Franklyn & Franklyn (No 2)
[2023] FedCFamC2F 1039
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Franklyn & Franklyn (No 2) [2023] FedCFamC2F 1039
File number(s): DUC 63 of 2018 Judgment of: JUDGE OBRADOVIC Date of judgment: 18 August 2023 Catchwords: FAMILY LAW – COSTS – Applicant and Respondent seeking costs – Applicant seeking on indemnity basis and to scale – Respondent seeking on indemnity basis – Where respondent’s conduct at the final hearing delayed the proceedings –Scale costs awarded Legislation: Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) sch 1
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.13
Cases cited: Colgate Palmolive Co and Anor v Cussons Pty Ltd [1993] FCA 801
Collins & Collins [1985] FamCA 15
Fitzgerald v Fish and Anor [2005] FamCA 158
Franklyn & Franklyn [2021] FCCA 588
Franklyn & Franklyn [2023] FedCFamC2F 353
Greedy & Greedy [1982] FamCA 41
I & I (No.2) [1995] FamCA 80
Jensen & Jensen [1982] FamCA 57
Kohan & Kohan [1992] FamCA 116
Latoudis v Casey [1990] HCA 59
Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157
Munday v Bowman (1997) FLC 92-784 at 84,660
Penfold & Penfold [1980] HCA 4
Renald & Renald (Costs) [2018] FamCAFC 4
Stasiuk & Guild [2021] FamCAFC 62
Vu & Ton (No 5) [2023] FedCFamC1F 157
Division: Division 2 Family Law Number of paragraphs: 83 Date of last submission/s: 9 June 2023 Date of hearing: In Chambers Place: Parramatta Solicitor for the Applicant: Matthews Folbigg Pty Ltd Appearing for the Respondent: In person ORDERS
DUC 63 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR FRANKLYN
Applicant
AND: MS FRANKLYN
Respondent
ORDER MADE BY:
JUDGE OBRADOVIC
DATE OF ORDER:
18 AUGUST 2023
THE COURT ORDERS THAT:
1.Within 28 days the respondent pay the applicant’s costs of 25 and 26 July 2022, assessed in the amount of $11,785.
2.All extant applications for costs are otherwise dismissed.
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.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE OBRADOVIC:
INTRODUCTION
On 26 March 2021, the Court delivered judgment and made final orders in respect of both final parenting and property adjustment orders (“First Judgment”).[1] The respondent appealed. She was partially successful and the property proceedings were remitted for rehearing.
[1] Franklyn & Franklyn [2021] FCCA 588.
On 30 March 2023, after rehearing the case, the Court delivered judgment and made orders in respect of the parties’ competing applications for property adjustment orders (“Final Orders”).[2]
[2] Franklyn & Franklyn [2023] FedCFamC2F 353 (“Franklyn & Franklyn”).
The Final Orders directed the parties, inter alia, to file and serve any evidence and written submissions in respect of costs and to include a schedule of any outstanding costs applications and/or reserved costs. This judgment deals with the parties’ costs applications.
The applicant seeks costs totalling $16,110 at scale (or $20,825 if indemnity costs are awarded)[3] as follows:
(a)For 18 June 2019 at scale for $1,178;
(b)For 23 May 2022 at scale for $3,147; and
(c)For 25 and 26 July 2022 on an indemnity basis for $16,500, or in the alternative, at scale for $11,785.
[3] Applicant’s Case Outline filed 28 April 2023 at D, with corrected addition of sums claimed.
The respondent seeks costs totalling $87,677,[4] on what appears to be, in essence, an indemnity basis. The respondent detailed the costs claimed as follows:[5]
(a)For 31 July 2018, costs for $14,087;
(b)For 13 August 2018, costs of counsel and legal fees of lawyer for $25,460;
(c)For 17 October 2018, costs as reserved for $15,375;
(d)For 13 August 2019, costs of counsel and solicitor for $19,749;
(e)For 5 September 2019, costs of $2,790; and
(f)For 4 May 2020, costs of counsel and solicitor for $10,216.
[4] Respondent’s Case Outline filed 26 May 2023 at 5, all figures rounded to nearest dollar.
[5] Respondent’s Case Outline filed 26 May 2023 at 4-5.
RELEVANT LEGAL PRINCIPLES
The principles in respect of costs orders in family law proceedings are well known. The starting position with respect to costs, as set out in s.117 of the Family Law Act 1975 (Cth) is that, subject to sub-section 117(2), each party to proceedings under the Act shall bear his or her own costs.
