Featherstone & Neibert (No 2)
[2024] FedCFamC2F 1540
•6 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Featherstone & Neibert (No 2) [2024] FedCFamC2F 1540
File number: CRC 116 of 2024 Judgment of: JUDGE BLAKE Date of judgment: 6 November 2024 Catchwords: FAMILY LAW – COSTS – Application to review orders made by a Registrar – where application to review by the husband was not successful – application by the wife for indemnity costs – application for indemnity costs refused but order for costs on the scale made. Legislation: Family Law Act 1975 (Cth) ss 117, 117(1), 117(2), 117(2A), 117(2A)(e), 117(2A)(g).
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) Sch 1, r 4.01.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Pt 14.3, r 12.13.
Cases cited: Colgate Palmolive Company v Cusson Pty Ltd (1993) 118 ALR 248
Featherstone & Neibert [2024] FedCFamC2F 1279
Penfold & Penfold (1980) 5 Fam LR 579
Division: Division 2 Family Law Number of paragraphs: 34 Date of last submissions: 30 September 2024 Date of hearing: On the papers Place: Melbourne Solicitor for the Applicant: MBT Lawyers Solicitor for the Applicant: Self-represented litigant ORDERS
CRC 116 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS FEATHERSTONE
Applicant
AND: MR NEIBERT
Respondent
ORDER MADE BY:
JUDGE BLAKE
DATE OF ORDER:
6 NOVEMBER 2024
THE COURT ORDERS THAT:
1.The husband pay the wife’s costs of and incidental to the Review Hearing on 2 September 2024 and such costs are to be paid in accordance with the scale of costs under schedule 1, the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) and are fixed in the amount of $4,746.91.
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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BLAKE:
This is an application made by the wife for costs arising from the hearing of an application to review the decision of a Registrar on 2 September 2024 (‘Review Application’). The wife seeks costs on an indemnity basis in the amount of $21,242.73. In the alternative, the wife seeks costs in accordance with the scale of costs set out in schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth), fixed in the amount of $8,682.61. The application is opposed by the husband.
BACKGROUND
I determined the Review Application, delivered ex tempore reasons, and then published those reasons (‘Reasons’): see Featherstone & Neibert [2024] FedCFamC2F 1279. The Reasons summarise the background, and I rely upon the Reasons and the orders I made that day.
In support of her application for costs, the wife relies on her application in a proceeding filed on 16 September 2024, her affidavit filed on 16 September 2024 and a written outline of submissions filed on 16 September 2024. The husband relies on his affidavit filed 30 September 2024 and a written outline of submissions filed on 30 September 2024.
RELEVANT LAW
Applications for review of orders of Registrars are to be determined in accordance with Part 14.3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘Rules’). The Court is required to hear an application for review as an original hearing.
Section 117 of the Family Law Act 1975 (Cth) (‘Act’) is the governing provision concerning applications for costs. The principal position under subsection 117(1) is that each party is to bear their own costs. That rule, however, is subject to subsection (2). In essence, subsection (2) permits the Court to make an order for costs if there are circumstances that justify it doing so, having regard to the subsections that follow, including subsection (2A) of the Act: see Penfold & Penfold (1980) 5 Fam LR 579 at 583.
Where cost orders are made, such costs are paid on a party/party basis, or more accurately in the case of this Court, according to the scale of costs. The Court should not lightly depart from that ordinary rule: see Kohan & Kohan (1993) FLC 92-340. Circumstances justifying a departure from the usual rule that costs are awarded on a scale basis should be of an exceptional kind, and there needs to be some special or unusual feature in the case to justify the Court departing from ordinary practice: see Colgate Palmolive Company v Cusson Pty Ltd (1993) 118 ALR 248 (‘Colgate Palmolive’).
There are rules governing the awarding of costs. Of particular relevance in this case is rule 12.13 of the Rules, along with schedule 3 of the Rules, as well as rule 4.01 along with schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth).
CONSIDERATION
At the outset, I note that the wife has a costs agreement with her solicitors, and her solicitors have an agreement with counsel. A copy of both agreements are annexed to her affidavit. She has therefore complied with the precondition required to seek indemnity costs set out in rule 12.13 of the Rules.
