Galani & Galani (No. 2)
[2021] FamCA 387
•10 June 2021
FAMILY COURT OF AUSTRALIA
Galani & Galani (No. 2) [2021] FamCA 387
File number(s): MLC 13970 of 2020 Judgment of: WILLIAMS J Date of judgment: 10 June 2021 Catchwords: FAMILY LAW – COSTS. Legislation: Family Law Act 1975 (Cth) ss 117(1), 117(2), 117(2A) Cases cited: Galani & Galani [2021] FamCA 229
In the Marriage of I and I (No. 2) (1995) 22 Fam LR 557
Worth & Worth (No. 2) [2019] FamCAFC 126
Number of paragraphs: 31 Date of last submission/s: 21 May 2021 Date of hearing: 13 April 2021 Place: Melbourne The Applicant: No Appearance Solicitor for the Respondent: Ms Carson Solicitor for the Respondent: Kennedy Guy ORDERS
MLC 13970 of 2020 BETWEEN: MR GALANI
ApplicantAND: MS GALANI
Respondent
ORDER MADE BY:
WILLIAMS J
DATE OF ORDER:
10 JUNE 2021
THE COURT ORDERS THAT:
1.The husband pay the party/party costs and disbursements of the wife, of and incidental to the Initiating Application filed on 16 December 2020, including the costs of preparation of the costs submissions, fixed in the sum of $2,384.23.
2.The payment referred to in order (1) hereof be made within 30 days of these orders.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Galani & Galani has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Williams J
This matter was listed in the Judicial Duty List on 13 April 2021. The substantive issue for consideration before the Court on that day was the husband’s Application in a Case filed 16 December 2020 and the wife’s response filed 15 March 2021.
The husband did not appear on 13 April 2021 and the wife proceeded with an application to summarily dismiss the husband’s Application in a Case. That matter was heard and determined by me and I made orders and published my reasons on 23 April 2021, Galani & Galani [2021] FamCA 229.
My reasons set out the background of the dispute and the litigation between the parties subsequent to final orders having been made on 24 March 2017. I do not propose to repeat the background and procedural history of the dispute.
The current application before me is the wife’s application for costs arising out of the husband’s Application in a Case. Orders made on 23 April 2021 provided that any written submissions as to costs, which shall not exceed five pages, shall be filed and served within 28 days, with a copy to be emailed to my associate.
On 21 May 2021, the wife’s solicitors filed submissions as to costs on behalf of the wife. On 21 May 2021, the husband sent email to my associate expressing his dissatisfaction with the orders made on 23 April 2021, including that he had been denied justice and his incredulity that the wife was seeking costs against him. The email did not include any cost submissions on the husband’s behalf nor address the wife’s costs submissions.
LEGAL PRINCIPLES
Section 117(1) of the Family Law Act 1975 (Cth) ("the Act"), states, subject to the provisions of s 117(2), that the general rule in proceedings in this court, is that each party to proceedings, shall each bear his or her own costs.
Section 117(2) of the Act provides as follows:
If, in proceedings under this Act, the court is of the opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) 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.
Section 117(2A) of the Act provides, that in considering what order (if any) should be made for the payment of costs, the court shall have regard to the following matters:
(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.
In the In the Marriage of I and I (No 2) (1995) 22 Fam LR 557, the Full Court said that 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"
I will now address the relevant considerations.
Section 117(2A)(a) the financial circumstances of each of the parties
The wife submits that the court can be satisfied that the husband has the means to satisfy a costs order and that the wife’s financial position justifies a costs order. Specifically:
(a)paragraph 7 of the affidavit of the wife’s solicitor filed 26 February 2021 refers to the husband receiving the balance of proceeds of sale of the B Street, Suburb C property;
(b)the husband filed a document in the proceeding on 16 December 2020, which had a heading “Financial Statement” which states:
Property Interest: B St Suburb C 85% paid equity, Approx
$1 mill.
Car: …, ~ $10 K
Finance approval of $72 k towards the property at the centre of dispute.’
(c)in her Financial Statement filed 15 March 2021, the wife deposes that her weekly expenditure exceeds her income and that she continues to have debt.
Section 117(2A)(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
There were no submissions on behalf the wife or suggestion that she or the husband were in receipt of a grant of legal assistance.
Section 117(2A)(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
It was submitted on behalf of the wife that the husband’s conduct has been left wanting, specifically, the husband issued the current proceeding in this court, when the original proceedings were in the Federal Circuit Court and by the filing of his application:
(a)the wife was placed in a position to respond to the proceedings which required evidence as to the history of litigation between the parties, particularly in circumstances where it was not easy to ascertain the factual basis of the husband’s application and his complete misunderstanding of the sequence of orders made in the court;
(b)the wife was required to engage solicitors to appear on her behalf on 13 April 2021, in circumstances where the husband had notice of the hearing date, had been advised that the matter would not be adjourned, gave no reasons for why he was unable to attend and that it was the husband who had initiated the application.
