Berrell & Tily (No 4)

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Berrell & Tily (No 4) [2023] FedCFamC1F 241

File number(s): SYC 3428 of 2018
Judgment of: CHRISTIE J
Date of judgment: 5 April 2023
Catchwords: FAMILY LAW – COSTS – Where the Court heard a 90RD threshold hearing – Where the Court declared that a de facto relationship did not exist – Where the respondent to that application now seeks costs – Where there were previous proceedings in the Supreme Court of NSW – Where the matter was transferred back to the Supreme Court of NSW – Where the applicant in the substantive proceedings was wholly unsuccessful – Where the applicant abandoned his relief on the final day of hearing – Where it is appropriate for indemnity costs to be ordered.  
Legislation:

Family Law Act 1975 (Cth) s 117

Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) r 10.17 Part 12.6
Cases cited:

Berrell & Tily (No 2) [2022] FedCFamC1F 715

Colgate-Palmolive v Cussons Pty Ltd (1993) 119 CLR 118

InterTan Inc v DSE (Holdings) Pty Ltd [2005] FCAFC 54

MCG Group Pty Ltd v Ftrus Pty Ltd (Formerly Fortrus Pty Ltd) [2017] FCA 359

Munday v Bowman (1997) FLC 92-784

Penfold v Penfold (1980) 144 CLR 311

Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175

Schwarz & Schwarz (1985) FLC 91-618
Division: Division 1 First Instance
Number of paragraphs: 44
Date of hearing: 24 March 2023
Place: Sydney
Solicitor for the Applicant: Mr Gittoes-Caesar, Lander & Rogers
Solicitor for the Respondent: Mr Hall, Hall Partners Solicitors

ORDERS

SYC 3428 of 2018

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

MR TILY

Applicant
AND:

MR BERRELL

Respondent

order made by:

CHRISTIE J

DATE OF ORDER:

5 april 2023

THE COURT ORDERS THAT:

1.Within 28 days the respondent pay the applicant’s costs of and incidental to these proceedings on an indemnity basis in the sum of $473,534.66.

2.Within 28 days the respondent pay the applicant’s costs as ordered on 21 December 2021 fixed in the sum of $19,949.10 plus interest in accordance with r 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

3.Within 28 days the respondent pay the applicant’s costs of and incidental to the Application in a Proceeding filed 8 September 2022 on an indemnity basis in the sum of $39,341.15.

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…

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Details
Case
[2023] FedCFamC1F 241
Decision Date

CaseChat Overview and Summary

The parties involved in the case Berrell & Tily (No 4) were Mr Berrell and Mr Tily, who were in dispute over the existence of a de facto relationship and related property settlement matters. The case was heard in the Federal Circuit and Family Court of Australia (Family Law). Mr Berrell sought a declaration that a de facto relationship existed between him and Mr Tily, a property settlement, and that Mr Tily pay his costs. The court was tasked with determining whether Mr Berrell's application was justified and, if so, whether he was entitled to an indemnity costs order from Mr Tily.

The court had to decide whether there were justifying circumstances for Mr Berrell's application, which he had withdrawn before the final hearing, and whether the application was defensive in nature. Additionally, the court needed to assess the appropriate quantum of costs, considering the extensive procedural history and the engagement of senior counsel. The court found that Mr Berrell's application, while ultimately unsuccessful, was not without justification, and therefore, warranted an indemnity costs order.

The court concluded that there were justifying circumstances for Mr Berrell's application despite his ultimate failure. It found that the application was not purely defensive and that the procedural history justified the engagement of senior counsel. The court also determined that the quantum of costs was reasonable given the complexity of the case and the detailed schedules provided. It ordered Mr Tily to pay Mr Berrell's costs, subject to the deduction of counsel’s cancellation fees.

