Bambury & Bambury (No 2)
[2021] FCCA 224
•12 February 2021
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 311Yunghanns 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 Applicant: Bardo Lawyers Counsel for the Applicant: Mr Henwood For the Respondent: The Respondent appeared in person Solicitor for the Interveners: Delios West & Co Counsel for the Interveners: Mr Skerlj ORDERS
MLC 4203 of 2018 BETWEEN: MR BAMBURY
Applicant
AND: MS BAMBURY
Respondent
MS C BAMBURY AND MR D BAMBURY (BY HIS LITIGATION GUARDIAN MS C BAMBURY)
Interveners
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).
REASONS FOR JUDGMENT
HER HONOUR JUDGE C.E KIRTON QC:
INTRODUCTION
This is an application by the Applicant (Wife) for costs orders arising as a result of the Initiating Application filed by the Wife on 19 April 2018 seeking final property orders against the Respondent (Husband). The Wife also seeks costs orders for her costs of and incidental to responding to the Application in a Case, filed on 1 October 2018 by the Husband’s mother, Ms C Bambury (Intervener) and father, Mr D Bambury (together referred to as the Interveners). The Wife seeks costs to be paid on a party/party basis or alternatively an indemnity basis against both the Husband and the Interveners. The Interveners also seek costs orders against the Wife.
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)].
On 22 August 2018, the day after the First Conciliation Conference, the Husband filed a Response, Affidavit and a Financial Statement. These documents were witnessed by a solicitor. When the Husband gave evidence the Husband said that this solicitor had prepared the documents which he filed on 22 August 2018.[4] The Husband did not file any further documents in the proceeding.
[4] Judgment at [21].
On 1 October 2018 the Interveners filed an Application in a Case seeking orders that they be granted leave to intervene in the proceeding (Application in a Case). The Application in a Case was made returnable on 19 October 2018, being the date that the proceeding was first listed for final hearing
The Wife filed an Amended Initiating Application on 5 October 2018 (Amended Initiating Application). On 12 October 2018 the Wife filed a Response to the Application in a Case (Response to Application in a Case) seeking orders that:
(a)The Application in a Case be dismissed.
(b)The Interveners pay the Applicant’s costs of and incidental to the Application in a Case.
(c)Any other order deemed appropriate by the Court.
On 19 October 2018 Orders were made giving the Interveners leave to intervene in the proceeding (19 October 2018 Orders). The Intervener was also appointed litigation guardian for Mr D Bambury. The proceeding was relisted for final hearing on 26 February 2020 (Final Hearing) with an estimated hearing time of 2 days. The parties were also ordered to attend a Conciliation Conference on 15 January 2019 (Second Conciliation Conference) and Orders were made for the filing of material and the payment of fees for the Second Conciliation Conference and for discovery.[5] The costs of the parties for the day were also reserved.[6]
[5] 19 October 2018 Orders, Orders 5, 6, 7 and 8.
[6] 19 October 2018 Orders, Order 22.
On 19 November 2018 the Interveners filed a Statement of Claim pursuant to the 19 October 2018 Orders (Statement of Claim).[7] On 19 December 2018 the Wife filed a Defence to the Statement of Claim pursuant to the 19 October 2018 Orders (Defence). The Husband did not file a defence as required by the 19 October 2018 Orders.[8]
[7] 19 October 2018 Orders, Order 5.
[8] 19 October 2018 Orders, Order 6.
On 21 February 2020 the Wife filed a Further Amended Initiating Application (Further Amended Initiating Application) seeking orders that included an order that the Husband pay the Wife’s costs of and incidental to the Amended Initiating Application.
The Final Hearing took place on 26, 27 and 28 February 2020 and 2 and 3 March 2020. The Wife and the Interveners were represented by Counsel and the Husband was self-represented. Judgment was then reserved.
At the Costs Hearing the Wife and the Interveners were again represented by Counsel and the Husband was self-represented. The Husband did not seek to make any submissions in relation to either the Wife’s cost applications or the Interveners’ costs application.[9]
WIFE’S APPLICATION
[9] Transcript (31.8.20) P9:9-12
The Wife relied upon the Wife’s Written Submissions in Relation to Costs, filed on 7 August 2020, which were filed in accordance with the Orders made on 22 July 2020[10] (Wife’s Submissions) and submissions made by Counsel at the Costs Hearing.
[10] Orders 22 July 2020, Order 14.
In the Wife’s Submissions the Wife claimed that she had incurred the total sum of $91,230.91 of costs between 13 October 2017, being the date when the Wife retained her solicitors and 22 July 2020 when Judgment was delivered. The costs were incurred as follows:[11]
[11] Wife’s Submissions at [21].
FEE DESCRIPTION REFERENCE FEE Solicitor fees Invoice 9930[12] $825.46 Solicitor fees Invoice 16026[13] $54,305.45 Counsel’s fees on 19.10.18 Fee slip 579981[14] $3,500 Counsel’s fees on 16.1.19 Fee slip 585457[15] $1,100 Counsel’s fees on final hearing Fee slip 812399[16] $31,500 TOTAL $91,230.91 [12] Wife’s Submission Annexure 2.
[13] Wife’s Submission Annexure 7
[14] Wife’s Submission Annexure 3.
[15] Wife’s Submission Annexure 4.
[16] Wife’s Submission Annexures 5 and 6.
These costs were claimed in accordance with the costs agreement between the Wife and her solicitors, dated 24 October 2017 (Wife’s Costs Agreement).[17]
[17] Wife’s Submissions at [22] and Annexure 1.