The discretion to award costs is a broad discretion.[6] No one factor under s.117(2A) prevails over any other factor. It is a matter of weight that is accorded to each of the relevant factors in the trial judge’s discretion.[7]
[6] For example, Collins & Collins [1985] FamCA 15.
[7] Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157 at [24] (“Medlon”).
The High Court held in Penfold & Penfold[8] that it is necessary for the Court to make a finding of justifying circumstances as an essential preliminary to the making of an order for costs. The Court is not required to specify the circumstances which justify the making of such an order.
[8] [1980] HCA 4 (“Penfold”).
As long as there is an essential preliminary finding that there are justifying circumstances to make a costs order, there is no additional or special onus which the applicant needs to establish for an order for costs. It is not the law that a costs order can only be made in what has been described as a “clear case”.[9]
[9] Penfold; Jensen &Jensen [1982] FamCA 57.
Any one of the factors in s.117(2A) may be the sole foundation for an order for costs.[10] Nevertheless, the relevant matters in s.117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”.[11]
[10] Fitzgerald v Fish and Anor [2005] FamCA 158 at [41]; Renald & Renald (Costs) [2018] FamCAFC 4 at [11] (“Renald”).
[11] I & I (No.2) [1995] FamCA 80; Renald at [11].
In determining what order, if any, should be made under s.117(2) the Court must have regard to the prescriptive but non-exhaustive list of considerations in sub-section (2A).
The Court has the power to order costs on an indemnity basis.[12] An order for indemnity costs in proceedings to which s.117 applies is exceptional.[13]
[12] Kohan & Kohan [1992] FamCA 116 (“Kohan”); Latoudis v Casey [1990] HCA 59.
[13] Kohan; Stasiuk & Guild [2021] FamCAFC 62.
The principles in respect of indemnity costs orders are also well known,[14] and may be summarised in the following way: [15]
(a)Where it appears that an action has been commenced or continued in circumstances where a party, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts;
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud;
(c)Evidence of particular misconduct causing loss of time to the court and to other parties;
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and/or
(e)An imprudent refusal of an offer to compromise.
[14] See generally Sheppard J in Colgate Palmolive Co and Anor v Cussons Pty Ltd [1993] FCA 801.
[15] Medlon at [28] referring to Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660, other citations omitted.
It is unnecessary to spell out detailed reasons for decisions in costs matters.[16]
RELEVANT CONSIDERATION
What the Costs sought by the applicant relate to
[16] Greedy & Greedy [1982] FamCA 41; Renald at [12].
18 June 2019
Following the respondent’s unilateral move with the parties’ child to another state, the applicant brought an interim application in respect of the child’s relocation.
On 18 June 2019, the interim hearing was adjourned as the respondent was not ready to proceed. Orders reserving the costs of the day of the applicant and the Independent Children’s Lawyer were made by the Court.
The respondent, by way of explanation, now says that her solicitor at the time had unexpectedly stepped down and that the adjournment was to allow her time to find new representation.[17]
[17] Respondent’s Affidavit filed 26 May 2023 at [4].
The applicant claims scale costs for the daily hearing fee of $1178, submitting that he was ready to proceed on the day and that due to the adjournment granted his costs were thrown away.
The interim parenting orders made by the Court were subsequently appealed, with the applicant herein being unsuccessful on the appeal. Costs certificates were issued to the parties in respect of the appeal. The matters referred to at paragraphs [44]-[48] and [49]-[53] below are relevant in this regard and put the matter in context.
23 May 2022
As noted at [1] above, on 26 March 2021, the Court made final parenting orders, which were subsequently not disturbed on appeal.
On 22 March 2022, the respondent filed a new interim application for parenting orders. At the time there were no parenting proceedings on foot. On 6 May 2022, the applicant filed a response and affidavit in respect of the respondent’s interim application. The application was first returnable on 31 May 2022.
On 23 May 2022, the respondent filed a Notice of Discontinuance with respect to the interim application filed 22 March 2022.
The applicant claims scale costs in the amount of $3147, (item 2 - Initiating or opposing an application that includes interim orders). The applicant submits that the respondent’s application was without merit, that it was likely to have been dismissed and that it was, in any event, discontinued, but only after the applicant filed his material in response.
