Kehoe & Seden (No 3)

Case [2022] FedCFamC1F 749

Federal Circuit and Family Court of Australia

(DIVISION 1)

Kehoe & Seden (No 3) [2022] FedCFamC1F 749

File number(s): SYC 7833 of 2018
Judgment of: HARPER J
Date of judgment: 30 September 2022
Catchwords: FAMILY LAW – COSTS – Wife seeks costs against husband and third parties in respect of subpoena objection proceedings – Costs sought on indemnity, or in the alternative, fixed basis – No dispute as to jurisdiction to order costs against third parties – Uncooperative stance by third parties and husband taken into account – Complete lack of success by husband and third parties in relation to one subpoena – Indemnity costs not justified – Certification for senior counsel – Third parties seek costs of compliance with subpoenas – Costs of compliance refused as substantial loss or expense to the third parties not established – Costs ordered in a fixed amount, consistently with overarching purpose.
Legislation:

Family Law Act 1975 (Cth) s 117

Federal Circuit and Family Court of Australia Act2021 (Cth) ss 67(1), 67(4), 68(4)

Family Law Rules2004 (Cth) r 15.23

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 6.01, 6.31, 6.34, 6.35, 12.17, 12.18
Cases cited:

Atkins & Hunt (Costs) [2017] FamCAFC 131

D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64

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

Harris & Dewell (No 2) (2018) FLC 93-863; [2018] FamCAFC 180

Jensen and Jensen (1982) FLC 91-263

Kehoe & Seden (No 2) [2022] FedCFamC1F 346

Kehoe & Seden [2019] FamCA 989

Kennedy and Evans; Trust Bank (Intervener) (1994) FLC 92-514; [1994] FamCA 172

Knight v F.P. Special Assets Limited (1992) 174 CLR 178; [1992] HCA 28

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

Lao & Zeng (2021) FLC 94-053; [2021] FedCFamC1A 17

Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCA 1178

Markoska & Markoska (Costs) (2012) 46 Fam LR 598; [2011] FamCA 833

Moorcroft & Moorcroft (2020) 60 Fam LR 361; [2020] FamCAFC 83

Moriarty & Moriarty (2009) 41 Fam LR 336; [2009] FamCA 369

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

Prantage & Prantage (Costs) [2014] FamCA 850

Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184; [1998] HCA 44

Seden & Kehoe [2020] FamCAFC 294
Division: Division 1 First Instance
Number of paragraphs: 83
Date of last submission/s: 9 September 2022
Date of hearing: On the papers
Place: Sydney
Counsel for the Applicant: Mr Kearney SC
Solicitor for the Applicant: Pearson Emerson Family Lawyers
Solicitor for the First Respondent: Coleman Greig Lawyers
The Second Respondent: No appearance required
Counsel for the Interveners: Mr May
Solicitor for the Interveners: Broun Abrahams Burreket

ORDERS

SYC 7833 of 2018

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

MS KEHOE

Applicant
AND:

MR SEDEN

First Respondent

MS G SEDEN

Second Respondent

MR K SEDEN

First…

Continue reading Kehoe & Seden (No 3)

Sign in free to access the full text

Details
AGLC
Kehoe & Seden (No 3) [2022] FedCFamC1F 749
Case
[2022] FedCFamC1F 749
Decision Date

CaseChat Overview and Summary

In Kehoe & Seden (No 3), the husband and third parties challenged the validity of subpoenas issued to Mr K Seden and DD Pty Ltd. The parties had been involved in a long-running financial dispute, with the wife seeking to enforce disclosure of documents held by the third parties and the husband. The primary issue for the court was whether the third parties and the husband had sufficient grounds to justify their opposition to the subpoenas and whether the wife was entitled to indemnity costs due to the husband and third parties' conduct. The court was also tasked with determining the appropriate costs order in light of the conduct of all parties involved.

The court found that the third parties and the husband had been wholly unsuccessful in their objection to the subpoena issued to Mr K Seden, while no party was wholly unsuccessful in relation to the subpoena issued to DD Pty Ltd. The court concluded that the disparities in the parties' financial positions, the uncooperative stance taken by the third parties and the husband, and the complete lack of success in relation to the subpoena issued to Mr K Seden justified an order for costs in the wife's favour. However, the court was not persuaded that the circumstances warranted an award of indemnity costs, despite the wife's arguments regarding the husband and third parties' conduct.

The court noted that the award of indemnity costs represented a significant departure from the norm and required exceptional circumstances. While the court acknowledged the husband and third parties' uncooperative conduct, it found that the complex nature of the financial arrangements and the wife's lack of total success in the proceedings did not provide the exceptional element necessary for an award of indemnity costs. The court further held that the wife's arguments regarding the husband's failure to disclose documents and the presence of ulterior motives did not justify an award of indemnity costs. The court ultimately certified the case for senior counsel.

The final orders included costs to be paid by the third parties and the husband to the wife, but did not include an award of indemnity costs. The case serves as a reminder of the high threshold required for the award of indemnity costs in Australian courts, and the need for exceptional circumstances to justify such an award.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In short, the third parties and the husband were wholly unsuccessful in upholding the objection to the subpoena issued to Mr K Seden. No party was wholly unsuccessful in relation to the subpoena issued to DD Pty Ltd. CONCLUSION ON JUSTIFYING CIRCUMSTANCES In my view, the disparities in the parties’ financial positions, the uncooperative stance taken by the third parties and the husband in respect of both subpoenas, and the complete lack of success in relation to the subpoena issued to Mr K Seden justify an order for costs in the wife’s favour.INDEMNITY COSTS The wife argues that the circumstances are such that the Court should award indemnity costs in her favour. The award of indemnity costs in this Court has regularly been called a significant departure from the normal standard, rare, and requires something exceptional: Harris & Dewell (No 2) (2018) FLC 93-863, where the Full Court said: 23. In Kohan and Kohan, the Full Court held, in applying the principles expounded by Sheppard J in Colgate-Palmolive, that an order for indemnity costs represents a “very great departure from the normal standard”. In the later decision of the Full Court in Prantage & Prantage, Thackray and Ryan JJ referred to Kohan and other authorities in the Full Courts of both this Court and the Federal Court of Australia as well as the state appeal courts. Their Honours concluded (at [86]) that the “usual rule” continued to apply in respect of awards of costs in this Court notwithstanding the Full Court accepting that the difference between party/party costs and a party’s actual costs has continued to grow significantly.24. That proposition also derives support from what Callinan J said in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation. His Honour said that an order for indemnity costs should “be exceedingly rare, as they have a tendency to encourage extravagance and put the quantum of legal fees beyond the effective scrutiny of the courts and their taxing officers”. 25. The rarity of an order for indemnity costs can also be seen illustrated by the comments of Lindgren J in NMFM Property Pty Ltd v Citibank Ltd (No 2), referred to by their Honours in Prantage (at [102] – [103]). Lindgren J said that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation.”(Footnotes omitted) The wife argued that the husband and third parties ought to have known that their positions in relation to the issues of relevance were doomed to fail, and this therefore gives rise to the presumption of some ulterior motive or a wilful disregard of the facts. Secondly, the wife argued that the husband’s failure in attempting to access any or all of the documents, in the face of his obligations as to disclosure and prior court orders made, justifies an award of indemnity costs. I do not accept these arguments. The discussion above of the conduct of the parties, the complex nature of the financial arrangements of the husband’s family, and the fact the wife has not enjoyed total success combine to deprive the circumstances of the exceptional element which would justify indemnity costs.CERTIFICATION FOR SENIOR COUNSEL

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.