Carson & Colt (No 2)
[2025] FedCFamC1A 143
•21 August 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Carson & Colt (No 2) [2025] FedCFamC1A 143
Appeal from: Colt &Carson (No 2) [2025] FedCFamC2F 303 Appeal number(s): NAA 108 of 2025 File number(s): BRC 8947 of 2023 Judgment of: MCCLELLAND DCJ Date of judgment: 21 August 2025 Catchwords: FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Whether trial judge erred in failing to consider an affidavit – Appeal dismissed – Appeal determined to be wholly without merit and lacked any prospects of success – Assertion by appellant found to be patently false – Submission by counsel for the appellant amounted to misconduct – Costs ordered on an indemnity basis – Exceptional circumstances – Proceedings not properly initiated. Legislation: Corporations Act 2001 (Cth)
Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Court and Federal Circuit and Family Court of Australia Regulations 2022 (Cth)
Judiciary Act1903 (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) 46 FCR 225; [1993] FCA 801
Cross & Beaumont (2008) 39 Fam LR 389; [2008] FamCAFC 68
D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64
Fitzgerald v Fish (2005) 33 Fam LR 123; [2005] FamCA 158
Graham & Squibb (2019) FLC 93-892; [2019] FamCAFC 33
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116
Kristiansen & Kristiansen [2025] FedCFamC1A 129
Maddax & Danner (Costs) [2016] FamCAFC 229
Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Medlow & Medlow (No 2) [2016] FamCAFC 63
Moy & Pao (2022) FLC 94–073; FedCFamC1A 17
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28
Plaintiff S164/2018 v Minister for Home Affairs (2018) 361 ALR 8; [2018] HCA 51
R v Birks (1990) 19 NSWLR 677
Number of paragraphs: 63 Date of last submission/s: 24 July 2025 Date of hearing: 24 July 2025 Place: Sydney Counsel for the Appellant: Mr Jones Counsel for the Respondents: Mr Linklater-Steele Solicitor for the Respondents: McInnes Wilson Lawyers Solicitor for the Second Respondent: O’Brien Family Law Second Respondent: Mr O’Brien appearing as litigant in person ORDERS
NAA 108 of 2025
BRC 8947 of 2023FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS CARSON
Appellant
AND: MR COLT
First Respondent
MR O’BRIEN THE TRUSTEE
Second Respondent
ORDER MADE BY:
MCCLELLAND DCJ
DATE OF ORDER:
21 AUGUST 2025
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The appellant is to pay the costs of the second respondent in the fixed sum of $4802.75.
3.The appellant and the first respondent are to file written submissions, of no more than three pages, in respect to the quantum of costs, within 14 days.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ
BACKGROUND
The parties commenced cohabitation in 2001, married in 2004, and separated between late 2018 and early 2019.
On 21 March 2019, B Pty Ltd was placed into liquidation. B Pty Limited is part of a group of companies collectively known as the C Group. Other companies in the group include M Pty Ltd and K Pty Ltd. These entities were retained by the wife following the final property orders made on 29 November 2021. Pursuant to Order 19 (“the indemnity order”) of the final property orders, the wife was required to indemnify the husband in respect to any liabilities of the companies retained by her.
The liquidator of B Pty Ltd is currently seeking to recover $6.9 million from the husband, alleging that B Pty Ltd traded while insolvent. Additionally, M Pty Ltd had an outstanding Director’s Penalty Notice debt issued by the Australian Taxation Office in the amount of $376,000.
The wife has made an application, pursuant to s 79A of the Family Law Act 1975 (Cth), to have the indemnity order set aside on grounds including alleged non-disclosure of liabilities and loans by the husband.
The appeal in these proceedings relates to orders made by the primary judge pending final hearing of the wife’s s 79A application.
Subsequent to the final orders made on 29 November 2021, on 24 December 2021, the wife filed a Notice of Appeal, which was dismissed by Tree J on 14 July 2022. The wife was ordered to pay the costs of the respondent.
The wife then filed a Special Leave Application in the High Court on 18 August 2022, which was dismissed on 8 December 2022.
On 13 July 2023, the wife initiated proceedings in the Supreme Court of New South Wales seeking repayment of loans from the husband.
