Betro & Grima (No 5)
[2023] FedCFamC1F 896
•20 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Betro & Grima (No 5) [2023] FedCFamC1F 896
File number: SYC 1826 of 2021 Judgment of: SCHONELL J Date of judgment: 20 October 2023 Catchwords: FAMILY LAW – COSTS – Where the husband and his brother sought costs against the wife in relation to an application for joinder of the husband’s brother which was unsuccessful – Where the circumstances are not exceptional to warrant an indemnity costs order – Consideration of factors in s 117(2A) of the Family Law Act 1975 (Cth) – Where the husband’s brother elected to provide no evidence as to his financial circumstances and the Court is therefore unable to assess and determine if it would be just to make a costs order – Where some of the husband’s submissions were absent foundation – Where the Court has made findings that the husband has failed to make full and frank disclosure – Applications dismissed. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Bant & Clayton (Costs) (2016) 56 Fam LR 31; [2016] FamCAFC 35
Betro & Grima (No 3) [2023] FedCFamC1F 727
Betro & Grima (No 4) [2023] FedCFamC1F 831
Colgate Palmolive Company & Anor v Cusson Pty Ltd (1993) 118 ALR 248; [1993] FCA 801
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116
PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123; [2005] FamCA 158
Penfold and Penfold (1980) 144 CLR 311; [1980] HCA 4
Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: Division 1 First Instance Number of paragraphs: 39 Date of last submissions: 16 October 2023 Place: Sydney Solicitor for the First Applicant: Holmes Donnelly & Co Solicitors Solicitor for the Second Applicant: Dimocks Family Lawyers Counsel for the Respondent: Mr Ford Solicitor for the Respondent: Lionheart Lawyers The Independent Children's Lawyer: Did not participate ORDERS
SYC 1826 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR BETRO
First Applicant
MR T
Second Applicant
AND: MS GRIMA
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
20 OCTOBER 2023
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed 19 September 2023 by Mr T is dismissed.
2.The Application in a Proceeding filed 21 September 2023 by the husband is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Betro & Grima has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
By Applications in a Proceeding filed respectively on 19 September 2023 and 21 September 2023 by Mr T (the husband’s brother) and the husband, they seek orders for costs on an indemnity basis or alternatively, costs in accordance with the scale of costs prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). The orders sought against the wife arise out of an interim hearing on 17 August 2023, which primarily dealt with joinder and consequential injunctions against the husband’s brother and other relief against the husband brought by the wife as well as parenting and financial orders sought by the husband.
The applications for costs need to be seen within the context of the judgment delivered by me on 24 August 2023 in relation to the application against the husband’s brother, consent orders made on 17 August 2023 between the husband and wife, and financial relief sought by the wife against the husband that resulted in orders being made on 28 September 2023.
The wife was unsuccessful in the joinder and injunctions application against the husband’s brother. In relation to the applications brought by the husband against the wife and the wife against the husband, the husband’s application and part of the wife’s relief was compromised by consent orders made on 17 August 2023. The balance of the wife’s relief was addressed in the judgment delivered on 28 September 2023.
The judgments have been published as Betro & Grima (No 3) [2023] FedCFamC1F 727 and Betro & Grima (No 4) [2023] FedCFamC1F 831.
The applications for costs are opposed by the wife.
By agreement of all parties, the applications were determined on the papers with the benefit of written submissions.
The husband’s brother relied upon the following documents:
(1)Application in a Proceeding filed 19 September 2023;
(2)Affidavit of husband’s brother filed 19 August 2023;
(3)Affidavit of husband filed 21 September 2023;
(4)Affidavit of wife filed 29 September 2023;
(5)Written submissions filed 5 October 2023; and
(6)Written submissions in reply filed 16 October 2023.
The husband relied upon the following documents:
(1)Application in a Proceeding filed 21 September 2023;
(2)Affidavit of husband filed 21 September 2023;
(3)Reasons for judgment delivered by me on 24 August 2023 (Betro & Grima (No 3) [2023] FedCFamC1F 727);
(4)Written submissions filed 5 October 2023; and
(5)Written submissions in reply filed 16 October 2023.
