Kenyatta & Borghi (No 2)

Case [2024] FedCFamC1F 501

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Kenyatta & Borghi (No 2) [2024] FedCFamC1F 501

File number(s): SYC 7834 of 2021
Judgment of: ALTOBELLI J
Date of judgment: 26 July 2024
Catchwords: FAMILY LAW – COSTS – Where an application for costs is made following substantive property proceedings – Where the applicant seeks indemnity costs – Where it is claimed that the applicant’s conduct bars her from relief – Where the existence of a sham offer is asserted – Where the offer was found to be reasonable – Where the refusal of the offer was unreasonable – Where the respondent’s conduct justifies indemnity costs for the substantive proceedings – Where a fixed costs order is made regarding the costs of the costs application.
Legislation:

Family Law Act 1975 (Cth) ss 78, 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 6.06, 12.08, 12.17
Cases cited:

Bhatt & Acharya (Costs) [2017] FamCAFC 71

Browne & Green (2002) FLC 93-115; [2002] FamCA 791

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

Calderbank v Calderbank [1975] 3 All ER 333

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

Cotter v Eggers-Cotter (No 2) [2015] FamCA 1008

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

Davida & Davida (Costs) [2011] FamCAFC 61

Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) 256 CLR 137; [2015] HCA 45

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

Hawkins & Roe (2012) 47 Fam LR 526; [2012] FamCAFC 77

Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23

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

Kenyatta & Borghi [2024] FedCFamC1F 300

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

Lenova & Lenova (Costs) (2011) FLC 93-467; [2011] FamCAFC 141

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

Messiter v Hutchinson (1987) NSWLR 525

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

Peake v Benedict (Costs) (2014) 53 Fam LR 476; [2014] FCCA 2723

Penfold v Penfold (1980) 144 CLR 311; [2016] FamCAFC 248

Penner & Conroy [2022] FedCFamC1F 283

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

Robinson and Higginbottom (1991) FLC 92-209; [1991]

FamCA 5

Stoian & Fiening (Costs) [2014] FamCA 944
Division: Division 1 First Instance
Number of paragraphs: 64
Date of last submission/s: 12 July 2024
Date of hearing: In Chambers
Place: Sydney
Counsel for the Applicant: Michelle McMahon
Solicitor for the Applicant: O’Sullivan Legal
Counsel for the Respondent: Lorne Havenstein
Solicitor for the Respondent: Unified Lawyers

ORDERS

SYC 7834 of 2021

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

MS KENYATTA

Applicant
AND:

MR BORGHI

Respondent

ORDER MADE BY:

ALTOBELLI J

DATE OF ORDER:

26 JULY…

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AGLC
Kenyatta & Borghi (No 2) [2024] FedCFamC1F 501
Case
[2024] FedCFamC1F 501
Decision Date

CaseChat Overview and Summary

This case involves a dispute between Ms Kenyatta and Mr Borghi regarding the costs associated with their family law proceedings. The substantive proceedings, which lasted three days in April 2024, concerned the division of property following the parties’ separation and subsequent divorce. The wife, Ms Kenyatta, filed an application for costs on 7 June 2024, seeking indemnity costs from her husband, Mr Borghi, for both the substantive and costs applications. Mr Borghi opposes this application and contends that each party should bear their own costs. The Federal Circuit and Family Court of Australia (Division 1) was tasked with determining whether the wife was entitled to indemnity costs and, if so, what amount should be awarded.

The court considered various factors, including the husband's conduct, his failure to comply with court orders, lack of full disclosure, refusal to admit certain facts, and unreasonable refusal of a settlement offer. The court found that the husband's actions justified an award of indemnity costs to the wife, notwithstanding her own shortcomings in the litigation process. The court reasoned that the wife had demonstrated numerous circumstances that warranted such an award, including the husband's breach of court orders, lack of full and frank disclosure, and unreasonable refusal of settlement offers. The court concluded that it was just for the husband to bear the wife's costs, including those of the present application for costs, fixed at $50,000, payable within 28 days.

The court made a fixed costs order in favour of the wife, directing that the husband pay the wife’s costs in the sum of $50,000 within 28 days of the publication of these orders. This decision reflects the court’s view that the husband's conduct during the proceedings justified the award of indemnity costs to the wife. The form of the order is subject to the entry in the Court’s records and may be subject to review or variation as per the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Orders

Orders of the court

SYC 7834 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS KENYATTA

Applicant

AND:

MR BORGHI

Respondent

ORDER MADE BY:

ALTOBELLI J

DATE OF ORDER:

26 JULY 2024

THE COURT ORDERS THAT:

1. The Respondent pay the Applicant’s costs fixed in the sum of $50,000.

2. Such payment shall be made within 28 days of the publication of these orders.

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

The husband opposes the wife’s application for costs and seeks for each party to bear their own costs for the substantive proceedings. The husband’s Response to an Application in a Proceeding filed 5 July 2024 is silent regarding the costs application. The precise orders sought are as follows:1. That the Application in a Proceeding filed 7 June 2024 be dismissed.2. That each party bear their own costs in relation to the Wife’s Initiating Application filed 28 October 2021.BREIF BACKGROUND The wife is 33 years old and is employed as a finance professional. The husband is 38 years old and is self-employed. The parties commenced cohabitation in 2013, married in 2016 and separated on 20 April 2021. The parties were divorced in 2022. There are no children to the marriage. The Court heard the substantive proceedings for three days in April 2024. My reasons for judgment were delivered on 10 May 2024 (Kenyatta & Borghi). I made orders for the wife to retain beneficial ownership of the property situated at D Street, Suburb C NSW, her motor vehicle, any chattels, furnishing or other property in her possession, and any monies, shared, debentures, employee emoluments and superannuation entitlements in her sole name at the date the orders were published. Under the same orders, the husband received beneficial ownership of the properties located at G Street, Suburb F NSW, and H Street, Suburb B NSW (“the Suburb B property”), as well as all motor vehicles in his name, the company O Pty Ltd, any chattels, furnishing or other property in his possession, and any monies, shared, debentures, employee emoluments and superannuation entitlements in his sole name at the date of the orders. This equated to the wife receiving 62.5 per cent, and the husband receiving 37.5 per cent of the property pool.THE PRESENT APPLICATION On 7 June 2024, I directed the costs application to proceed by way of written submissions, and for the costs application to be determined on the papers. In support of her case, the wife relies on the following material:(a)Application in a Proceeding filed 7 June 2024;(b)Her affidavit filed 7 June 2024;(c)Written submissions filed 21 June 2024; and(d)Written submissions in reply filed 12 July 2024. In support of his case, the husband relies on the following material:(a)Response to an Application in a Proceeding filed 5 July 2024;(b)His affidavit filed 5 July 2024; and(c)Written submissions filed 5 July 2024.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. 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.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I consider it reasonable for the husband to pay the wife’s costs, including the present application for costs, fixed in the sum of $50,000, payable within 28 days. The figure would have been higher but for the wife’s own poor litigation behaviour.CONCLUSION As foreshadowed in Kenyatta & Borghi at [36], “in the clearest possible terms…there was a high prospect of a costs order” following the substantive proceedings. The wife has made out numerous circumstances that justify an award of costs. These include, the husband’s conduct, breach of Court orders, lack of full and frank disclosure, failure to admit facts and unreasonable refusal of settlement offers. In the circumstances, it is just that the husband pays the wife’s costs for both applications fixed in the sum of $50,000.

Ratio Decidendi

Legal Principle Established

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