Shortly after, on 24 July 2023, the husband filed an Enforcement Application in the Federal Circuit and Family Court of Australia, seeking the sale of the Suburb D property, owned by the wife, under Order 3 of the 29 November 2021 orders. That action was taken due to the wife failing to pay the settlement sum. On 9 November 2023, Judicial Registrar Dore appointed Mr O’Brien (the second respondent to these proceedings) as Trustee for Sale (“the Trustee”). The contract of sale for the property was executed on 6 August 2024.
On 26 August 2024, the wife filed an urgent Initiating Application to set aside the indemnity order. She also filed an Application for Review on 27 August 2024, which was dismissed by Judge Harland on 29 August 2024.
On 1 September 2024, the husband filed an Application in a Proceeding seeking leave to use documents from the family law proceedings in other courts.
On 2 September 2024, the Trustee received correspondence from F Pty Ltd regarding retention of $250,000 from the sale proceeds of the Suburb D property. F Pty Ltd was the second respondent in the proceedings at first instance. F Pty Ltd is a financial entity that provided a loan of $1,750,266.45 to P Pty Ltd (an entity controlled by the wife) on 20 December 2021. This loan was secured by two mortgages registered against the Suburb D property, which was owned by the wife and subject to enforcement proceedings following her default on a $1.5 million payment to the husband under the final property order.
At the time of settlement of the sale of the Suburb D property on 3 September 2024, F Pty Ltd required that $250,000 be withheld from the sale proceeds to cover contingent costs and expenses. This led to the Trustee providing an undertaking to hold the disputed funds in trust until either an agreement was reached, a court order was made, or three months had passed.
On 30 October 2024, the Trustee filed an application to be released from the undertaking.
The matter was heard before the primary judge on 20 November 2024, and judgment was delivered on 12 March 2025.
THE DECISION BY THE TRIAL JUDGE
The issues identified as requiring adjudication were identified by the primary judge to be as follows:
(1)Whether there should be a stay of the enforcement order and the final property order.
(2)Whether an injunction should issue restraining the husband from using the settlement monies, or alternatively, whether the wife’s application should be summarily dismissed—and if so, whether she should pay the husband’s costs on an indemnity basis.
(3)Whether the wife should pay security costs of $80,725 to the husband’s solicitors, or whether her application should be stayed pending payment of those costs.
(4)Whether the wife should pay the husband’s costs of and incidental to the Application for Review filed on 27 August 2024, and if so, whether those costs should be assessed on an indemnity or scale basis.
(5)Whether the parties should be granted leave to use all documents filed in the Federal Circuit and Family Court of Australia in proceedings instituted in the Supreme Court of Queensland, Supreme Court of New South Wales, and the Magistrates Court of Queensland—or alternatively, whether leave should be granted only for specified documents.
(6)Whether the Trustee ought to be released from the undertaking given to F Pty Ltd on 3 September 2024.
(7)Directions regarding the payment of the disputed funds held under the Trustee’s undertaking—specifically, whether they should be paid to F Pty Ltd, the wife, the Supreme Court of New South Wales, the Federal Circuit and Family Court, or held in the trust account of F Pty Ltd’s solicitors.
(8)Whether the Trustee was entitled to be paid his fees from the balance of the Suburb D property sale proceeds pursuant to the enforcement order
In respect to those issues, by way of summary, the primary judge found as follows.
In respect to the first issue, the Court dismissed the wife’s application for a stay of the enforcement and final property orders. The primary judge found that there was no power to grant a stay in the absence of an appeal or an application for leave to appeal, neither of which had been filed by the wife. The primary judge found the wife was also out of time to appeal and she had not sought an extension.
In respect to the second issue, the primary judge dismissed the wife’s application for an injunction. In that respect, the primary judge found that the wife had no reasonable prospects of success in setting aside the final property order pursuant to s 79A based on alleged non-disclosure. In so determining, the primary judge found that the weight of evidence showed that the wife was aware of the loans and the liquidation of B Pty Ltd at the time of trial, and that it was unlikely that the wife would succeed in establishing that the indemnity order was unjust in those circumstances and where she retained those entities.
In respect to the third issue, the husband’s application for security for costs was dismissed as unnecessary, given the summary dismissal of the wife’s substantive application. The issue was rendered moot by the earlier finding.
In respect to the fourth issue, the primary judge determined that each party should bear their own costs in relation to the Application for Review filed on 27 August 2024. In that respect the primary judge held that while the wife was ultimately unsuccessful, her conduct was not found to be unreasonable or an abuse of process, and it was found that her concern about the disbursement of sale proceeds was understandable.