The wife relied upon the following documents:
(1)Affidavit of wife filed 22 June 2023;
(2)Affidavit of wife filed 29 September 2023;
(3)Financial statement of wife filed 16 August 2023;
(4)Reasons for judgment delivered by me on 28 September 2023 (Betro & Grima (No 4) [2023] FedCFamC1F 831); and
(5)Written submissions filed 13 October 2023.
SUBMISSIONS
The husband’s brother submitted that a costs order should be made in his favour on an indemnity basis or alternatively at scale in circumstances where the wife was totally unsuccessful in relation to the orders she sought against him. He submitted that as a non-party to the marriage, the Court should more readily make orders in his favour including an indemnity costs order as there was no basis for his involvement in the proceedings. Through his written submissions, he submitted that the allegations made by the wife in her affidavit were “untrue and unfounded” (at paragraph 2) (footnote omitted), and that she “brought an unreasonable or unmeritorious application” (at paragraph 13.5). He submitted that he has incurred unnecessarily, significant legal fees and should not be “out of pocket” (at paragraph 13.10) as a consequence of the actions of the wife. He submitted that costs should in essence follow the event, being what he describes as an “unsuccessful investigation” by the wife (at paragraph 13.12). He submitted that the wife has the financial means to meet the order that he seeks.
The husband submitted that the wife’s failure warrants an order for cost in his favour in that he and his brother were “wholly successful” (husband’s written submissions, paragraph 11.4). He said that the wife has the financial means to meet the order he seeks and asserted that it was brought for an “ulterior motive including but not limited to applying additional pressure to the husband” and that the wife had “wilful disregard” to the evidence of the husband and his brother (husband’s written submissions, paragraph 28).
The wife submitted that while her application against the brother was unsuccessful, the usual order as to costs should apply. As against the husband, she submitted that she was not totally unsuccessful as part of the relief was resolved by consent orders and she was later successful in obtaining a litigation funding order. The wife submitted that her financial circumstances are straitened, that she is the sole financial supporter of the parties’ child, and that the Court has made findings that the husband has failed in his obligations of disclosure.
DISCUSSION
My judgment makes plain that I found that the wife did not establish an arguable case for joinder of the husband’s brother.
I did not find, according to the submission of the brother, that her assertions were “untrue” (husband’s brother’s written submissions, paragraph 2). Nor did I find, according to the submissions of the husband, that she brought the application with an “ulterior motive” or to apply “pressure to the husband” (husband’s written submissions, paragraph 28.1).
The husband’s submission in that respect has no foundation, borders on the scandalous and should not have been made. One available basis for the making of an indemnity costs order is the making of unfounded or improper submissions.
INDEMNITY COSTS
The authorities make it plain that an order for indemnity costs is not one that is made lightly and that there should be circumstances of an exceptional kind that warrant orders for costs on an indemnity basis.
In Kohan & Kohan (1993) FLC 92-340, their Honours in the Full Court observed at 79,614:
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. By O. 38 r. 2, the provisions of O. 38 apply to costs ordered to be paid or taxed, and costs payable or to be taxed between solicitor and client. O. 38 r. 7 makes provision for the allowance of additional amounts for complexity, difficulty or novelty and special skill, knowledge or responsibility. 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. …
Justice Sheppard in Colgate Palmolive Company & Anor v Cusson Pty Ltd (1993) 118 ALR 248 identified a series of circumstances which may warrant the making of a cost order. The category of cases in which a court may make an indemnity costs order are not closed and are not limited to those identified by Shepard J. In Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029, the Full Court said at 87,471:
… 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. All that is required is that the Court asked to exercise the discretion be satisfied that some '”particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party and party basis”: per Shepherd J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233.
To order indemnity costs, there must be something that carries the hallmark of exceptionality to warrant departure both from the rule that each party pays their own costs and an order for costs on a party/party basis. The mere fact that a party is unsuccessful in an application, even one seeking joinder, does not without more in this jurisdiction (where the usual order is that set out in s 117(1) of the Family Law Act 1975 (Cth) (“the Act”)) warrant an indemnity costs order.
