Bambury & Bambury (No 2)

Case [2021] FCCA 224

FEDERAL CIRCUIT COURT OF AUSTRALIA

Bambury & Bambury (No 2) [2021] FCCA 224

File number(s): MLC 4203 of 2018
Judgment of: HER HONOUR JUDGE C.E. KIRTON QC
Date of judgment: 12 February 2021
Catchwords: FAMILY LAW – COSTS – Wife’s application for costs against the Husband and the Interveners in relation to previous property proceedings – Wife seeks costs on a party-party basis or on a solicitor-client basis or on an indemnity basis in the alternative – discretion of Court to order costs on indemnity basis – matters justifying departure from proposition that each party shall bear his or her own costs – s.117(1) not paramount to s.117(2) – enunciation of relevant legal principles in relation to indemnity costs – whether Court’s discretion contingent upon preliminary onus or existence of any particular fact or circumstance – existence of circumstances not a condition precedent to the exercise of the discretion – section 117 confers a broad discretion upon the trial judge – where there are exceptional circumstances justifying a departure from party-party costs – where the Husband’s conduct during the proceedings was deliberately obstructive – substantial non-compliance with orders – interference with orders for sale of property – failure to provide full and frank disclosure – Wife’s inability to formulate Calderbank offer and engage in bone fide settlement negotiations – substantial delay caused by late joinder application by Interveners – Intervener’s precarious financial position not accepted – impecuniosity not a bar to a costs order against a party in any event – Wife put to significant expense to prosecute Application for alteration of property interests – costs order made in favour of the Wife against the Husband and Interveners – costs quantified on a solicitor-client basis – costs to be paid by Husband from proceeds of property settlement
Legislation:

 Family Law Act 1975 (Cth) ss 117(1), (2), (2A)(a),(c),(e),

(f),(g)

Federal Circuit Court Rules 2001 (Cth), Pt 1, Sch 1, r 21.02(2)(a)

Cases cited:

Colgate-Palmolive v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 22
Cross & Beaumont [2008] FamCAFC 68; (2008) 39 Fam LR 389
Danks &McCabe [2017] FamCAFC 41
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish   [2005] FamCA 158; (2005) 33 Fam LR 123
Jensen & Jensen [1982] FamCA 57; (1982) FLC 91-263
Johnson & Johnson [1999] FamCA 959; (2000) FLC 93-040
Kohan & Kohan [1992] FamCA 116; (1993) FLC 92-340
Limousin & Limousin (Costs) [2007] FamCA 1178; [2007] 38 FamLR 478
Marinko & Marinko [1983] FamCA 1; (1983) FLC 91-307
Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157; (2015) FLC 93-664
Munday v Bowman  (1997) FLC 92-784
Nada & Nettle (Costs) [2014] FamCAFC 207; (2014) FLC 93-612
Penfold v Penfold [1980] HCA 4; (1980) 144 CLR 311

Yunghanns v Yunghanns [2000] FamCA 681; (2000) FLC 93-029

Number of paragraphs: 117
Date of last submission/s: 31 August 2020
Date of hearing: 31 August 2020
Place: Melbourne
Solicitor for the…

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AGLC
Bambury and Bambury (No 2) [2021] FCCA 224
Case
[2021] FCCA 224
Decision Date

CaseChat Overview and Summary

In *Bambury & Bambury (No 2)*, Her Honour Judge C.E. Kirton QC of the Federal Circuit and Family Court of Australia considered an application by the Wife for costs against the Husband and Interveners following previous property proceedings. The Wife sought costs on a party-party, solicitor-client, or indemnity basis. The dispute centred on the conduct of the parties during the property proceedings and the subsequent costs applications.

The court was required to determine whether costs orders should be made against the Husband and the Interveners in favour of the Wife, and if so, on what basis: party-party, solicitor-client, or indemnity. Additionally, the court needed to consider whether the Wife should pay the Interveners' costs. The court also had to assess the quantum of any costs awarded.

Her Honour found that circumstances justified making costs orders against both the Husband and the Interveners in favour of the Wife, pursuant to section 117(2) of the *Family Law Act 1975* (Cth). The Husband's conduct, including deliberate obstruction, substantial non-compliance with orders, interference with property sale orders, and failure to provide full and frank disclosure, led to significant unnecessary costs for the Wife. While not egregious enough for an indemnity order, this conduct warranted a departure from the usual party-party basis to a solicitor-client basis. Similarly, the Interveners' conduct, relating to their joinder application and its impact on the Wife's ability to negotiate settlement, also justified a solicitor-client costs order against them. The court dismissed the Interveners' application for costs against the Wife.