In respect to the fifth issue, the primary judge granted leave to the husband to use specific documents from the family law proceedings in related proceedings in the Supreme Court of Queensland and the Supreme Court of New South Wales. However, the primary judge declined to grant leave for the documents to be used in the Magistrates Court of Queensland proceedings finding that there was lack of justification and relevance.
In respect to the sixth issue, the primary judge ordered that the Trustee be released from the undertaking given to F Pty Ltd. Her Honour found that the Trustee had fulfilled his obligations, and that the ongoing dispute over the retained funds no longer required the Trustee’s involvement.
In respect to the seventh issue, the primary judge directed that the disputed funds—$250,000 held under the Trustee’s undertaking—be paid into the Supreme Court of New South Wales. This was stated to be for the purpose of preserving the funds, pending the resolution of related proceedings.
In respect to the eighth and final issue, the primary judge found that the Trustee was entitled to be paid his outstanding costs and counsel’s fees, totalling $50,386.60, from the Suburb D property sale proceeds. The remaining balance of $63,283.66 was to be paid to the wife. The primary judge rejected the wife’s objections and found that the Trustee had acted reasonably and efficiently in the circumstances.
GROUNDS OF APPEAL
At the commencement of the hearing, counsel for the wife advised the Court that the wife did not press her appeal in so far as it challenged Order 6 made by the primary judge. That was the only order that impacted the second respondent, and the second respondent was released from the proceedings. I will subsequently set out why I have ordered the wife to pay the costs of the second respondent.
By consent, at the hearing of the matter, the wife was granted leave to rely upon a further Amended Notice of Appeal attached to her affidavit filed on 27 June 2025, and an Amended Summary of Argument in support of the grounds, filed on 21 July 2025. The respondent husband was, correspondingly, given leave to file and reply upon an Amended Summary of Argument in response to the wife’s Amended Summary of Argument.
The amended grounds of appeal are:
(1)The primary judge failed to afford the appellant procedural fairness by not allowing the appellant to rely upon the contents of her affidavit filed on 8 November 2024 at the interim defended hearing of the appellant's section 79A application.
(2)The primary judge failed to consider some of the available evidence contained in the appellant's affidavit filed on 21 October 2024 which showed the appellant had not appealed the indemnity order made by the Court on 29 November 2021.
(3)The primary judge failed to adequately consider some of the available evidence before the Court, which showed the first respondent during the trial and subsequently thereafter had:
(a)Misrepresented certain facts relevant to the first respondent's conduct as a director of P Pty Ltd, B Pty Ltd, M Pty Ltd and K Pty Ltd; and/or
(b)Failed to disclose the relevant assets and liabilities including his personal guarantees he made when obtaining loans on behalf of P Pty Ltd, the company that administered the appellant's family trust, and failing to repay those loans; and/or
(c)Suppressed evidence which formed:
(i)The grounds by which a prior Court granted the indemnity order in favour of the first respondent on 29 November 2021, and
(ii)The non-disclosure of inter-company loans and personal guarantees by the first respondent to the appellant, which solely benefited companies controlled by the first respondent, resulting in the indemnity orders being made by the Court without consent.
(d)Used the indemnity order made in his favour to transfer liability to the appellant for a debt he incurred as the company director of B Pty Ltd when he, as sole director (and ongoing director), allowed the company to engage in unlawful activity in breach of the Corporations Act 2001 (Cth) through insolvent trading.
In circumstances where the transcript of the proceedings at first instance showed that no application was made, by counsel for the wife, to rely upon the affidavit of the wife dated 8 November 2025, it was conceded, by counsel for the wife, that the success of the appeal depended upon me being satisfied that the primary judge failed to have regard to the wife’s affidavit dated 21 October 2025.
I will therefore restrict my reasons to that issue.
THE WIFE’S AMENDED SUMMARY OF ARGUMENT
Relevantly, in her Amended Summary of Argument, the wife contended at paragraph 38:
38. The primary judge only considered two aspects of the Appellant’s material, rather than the entirety of her filed material, primarily material filed in her affidavit on 21 October 2024. The two aspects, according to the primary judge were:
(a) The Respondent failed to disclose [B Pty Ltd] had entered into liquidation prior to the trial, and
(b) Non-disclosure of the quantum of the loans and a director’s penalty notice levied against him (First Respondent) by the Australian Taxation Office.
