FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Franco & Daley (No 3) [2024] FedCFamC1F 122
File number(s): MLC 9994 of 2020 Judgment of: MCNAB J Date of judgment: 6 March 2024 Catchwords: FAMILY LAW – PROCEDURAL - COSTS - Where the second respondent father seeks indemnity costs against the first respondent mother – where the applicant grandmother seeks costs against the first respondent mother on a party/party basis for part of the proceeding and indemnity costs for the trial – where the first respondent mother opposes any cost order – where the first respondent mother brought numerous applications before the Court accompanied by prolix and argumentative affidavit evidence – where the first respondent mother was aware that her conduct was unreasonable by reason of previous orders – where the first respondent mother was put on notice in relation to costs orders – where the conduct of the mother has caused extraordinary costs to be incurred - where impecuniosity is not a reason for not ordering costs in appropriate circumstances - fixing costs in a lump sum -where costs are fixed as a percentage of solicitor client costs. Legislation: Family Law Act 1975 (Cth) ss 117, 121
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 10.13, 10.14(b), Division 12.4.1 rr 12.13, 12.17
Cases cited: Franco & Daley [2023] FedCFamC1F 960
Hadid v Lenfest Communications Inc [2000] FCA 628
Hitch & Hitch [2012] FamCAFC 124
Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23 (unreported delivered 7 February 2007)
Kohan & Kohan [1992] FamCA 116; (1993) FLC 92–340
Prantage & Prantage (2013) FLC 93–544; [2013] FamCAFC 105
Stasiuk & Guild [2021] FamCAFC 62
Division: Division 1 First Instance Number of paragraphs: 39 Date of last submission/s: 29 February 2024 Date of hearing: Heard in Chambers on the papers Place: Melbourne Solicitor for the Applicant: Pearsons Lawyers Pty Ltd Solicitor for the First Respondent: Litigant in Person Solicitor for the Second Respondent: Blackwood Family Lawyers Solicitor for the ICL: Bowlen Dunstan And Associates Pty ORDERS
MLC 9994 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS FRANCO
Applicant
AND: MS DALEY
First Respondent
MR DALEY
Second Respondent
ORDER MADE BY:
MCNAB J
DATE OF ORDER:
6 MARCH 2024
THE COURT ORDERS THAT:
Pursuant to the powers under r 12.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) that the mother pay:
(a)The sum of $273,594.11 being 70% costs in respect of the father’s legal costs and
(b)The sum of $171,848.15 being 60% of the grandmother’s costs.
The payment of the costs referred to in paragraph 1 herein shall be in satisfaction of the costs order as follows:
(a)The sum of $4,500 being the sum of costs ordered to be paid by order made on 1 August 2022 (as amended 11 August 2022) by a Senior Judicial Registrar in favour of the grandmother for costs.
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- Franco & Daley (No 3) [2024] FedCFamC1F 122
- Case
- [2024] FedCFamC1F 122
- Decision Date
CaseChat Overview and Summary
The legal issues before the Court were whether the mother's conduct warranted indemnity costs and whether her impecuniosity was a reason for not ordering costs. The Court considered that the mother's conduct was unreasonable and that she was aware of it by reason of previous orders. The Court also noted that the mother had been put on notice in relation to costs orders. The Court found that the mother's conduct had caused extraordinary costs to be incurred and that impecuniosity was not a reason for not ordering costs in appropriate circumstances.
The Court held that it could make an order for indemnity costs where it was just to do so, and that indemnity costs were restricted to 'an exceedingly rare situation'. The Court fixed the costs in a lump sum, as a percentage of solicitor/client costs. The Court ordered the mother to pay 70% of the father's legal costs and 60% of the grandmother's costs. The payment of the costs referred to in paragraph 1 herein be in full satisfaction of all costs orders up to the date of the delivery of Judgment on 8 December 2023 that have been previously made which are not specifically referred to in these orders or where costs have been reserved.
Orders
Orders of the court
MLC 9994 of 2020
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:
MS FRANCO
Applicant
AND:
MS DALEY
First Respondent
MR DALEY
Second Respondent
ORDER MADE BY:
MCNAB J
DATE OF ORDER:
6 MARCH 2024
THE COURT ORDERS THAT:
1.
