Erwin & Loupe (No 6)
[2025] FedCFamC1F 158
•14 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Erwin & Loupe (No 6) [2025] FedCFamC1F 158
File number: MLC 14204 of 2022 Judgment of: MCNAB J Date of judgment: 14 March 2025 Catchwords: FAMILY LAW – COSTS – Where the applicant seeks indemnity costs against the third respondent – Where the third respondent failed to comply with various orders –Party-Party costs in a fixed sum ordered. Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Cross & Beaumont (2008) 39 Fam LR 389; [2008] FamCAFC 68
Erwin & Loupe (No 5) [2024] FedCFamC1F 802
Division: Division 1 First Instance Number of paragraphs: 14 Date of hearing: Matter determined on the papers Place: Melbourne Counsel for the Applicant: Mr Mort Solicitor for the Applicant: Cahill Family Lawyers Counsel for the First and Second Respondents: The First and Second Respondents did not participate Counsel for the Third and Fourth Respondents: The Third Respondent on behalf of the Third and Fourth Respondents ORDERS
MLC 14204 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ERWIN
Applicant
AND: MR LOUPE
First Respondent
CA PROPERTY PTY LTD
Second Respondent
MS GG
Third Respondent
CB LAWYERS
Fourth Respondent
ORDER MADE BY:
MCNAB J
DATE OF ORDER:
14 MARCH 2025
THE COURT ORDERS THAT:
1.The third respondent pay the applicant’s costs fixed in the sum of $7,000.
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 Erwin & Loupe has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCNAB J
BACKGROUND
On 26 November 2024, the Court made final orders accompanied by written reasons (Erwin & Loupe (No 5) [2024] FedCFamC1F 802) after a hearing over three days. The background of the matter is contained within those written reasons.
The applicant wife in the substantive proceedings, Ms Erwin, now seeks an order for costs, including indemnity costs, against the third respondent in the substantive proceedings, Ms GG, in the sum of $56,945.60.
Ms GG is a solicitor. She has, at times, been the solicitor for the first respondent in the substantive proceedings, Mr Loupe, whilst they were romantically involved before she ceased acting for him. She advises the Court that she is no longer in a romantic relationship with Mr Loupe, however, they have a child together who is now aged about one year. She says that she has a domestic violence protection order in place against Mr Loupe.
The applicant seeks orders against Ms GG for costs said to have been incurred as a result of her failure to comply with orders made on 6 May 2024 for the removal of caveats lodged by her over three properties which were in the pool of assets between the applicant and first respondent. Costs are also sought in relation to the final hearing of the matter.
At the commencement of the final hearing on 12 August 2024, Ms GG had failed to remove the caveats on two of the properties. The failure to comply with the Court orders necessitated the solicitors for the applicant on numerous occasions to write Ms GG between 7 May 2024 and 12 August 2024. The orders to remove the caveats were made by consent.
The applicant also seeks costs arising out of Ms GG’s failure to file material in accordance with orders and her attempt to appear electronically at the final hearing despite orders that she appear in person. It is said that because Ms GG failed to comply with orders in relation to her filing material and comply with the orders of the Court, that the applicant was put to significantly greater expense.
The Court ordered that because of her non-compliance with orders, the matter would proceed on an undefended basis as against Ms GG and the fourth respondent, who Ms GG appeared for (although she was entitled to cross examine witnesses on the basis of material that had been filed).
RELEVANT LAW
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) relevantly provides:
(1)Subject to subsection (2), subsection 102QAB(6) and sections 117AA and 117AC, each party to proceedings under this Act must bear the party’s own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
…
The applicant submits that this is a matter where it is appropriate for there to be an order for indemnity costs. The applicant refers to the following factors which she says establishes that there are exceptional circumstances for a basis for indemnity costs:
a[Ms GG’s] misconduct in involving herself with the First Respondent to undermine and frustrate the Applicant’s case;
b[Ms GG’s] non-disclosure in terms of the extent of her relationship with the First Respondent and the fact she was pregnant to him;
c[Ms GG’s] financial entanglement with the First Respondent. For example, the [Town VV] property, where futile and ill prepared proceeding were listed for determination to attempt to have the Applicant lift securities in order for the First Respondent and her to purchase an estimated $4,000,000 property;
d[Ms GG’s] actions that caused proceedings to be prolonged by making irrelevant and nuisance arguments that were not supported by evidence and had no basis;
eThe Court’s referral of [Ms GG] to her professional legal body;
fThe situation in which she found herself at the final hearing in failing to comply with Court orders and engaging in a case without filed evidence. Her conduct prolonged matters.
CONSIDERATION
In my view, an orders for costs against Ms GG is warranted as a result of her failure to comply with orders to remove caveats for the subject properties. That delay was a direct breach of orders. I also have regard to s 117(2A)(c) of the Act.
I am not minded to make a costs order in relation to Ms GG’s conduct at the hearing. Ms GG did not conduct herself so as to prolong the hearing. The hearing was lengthy because of the volume and the complexity of the material that had to be dealt with. Notwithstanding the issues that arise with Ms GG and her conduct which are referred to in the substantive written reasons, an order for costs against her arising from the final hearing is not warranted. The matter proceeded on an undefended basis and the questions that she asked the applicant in cross examination did not substantially increase the length or expense of the hearing. The written reasons in the substantive judgment also took into account the expense and trouble that the applicant had been put to by the conduct of Mr Loupe. Whilst Ms GG is not referred to in those paragraphs, the conduct it is said that Ms GG was involved in has already been taken into account in making those orders. To make an order for costs relating to it may involve a double counting. I will, however, allow party/party costs arising from the appearances involved in dealing with her application to appear electronically and her failure to file material.
Having regard to the costs charged to a client on a hourly basis and the scale of costs under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), I will allow costs of $5,000 in respect of the work associated with the removal of the caveats and costs of $2,000 in relation to the appearances due to Ms GG seeking to appear by electronic means and dealing with her failure to file material in accordance with the Court orders. Otherwise, the costs of preparing for the final hearing are not attributable to the conduct of Ms GG. The quantum of costs ordered is not intended to equal indemnity costs but is an estimate of reasonable party/party costs.
Ms GG made submissions in relation to her means and financial resources. She annexed a schedule of divisible assets between her and her husband (noting that they have ongoing proceedings in this Court). In the annexure, she fails to make reference to the debt of about $1,000,000 that she says she and the fourth respondent are owed by Mr Loupe (which she sets out at [4]-[6] of her written submissions). Ms GG says that she is impecunious and unable to pay an order for costs. Impecuniosity is not a reason for there to not be an order for costs in appropriate circumstances: Cross & Beaumont (2008) 39 Fam LR 389 at [60].
I will make orders reflecting these reasons that Ms GG pay the applicant’s costs fixed in the sum of $7,000.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McNab. Associate:
Dated: 14 March 2025
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