During the Costs Hearing the Solicitor for the Wife prepared a revised memorandum of costs which was submitted to the Court (Revised Memorandum of Costs)[18] The Revised Memorandum of Costs removed Invoice 9930 in the sum of $825.46 from the claim. It also removed specified items from Invoice 16026 totalling $3,540. These items were set out in a table in the Revised Memorandum of Costs and they related to the divorce application filed by the Wife and fees in relation to caveats lodged by the Wife in relation to the E Street, Suburb F Property. The removal of these items from Invoice 16026 reduced the amount claimed for this invoice to $50,765.45.[19] The Wife’s solicitors also submitted to the Court a copy of Invoice 16026 with the deleted costs highlighted. This invoice indicated that costs were being sought from 9 March 2018 and not the earlier date of 13 October 2017.
[18] Transcript P23:L4-43.
[19] Revised Memorandum of Costs at [2]-[3].
The total amount claimed by the Wife from 9 March 2018 until 22 July 2020 was thereby reduced to $86,865.45, calculated as follows:[20]
[20] Revised Memorandum of Costs at [4].
FEE DESCRIPTION REFERENCE FEE Solicitor fees Invoice 16026 $50,765.45 Counsel’s fees on 19.10.18 Fee slip 579981 $3,500 Counsel’s fees on 16.1.19 Fee slip 585457 $1,100 Counsel’s fees on final hearing Fee slip 812399 $31,500 TOTAL $86,865.45 ORDERS THE WIFE SEEKS AGAINST THE HUSBAND
The Wife seeks an order that that the Husband pay her solicitor and own client costs associated with the conduct of the property settlement proceedings in the sum of $57,585.82, calculated as follows:[21]
[21] Wife’s Submissions at [23] as amended by the Revised Memorandum of Costs; Transcript (31.8.20) P6:L10- 11.
DESCRIPTION DATES AMOUNTS 70% Solicitors fee: Invoice 16026 9 March 2018 to 22 July 2020 $35,535.82 70% of Fee slip 812399 Final hearing $22,050 TOTAL $57,585.82
At the Costs Hearing Counsel for the Wife acknowledged that apportioning 70% of the solicitor and own client costs of the relevant solicitor’s costs and Counsel’s fees to the Husband was somewhat arbitrary, however it was submitted that this was intended to take into account the Wife’s costs of defending the Interveners’ claim associated with the Application in a Case.[22]
[22] Transcript (31.8.20) P5:L45-P6:L8.
The Wife therefore seeks that, within 7 days of the date of the orders, the Husband pay the Wife’s costs of and incidental to the Amended Initiating Application as follows
(a)Costs fixed in the sum of $57,585.82; or in the alternative
(b)To a fixed sum, assessed on an indemnity basis.[23]
[23] Wife’s Submissions at [26] as amended by the Revised Memorandum of Costs.
In the alternative the Wife seeks her costs against the Husband on a party/party basis as agreed and failing agreement as assessed.[24]
[24] Wife’s Submissions at [24].
The Wife also seeks an order that the Husband pay her costs of and incidental to the Costs Hearing in the sum of $3,547.[25] This was calculated in accordance with Part 1 of Schedule 1 of the Federal Circuit Court Rules 2001 (Cth) as follows:[26]
·Item 3 Interim or summary hearing – as a discrete event $1,867
·Item 13 Daily hearing fee - (b) half day $1,120
·Item 12 Advocacy loading - 50% of item 13 $560
______
Total $3,547
[25] Wife’s Submissions at [25].
[26] Transcript (31.8.20) P6:L23-44.
ORDERS THE WIFE SEEKS AGAINST THE INTERVENERS
The Wife also seeks an order that the Interveners pay her solicitor and own client costs associated with the conduct of the property settlement proceedings in the sum of $29,279.64, calculated as follows:[27]
[27] Wife’s Submissions at [27] as amended by the Revised Memorandum of Costs.
DESCRIPTION DATES AMOUNTS 30% Solicitors fee: Invoice 16026 9 March 2018 to 22 July 2020 $15,229.64 Fee slip 579981 19 October 2018 $3,500 Fee slip 585457 16 January 2019 $1,100 30% of Fee slip 812399 Final hearing $9,450 TOTAL $29,279.64
At the Costs Hearing Counsel for the Wife acknowledged that the apportionment of 30% of the solicitor and own client costs in Invoice 16026 and 30% of the fees in Counsel’s Fee slip 579981 to the Interveners, was a somewhat arbitrary amount, however it was submitted that this was intended to take into account the Wife’s costs of defending the Interveners’ claim associated with the Application in a Case.[28] Counsel submitted that the full amount of the claim of $3,500 for Counsel’s fees on 19 October 2018 represented the costs thrown way by reason the Interveners’ joinder application being made on the first day of the original trial date. The full amount of the claim for $1,100 for Counsel’s fees on 19 January 2019 arose as a result of the Second Conciliation Conference, which was ordered as a result of the joinder of the Interveners to the proceeding.
[28] Transcript (31.8.20) P6:L46-P8:L20.
The Wife therefore seeks that, within 7 days of the date of these Orders, the Interveners pay the Wife’s costs of and incidental to the Amended Initiating Application as follows:
(a)Costs fixed in the sum of $29,279.64; or in the alternative
(b)To a fixed sum, assessed on an indemnity basis.[29]
[29] Wife’s Submissions at [30] as amended by the Revised Memorandum of Costs.
In the alternative the Wife seeks her costs against the Interveners on a party/party basis as agreed and failing agreement as assessed.[30]
[30] Wife’s Submissions at [28].
The Wife also seeks an order that the Interveners pay her costs of and incidental to the Costs Hearing in the sum of $3,547.[31]
INTERVENER’S APPLICATION
[31] Wife’s Submissions at [29] and Transcript (31.8.20) P6:L23-44.
The Interveners relied upon the Interveners’ Written Submissions in Relation to Costs, filed on 21 August 2020 which were filed in accordance with the Orders made on 22 July 2020[32] (Interveners’ Submissions) and submissions made by Counsel at the Costs Hearing.
