Bondelmonte and Bondelmonte (No 5)

[2016] FamCA 1146

FAMILY COURT OF AUSTRALIA

BONDELMONTE & BONDELMONTE (NO 5) [2016 ] FamCA 1146

FAMILY LAW – COSTS – Where the wife seeks an order that the husband pay her costs on an indemnity basis in respect of the proceedings initiated by her seeking orders for the return of the two eldest children to Australia – Where an order is made for the husband to pay the wife’s cots on a party/party basis.

Family Law Act 1975 (Cth)

Colgate Palmolive Co and Anor v Cussons Pty Ltd (1993) 118 ALR 248
Kohan & Kohan (1993) FLC 92-340
Munday v Bowman (1997) FLC 92-784
Prantage & Prantage (2013) FLC 93-544
Preston v Preston [1982] 1 All ER at 58

Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029

APPLICANT: Ms Bondelmonte

RESPONDENT: Mr Bondelmonte

FILE NUMBER: SYC 4839 of 2011

DATE DELIVERED: 23 December 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 4 August 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Batey

SOLICITOR FOR THE APPLICANT: Broun Abrahams Burreket

SOLICITOR FOR THE RESPONDENT: Karras Partners

Orders

1. The husband pay the wife’s costs on a party/party basis of and incidental to the proceedings which were initiated by her application filed 10 February 2016 and concluded on 8 March 2016 seeking orders for the return of the two eldest children to Australia as agreed or assessed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bondelmonte & Bondelmonte (No 5) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4839 of 2011

Ms Bondelmonte

Applicant

And

Mr Bondelmonte

Respondent

REASONS FOR JUDGMENT

1. On 10 February 2016 the applicant wife filed an Application seeking orders for the return of the two eldest children of her marriage to the husband. That application was amended on 2 March 2016. The application was opposed by the husband who filed a response simply seeking that the wife’s application be dismissed.

2. The matter was heard on 29 February 2016 and 2 March 2016 and the wife was wholly successful in obtaining the orders that she sought.

3. The husband appealed to the Full Court and on 8 April 2016 the Full Court dismissed the husband’s appeal. The husband has subsequently had an appeal from the decision of the Full Court dismissed by the High Court.

4. In the application filed 10 February 2016 the wife sought an order that the husband pay her costs of and incidental to the application on an indemnity basis and she now seeks an order in those terms.

Applicable law

1. Generally, pursuant to s 117(1) Family Law Act 1975 (Cth) (“the Act”), each party bears their own costs of the proceedings.

2. An order for costs can be made by the court if it is satisfied there are circumstances to justify them doing so (s 117(2) of the Act).

3. The matters which the court shall have regard to in determining what if any order is to be made under s 117(2) are set out in s 117(2A) of the Act.

4. The relevant considerations in this case pursuant to s 117(2A) are:

   (a)   The financial circumstances of each of the parties to the proceedings;

   …

   (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;

   …

5. Neither party asserted that either party to the proceedings had made an offer in writing to the other party to the proceedings to settle the proceedings.

6. The wife has made an application for indemnity costs.

7. While the court clearly has a power to award indemnity costs, as opposed to costs on a party/party basis, it is an exceptional case in which indemnity costs are awarded (Kohan & Kohan (1993) FLC 92-340).

8. In Colgate Palmolive Co and Anor v Cussons Pty Ltd (1993) 118 ALR 248, Sheppard J referred to the courts’ “settled practice” that where the court orders one party to pay another party’s costs, the order is for costs to be paid on a party/party basis. His Honour went on to say “there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice.”[1]

   [1] As enunciated by Brandon LJ (as he was) in Preston v Preston [1982] 1 All ER at 58.

9. In Colgate Palmolive Co and Anor v Cussons Pty Ltd Sheppard J identified the following instances where indemnity costs might be made:

   ·     Allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud

   ·     Evidence of particular misconduct that causes loss of time to the court and the other parties

   ·     The fact that the proceedings were commenced or continued for some ulterior motive

   ·     The making of allegations which ought never have been made or the undue prolongation of a case by groundless contentions

   ·     An award of costs against a contemnor

10. In Munday v Bowman (1997) FLC 92-784, Holden CJ highlighted at 84,660 the following examples of circumstances where indemnity costs may be awarded:

    (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.

    (b) Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.

    (c) Evidence of particular misconduct causing loss of time to the court and to other parties.

    (d) The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.

    (e) An imprudent refusal of an offer to compromise.

    (Footnotes omitted)

11. This list is not exhaustive, and it is clear that each case shall be assessed on its individual merits (Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029).

12. In Prantage & Prantage (2013) FLC 93-544, the Full Court made it clear that the fundamental principles applying in other jurisdictions to the awarding of indemnity costs also apply in this jurisdiction.

The financial circumstances of the parties

1. In the Reasons for Judgment of 8 March 2016 I describe the husband as “a man of significant means”. That description was endorsed by the Full Court.

2. At the time of this costs hearing the husband had:

   18.1.Caused to have lodged significant funds borrowed on his behalf in respect of proceedings that were then currently being conducted in the Federal Court;

   18.2.Expended money on travel, accommodation and support of the children in respect of their departure from and accommodation in the United States; and

   18.3.The husband deposed to business interests in the United States that have provided him with a salary of US $250,000 per annum.

3. The wife is not employed. The wife’s income and financial circumstances are inferior to those of the husband’s.

Conduct of the Proceedings

1. The wife asserts in submissions, and it is not disputed by the husband in written submissions in reply, that the second day of the hearing was necessitated by the husband’s inability to provide instructions to his senior counsel on the first day of the hearing about the ability of the children’s paternal grandmother to provide alternate care for the children should they be ordered to be returned to Australia without the husband returning himself with the children.

Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. At the time the wife made the application there were final parenting orders in place that the parents had equal shared parental responsibility for decisions about major long term issues in respect of the children. The orders more specifically provided for a regime for overseas holidays. By failing to return the two eldest children to the jurisdiction and placing them in new accommodation and new schools in the United States, the husband failed to comply with the final parenting orders. It was that failure to comply with the orders of the court that necessitated the wife’s application.

Whether a party to the proceedings has been wholly unsuccessful

1. The husband sought that the wife’s application be dismissed. He was wholly unsuccessful in that application and the wife was wholly successful.

2. That position was confirmed last week by the High Court.

Should an order for indemnity costs be made?

1. The wife relies upon the fact that the application was necessary because of the husband’s failure to comply with existing final parenting orders. Although that fact does not seem to be seriously in dispute and an indemnity costs order may be made against the contemnor, no findings of contempt or contravention have been made in relation to what the husband did or did not do in January/February 2016.

2. I decline to make an indemnity costs order.

Conclusion

1. It is not often a costs order is made in parenting proceedings. In this case however I place weight primarily on the fact that the proceedings were necessitated by the failure of the husband to comply with orders of the court.

2. I find that it is just that a costs order be made in the wife’s favour on a party/party basis for her costs of and incidental to the proceedings which were initiated by her application filed 10 February 2016 and concluded on 8 March 2016 seeking orders for the return of the two eldest children to Australia as agreed or assessed.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 23 December 2016

Associate:

Date: 23 December 2016