Garwood & Shipton (No 10)
[2024] FedCFamC1F 510
•5 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Garwood & Shipton (No 10) [2024] FedCFamC1F 510
File number: ADC 4460 of 2023 Judgment of: TREE J Date of judgment: 5 August 2024 Catchwords: FAMILY LAW – Costs – Indemnity costs – Where the mother was wholly unsuccessful in her application to restrain the father’s barrister from acting for him in the substantive proceedings – Where the father seeks his costs of the application on an indemnity basis – Where it cannot be said the mother’s application was brought in wilful disregard of known facts or clearly established law – Where whilst the mother’s application failed it was not necessarily doomed to fail – Where the mother will pay the father’s costs as assessed on a party/party basis – Where the mother in her response made stand-alone applications for further relief that are more appropriately made to the docket judge in the substantive proceedings – Response dismissed – Orders made. Legislation: Evidence Act (1995) (Cth) s 128
Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia Act (2021) (Cth) ss 67, 68
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Pt 12.6, r 12.16
Cases cited: Company & Colgate-Palmolive Pty Ltd v Cussons Pty Ltd (1993) FCR 225
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 364
Garwood & Shipton (No 8) [2024] FedCFamC1F 208
J Corp Pty Ltd v Australian Building Labourers Federation Union of Workers (WA Branch) (No 2) [1993] FCA 42
Kohan & Kohan (1993) FLC 92-340
Muldoon & Carlyle (2012) FLC 93-513
Northern Territory v Sangare (2019) 265 CLR 164
Yunghanns & Ors & Yunghanns (2000) FLC 93-029
Zetta Jet Pte Ltd v Ship Dragon Pearl (No 2) (2018) 265 FCR 290
Z (A Solicitor v Limousin (Costs) (2010) FLC 93-433
Division: Division 1 First Instance Number of paragraphs: 46 Date of last submission: 28 June 2024 Date of hearing: Heard by way of written submissions Place: In Chambers - Cairns Counsel for the Applicant: Mr Manetta Solicitor for the Applicant: Mills Oakley Adelaide Counsel for the Respondent: Ms Hume Solicitor for the Respondent: Angela Ferdinandy ORDERS
ADC 4460 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR GARWOOD
Applicant
AND: MS SHIPTON
Respondent
ORDER MADE BY:
TREE J
DATE OF ORDER:
5 AUGUST 2024
THE COURT ORDERS THAT:
1.Within 28 days of the making of a costs assessment order, the respondent pay the applicant’s cost of and incidental to paragraph 4 of the respondent’s Amended Application in a Proceeding filed 6 August 2023 and the applicant’s Application in a Proceeding filed 28 April 2024 as assessed.
2.Otherwise:
(a)The applicant’s Application in a Proceeding filed 28 April 2024 is dismissed;
(b)The respondent’s Response to Application in a Proceeding field 29 May 2024 is 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).
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 the pseudonym Garwood & Shipton (No 10) has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE J:
INTRODUCTION
On 6 August 2023, Ms Shipton (“the mother”) filed an Amended Application in a Proceeding which, among other things, by paragraph 4 sought that senior counsel (“[Ms AP]”) for Mr Garwood (“the father”) be restrained from further acting for him in the substantive family law proceedings (“the application”). The application was opposed by the father, and proceeded to a discrete hearing before me on 6 and 7 February 2024. On 28 March 2024, for reasons then delivered, I dismissed the application (Garwood & Shipton (No 8) [2024] FedCFamC1F 208) (“the reasons”).
On 28 April 2024, the father filed an Application in a Proceeding which sought “that [the mother] pay [the father’s] costs on an indemnity basis for costs incurred as a result of [the application]” (“the father’s costs application”).
On 7 and 17 May 2024 I made procedural directions in chambers in relation to the father’s costs application, pursuant to which my decision in the father’s costs application was reserved on 28 June 2024.
This is that decision and my reasons for it.
BACKGROUND
At [3]–[23] of the reasons I said:
3.The mother is presently 54 years of age, and a business woman. The father is presently 50 years of age and a business manager.
4.The parties met in […] 2014 when the father commenced working as [an executive] of the mother’s business, although not long afterwards [he took up another executive position]. The father says that he and the mother commenced a sexual relationship in […] 2015, and that from [mid] 2015 were in a de facto relationship. The mother denies that the parties were ever de facto partners, but appears to accept that they were in some kind of relationship.