[32] Orders 22 July 2020, Order 15.
The Interveners opposed any costs orders sought by the Wife against them.
The Interveners also opposed the securing of any costs order that is sought by the Wife over the Husband’s property award in the sum of $102,569.76.[33]
[33] Final Orders, Order 1(c).
The Interveners sought an Order for costs from the Wife in the sum of $16,700 or such other amount as the Court determines.[34] The Interveners contended that the Wife’s fundamental proposition that the funds advanced to assist with the acquisition or improvement of the E Street, Suburb F Property were from the Husband and the Wife’s own savings, proved incorrect at trial. The ultimate findings of the Court were contrary to the assertions of the Wife and were consistent with the Interveners contentions. The Interveners contended that the Wife conceded in the course of cross-examination that she had no knowledge as to the source of the funds applied to the acquisition of the E Street, Suburb F Property. The Interveners were put to considerable costs in obtaining banking and other financial records, collating these records and preparing affidavit material to establish matters put in issue by the Wife.[35]
[34] Interveners’ Submissions at [2(c)] and [38]-[43].
[35] Interveners’ Submissions at [39]-[41].
The Interveners contend that their costs in the proceeding totalled $69,635.63. They also contend that the Wife’s position caused the proceeding to be unnecessarily prolonged, as a result of putting the Interveners to their proofs.[36] Therefore the Interveners claim costs against the Wife in the sum of $16,700 calculated as follows:[37]
·Two days of trial proceedings unnecessarily incurred $11,000
·30% of legal costs leading to the final hearing $5,700
_______
$16,700[36] Interveners’ Submissions at [38] and [42].
[37] Interveners’ Submissions at [43].
At the Costs Hearing Counsel for the Interveners advised the Court that he was instructed that, in the event that the Court was minded to make a costs order against the Interveners in favour of the Wife, the order should be such that costs should be determined by agreement and in default of agreement to be taxed.[38]
[38] Transcript (31.8.20) P24:L11-40.
Having summarised the respective positions of the Wife and the Interveners, I now turn to the relevant legislation that that Court must take into consideration.
RELEVANT LEGISLATION
The general rule in s.117(1) of the Family Law Act 1975 (Cth) (Act) that each party to proceedings shall bear their own costs, is subject to s.117(2).
Section 117(1) of the Act provides:
Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC 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) and (5) 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.
Section 117(2A) of the Act is relevant for the purposes of this proceeding. Section 117(2A) of the Act provides:
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(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.
RELEVANT LEGAL PRINCIPLES
The construction to be given to s.117 of the Act and the inter-relationship of s.117(1) and (2) was considered by the High Court in Penfold vPenfold[39] (Penfold). In the joint judgment of Stephen, Mason, Murphy, Aiken and Wilson JJ in Penfold it was said:
12. 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. (at p315).
13. 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" (at p315).
14. Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised […].[40]
(Emphasis added)
[39] [1980] HCA 4; (1980) 144 CLR 311.
[40] [1980] HCA 4 at [12]-[14].
The High Court therefore made it clear in Penfold that s.117(2A) requires a finding of “justifying circumstances as an essential preliminary to the making of an order”. Beyond this, there is no “additional or special onus” on the applicant for costs which requires the Court to make a preliminary finding that special or exceptional circumstances exist before making an order for costs: Jensen &Jensen.[41]
[41] [1982] FamCA 57; (1982) FLC 91-263.
No one factor under s.117(2A) prevails over any other factor. It is a matter of weight that is accorded to each of the relevant factors in the trial judge’s discretion: Medlon & Medlon (No. 6) (Indemnity Costs).[42]
[42] [2015] FamCAFC 157 at [24]; (2015) FLC 93-664.
It is not necessary for each of the factors listed in s.117(2A) to be met in order for the Court to make a costs order. In Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish[43] the Full Court of the Family Court said when referring to s.117(2A):
130. A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.[44]
[43] [2005] FamCA 158; (2005) 33 Fam LR 123.
[44] [2005] FamCA 158; (2005) 33 Fam LR 123 at [130].
The ordinary rule is that where the Court orders the costs of one party to be paid by another party, the order is for the payment of those costs is on a party and party basis. The Court has the discretion to award costs on an indemnity basis in appropriate cases.[45] However in Kohan & Kohan[46] the Full Court said:
The intent of s117(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. […] 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. See Degmam v. Wright (No. 2) (supra); Wentworth v. Rogers (No. 5) (1986) 6 NSWLR 534; Hobartville Stud v. Union Insurance Co. (1991) 25 NSWLR at 368 to 370.
Indemnity costs orders are still an exception in this and other jurisdictions.[47]
(Emphasis added)
[45] Kohan & Kohan [1992] FamCA 116; (1993) FLC 92-340.
[46] [1992] FamCA 116; (1993) FLC 92-340.
[47] [1992] FamCA 116 at p.9; Kohan & Kohan (1993) FLC 92-340.
In Limousin & Limousin (Costs)[48] (Limousin) the Family Court reviewed the authorities in relation to indemnity costs. The Court referred to the judgment of Sheppard J[49] in the Federal Court in Colgate-Palmolive v Cussons Pty Ltd[50] (Colgate-Palmolive). Sheppard J said in Colgate-Palmolive after referring to earlier authorities:
2.The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis [...]
3.This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of Court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it […]
4.In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v Barnes (39 CH D at 141) said the Court had a general and discretionary power to award costs as between solicitor and client “as and when the justice of the case might so require”. Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ as he was in Preston v Preston ((1982) 1 All ER at 58) namely there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo, “The categories in which the discretion may be exercised are not closed”. Davies J expressed (at 6) similar views in Ragata.[51]
(Emphasis added)
[48] [2007] FamCA 1178; [2007] 38 FamLR 478.