On 23 May 2022, the Court made orders in chambers vacating the first return date of the interim application and standing over, for determination at the conclusion of the substantive proceedings, the applicant’s costs application in respect of the interim application.
25 and 26 July 2022
In November 2021, the Court listed the remitted property proceedings for hearing on 25‑27 July 2022. At the commencement of hearing, the respondent unsuccessfully applied for an adjournment.
Ultimately, the matter was stood down to allow the respondent to view subpoenaed material which had been available for inspection for some time but which the respondent had not viewed. It took the respondent the better part of the first two days of hearing to go through the subpoenaed material and be ready to commence the hearing, which started on 27 July 2022. The respondent also, for the first time, served on the applicant material which she indicated she would rely upon at hearing, but which was ultimately not relevant.
During the course of the hearing, the respondent also sought and was granted leave to rely on prior material which had been filed by her which was ultimately not relevant to the matters the Court needed to determine. The applicant was put to further cost in having to consider this material.
The applicant claims costs on an indemnity basis in the amount of $16,500 or in the alternative, in the scale amount of $11,785. The applicant submits that the Court should consider an order for indemnity costs where the trial was not completed in the allocated time, and that the reason the trial was not completed in the time allocated was because the respondent was not ready.
The Court noted on 27 July 2022, when proceedings were stood over part-heard to 12 August and 21 September 2022, that the applicant had foreshadowed a costs application in respect of 25, 26 and 27 July 2022.
What the Costs sought by the respondent relate to
31 July 2018
In support of her application for costs of 31 July 2018, in the amount of $14,087, the respondent relies upon a tax invoice, dated 26 July 2018 in the amount of $4,867. The invoice relied upon refers to a statement of account in respect of costs owing to date, in the amount of $14,087. [18]
[18] Respondent’s Case Outline filed 26 May 2023 at annexure A.
There is no evidence whatsoever in respect of costs incurred on the relevant date, 31 July 2018, for which the respondent claims costs.
What the respondent is really claiming are her costs outstanding as at 26 July 2018, on an indemnity basis.
The respondent does not, in her submissions or evidence, explain the basis for the particular amount of costs claimed in respect of 31 July 2018.
On 31 July 2018, the proceedings came before the Court for a directions hearing. The orders on the day were procedural in nature. There was no order made reserving costs.
13 August 2018
In support of her application for costs of 13 August 2018, in the amount of $25,460, the respondent relies upon a tax invoice dated 22 August 2018 which is for that amount.[19] That tax invoice itemises the costs the respondent was charged by her legal representatives, including for an appearance on 13 August 2018 in the amount of $3465.
[19] Respondent’s Case Outline filed 26 May 2023 at annexure B.
What the respondent is really claiming are her costs outstanding as at 22 August 2018, on an indemnity basis.
The respondent does not, in her submissions or evidence, explain the basis for the particular amount of costs claimed in respect of 13 August 2018.
On 13 August 2018, orders were made on the day of the contempt hearing for the preparation and filing of submissions in relation to the contempt application which was later dismissed. There was no order made reserving costs.
17 October 2018
In support of her application for costs of 17 October 2018, in the amount of $15,376, the respondent relies upon a “schedule to tax invoice No...”, which totals the amount claimed.[20] The tax invoices is not provided. There is no evidence on what date it was issued. The itemised costs relate to work which goes well beyond the scope of 17 October 2018, but do appear to include itemised costs of and incidental to the appearance on 17 October 2018.
[20] Respondent’s Case Outline filed 26 May 2023 at annexure C.
What the respondent is really claiming are her costs outstanding as at an unknown date, on an indemnity basis.
The respondent does not, in her submissions or evidence, explain the basis for the particular amount of costs claimed in respect of 17 October 2018.
The orders of 17 October 2018 relate to a number of matters and included orders made by consent, inter alia, progressing the matter towards mediation, and removing or amending restraints made. The Court otherwise dismissed the ‘property components’ of an interim application and listed the matter for interim hearing in relation to outstanding parenting matters.
Order 3 of those orders reserved the costs of Mr AR and the respondent. That was in relation to the matter of a subpoena lodged by the respondent and to which Mr AR apparently objected. There is no evidence as to the applicant himself objecting to the subpoena. There is no order made reserving costs otherwise.
