Colby & Coppola (No. 3)

[2021] FamCA 590

FAMILY COURT OF AUSTRALIA

Colby & Coppola (No. 3) [2021] FamCA 590

File number(s):	MLC 3489 of 2015
Judgment of:	BAUMANN J
Date of judgment:	9 August 2021
Catchwords:	FAMILY LAW – COSTS – Where the Respondents seek an order for indemnity costs against the Applicant in circumstances where the Applicant was wholly unsuccessful in contesting the Respondents’ application for summary dismissal – Costs order made in favour of the Respondents.
Legislation:	Family Law Act 1975 (Cth) s 117
Cases cited:	Colby & Coppola [2019] FamCA 629 Colby & Coppola and Ors [2020] FamCA 358 Colby & Coppola and Ors (No. 2) [2020] FamCA 1067
Number of paragraphs:	14
Date of last submission/s:	1 March 2021
Date of hearing:	In chambers on the papers
Place:	Brisbane

ORDERS

MLC 3489 of 2015

BETWEEN:

MS COLBY

Applicant

AND:

MR COPPOLA

First Respondent

MR D COPPOLA

Second Respondent

L PTY LTD

Third Respondent

ORDER MADE BY:	BAUMANN J
DATE OF ORDER:	9 AUGUST 2021

THE COURT ORDERS:

1.That the Applicant, Ms Colby, shall pay a contribution to the costs of the Second Respondent and Third Respondent, fixed in the sim of $10,000, within sixty (60) days of the date of this Order.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Colby & Coppola has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

BAUMANN J:

1. On 14 December 2020, for Reasons published (see Colby & Coppola and Ors (No. 2) [2020] FamCA 1067), the Court ordered that the application for relief against the Second Respondent, Mr D Coppola and the Third Respondent, L Pty Ltd (hereafter called “the Respondents”), be summarily dismissed. The Respondents were removed from the proceedings.

2. I rely upon the Reasons so published.

3. In an Application in a Case initially filed on 18 September 2020, the Respondents sought costs in the event they were successful in the Application for summary dismissal – which they were.

4. In written submissions filed 29 January 2021 (further supported by an affidavit of the Respondents’ solicitor, Howard Komesaroff filed the same day), the Respondents contend for an order for costs, fixed in the sum of $16,213 “because she dragged non-parties, including a family member, into the Family Law proceeding without any merit to the claims”.

5. The Applicant (in the substantive proceedings), Ms Colby, by Response filed 1 March 2021 (supported by her affidavit) opposes any order for costs.  I have considered all submissions (those of Ms Colby being annexed to her said Response).

6. The statutory framework provides that in family law proceedings, the general rule is that each party bears their own costs (s 117(1)), however if after consideration of the factors set out in s 117(2A), the Court is satisfied circumstances exist to justify an order for costs, then the Court is empowered to make such an order as is just.

7. Before turning to analyse the relevant s 117(2A) factors, it is proper to record, in my view, although the Respondents were in one sense “non-parties” as they describe themselves, the Second Respondent, Mr D Coppola, is the son of the de facto husband. The company, L Pty Ltd, is the alter ego of Mr D Coppola. Although Ms Colby did seek to expand her orders for relief beyond the core allegation that the de facto husband had transferred a valuable business interest to his son (or his son’s entity) without proper consideration passing, it was not until further discovery had been undertaken by Mr D Coppola that the full details of the transaction which took place between April 2016 and 23 June 2016 – in particular funds exchanged for the equipment – were known.

8. However, although Ms Colby is an intelligent person, as an unrepresented litigant her focus on these transactions generally, and Mr D Coppola in particular, became intensely directed when it became clear her former partner has no funds or assets.  This meant, from her perspective, the only source of recovery of funds she felt she was entitled to recover (which she quantified at $462,000) became Mr D Coppola.

9. The long history of this litigation which commenced before the Federal Circuit Court of Australia in Dandenong is recorded in at least the Reasons for Judgment by:

   (a)Hogan J in Colby & Coppola [2019] FamCA 629, when her Honour made various interlocutory Orders to progress discovery;

   (b)Me in Colby & Coppola and Ors [2020] FamCA 358, when I dismissed an application by the Respondents to be removed as parties and ordered further discovery; and

   (c)Me in Colby & Coppola and Ors (No. 2) [2020] FamCA 1067, when I summarily dismissed the Application by the de facto wife against the Respondents.

10. Also I note, that although the substantive proceedings have been listed for a Final Hearing commencing 20 October 2021, recently the Applicant has filed a Notice of Discontinuance.  At first blush, where the de facto husband has no assets and sought that the Application be dismissed, the proceedings may have essentially come to an end.

11. I now discuss the relevant s 117(2A) factors:

    (d)There is limited evidence as to the financial position of the Respondents, save that the Financial Statements of L Pty Ltd (created solely for the purpose of acquiring the earthmoving business and equipment) reveal it has few assets and limited profitability.  The Applicant, Ms Colby, owns property with a modest equity – she says greatly reduced by the debts that burden the property, raised during the course of the de facto relationship;

    (e)Neither party was in receipt of Legal Aid;

    (f)As noted, although the position taken by the Applicant as against the Respondents was not founded on the evidence, I do accept that the Respondents showed reluctance to make full and timely disclosure.  Whilst in part this stemmed from the clear suspicions and mistrust between the de facto partners, the nature of the transactions and the manner in which the de facto husband maintained some apparent connection with the earthmoving operations, fuelled the suspicions of Ms Colby.  I do take all this conduct into account;

    (g)The proceedings were not necessitated by the failure of a party to comply with previous Orders of the Court; and

    (h)After the de facto wife was successful in defending an Application by the Respondents to be removed as parties to the substantive litigation, the de facto wife may have been of the belief that the Court was in some way indicating she had a sustainable claim against the Respondents.  Had she read the Judgment carefully (or, even better, taken some legal advice at the time), it should have become apparent to her that was not the case.  Rather, at the time, and applying the appropriate principles, the relief to be removed was not granted.

    However, after further discovery was made, and before the commencement of the Application for summary dismissal, Ms Colby had an opportunity to discontinue as against the Respondents.  By not doing so, she left the Respondents with the available remedy to seek summary dismissal.  Ms Colby, although contesting the Application, was “wholly unsuccessful”.  This is, in this case, a significant factor in favour of making a costs order.

    CONCLUSION

12. On the basis of the findings above, I am satisfied that circumstances exist to justify an order for costs.

13. However, despite the Respondents not being a party to the de facto relationship and although the claims were summarily dismissed, I am not satisfied that this is one of those exceptional cases that justify and “indemnity” costs order.

14. I propose to fix costs – so as to avoid the necessity for further assessment by a Registrar.  Considering the evidence of the solicitor for the Respondents, and the submission quantifying indemnity costs at $16,213, I make an order that the Applicant, Ms Colby, shall pay a contribution to the costs of the Respondents, fixed in the sim of $10,000, within 60 days.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann.

Associate:  

Dated:       9 August 2021