Dubois & Kusumo (No 2)

[2019] FamCA 641

FAMILY COURT OF AUSTRALIA

DUBOIS & KUSUMO (NO. 2) [2019] FamCA 641

FAMILY LAW – COSTS – whether an order under s 117(2A) should be made on an interim basis – untested evidence – whether one party’s success on certain issues debated on an interim basis equated to that party being “wholly successful” – desirability of determining costs issues after a full ventilation of all facts at trial – held, costs to be determined at trial.

Family Law Act 1975 (Cth), s 117
Family Law Rules 2004 (Cth), r 19.18

Colgate Palmolive Co v Cussens Pty Ltd (1993) 46 FCR 225
Dubois & Kusumo [2019] FamCA 567
In the Marriage of Hogan (1986) 10 Fam LR 681
In the Marriage of Wilson (1989) 13 Fam LR 205
Penfold v Penfold (1980) 144 CLR 311

APPLICANT: Ms Dubois

RESPONDENT: Mr Kusumo

FILE NUMBER: MLC 8329 of 2017

DATE DELIVERED: 11 September 2019

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Wilson J

BY WAY OF WRITTEN SUBMISSIONS: 6 September 2019

SUBMISSIONS RECEIVED FROM:

COUNSEL FOR THE APPLICANT: Mr L Wraith

SOLICITOR FOR THE APPLICANT: Peter Szabo Family Law

COUNSEL FOR THE RESPONDENT: Not applicable

SOLICITOR FOR THE RESPONDENT: Waterson Legal

Orders

Costs of and incidental to this application are to be determined after the trial of this proceeding.

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 Dubois & Kusumo 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 MELBOURNE

FILE NUMBER: MLC 8329 of 2017

Ms Dubois

Applicant

And

Mr Kusumo

Respondent

REASONS FOR JUDGMENT

Introduction

1. Following the provisions of reasons handed down on 21 August 2019 (Dubois & Kusumo),[1] the applicant has sought the costs of the application in relation to the refundable accommodation deposit (“RAD”).  She sought payment of the sum of $19 730 as itemised in written submissions prepared by Mr Wraith of counsel.

   [1] [2019] FamCA 567

2. In essence, the applicant argued she should have her costs because –

   a)she had been wholly successful on each of the three discrete applications argued before me;

   b)conversely the respondent has been wholly unsuccessful on each of those three applications; and

   c)the financial circumstances of the applicant are such that continuing legal costs place significant financial pressure on the applicant.

3. Conversely, the respondent submitted that the applicant’s costs should not be paid by him.  In essence, he contended –

   a)it was erroneous for the applicant to say she had been wholly successful in the applications on 14 August 2019;

   b)at no stage prior to 14 August 2019 did the applicant indicate that she consented to any payment being made of the RAD;

   c)the respondent was partially successful in his RAD payment application;

   d)the elements of s 117(2A) of the Family Law Act were not enlivened so as to deviate from the position set out in s 117 to the effect that each party should bear her and his own costs;

   e)alternatively, all questions of costs should be reserved for determination at trial.

Synopsis

1. For the reasons that follow I am of the view that costs of and incidental to this application should be determined after the trial of this proceeding.

A short examination of the facts

1. This proceeding was commenced following the cessation of the applicant’s and the respondent’s relationship.  The duration of the relationship was in dispute.  The applicant contended it lasted for 20 years whereas the respondent contended it lasted for six years.  Soon after the applicant commenced this litigation the respondent was hospitalised leading to his being placed in aged care accommodation.  The respondent’s daughter was proposed as his administrator.  However, by orders made in the Victorian Civil and Administrative Tribunal Ms D was appointed the respondent’s administrator.  According to the respondent, for most of the 2018 calendar year questions about the administration of the respondent’s estate were before VCAT. 

2. Soon after this proceeding was transferred to this court from the Federal Circuit Court of Australia, on 3 July 2019 a registrar of this court conducted a case management conference.  On that occasion the applicant’s counsel informed the registrar that the applicant objected to the payment of any sum by way of RAD.  In written submissions dated 6 September 2019 the respondent’s solicitor contended that only at the hearing of the application on 14 August 2019 did the applicant change her position so that she conceded an RAD payment of $275 000 was appropriate.

