Gallegos & Berntsson
[2025] FedCFamC1F 125
•4 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Gallegos & Berntsson [2025] FedCFamC1F 125
File number(s): SYC 4968 of 2024 Judgment of: BEHRENS J Date of judgment: 4 March 2025 Catchwords: FAMILY LAW – COSTS – Where interim and final parenting and property orders are sought in substantive proceedings – Where the Husband pursued and then withdrew a stay application – Where the Wife is seeking the costs of and associated with the Husband’s stay application – Where there was no appearance by or on behalf of the Husband at the hearing of the Wife’s costs application – Where the Wife is receiving pro bono legal representation pursuant to a non-contingent costs agreement – Where factual circumstances are novel in this jurisdiction – Where authorities from other jurisdictions in relation to the awarding of costs in circumstances of pro bono representation considered – Section 117 of the Family Law Act 1975 (Cth) considered – Where section 117 incorporates the indemnity principle – Where Wife not liable in any circumstances for the relevant legal costs above an amount she has already paid – Where costs order can only be made in respect of her costs incurred – Where the Husband’s stay application was wholly unsuccessful and wasteful of time and resources – Where the Husband did not promptly respond to an offer that he withdraw the stay application – Where Husband’s asserted financial impecuniosity is not a bar to the making of a costs order – Where it is found that the making of a costs order in respect of the costs actually paid by the Wife is just – Where it is not possible to find that the Husband has engaged in a scheme with the evidence untested –Where orders made for the Husband to pay the Wife the costs of and associated with responding to the stay application in a fixed sum, being the amount of the costs she has actually incurred Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Federal Court Rules 2011 (Cth) r 4.19
High Court Rules 2004 (Cth)
Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.34.2
Uniform Civil Procedures Rules 2015 (NSW) pt 9 div 7
Cases cited: Cachia v Hanes (1994) 179 CLR 403
Charisteas & Charisteas(No 2) [2023] FedCFamC1A 10
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116
Lao & Zeng (2021) FLC 94-053; [2021] FedCFamC1A 17
Legal Aid ACT & Westwell (2021) FLC 94-013; [2021] FamCAFC 50
Lenova & Lenova (Costs) [2011] FamCAFC 141
Loomis v ML Lawyer [2016] FLC 93-731; [2016] FamCAFC 168
Manieri & Anor v Cirillo (2014) 47 VR 127; [2014] VSCA 227
Mourik v Von Marburg [2016] VSC 601
PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123; [2005] FamCA 158
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Trevorrow v State of South Australia (No 7) [2008] SASC 5
Wentworth v Rogers (2006) 66 NSWLR 474; [2006] NSWCA 145
Division: Division 1 First Instance Number of paragraphs: 44 Date of last submission/s: 20 January 2025 Date of hearing: 18 December 2024 Place: Sydney Solicitor for the Applicant: Mr Gittoes-Caesar, Lander & Rogers Solicitor for the Respondent: No Appearance ORDERS
SYC 4968 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GALLEGOS
Applicant
AND: MR BERNTSSON
Respondent
ORDER MADE BY:
BEHRENS J
DATE OF ORDER:
4 MARCH 2025
THE COURT ORDERS THAT:
1.Within seven days, pursuant to s 117(2) of the Family Law Act 1975 (Cth), the Respondent Husband will pay to the Applicant Wife her costs of and associated with responding to the stay application, as contained in the Response to Initiating Application filed 1 August 2024, fixed in the sum of $3,433.
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
BEHRENS J
The applicant wife in this matter is Ms Gallegos. The respondent husband is Mr Berntsson. Ms Gallegos and Mr Berntsson are the parents of X, aged nine. The proceedings were commenced by Ms Gallegos on 28 June 2024 and involve an application for financial orders and parenting orders in respect of X, both on an interim and final basis. By his Response to Initiating Application filed 1 August 2024, Mr Berntsson sought that the proceedings be permanently stayed or, in the alternative, that they be stayed pending the determination of proceedings he had commenced in Country C (“the stay application”). Ms Gallegos and Mr Berntsson had lived together in Country C between 2013 and 2022, and X was born there. They had relocated to Australia in mid-2022, and soon afterwards, they separated. Mr Berntsson returned to Country C in around late 2022, and continues to reside there. In mid‑2023, Mr Berntsson commenced proceedings in Country C, seeking orders for “divorce” and “custody” of X.