(Footnotes omitted)
THE HUSBAND’S AMENDED SUMMARY OF ARGUMENT
In response to the question as to whether an affidavit purportedly sworn by the wife on 21 October 2024, was read in the first instance proceedings, the husband contends in his Amended Summary of Argument:
54.This Court has to determine whether the Affidavit said to have been filed on 21 October 2024 was in evidence and properly relied upon by the Appellant before the Court at first instance before it finds the Judge fell into error.
55.The Court would note that the Response and the Affidavit said to have been filed on 21 October 2024, is sealed as being filed on 21 November 2024, the day after the hearing. This seems consistent with the assertions made by the Appellant in her Summary of Argument, which states that she discovered difficulties with her Affidavits the next day (21 November 2024) when she attended the Registry.
56.It is also consistent with the discovery of the reality of the position being made on 21 November 2024 and the subsequent application by the Appeal to re-open the evidence as noted in the Appellant’s written submissions. The Court’s refusal to allow a re-opening is not the subject of the present appeal.
57.Whatever machinations may have been undertaken by the Appellant in seeking to file material after the hearing, it is evident on the Transcript that the Affidavit could not be relied upon. This is clear in that the attempt to refile material was couched in terms of “to be able to file those two errant affidavits to the clarify the error.”
58.The Court would note that in the body of the judgment, the references to the Appellant’s evidence and arguments are confined to reference to the Appellant’s Affidavit filed 26 August 2024.
59. The Transcript reveals the lukewarm attempt to in some way “refile” the two affidavits l late in the day, was abandoned before any ruling was made.
60. The Appellant did not apply for an adjournment or take any action at the hearing to put before the Court the Affidavit executed on 21 October 2024. The Appellant is bound by the case as run at first instance.
(Footnotes omitted)
CONSIDERATION
The Appeal is Incompetent
This is an appeal against interim orders made by the primary judge. Such an appeal requires leave to appeal. In that respect section 28(1)(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) provides that leave of the Federal Circuit and Family Court of Australia (Division 1) is required to appeal to the Court from “a prescribed judgment of the Federal Circuit and Family Court of Australia (Division 2).”
Those prescribed judgments are identified in regulation 4.02 of the Federal Court and Federal Circuit and Family Court of Australia Regulations 2022 (Cth), and include “an interlocutory decree (other than a decree in relation to a child welfare matter).” These proceedings are property proceedings and do not concern a child welfare matter.
The grant of leave requires the appellant to show the decision at first instance is attended by sufficient doubt to warrant appellate scrutiny and, additionally, substantial injustice would result if leave were refused, in the event it is determined that the decision is wrong (Medlow & Medlow (2016) FLC 93-692 at [44]–[57]).
The appeal in this matter is incompetent because it purports to be brought as of right. The grounds of appeal specifically disavow any intention to apply for leave to appeal. As noted by Edelman J in Plaintiff S164/2018 v Minister for Home Affairs (2018) 361 ALR 8 at 10 [8];
The requirement for leave cannot be waived by a defendant. Nor can a defendant submit to a hearing in the absence of leave. Nor could the act of filing an appearance in the appeal somehow create an estoppel that precludes a defendant from making submissions about the scope of the Court's subject matter jurisdiction. Such a result would be inconsistent with the "first duty" or "threshold" consideration "of any Court, in approaching a cause before it, ... to consider its jurisdiction"
(Footnotes omitted)
By reference to similar leave requirements in the Judiciary Act1903 (Cth), Edelman J noted, at 10 [10], the purpose being to:
… relieve the Full Court from having to deal with misconceived appeals from rulings on interlocutory matters, such as where a writ appears on its face to be an abuse of the process of the Court or where there is an attempt to institute a frivolous or vexatious proceeding.
In terms of what constitutes an interlocutory order Edelman J stated, at 11 [11]:
The "usual test for determining whether an order is final or interlocutory is whether the order, as made, finally determines the rights of the parties in a principal cause pending between them". Whether the rights of the parties are finally determined by the order will depend on whether the legal, not the practical, effect of the judgment is final. If it is open to the parties to bring another application then the legal effect is not final, even if the second application would usually be "doomed to failure because the issues of substance which it raised would have been decided adversely to the defendant in the first application."
(Footnotes omitted)
Leave to Appeal Would not have been Granted
For completeness, and in so far as it is relevant to the question of costs, I indicate that even if the wife had sought leave to appeal, such leave would not be granted.
