Artinos & Artinos (No 4)

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Artinos & Artinos (No 4) [2023] FedCFamC1F 314

File number(s): MLC 4132 of 2020
Judgment of: STRUM J
Date of judgment: 26 April 2023
Catchwords:

FAMILY LAW – COSTS – Where the wife sought costs thrown away in relation to an interim application – Where the interim application was premature and not ready to proceed – Where appearances would have been required in any event – Costs application dismissed.

FAMILY LAW – COSTS – Costs initially sought otherwise than at scale – Scale costs to be particularised to enable comparison – No basis for costs other than at scale.

Legislation:

Family Law Act 1975 (Cth) s 117(1), (2), (2A)

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67

Federal Circuit and Family Court (Family Law) Rules 2021 rr 30.1, 7.25, 7.26,

Federal Circuit and Family Court of Australia, Central Practice Direction – Family Law Case Management, 28 November 2022 para 5.18(b)
Cases cited:

Artinos & Artinos (No 2) [2023] FedCFamC1F 37

Collins&Collins (1985) FLC 91-603; [1985] FamCA 15

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

Luadaka v Luadaka (1998) FLC 92-830; [1998] FamCA 1520

Munday v Bowman (1997) FLC 92-784

Parke&TheEstateoftheLateAParke (2016) FLC 93-748; [2016] FamCAFC 248

Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4

Prantage & Prantage (2013) FLC 93-544; [2013] FamCAFC 105

Division: Division 1 First Instance
Number of paragraphs: 47
Date of last submission/s: 28 March 2023
Date of hearing Determined on the papers in Chambers
Place: Melbourne
Solicitor for the Applicant: Blackwood Family Law
Solicitor for the Respondent: Belleli King & Associates

ORDERS

MLC 4132 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS ARTINOS

Applicant
AND:

MR ARTINOS

Respondent

order made by:

STRUM J

DATE OF ORDER:

26 April 2023

THE COURT ORDERS THAT:

1.The applicant’s application for costs of and incidental to the hearing on 1 February 2023 be 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).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 the pseudonym Artinos & Artinos has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

STRUM J:

INTRODUCTION

  1. This is an application by the applicant wife, Ms Artinos, for costs to be payable by the first respondent husband,…

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Details
Case
[2023] FedCFamC1F 314
Decision Date

CaseChat Overview and Summary

In the matter of Artinos & Artinos (No 4), the applicant, Ms Artinos, sought costs from the first respondent, Mr Artinos, for the proceedings held on 1 February 2023. This was in relation to his application filed on 19 December 2022, seeking leave to adduce adversarial expert evidence and the joinder of additional respondents. The trial of these proceedings was initially scheduled to commence on 1 February 2023, but was adjourned due to the late availability of the single expert's final report and the application for joinder of third parties. The wife filed a response to the husband's applications and sought various other orders, including a further partial property settlement.

The legal issues that the court had to decide included whether the wife was entitled to costs under s 117(2) of the Family Law Act 1975 (Cth) and if so, whether the costs should be ordered on a party/party, solicitor/client, or indemnity basis. The wife argued that she was entitled to costs for the appearances of Senior Counsel and junior counsel, the preparation of submissions, and the attendance of their instructing solicitor. However, the husband contended that the wife's costs application should be dismissed.

The court considered the circumstances of the case and the reasons for the adjournment of the trial. The court noted that the adjournment was due to factors beyond the control of the parties, such as the late release of the single expert's final report and the application for joinder of third parties. The court also observed that neither party had filed trial affidavits at the time of the hearing. The court held that there were no sufficient circumstances that would justify it departing from s 117(1) and making an order for costs under s 117(2). The court further noted that the wife's first costs submissions did not explicitly specify the basis upon which the costs sought were calculated. The court considered it fundamental to the exercise of its discretion to order costs on an indemnity basis that the Judge should know what the terms of the agreement are, to what extent it exceeds the parameters set by the scale, and what its likely impact will be on the financial position of each of the parties.

In conclusion, the court dismissed the wife's costs application. The court found that the circumstances of the case did not warrant an order for costs under s 117(2) and that the wife had failed to specify the basis upon which the costs sought were calculated. The court further noted that the submissions may yet prove relevant on the adjourned date.