On 30 July 2024, orders were made by consent providing for the appointment of a single expert in relation to the relevant law in Country C. On 10 September 2024, the matter was listed for a compliance and readiness hearing. On 18 September 2024, the matter was listed for a one-day hearing on the forum question, to take place before me on 11 October 2024. On 30 September 2024, Mr Berntsson filed a Notice of Discontinuance in relation to his stay application, and on 8 October 2024, I made orders in chambers giving effect to the Notice. I also vacated the 11 October 2024 one-day hearing on the question of forum.
These Reasons deal with Ms Gallegos Application filed 9 October 2024 (“the Costs Application”), so far as it sought that Mr Berntsson pay her costs of the stay application.
The Costs Application was before me in the afternoon of 18 December 2024. There had been an interim hearing before Senior Judicial Registrar Osmand in the morning, and I was told that Mr Berntsson had appeared via video-link on his own behalf. The previous day, my Associate had received an email from Mr Berntsson requesting the dial-in details for the costs hearing and, in response to that email, provided this information to Mr Berntsson. Mr Berntsson had filed a Case Outline on 13 December 2024, although that Case Outline did not clearly address the costs issue (focusing instead on the issues to be agitated before Senior Judicial Registrar Osmand).
When the matter was called on before me, Mr Berntsson did not appear. I stood the matter down so that Ms Gallegos’s legal representatives could attempt to contact Mr Berntsson on the telephone number which they had for him. I was told that attempt was unsuccessful. My Associate also attempted to contact Mr Berntsson by email. Ultimately, the matter proceeded with no appearance by or on behalf of Mr Berntsson, but on the basis that he would be provided with the transcript of the proceedings and given an opportunity to file any written submissions.
An Outline of Case Document had been filed on behalf of Ms Gallegos on 13 December 2024. By that document, she confirmed that she sought that Mr Berntsson pay her costs of and incidental to the substantive proceedings as follows:
1.1on an indemnity basis in the sum of $14,361.60; or
1.2in the alternative, on a party/party basis [this being 70 per cent of indemnity] in the sum of $10,053.12; or
1.3in the alternative, at scale in the sum of $7,415.46.
Ms Gallegos relied on:
(1)Her affidavit filed 9 October 2024, with annexures (“wife’s October affidavit”);
(2)Her affidavit filed 12 December 2024, with annexures (“wife’s December affidavit”); and
(3)Her Financial Statement filed 12 December 2024.
During submissions, I was also referred to the Costs Notice (“wife’s Costs Notice”) filed on behalf of Ms Gallegos on 17 December 2024, and have had regard to that.
By his Case Outline, Mr Berntsson indicated that he relied on:
(1)His affidavit filed 14 November 2024 (“husband’s November affidavit”);
(2)His affidavit filed 13 December 2024 (“husband’s December affidavit”);
(3)His Financial Statement filed 14 November 2024 (“husband’s November Financial Statement”); and
(4)His Financial Statement filed 13 December 2024 (“husband’s December Financial Statement”).
At the hearing, oral submissions were made on behalf of Ms Gallegos, which supplemented the summary of submissions in the Outline of Case document. I raised with Ms Gallegos’s legal representative the question of whether a costs order can be made under the Family Law Act1975 (Cth) (“the Act”) in circumstances where, as here, the legal representation in respect of which costs are claimed was provided on a pro bono basis. I was told that no authority directly on this point had been identified – although it was acknowledged that there is relevant authority in other jurisdictions. By way of an alternate position, the legal representative for Ms Gallegos referred to the Costs Notice filed on her behalf on 17 December 2024, and to the fact that it shows that Ms Gallegos has paid the sum of $3,433 from her own earnings and savings, such that if I found I was not able to make the costs order sought because of the pro bono issue, I could make an order in that amount.