5. In December 2017 the parties separated (according to the father).
6.[In] 2018 the mother gave birth to a child conceived as a result of IVF, in which the father’s sperm fertilised an egg obtained from a third party, with the resulting zygote having been implanted in, and gestated by, the mother.
7.[In] 2018 the father’s employment […] ceased, with him being made redundant.
8.On 30 November 2018 the father commenced parenting proceedings against the mother, which were later amended to include a property settlement claim as well. [AQ Lawyers] were his solicitors, and [Ms AR] had carriage of his file.
9.In due course the trial of those proceedings commenced before Kari J on 5 September 2022, and proceeded for some 9 days, albeit by 20 September 2022, only the mother had given evidence, and indeed her cross-examination had not completed. While the parties have since come before Kari J on an alarmingly regular basis to determine various interlocutory disputes between them, the trial has not yet resumed.
10.It is not in dispute that whilst [an executive] of the mother’s business, the father obtained financial benefits beyond his salary, including the payment of private legal fees. The father says these financial benefits were agreed to by the mother, and paid by methods which (likely illegally) saw no tax paid by the father on them, or indeed any tax paid in relation to them. The father further contends that the mother and he agreed to conceal the true nature of the payments from the business’ bookkeeper, which again the mother denies. A significant issue at the trial became whether the father had the mother’s authority to cause her business to pay for his private legal bills.
11.Of course, ordinarily an issue relating to allegedly unauthorised benefits being received by the father would be irrelevant in parenting proceedings, but this is not an ordinary case. The issue has assumed prominence because in the current litigation, the mother raised the father’s receipt of the additional benefits as part of her chain of reasoning for why she no longer trusts him, which apparently is said to inform what parenting orders would be in the child’s best interests. The father has responded by claiming the payment of the benefits were authorised by the mother, and hence the mother’s claim that he took the benefits in some dishonest way, which has now been deployed as a contended basis to restrict his time with the child, shows that the mother has falsely invented the claim in an attempt to deprive him of a relationship with the child.
12.Standing back, one might well think that neither party’s contention as to how this issue informs the parenting litigation is soundly based or reasoned, but that is a matter for the trial judge, not me. The reality is that the parties are presently joined in mortal combat on the issue in the trial.
13.At the September hearing (and indeed since at least 22 October 2019), the father was represented by [Ms AP] SC who was instructed by [AQ Lawyers]. The complicating factor is that the relevant legal bills the subject of the dispute about authorisation, were incurred in family law proceedings between the father and his former wife, in which [Ms AR] (and [AQ Lawyers]) acted for the father, although [Ms AP SC] had no involvement in them.
14.In the September 2022 tranche of the trial, during cross-examination of the mother, [Ms AP] SC called for her to produce all documents relevant to the issue of the father’s authorisation or otherwise. In due course they were produced. The impact of their contents has proved vexed. That is because it seems reasonably clear that [Ms AR] was aware of the need to, at the least, not include information in the [AQ Lawyers] accounts to the father which might alert the bookkeeper to the identity of the true recipient of the legal services, namely the father, rather than the mother’s business. I say that because in several emails to the father, [Ms AR] evidences considerable malleability as to how [AQ Lawyers] accounts are cast, or amended.
15.Further, the father’s financial statement prepared by [Ms AR] filed in the first matrimonial litigation did not disclose the additional financial benefits which the father was receiving from the mother’s business in the form of payment of the accounts of [AQ Lawyers].
16.In the September 2022 hearing then counsel for the mother appears to have not been aware of the contents of the documents produced by the mother, but rapidly realised their potential significance, particularly as regards [Ms AR] (and perhaps [AQ Lawyers]). The following exchange occurred:
[COUNSEL FOR THE MOTHER]: We’re well and truly in the quicksand and I’m about to bring Ms [AR] into it with me because later on in the document – your Honour only has the first - - -
HER HONOUR: Two pages. Yes.
[COUNSEL FOR THE MOTHER]: No. Your Honour has two versions of page 1.
HER HONOUR: Right.
[COUNSEL FOR THE MOTHER]: There are a number of further pages but one of the significant line items of what adds up to roughly 150,000 is 34,000-odd paid to [AQ Lawyers] from [the mother’s business] in respect of [the father’s] - - -
HER HONOUR: [the father’s former wife’s] previous - - -
[COUNSEL FOR THE MOTHER]: - - - earlier family court proceedings. So it gets worse.
HER HONOUR: It doesn’t get better. It gets worse. I’m not sure, though, that that puts [Ms AR] in a difficulty.
