FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cavendish & Cavendish (No 2) [2023] FedCFamC1F 548
File number(s): SYC 7595 of 2016 Judgment of: HARPER J Date of judgment: 5 July 2023 Catchwords: FAMILY LAW – COSTS – Where husband seeks costs on an indemnity basis – Where wife seeks that no costs orders be made – Where wife was wholly unsuccessful – Where husband made numerous offers of settlement – Where the outcome obtained by the wife at final hearing was worse than would have been achieved had she accepted any of the settlement offers – Wife provided no reasonable explanation for rejecting the settlement offers – Where wife repeatedly failed to comply with disclosure obligations, case management directions of the Court and failed to attend and engage in mediation and settlement in good faith – Where actions of the wife caused the husband to incur unnecessary legal costs – Where husband complied with case management directions and wife did not – A basis for indemnity costs established but evidence from husband did not allow Court to differentiate costs for parenting and property issues – Costs ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 6.01 6.06
Cases cited: Atkins & Hunt (Costs) [2017] FamCAFC 131
Cavendish & Cavendish [2023] FedCFamC1F 14
Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225; [1993] FCA 536
D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish (2005) 33 Fam LR 123; [2005] FamCA 158
Harris & Dewell (No 2) (2018) FLC 93-863; [2018] FamCAFC 180
Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116
Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCA 1178
Moorcroft & Moorcroft (2020) 60 Fam LR 361; [2020] FamCAFC 83
Munday and Bowman (1997) FLC 92-784; 22 Fam LR 321
Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248
Prantage & Prantage (Costs) [2014] FamCA 850
Re JJT; Ex parte Victoria Legal Aid (1998) 1998 CLR 184; [1998] HCA 44
Division: Division 1 First Instance Number of paragraphs: 49 Date of last submission/s: 31 May 2023 Date of hearing: On the papers Place: Sydney Solicitor for the Applicant: York Family Law Specialists Solicitor for the Respondent: Kinghan & Associates ORDERS
SYC 7595 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR CAVENDISH
Applicant
AND: MS CAVENDISH
Respondent
order made by:
HARPER J
DATE OF ORDER:
5 July 2023
THE COURT ORDERS THAT:
1.Within 60 days of the date of these orders, the Respondent Wife pay to the Applicant Husband:
(a)costs of the financial issues in the proceedings in the fixed sum of $85,000; and
(b)costs of the Application subject of this judgment in the amount of $5,000.
Note: The form of the order is subject to the entry…
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- AGLC
- Cavendish & Cavendish (No 2) [2023] FedCFamC1F 548
- Case
- [2023] FedCFamC1F 548
- Decision Date
CaseChat Overview and Summary
In Cavendish & Cavendish (No 2), the husband and wife were involved in a property settlement dispute following their divorce. The wife had been awarded costs at the interlocutory level, but the husband sought a costs order in his favour at the final hearing, arguing that the wife's failure to accept any offer made by him and her total lack of success justified such an order. The wife contended that her financial position neutralised the justifying circumstances. The court was required to determine whether the circumstances warranted an order for indemnity costs, which are rare and require something exceptional. The husband argued that the case met the criteria for indemnity costs set out in Colgate-Palmolive Company v Cussons Pty Limited and Munday and Bowman, including the wife's imprudent refusal of an offer to compromise.
The court found that the circumstances did not warrant an order for indemnity costs. While the wife's failure to accept any offer and her lack of success justified an order for costs in the husband's favour, the court held that the circumstances did not reach the exceptional level required for indemnity costs. The court noted that the award of indemnity costs is a significant departure from the normal standard and requires something special or unusual. The husband's arguments, while persuasive, did not demonstrate the exceptional circumstances required for such an order. The court concluded that a costs order in the husband's favour was appropriate, but the circumstances did not justify indemnity costs.
The court found that the circumstances did not warrant an order for indemnity costs. While the wife's failure to accept any offer and her lack of success justified an order for costs in the husband's favour, the court held that the circumstances did not reach the exceptional level required for indemnity costs. The court noted that the award of indemnity costs is a significant departure from the normal standard and requires something special or unusual. The husband's arguments, while persuasive, did not demonstrate the exceptional circumstances required for such an order. The court concluded that a costs order in the husband's favour was appropriate, but the circumstances did not justify indemnity costs.
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
As can be seen, the outcome obtained by the wife at final hearing was worse than what would have been achieved had she accepted any offer made after 16 May 2017. CONCLUSION ON JUSTIFYING CIRCUMSTANCES I am satisfied that the wife’s total lack of success and her failure to accept any offer made by the husband justify an order for costs in his favour. I do not accept the wife’s arguments that her financial position neutralises such justifying circumstances. She did not in her evidence or submissions provide a sound reason for why a costs order should not be made. The question remains the basis on which costs should be awarded.INDEMNITY COSTS The husband argues that the circumstances are such that the Court should award indemnity costs in his favour. The award of indemnity costs in this Court has regularly been called a significant departure from the normal standard, rare, and requires something exceptional: Harris & Dewell (No 2) (2018) FLC 93-863, where the Full Court said: 23. In Kohan and Kohan, the Full Court held, in applying the principles expounded by Sheppard J in Colgate-Palmolive, that an order for indemnity costs represents a “very great departure from the normal standard”. In the later decision of the Full Court in Prantage & Prantage, Thackray and Ryan JJ referred to Kohan and other authorities in the Full Courts of both this Court and the Federal Court of Australia as well as the state appeal courts. Their Honours concluded (at [86]) that the “usual rule” continued to apply in respect of awards of costs in this Court notwithstanding the Full Court accepting that the difference between party/party costs and a party’s actual costs has continued to grow significantly.24. That proposition also derives support from what Callinan J said in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation. His Honour said that an order for indemnity costs should “be exceedingly rare, as they have a tendency to encourage extravagance and put the quantum of legal fees beyond the effective scrutiny of the courts and their taxing officers”. 25. The rarity of an order for indemnity costs can also be seen illustrated by the comments of Lindgren J in NMFM Property Pty Ltd v Citibank Ltd (No 2), referred to by their Honours in Prantage (at [102] – [103]). Lindgren J said that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation.”(Footnotes omitted) The husband relied on Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 in support of his argument that some “special or unusual feature” existed in the matter to “justify the Court departing from the ordinary practice” at [16]. He further referred to Munday and Bowman (1997) FLC 92-784 at 84,660, where Holden CJ set out five circumstances in which an award of indemnity costs might be justified: (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: see Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397.(b) Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud: see Fountain Selected Meats (Sales) Pty Ltd.(c) Evidence of particular misconduct causing loss of time to the court and to other parties: see Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (French J, Fed C of A, 3 May 1991, unreported).(d) The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions: see Ragatta Developments Pty Ltd v Westpac Banking Corporation (Davies J, Fed C of A, 5 March 1993, unreported).(e) An imprudent refusal of an offer to compromise.
Ratio Decidendi
Legal Principle Established
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