At the conclusion of the hearing, I ordered that the parties file and serve any further written submissions in relation to the matter. My Associate subsequently emailed Mr Berntsson a transcript of the hearing and the Orders I had made on 18 December 2024.
Further written submissions on behalf of Ms Gallegos were filed on 20 January 2025. Mr Berntsson did not file any written submissions.
Accordingly, the wife’s Costs Application is determined on the basis of the following:
(1)The Case Outline of the applicant wife, filed 13 December 2024;
(2)The Case Outline of the respondent husband, filed 13 December 2024;
(3)The oral submissions made on behalf of the applicant wife on 18 December 2024; and
(4)Supplementary written submissions of the applicant wife, filed 20 January 2025.
LEGAL PRINCIPLES
Pursuant to s 117(1) of the Act, the default position is that each party is responsible for bearing their own costs. By virtue of s 117(2), the Court is empowered to make a “just” costs order where the Court is of opinion that there are circumstances that justify it in doing so.
As to the exercise of the Court's discretion with respect to costs orders under s 117(2), the Act provides in s 117(2A) that consideration must be given to the following:
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(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.
Whilst I am required to consider these factors ”to the extent they are relevant”, the weight I attribute to such matters is at my discretion (Lao & Zeng (2021) FLC 94-053 at [42]), and s 117(2A) does not identify any one or more factors as necessary for a costs order under s 117(2) to be made (PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123 at [41]).
In Kohan & Kohan (1993) FLC 92-340 (“Kohan”), the Full Court observed that:
The intent of s 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the Court may make such order as the Court considers just.
In Penfold v Penfold (1980) 144 CLR 311, the High Court considered that while there must be justifying circumstances for a costs order to be made, no “additional or special onus” is placed upon applicants in their pursuit of costs. Once justifying circumstances are found, the Court has discretion to award costs.
Before considering whether there are justifying circumstances to make a costs order, it is convenient to address the relevance of the fact that Ms Gallegos’s legal representatives were acting on a pro bono basis at the relevant time. As I set out below: this is a matter in relation to which the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) and the High Court Rules 2004 (Cth) are silent; and, the Court has not been able to identify any relevant authority where an application for costs on this basis has been made under s 117 of the Act.
RELEVANCE OF THE FACT THAT MS GALLEGOS’ LEGAL REPRESENTATIVES WERE ACTING ON A PRO BONO BASIS
Ms Gallegos has been in receipt of pro bono representation from Lander & Rogers, with whom she entered a Costs Agreement on 25 March 2024.
That Costs Agreement, with a covering letter, was annexed to her October affidavit. Those documents relevantly provide:
3. We will not charge you for the costs of our time (known as ‘legal fees’).
4.You will still need to pay for expenses we incur on your behalf, including services supplied to our associated entities (known as ‘disbursements’).
The Costs Agreement is not a contingent one – in other words, it does not create a liability on Ms Gallegos to pay her costs in the event a costs order is made in her favour.
At paragraphs 23, 26 and 27 of her October affidavit, Ms Gallegos gave the following relevant evidence:
23.I am presently assisted by my solicitors, Lander & Rogers, on a pro bono basis. However, that arrangement was initially only for a limited basis until the conclusion of my interim application. As a result of [Mr Berntsson’s] stay Application, I sought pro bono assistance from Lander & Rogers until the conclusion of the hearing of the stay Application. I understand the current pro bono budget allocated to my case is $57,500.00. There is no guarantee that such pro bono assistance can be extended beyond this amount. I am required to pay any disbursements out of pocket, including counsel fees and Court fees.
…
26.Whilst I have had the assistance of Lander & Rogers on a pro bono basis thus far, the amount expended in relation to the Stay application has limited the funding available to me to prepare for the interim financial and parenting relief sought in my Initiating Application.
27.Upon the cessation of the pro bono assistance, I understand that Lander & Rogers will only continue to act for me on the basis that I will pay their monthly accounts promptly and within 14 days of each account issuing. The firm will not agree to act for me on the basis that my fees are paid at the conclusion of these proceedings from my property settlement. It is estimated that the costs of these proceedings to a Final Hearing will be approximately $200,000.