[COUNSEL FOR THE MOTHER]: Not necessarily, your Honour - - -
HER HONOUR: But maybe.
[COUNSEL FOR THE MOTHER]: - - - but in terms of whether, you know, that wasn’t – the dispute about whether it’s authorised or not, if she and/or her firm were receiving funds from [the mother’s business], whether there was any arrangement for that to happen with [the mother’s business’] consent. It may or may not make her a witness. I don’t know. I don’t know enough about what happened there.
[Ms APSC]: I can assure your Honour that we have covered that. Historically covered it. I’m absolutely certain my instructing solicitors are in no position where they would be embarrassed regardless of what the answers are. We’ve given – I’ve given advice, clear advice, in relation to those matters because of my client’s instructions.
HER HONOUR: received by - - - any number of questions that might flow from that. Anyway–
[Ms AP SC]: I have spoken – I have taken instructions and there is nothing that would cause me concern as counsel in relation to that matter, your Honour.
HER HONOUR: That might be so but that doesn’t prevent what is the nub of [counsel for the mother’s] submission and that is there is the potential for your instructor to be called as a witness somewhere. Is that right?
[Ms AP SC]: Yes…
(Transcript 7 September 2022, p.314 line 24 to p.315 line 29) (emphasis added)
17.After the trial adjourned on 20 September 2022, on 13 February 2023 the mother terminated the retainer of her then legal team, and self-represented for some weeks. On 6 March 2023, a new solicitor filed a Notice of Address for Service, and progressively an entirely new legal team was engaged.
18.By Application in a Proceeding filed 3 August 2023, her new solicitor challenged the ongoing representation of the father by [Ms AR] and [AQ Lawyers], and after [Ms AR] and [AQ Lawyers] ceased to act for the father on 7 August 2023, on 13 August 2023 amended the application to extend that challenge to [Ms AP] SC too.
19.As to [Ms AR], the mother says that her knowledge (or otherwise) of the father’s contention that her accounts were being paid to the father’s benefit by the mother’s business with her authority, makes her a likely witness in the father’s case. Immediately prior to the father terminating his retainer of [AQ Lawyers] at a hearing before Kari J on 7 August 2023, [Ms AR] had been seeking leave to withdraw. This was not, it seems, opposed by the mother, although she demanded [Ms AR] explain the justification for her withdrawal, which demand apparently precipitated [AQ Lawyers’] termination. It may be that [Ms AR] agrees she is a likely witness in the father’s case, but I do not know.
20.The mother also contends [Ms AR] is likely to face civil claims, costs claims, and professional disciplinary action arising from her conduct. Some, if not all, of that seems feasible.
21. I will detail the mother’s claims against [Ms AP SC] later.
22.The mother’s new legal team has also been firmly pressing for the production of further documents by the father. Indeed that aspect of the matter was at earlier dates listed before me, but resolved by consent, with the consequence being that the father produced some 396 pages of previously undisclosed material on 16 November 2023.
23.At the ultimate hearing before me of the relief sought by paragraph 4 of the mother’s Further Amended Application in a Proceeding, [Ms AP SC] did not appear, but rather the father was represented by a silk and junior, neither of whom had appeared at the trial.
(Emphasis in original)
In advancing the application, the mother contended several bases for the restraint of Ms AP SC. However I was not satisfied that, either individually or collectively, they ought see Ms AP SC restrained, and went on to say:
76.Moreover, even if the test was satisfied by the concerns which may nonetheless hover around [Ms AP SC’s] continued involvement in the proceedings, such that the discretion to restrain [Ms AP SC] arises, those concerns are vastly outweighed by:
(a)The fact that the trial has now run for nine days, and the cost of alternate senior counsel coming up to speed likely to be vast, a matter which goes directly to the due administration of justice;
(b)The fact that from the time her then lawyers became aware of the material on which the claim is now grounded, it took the mother nearly a year to bring her application to restrain [Ms AP SC]. Worse, most of that material has been in the mother’s possession at all material times since its creation, and had not been disclosed.
77.It is, as [Porter v Dyer (2022) 402 ALR 659] acknowledges, an exceptional thing to restrain a legal practitioner from appearing, here all the more so where the client, separately represented by eminent lawyers, nonetheless wants to have his barrister of choice continue to appear for him. This is not one of those exceptional cases, and whether the allegations are viewed individually or collectively, not only is the test not satisfied, but there are weighty matters which would strongly tell against any restraint of [Ms AP SC] in any event.
