Calvin & Calvin (No 2)
[2023] FedCFamC1F 185
FEDERAL CIRCUIT AND
FAMILY COURT OF AUSTRALIA (DIVISION 1)Calvin & Calvin (No 2) [2023] FedCFamC1F 185
File number(s): BRC 4190 of 2019 Judgment of: HOGAN J Date of judgment: 23 March 2023 Catchwords: FAMILY LAW – COSTS – Where the Court is persuaded that the circumstances justify the making of an order for costs but is not persuaded that it is just to make an order for costs on an indemnity basis – Where costs are ordered in a fixed amount. Legislation: Corporations Act 2001 (Cth)
Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; [1995] FCA 350
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; [1993] FCA 801
Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213
Idoport Pty Limited v National Australia Bank Limited & Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23
In the Marriage of Kohan (1993) FLC 92-340; [1992] FamCA 116
Limousin v Limousin (Costs) (2008) 38 Fam LR 478; [2007] FamCA 1178
Munday v Bowman (1997) FLC 92-784
Worth and Worth (No. 2) (2019) FLC 93-910; [2019] FamCAFC 126
Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: First Instance Number of paragraphs: 22 Date of hearing: Determined in Chambers following the receipt of written submissions Place: Brisbane Solicitor for the Applicant: Watson Mangioni Lawyers Pty Limited Solicitor for the First Respondent: Fox & Thomas Solicitors Solicitor for the Second Respondent: Arnold Bloch Liebler Solicitor for the Third, Fourth and Fifth Respondents: Phillips Family Law ORDERS
BRC 4190 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CALVIN
Applicant
AND: MR CALVIN
First Respondent
CALVIN PTY LTD
Second Respondent
MR B CALVIN (and others named in the Schedule)
Third Respondent
order made by:
HOGAN J
DATE OF ORDER:
23 March 2023
THE COURT ORDERS THAT:
1.Pursuant to s 117(2) of the Family Law Act 1975 (Cth), the Applicant pay, within 28 days of the date of this order, the First Respondent’s costs of and incidental to the applications determined by order made on 25 August 2022.
2.Pursuant to Rule 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the costs referred to in Order 1 shall be fixed in the amount of $15,000.
3.Pursuant to s 117(2) of the Family Law Act 1975 (Cth), the Applicant pay, within 28 days of the date of this order, the Third Respondent’s costs of and incidental to the applications determined by order made on 25 August 2022.
4.Pursuant to Rule 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the costs referred to in Order 3 shall be fixed in the amount of $15,000.
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 Calvin & Calvin has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J
On 1 April 2021, Carew J made final orders by consent to finalise the property settlement proceedings between the Applicant and the First Respondent and third party claims between them and the Second to Fifth Respondents, which proceedings included the Applicant’s claims, pursuant to various sections of the Corporations Act 2001 (Cth) and generally, against the Third Respondent and entities under his control[1] (“the April 2021 orders”).
[1] The Fourth and Fifth Respondents.
On 11 March 2022, the Applicant filed an Application – Enforcement (Amended) (“the Application”), seeking the relief particularised in that document. This was dismissed by order made 25 August 2022 for the reasons expressed in the Reasons for Judgment delivered that day (“the August 2022 Reasons”). To the extent that it is necessary to do so, I incorporate the August 2022 Reasons into these Reasons, delivered in support of the orders made to determine the subsequent applications for costs brought by the Respondents.
Before discussing each Respondent’s application for costs in turn, it is useful to outline the matters common to the consideration of each – namely, that:
(a)despite having been the subject of earlier “discussion”[2], Counsel for the Applicant advised, during the hearing on 19 August 2022, that the Applicant did not seek to press the issue particularised in Notation D(a) to the order made by the Judicial Registrar on 7 June 2022; and
[2] In the sense that it is recorded in the Notations made in the orders made on 7 June 2022.
(b)during the hearing on 19 August 2022, Counsel for the Applicant advised that the Applicant no longer sought the relief particularised as orders 1(c), 1(d) and 2 under Part E of the Outline of Case filed on her behalf on 18 August 2022; and
(c)the Applicant was wholly unsuccessful in her attempt to obtain an order that each of the Respondents give discovery to her of all documents recording the usage of the plant and equipment referred to in paragraph 1.11.1 of the April 2021 orders for the period 14 August 2019 to date (“the Usage”) and all payments for the Usage; and
(d)the Third to Fifth Respondents were wholly unsuccessful in the attempt, prosecuted during the hearing on 19 August 2022,[3] to have correspondence from their solicitor that was marked “without prejudice” (and any subsequent reference to the same in the affidavits relied on by the Applicant) struck out; and
(e)none of the parties are in receipt of legal aid and each has funded their own legal representation; and
(f)no party made any offer in writing to the others to settle the applications; and
(g)each party has the financial capacity to pay their own legal costs; and
(h)the Applicant has the financial capacity to pay the legal costs sought by the Respondents[4], although:
(i)if each Respondent was successful in obtaining an order for the payment of costs on an indemnity basis, the total sum which the Applicant would be required to pay would be about $161,269.62[5]; and
(ii)if each Respondent was successful in obtaining an order for the payment of costs on the party and party basis, the total sum which the Applicant would be required to pay would be about $98,587.31.[6]
[3] Application in a Proceeding filed 16 May 2022.