13 August 2019
In support of her application for costs of 13 August 2019, in the amount of $19,749 (being solicitor’s fees in the amount of $7,924 and barrister’s fees in the amount of $11,825), the respondent relies upon two tax invoices, dated 5 September 2019 and 22 September 2019 in the amount of $7,924 and $825 respectively.[21]
[21] Respondent’s Case Outline filed 26 May 2023 at annexure D.
The tax invoice dated 5 September 2019 itemised costs for work which goes well beyond the scope of the interim hearing on 13 August 2019, but does appear to include itemised costs of and incidental to the appearance on 13 August 2019. The tax invoice dated 22 September 2019 relates to the judgment and advising on grounds of appeal.
The respondent also relies upon a costs agreement between her solicitor and the barrister briefed to appear at the interim hearing, dated 18 July 2019.[22] This document only provided an estimate of fees.
[22] Which is annexed to the Respondent’s affidavit relied upon in the costs application.
The respondent does not, in her submissions or evidence, explain the basis for the particular amount of costs claimed in respect of 13 August 2019.
The orders made on 13 August 2019 were made at the conclusion of an interim hearing and relate to: (i) the delivery by the respondent of a motor vehicle to the applicant for sale by him; (ii) directions for valuations to progress the matter; (iii) confirmation of urgent parenting arrangements pending the delivery of interim judgment at a date to be fixed; and (iv) other procedural orders. There was no order made reserving costs.
5 September 2019
In support of her application for costs of 5 September 2019, in the amount of $2,790, the respondent relies upon a tax invoice dated 16 September 2019 in the amount of $2,790.[23]
[23] Respondent’s Case Outline filed 26 May 2023 at annexure E.
It appears from the itemised costs attached to the invoice that the costs of 5 September 2019 were $315 plus GST.
What the respondent is really claiming are her costs outstanding as at 5 September 2019, on an indemnity basis.
The respondent does not, in her submissions or evidence, explain the basis for the particular amount of costs claimed in respect of 5 September 2019.
On 5 September 2019, the Court made interim parenting orders following the interim hearing. The interim parenting orders were subsequently successfully appealed[24] by the respondent. Costs certificates were granted to the parties in respect of the appeal. There was no order made reserving costs of 5 September 2019.
[24] Franklyn & Franklyn [2019] FamCAFC 256.
4 May 2020
In support of her application for costs of 4 May 2020, in the amount of $10,216, the respondent relies upon a tax invoice dated 31 May 2020 in the amount of $10,216. [25] The itemised costs include a fee for “attending at Interim Hearing with Counsel via telephone” for $1,776.
[25] Respondent’s Case Outline filed 26 May 2023 at annexure F.
What the respondent is really claiming are her costs outstanding as at 4 May 2020, on an indemnity basis.
On 4 May 2020, the Court made orders relating to: (i) further interim parenting orders made following the appeal; (ii) orders allowing the respondent to sell her F Town property with distribution of proceeds subject to certain provisions (including payment of a sum to the respondent); and (iii) directions progressing the matter for trial.
The respondent does not, in her submissions or evidence, explain the basis for the particular amount of costs claimed in respect of 4 May 2020. What the respondent does is address the reasons as to why the sale of the F Town property occurred. The Court infers from her submissions that she lays the blame for the sale of that property at the feet of the applicant.
Section 117(2A)
Having regard to the matters set out in Franklyn & Franklyn[26] and the Final Orders, the Court is satisfied that each of the parties has sufficient means to meet an order for costs.
[26] Supra n.2
Neither the applicant nor the respondent was legally aided during the proceedings.
The Court has found that the applicant had previously not acted in the spirit of full and frank disclosure.[27]
[27] Franklyn & Franklyn at [78].
The respondent, on the application for costs, maintains that the applicant has engaged in non‑disclosure and that this non-disclosure has caused delay and increased expense. The respondent submits that “the costs as claimed arise primarily because of the father’s failure to comply with court orders of non-disclosure causing delay and ongoing increased costs for the wife.” Such a submissions is unfortunately typical of the respondent in its lack of detail and proper basis.
There is no specific evidence by the respondent of: (a) requests for disclosure and/or obligations for disclosure with reference to dates, relevant Court rules and/or orders; (b) the alleged specific failure by the applicant to comply with such requests and/or obligations; or (c) how such alleged failure has caused the respondent to incur costs she otherwise would not have incurred or which were incurred such as to justify the making of a costs order.