78.Finally, I should advert to the claim made by the father that the mother’s application was tactical in two respects. Firstly, it was said to be an attempt to create an outcome where the father would be obliged to find a new barrister to act for him in the part-heard trial, thus occasioning him great expense. In common parlance it was said to be trying to “run him out of petrol.” Secondly, it was said that the mother, over her nine days in the witness box, gave such a poor performance that she wanted a new legal team for herself (and has that) a new solicitor acting for the father (and has that) and now wants a new barrister acting for the father (hence this application), and a new judge (she has on foot applications for Kari J to recuse herself).
79.In other words she is using all means at her disposal to expunge any memory of her bad performance as a witness, and wants to start over with a clean slate.
80.The simple answer it that whilst they are both possible, the evidence could not, at least at present, satisfy me of either, or indeed that the mother’s performance in the witness box was as contended. Further, even if they were established, it was conceded they do not comprise any abuse of process. Precisely what I was therefore supposed to do about them remains unclear.
THE PARTIES’ APPLICATIONS
I have already recited the sole order sought by the father’s cost application. In his supporting affidavit material the father quantified his indemnity costs in the sum of $104,901.93. No attempt was made to quantify his costs on any basis other than by way of indemnity, nor was his costs claim advanced on the usual cascading alternatives of costs on a solicitor and client basis, and on a party and party basis.
For her part, the mother sought the following relief in her Response to Application in a Proceeding filed 29 May 2024 (“the response”):
1.That the [father] pay the [mother’s] costs of and incidental to paragraph 5 of the Amended Application filed by [the mother] on 6 August 2023 (delinquent disclosure).
2.That [the father’s costs application] be dismissed in its entirety and that there be no orders as to costs and, in the alternative if the court considers that an order for costs is warranted:-
(a)that the costs be assessed on a party and party basis by way of an assessment of costs pursuant to Rule 12.17(1)(d) of the Federal circuit and Family Court Rules; or
(b)in the event costs are quantified that such costs be payable upon the conclusion of the matter at which time the various applications and cross applications for costs can be set off against each other; and
(c)in any event that any order for costs against [the mother] be payable within thirty (30) days of the making of final orders in these proceedings and upon the determination of all costs applications and cross applications.
3.That for the purposes of paragraph 2(a) hereof [the father] do produce for inspection all documents, memoranda, notes and advice referred to in the timesheet listing and claimed as part of his application and that all such descriptions are the subject of a waiver of privilege.
4.That the misconduct alleged against Ms [AR] be referred by this court to the Legal Practitioners Conduct Board.
5.That [the father] file evidence of the source of funds for payment of his legal fees from 6 August 2023 to date within seven days.
6.That [the father] disclose and produce the document referred to in paragraph 1B(iv) of the Mills. Oakley cost agreement being annexure [MG3] to his affidavit filed on 25 January 2024 and the advice given in relation to party - party costs referred to in clause 1B(iv)(c) of the said cost agreement.
7. That [the father] pay [the mother’s] costs of and incidental to this Application.
(As per the original)
That was a curious and, at least by reference to what the parties raised in correspondence which led to the chambers orders of 7 and 17 May, not foreshadowed broadening of what was anticipated as being the costs dispute requiring determination by me.
I propose therefore to deal with the dispute in the following order:
(a)the father’s costs application, and paragraphs 2 and 3 of the response;
(b)paragraph 1 of the response;
(c)paragraph 4 of the response;
(d)paragraphs 5 and 6 of the response;
(e)paragraph 7 of the response, and more broadly, whether there should be any, and if so what, costs order made in respect of the father’s costs application itself.
THE FATHER’S COSTS APPLICATION AND THE MOTHER’S CLAIMS
Overview
Logically the first matter I need to consider is whether there should be a costs order of any kind made in relation to the application, and if there should, then consider whether it should be on an indemnity basis, and if so, in what sum, or if not, whether any of the additional orders sought by the mother should be made.
Relevant statutory provisions and legal principles
Costs orders generally
The starting point for a consideration of these applications is s 117 of the Family Law Act 1975 (Cth) (“the Act”) which relevantly provides as follows:
(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.
…
Part 12.6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), deals with the method of calculation of costs in the following terms:
12.17 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.
12.18 Maximum amount of party and party costs recoverable
(1)This rule sets out the maximum amount of party and party costs a person may recover:
(a)if the court orders that costs are to be paid and does not fix the amount by means of a maximum costs order made under rule 12.10 or otherwise; and
(b) if a person is entitled to costs under these Rules.
