Eide & Yoxall (No 3)

Case [2025] FedCFamC1F 37

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Eide & Yoxall (No 3) [2025] FedCFamC1F 37

File number: MLC 2724 of 2021
Judgment of: WILLIAMS J
Date of judgment: 31 January 2025
Catchwords: FAMILY LAW – COSTS – DE FACTO RELATIONSHIPS – Where the applicant seeks costs following a declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”) that a de facto relationship existed between the parties – Where the declaration was upheld by the Full Court – Where the applicant seeks special costs – Consideration of relevant principles under s 117 of the Act – Where the respondent enjoys a vastly superior financial position – Where the respondent was wholly unsuccessful in the first instance threshold proceedings and the appeal proceedings to the extent that the appeal did not displace the underlying finding of a de facto relationship between the parties – Circumstances warranting departure from the usual principle that each party bear his or her own costs – Order that the respondent pay the applicants costs of the threshold hearing fixed at $159,296.86 – Order that the respondent pay the applicants costs of this application fixed at $5,025.85.
Legislation:

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

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 sch 3, r 12.17
Cases cited:

Eide & Yoxall (No 2) [2024] FedCFamC1F 320

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)v Fish (2005) 33 Fam LR 123; [2005] FamCA 158

In the Marriage of I & I (No 2) (1995) 22 Fam LR 557

Marsden v Winch (Costs) [2008] FamCAFC 32

Marvis & Marvis [2023] FedCFamC1A 34

Massalski & Riley (No 2) [2021] FamCAFC 152

Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157

Sfakianakis & Sfakianakis (2019) 59 FLR 419; [2019] FamCAFC 54

Stopford Malloy & Malloy (Costs) [2018] FamCAFC 6

Warbrick & Warbrick (No 2) (2021) FLC 94-030; [2021] FamCAFC 101

Yoxall & Eide [2024] FedCFamC1A 200
Division: Division 1 First Instance
Number of paragraphs: 69
Date of last submission: 20 January 2025
Date of hearing: 26-28 June 2023; 4, 6, 7 September 2023 and 4-5 March 2024
Place: Melbourne
Counsel for the Applicant: Ms Tulloch and Mr Ellis
Solicitor for the Applicant: Jag Lawyers
Counsel for the Respondent: Ms Fisken and Ms Ferrari
Solicitor for the Respondent: Belleli King & Associates

ORDERS

MLC 2724 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS EIDE

Applicant
AND:

MR YOXALL

Respondent

ORDER MADE BY:

WILLIAMS J

DATE OF ORDER:

31 JANUARY 2025

THE COURT ORDERS THAT:

1.Within 28 days of these orders, the respondent pay to the applicant, the sum of $164,322.71, being the applicants’ costs and disbursements calculated as follows:

(a)Her costs and disbursements of the threshold hearing for a declaration that a de facto relationship existed between them, fixed in the sum of $159,296.86; and

(b)Her costs of this application fixed at $5,025.85.

Note:   The form of…

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AGLC
Eide & Yoxall (No 3) [2025] FedCFamC1F 37
Case
[2025] FedCFamC1F 37
Decision Date

CaseChat Overview and Summary

The case of Eide & Yoxall (No 3) involved a dispute over costs following a declaration by the Federal Circuit and Family Court of Australia that a de facto relationship existed between the parties. The applicant sought costs following the successful establishment of the de facto relationship, including special costs which were not limited to the scale fees but included the actual fees billed by her counsel. The respondent, who had a significantly superior financial position, opposed the applicant's costs claim.

The court had to decide whether the applicant was entitled to special costs and whether the respondent should bear the applicant's costs of the proceedings. The court considered the principles under section 117 of the Family Law Act 1975 (Cth), which allow for special costs in certain circumstances, and whether the disparity in financial positions between the parties warranted such an order. The court also had to assess the quantum of the costs, taking into account the complexity of the issues, the conduct of the parties, and the rates ordinarily payable to lawyers in comparable proceedings.

The court found that the circumstances warranted a departure from the usual principle that each party bear their own costs. The applicant had been successful in establishing the de facto relationship, and the respondent had been wholly unsuccessful in his opposition to this finding. The court also noted the significant disparity in financial positions between the parties and the significant sum the respondent had paid for his own costs. Consequently, the court ordered the respondent to pay the applicant's costs of the threshold proceedings and the costs of the costs submissions. The total amount fixed was $164,322.71.

The court's decision was based on the principles of fairness and the need to adequately compensate the applicant for the actual costs incurred in the proceedings, which were significantly impacted by the respondent's conduct and the complexity of the hearing. This decision underscores the court's ability to make special costs orders when warranted by the circumstances of the case.

Orders

Orders of the court

MLC 2724 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS EIDE

Applicant

AND:

MR YOXALL

Respondent

ORDER MADE BY:

WILLIAMS J

DATE OF ORDER:

31 JANUARY 2025

THE COURT ORDERS THAT:

1. Within 28 days of these orders, the respondent pay to the applicant, the sum of $164,322.71, being the applicants’ costs and disbursements calculated as follows:

(a) Her costs and disbursements of the threshold hearing for a declaration that a de facto relationship existed between them, fixed in the sum of $159,296.86; and

(b) Her costs of this application fixed at $5,025.85.