[4]Given that the consequence of the orders made on 1 April 2021 was that the Applicant and First Respondent agreed to an approximately equal division of over $16 million of jointly-owned property, including that the Applicant retain real property at Suburb Q on an unencumbered basis and receive a payment of $4,500,000.
[5]Namely: $86,975.10 to the First Respondent; $10,661.75 to the Second Respondent; and $63,632.77 to the Third to Fifth Respondents (being the total of the claim for the payment of $59,194.27 together with the estimated $2,772.50 relating to the preparation of the costs submissions and affidavit in support of the same and $1,716 as the estimated costs for Counsel to settle the submissions).
[6]Namely: $60,908.82 to the First Respondent; $7,143.37 to the Second Respondent; and $30,535.12 to the Third to Fifth Respondents.
The competing positions
Each Respondent sought that the Applicant pay their costs on an indemnity basis or, failing that, on a party/party basis. By way of broad overview, each submitted that that the circumstances justify the making of an order that the Applicant pay their costs of and incidental to the Application and, because the Applicant’s conduct (including in commencing the proceedings) was “exceptional”, it is proper and just that such costs are paid on an indemnity basis.
The Applicant opposed the making of any order for costs. She advanced that her enforcement application was necessitated because the Third Respondent failed to comply with those terms of the April 2021 order which restrained any dealing with any assets of the Second Respondent after the April 2021 orders were made. Whilst the Third Respondent accepted that he used the relevant asset, he did not accept that he did so in contravention of the April 2021 orders – instead, he asserted that the restraints within the April 2021 orders did not prevent a party using equipment and only prevented the disposition, encumbering or charging of the same.
The Applicant submitted, in essence, that given the Third Respondent’s admission that he used an asset owned by the Second Respondent, the circumstances surrounding her bringing the Application are such that the Court would not be persuaded to depart from the legislative starting point that each party to the proceedings bear their own costs; if this primary submission does not find favour and the discretion is exercised in favour of making an order that she pay the costs of each Respondent, it was submitted that any such order should require her to pay costs on a party and party basis, either in an amount agreed or, failing agreement, as assessed.
Relevant summary of the First Respondent’s submissions
The First Respondent submitted that the Applicant was clearly put on notice, as a consequence of the Application in a Proceeding filed on 11 May 2022, that he sought that her enforcement application be dismissed and that she be ordered to pay his costs on an indemnity basis; it was submitted that the 11 May 2022 application clearly asserts that the application should be dismissed because:
(a)the Court could not determine the Application due to an absence of jurisdiction and/or power to make the orders sought by the Applicant; and/or
(b)res judicata applies; and/or
(c)it was an abuse of process for the Applicant to seek orders for further disclosure in the circumstances.
Further, it was also submitted that:
(a)the Applicant’s enforcement application was flawed from the outset as there was nothing of the April 2021 order left to enforce so as to make the request for disclosure appropriate; and
(b)given the above, the Court should presume that, in commencing the Application, the properly advised Applicant proceeded for some ulterior purpose or because of a wilful disregard of the known facts[7]; and
(c)the First Respondent’s legal representatives put the Applicant on notice on 12 May 2022 that indemnity costs would be sought; and
(d)the First Respondent’s objections to the Application were noted in the orders made on 16 May 2022 by a Judicial Registrar; and
(e)the Applicant was made aware of the First Respondent’s estimated costs as a consequence of the requirement to file Costs Notices for each appearance; and
(f)the First Respondent incurred legal fees of $81,962.10 (inclusive of GST) between 18 February 2022 until 19 August 2022 and the total amount of the costs of and incidental to the Application incurred by the First Respondent is $86,97.10 (if calculated on an indemnity basis) or $60,908(if calculated on the party and party basis).
[7]Worth and Worth (No. 2) (2019) FLC 93-910 and the reference at [9] to Munday v Bowman (1997) FLC 92-784 at 84,660.