In summary, the wife submits that there are justifying circumstances to make a costs order in this matter for the following reasons:
(a)the husband is in a superior financial position;
(b)the husband’s conduct by filing and pursuing the Review Application was unreasonable and led to additional costs being incurred by the wife;
(c)despite three orders being made as a result of the Review Application, the husband was wholly unsuccessful; and
(d)the Review Application was frivolous, vexatious and self-serving.
Further to the above, the wife contends that there are justifying circumstances for indemnity costs to be awarded. The particular matters that the wife relies on in support of her application for indemnity costs are that:
(a)the Review Application was commenced or continued in circumstances where a party properly advised, should have known they had no chance of success;
(b)the husband had an ulterior motive to delay and frustrate the proceedings and control the wife and the proceedings, which is evident by his disregard of the facts; and
(c)the husband advanced groundless contentions which prolonged the matter.
The husband submits that no order for costs should be made as the Review Application was ‘partially upheld’ and was brought with proper purpose, and without malicious intent.
The husband relies on the following submissions in support of his position:
(a)that the wife is concealing income that she generates through her small business;
(b)the conduct of the wife throughout the proceedings which, inter alia, included:
(i)refusing to engage in family dispute resolution prior to the commencement of proceedings;
(ii)making a false financial presentation to the Court;
(iii)failing to provide particular disclosure as ordered by the Court;
(c)that the wife’s actions throughout the proceedings have been deceitful and unacceptable, warranting the dismissal of all of her applications before the Court;
(d)that he has not been wholly unsuccessful in his Review Application; and
(e)the application for costs brought by the wife is without proper cause.
Financial circumstances of each party
There is an active dispute as to the content of the asset pool. The Financial Statements filed by the parties on a best case scenario disclose assets of less than $200,000. The issue appears to be whether a property at B Street, Town C (‘Property’) is owned by the husband, or is genuinely owned by a Trust (which the husband asserts it is). There is no valuation of that property before the Court.
The wife discloses income of $831 per week, which consists of $531 in Government benefits and $300 in child support. Her expenditure is $1,113 per week. The wife’s expenses clearly exceed her income. I observe, however, that she is not paying rent or mortgage payments and has the benefit of living in the former matrimonial home.
The husband discloses an income of $1,423 per week. His expenditure is $1,701 per week. The wife submits that of the husband’s expenses, $323 paid for rent to the D Property Trust (‘Trust’) is, in effect, rent he is paying to himself. The wife further submits that the claim of $650 per week for ‘all other expenses’ is unparticularised and the husband has access to the financial resources of the Trust. I give some weight to these submissions. The husband appeared before me seeking orders that the wife vacate the Property. How he can claim to have standing to seek those orders apparently on behalf of the Trust is not clear nor explained, and inconsistent with his position that the Trust is independent and that he is paying rent to it. I accept that the husband has not particularised the $650 he claims as expenses in Part N of his Financial Statement. Also relevant to the financial position of the husband is that he has a significant amount of superannuation in the context of the assets apparently owned by the parties.
There are then the legal fees to consider. The wife is privately funded. The Costs Notice filed by her and dated 30 August 2024 disclosed the source of her ability to pay her fees as coming from her son. The total fees she has incurred to the date of the August Costs Notice are approximately $65,000. The husband is unrepresented.
In the circumstances, the husband is in a superior financial position when compared to the wife.
Conduct of the parties
I noted in the Reasons at [6] that the proceedings were at an early stage. Notwithstanding that, there are aspects of the husband’s conduct in this proceeding that are troubling. They are as follows:
(a)the husband before me sought the discharge of orders to value the Property. He did so having consented to such an order on 29 May 2024, and then never having sought to review the order: see Reasons at [8]-[12];
(b)the husband’s conduct in the proceeding is not consistent and appears to be leading to advancement of claims that may not need resolution. For example, he claims the Trust owns the Property, but then, by his application, asserts standing to press for orders that the wife vacate the Property: Reasons at [10];
(c)the husband presses for private mediation and that the wife pay the costs of that mediation. Why private mediation is being pursued when the Registrar has contemplated the parties may request the Court to conduct a conciliation conference is not explained, and appears to be an attempt to intimidate the wife or have her incur costs: Reasons at [17]; and
(d)the husband sought to have the Court review orders made by the Registrar and make other orders, in circumstances where the issues the husband was raising in the Review Application were never before the Registrar: Reasons at [16], [24].