The court ordered the Husband to pay 70% of the Wife's costs of the proceeding and the costs hearing on a solicitor-client basis, totalling $57,585.82 for the proceeding and $2,482.90 for the hearing. The Interveners were ordered to pay 30% of the Wife's costs of the proceeding and the costs hearing on a solicitor-client basis, totalling $29,279.64 for the proceeding and $1,064.10 for the hearing. The Husband was to pay his portion of the Wife's costs from the proceeds of a property sale. The Interveners' application for costs against the Wife was dismissed.

Orders

Orders of the court

ORDER MADE BY:

HER HONOUR JUDGE C.E. KIRTON QC

DATE OF ORDER:

12 FEBRUARY 2021

THE COURT ORDERS THAT:

1. Order 3(c) of the Orders made on 28 May 2018 be discharged so that the proceeds of sale of the real property situate at and known as E Street, Suburb F in the State of Victoria (E Street, Suburb F Property) may be paid by the Applicant Wife’s (Wife) Solicitors in accordance with Order 1 of the Orders made on 22 July 2020 and Order 3 of these Orders.

2. Within 7 days of the date of these Orders the Respondent Husband (Husband) pay the Wife’s Costs of and incidental to the Amended Initiating Application fixed in the sum of $60,068.72 (Wife’s Costs).

3. The Husband is to pay the Wife’s Costs pursuant to Order 2 herein from the proceeds of the sale of the E Street, Suburb F Property in the sum of $102,569.76 paid to the Husband pursuant to Order 1(c) of the Orders made on 22 July 2020 and Order 1 of these Orders.

4. Within 7 days of the date of these Orders the Interveners pay the Wife’s costs of and incidental to the Response to an Application in a Case filed 12 October 2018 fixed in the sum of $30,343.34.

5. The Interveners’ application for costs against the Wife is dismissed.

6. All extant applications are otherwise dismissed.

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 under the pseudonym Bambury & Bambury (No 2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Reasons for Judgment were delivered on 22 July 2020 (Judgment) after a trial that proceeded over five days on 26, 27 and 28 February 2020 and 2 and 3 March 2020. Final Orders were made on 22 July 2020 (Final Orders), save that the proceeding was adjourned to 31 August 2020 for the hearing of any costs applications made by the parties. On 31 August 2020 the Court heard applications made by the Wife and the Interveners for costs and Judgment in relation to the applications for costs was reserved (Costs Hearing). These are the Reasons for Judgment in relation to the costs applications made at the Costs Hearing. ISSUES FOR DETERMINATION The issues for determination in these proceedings are: (a)Whether the Husband should pay:(i)70% of the Wife’s costs of the proceeding and if so, whether those costs should be paid on a party/party, solicitor and own client or on an indemnity basis;(ii)The Wife’s costs of the Costs Hearing in the sum of $3,547.(b)Whether the Interveners should pay:(i)30 % of the Wife’s costs of the proceeding and if so, whether those costs should be paid on a party/party, solicitor and own client or on an indemnity basis;(ii)The Wife’s costs of the Costs Hearing in the sum of $3,547.(c)Whether the Wife should pay the Interveners Costs of the proceeding in the sum of $16,700 or such other sum as the Court determines. SYNOPSIS I have determined that:(a)The Husband should pay:(i)70% of the Wife’s costs of the proceeding on a solicitor and own client basis fixed in the sum of $57,585.82.(ii)70% of the Wife’s costs of the Costs Hearing fixed in the sum of $2,482.90.(b)The Interveners should pay:(i)30% of the Wife’s costs of the proceeding on a solicitor and own client basis fixed in the sum of $29,279.64.(ii)30% of the Wife’s costs of the Costs Hearing fixed in the sum of $1,064.10.(c)The Interveners’ application for the Wife to pay the Interveners’ costs of the proceeding in the sum of $16,700 be dismissed.BACKGROUND The history of the parties’ relationship and the circumstances leading to the purchase and eventual sale of the property situated at and known as E Street, Suburb F in the State of Victoria (E Street, Suburb F Property) were set out in paragraphs 7 to 13 of the Judgment. I will therefore not repeat those details, save where they are relevant in these Reasons for Judgment.PROCEDURAL HISTORY The procedural history of his matter was set out in detail in paragraphs 14 to 33 of the Judgment. It may be relevantly summarised for the current costs applications as follows. The Wife commenced this proceeding by filing an Initiating Application, Affidavit and Financial Statement in this Court on 19 April 2018. The Husband was served with the Wife’s Initiating Application, Affidavit and Financial Statement on 3 May 2018.[1] The first return date of this proceeding was in the Duty List on 28 May 2018. [1] Affidavit of Service, filed 22.5.18. The Husband has been self-represented throughout this proceeding. On 21 August 2018 a Conciliation Conference was held before a Registrar (First Conciliation Conference). The Wife attended with her solicitor and the Husband also attended. At the First Conciliation Conference it was established that the Husband had failed to comply with the Orders made by consent on 28 May 2018 (28 May 2018 Orders) to file his responding material and to make discovery within 21 days.[2] The Registrar ordered that the Husband pay the Wife’s costs of $1,650 that were thrown away as a consequence of the Wife’s attendance at the First Conciliation Conference and the Husband’s failure to comply with the 28 May 2018 Orders. Those costs remained unpaid by the Husband until he paid the costs during the trial.[3] [2] 28 May 2018 Orders, Consent Orders 1 and 2(a) to (d). [3] Judgment at [37(a)].