Her updating evidence was (wife’s December affidavit, paragraph 17):
I continue to be represented in these proceedings by Lander and Rogers on a pro bono basis. However, this arrangement is only for a limited time and is in place until the conclusion of the hearing of my interim application. I am required to pay any disbursements out of pocket, including counsel fees and Court fees. I do not have the funds to continue to meet the costs of my legal representation in these proceedings or the [Country C] proceedings.
The wife’s Costs Notice in fact reveals that:
(1)So far, the sum of $117,500 has been approved to be paid from Lander & Rogers acting on a pro bono basis for the matter (presumably by way of an extension of the original allocation referred to by Ms Gallegos in her October affidavit); and
(2)Ms Gallegos has paid legal costs/disbursements from her income and savings in the sum of $3,433.
The Costs Application therefore deals with what appears to be a novel question in this jurisdiction – namely, whether a costs order can be made pursuant to s 117(2) of the Act in favour of a party in circumstances where their legal representatives have acted on a pro bono basis. The issue arises because costs orders are made to enable a party to recover costs which they have paid, or owe, to their lawyers. The so-called “indemnity principle” means that the costs that can be recovered are limited to the amount which a party owes to their lawyers. Expressed another way, a party should not profit from a costs order, or should not receive a “bonus”.
The application raises the following legal issues:
(1)Does the indemnity principle apply to applications made under s 117(2) of the Act? For the reasons set out below, I conclude that it does.
(2)Does the indemnity principle allow the making of an order where, although the applicant is not under any liability to pay the relevant professional legal costs, there has been a cost to the applicant by reason of the use of her entitlement to pro bono services, such that the applicant may, in future, be liable for professional legal costs which she otherwise would not have been? For the reasons set out below, I conclude that the indemnity principle does not so allow, although Ms Gallegos may recover costs actually incurred by her.
The indemnity principle
The relevant law is usefully summarised by Gray J in Trevorrow v State of South Australia (No 7) [2008] SASC 5 (“Trevorrow”) at [7]-[17], commencing with the authority of Cachia v Hanes (1994) 179 CLR 403 at 410 (footnotes omitted):
It has not been doubted since 1278, when the Statute of Gloucester introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation.
Justice Gray explores various scenarios in which the indemnity principle will not exclude an application for costs, including: where there is no costs agreement excluding liability; where another person or organisation has agreed to pay the costs; where it is unlikely costs will be recovered; where litigants are to be indemnified; and where legal aid is obtained. Justice Gray also deals with the conflicting authorities about whether the existence of a conditional costs agreement which creates a liability for costs in the event a costs order is made (or, in some cases, a payment received) means that the indemnity principle is not offended by the making of an order for costs. In this context, his Honour at [15] refers to the authority that “[t]he indemnity principle is not immutable, and should be applied flexibly rather than made into a rigid rule” (per Santow JA in Wentworth v Rogers (2006) 66 NSWLR 474 at [50]).
None of these examples, nor the need for flexibility, would allow for the making of a costs order where, by way of a costs agreement, a party is simply not liable for their legal costs, and where there is no conditional costs agreement in place. Unless there is some statutory intervention, the authorities suggest that, in the circumstances here, a costs order is excluded by reason of the indemnity principle.
Section 117(2)
An initial question is whether s 117(2) incorporates the indemnity principle. It would be a surprising result if such a well-established principle of the common law had been displaced, simply by the entreaty to do what is just.
Such an interpretation was not contemplated in the single judge appeal of Loomis v ML Lawyer [2016] FLC 93-731, which considered whether a self-represented solicitor can recover costs. The appeal was dealt with on the basis that the indemnity principle applies in relation to applications under s 117(2), and that the partial indemnity provided by an award of party and party costs in that situation represents the loss of opportunity “’of using that time doing professional work for other clients and being remunerated accordingly’” (per Murphy J at [65]).