(2)The maximum amount of costs that a person may recover under this rule is as follows:
(a)for fees--an amount calculated in accordance with Schedules 2 and 3;
(b)for an expense referred to in Schedule 2 (other than item 101 of Part 1)--the amount specified in that Schedule for that expense;
(c)for any other expenses--a reasonable amount.
…
Principles relating to indemnity costs
In order to justify the making of an order for costs on other than a party/party basis, all that is required are particular facts and circumstances of the case in question warranting the making of such an order.[1] That said, such an order is a very great departure from the normal standard, and hence it is imperative that the court be aware of what the nature of the indemnity is, in the sense of what the costs agreement between the parties seeking the order and their solicitors is.[2] However such an order remains wholly compensatory and not punitive.[3]
[1]Yunghanns & Ors & Yunghanns (2000) FLC 93-029 adopting Sheppard J in Colgate-Palmolive Company & Colgate-Palmolive Pty Ltd v Cussons Pty Ltd (1993) FCR 225.
[2]See Kohan & Kohan (1993) FLC 92-340 and Rule 12.13(4) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
[3]See Muldoon & Carlyle (2012) FLC 93-513 at [114].
It is well established that proceedings brought in wilful disregard of known facts or clearly established law are one of the established categories which justify indemnity costs.[4] An instance of that in this court is the decision of Z (A Solicitor v Limousin (Costs) (2010) FLC 93-433, where the Full Court did not disturb a costs order against a solicitor who had failed to have any proper regard to the prospects of success of a claim.
[4]Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 364; J Corp Pty Ltd v Australian Building Labourers Federation Union of Workers (WA Branch)(No 2) [1993] FCA 42; Colgate-Palmolive (supra) and Yunghanns (supra).
Should there be a costs order at all?
By reference to the matters enumerated in s 117 of the Act, I make the following observations.
The father earns in the order of $233,000 gross per annum. The mother’s income is presently unclear, as her business is now in voluntary administration. She asserts her current financial circumstances are dire, but, given she has expended (it seems) some $285,000 on her various applications in the hiatus of the trial, and $2,380,982.49 since February 2019, I take her claim with a grain of salt, and at least incline to a view that any impecuniosity is likely significantly the product of her spending on this litigation.
In any event, impecuniosity is no bar to a costs order (Northern Territory v Sangare (2019) 265 CLR 164).
No party is in receipt of legal aid.
I propose to confine my consideration of s 117(2A)(c) to the parties’ conduct in the various hearings before me which led to the first reasons.
The mother has at all time aggressively pursued the relief she sought. A notable characteristic of her conduct is the extremely complex way she advanced her various claims, and the vast amounts of material which her lawyers generated on her behalf. It may fairly be said the mother left not a single stone unturned, and no argument unadvanced.
Her own costs of doing so did not, at least so far as I could discern, demonstrate much constraint. Of course, there was nothing illegal in her using her wealth in that way, although it may also fairly be said that such an approach to litigation is inconsistent with a litigant’s duties under s 68(1) of the Federal Circuit and Family Court of Australia Act (2021) (Cth) (“the FCFCOA Act”), in that it does not see the quick, inexpensive and efficient resolution of disputes, a matter which under s 68(4) may inform the question of costs.
The father, on the other hand, has generally tried to narrow issues and demonstrated appropriate discipline in the matters raised and arguments pressed. That said, there was his late production of 396 pages of previously undisclosed material.
The application was not necessitated by any non-compliance with previous orders.
The mother was wholly unsuccessful in the application.
There were apparently no relevant offers in relation to the application, although the mother contends she has made offers to settle the proceedings in their entirety which she cannot presently rely upon, and which might justify deferring the consideration of the father’s costs application until the substantive proceedings have concluded. I reject that contention, as plainly the application was a stand-alone claim which had no bearing, in a legal sense, on the principal proceedings, nor did it stand to advance them in any material way, determining only who might appear for the father in them.
I cannot identify any further relevant matters.
Weighing those factors tells strongly in favour of a costs order being made against the mother in this case, particularly given her complete lack of success in the application where she took every possible point, thereby necessarily increasing the father’s costs of defending it.
On what basis should costs be assessed?
The next question is whether those costs should be on an indemnity basis, or on a party and party basis.
It cannot be said that the application was brought in wilful disregard of known facts or clearly established law. Rather the father relies upon what he says was the inevitable failure of the application as justifying the indemnity. However whilst the application failed, it cannot be said to have been necessarily foredoomed to do so.