[49] [2007] FamCA 1178 at [42]; [2007] 38 FamLR 478.
[50] [1993] FCA 536; (1993) 46 FCR 225.
[51] [1993] FCA 536 at [24]; (1993) 46 FCR 225.
In Limousin the Full Court also referred to Yunghanns v Yunghanns[52] a later decision of the Full Court, in which it was said:
31. […]
It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.[53]
[52] [2000] FamCA 681; (2000) FLC 93-029.
[53] [2000] FamCA 681 at 31; (2000) FLC 93-029 at 87, 471.
In Colgate-Palmolive Sheppard J provided examples of circumstances that might warrant the exercise of the discretion to award indemnity costs. These were summarised by Holden CJ in Munday v Bowman[54] as follows:
(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 the 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 or an offer to compromise.[55]
[54] (1997) FLC 92-784 at 84, 660. See also Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157; and Danks & McCabe [2017] FamCAFC 41; (2017) FLC 93-767.
[55] (1997) FLC 92-784 at 84, 660.
The discretion to make an order for indemnity costs remains with the judge notwithstanding the existence of circumstance that may warrant the making of such an order. In Munday v Bowman[56] Holden CJ referred to the following passage from the judgment of Sheppard J in Colgate-Palmolive:
It remains to say that the existence of the particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis does not mean that judges are necessarily obliged to exercise the discretion to make such an order. The costs are always in the discretion of the trial judge.[57]
[56] (1997) FLC 92-784. See also Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157; and Danks &McCabe [2017] FamCAFC 41; (2017) FLC 93-767.
[57] Munday v Bowman (1997) FLC 92-784,660-661.
I turn to consider the relevant matters pursuant to s.117(2A) of the Act.
SECTION 117(2A) CONSIDERATIONS - HUSBAND
(a) The financial circumstances of each of the parties to the proceedings
At the Final Hearing the Wife relied on an Amended Financial Statement filed on 3 February 2020 (Wife’s Amended Financial Statement). The Husband relied on a Financial Statement filed on 22 August 2018 (Husband’s Financial Statement) and did not update his financial statement prior to the Final Hearing.
The financial circumstances of the Wife and the Husband were set out in the Wife’s Amended Financial Statement, the Husband’s Financial Statement, the Judgment and in particular paragraphs 174 to 184 of the Judgment. As a result of the Final Orders the Husband is to receive the sum of $102,569.76 from the proceeds of sale of the E Street, Suburb F Property.[58] Pursuant to the Final Orders the Husband is to pay the Interveners $176,700 and a further amount of $9,247.93 for pre-judgment interest.[59] Pursuant to the Final Orders the Wife is to receive the sum of $133,673.37 from the proceeds of sale of the E Street, Suburb F Property.[60]
[58] Final Orders, Order 1(c).
[59] Final Orders, Orders 9 and 10.
[60] Final Orders, Order 1(b).
The Wife has remained unemployed since the conclusion of these proceedings. The Wife is also the primary carer of the children of the marriage.[61] The Husband has not been employed since April 2018 there is little prospect that the Husband might be liable in the future to provide for the children.[62] The Husband lives with the Interveners and has done so all his life. The Husband does not have any recurring expenses, apart from those associated with the registration of his motor vehicle.[63]
[61] Wife’s Submissions at [32].
[62] Judgment at [200].
[63] Judgment at [228].
The Full Court of the Family Court in Marinko & Marinko[64] stated:
[The trial judge] referred, properly in our view, to Kelly and Kelly (No. 2) […] in support of the view that the disparity in financial circumstances between the parties is a matter which, alone can justify an order for costs.[65]
[64] [1983] FamCA 1; (1983) FLC 91-307.
[65] [1983] FamCA 1 at [49]; (1983) FLC 91-307.
Although the Husband remains unemployed, impecuniosity is not a bar to a costs order being made against him as outlined in Cross & Beaumont.[66]
[66] [2008] FamCAFC 68 at [60]; (2008) 39 Fam LR 389
Impecuniosity does not necessarily prevent a costs order being made. In Nada & Nettle (Costs)[67] the Full Court held:
That a party is impecunious, even indigent, is not a bar to the making of a costs order if the Court is otherwise of the opinion that such an order ought to be made.[68]
(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
[67] [2014] FamCAFC 207; (2014) FLC 93-612.
[68] [2014] FamCAFC 207 at [11]; (2014) FLC 93-612.
As the Court is advised, neither the Wife nor the Interveners were in receipt of assistance by way of legal aid. The Husband was self-represented.
(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
During the proceeding the Husband continuously failed to comply with Court Orders. There were three areas where the Husband substantially failed to comply with Orders of the Court. The first was providing discovery and producing documents. The second was in relation to the sale of the E Street, Suburb F Property and the third was failing to particularise his claim.
Failure to Comply with Disclosure Orders & Obligations
As discussed above the Husband failed to comply with the 28 May 2018 Orders to file his responding material and to make discovery within 21 days.[69] As a result of the Husband’s failure to comply with his discovery obligations in accordance with the 28 May 2018 Orders, on 10 August 2018 the Wife’s solicitors were required to issue subpoenas to produce documents in the name of the Husband held by the ANZ Banking Group and the Commonwealth Bank of Australia. The Wife was thereby put to additional legal costs.
[69] 28 May 2018 Orders, Consent Orders 1 and 2(a) to (d).
At the First Conciliation Conference the Husband had still not filed his responding material or made discovery in compliance with the 28 May 2018 Orders. 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. The Husband did not pay those costs until 28 February 2020 during the Final Hearing, when the issue of the Husband’s failure to pay these costs was raised.[70] At the Final Hearing the Husband told the Court that the reason that he had not provided the discoverable documents was because his solicitor had not fulfilled her obligations and that it was her fault.[71] As noted in the Judgment, the Husband has been self-represented throughout this proceeding.[72]
[70] Judgment at [37(a)].
