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
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…
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Details
- Case
- [2024] FedCFamC1F 510
- Decision Date
CaseChat Overview and Summary
In the case of Mr Garwood v Ms Shipton, the mother sought to restrain the father's barrister from acting for him in the substantive proceedings, but her application was wholly unsuccessful. The father then sought indemnity costs for his application on the basis that the mother's application was brought in wilful disregard of known facts or clearly established law. The court was required to determine whether the mother's application was brought in wilful disregard of known facts or clearly established law, and if so, whether the father was entitled to indemnity costs. The court found that while the mother's application failed, it was not necessarily doomed to fail, and it could not be said that the application was brought in wilful disregard of known facts or clearly established law. Therefore, the father was not entitled to indemnity costs. However, the court did order that the mother pay the father's costs of the application on a party and party basis. The mother was also ordered to pay the father's costs of a subsequent application she made for further relief, as these applications were more appropriately made to the docket judge in the substantive proceedings.
The court's reasoning was that the mother's application to restrain the father's barrister from acting for him was not necessarily doomed to fail, and it could not be said that the application was brought in wilful disregard of known facts or clearly established law. The court noted that the mother's application was not frivolous or vexatious, and that there was a reasonable basis for her contention that the father's barrister may be a witness in the substantive proceedings. However, the court found that the mother's application was not well-founded, and that the father's barrister was not likely to be a witness in the substantive proceedings. The court also noted that the mother's application was not brought in bad faith, and that there was no evidence of wilful disregard of known facts or clearly established law. The court concluded that the mother should pay the father's costs of the application on a party and party basis, as the application was not brought in wilful disregard of known facts or clearly established law.
The final orders of the court were that the mother pay the father's costs of the application on a party and party basis, and that the mother pay the father's costs of a subsequent application she made for further relief. The court also dismissed the mother's application to restrain the father's barrister from acting for him in the substantive proceedings, and dismissed the mother's response to the father's application for costs. The court's orders were subject to review to remedy minor typographical or grammatical errors, or to record a variation to the order. The court's reasons for judgment were also subject to review to remedy minor typographical or grammatical errors, or to record a variation to the order.
The court's reasoning was that the mother's application to restrain the father's barrister from acting for him was not necessarily doomed to fail, and it could not be said that the application was brought in wilful disregard of known facts or clearly established law. The court noted that the mother's application was not frivolous or vexatious, and that there was a reasonable basis for her contention that the father's barrister may be a witness in the substantive proceedings. However, the court found that the mother's application was not well-founded, and that the father's barrister was not likely to be a witness in the substantive proceedings. The court also noted that the mother's application was not brought in bad faith, and that there was no evidence of wilful disregard of known facts or clearly established law. The court concluded that the mother should pay the father's costs of the application on a party and party basis, as the application was not brought in wilful disregard of known facts or clearly established law.
The final orders of the court were that the mother pay the father's costs of the application on a party and party basis, and that the mother pay the father's costs of a subsequent application she made for further relief. The court also dismissed the mother's application to restrain the father's barrister from acting for him in the substantive proceedings, and dismissed the mother's response to the father's application for costs. The court's orders were subject to review to remedy minor typographical or grammatical errors, or to record a variation to the order. The court's reasons for judgment were also subject to review to remedy minor typographical or grammatical errors, or to record a variation to the order.
Orders
Orders of the court
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.
Background
Background to the litigation
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)
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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.
Ratio Decidendi
Legal Principle Established
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