Bakalov & Bakalov (No 2) - [2022] FedCFamC1F 30

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Bakalov & Bakalov (No 2) [2022] FedCFamC1F 30

File number(s): BRC 13229 of 2020

Judgment of: WILSON J

Date of judgment: 2 February 2022

Catchwords: FAMILY LAW – ARBITRATION – indemnity costs sought – ordered.

Legislation: Family Law Act 1975 (Cth) s 117, 117(2A)(c) and (f)

Cases cited:
Fitzgerald & Fish (2005) 33 Fam LR 123

Fountain Selected Meats (Sale) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 364

In the Marriage of Hogan (1986) 10 Fam LR 681

J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (No 2) [1993] FCA 70

Bakalov & Bakalov [2021] FedCFamC1F 161

Phillips & Hansford [2020] FamCAFC 28

Division: Division 1 First Instance

Number of paragraphs: 19

Date of last submissions: 24 November 2021

Place: Melbourne

Solicitor for the Applicant: Cherry Family Lawyers

Solicitor for the Respondent: Allan R De Brenni & Company
ORDERS

BRC 13229 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MS BAKALOV

Applicant

AND:
MR BAKALOV

Respondent

ORDER MADE BY:

WILSON J

DATE OF ORDER:

2 FEBRUARY 2022

THE COURT ORDERS THAT:
1.On or before 4:00pm on 9 February 2022 the husband must pay the wife’s indemnity costs of $20,067.66 from the sum held in the trust account of D Solicitors Trust Account.

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 Bakalov & Bakalov is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J

These reasons address the wife’s application for indemnity costs consequent upon the husband’s unsuccessful application to review the arbitral award.[1] As these reasons explain, in my view indemnity costs should be ordered.
[1] Bakalov & Bakalov [2021] FedCFamC1F 161.
The wife has sought an order that the husband pay her $20,067.66 on account of indemnity costs made up of $16,767.66 calculated in the manner set out in paragraph 3 of the wife’s 10 November 2021 affidavit together with $3,300 calculated in the manner set out in paragraph 7 of the same affidavit.
Pursuant to the arbitral award, the parties’ property interests were altered as to 55% in favour of the wife and as to 45% in favour of the husband.
On behalf of the wife, it was submitted that –
(a)the principle reposed in s 117(1)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] FedCFamC1F 30
Decision Date

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, Ms Bakalov brought an application against Mr Bakalov for indemnity costs following his unsuccessful application to review the arbitral award made in their property settlement proceedings. The application was heard by Wilson J who ultimately ordered that Mr Bakalov pay the wife’s indemnity costs of $20,067.66. The legal issues the court was required to decide were whether the wife’s application for indemnity costs was justified under the Family Law Act 1975 (Cth) and, if so, what sum was appropriate. The court found that the wife’s application for indemnity costs was justified on two bases: firstly, the husband’s wholly unsuccessful application to review the arbitral award, and secondly, his resistance to setting aside $25,000 in trust pending the outcome of the wife’s costs application. The court held that the husband’s application to review the arbitral award was doomed from the outset as he failed to properly articulate the basis on which he sought relief and made no effort to analyse the relevant provisions of the Family Law Act. Additionally, the husband’s resistance to setting aside $25,000 in trust was ultimately futile. The court found that the husband should have known that he had no chance of success and, accordingly, ordered that he pay the wife’s indemnity costs of $20,067.66. The sum was deemed to be reasonable and proportionate to the wife’s expenditure in resisting the husband’s unsuccessful review application and in dealing with the application to quarantine the sum of $25,000 in trust. The court ordered that the husband pay the wife’s indemnity costs of $20,067.66 by 4:00pm on 9 February 2022 from the sum held in the trust account of D Solicitors Trust Account.

Orders