One of the matters to which the Court is required to have regard in considering what (if any) order should be made under s 117 of the Act is “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” (s 117(2A)(b)). The reference to “legal aid” in this subsection is: “… a reference to the commonly understood notion of a legal aid body or other assistance organisation, usually but not necessarily, funded by the government, which provides financial support to enable a lawyer to act for the recipient of the grant” (Legal Aid ACT & Westwell (2021) FLC 94-013 at [18]). The Full Court made clear that the term should not be “… read more widely to include any legal assistance at all including pro bono assistance or the attendance of a ‘McKenzie’ friend” (at [29]). Legal Aid schemes are statutory creatures, and relevant legislation provides that funds recovered by a legally aided client must be paid in full to the relevant legal aid fund. This might be seen as a statutorily based exception to the indemnity principle (in the sense that a costs order is made in favour of an individual, notwithstanding they have not incurred costs). It is one of the examples dealt with by Gray J in Trevorrow. Its inclusion in s 117 does not tell against the application of the indemnity principle generally.
I conclude that the indemnity principle applies, notwithstanding that this application for costs is made pursuant to s 117(2) of the Act.
Relevant rules of Court
Presumably in recognition of the public interest in encouraging pro bono assistance and other public policy imperatives, the issue has been addressed in the rules of court in different jurisdictions:
(a)Rule 4.19 of the Federal Court Rules 2011 (Cth) (“the Federal Court Rules”) enables the making of a costs order in circumstances where a costs agreement provides that the assisted party is liable to pay professional fees if an order for costs is made in favour of the assisted party.
(b)Division 9 of pt 7 of the Uniform Civil Procedures Rules 2015 (NSW) (“the New South Wales Rules”) provides for a statutory pro bono scheme under which a court can refer a litigant for pro bono assistance and enables the making of costs orders under that scheme.
(c)Following the decisions in Manieri & Anor v Cirillo (2014) 47 VR 127 and Mourik v Von Marburg [2016] VSC 601, the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (“the Victorian Rules”) were amended to include r 63.34.2 which at subsection 1 provides that:
If a legal practitioner provides legal assistance to an assisted party in a proceeding on a pro bono basis, the Court may make, in favour of the assisted party, any order for the recovery of the costs of the legal assistance that the Court might have made had the legal assistance been provided not on a pro bono basis but on the basis that the assisted party was under an obligation to pay for the legal assistance in the ordinary way.
Unlike the Federal Court Rules, r 63.34.2(1) of the Victorian Rules does not on its face require, in order to ground a costs order, that there be a conditional costs agreement in place.
Thus, there are three different approaches to this question taken respectively in the Federal Court Rules, the Victorian Rules, and the New South Wales Rules.
There are no relevant rules applying in this Court.
Application of the indemnity principle
In Ms Gallegos’s written submissions, it was said that I should find that it is just and equitable to make the costs order sought, notwithstanding her lawyers have acted on a pro bono basis, and notwithstanding further that the costs agreement in place between her and her lawyers does not create a liability on Ms Gallegos in the event a favourable costs order is made. It is pointed out that Ms Gallegos has a limited grant of pro bono assistance, and that some of that grant has been used in responding to the stay application, such that Ms Gallegos has incurred (albeit in an indirect way) a relevant cost because those funds are no longer available to her to use towards her future legal costs.
While superficially attractive, after careful consideration I do not accept that is the correct approach to this matter. Long-established common law requires a focus on whether Ms Gallegos is liable for the costs which are the subject of the costs application. The fact that she may be liable for costs in the future as a result of the consumption of her pro bono grant is not the point, and will be properly be the subject of any costs application to be made in respect of those costs.
The Costs Notice filed on Ms Gallegos’s behalf indicates that she has paid costs from her own earnings and savings of $3,433. I turn now to consider whether I should make an order for her to recover that amount, or some of it.
SHOULD A COSTS ORDER BE MADE?
Above, I have set out the relevant legislation and principles.
