Edgar & Edgar (No 2)

Case [2024] FedCFamC1F 552


FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Edgar & Edgar (No 2) [2024] FedCFamC1F 552

File number: SYC 6432 of 2023
Judgment of: HARTNETT J
Date of judgment: 20 August 2024
Catchwords: FAMILY LAW – COSTS – Where the wife filed an application for joinder of the proposed second respondent – Where the wife was wholly unsuccessful – Where previous orders were made for the wife to pay the proposed second respondent’s costs – Where the wife and the proposed second respondent were unable to agree on costs – Costs order in a fixed sum to be paid by the wife to the proposed second respondent.
Legislation:

Family Law Act 1975 (Cth) ss 117, 90AF

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)

Federal Circuit and Family Court of Australia (Family Law) Regulations 2021 Schedule 3

Cases cited:

Collins & Collins (1985) FLC 91-603

Cross & Beaumont (2008) 39 Fam LR 389

Kohan & Kohan (1993) FLC 92–340

Pascoe & Larsen (No 2) [2022] FedCFamC1A 126

PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123

Penfold v Penfold (1980) 144 CLR 311

Division: Division 1 First Instance
Number of paragraphs: 25
Date of hearing: 2 August 2024
Place: Melbourne, via videolink
Solicitor for the Applicant: Ramsden Family Law
Counsel for the Respondent: Ms Edwards
Solicitor for the Respondent: PW Lawyers
Counsel for the Proposed Second Respondent: Mr Walsh
Solicitor for the Proposed Second Respondent: Crompton + Walsh Pty Ltd

ORDERS

SYC 6432 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR EDGAR

Applicant

AND:

MS EDGAR

Respondent

B LTD

Proposed Second Respondent

ORDER MADE BY:

HARTNETT J

DATE OF ORDER:

20 AUGUST 2024

THE COURT ORDERS THAT:

1.The wife pay the costs of B Ltd fixed in the sum of $32,000, with such sum to be paid by the wife within 6 months of this date.

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 the pseudonym Edgar & Edgar has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

HARTNETT J

INTRODUCTION

  1. The discrete issue for the Court to determine is the quantum of costs payable to the proposed second respondent B Ltd by the respondent wife (“the…

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AGLC
Edgar & Edgar (No 2) [2024] FedCFamC1F 552
Case
[2024] FedCFamC1F 552
Decision Date

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, the case of Edgar & Edgar (No 2) dealt with an application by the wife to join a proposed second respondent, B Ltd, to the existing family law proceedings. The application was unsuccessful, and the Court had to determine the quantum of costs to be paid by the wife to B Ltd. The wife's financial circumstances were considered, as she is an educator earning approximately $40,000 per annum, and she has incurred considerable legal fees. Despite her financial constraints, the Court noted that impecuniosity is not a barrier to making a costs order if justified. The Court fixed the costs at $32,000, to be paid within six months, aiming to avoid further delay and inconvenience to the parties.

The central legal issue was determining the appropriate quantum of costs to be paid by the wife to B Ltd. The Court considered the wife's financial circumstances, her employment status, and the absence of support from the husband. The wife's income and her entitlement to a property adjustment from the husband were significant factors. Additionally, the Court noted the unencumbered and valuable real property owned by the wife and husband. The Court recognised the wife's limited financial resources and the need to balance this with the necessity of holding the wife accountable for the unsuccessful application.

Hartnett J addressed the matter by considering the financial implications and the need to expedite the resolution of the costs dispute. The judge acknowledged the wife's financial constraints but also recognised the need for the wife to bear the costs of the unsuccessful application. The Court opted to fix a lump sum to avoid further litigation and costs. The decision was influenced by the need to balance the wife's financial situation with the requirements of justice in the context of family law proceedings. The Court's reasoning emphasised the importance of considering all relevant factors in determining the appropriate costs order.

The Court ordered that the wife pay the costs of B Ltd in the fixed sum of $32,000, to be paid within six months of the order date. This decision aimed to conclude the costs dispute and avoid additional litigation, recognising the wife's financial limitations while upholding the principle that unsuccessful parties in family law proceedings may be required to bear costs. The form of the order is subject to minor adjustments as per the Court's rules.

Orders

Orders of the court

SYC 6432 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR EDGAR

Applicant

AND:

MS EDGAR

Respondent

B LTD

Proposed Second Respondent

ORDER MADE BY:

HARTNETT J

DATE OF ORDER:

20 AUGUST 2024

THE COURT ORDERS THAT:

1. The wife pay the costs of B Ltd fixed in the sum of $32,000, with such sum to be paid by the wife within 6 months of this date.

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.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The financial circumstances of a party against whom a costs order is sought is a material consideration, albeit it may be outweighed by another or other considerations. I observe that impecuniosity is not a barrier to the making of a costs order where there are circumstances that justify the Court in doing so (Cross & Beaumont (2008) 39 Fam LR 389 at [60]). CONSIDERATION A costs order against the wife was a matter determined prior to this time. Its quantum was not. I propose to fix a lump sum which is a course open to me and one not opposed by the parties. Certainly, it will avoid further delay, inconvenience and cost to the parties. A detailed chronology of this matter is outlined in my judgment delivered 17 May 2024 which contents I adopt. For present purposes, I note the following matters. On 1 January 2024, the wife filed an Amended Response to Initiating Application. The wife sought leave to join B Ltd as a party to the proceeding and otherwise sought, amongst other orders, injunctive relief pursuant to s 90AF of the Act to restrain B Ltd from continuing legal proceedings against her for repossession of real property owned by the wife and her husband as tenants in common in equal shares and situate at and known as D Street, Suburb E in the State of NSW. B Ltd is the registered mortgagee of three mortgages secured by the Certificate of Title to that property. Neither the husband nor the wife, both parties to the proceeding, have made the requisite repayments in respect of B Ltd’s secured interest over the property. By Orders of the Court made on 17 May 2024, following an interim hearing, it was apparent that the wife’s application for joinder had been wholly unsuccessful. Orders were made for the wife to pay B Ltd’s costs of the proposed joinder application. By virtue of the parties inability to agree costs, the matter was required to be re-listed to determine the quantum of the costs payable by the wife to B Ltd pursuant to Order 2 of the Orders made 17 May 2024. On 2 August 2024, the matter proceeded before me with all parties in attendance. The husband played no active part in the costs dispute, it not being a matter which engaged him. The question for the Court is one of quantum. What is an appropriate lump sum in the circumstances here? The wife’s financial circumstances are not those of B Ltd. Further, she does not have surplus funds to meet any large costs order in a short time frame. The wife works as an educator and earns approximately $40,000 per annum. The wife, since separation, has received no support from the husband. She has incurred considerable legal fees. She will be entitled to a property adjustment between she and the husband which parameters are currently unknown. She resides in housing owned by her and the husband and is paying no or minimal mortgage in respect thereof. She and the husband own other real property however which is unencumbered and significant in value. The parties are in dispute with the husband’s former employer, B Ltd (he previously being the CEO), as to monies owed by the parties to B Ltd pursuant to secured mortgages and/or on the wife’s case, whether such monies are owed by her.