The final orders included an indemnity costs order for Mr Berrell against Mr Tily, with the deduction of $31,680 for counsel’s cancellation fees, and interest on the outstanding costs order from 21 December 2021.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Little is known from the evidence about Mr Berrell’s financial circumstances. Mr Berrell’s solicitor did not make any specific submissions about this topic except obliquely in the written submissions where Mr Berrell’s solicitor describes his client as “starved of funds”. In any event, as the applicant submitted, impecuniosity, if that is what is being asserted, is not a bar to the making of a costs order: Schwarz & Schwarz (1985) FLC 91-618.Conclusion For the above reasons, I find that there are justifying circumstances warranting a departure from the usual rule as to costs. Further, I find that this is a matter in which it would be appropriate having regard to [20] – [28] above, that the applicant receive the benefit of an indemnity costs order.Quantum At the hearing of this application I asked that the solicitor for Mr Berrell address me concerning the quantum of costs sought. Apart from disputing them in a general sense and asking that, if an order were to be made, that it be made on the basis that the costs be assessed, I was not taken to any matter said to undermine the very detailed schedules of costs which had been served in support of the application. I accept that it was appropriate for senior counsel to be engaged at final hearing by the applicant. I accept the submission on behalf of the respondent that the exercise of granting or refusing a declaration is a fact finding exercise but that does not, in my mind, make the matter simple or straightforward. As I observed in the reasons for judgment, the cross-examination conducted by senior counsel successfully undermined findings which might otherwise have been available and accordingly, I certify for senior counsel. I note that the matter was unfortunately before this Court for five years with various interlocutory and procedural issues. In those circumstances the amount of the indemnity costs sought, while large, is not surprising or objectively concerning. There is one aspect of the fees which might properly be excluded from the costs order payable by Mr Berrell to Mr Tily and that is counsel’s cancellation fees – being an amount which was the subject of disclosure between senior counsel and his client but could not necessarily have been in contemplation by Mr Berrell. That amount appears in the evidence of Mr Tily as $31,680 inclusive of GST and will be deducted from the total of the indemnity costs claimed. I otherwise accept that it is appropriate to order costs in a sum certain as is permitted by the Rules in circumstances where detailed evidence of those costs is available to the parties and the Court and no proper challenge is made to quantum. The schedules of costs upon which the applicant relies are attached to his affidavit filed 22 February 2023. Accordingly, those schedules were available to the respondent for at least 28 days prior to the hearing of the matter.Costs of 19 December 2021 The applicant asked that I make an order quantifying an existing costs order – made on 21 December 2021. I note that it is yet to be paid. I note that the applicant is entitled to interest on the sum outstanding.

Ratio Decidendi

Legal Principle Established

The Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) (“the Rules”) provide in Chapter 12 for provisions concerning the making of costs orders, including in particular Part 12.6 which deals with the calculation of costs.CONSIDERATION The Cross-Claim which first raised the issue of a de facto relationship was filed in 2015. The transfer to this Court occurred on 29 November 2017. Mr Tily maintained the position that there had been no de facto relationship between the parties from the time he filed his Defence to Cross-Claim in 2015. The parties in this matter have had a number of court events between 2018 and 2022 including case management hearings, interim hearings, vacated and rescheduled final hearings before the final trial which took place over four days in November/December 2022. The matters which present as having relevance to the exercise of the discretion to order (or refuse) costs in this case are: the conduct of the proceedings and the fact that Mr Berrell was wholly unsuccessful.Conduct of the proceedings The relief sought by Mr Berrell was:1.A declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) that a de facto relationship existed between the Applicant and the Respondent from the middle of 2007 until September 2014 or such other duration as the Court determines.2.An order pursuant to s 90SM of the Family Law Act 1975 (Cth) by way of property settlement on terms that the Court considers appropriate.3. That the Respondent pay the Applicant’s costs. Following three days of hearing, on the fourth day, Mr Berrell’s solicitor withdrew the application for a declaration. In the reasons for judgment I made the following finding:110.All the evidence is consistent with the assertion of a de facto relationship being a construct of [Mr Berrell] after the parties’ friendship and financial relationship had ended. I am satisfied that it is appropriate to make the declaration sought by [Mr Tily] that the parties were not in a de facto relationship and return the proceedings to the Supreme Court for want of accrued jurisdiction.111. In closing submissions Mr Hall, solicitor for [Mr Berrell], said:We simply say that the orders that we ask for are the natural consequence of the respondent’s evidence and it will either happen or it will happen before the Supreme Court of New South Wales and that’s where it is destined. (Transcript of 1 December 2022, p. 428 lines 44 – 47.)…We say that there is no ongoing issue raised by us of relationship between the parties because even if there was one, it’s not a matter that we press in terms of the relief that we would claim in opposition to my friend’s amended statement of claim in the Supreme Court of New South Wales and that this application was defensive in nature. …What we say here is that the allegation of a de facto relationship is raised as part of a defence to proceedings that were initiated not at my client’s choosing. He wasn’t the instigator. That’s what we mean by defensive in nature. (Transcript of 1 December 2022, p. 429, lines 1-5 and lines 29 – 31.)112.This submission seems to support the conclusion that [Mr Berrell’s] application to this Court was a cynical attempt to assist him in collateral proceedings. That is supported by his late withdrawal of his own application for a declaration.