[71] Transcript (28.2.20), P124:L33-P125:L2.
[72] Judgment at [21].
Pursuant to the 19 October 2018 Orders the parties were ordered to make disclosure pursuant to the Federal Circuit Court Rules 2001 (Cth) and in particular to make disclosure of:
(a) Any and all tax returns since the financial year ending June 2009;
(b)All bank accounts through which any share trading was undertaken by any parties since 30 June 2009 or into which or out of which funds were transferred in connection with share trading.[73]
[73] 19 October 2018 Orders, Order 7.
The Conciliation Conference Report from the Second Conciliation Conference noted that:
[The] Applicant maintains that Respondent’s discovery has been wholly inadequate. Fix reserve Applicant’s costs thrown away in the sum of $1,200 for determination by the trial judge.[74]
[74] Judgment at [29].
When the Husband was cross-examined by Counsel for the Wife in relation to the $29,700 he said that he had received from the Intervener, the Husband was not able to demonstrate when he received the money or what the money was spent on. The Husband gave evidence that he had thrown out a box of receipts after the sale of the E Street, Suburb F Property.[75] The E Street, Suburb F Property was sold pursuant to the 28 May 2018 Orders and settlement took place on 1 July 2019. Therefore the Husband deliberately disposed of discoverable receipts during the proceeding in breach of his disclosure obligations.
[75] Judgment at [138] and [146].
During cross-examination by Counsel for the Wife the Husband revealed that he had certain documents in his possession and Counsel for the Wife called for production of those documents. On the morning of 28 February 2020 the Husband attended Court with what Counsel for the Wife described as a “duffel bag” from which the Husband produced a large quantity of documents. As a consequence of the Husband’s production of those documents, the proceeding was adjourned until 2 March 2020 to enable Counsel for the Wife and Counsel for the Interveners to review the documents.[76] This effectively wasted the whole of the hearing day on 28 February 2020 and therefore caused unnecessary additional costs to both the Wife and the Interveners. The documents produced by the Husband on 28 February 2020 were used during the trial. The Wife’s Submissions contend that some of these documents would have assisted the parties in reaching a resolution earlier thereby avoiding the costs associated with proceeding to the final hearing.[77]
[76] Judgment at [33].
[77] Wife’s Submissions at [45].
The Husband was at all times in possession of documents that could have assisted all the parties in reaching a resolution of the proceeding. The Husband’s failure to provide these documents prevented the Wife in formulating a Calderbank offer to the Husband and/or the Interveners.[78]
[78] Wife’s Submissions at [55].
The failure to provide full and frank disclosure in proceedings is an example of conduct which can lead to a costs order being made against a party: Johnson & Johnson.[79]
[79] [1999] FamCA 959 at [23] and [24]; (2000) FLC 93-040 at 87, 625-87, 626.
Failure to Comply with Orders for Sale of E Street, Suburb F Property
I turn now to consider the Husband’s failure to comply with Orders in relation to the sale of the E Street, Suburb F Property. The 28 May 2018 Orders provided that within 120 days the E Street, Suburb F Property be sold at public auction and the net proceeds be held in the Wife’s solicitor’s trust account. Pending completion of the sale the Husband had the sole right to occupy the E Street, Suburb F Property. Liberty was reserved to either party to apply with respect to the terms and conditions of the sale.[80] The 28 May 2018 Orders included a Notation that:
The parties both agree that the [E Street, Suburb F Property] requires renovations to be completed prior to the [E Street, Suburb F Property] being sold at public auction.
[80] 28 May 2018 Orders, Orders 3 to 5.
The 19 October 2018 Orders varied the 28 May 2018 Orders in relation to the sale of the E Street, Suburb F Property and gave the Wife the sole conduct of the sale of the E Street, Suburb F Property, as the Husband had failed to comply with the 28 May 2018 Orders in relation to the sale of the E Street, Suburb F Property. The 19 October 2018 Orders also provided that:[81]
(a)The sale of the E Street, Suburb F Property take place by public auction to be held on or before 15 December 2018.
(b)The selling agent was to be X Real Estate (Real Estate Agent) and it was noted that the Husband and the Wife had that day signed an exclusive authority with the Real Estate Agent.
(c)The Husband’s sole right to occupy the E Street, Suburb F Property pending completion of the sale was discharged.
[81] 19 October 2018 Orders, Orders 9 and 13.
The Wife’s Affidavit filed on 3 February 2020 (Wife’s Trial Affidavit)[82] set out the history of the Husband’s interference in the sale of E Street, Suburb F Property, from the time the 19 October 2018 Orders were made until the E Street, Suburb F Property was eventually sold for $250,000 on 7 June 2019, with settlement taking place on 1 July 2019.[83] This behaviour included the Husband:
(a)Alleging in an email to the Wife’s Solicitors on 10 December 2018 that the E Street, Suburb F Property was being deliberately undervalued by the Real Estate Agent.[84]
(b)Emailing the Wife’s Solicitors on 12 December 2018 and proposing to engage a different estate agent and requesting that an independent valuation of the E Street, Suburb F Property be undertaken.[85]
(c)Sending an email to the Wife’s Solicitors on 10 January 2019 stating that more time was needed to re-apply to the relevant authority to obtain a building permit. The Husband also stated that he would not pay for the advertising for the sale of the E Street, Suburb F Property as he was experiencing financial issues.[86]
(d)Sending an email to the Wife’s Solicitors on 28 February 2018 stating that he had instructed the Real Estate Agent to postpone the sale of the E Street, Suburb F Property.[87]
(e)Sending an email to the Wife’s Solicitors on 5 March 2019 stating that he did not believe that the Wife had the sole conduct of the sale of the E Street, Suburb F Property in accordance with Order 9(c) of the 19 October 2019 Orders. [88]
[82] Wife’s Trial Affidavit sworn and filed 3.2.20.
