Harford & Spalding (No 2)

Case [2023] FedCFamC1F 583

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Harford & Spalding (No 2) [2023] FedCFamC1F 583

File number(s): SYC 3026 of 2020
Judgment of: ALTOBELLI J
Date of judgment: 18 July 2023
Catchwords: FAMILY LAW – COSTS – Where the husband was wholly unsuccessful – Where the Court found the husband’s Notice to Produce to be an abuse of process – The proceedings were not sufficiently complex to warrant both junior and senior counsel to appear for the wife – Indemnity costs ordered.
Legislation:

Family Law Act 1975 (Cth) s 117

Federal Circuit and Family Court of Australia Rules 2021 (Cth) r 12.17(1)
Cases cited:

Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801

Cross & Beaumont (2008) 39 Fam LR 389; [2008] FamCAFC 68

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish & Another (2005) 33 Fam LR 123; [2005] FamCA 158

Harford & Spalding [2023] FedCFamC1F 5

In the Marriage of I & I (No. 2) (1995) FLC 92-625; [1995] FamCA 80

Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116

Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157

Munday v Bowman (1997) FLC 92-784

Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248

Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4

Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28

Rankin & Rankin (No. 3) [2019] FamCAFC 133
Division: Division 1 First Instance
Number of paragraphs: 48
Date of last submission/s: 24 March 2023
Date of hearing: In Chambers
Place: Sydney
Counsel for the Applicant: Ms Louise Carter
Solicitor for the Applicant: Newnhams Solicitors
Counsel for the Respondent: Ms Rachel Dart
Solicitor for the Respondent: Meredith Lawyers

ORDERS

SYC 3026 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS HARFORD

Applicant
AND:

MR SPALDING

Respondent

ORDER MADE BY:

ALTOBELLI J

DATE OF ORDER:

18 JULY 2023

Amended pursuant to r 10.13(h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 on 21 September 2023

THE COURT ORDERS THAT:

1.Within 28 days of the date of this order, Tthe Respondent husband is to pay the costs of the Applicant wife fixed in the sum of $35,000.

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…

Continue reading Harford & Spalding (No 2)

Sign in free to access the full text

Details
AGLC
Harford & Spalding (No 2) [2023] FedCFamC1F 583
Case
[2023] FedCFamC1F 583
Decision Date

CaseChat Overview and Summary

The case of Harford & Spalding (No 2) involved the husband opposing the wife's application for costs following the dismissal of his application to set aside consent orders. The wife sought indemnity costs for the proceedings, arguing that the husband's conduct warranted such an award. The husband, on the other hand, opposed the application and contended that if any order for costs were to be made, it should be limited to the costs of the hearing before the judge and should be assessed on a party/party basis. The central legal issues were whether the husband's conduct justified an order for indemnity costs and whether the wife's reliance on both senior and junior counsel was warranted given the complexity of the case.

The court found that the husband's Notice to Produce was an abuse of process, and his application was wholly unsuccessful. Although the matter was not sufficiently complex to justify both senior and junior counsel for the wife, the court concluded that it was in the interests of justice to order costs in favour of the wife, limited to junior counsel only. Regarding indemnity costs, the court considered the well-established criteria for such an order, including the husband's lack of reasonable prospects of success and his improper conduct. The court determined that the husband's actions warranted indemnity costs, reflecting the significant disparity between approved fee schedules and actual professional fees.

The court ordered that the husband pay the wife $35,000 within 28 days of the date of the order. This sum represented the costs for the proceedings before the judge, limited to junior counsel. The form of the order was subject to minor corrections or variations as per the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Orders

Orders of the court

THE COURT ORDERS THAT:

1. Within 28 days of the date of this order, Tthe Respondent husband is to pay the costs of the Applicant wife fixed in the sum of $35,000.

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.

Background

Background to the litigation

The husband opposes the application and seeks that no order for costs be made in relation to these proceedings. However, if such order were to be made, the husband contends it should be confined to the costs of the hearing before me on the basis that the costs are assessed or agreed pursuant to Schedule 3 of the Federal Circuit and Family Court of Australia Rules 2021 (Cth) (“the Rules”) (r 12.17(1)(d)).BACKGROUND On 21 September 2022, the Court heard the wife’s Application in a Case filed on 21 January 2021 seeking summary dismissal of the husband’s Amended Initiating Application filed on 11 March 2021 to set aside consent orders. On 17 January 2023, the Court dismissed the husband’s application and reasons for judgment were provided: Harford & Spalding [2023] FedCFamC1F 5 (“my reasons for judgment”). Where it is relevant, various passages from my reasons for judgment will be referred to or reproduced.PRESENT APPLICATION In support of her case, the wife relied on the following material:(a)Affidavit of the wife’s solicitor, Marcia Simeone, filed 17 February 2023; (b)Written submissions filed 17 February 2023; and(c)Written submissions in reply filed 24 March 2023. In support of his case, the husband relied on the following material:(a)His affidavit filed 3 March 2023; and(b)Written submissions in reply filed 3 March 2023. LEGAL PRINCIPLES The law relating to costs in family law proceedings is well settled and is set out in detail in the Full Court decision of Parke & The Estate of the Late A Parke (2016) FLC 93-748 (“Parke”). An application for costs is governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). Section 117(1) of the Act sets out the general presumption that each party to the proceedings shall bear their own costs. This is subject to s 117(2), which provides that: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) and (5) and the applicable Rules of Court, make such order as the court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just. Section 117(2A) sets out the matters that the Court is to have regard to: (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.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The wife also seeks that the Court find it was appropriate for senior and junior counsel to be retained in light of the issues and volume of material relied upon by the husband. The husband contends he was represented by junior counsel in both the hearing before Henderson J and myself whilst the wife was represented by senior and junior counsel at the rehearing. The husband alleges it would be unjust to visit those costs upon the husband as there was no particular complexity associated with the wife’s application or the evidence. The Court agrees with the husband that this matter was not sufficiently complex to warrant both senior and junior counsel and it would be unjust to burden these costs on the husband. CONCLUSION For these reasons, I am satisfied that it is in the interests of justice for an order for costs to be made in favour of the wife, confined to the proceedings before myself, and be limited to junior counsel only. SHOULD COSTS BE ORDERED ON AN INDEMNITY BASIS? The wife seeks indemnity costs in the sum of $121,145 for the proceedings concluded by the Court on 17 January 2023 and $6,380 for this costs application, and in the alternative, on an indemnity basis as agreed or as assessed, or on a party/party basis fixed in the amount of $93,944 and $4,662 or on a party/party basis as agreed or as assessed. The wife relies on the Full Court in Rankin & Rankin (No. 3) [2019] FamCAFC 133 where the Court stated that the purpose of r 12.17(1)(a) of the Rules is “practical and aimed at avoiding the expense, delay and aggravation involved in protracted litigation arising out of taxation”. A costs order is compensatory in nature, not punitive. The Court accepts that there is a significant chasm between costs that are payable pursuant to Court approved schedules of fees, and the professional fees actually charged. In Munday v Bowman (1997) FLC 92-784 at 84,660, CJ Holden summarised the High Court of Australia’s consideration as to when circumstances justify an order of costs on an indemnity basis per Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 as follows:(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] FCA 202; [1988] 81 ALR 397.)(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra).(c)Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v Westpac Banking Corporation (unreported Federal Court, 5 March 1993)).(e) An imprudent refusal of an offer to compromise [Medlon No. 6 (supra)].

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.