In respect of the paragraph (d) above, I am prepared to accept that the husband, as an unrepresented litigant, may not have appreciated that the Registrar has not determined the issues he was raising. For example, the Registrar noted that the wife’s applications to join others remained on foot, but made no mention of the interim applications made by the husband. The other matters above, however, lead me to the view that the husband, by his conduct, is frustrating the proceeding by raising irrelevant or resolved matters, which in turn are causing the wife to incur costs.
The husband contends that the wife has made a ‘false Financial presentation to the Court’ by filing a Costs Notice that erroneously claimed that she was funding her legal costs when in fact they were being funded by someone else. There was an error in the Costs Notice filed by the wife on 29 May 2024. The wife’s solicitor, however, subsequently clarified the matter. I do not regard the conduct of the wife as being deliberate, nor has it had any impact on the conduct of the proceedings to date, given the error appears to have been corrected voluntarily by her solicitor.
The husband contends that the costs of the proceedings have arisen because the wife commenced proceedings after refusing to engage in mediation. I observe the wife sought to be excused from certain pre action dispute resolution on the basis that the matter was urgent. In any event, it is not clear exactly how this submission benefits the husband. As matters stand, he is the one seeking orders for private mediation to be paid for solely by the wife, when a conciliation conference conducted by the Court is clearly in the offing and on the cards. He is also the one that is resisting the valuation of the Property on the basis it is owned by someone else, yet claiming standing to seek orders on behalf of the Trust. These actions of the husband are contributing to costs.
The husband also contends that the wife failed to give disclosure in the proceeding and that he has had to come to Court to achieve it. Order 1 of the orders I made on 2 September 2024 required the wife to give further disclosure. This order is substantively in the same form as proposed order 4(c) in the husband’s Review Application. Two points should be noted about this. First, the husband never sought this order before the Registrar - it is not in his ‘Response to the Application in a Proceeding’ dated 26 June 2024 and the wife says he did not seek it orally at the hearing before the Registrar or otherwise. Second, when confronted with the request for the first time, the wife consented to the order: Reasons at [20]. The wife cannot, in my view, be criticised for her conduct in not providing this disclosure in circumstances where it was not specifically requested by the husband, and then when it was requested, she consented to the order on the first occasion that the opportunity to do so arose.
On the issue of disclosure, I also made orders that the wife file, effectively, an affidavit of disclosure. As I noted in the Reasons at [20], I did this not because of any concerns I had about the wife failing to disclose, but in order to efficiently manage the matter and move it along.
In all the circumstances, the conduct of the husband has been inimical to the efficient conduct of the proceeding. It weighs towards making a costs order in favour of the wife.
Failure of a party to comply with orders of the Court
The husband did not comply with the orders to value the Property made on 29 May 2024 (order 1 of that date). The Registrar on 24 July 2024 made a further order to ensure that occur (order 3 of the orders of 24 July 2024). The husband then sought the discharge of the relevant valuation orders before me, which I declined. Self-evidently, the husband has not complied with the valuation orders. The hearing before me was the third occasion on which the valuation issue had been raised.
Has either party been wholly unsuccessful and other relevant matters
The husband sought 18 principal orders be made in the Review Application. In respect of each of those orders:
(a)I declined to make proposed order 1 sought by the husband in the Review Application;
(b)I declined to make proposed orders 2 and 3 sought by the husband in the Review Application;
(c)In respect of proposed order 4 sought by the husband, I made order 1 (reflecting order 4(c) of the husband’s proposed orders) by consent in the circumstances mentioned above. I made the order that the wife file an affidavit of disclosure to deal with the other matters sought in proposed orders 4(a)-(j) in the circumstances I set out at [20] of the Reasons;
(d)I declined to make proposed orders 5-8 sought by the husband in the Review Application;
(e)I made orders similar to proposed orders 9 and 10 sought by the husband in the Review Application. The orders were consented to by the wife; and
(f)I declined to make proposed orders 11-18.