While the husband’s brother has adduced evidence of the cost’s agreements between himself and his lawyers, the husband has not.
Beyond a lack of success and the incurring of cost, I was not taken to any fact or matter by either the brother or the husband that points to exceptionality. I am not satisfied that the circumstances of this case are such as to justify the making of an indemnity costs order.
I will now proceed to consider whether to make an order under s 117 of the Act other than on an indemnity basis.
COSTS IN ACCORDANCE WITH SCALE
An application for costs is governed by the provisions of s 117 of the Act, which provides a general rule that each party to the proceedings should bear their own costs.
Section 117(2) reposes in the Court a discretion to make a costs order in circumstances where the Court determines that there are circumstances that justify it making an order and, if there are such circumstances, the Court may make such order as it considers just, having regard to the matters set out in s 117(2A).
In Penfold and Penfold (1980) 144 CLR 311, the plurality in the High Court determined that to make an order under s 117(2), the Court needs to make a finding of justifying circumstances as a preliminary prerequisite to the making of an order. Their Honours also observed that terms such as ‘an exceptional case’, ‘special circumstances’ or ‘a clear case’ are not necessary determiners of whether an order for costs should be made. All that is required or necessary is that there are justifying circumstances.
It is well-settled law that no one factor under s 117(2A) is determinative and the Court may give such weight as it considers relevant to any factor. In PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123, the Full Court observed:
41. … 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
I will deal with such of the matters under s 117(2A) that are relevant.
(a) The financial circumstances of each party to the proceedings
The husband’s brother has elected to place no evidence before the Court as to his financial circumstances with the full knowledge that it is a relevant consideration. Having elected to not provide that evidence, he cannot be heard to complain if the Court declines to make orders sought by him where it is not appraised of a relevant factor. There is no evidence before me to suggest that the husband and wife’s financial circumstances have changed from that set out in the judgment delivered on 28 September 2023.
(b) Whether the parties are in receipt of legal aid
No party was or is in receipt of legal aid.
(c) The conduct of the parties to the proceedings
What is relevant is conduct of a party which in some way or other leads to an increase in costs by the other party. Such factors may include uncooperative behaviour, obstruction, prolonging of litigation, the bringing of unreasonable or unmeritorious applications. It may include non‑disclosure or a failure to comply with the Rules of Court in relation to disclosure.
The wife contended that the husband’s conduct is relevant to resisting the making of a costs order. In that respect, she submitted that the husband’s failure to disclose is a factor warranting consideration in deciding whether to make a costs order.
(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
Not relevant.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
The term “wholly unsuccessful” relates to a situation in which proceedings as a whole have been unsuccessful (see Bant & Clayton (Costs) (2016) 56 Fam LR 31.
The husband makes a submission that he and the brother were wholly successful in the joinder application. The subsection does not speak in such terms; it does not relate to being unsuccessful in an application but rather the proceedings as a whole. The application against the husband’s brother was not a separate proceeding but an application in a proceeding. As much is obvious by the title of the application on which the wife originally moved.
(f) Whether any party has made an offer in writing
I was not taken to any written offers.
(g) Any other matter the Court considers relevant
There is no other relevant matter.
While the wife was unsuccessful in the joinder application against the husband’s brother and in some circumstances that may be a basis for consideration of a costs order, in this case the husband’s brother has elected not to provide any evidence as to his financial circumstances. As a result of that election, I am unable to assess and consequentially determine whether in the circumstances of the husband’s brother’s and wife’s financial circumstances it would be just to make the costs order sought. Consequentially, if I cannot determine whether it is just, then the foundation for making an order does not exist.
Some of the husband’s submissions in support of the application were for the reasons given earlier absent foundation. They only further fuel what is already acrimonious litigation. They should not have been made. I am for reasons given earlier not satisfied that the husband has complied fully with his obligations of disclosure. The obligation of disclosure goes to the very heart of proceedings before the Court and a party who fails to make a full and frank disclosure frustrates that very process to the disadvantage of the other party.
For all of the above reasons, I am not satisfied that it is just that an order for costs should be made and accordingly, the applications for cost will be dismissed.
I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 20 October 2023
0
6
2