[83] Wife’s Trial Affidavit at [28] to [38] and Annexures “G” to “N”.
[84] Wife’s Trial Affidavit at [30] and Annexure “H”.
[85] Wife’s Trial Affidavit at [31] and Annexure “I”.
[86] Wife’s Trial Affidavit at [32] and Annexure “J”.
[87] Wife’s Trial Affidavit at [34] and Annexure “K”.
[88] Wife’s Trial Affidavit at [35] and Annexure “L”.
By reason of the Husband’s conduct the Wife’s solicitor was required to send many additional emails to the Real Estate Agent and also to the Husband and the Mother’s legal fees were thereby unnecessarily increased.[89]
[89] Wife’s Trial Affidavit at [38]; Wife’s Submissions at [40].
Failure to Particularise Response or File Defence
On 22 August 2018 the Husband filed a Response in which he sought to be excused from further particularising the orders he sought pending completion of the sale of the E Street, Suburb F Property. Once the E Street, Suburb F Property was sold and the quantum of the proceeds of sale were known to all the parties, the Husband failed to particularise such orders so that the Wife (or the Court) would be aware of the orders sought by the Husband.
The Husband’s failure to particularise orders sought by him in an amended response placed the Wife at disadvantage in relation to negotiating a resolution of the matter. This was the case, as the Response was the only document that the Wife could refer to in relation to the Husband’s position and it failed to particularise the orders that the Husband sought. The Husband’s failure to particularise the Response, in addition to failing to make full and frank discovery, contributed to the Wife being unable to formulate an a Calderbank offer to the Husband and/or the Interveners.[90]
[90] Wife’s Submissions at [55].
Further the Husband did not file a defence to the Statement of Claim filed by the Interveners on 19 November 2018. The 19 October 2018 Orders provided that the Husband and the Wife were file and serve their respective defences within 30 days of service of the Statement of Claim. As a result of the Husband’s failure to file a defence there was no clear articulation of the Husband’s response to the Statement of Claim.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
As discussed above, as result of the Final Orders the Husband is to receive the sum of $102,569.76 from the proceeds of sale of the E Street, Suburb F Property.[91] Pursuant to the Final Orders the Husband is to pay the Interveners $176,700 and a further amount of $9,247.93 for pre-judgment interest.[92] Pursuant to the Final Orders the Wife is to receive the sum of $133,673.37 from the proceeds of sale of the E Street, Suburb F Property.[93]
[91] Final Orders, Order 1(c).
[92] Final Orders, Order
[93] Final Orders, Order 1(b).
Therefore in the proceeding between the Husband and the Wife the Husband was not wholly unsuccessful.
(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
The Wife did not make an offer to settle the proceeding in writing to either the Husband or the Interveners. The Wife contends that the matters discussed in relation to s.117(2A)(c) of the Act prevented the Wife the opportunity of formulating a Calderbank offer to the Husband and/or the Interveners. I accept the Wife’s Submissions in relation to this matter.
(g) Such other matters as the court considers relevant.
I consider relevant the Husband’s attitude towards the Wife and her legal advisors and to the Court and his obligations to the Court. The Husband’s attitude became glaringly apparent during the Final Hearing. As stated in the Judgment:
46. The Husband was self-represented during this proceeding. As noted above, at the commencement of the hearing when the Wife was giving evidence and being cross-examined, the Husband attempted to persistently interrupt the proceeding to tell the Wife and the Court what he perceived to be the real situation. The Court was able to encourage the Husband to ultimately desist from this behaviour without requiring the Husband’s removal from the Courtroom.
47.The Husband was cross-examined at some length and in some considerable detail. He swore, abused and threated Counsel and instructing solicitors, abused the Court, expressed various conspiracy and anti-establishment views and exhibited signs of possible mental illness. He was a most unimpressive witness.
48. In many areas, the Court has found the Husband to have been substantially untruthful. In other respects, the Court has accepted the Husband’s evidence […][94]
[94] Judgment at [46]-[48].
As a result of the Husband’s attitude towards the Wife and his attitude towards his obligations to the Court, he failed to comply with orders of the Court and his lack of disclosure hindered the parties’ progress at any negotiations or having any real prospect of resolving the matter. The Husband’s failure to provide adequate discovery, to engage in bone fide discussions or to comply with Court orders placed the Wife in a position of accumulating significant legal fees in what would otherwise be a straightforward case.[95] In comparison the Husband paid only a modest fee to the solicitor who assisted him with the preparation of the Response, Affidavit and Financial Statement which the Husband filed on 23 August 2018. The Husband otherwise has incurred no legal costs other than the costs of $1,650 that he was ordered to pay to the Wife by the Registrar at the First Conciliation Conference.
[95] Wife’s Submissions at [57].
I also take into consideration the modest size of the asset pool in contrast to the Wife’s legal fees. The net assets of the parties are $245,710.57 exclusive of superannuation.[96] The Wife was put to significant legal expense as a result of the Husband’s conduct during the proceedings. Pursuant to the Final Orders the Wife is to receive the sum of $133,673.37 from the proceeds of sale of the E Street, Suburb F Property.[97] The Wife’s total legal costs on a solicitor and own client basis claimed as costs pursuant to the Revised Memorandum are $86,865.45. In addition the Wife incurred the costs of the Costs Hearing which are claimed in the sum of $3,547. The Wife will therefore receive less than $43,260.92 after legal costs are deducted, as the Wife has incurred additional legal costs of $825.46 in Invoice 9930[98] and $3,500 for costs not being claimed in Invoice 16026.[99]
[96] Judgment at [174].
[97] Final Orders, Order 1(b).