Pursuant to the powers under r 12.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) that the mother pay:
(a) The sum of $273,594.11 being 70% costs in respect of the father’s legal costs and
(b) The sum of $171,848.15 being 60% of the grandmother’s costs.
2.
The payment of the costs referred to in paragraph 1 herein shall be in satisfaction of the costs order as follows:
(a) The sum of $4,500 being the sum of costs ordered to be paid by order made on 1 August 2022 (as amended 11 August 2022) by a Senior Judicial Registrar in favour of the grandmother for costs.
(b) The sum of $3,500 being the sum of costs ordered to be paid by order made on 1 August 2022 (as amended 11 August 2022) by the Senior Judicial Registrar in favour of the father for costs in the amounts of $3,500 and
(c) The sum of $1,964 being the sum of costs ordered in favour of the father by a Senior Judicial Registrar on 5 October 2021.
3.
Such costs outlined in Order 1 to be deducted from the sum ordered to be paid to the mother pursuant to final orders made on 8 December 2023.
4.
The payment of the costs referred to in paragraph 1 herein be in full satisfaction of all costs orders up to the date of the delivery of Judgement on 8 December 2023 that have been previously made which are not specifically referred to in these orders or where costs have been reserved.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
The Court can make an order for indemnity costs where it is just to do so. The leading authority regarding indemnity costs is Kohan & Kohan [1992] FamCA 116; (1993) FLC 92–340, recently affirmed in Stasiuk & Guild [2021] FamCAFC 62. Indemnity costs are restricted to ‘an exceedingly rare situation’. Murphy J noted in Prantage & Prantage (2013) FLC 93–544; [2013] FamCAFC 105 at [152]:Section 117(1) is important in that respect. Indemnity costs are confined to ‘an exceedingly rare situation’ (Callinan J quoted by Thackray and Ryan JJ at [42]) in jurisdictions where the ‘usual rule’ is that a successful party receives an order for costs (i.e. 'costs follow the event’). They might, then, be seen to be more so in this jurisdiction where the usual rule is that each party shall bear his own costs (s117(1)). The comments by this Court in Kohan that indemnity costs are ‘a very great departure’ from the ‘normal standard’ should be seen in that context. …CONSIDERATION This is a matter where the father seeks indemnity costs against the mother and in the alternative costs according to scale. The father states his total indemnity costs are $390,848.74 with disbursements in the amount of $112,649[5] so his solicitor/client costs are $278,199.74.[5]Father’s Affidavit sworn 29 February 2024 at [3] – [12]. The grandmother seeks costs calculated on the basis of 50% that she receives 50% of the solicitor/client costs related to pretrial preparation and 100% of the trial costs. Based on solicitor/client costs the grandmother’s costs are $199,548.20[6] with disbursements in the amount of $86,865.39.[7] Costs plus disbursements is $286,413.59.[8] Both parties seek costs to be fixed for orders previously made reserving costs and for costs to be enforced for orders already made.[6]Grandmother’s Cost Submission emailed 22 December 2023 at [55].[7]Grandmother’s Disbursement Totals emailed 27 February 2024.[8]Grandmother’s Cost Submission emailed 22 December 2023 at [55] and Grandmother’s Disbursement Totals emailed 27 February 2024. The Court can make any costs order it sees as just subject to consideration of the relevant factors under s 117(2A) of the Act. The mother has made 11 Applications in a Proceeding and one Contravention Application prior to the Final Orders, and the sheer number of applications has increased the costs of the father and grandmother. Applications for unsupervised time were unsuccessful on five separate occasions and as a result the volume of unsuccessful applications a Senior Judicial Registrar made orders that any application needed to be sent to his Chambers prior to filing. The mother has been on notice that the father and grandmother will be seeking costs but has not modified her behaviour throughout the proceedings. The numerous applications made by the mother have been accompanied by prolix and argumentative affidavit evidence. She is aware that her conduct was unreasonable by reason of the orders of the Senior Judicial Registrar as he then was, made on 28 October 2022, which provided that any application in these proceedings be sent to the chambers of the Senior Judicial Registrar for consideration of whether such an application is reasonably appropriate for filing. That order had no discernible effect on her.