Gambetto & Farrelli (No 8)

[2022] FedCFamC2F 1302

Federal Circuit and Family Court of Australia

(DIVISION 2)

Gambetto & Farrelli (No 8) [2022] FedCFamC2F 1302

File number:

SYC 4559 of 2021

Judgment of:

JUDGE O'SHANNESSY

Date of judgment:

28 September 2022

Catchwords:

FAMILY LAW – costs– unsuccessful application included unusual aspects – offer in writing manipulative – costs fixed to avoid disputation.

Legislation:

Family Law Act 1975 (Cth) s 117.

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 192.

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 10.13.

Cases cited:

Colgate-Palmolive Co v Cussons (1993) 43 FCR 225.

Gambetto & Farrelli (No 6)] [2022] FedCFamC2F 1007.

Kohan and Kohan (1993) FLC 92-340.

Munday v Bowman (1997) FLC 92-784.

Rice & Asplund (1979) FLC 90-725.

Division:

Division 2 Family Law

Number of paragraphs:

22

Date of last submission:

31 August 2022

Date of hearing:

2 August 2022

Place:

Melbourne

Solicitor for the Applicant:

Worland Family Lawyers

The Respondent:

On his own behalf

The Independent Children's Lawyer:

Did not participate

ORDERS

SYC 4559 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

MS FARRELLI

Applicant

AND:

MR GAMBETTO

Respondent

INDEPENDENT CHILDREN'S LAWYER

order made by:	JUDGE O'SHANNESSY
DATE OF ORDER:	28 SEPTEMBER 2022

THE COURT ORDERS THAT:

1.That in respect to the application for review and/or extension of time to review filed 15 April 2022 and heard on 3 June 2022, the Father, Mr Gambetto, pay the Mother’s costs fixed in the sum of $12,416, on or before 4.00 pm Wednesday 30 November 2022.

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 Gambetto & Farrelli has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

JUDGE O’SHANNESSY

1. On 3 June 2022 I heard the Father's application for review filed on 15 April 2022. I delivered judgement on 2 August 2022 dismissing those applications.  These reasons should be read with that judgment, Gambetto & Farrelli (No 6) [2022] FedCFamC2F 1007, anonymised as Gambetto & Farrelli (No 6) [2022] FedCFamC2F 1007.

2. On 2 August 2022 I ordered that any application for costs be made in writing by short submission (no more than three pages), headed "Application For Costs", within 14 days of the orders dismissing the applications and that any response be filed and served within 14 days of receipt of those short submissions as to costs.

3. On 16 August 2022 the Mother filed an application for costs pursuant to the 2 August 2022 orders.  The application annexed a detailed calculation of costs on scale and on an indemnity or actual cost basis and the cost agreement between the Mother and the solicitors retained by her.  On 31 August 2022 the Applicant Father filed a response to that application.

4. The Mother sought indemnity costs in the sum of $22,070 and alternatively party/party costs in the sum of $14,045.  The Mother's submissions identified that the Father’s application for review sought leave to review the decision of the Senior Judicial Registrar ('the SJR') made on 25 March 2022 and an extension of time to review the orders made by the same SJR on 28 September 2021 and submitted that the relevant factors include the following:

   ·that the review/applications of the Father were wholly unsuccessful and/or misconceived;

   ·that the father had failed to comply with the Rules;

   ·that the applications of the Father indicated a failure to litigate responsibly and minimise costs and expense;

   ·that the Father had provided no evidence that he could not satisfy a costs order;

   ·that the Father failed to take genuine steps to resolve disputes prior to the issue of proceedings;

   ·that on the principles of Colgate-Palmolive Co v Cussons (1993) 43 FCR 225 (‘Colgate’), indemnity costs are appropriate and warranted in the circumstances; and

   ·that the sum of costs should be fixed to avoid further aggravation of prolonged litigation in an assessment of costs.

5. The Father's submissions sought that the cost application by the Mother be refused and alerted the reader that the Father intended to seek costs against the Mother and her solicitor as part of the final hearing.  His submissions included:

   ·notice that an appeal from the decision of 2 August 2022 had been filed on 2 August 2022;

   ·that it may be appropriate to reserve all costs until final hearing;

   ·a complaint that the review hearing heard on 3 June 2022 was not heard within 28 days;

   ·a number of complaints of the manner of the Mother conducting her application for final orders;

   ·a complaint that the Mother and her solicitor had failed to properly engage in resolving the matter;

   ·an assertion that the Mother could well afford to pay her own costs and that she was frivolous with money;

   ·a complaint that after the release of the decision on 2 August 2022, the Mother advised that she had relocated and moved in with a new partner that tripled the distance between the Father and the child and that the Father did not consent to the child living with that person and a warning that that conduct (of moving, apparently within Sydney, and re-partnering) would likely cause another application; and

   ·the submission that the orders of 28 September 2021 were obtained by fraud and that the Mother had misled the court as to her true position and hence had wasted her own resources, the resources of the Father and the resources of the court.

6. It is settled law that indemnity costs will only be awarded in exceptional circumstances, see Kohan and Kohan (1993) FLC 92-340 and Munday v Bowman (1997) FLC 92-784. The well settled and often cited guideline or principal number 5 at 233 of Colgate describes the following matters as warranting consideration of indemnity costs: making allegations of fraud knowing them to be false (and/or) bringing proceedings for some ulterior motive or in wilful disregard of known facts or clearly established law or the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.

