Farnell & Farnell

Case [2025] FedCFamC1A 73

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Farnell & Farnell [2025] FedCFamC1A 73

Appeal from: Farnell & Farnell (No 2) [2024] FedCFamC2F 1417
Appeal number(s): NAA 311 of 2024
File number(s): PAC 5064 of 2020
Judgment of: CHRISTIE J
Date of judgment: 30 April 2025
Catchwords:  FAMILY LAW – APPEAL – COSTS – Where the wife appeals against a fixed costs order made after a contested final hearing – Where it is argued that the parties were not afforded procedural fairness – Where parties were not aware a fixed costs order was in contemplation – Where parties were therefore not able to make submissions regarding a fixed costs order – Appeal allowed and matter re-determined.
Legislation:

Family Law Act 1975 (Cth)

Federal Circuit and Family Court of Australia Act 2021 (Cth)

Federal Proceedings (Costs) Act 1981 (Cth)

Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth)

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

Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119

Boensch v Pascoe (2019) 268 CLR 593

Bolitho and Cohen (2005) FLC 93-224

Concrete Pty Ltd v Parramatta Design (2006) 229 CLR 577

Farnell & Farnell (No 2) [2024] FedCFamC2F 1417

Farnell & Farnell [2024] FedCFamC2F 222

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

Graham & Squibb (2019) FLC 93-892

Harris v Harris (1991) FLC 92-254

Kioa v West (1985) 159 CLR 550

Lenova & Lenova (2011) FLC 93-467

Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664

Robertson & Sento [2009] FamCAFC 49

Robinson v Higginbotham (1991) FLC 92-209

Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128

Trevi & Trevi (Re-Exercise) [2019] FamCAFC 51

U v U (2002) 211 CLR 238
Number of paragraphs: 82
Date of hearing: 25 March 2025 
Place: Sydney
Counsel for the Appellant: Ms Tabbernor 
Solicitor for the Appellant: Clear Lawyers
Counsel for the Respondent: Mr Fermanis
Solicitor for the Respondent: Family Focus Legal Pty Ltd

ORDERS

NAA 311 of 2024
PAC 5064 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION
BETWEEN:

MS FARNELL

Appellant
AND:

MR FARNELL

Respondent

ORDER MADE BY:

CHRISTIE J

DATE OF ORDER:

30 APRIL 2025

THE COURT ORDERS THAT:

1.The Appeal be allowed.

2.Order 1 of the Orders of 22 October 2024 be set aside.

3.The Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by her in relation to this appeal.

4.The Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that in the…

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Farnell & Farnell [2025] FedCFamC1A 73
Case
[2025] FedCFamC1A 73
Decision Date

CaseChat Overview and Summary

In the case of Farnell & Farnell, Ms Farnell, the appellant, appeals against a fixed costs order made by the Federal Circuit and Family Court of Australia after a contested final hearing. The appeal focuses on whether the parties were given procedural fairness, specifically if they were aware that a fixed costs order was being considered and thus unable to make submissions regarding it. The central legal issues involve the interpretation and application of the Family Law Act 1975 and the rules governing costs in family law proceedings, particularly the circumstances that justify a departure from the usual rule that each party bears their own costs.

The court acknowledges the broad discretion conferred by the Act and the Rules on judges in determining costs applications. Ms Farnell argues that she was not given procedural fairness, as neither party was aware that a fixed costs order was being contemplated. Consequently, they were unable to make relevant submissions. The court notes that the husband did not pursue an application for indemnity costs before the appeal court and limits his application to specific costs. The court dismisses the husband’s application for costs incurred during a particular hearing, as the wife was partly successful in obtaining some relief by consent shortly after. Regarding the application for the costs of the proceedings, the court finds that the husband’s arguments do not sufficiently justify a departure from the usual rule of each party bearing their own costs.

The appeal court concludes that the fixed costs order must be set aside due to the lack of procedural fairness. It grants Ms Farnell a costs certificate for the appeal, allowing the Attorney-General to authorise payment of her appeal costs. The court also grants a similar certificate for the husband. Additionally, it orders that Ms Farnell pay the husband's costs of the financial proceedings from 8 August 2022 to 25 May 2023, excluding the costs of a particular application filed on 5 May 2023, on a party/party basis. Lastly, the court orders that Ms Farnell pay the husband’s costs of the application filed on 29 May 2024, at the scale set out in the relevant rules.

In summary, the appeal court allowed the appeal, set aside the fixed costs order, and made new orders concerning the costs of the proceedings, emphasising the importance of procedural fairness in such matters.

Orders

Orders of the court

NAA 311 of 2024

PAC 5064 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MS FARNELL

Appellant

AND:

MR FARNELL

Respondent

ORDER MADE BY:

CHRISTIE J

DATE OF ORDER:

30 APRIL 2025

THE COURT ORDERS THAT:

1. The Appeal be allowed.

2. Order 1 of the Orders of 22 October 2024 be set aside.

3. The Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by her in relation to this appeal.

4. The Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by him in relation to this appeal.

5. The wife pay to the husband the costs of the financial proceedings from 8 August 2022 to 25 May 2023 (excluding the application in a proceeding filed 5 May 2023) on a party/party basis as agreed or assessed.