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

For the reasons that follow, an order will be made for the respondent to pay the applicant’s costs and disbursements of the eight-day threshold hearing, and the costs incurred in drafting the costs submission, fixed in the sum of $164,322.71.Background The extensive background of the dispute between the parties as to the characterisation of their relationship is set out at paragraphs [47]–[96] of my reasons in Eide & Yoxall (No 2) [2024] FedCFamC1F 320, which I incorporate and rely on in these reasons.Proposals of the parties and documents relied upon The applicant seeks as her preferred position, that the respondent within 28 days pay her costs of the threshold proceedings of $208,159.98, characterised as “special costs”. The costs comprise solicitor’s fees in accordance with Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) (“the Rules”) fixed in the sum of $52,866.50, counsel’s fees billed in the sum of $138,460, and disbursements of $16,833.48. The applicant also seeks her costs of the costs submissions of $5,650.80 comprising solicitor’s fees in accordance with Schedule 3 to the Rules, of $2,763.3, and counsel’s fees of $2,887.50 for drafting the submissions. The secondary position of the applicant is that the respondent pay her costs of the threshold proceedings on a party/party basis calculated at $159,296.86. The difference between the two claims for the costs of the threshold proceedings is that counsel’s fees in the secondary position, are claimed in accordance with Schedule 3 of the Rules, rather than the amount actually billed. The secondary position of the applicant pertaining to the costs submissions, is that the respondent should pay her costs of this application being a total of $5,025.85, which is explained by a reduction of counsel’s fees claimed. The applicant relies on the following documents as identified in her written submissions:(a)Orders made on 16 May 2024 by the Honourable Justice Williams;(b)Judgment of Honourable Justice Williams delivered on 16 May 2024;(c)Financial Statement of Ms Eide filed on 4 October 2021;(d)Paragraphs 32 to 37 of Affidavit of Ms Eide sworn on 24 October 2022 and filed on 1 May 2023;(e)Costs Notice filed by Ms Eide on 4 March 2024;(f)Financial Statement of Mr Yoxall filed on 2 September 2021;(g)Paragraph 7 of Affidavit of Mr Yoxall filed 2 September 2021;(h)Costs Notice filed by Mr Yoxall on 4 March 2024;(i)Orders made on 19 May 2022 by the Honourable Justice Williams: (i)Trial listed for 28 November 2022;(ii)Applicant to file 35 days prior to trial date (i.e., 24 October 2022);(iii)Respondent to file 21 days prior to trial date (i.e., 7 November 2022).(j)Respondent’s Application in a Proceeding dated 9 November 2022 and filed 21 November 2022 (seeking adjournment of final hearing);(k)Affidavit of Mr SS filed on 9 November 2022;(l)Affidavit of Mr Yoxall filed 21 November 2022;(m)Orders made on 22 November 2022 by the Honourable Justice Williams: (i)Trial listed for 19 June 2023; (ii)Respondent to file by 6 April 2023;(iii)Both parties’ costs reserved.(n)Respondent’s Application in a Proceeding dated 4 April 2024 and filed on 17 April 2023 (seeking that the trial date on 26 June 2023 be vacated);(o)Affidavit of Mr Yoxall filed 4 April 2023;(p)Orders made on 26 April 2024 by the Honourable Justice Williams;(i)Respondent’s Application in a Proceeding filed 17 April 2023 be dismissed.(ii)Respondent to file by 19 May 2023.(iii)Both parties’ costs reserved.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

At first instance, in his Response filed 2 September 2021, the respondent sought orders for a declaration pursuant to s 90 RD of the Act, “that a de facto relationship did not exist between the parties” and that “the application be otherwise dismissed”. It cannot possibly be concluded that the applicant was unsuccessful in the primary proceedings or the appeal, as to the existence of the de facto relationship. The relief sought by the respondent in his Response, was not granted at first instance, nor at appellate level. CONCLUSION Having weighed and balanced the relevant considerations, I am satisfied there are circumstances warranting departure from the usual principle that each party bear his or her own costs, and that the respondent should pay the applicant’s costs arising from the threshold proceedings. Because there were no specific submissions by the respondent about the applicant’s claim for the costs of the costs submissions, and because the applicant has been successful in her claim for costs of the threshold proceedings, I intend to also make orders for the respondent to pay the applicant’s costs of the cost submissions. I now turn to the issue of quantum of both the costs of the threshold proceedings and the costs submissions. Quantum Rule 12.17 of the Rules provides:Method of calculation of costs(1)The court may order that a party is entitled to costs:(a)of a specific amount; or(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or(c)to be calculated in accordance with the method stated in the order; or(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.(2)If costs are payable under the Family Law Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party and party basis(3) In making an order under subrule (1), the court may consider the following:(a)the importance, complexity or difficulty of the issues;(b)the reasonableness of each party's behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);(c)the rates ordinarily payable to lawyers in comparable proceedings;(d)whether a lawyer's conduct has been improper, unfair, unreasonable or disproportionate;(e)the time properly spent on the proceeding, or in complying with pre-action procedures;(f)whether expenses (paid or payable) are fair, reasonable and proportionate. As referred to above, the applicant seeks a special costs order, which in practical terms equates to the respondent paying counsel’s fees which were actually incurred by her, rather than counsel’s fees allowed in accordance with the relevant scale. In doing so, she relies upon the observations of the Full Court of the Family Court (per Aldridge, Watts, and Austin JJ) in Sfakianakis & Sfakianakis [2019] FamCAFC 54 (“Sfakianakis”) at [10]. To justify an order for special costs, the applicant relies upon the respondent’s conduct in the proceedings, the significant disparity of wealth between them, the significant sum the respondent has paid for his own costs and by comparison, the modest nature of the costs claimed by her as special costs. She contends calculating her costs on scale would not adequately compensate her for the actual costs incurred in the proceedings, and that she was justified in engaging both counsel because of the length and complexity of the hearing which was primarily attributable to the evidence adduced by the respondent, which included his own trial affidavit and 17 affidavits from supporting witnesses.

Ratio Decidendi

Legal Principle Established

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