This is because it is quite clear that an affidavit of the wife dated 21 October 2024 was not read by counsel by the wife in the proceedings at first instance. This is made clear by the Transcript from p.45 at line 26 to p.46 at line 4 which records:
HER HONOUR: Mr Jones.
MR JONES: Your Honour, might I just place the course. And I recognise it is extraordinary to do it this way, however, your Honour, the applicant has experienced difficulties on two occasions when she has attempted to file her affidavits, one of which is the one that I referred to was the response to the trustee’s application and its supporting affidavit that she attempted to file on 8 November 2024. That’s not on the portal yet. She filed that material. Where it has gone to, whether it’s in the registry at some stage waiting to be rejected and sent back, the applicant is unaware.
It also happened on 21 October 2024, when she has attempted to file an affidavit, and, apparently, that doesn’t appear on the portal at all. That then creates the difficulty where the applicant has attempted to file two affidavits in support, annexing this material that has been rejected by the registry for some unknown reason. And I am loathe to give evidence from the bar table on that point, however, I’m obliged… the applicant’s case as best I can.
HER HONOUR: No. I appreciate that, Mr Jones, but - - -
MR JONES: The question is, clearly, this is at an interlocutory stage. I would seek leave for the applicant to be able to file those two errant affidavits to clarify the error. I’m perhaps already understanding what your Honour will say in response.
HER HONOUR: But don’t we run into the difficulty – there’s some 70 pages that she wishes to annex.
MR JONES: Yes, your Honour.
HER HONOUR: So we fall foul of the rules yet again.
MR JONES: Yes. I did envisage that. Thank you, your Honour.
HER HONOUR: Is there anything further, gentlemen?
MR JONES: No, your Honour.
HER HONOUR: All right. So we won’t be tendering the documents that your client has annexed to the - - -
MR JONES: Under those circumstances, no, your Honour.
It was, with respect, disingenuous for counsel for the wife to submit that there was, before the court at first instance, an affidavit of the wife dated 21 October 2024. This was in circumstances where counsel for the wife in the appeal was also counsel who appeared on behalf of the wife at first instance, and where he acknowledges that, as incredulous as it seems, neither himself nor his client were in possession of either an electronic or hard copy of an affidavit by the wife dated 21 October 2021 during the course of the hearing at first instance. Furthermore, the affidavit of the wife dated 21 October 2024, which was filed on 21 November 2024, the day after the hearing, was sworn before Mr Jones himself.
This is in circumstances where counsel for the wife contended, in the proceedings at first instance, that the affidavit of 21 October 2024 was not before the Court due to problems the wife had with the electronic filing of the document, necessarily indicating that she retained a hard copy of the affidavit that had purportedly been signed by her and witnessed by Mr Jones on 21 October 2024. No explanation was provided to the primary judge nor to this court as to why, in those circumstances, a hard copy of the affidavit was not available to provide to the primary judge at the hearing on 20 November 2025.
Counsel for the wife submitted that despite him not seeking to read the affidavit of the wife, said to have been filed on 21 October 2024, it can be inferred the that the primary judge must have, without notice to the other parties, accessed the court’s electronic portal to access the affidavit. That inference, he contends, can be drawn from the reference at [32] of the primary judge’s reasons, to the wife relying on “her affidavit filed 21 October 2024.”
That submission was wholly without merit. It is inconsistent with the transcript extract to which I have referred, and it is inconsistent with the fact that the only affidavit dated 21 October 2024 that has been included in the appeal book is an affidavit filed on 21 November 2024 – the day after the hearing. That submission is also inconsistent with the fact that, after the hearing, the wife through her advocate, Mr Jones, applied, unsuccessfully, to reopen the first instance proceedings to admit into evidence an affidavit purportedly sworn by the wife before Mr Jones on 21 October 2024.
In summary, it is clear that there was no affidavit of the wife, sworn on 21 October 2024, that was read by counsel for the wife in the proceedings before the primary judge. The reference to such an affidavit in paragraph [32] was clearly an error. It is regrettable that reality was not acknowledged by counsel for the wife. It is more regrettable that he made submissions with a view to attempting to persuade me of the existence of a different reality, in circumstances where he was the wife’s advocate in the first instance proceedings.