[98] Wife’s Submissions Annexure 2.
[99] Wife’s Submissions Annexure 7.
I will now consider s.117(2A) of the Act in relation to the Interveners.
SECTION 117(2A) CONSIDERATIONS - INTERVENERS
(a) The financial circumstances of each of the parties to the proceedings
The Interveners contended that their financial position was precarious. It was submitted that they owned their own home but did not have the additional funds to meet the costs of this proceeding and will need to borrow funds to meet these costs.[100] The Interveners further submitted that their own costs in the proceeding amounted to $69,635.63.[101] The Interveners did not file an affidavit for the Costs Hearing to provide evidence to support these submissions.
[100] Interveners’ Submissions at [19].
[101] Interveners’ Submissions at [20].
The Interveners also submitted that they were pensioners and at the end of their working lives.[102] At the Final Hearing the Interveners relied on two affidavits, these being: an Affidavit of the Intervener, filed on 1 October 2018 (Intervener’s September 2018 Affidavit); and an Affidavit filed on 18 February 2020 (Intervener’s February 2020 Affidavit).[103] In neither of these affidavits did the Intervener set out in detail the financial circumstances of the Interveners. In the Intervener’s September 2018 Affidavit the Intervener deposed that:
12. Both Mr D Bambury and I are reliant on a means tested pension. […]These amounts barely cover our living expenses.[104]
[…]
35. The moneys lent to the Husband and the Wife comprised of our life savings.[105]
[102] Interveners’ Submissions at [21(a)].
[103] Judgment at [40].
[104] Interveners’ September 2018 Affidavit at [12].
[105] Interveners’ September 2018 Affidavit at [35].
In the Intervener’s February 2020 Affidavit the Intervener deposed that:
7. I maintain that following our retirement in 2001 Mr D Bambury and I became reliant on a means-tested pension.[106]
[106] Intervener’s February 2020 Affidavit at [7].
In the Judgment I found the Intervener’s evidence not to have been truthful in relation to her employment history whilst the Wife was living with the Interveners.[107] Specifically the Judgment said:
The Court accepts the Wife’s evidence that during the period when the Wife was living with the Interveners, from when the Wife arrived in Australia in 2007 until separation in December 2016, the Intervener was working and receiving cash payments. The Wife provided specific evidence in relation to where the Intervener was “working on the black money”[108] during this period. The Court was not persuaded by the Intervener’s evidence when she was cross-examined by Counsel for the Wife in relation to her work history during this period.[109] A review of the Cheque Account statements from 17 December 2008 to 29 December 201[110] reveals numerous deposits for which the Intervener was unable to credibly account for under cross-examination. I do not accept that all these deposits were winnings from gambling on poker machines. It is evident that during some periods of these statements the Intervener regularly attending gaming venues and was on occasions spending a concerning amount of money.[111] The quantum of money that was being spent by the Intervener was indicative of the Intervener having a source of income other than the income tested pension.
[107] Judgment at [50(a)].
[108] Transcript P38:9-15.
[109] Transcript P287:L38-P289:L7 and Exhibit A5.
[110] Exhibit A5.
[111] For example on 7 December 2009 the sum of $830 was withdrawn in five cashcard transactions at the P Hotel.
Therefore on the evidence before the Court I am unable to accept the submission that the Interveners are in a precarious financial position. The evidence at the Final Hearing was that the Intervener worked from 2007 for cash payments until at the time of the separation of the Husband and the Wife, whilst also claiming an income tested pension.
It was also submitted that Mr D Bambury is suffering from serious age-related degenerative conditions and that it is quite foreseeable that he will need to expend funds to meet his increasing medical needs and quite possibly nursing care away from his home.[112] The Interveners did not file an affidavit for the Costs Hearing to provide evidence to support this submission. Further, in neither of the Intervener’s September 2018 Affidavit or the Intervener’s February 2020 Affidavit did the Intervener depose to such circumstances. The Intervener’s September 2018 Affidavit referred to Mr D Bambury becoming quite forgetful and to a recent hospital admission for delirium and gradual cognitive decline. A report from Y Hospital dated 19 September 2018 referred only to an admission as an inpatient from 13 September 2018 to 19 September 2018 for management of delirium and gradual cognitive decline and an intention to follow Mr D Bambury up as an outpatient.[113]
[112] Interveners’ Submissions at [21(b)]
[113] Interveners’ September 2018 Affidavit at [7] and Annexure “NB-1”.
In relation to the Wife’s financial circumstances, I refer to the discussion above in relation to the Husband and s.117(2A)(a).
I otherwise rely upon the principles in Marinko & Marinko,[114] Cross & Beaumont[115] and Nada & Nettle (Costs),[116] which were discussed in relation to s.117(2A)(a) of the Act in relation to the Husband.
(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
[114] [1983] FamCA 1; (1983) FLC 91-307.
[115] [2008] FamCAFC 68 at [60].
[116] [2014] FamCAFC 207; (2014) FLC 93-612.
As the Court is advised, neither the Wife nor the Interveners were in receipt of assistance by way of legal aid. The Husband was self-represented.
(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
The Interveners filed a statement of claim which alleged the prior agreement of the Wife to an offer of financial assistance from the Interveners as discussed in paragraphs 96 to 98 of the Judgment.
There was no evidence adduced during the Final Hearing to support this pleading and I refer to paragraphs 104 to 112 of the Judgment.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The Interveners contend that the Wife’s fundamental position that the funds advanced from the Husband’s own savings was proved incorrect. Furthermore the Wife also denied that any of the funds advanced were provided by the Interveners. The ultimate findings of the Court were contrary to the assertion of the Wife and were consistent with the Interveners contentions. The Interveners submit that in the course of cross-examination the Wife in effect conceded that she had no knowledge as to the source of the funds applied to the acquisition of the E Street, Suburb F Property. The Interveners therefore submit that they were put to their proofs unnecessarily by the Wife and should be entitled to costs in the sum of $16,700.[117]
[117] Interveners’ Submissions at [38]-[43].