The father also presses his claim for indemnity costs on the grounds that the mother was motivated to use the application as a vehicle to further exhaust his ability to fund the litigation. However as I said at [80] of the reasons, the evidence could not then persuade me of that, and nothing has changed.
I am not satisfied costs should be ordered on an indemnity basis.
No claim for solicitor and client costs was advanced by the father and hence the costs must be on a party and party basis. The material does not enable me to determine what the quantum of those costs might be, and as tempting as it is to simply make a mildly informed guess (so as to put a stake through the heart of at least this aspect of the parties’ dispute) that would likely be substantially unfair to one party. That after assessment, the costs of achieving it would probably ameliorate that unfairness does not persuade me otherwise. The costs must be assessed.
Other issues
The next question is whether payment of those costs should await the conclusion of the substantive litigation. In my view it should not, as not only was this a completely severable dispute, but it was not, in truth, an application brought in the ordinary course of the litigation, nor as I have said, did its determination stand to materially advance the resolution of the principal proceedings. The costs should be payable within 28 days of any assessment order.
The next question is whether there should be an order in terms of paragraph 3 of the response. This appears to be an application to force the waiver of privilege for all work claimed in the assessment. It seems to be a very courageous fishing expedition. I decline to make any such order, which application can in any event be pressed in the assessment process under r 12.46.
PARAGRAPH 1 OF THE RESPONSE
In paragraph 1 of her response the mother seeks the following:
1.That the [father] pay the [mother’s] costs of and incidental to paragraph 5 of the Amended Application filed by [the mother] on 6 August 2023 (delinquent disclosure).
Paragraph 5 of the mother’s Amended Application filed 6 August 2023 provided:
5.Without limiting his continuing obligation to make full disclosure in compliance with the Rules, within 7 days, the applicant shall:
5.1disclose by a List of Documents and produce to the respondent the documents described in Annexure G to the outline of Submissions to be filed on 7 August 2023; and
5.2file and serve upon the respondent an affidavit verifying that disclosure on oath and verifying that he has otherwise complied with his duty of disclosure under rule 6.01 of the Rules.
That was an application which, unlike that made by paragraph 4, did stand to materially contribute to the resolution of the principal proceedings. Generally, such costs are best considered as part of the costs of the cause; if every single step of proceeding were accompanied by a costs application, then litigation would grind to a halt.
It pays to recall that the rules of court dealing with costs are “family law practice and procedure provisions” such that they must be applied in the way that best promotes the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (s 67 of the FCFCOA Act).
I decline to deal with this aspect of the response at this time; it would best be left to be dealt with as part of any consideration of costs once the principal litigation has finally concluded.
PARAGRAPH 4 OF THE RESPONSE
There are legitimate questions surrounding the conduct of Ms AR, however it seems likely that she will be a witness in the resumed trial, perhaps giving her evidence under a certificate issued under s 128 of the Evidence Act (1995) (Cth). The trial judge will therefore have a far better understanding of events after the trial has concluded than I presently do.
I decline to make the order sought.
My dismissal of paragraph 4 of the response is not a merits determination, and hence will not prohibit the mother from again raising it at an appropriate time (Zetta Jet Pte Ltd v Ship Dragon Pearl (No 2) (2018) 265 FCR 290 at [20]).
PARAGRAPHS 5 AND 6 OF THE RESPONSE
These seem to be stand-alone applications for further disclosure, and not properly any issue relating to costs. I will not consider them further before dismissing them, save to say that again my dismissal is not a merits based determination, such that the matters could be again advanced before the trial judge. I should emphasise that I am not the docket judge for this matter; my remit was to hear a particular suite of applications, not to become interminably mired in every dispute that these parties choose to engage in, merely because they presently otherwise have the ear of a captive judge.
THE COSTS OF THE COSTS APPLICATION
In this case, the costs of the father’s costs application are logically indistinguishable from the costs of the application itself. That said, I recognise that an offer to settle the father’s costs application for $70,000 was made by the father to the mother but elicited no response. However I simply do not know if the assessed party and party costs will exceed $70,000, nor the amount of any excess or deficiency. However even despite that ignorance, I am nonetheless satisfied the costs of the father’s costs application should be paid by the mother, and be assessed together with the costs of the application. The total sum should be payable within 28 days of any order of assessment.
CONCLUSION
For these reasons there will be orders as set out at the commencement of these reasons.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Tree. Associate:
Dated: 5 August 2024
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