The reality is that counsel for the wife did not, in the first instance proceedings, seek to rely on an affidavit by the wife purportedly sworn on 21 October 2024. The wife is bound by forensic decisions of her counsel. In that respect in R v Birks (1990) 19 NSWLR 677 at 683 – 684 Gleeson CJ, (with whom McInerny J agreed), relevantly stated:
… civil litigation conducted in accordance with what is sometimes described as the adversary system of justice. To a large extent the parties to such proceedings are bound by the manner in which they conduct them. It is the parties who decide, for example, what information will be put before a tribunal of fact, and the tribunal bases its decision on that information.
As a general rule, a party is bound by the conduct of his or her counsel, and counsel have a wide discretion as to the manner in which proceedings are conducted. Decisions as to what witnesses to call, what questions to ask or not to ask, what lines of argument to pursue and what points to abandon, are all matters within the discretion of counsel and frequently involve difficult problems of judgment, including judgment as to tactics. The authorities concerning the rights and duties of counsel are replete with emphatic statements which stress both the independent role of the barrister and the binding consequences for the client of decisions taken by a barrister in the course of running a case. For example, in Rondel v Worsley [1969] 683 1 AC 191 at 241, Lord Morris of Borth-y-Gest quoted with approval the following statement of the Lord President in the Scottish case of Batchelor v Pattison and Mackersy (1876) 3 R (Ct of Sess) 914, concerning the role of an advocate:
“… His legal right is to conduct the cause without any regard to the wishes of his client, so long as his mandate is unrecalled, and what he does bona fide according to his own judgment will bind his client, and will not expose him to any action for what he has done, even if the client’s interests are thereby prejudiced.”
Accordingly, for these reasons, even if leave to appeal had been sought, the appeal was wholly without merit and lacked any prospects of success.
ORDERS AND COSTS
Dismissal of Appeal
It has been earlier noted that the appeal against the second respondent was dismissed by consent. For the reasons earlier set out, the appeal against the first respondent is without merit and is dismissed.
Costs
The issue of costs in respect to proceedings under the Family Law Act 1975 (Cth) (“the Act”) is to be determined in accordance with s 114UB of the Act. That section relevantly provides that, ordinarily each party will bear their own costs in family law proceedings. That situation may be varied, however, in circumstances where the court considers that there are circumstances which justify the awarding of costs in favour of a party or parties. Those circumstances are set out in s 114UB(3) of the Act and include the following:
(a)the financial circumstances of each party to the proceedings;
(b)whether any party to the proceedings is receiving assistance by way of legal aid in respect of the proceedings and, if so, the terms of the grant of the assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting paragraphs (a) and (b), 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, and in relation to their duty of disclosure under subsection 71B(1), 90RI(1) or 90YJA(1);
(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 a 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;
(g)such other matters as the court considers relevant.
In Penfold v Penfold (1980) 144 CLR 311 at 315, when considering the equivalent section of the Act, the court held that beyond the “essential preliminary” consideration of those matters set out above, there is no “additional or special onus” on the applicant, for the Court to make an order for costs.
In considering whether it is appropriate and just to make an order for costs in favour of a party, it is unnecessary for the Court to be satisfied in respect to each and every factor set out in s 114UB; Fitzgerald v Fish (2005) 33 Fam LR 123 at 130 [41]. Nor does any factor set out in that section have priority over another: Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 at 80,400 [24].
In opposing an order for costs, counsel for the appellant referred to the appellant facing difficult financial circumstances. The second respondent and counsel for the first respondent noted, however, that the appellant is entitled to receive a lump sum amount as result of property adjustment orders made by the Court. In any event, in Cross & Beaumont (2008) 39 Fam LR 389 at 402 [60], the Full Court held that financial incapacity to pay a costs order is not a barrier to the making of such an order, where the conduct of the party may warrant a costs order being made.
In considering the application for costs by the second respondent, I note that the second respondent’s involvement in the appeal occurred as a result of the appellant appealing all orders of the primary judge, including Order 6. Order 6 was the only order that impacted the second respondent. Despite appealing Order 6, neither the Amended Notice of Appeal nor the appellant’s Summary of Argument contended that there was any error on the part of the primary judge in making Order 6.