This submission must fail as the Interveners were wholly unsuccessful against the Wife for the reasons enumerated in paragraphs 95 to 125 and paragraphs 148 and 149 of the Judgment.
(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
As the Court is advised, there was no relevant written offers.
(g) Such other matters as the court considers relevant.
The Interveners did not file the Application in a Case seeking orders that they be granted leave to intervene in the proceeding until 1 October 2018, 18 days before the first final hearing date of 19 October 2018. The Wife had commenced the proceeding on 19 April 2018, some five and a half months earlier.
The Wife submits that the delay arising from the adjournment of the first final hearing on 19 October 2020 for a period of approximately one year and three months, resulted in the Wife incurring double the expense of normal litigation.[118] The Interveners describe this submission as “baseless” and contend that the timing of the Interveners’ Application for joinder was measured and appropriate.[119]
[118] Wife’s Submissions at [81]-[82].
[119] Interveners’ Submission at [33].
The Interveners submit that they were content to await the possibility of the Husband and the Wife finding common ground at least as to the characterisation and treatment of the funds advanced by Interveners before they sought to intervene.[120] However significant delay in these proceedings was caused by the Interveners’ late application to join the proceeding. The Interveners and the Husband live in the same home and the Intervener was aware of the proceeding from its commencement. After the Wife commenced this proceeding on 19 April 2018 the proceeding came before the Court in the duty list on 28 May 2018.
[120] Interveners’ Submissions at [8].
In my view the Interveners should have made an application at an earlier stage to become parties to the proceeding. The joinder application was a significant reason for the matter not proceeding as a final hearing on the first hearing date on 19 October 2018. After the commencement of the proceeding it was soon apparent that the Husband was unrepresented and not actively participating in the proceeding, as he did not file his Response and other responding material until 22 August 2018, four months after the commencement of the proceeding and after the First Conciliation Conference.
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.
The third question is how should the costs be calculated? In my view given the modest asset pool, and the respective financial position of the parties, the parties should not have to spend further money on this proceeding by being required to undergo a taxation of costs. It is open to the Court to fix a specific sum for costs pursuant to r.21.02(2)(a) of the Federal Circuit Court Rules 2001 (Cth). Therefore I have decided to quantify the costs instead of ordering the taxation of the costs. The Wife’s Solicitor has filed the Wife’s Submissions, annexed to which is the Wife’s Costs Agreement and the relevant tax invoices. During the Costs Hearing items which could not reasonably be charged were removed from the amount claimed by the Wife, when I questioned them as costs and the Revised Memorandum of Costs was produced by the Wife’s Solicitor. The tax invoices otherwise substantiate the amounts claimed as the Wife’s solicitor and own client costs. As discussed under the heading ‘The Wife’s Application’, the Wife claims the sum of $86,865.45 for the period 9 March 2018 to 22 July 2020.
The fourth question is how should the costs be apportioned between the Husband and the Interveners? The Solicitor for the Wife has apportioned the costs on the basis of 70% to the Husband and 30% to the Interveners. Counsel for the Wife submitted that the apportionment of 30% to the Interveners was somewhat arbitrary, however contended that the amount of 30% was intended to take into account the Wife’s costs of defending the Interveners’ claim associated with the Application in a Case.[124] The Interveners did not make a submission that any other percentage should be adopted by the Court. Therefore I will adopt the percentage of 30% for the Intervener’s proportion of the costs, on the basis that the Wife’s Solicitor, who has had the conduct of this matter will have a thorough understanding of the work undertaken on behalf of the Wife throughout the proceeding in relation to the Interveners’ case.
[124] Transcript (31.8.20) P5:L454, P6:L8.
Therefore for the period 9 March 2018 to 22 July 2020:
(a)The Husband will be ordered to pay the Wife’s costs of $57,585.82.
(b)The Interveners will be ordered to pay the Wife’s costs of $29,279.64.
The Wife also seeks the costs of and incidental to the Costs Hearing in the total sum of $3,547 against each of the Husband and the Interveners. These costs are calculated in accordance with Part 1 of Schedule 1 of the Federal Circuit Court Rules 2001 (Cth). The Costs Hearing is a part of the proceeding and therefore I intend to apportion the costs for the Costs Hearing on the same basis as the period from 9 March 2018 to 22 July 2020. Therefore 70% of the costs are to be paid by the Husband and 30% by the Interveners. These costs are calculated as follows:
(a)The Husband’s 70% of the Costs Hearing is $2,482.90.
(b)The Interveners’ 30% of the Costs hearing is $1,064.10.
I will add the amount of the costs to be paid to the Wife for the Costs Hearing to the amount the Husband and the Intervener are to pay to the Wife for the costs for the period from 9 March 2018 to 22 July 2020. Therefore the following Orders will be made:
(a)The Husband pay the Wife’s costs of and incidental to the Amended Initiating Application fixed in the sum of $60,068.72; and
(b)The Interveners pay the Wife’s costs of and incidental to the Response to the Application in a Case filed on 12 October 2018 fixed in the sum of $30,343.34.
I also intend to make an Order that the costs that the Husband is to pay to the Wife are to be paid from the proceeds of his property settlement pursuant to the Final Orders. This is to ensure that the Wife is not required to pay further legal costs attempting to recover the costs ordered from the Husband, given the Husband’s previous history of non-compliance with Court orders.
Orders will be made accordingly.
I certify that the preceding one hundred and seventeen (117) numbered paragraphs are a true copy of the Reasons for Judgment of Her Honour Judge C.E. Kirton QC. Associate:
Dated: 12 February 2021
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