Orders

Orders of the court

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Background

Background to the litigation

This is an application by the applicant wife, Ms Artinos, for costs to be payable by the first respondent husband, Mr Artinos, in a fixed sum, of and incidental to the hearing on 1 February 2023 of his Application in a Proceeding filed 19 December 2022.BACKGROUND The trial of these proceedings was listed to commence on 1 February 2023. Orders were made by consent on 14 June 2022 in relation to valuations, as follows:1.Forthwith, the First Respondent (the husband) do all things necessary and sign all documents required to instruct the accountants for [F Pty Ltd] to prepare financial statements and taxation returns for the financial year ending 30 June 2022.2.Forthwith, the husband do all things necessary and sign all documents required to instruct the accountants to prepare financial statements and taxation returns for the financial year ending 30 June 2022 for the following entities:2.1[C Pty Ltd];2.2[G Pty Ltd];2.3[V Pty Ltd];2.4[Artinos Family Investment Trust];2.5[Artinos Family Trust];2.6[GG Trust];2.7[E Trust];2.8[HH Trust];2.9[Z Trust];2.10[JJ Trust]; and [KK Trust]. (the [C Group] entities)3.On or before 30 August 2022, the husband provide to the single expert, [Mr H] of [T Accountants] (the single expert):3.1Copies of taxation returns and financial statements for [F Pty Ltd].3.2Copies of taxation returns and financial statements for the [C Group] entities.4.The husband, in a timely manner, comply with all requests by the single expert for the supply of documentation to enable him to complete his report. On 19 December 2022, the husband filed an Application in a Proceeding seeking leave to adduce adversarial expert evidence from Mr CC, an accountant with DD Accountants, who prepared a report dated 13 December 2022, and from Mr EE, a valuer with FF Services, whose report is dated 8 December 2022. The husband lodged for filing on 21 December 2022 a second Application in a Proceeding, inter alia, seeking that further respondents be added to the proceedings and the final hearing be vacated. That application was sealed by the Court on 13 January 2023. The court vacation commenced on 24 December 2022 and concluded on 6 January 2023. The wife filed a single Response to an Application in a Proceeding on 27 January 2023, responding to both of the husband’s applications and seeking various other orders, including for a further partial property settlement. As this matter was in my docket and listed for trial before me, it was appropriate that these interlocutory issues be heard and determined by me. I was on leave until 31 January 2023. Accordingly, the applications and response were listed for hearing on the first day of the scheduled trial, being the day after I returned from leave. It became apparent that day that the trial would be unable to commence, including by reason of the relevant single expert’s final report only having been released to the parties on 17 January 2023 and the application for joinder of third parties. Further, neither party had filed trial affidavits. In relation to that report, a notation in the orders made by consent on 14 June 2022 stated that the parties expected the final report to be available to them in October 2022, in time for a mediation. Clearly, that was overly optimistic on their part.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Neither party raises any other matters as being relevant for my consideration.CONCLUSION The costs sought by the wife are in respect of the appearances on 1 February 2023 of Senior Counsel and junior counsel, as well as the preparation of submissions and the attendance of their instructing solicitor. As I have observed above, attendances would have been required in any event. True it is that, but for husband’s the application for leave to adduce adversarial evidence, she might have elected to retain only junior counsel to appear that day. However, I refer to and repeat the observations of the Full Court in Kohan v Kohan set out at [38], above. Further, as I have observed above, the submissions may yet prove relevant on the adjourned date. Taking all the matters above into account, I am of the opinion that there are no sufficient circumstances that would justify me departing from s 117(1) and making an order for costs under s 117(2). Accordingly, the wife’s costs application shall be dismissed. However, there is one further matter which requires comment. For reasons which are not readily apparent, the wife’s first costs submissions, filed 6 March 2023, did not explicitly specify the basis upon which the costs sought were calculated. A scale of costs is prescribed by the Rules from time to time. The law recognises three bases of costs orders: party/party, solicitor/client and indemnity costs (although the distinction between the latter two bases appears to have become increasingly opaque over time). As the Full Court further said in Kohan v Kohan at 79,611:We are of the opinion that in an appropriate case, the Court has a discretion to order costs on an indemnity basis and that such costs may be ordered, where they have been incurred under a costs agreement which departs from the usual scale of costs. However, it is fundamental to the exercise of 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 that the Judge should know what the terms of the agreement are, to what extent 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 s117(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. The wife, at the outset, should have specified the basis upon which the costs she sought were calculated and, if not at scale, provided a comparison between the costs sought by her and those costs at scale on a party/party basis. However, this was only done when required by me upon receipt of her submissions filed 6 March 2023.

Ratio Decidendi

Legal Principle Established

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