In Maddax and Danner (Costs) [2016] FamCAFC 229 the Full Court stated at [6]:
It follows that in relation to the two appeals which were dismissed the appellant has been wholly unsuccessful. In our view, his lack of success amounts to justifying circumstances (s 117(2)) in these appeals, albeit this does not mean costs follow the event. Although an appeal which has been discontinued would not be categorised as one that has been “wholly unsuccessful” (Bant & Clayton (Costs) [2016] FamCAFC 35), an appeal which is discontinued as it is called on for hearing will almost certainly require a respondent (as it has here) to incur costs unnecessarily. This circumstance amounts to justifying circumstances as well.
In this matter, it was unreasonable for the appellant to wait until the commencement of the appeal before discontinuing the appeal against the second respondent, and in those circumstances an award of costs in favour of the second respondent is justified. I will subsequently explain why those costs should be paid as a lump sum amount assessed at scale by the second respondent.
An appellant that has been wholly unsuccessful in their appeal will ordinarily be required to pay the respondent’s costs: Medlow & Medlow (No 2) [2016] FamCAFC 63 at [30]. The appeal against the first respondent was misconceived. The appellant was not entitled to commence an appeal as of right but rather required leave. For reasons that I have explained, even if the proceedings had been properly initiated, the proceedings were wholly without merit. In those circumstances, the appellant should pay the costs of the first respondent. The question becomes whether those costs should be paid on an indemnity basis as sought by the respondent.
An applicant for indemnity costs carries the onus of establishing that the case falls within the “exceptional” category of cases, where such an order is justified: Kohan & Kohan (1993) FLC 92-340 at 79,614; D & D (Costs) (No 2) (2010) FLC 93-435 at 1,470 – 1,471 [26]–[28] and Phillips & Hansford (2020) FLC 93-941. In considering whether to make such an order, as a general rule the Court is reluctant to order indemnity costs against an unrepresented litigant: Kristiansen & Kristiansen [2025] FedCFamC1A 129 at [92].
I accept that at the time she commenced this appeal, the appellant was self-represented. That was not the case, however, on 21 July 2025 and subsequently, when the appellant filed the “Appellant’s Written Submissions and Amended Summary of Argument.” That document which, on its face, has been drafted and or authorised by counsel for the appellant contains a misleading statement which is set out in paragraph 7(c) as follows:
The Appellant filed an affidavit on 21st October 2024. The primary trial judge relied on this affidavit and evidence as part of her judgement. This Affidavit was sealed on 21 November 2024 – the affidavit was actually filed on 21 October 2024. Counsel for the Appellant read this affidavit without objection during the Interim Defended Hearing The primary judge in her Reasons for Judgment relied upon the Appellant’s affidavit filed ‘21 October 2024’.
(As per the original, citations omitted)
Even if, contrary to the weight of available evidence, an affidavit sworn by the appellant on 21 October 2024 had been filed on that day, on the admissions of counsel for the appellant neither an electronic copy nor a hard copy of that document was available at the time of the interim hearing before the primary judge on 20 November 2024. The assertion that this affidavit was read in the proceedings was patently false. The submission by counsel for the appellant to the contrary amounted to misconduct as a litigant. This was in circumstances where counsel for the appellant in the appeal proceedings was also counsel who appeared for the appellant in the proceedings before the primary judge and must necessarily have known the truth as to what occurred.
Misconduct that causes a loss of time to the court and the other parties falls within the category of exceptional circumstances, where an order for indemnity costs may be justified: Moy & Pao (2022) FLC 94-073 at [32] referring to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225. This is such a case.
Accordingly, I propose to make an order requiring the appellant to pay the costs of the first respondent in connection with the appeal, on a party and party basis up until, and including, 20 July 2025 and on an indemnity basis after that date. At the conclusion of the hearing, I indicated to the parties that I would make orders for the parties to make such submissions as they considered appropriate in respect to the quantum of costs, with those submissions to be no more than three pages in length, to be filed within 14 days of the date of these orders.
The dismissal of the appeal in respect to the second respondent does not, however, fall within the category of exceptional circumstances. Nonetheless, it is appropriate in my view to order costs in a fixed sum amount. In that respect, rule 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) permits the Court to order costs in a specific amount. The power to do so is to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”: Graham & Squibb (2019) FLC 93-892 at [92] quoting Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120.
I am satisfied that the costs sought by the second respondent have been assessed at the relevant scale at $4802.75 and that those costs are logical, fair and reasonable. I will therefore make an order for the appellant to pay the costs of the second respondent in that amount.
I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland. Associate:
Dated: 21 August 2025
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