3. In the respondent’s submissions, Mr Waterson contended that the applicant sourced the evidence of Mr C.  Mr Waterson submitted that the applicant persisted in her opposition to the payment of any RAD amount until the hearing on 14 August 2019 and that on that day, in court, the applicant acknowledged that an RAD payment of $275 000 was appropriate.

4. Mr Waterson submitted that on a proper construction of my reasons the applicant was not wholly successful in the applications that were agitated on 19 August 2019.  He said the respondent was justified in bringing the application as it led at least to the sum of $275 000 being applied to the RAD whereas the applicant had earlier opposed the payment of any RAD amount.  Mr Waterson also pointed out that the applicant abandoned her application for security for costs on 19 August 2019 and instead pursued only the application for a partial property settlement.

5. There is force in Mr Waterson’s contentions.

Costs orders generally

1. The starting point in any examination of an application for costs is s 117(1) of the Family Law Act. That section provides that each party should bear his or her own costs. Where circumstances justify the court so doing, the court is empowered to make such order as to costs as it considers just, as s 117(2) provides. The applicable rules of court mentioned in s 117(2) include r 19.18(1) of the Family Law Rules.  Relevantly, that rule provides that the court possesses a discretion to make an order that costs be paid in a specific sum or on a particular basis, most usually on an indemnity basis of the type canvassed in Colgate Palmolive Co v Cussens Pty Ltd.[2] 

   [2] (1993) 46 FCR 225

2. The decision of the High Court in Penfold v Penfold[3] was an early authoritative statement about the proper interpretation of s 117(2) of the Family Law Act. There, the plurality (Stephen, Mason, Aickin and Wilson JJ) held that it was erroneous for the Full Court of this court (Evatt CJ, Asche & Lusink JJ) to have concluded that an order can only be made under s 117(2) in a clear case. The High Court held that s 117(2) of the Family Law Act said no such thing. However, s 117(2A) of the Family Law Act overcame other observations in that decision, especially the observation that “in the absence of some positive legislative indication, we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs”.

   [3] (1980) 144 CLR 311

3. Section 117(2A) is expressed in mandatory terms to require a court when considering what order (if any) should be made under s 117(2) to have regard to seven matters. None of those seven matters is determinative. However, the court must consider each matter in the seven alphabetical subsections of s 117(2A).

4. The elements of s 117(2A) and the observations in In the Marriage of Wilson[4] (especially those of Kay J) lead me to the conclusion that direct evidence of those matters relevant to costs is essential. In other words, in order for me to determine a question of costs – whether as to liability for or quantum of costs – direct evidence (rather than mere submission) must be before me about each matter canvassed in the alphabetical subsections of s 117(2A). Accordingly, I needed direct evidence of –

   a)the financial circumstances of each party;

   b)whether either was in receipt of legal aid;

   c)the conduct of the parties in respect of the issues set out in s 117(2A)(c);

   d)whether the litigation was necessitated by a failure to comply with a previous order;

   e)whether any party had been wholly successful in the proceeding;

   f)whether an offer of settlement had been made to settle the litigation and its terms; and

   g)any other relevant matter.

   [4] (1989) 13 Fam LR 205

5. In this application for costs, no affidavit material was adduced on any of those matters, save possibly for some modest financial information in the form of the parties’ financial statements.

6. As with any costs order, the need for such an order to be just was stated in In the Marriage of Hogan.[5]  That is the case irrespective of whether the costs order is interim or final.

   [5] (1986) 10 Fam LR 681

7. In my view, the evidence of the matters identified in s 117(2A) is of such fluidity as to enable me to conclude that, at present –

   a)no direct evidence exists on key matters of which s 117(2A) requires proof and consideration;

   b)I should not guess at the evidence on point; and

   c)I am unable to conclude that the making of an order for costs at this interim juncture is just.

8. The factual situation may firm up between now and trial.  If so, the issue of costs, not only of this application but generally, can be addressed when the evidence is tested in its entirety.  In my view costs should be determined at trial.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 11 September 2019.

Associate: 

Date:  11 September 2019