Section 117(2A)(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
There were no submissions about this consideration, other than the husband asserted in his email to my associate, the allegations contained in his affidavit in support of the Initiating Application, about the wife’s failure to act in good faith.
Section 117(2A)(e) whether a party to the proceedings has been wholly unsuccessful
On 15 March 2021, the wife filed a Response to the husband’s Initiating Application seeking that his application be summarily dismissed. Orders were made on 23 April 2021 dismissing the husband’s Initiating Application, and accordingly the wife has been wholly successful and the husband has been wholly unsuccessful, in his application.
Section 117(2A)(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
The wife submitted that the husband was on notice, at least from 1 March 2021 that the wife would seek a summary dismissal of his application and that indemnity costs orders would be sought by the wife in the proceeding. That was reflected in recital C to the orders made 1 March 2021 by Registrar Litterick at the conclusion of the Case Assessment Conference.
Additionally, the wife’s Response, which was filed on 15 March 2021 sought orders in those terms, following the husband’s failure to withdraw his application after the Case Assessment Conference on 1 March 2021.
Section 117(2A)(g) any other matters the court considers relevant
The wife’s submissions refer to the context of the long history of litigation between the parties in both the Federal Circuit Court and the Appeal Division of this Court. It was submitted that the current proceedings issued by the husband were but one of a series of applications made by him to the court, without success. Past proceedings included two unsuccessful appeals. The husband’s Application in a Case filed 16 December 2020 has the effect of unduly delaying the finalisation of proceedings initially commenced in the Federal Circuit Court in 2015.
I agree with the submissions on behalf of the wife that the husband’s conduct was highly inappropriate and that the Initiating Application was ill-conceived and demonstrated a complete misunderstanding of the sequence of orders made subsequent to the final orders of March 2017. I am also satisfied that the husband was on notice at least from 1 March 2021 that the wife would seek that his application be summarily dismissed and that costs consequences would flow.
The husband has had an extensive history of litigation in both this court and the Federal Circuit Court, including costs orders made against him as a result of unsuccessful applications made to the courts. It could not be a surprise to him that the possible consequences of his conduct would be an order that he pay the wife’s costs of his Initiating Application.
The wife should not be responsible for the payment of costs arising from an ill-conceived application.
I have considered and taken into account all of the relevant matters in s 117(2A) of the Act and the submissions of both parties, and I am satisfied that there are justifying circumstances to depart from the general rule that each party shall bear his or her own costs.
INDEMNITY COSTS
As I am satisfied that there are justifying circumstances for an order for costs, the outstanding issues are whether costs should be ordered on the usual party/party basis, or the exceptional indemnity basis.
The principles as to the basis on which indemnity costs should be ordered is set out by the Full Court in Worth & Worth (No. 2) [2019] FamCAFC 126, as follows:
[9] The authorities are clear, that for the usual basis to be departed from, exceptional circumstances need to be demonstrated (see, eg, Limousin & Limousin (Costs) (2007) 38 FamLR 478). The categories of such circumstances are not closed (Yunghanns & Yunghanns (2000) FLC 93–029 ), but some examples are provided in the oft-quoted decision of Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (“Colgate-Palmolive Co”), and usefully, Holden CJ in Munday v Bowman (1997) FLC 92–784 at 84,660, drew from his Honour’s decision the following:
(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.
(e)An imprudent refusal of an offer to compromise.
CONCLUSION
I am able to infer from the husband’s email of 21 May 2021 that he opposes any order for costs, let alone indemnity costs. I do not accept that he should not pay the wife’s costs, for the reasons set out in the preceding paragraphs.
The conduct of the husband is clearly unacceptable and in my view warrants an order for costs, when all of the relevant statutory considerations are addressed however, the appropriate costs remedy is to order costs on a party/party basis. I am not persuaded that the circumstances of this matter are so exceptional, as required by the authorities, that my discretion should be exercised to make an order for indemnity costs.
I intend to make an order that the husband pay the party/party costs of the wife of and incidental to the husband’s Initiating Application filed 16 December 2020.
QUANTUM
In relation to quantum of the costs claimed, the wife’s costs submissions set out an itemised account of the work involved in accordance with the scale of costs which total $2,384.23.
In the absence of any submissions by the husband in relation to quantum, I accept the itemised schedule of costs and will fix the costs in accordance with the amount claimed.
If an order were made for costs to be paid as agreed or in default to be taxed, given the limited nature of the claim, it is highly likely that there would never be any agreement by the husband as to quantum and to require the wife to prepare for and attend a taxation of costs would in my view be unduly onerous.
I will therefore order that the husband pay the wife’s costs fixed in the sum of $2,384.23 within 30 days of these orders.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Williams. Associate:
Dated: 10 June 2021
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