Ratio Decidendi

Legal Principle Established

Nevertheless I do not accept the Wife’s submission that the Wife’s legal expenses were doubled as a result of the joinder of the Interveners. I do accept however that there would have been some increase in the Wife’s legal expenses. CONSIDERATION AND CONCLUSION The first question to be addressed is whether a costs order should be made at all against either the Husband, the Interveners or the Wife. In relation to the Husband I consider that pursuant to s.117(2) of the Act there are circumstances that justify making a costs order against the Husband in favour of the Wife. In considering what order should be made against the Husband I have taken into account the matters discussed above in relation to ss.117(2A)(a), 117(2A)(c), 117(2A)(f) and 117(2A)(g) of the Act. In relation to the Interveners I consider that pursuant to s.117(2) of the Act there are circumstances that justify making a costs order against the Interveners in favour of the Wife. In considering what order should be made against the Interveners I have taken into account the matters discussed above in relation to ss.117(2A)(a), 117(2A)(c), 117(2A)(e) and 117(2A)(g) of the Act. In relation to the Wife, for the reasons discussed above in relation to the Interveners and s.117(2A)(e) of the Act, I do not consider that there are circumstances pursuant to s.117(2) that justify making a costs order against the Wife in favour of the Interveners. Therefore there is a basis for making a costs order against the Husband and also the Interveners in favour of the Wife. That then leads to the second question, namely, how should those costs be calculated, on the usual party/party basis, on a solicitor and own client basis or on an indemnity basis as sought by the Wife? I am satisfied that in the circumstances of this case there should be a departure from the ordinary rule that where the Court orders the costs of one party to be paid by another party, the order is for the payment is on a party/party basis. In relation to the Husband this is primarily as a result of the Husband’s behaviour and conduct throughout the proceeding which has been discussed in relation to s.117(2A)(c) of the Act. Counsel for the Interveners described the Husband’s behaviour as being “an overarching problem caused by (the Husband) rather than the Interveners”.[121] However I do not consider the Husband’s behaviour so egregious that it falls into the category of cases that would attract an indemnity costs order, as considered by Sheppard J in Colgate–Palmolive and summarised by Holden J in Mundy v Bowman.[122] The Husband’s behaviour has nevertheless caused significant unnecessary additional costs to the Wife. In such circumstances I am satisfied that an Order for solicitor and own client costs is appropriate in the circumstances rather than an order for party/party costs. [121] Transcript (31.8.20) P17:L29-30.[122] (1997) FLC 92-784 at 84, 660. In relation to the Interveners this is as a result of the matters discussed in relation to s.117(2A)(c), s.117(2A)(e) and s.117(2A)(g) of the Act. I do not consider the Interveners’ conduct to falls into the category of cases that would attract an indemnity costs order, as considered by Sheppard J in Colgate–Palmolive and summarised by Holden J in Mundy v Bowman.[123] In such circumstances I am satisfied that an Order for solicitor and own client costs is appropriate in the circumstances.[123] (1997) FLC 92-784 at 84, 660.