I am satisfied that there are circumstances in this matter which render the making of a costs order just, notwithstanding the difficulties with making factual findings where the evidence is untested. Those circumstances are as follows:
(1)Mr Berntsson made an application which, by its nature, required significant work to meet. That work included identifying and instructing a single expert on the issue of the law of Country C. A short time before the application was due to be heard, it was withdrawn by Mr Berntsson. He was therefore both wholly unsuccessful in obtaining the relief he sought, and also wasted the Court’s time and Ms Gallegos’s resources.
(2)Ms Gallegos’s lawyers wrote to Mr Berntsson’s lawyers on 9 September 2024 inviting him to withdraw the stay application “in order to save the parties’ costs”, and put him on notice that, in the event the application was not withdrawn and Ms Gallegos was successful in opposing Mr Berntsson’s stay application, costs would be sought on an indemnity basis (that letter is Annexure JO1 to the wife’s October affidavit). He should have accepted that offer promptly.
(3)Ms Gallegos was living in strained financial circumstances at the time of the application, and has the sole care of X. She was not receiving regular and predictable child support from Mr Berntsson – rather, he made two payments in September and October 2024 respectively, but no payment in November (wife’s December affidavit, paragraph 35). He has sold the car which Ms Gallegos was using (wife’s December affidavit, paragraphs 48, 49 and 51). Interim orders were made on 18 December 2024 by Senior Judicial Registrar Osmand for the payment of spousal maintenance and child maintenance, including the payment of various expenses. I do not have any evidence about whether those orders are being complied with. If Mr Berntsson is complying, then Ms Gallegos’s circumstances will be less strained. Nonetheless, Ms Gallegos has access to no property or savings. Ms Gallegos has, for the time being at least, the pro bono assistance of her lawyers. There is no obvious source from which she could pay lawyers.
(4)On the face of Mr Berntsson's Financial Statement filed 13 December 2024 and on Mr Berntsson’s other evidence he is also living in strained financial circumstances. However, as set out in Ms Gallegos's December affidavit at paragraph 62:
·In October 2024, he received approximately $600,000 into his NAB bank account and transferred more than that sum out of his bank account;
·Also in October 2024, he received approximately $830,000 into his bank account in Country C and withdrew over $2,000,000;
·In September 2024 he appeared to withdraw and transfer over $1 million between his three B Bank accounts.
Mr Berntsson gives no detailed evidence about these transactions. At paragraph 25 of his December affidavit, Mr Berntsson says that certain funds in his various bank accounts “were utilised for the purpose of settling my debts and extricating myself from the scam that occurred in 2016”. The scam he refers to is one he gives evidence about in his November affidavit. He says that his brother has withdrawn funds from the B Bank account (husband’s December affidavit, paragraph 27). The bank statements were not tendered in evidence in the costs hearing and the evidence is untested, so I am not able to make any detailed findings. I am, however, satisfied that Mr Berntsson has had access to significant sums of money over the period September to October 2024 and I cannot be satisfied by his evidence that those funds are no longer available to him – or have been appropriately disposed.
(5)In any case, financial impecuniosity is not a bar to the making of a costs order (Lenova & Lenova (Costs) [2011] FamCAFC 141 at [12], cited with approval by the Full Court in Charisteas & Charisteas(No 2) [2023] FedCFamC1A 10 at [5])
Rule 12.17 of the Rules specifies:
Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c)to be calculated in accordance with the method stated in the order; or (d) for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
(2)If costs are payable under the Family Law Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party and party basis.
(3) In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable proceedings;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre-action procedures;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
With the evidence untested, I am not able to find that making the stay application was part of a deliberate scheme by Mr Berntsson to “buy time”, such that he could divest himself of wealth before Ms Gallegos’s interim application was able to be determined.
I am left with the situation where, had the wife’s lawyers not acted on a pro bono basis, I would be considering the basis upon which to award the wife’s costs (that is, whether on an indemnity or some other basis). As it is, I am satisfied that it is just that the wife recovers all the costs she has actually expended. That is a very modest and reasonable amount in the context of the application – namely, $3,433. That sum is to be paid by Mr Berntsson within seven days.
I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Behrens. Associate:
Dated: 4 March 2025
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