Neither party was wholly unsuccessful in the proceedings.
Neither party puts before the Court any evidence of relevant offers to settle.
The respondent claims that domestic violence was perpetrated by the applicant during the relationship and that financial abuse and coercive control perpetrated by the applicant continues.[28] The Court has previously not been satisfied that there was family violence during the relationship.[29] In respect of the assertion that such abuse continues, on the evidence before the Court, no such finding is made. This is not a matter relevant to the costs applications as no findings of family violence have been made.
[28] Respondent’s Affidavit filed 26 May 2023 at [28].
[29] Franklyn & Franklyn at [89]-[91].
DETERMINATION
The starting point in proceedings under the Act is that each party bears its own costs, subject to a finding that there are circumstances justifying a costs order, and then a determination of what, if any, costs order is to be made.
It is the applicant for costs who needs to convince the Court that any order for costs should be made, that the Court should exercise its discretion in the applicant’s favour, and that a departure from the starting statutory position that each party bears its own costs is justified.
In respect of Costs sought by Applicant
Having regard to all of the relevant matters outlined in these reasons, the Court is satisfied there are circumstances justifying a costs order in the applicant’s favour in respect of 25 and 26 July 2022, but not in respect of any of the other dates claimed.
The final hearing was not concluded on 27 July 2022 due to the respondent not being ready to proceed on the first and second day of hearing. The conclusion of the final hearing was delayed due to the respondent’s conduct.
It is appropriate that the respondent pay the applicant’s costs thrown away by the delay and by virtue of her not being ready to proceed on the first and second day when the matter was listed for final hearing.
The respondent submits that it was never her choice to be self-represented and indicated that she has struggled to deal with the complex nature of this case.[30] Aside from drawing this to the attention of the Court, the respondent does not explain the relevance of this in relation to submissions for costs. The Court acknowledges that self-represented parties may find legal proceedings difficult to navigate, however, every effort was made to facilitate the respondent’s engagement with the proceedings.
[30] Respondent’s Affidavit filed 26 May 2023 at [34].
The applicant conducted the final hearing in a manner which took into account the respondent’s self-representation by making reasonable allowances at relevant times. This does not mean, however, that the applicant should bear any cost associated with the respondent’s lack of representation or the respondent’s lack of readiness.
The applicant primarily seeks costs at scale as quantified in sch.1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth), as at 31 December 2022.
This is not a matter where the applicant has met the bar with respect to indemnity costs.
An order for the respondent to pay the applicant’s costs of 25 and 26 July 2022 in accordance with the scale will be made.
In respect of Costs sought by Respondent
Having regard to all of the relevant matters outlined in these reasons, the respondent has not satisfied the Court that there are circumstances justifying any costs orders in her favour, lest of all any costs order on an indemnity basis as claimed.
Each of the days the respondent seeks costs in respect of occurred prior to the Court determining the parenting and property proceedings in 2021, and in circumstances where no order reserving the parties’ costs (as between them) was made on any of those occasions.
Under r.12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), an application for costs can be made at any stage in the proceedings or by filing an Application in a Proceeding within 28 days of final orders being made. In regard to costs, “final orders” means an order that finalises a particular cause of action, including orders finalising an Application in a Proceeding.[31]
[31] See e.g. Vu & Ton (No 5) [2023] FedCFamC1F 157 at [22]-[27].
The Court has the power to dispense with the requirement for compliance with rules. In circumstances where the Court invited the parties to make any costs applications, and indeed in circumstances where the Court has the power pursuant to r.12.13(1) to make an order for costs of its own initiative, the Court does not accept the submission by the applicant that the respondent is out of time to make the costs applications she now does.
However, none of the evidence relied upon by the respondent or her submissions have convinced the Court as to why the Court should make an order for costs in respect of those particular days, in circumstances as described above and where the application is in truth an application for costs on an indemnity basis in respect of much of the parenting and property proceedings.
Much, if not all of the evidence, which the respondent relies upon is either not relevant, inadmissible or otherwise has little to no weight.
Furthermore, and unfortunately, the submissions of the respondent show a misguided understanding of the relevant principles and consideration in respect of costs applications, and are by and large an attempt by the respondent to re-agitate many matters which have already been the subject of judicial determination.
In those circumstances, the respondent’s application for costs will be dismissed.
I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Obradovic. Associate:
Dated: 18 August 2023
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