Relevant summary of the Third, Fourth and Fifth Respondents’ submissions
The Third to Fifth Respondents submitted that the Applicant’s the financial circumstances were not such as would preclude the Court from making an order that she pay their costs of and incidental to the Application: it was submitted, in particular, that the Applicant was paid $300,000 by them pursuant to the terms of the April 2021 order.
It was also submitted that the Court would be persuaded that the circumstances justify the making of an order as to costs against the Applicant and that the same be paid on an indemnity basis because: her position about the relief she sought changed at least five times during the currency of the Application (which put them to additional cost); she was wholly unsuccessful; she had been put on notice from at least 11 May 2022, (though arguably 22 February 2022) that they contended that the orders she sought could not be made; despite the Respondents having raised significant issues about the prospects of the Applicant succeeding on her enforcement application, she determined to press on.
Relevant summary of the Second Respondent’s submissions
The Second Respondent adopted the submissions made on behalf of the other Respondents in relation to the reasons the Court would be persuaded that the circumstances justify the making of an order as to costs and that the same be made on an indemnity basis or, failing that, on the party and party basis. It was submitted that the Second Respondent’s costs of and incidental to the defence of the Application were $10,661.75 (including GST); the costs were estimated to be $7,143.37 (or 67 per cent of the actual costs) if calculated on the party and party basis.
Relevant summary of the Applicant’s submissions
In resisting an order for costs, the Applicant submitted that:
(a)the fact that a party has the financial capacity to pay an order for costs and/or meet their own costs and that they have been unsuccessful are not the sole determinants of the exercise which a court is required to undertake in determining an application for an order as to costs under the Family Law Act 1975 (Cth) (“the Act”); and
(b)given that aspects of the dispute between the parties which was resolved by the April 2021 orders included the Applicant’s assertions that the Third Respondent (and his companies) had used plant and equipment belonging to the Second Respondent (in which she, the First Respondent and the Third Respondent were all equal shareholders) without accounting to the Second Respondent for such use, the Third Respondent’s subsequent use of an asset belonging to the Second Respondent without accounting to it for such use and prior to the disposal of the same (and such use only coming to light because the asset was damaged and required repair) was such as to be likely to result in the Applicant taking the action that was taken and would persuade the Court that the circumstances do not justify the making of an order as to costs; and
(c)the financial statements required to ensure that the terms of the April 2021 order could be carried out were received only a matter of days (in respect of some) and the night before the hearing date (in respect of others); and
(d)it was unnecessary for the Second Respondent to retain separate legal representation in respect of the Application because no relief was sought against the Second Respondent; further, the fact that the Second Respondent’s legal representative played no active role at the hearing of the Application demonstrated that separate legal representation was not needed; and
(e)the Third Respondent’s ultimately unsuccessful application to strike out some annexures to her affidavit – which contained the Third Respondent’s admission that he had used an asset of the Second Respondent (as noted earlier) – occupied some of the hearing time and caused the parties to incur costs (via the need to have regard to the material complained of and the provision of submissions about the objection taken) that would not otherwise have been incurred; and
(f)the fact that the Third Respondent pressed the objection taken to the annexure in the way that it was pressed exemplified the manner in which all of the parties had approached the litigation in which they had been embroiled and put the Applicant’s conduct into context; and
(g)the mere fact that she had been wholly unsuccessful on her enforcement application did not, of itself, mandate that any order as to costs to be made should properly be made on an indemnity basis; and
(h)if persuaded that the circumstances justify the making of an order as to costs, the Court would not be persuaded of the existence of those exceptional circumstances needed to be shown before a court departs from the usual basis (namely, the party and party basis) on which orders for costs are made.
In addition to these general submissions, the Applicant also made the following submissions, in essence, in relation to each of the following Respondents individually:
(a)the First Respondent: any order for costs should exclude any costs associated with the Third Respondent’s objection to the Applicant’s affidavit, should be on the party and party basis and, given the absence of “breakdown” in the estimate of the costs relied on by the First Respondent, should be in an amount agreed or assessed on that basis; and
(b)the Second Respondent: whilst the amount claimed is modest, no order as to costs should be made for the reasons set out in paragraph 12(d) but, if the Court determined to make any order, costs should be on the party and party basis and payable in an amount agreed or assessed on that basis; and
(c)the Third Respondent: any order for costs should exclude the costs associated with the Third Respondent’s objection to the Applicant’s affidavit and should be on the party and party basis and payable in an amount agreed or assessed on that basis; and
(d)the Fourth and Fifth Respondents: there should be no order as to costs because they did not take any active role in the proceedings.
