 April 2022 then he would have resolved the matter by paying the applicant less than the amount ordered, and he would have avoided the legal fees he subsequently incurred.
I consider that the respondent’s refusal to accept the offer of settlement was imprudent.
What order is “just” having regard to s.117(2A)?
In my opinion, considering the relevant matters in s.117 (2A) of the Act and the submissions of both parties, there are circumstances which justify the court making an order for costs in favour of the applicant.
The court must determine the way costs payable by the respondent to the applicant should be calculated, and the period which should be covered by the costs order.
The settled practice is that costs are calculated on a party and party basis: Colgate Palmolive Co & Anor v Cussons Pty Ltd (1993) 118 ALR 248 at 256-257 per Justice Shepherd.
The applicant’s primary position is that costs should be calculated on an indemnity basis, due to:
(a)The respondent having commenced and continued a case that there be no property adjustment in circumstances where the respondent properly advised should have known that he had no chance of success such that the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts;
(b)The denials of allegations of family violence knowing such denials to be false;
(c)The respondent’s particular misconduct causing loss of time to the court and to other parties;
(d)The denials or allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and
(e)The respondent’s ability to meet any order of the Court upon the sale of the Suburb H property.
In the Marriage of W P J Munday and H J Bowman [1997] 22 Fam LR 321, Holden CJ considered the principles which apply to an order for indemnity costs in a case involving proceedings to bring property proceedings out of time pursuant to s.79 of the Act. In the judgment, His Honour referred to the non-exhaustive list of circumstances set out by Sheppard J in Colgate Palmolive Co & Anor v Cussons Pty Ltd (supra) which have led to indemnity costs order in some other cases:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] 81 ALR 397.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra).
(c)Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v. Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v. Westpac Banking Corporation (unreported, Federal Court, 5 March 1993)).
(e) An imprudent refusal of an offer to compromise.[11]
[11] In the Marriage of Munday v Bowman (1997) 22 Fam LR 321, 322.
Holden CJ also referred to the decision of the Full Court in In the Marriage of Kohan (1992) 16 FamLR 245; (1993) FLC 92-340, and in particular the following passages:
The intent of s 117 (1) and 117 (2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the court may make such order as the court considers just. As we have pointed out the court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges…[Order 38 r 7][12]….makes provision for the allowance of additional amounts for complexity, difficulty, or novelty and special skill, knowledge or responsibility. Consequently, the court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind…Indemnity costs orders are still an exception in this and other jurisdictions.
…However it is fundamental to the exercise to that discretion in the Family Court that the judge should not only understand that such an order is a very great departure from the normal standard, but also the judge should know what the terms of the agreement are, to what extend it exceeds the parameters set by the scale and what its likely impact will be on the financial position of each of the parties. This impact is a relevant matter to which the trial judge should have had regard, when considering the financial circumstances of each of the parties to the proceedings under s 117 (2A) (a) , or perhaps even more, as a relevant matter under paragraph (g). The degree to which a costs agreement departs from the established norm and the actual financial significance of such a departure may itself be a reason for not ordering costs on an indemnity basis.
[12] Relevantly for the purpose of the present proceeding Schedule 1 Federal Circuit and Family Court of Australia (Division 2)(Family Law) Rules 2021.
The applicant has provided the court with a copy of the relevant costs agreements. While I am satisfied that there are circumstances which justify the court departing from the general provision in s.117(1) of the Act, and consider that there are aspects of the respondent’s conduct in this case which might properly sound in an order for indemnity costs, having regard to the financial circumstances of each of the parties to the proceedings, and the financial significance of departing from the settled practice, in particular the significance of such a departure on the respondent, given his relatively modest means and his age and state of health, I am not satisfied that an order for costs on an indemnity basis is justified.
The applicant claims costs on a party and party basis calculated in accordance with Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021, which is the appropriate scale.
The applicant claims costs in the sum of $44,417 from 24 December 2021 until 11 April 2024, calculated in accordance with the scale. That amount comprises costs of $36,613, disbursements of $2,552, and other items not covered by items in the schedule which total $5,252.
The rules and authorities make plain that the court can fix an amount for costs[13]. To fix costs avoids further costs and delay, consistent with the overarching purpose of family law practice and procedure as set out in s.190 of the Federal Circuit and Family Court of Australia Act 2021.
[13] Pascoe & Larsen (No 2) [2022] FedCFamC1A 126 at [27] – [28]
Having regard to the submissions of the applicant in relation to costs calculated in accordance with the scale, I consider that a logical, fair and reasonable approach is to allow the applicant’s party and party costs and disbursements from 24 December 2021 up to and including the date of judgment as claimed, apart from the following claims:
(a)Costs claimed in the sum of $8,608.50 for the interim hearings conducted on 17 January 2022 and 14 April 2022 because:
(i)The applicant was wholly unsuccessful in her interim application heard on 17 January 2022, to restrain the respondent from dealing with the proceeds of sale of the property at Town F.[14]
(ii)While the applicant was successful in obtaining a grant of leave to commence the proceedings nine years and 10 months out of time, in my view the respondent was entitled to defend the proceeding at that time by virtue of the provisions of s.44(5) of the Act. Section 44(5) of the Act provides that, subject to s.44(6) of the Act, a party to a de facto relationship may apply for orders under s.90SM only if the application is made within the standard application period, in this case two years after the end of the de facto relationship, unless both parties consent to the application.
(iii)In the exercise of discretion under s.44 of the Act, the court was required to balance various matters to avoid hardship to the applicant and hardship to the respondent, in a manner which gave due weight to the legislative intention that proceedings for alteration of property interests ought to be brought within two years after the end of the de facto relationship
(b)Items not otherwise covered in the schedule in the sum of $1,794 for the period before 1 September 2022, which is the date that leave was granted, for reasons provided in relation to the exclusion of costs claimed relating to the interim hearings on 17 January 2022 and 14 April 2022.
[14] Arias & Grasso [2022] FedCFamC2F 47
I will deduct $10,402 from the amount claimed by the applicant on a party and party basis. The respondent will be ordered to pay the applicant’s costs on a party and party basis fixed in the amount of $34,015.
In respect of the applicant’s claim for costs to be paid on the costs’ application, the respondent has been wholly unsuccessful in the cost application, and I consider it just to order that he pay the applicant’s costs on a party and party basis fixed in the sum of $3,142.
CONCLUSION
In my opinion it is just to order that the respondent pay the applicant’s costs in the substantive property proceedings on a party and party basis fixed in the sum of $34,015, and just to order that the respondent pay the applicant’s costs in the costs application fixed in the sum of $3,142 and I make orders accordingly.
I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Carty. Associate:
Dated: 18 December 2024
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