The following emerges from the above. Of the 18 principal orders sought by the husband, only three orders were made. Of those three orders that were made, all were consented to by the wife without issue. The husband has not indicated that he raised these matters with the wife prior to the hearing before me and she refused to provide her consent. Had he done so, those matters it seems would have been capable of resolution given what occurred before me. The other 15 orders sought by the husband were not made. As I noted at paragraph [19] above, I accept the husband may not have fully understood what remained to be determined by the Registrar before he filed his Review Application, but even allowing for that, the husband has, in my view, not been successful.
Subsection 117(2A)(e) requires consideration of whether the proceeding has been ‘wholly’ unsuccessful. In the absence of being taken to any authority, I am not prepared to draw the conclusion that the Review Application was wholly unsuccessful given the husband obtained some of the relief he sought (with the consent of the wife). It is relevant, however, that the only relief the husband obtained was consented to by the wife, and that the majority of his Review Application was unsuccessful. I take this matter into account under subsection 117(2A)(g).
DETERMINATION
In my view, the circumstances of this case warrant the making of a costs order. In particular, I am satisfied that the financial circumstances of the wife, combined with the conduct of the husband, his failure to comply with the order to value the Property (which he again sought to effectively relitigate before me) and his relative lack of success in the Review Application are circumstances that justify the Court making an order for costs against him.
I am not satisfied the circumstances of the case warrant an order for indemnity costs. In a jurisdiction where the principal position is that each party bear their own costs, an order to award costs is itself a significant step. An order for indemnity costs would constitute a further additional step. While there is conduct of the husband which comes close to bringing this matter within the factors set out in Colgate Palmolive, I am conscious of a number of matters. First, the husband is unrepresented. The wife submitted in her application for indemnity costs that a person ‘properly advised’ would have known that the Review Application had no prospect of success. The husband is of course not a beneficiary of any legal advice. Second, notwithstanding what I have said about the husband’s conduct, I have acknowledged the potential for some confusion on his part as an unrepresented litigant as to whether his application for interim orders had been determined by the Registrar. These matters weigh against the making of an order for indemnity costs. The husband should regard himself as being on notice, however, that a failure to properly and efficiently prosecute this proceeding could leave him exposed to an application for indemnity costs in the near future.
The wife sought costs in the amount of $8,682.61. She submitted this amount was sought in accordance with the scale of costs set out in schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth). The wife annexed to her affidavit of 16 September 2024, a summary of the costs she sought under items 3, 13, 14 and 15 of the scale. Items 3, 13 and 14 are self-explanatory and should be awarded according to the scale.
The wife then sought costs under item 15 for drafting, conference and chambers work undertaken by her solicitor. There are difficulties with this claim. The schedule identifies ‘Units’. It is not clear what a ‘Unit’ is. There is then a rate of ’27.72’. It is not clear how that rate is arrived at or what it is referable to. No explanation has been provided. Further, the descriptions for each item are not clear. They identify particular actions, but not always what those actions relate to. Examples include ‘Letter to other party’ or ‘Email from Judge’s Associate’. In the circumstances, I cannot be satisfied that each of the items claimed under item 15 of the schedule properly relate to the Review Application. I will therefore not award the wife costs under item 15 in relation to the work of her solicitors.
The wife then seeks costs under item 15 for two hours of Counsel preparation. These costs are not itemised, but I consider the amount claimed to be reasonable given the nature and content of the Review Application that the wife had to deal with. I will allow costs to the wife under item 15 for the work completed by Counsel.
Given the above, I will make an order that the husband pay the wife’s costs in accordance with the scale of costs, fixed in the amount of $4,746.91.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Blake. Associate:
Dated: 6 November 2024
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