6. The wife pay to the husband the costs of the Application in a Proceeding filed 29 May 2024 at the scale in Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth).

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

Full text does not contain this section.

Decision

Reasons for decision

I am conscious of the approach endorsed by the Full Court in Trevi & Trevi (Re-Exercise) [2019] FamCAFC 51 (“Trevi”) at [20] citing Allesch and Maunz (2000) 203 CLR 172: Once error is established “an appellate Court can substitute its own decision based on the facts and the law as they then stand”. The Court’s power to do so is statutory. Section 94(2) provides, relevantly, that this Court may “make such decree or decision as in the opinion of the court, ought to have been made in the first instance”.(Emphasis in original, footnotes omitted) The power is now found in s 36(1) of the FCFCOA Act (as opposed to s 94(2)) and is expressed as permitting the Court to:(a) affirm, reverse or vary the judgment appealed from; or(b) give such judgment or make such order as, in all the circumstances, it thinks fit, or refuse to make an order; or(c) set aside the judgment appealed from, in whole or in part, and remit the proceeding to the court from which the appeal was brought for further hearing and determination, subject to such directions as the Court thinks fit; or(d) award execution from the Court or, in the case of an appeal from another court, award execution from the Court or remit the cause to that other court, or to a court from which a previous appeal was brought, for the execution of the judgment of the Court. Given the scope of the dispute, relating to costs of completed proceedings, neither party sought to lead further evidence. Section 35(b) of the FCFCOA Act deals with evidence on appeal and provides:In an appeal, the Federal Circuit and Family Court of Australia (Division 1):(a) must have regard to the evidence given in the proceedings out of which the appeal arose; and(b) has the power to draw inferences of fact and, in its discretion, to receive further evidence, which evidence may be given:(i) as provided for in Division 2 of Part XI of the Family Law Act 1975; or(ii) by oral examination before the Court or a Judge; or(iii) otherwise in accordance with section 73 of this Act. I have had the opportunity to read and consider the reasons for judgement (Farnell & Farnell [2024] FedCFamC2F 222, Farnell & Farnell (No 2) [2024] FedCFamC2F 1417), the Application for costs filed 29 May 2024 and affidavits in support, the Response filed 29 July 2024 and affidavit in support, the exhibits, the written submissions which were before the primary judge, the summaries of argument on appeal and the oral submissions at the hearing of the appeal.THE LAW The general rule is that each party pays his or her own costs. The husband seeks a departure from the usual rule. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out the basis upon which the Court is empowered to award costs. The relevant subsections provide:(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.

Ratio Decidendi

Legal Principle Established

The provisions of the Act and the Rules confer a broad discretion on a judge hearing and determining a costs application.CONSIDERATION Noting that the husband did not revive his application for indemnity costs before me (and there was no cross-appeal filed), the husband’s application is limited to the following, adopting the paragraphs of the original application in a proceeding:Hearing of 22 May 2023…the [wife] pay the [husband’s] costs as agreed or assessed… on a party/party basis;Costs of the proceedings8. …the [wife] pay the [husband’s] costs as agreed or assessed… on a party/party basis;Costs of this Application9. The [wife] pay the [husband’s] costs of an incidental to this application. For her part, the wife sought that the husband’s application be dismissed. The are three distinct applications:(1)The application for the costs of the 22 May 2023 hearing;(2)The application for the “costs of the proceedings”; and(3)The applications for the costs of the costs application.Application for costs of 22 May 2023 hearing The husband seeks a departure from the usual rule in respect of costs, in respect of costs incurred by the wife’s Application in a Proceeding filed 5 May 2023. The application filed 5 May 2023 sought interim property orders, orders concerning expert evidence and vacation of the trial dates which had been allocated by the Court. That application was withdrawn and dismissed on 22 May 2023. On 30 May 2023 the parties agreed to interim property orders and final parenting orders. The justifying circumstance, upon which the applicant relies to depart from the usual rule, is that the application was withdrawn and the wife was in, in those circumstances, wholly unsuccessful. It cannot be overlooked that the wife obtained some of the relief which she sought (interim property orders) 8 days later by consent and the parties were at Court for a brief period of time on 22 May 2023 during which their parenting consent orders were made. The husband does not identify any other basis upon which the Court would find that the circumstances justify departure and I propose to dismiss the application.Application for the “costs of the proceedings” The application identifies that costs of the proceedings are sought from 30 August 2021. That date is the date the parties attended a conciliation conference. Following the conference a letter was sent by the husband’s lawyers to the wife’s lawyers by email. The husband, in his outline of submissions, identified three bases upon which costs of the proceedings should be ordered:(1)The wife’s “unsuccessful tryst in attacking the single expert report”;(2)The fact that the wife abandoned her “addback” argument on the last day of the hearing;(3)The offers made by the husband to settle the matter. It is necessary to consider whether the three matters identified are matters which would be arise under s 117(2A) of the Act. The matters raised in (1) and (2) could only be relevant considerations under s117(2A)(c), or (g).