7. Section 192(4)(d) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) states a Judge of Division 2 may award costs against a party. The issue of costs is controlled by that section and section 117 of the Family Law Act 1975 (Cth) (‘the Act’). Section 117 includes as follows (notations omitted):

   117  Costs

   (1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.

   (2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) 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.

   (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.

8. The starting point is that each party should bear his or her own costs unless there is some sound reason contemplated by section 117(2A).

9. I have very little information about the financial circumstances of the parties and although both parties complain about the expense of litigation, neither submits that he or she is unable to pay their own or the other party's legal costs.  That a party is impecunious is relevant but not a bar to an order for costs.  I infer that neither party is in receipt of legal aid. 

10. The Father's application to review out of time or to have leave to review the September orders was issued well out of time, after the Father had already sought to change and impugn those orders, as I have recited in the 2 August 2022 reasons.  That is a serious matter. 

11. The proceedings have not been necessitated by the failure of anyone to comply with orders. 

12. The Father has been entirely unsuccessful in his applications before me. 

13. The Father did make an offer in writing, recited in the 2 August 2022 reasons, to settle at least part of his application.  That offer was inappropriate and on its face had the sting of manipulation to it. 

14. As to the conduct of the proceedings and “such other matters as the court considers relevant,” I must consider that offer referred to above.  Costs are by way of compensation.  The Father's attempt to leverage the threatened perjury proceedings to get the orders he wants has caused me to contemplate whether a costs order, and an indemnity costs order, should mark the inappropriateness of that conduct.  However, I have determined that I should not do so only on account of the offer as there may be other circumstances that I am unaware of relevant to that issue and that offer.  The offer of itself did add to the Mother’s costs, although not substantially, and it may have added to the stress of the litigation.

15. The eight matters of most significance to me in the circumstances of this case are:

    (1)the principle that each pay his or her own costs is a starting point;

    (2)save for the leave to bring criminal proceedings (which was only withdrawn during the hearing), the Father was entirely unsuccessful in all of the applications, including the application based on an allegation of fraud;

    (3)although a litigant in person, by reason of the comprehensive and detailed explanation of the Senior Judicial Registrar in the 25 March 2022 reasons, the Father was well aware (or should have been), of the importance of the doctrine or ‘Rule’ of Rice & Asplund (1979) FLC 90-725 and the reasons for that ‘Rule’ or principle;

    (4)the fact that the leave (or extend time) to review the September orders application and the rule Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) rule 10.13(1)(b) application (‘obtained by fraud’), albeit only one part, but the substantial part of his case, were brought after the Father had already unsuccessfully sought to impugn and/or vary the September orders on other grounds;

    (5)the very broad and detailed allegations made by the Father in his applications, including allegations of fraud, that caused the other parties to expend considerable time and expense on responding to myriad allegations;

    (6)that I do not have any allegation of financial hardship of the Father;

    (7)that the Father’s unsuccessful allegations of fraud, on an interim hearing, were made in wilful disregard of known facts (his own account of the child’s prior time with him) and were allegations that should never have been made on this interim hearing; and

    (8)that the matter relates to a genuine dispute about the welfare of a young child and it may be that the Father genuinely believes the range of allegations he makes are true.

16. An order for costs is appropriate because of those matters. The matters described at (4), and (7) above are exceptional or out of the ordinary and together with the other matters came very close to persuading me that an order for indemnity costs was warranted.  However I have determined that because of the matters at (1) and (8) above, only an ordinary or not indemnity costs order should be made.  Unless I fix costs interminable disputation may follow.

17. Hence, costs on scale and fixed costs are appropriate.  I will stay the enforcement of the costs order for about two calendar months to give the Father a chance to organise funds to pay this costs order.

18. I am persuaded it is appropriate to fix the costs payable rather than have them assessed, and the relevant Rules encourage me to do so by painting with a broad but conservative brush. The scale of costs in this (Division 2) of the Court is straightforward and is set out in Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) and the following items apply:

    Item 2: Initiating or opposing an application that includes interim orders (other than procedural orders) up to the completion of the first court date

    (a)  $2,947

    and

    (b) the daily hearing fee specified in item 13 that applies to the hearing

    …

    Item 13: Full day hearing fee  $2,357

19. In addition, the Father’s application contained a number of unusual requests, including seeking leave to commence criminal proceedings as well as seeking both a review of the 25 March 2022 orders and leave to extend the time to review the 28 September 2021 orders.  This would have necessitated more than the usual or regular amount of preparation and I assess the costs the Father should pay for that additional work as being about half as much again of the general preparation of item 13, or an additional $1,473. 

20. In addition, it was appropriate to brief counsel and the fees sought in regard to counsel's fees include a separate fee for preparation.  An appearance and a preparation fee is appropriate in all the circumstances.  Those fees, claimed to be on scale, are preparation of $2,547 and appearing before me (all day) of $3,092, total of $5,639 (actual counsel's fees charged total $10,780).  I take into account that the Mother's fees are greater than the amount I have ordered.

21. The Father should pay costs fixed in the sum of $12,416 which I assess and fix as follows:

    Item 1 (see above), solicitor,  $2,947

    Additional work involved in preparation 50% of $2,947,  $1,473

    Item 13: Full day hearing fee, solicitor's attendance to instruct counsel,   $2,357

    Total, solicitor:  $6,777

    Counsel's fees including preparation,   $5,639

    Total costs to be paid by Respondent.  $12,416

22. I find that the sum of $12,416 is an appropriate amount of costs to be paid by the Father.  For those reasons, I make the cost order recited above. 

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Shannessy.

Associate:

Dated:       28 September 2022