Applicable principles and consideration
It is clear that the starting point in relation to costs in proceedings under the Act is that each party bears their own costs.[8] It is also clear that, if it is of the opinion that there are circumstances that justify it in doing so, the Court may, subject relevantly to s 117(2A) of the Act, make such order as it considers just.[9]
[8] Family Law Act 1975 (Cth) s 117(1).
[9] Family Law Act 1975 (Cth) s 117(2).
Having regard to the submissions made on behalf of the parties, the Reasons expressed on 25 August 2022 when the Application was dismissed and the fact that the Applicant was wholly unsuccessful in the prosecution of her application for enforcement, I am of the opinion that the circumstances justify the making of an order that the Applicant pay the First and Third Respondent’s costs of and incidental to the Application, with such costs to exclude any costs associated with the application made by the Third to Fifth Respondents to strike out correspondence dated 29 April 2021 which had been exhibited to the Applicant’s affidavit.
However, having regard to the Applicant’s submissions summarised above in paragraph 12(d), I am not persuaded that the circumstances justify the making of an order that the Applicant pay the Second Respondent’s costs of and incidental to the Application. There is, in my view, no basis for an order that the Applicant pay the Fourth and Fifth Respondents’ costs, which was not really sought in any event.
I am not, though, persuaded that the circumstances here are exceptional or otherwise of such a nature as to justify the Court departing from the usual basis on which costs are ordered to be paid;[10] I am not persuaded that it would be just to order that the Applicant pay the costs sought on the indemnity basis, particularly given the amount of the same and noting that the Respondents’ submissions were that the relief sought by the Applicant was so obviously doomed to fail. Consequently, I decline to accede to the Respondents’ application that costs be ordered on the indemnity basis.
[10]Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; In the Marriage of Kohan (1993) FLC 92-340; Yunghans & Yunghans (2000) FLC 93-029; Limousin & Limousin (Costs) (2007) 38 FamLR 478.
Whilst the Applicant submitted that the amount of costs should be as agreed between the parties, there is nothing to suggest that such agreement is likely to be forthcoming. Rather, the history between the Applicant and the Respondents and the manner in which the litigation has been conducted – as adverted to in the Applicant’s submissions, albeit for another purpose – suggests that it is much more likely than not that the parties will be put to the costs of engagement in the assessment process if an order is not made fixing the amount of the costs that are payable.
In order to obviate the necessity for these parties to participate in the assessment process and to remove the need for them to be engaged in a further aspect of the litigation process, I consider it just that I fix the quantum of costs to be paid by the Applicant to each of the First and Third Respondents.
In undertaking this exercise, I am not undertaking the process that a registrar would undertake if called on to assess costs. Rather, I accept that:
(a)such sum should be fixed broadly, having regard to the information before the Court;[11] and
(b)the process to be undertaken in specifying or fixing such sum does not envisage that a process similar to that involved in a taxation or assessment of costs should occur;[12] and
(c)there is no requirement to approach the task in any scientific or formulaic manner. [13]
[11] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at [24].
[12]Idoport Pty Limited v National Australia Bank Limited & Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23; Harrison v Schipp (2002) 54 NSWLR 738.
[13]Idoport Pty Limited v National Australia Bank Limited & Ors Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23 at [10] per Einstein J.
In fixing the sum which I consider it just that the Applicant pay to each of the First and Third Respondents by way of costs on the party and party basis, exclusive of the costs associated with the Third Respondent’s objection to an aspect of the Applicant’s evidence, I have had regard to the amounts sought by each of the Respondents on that basis. However, I have also had regard to their overarching submissions that the Application was so obviously flawed – given this (and even taking into account the various changes in position as alluded to in the submissions made on behalf of the Third Respondent), I am unpersuaded that it is just that the Applicant be required to pay $60,908.82 to the First Respondent for his costs and $30,535.12 to the Third Respondent for his costs. Simply, such amounts seem to me to be disproportionate – particularly when the Respondents’ clear position, ultimately upheld, was that the Applicant’s Application was doomed to fail from the outset.
Having regard to the principles set out in paragraph 20 and the amounts particularised in Parts 1 and 2 of Schedule 3 to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) as allowable for lawyer’s work done and services performed and costs allowable for counsel’s work done and services performed, I consider that the order that is just is an order that requires the Applicant to pay, within twenty-eight days, the sum of $15,000 to each of the First and Third Respondents.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan.
Associate:
Dated: 23 March 2022
SCHEDULE OF PARTIES
BRC 4190 of 2019 Respondents
Fourth Respondent:
F PTY LTD IN ITS OWN RIGHT AND ATF THE G TRUST
Fifth Respondent:
D PTY LTD
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