Layton & Layton (No 2)
[2022] FedCFamC1F 828
Federal Circuit and Family Court of Australia
(DIVISION 1)Layton & Layton (No 2) [2022] FedCFamC1F 828
File number(s): BRC 8675 of 2021 Judgment of: HOGAN J Date of judgment: 27 October 2022 Catchwords: FAMILY LAW – COSTS – Where the Court is persuaded that the circumstances justify the making of an order for costs on the party and party basis. Legislation: Family Law Act 1975 (Cth) Cases cited: D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64
De Roma v De Roma (2013) 49 Fam LR 226; [2013] FamCA 566
PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123; [2005] FamCA 158
Lenova and Lenova (Costs) [2011] FamCAFC 141
Markoska and Markoska (Costs) (2012) 46 Fam LR 598; [2011] FamCA 833
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Division: First instance Number of paragraphs: 16 Date of last submission/s: 21 October 2022 Date of hearing: Determined in Chambers following the receipt of written submissions Counsel for the Applicant: Mr Wilson of King’s Counsel by way of written submissions in response filed 14 October 2022 Solicitor for the Applicant: Ryan Kruger Lawyers Solicitor for the First Respondent: Barry Nilsson Lawyers – no requirement for submissions as to costs Solicitor for the Second Respondent: Merthyr Law – no requirement for submissions as to costs Counsel for the Proposed Third Respondent: Mr McQuade of King’s Counsel with Mr Wacker of Counsel by way of written submissions filed 7 October 2022 and by way of written submissions in reply filed 21 October 2022 Solicitor for the Proposed Third Respondent: McInnes Wilson Lawyers ORDERS
BRC 8675 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS LAYTON
Applicant
AND: MR LAYTON
First Respondent
B PTY LTD
Second Respondent
C PTY LTD
Proposed Third Respondent
order made by:
HOGAN J
DATE OF ORDER:
27 October 2022
THE COURT ORDERS THAT:
1.The Applicant pay the proposed Third Respondent’s costs of and incidental to the Application in a Proceeding filed 3 May 2022 and sealed 13 May 2022, including the appearance before a Judicial Registrar on 14 June 2022, on the party and party basis in such amount as agreed between them or assessed on the party and party basis.
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.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Layton & Layton has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
On 13 May 2022, Ms Layton filed an Application in a Proceeding (“the Application”) by which she sought leave to join C Pty Ltd (“C Pty Ltd”) to the property settlement proceedings which she had commenced by filing an Initiating Application on 2 July 2021.
On 23 September 2022, I dismissed Ms Layton's Application and made orders to facilitate any application for costs being made consequent upon that determination.
C Pty Ltd now seeks an order that Ms Layton pay its costs of the Application on the party and party basis.
Each of C Pty Ltd and Ms Layton have filed submissions[1] to which I have had regard in determining the outstanding application for an order for costs.
[1]In so far as AH is concerned: written submissions filed 7 October 2022, written submissions in reply filed on 21 October 2022 and an affidavit of Ms F filed 21 October 2022; in so far as Ms Layton is concerned: written submissions filed 14 October 2022.
Discussion of applicable legislation and principles
The dismissal of the Application means that C Pty Ltd is not a party to the property settlement proceedings which Ms Layton commenced on 2 July 2021. Given this, it was submitted on behalf of C Pty Ltd that the “starting point” provided by s 117(1) of the Family Law Act 1975 (Cth) (“the Act”) – namely, that each party to proceedings under the Act shall bear his or her own costs – does not apply in this case.[2]
[2] See, for example: De Roma v De Roma (2013) 49 Fam LR 226 at [7]-[12] (per Watts J).
However, I consider that the Application falls within the definition of “proceedings” given to that term by s 4 of the Act – namely, “a proceeding in a court, whether between parties or not, and includes cross proceedings or an incidental proceeding in the course of or in connexion with a proceeding” – and that C Pty Ltd was a party to the proceedings (the Application) by which Ms Layton sought leave to join it to the property settlement proceedings to which she and Mr Layton are the parties.[3]
[3]See the discussion by Murphy J in Markoska and Markoska (Costs) (2012) 46 Fam LR 598 at [85]-[100] and [103], noting that the same occurred in the course of consideration of an application for costs by the recipient of a subpoena issued at the request of one of the parties to property settlement proceedings.
Consequently, I intend to proceed on the basis that s 117(1) of the Act applies in this case. Such conclusion does not mean, of course, that C Pty Ltd’s application for an order that Ms Layton pay its costs of and incidental to the Application must fail because, if I am of the opinion that there are circumstances that justify it, I may, subject relevantly to s 117(2) of the Act, make such order as to costs as I consider just.[4]
[4] Family Law Act 1975 (Cth) s 117(2).
I accept that:
(a)nothing in s 117 of the Act imposes the requirement that a person seeking an order for costs establish the existence of more than one of the matters prescribed in s 117(2A); and
(b)there is nothing to prevent any one of the matters prescribed by s 117(2A) being the sole foundation for an order for, or as to, costs;[5] and
(c)nothing in the Act provides any guidance about the weighting to be accorded to the matters listed in s 117(2A) of the Act when I am considering whether I am of the opinion that the circumstances in a case justify the making of an order as to costs; and
(d)an applicant for an order for costs does not have to satisfy any “additional or special onus”; and
(e)what is required, as an essential preliminary to the making of an order for costs, is a finding of “justifying circumstances”;[6] and
(f)the inclusion of “conduct” in the matters to which the Court must have regard in considering what order, if any, should be made under s 117(2) of the Act suggests that the reasonableness or unreasonableness of pursuing a claim is relevant to the exercise of the discretion.
[5]PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 Fam LR 123 at [44].
[6] Penfold v Penfold (1980) 144 CLR 311 at 315-316.
Neither Ms Layton nor C Pty Ltd were in receipt of assistance by way of legal aid.[7] There is no suggestion that the Application was necessitated by the failure of any party to the Application to comply with previous orders.[8]
[7] Family Law Act 1975 (Cth) s 117(2A)(b).
[8] Family Law Act 1975 (Cth) s 117(2A)(d).
I accept that there is no evidence to establish the financial circumstances of C Pty Ltd. Reference to the submissions filed on its behalf makes it clear that this is highly likely to have been the consequence of the view that s 117(2A)(a) of the Act does not apply to it.
I am not persuaded that the absence of specific evidence about C Pty Ltd’s financial circumstances is fatal to its application for an order that Ms Layton pay the costs of and incidental to the Application. Given that it has been able to:
(a)fund the proceedings it commenced in the Supreme Court of Queensland; and
(b)appear in the proceedings in this Court by way of King’s Counsel and a junior; and
(c)fund the preparation of the expert’s reports for use in the Supreme Court proceedings (the most recent of which was before me for the purposes of determining the Application); and
(d)survive the financial impact of what, on the evidence it relied on, was misappropriation by Mr Layton of significant funds over a significant period of time,
I consider it open to me to infer, for the purposes of my consideration of its application for an order as to costs, that its financial circumstances are not parlous.
I consider that Ms Layton’s financial circumstances are not such as to mitigate against the making of an order for costs.[9] I also note that the impecuniosity or insolvency of a person against whom an order for costs is sought is not, of itself, a bar to this Court being otherwise of the opinion that the circumstances before it justify the making of an order for costs.[10]
[9] Family Law Act 1975 (Cth) s 117(2A)(a).
[10]See, for example: D & D (Costs) (No 2) (2010) FLC 93-435 at [21]; Lenova and Lenova (Costs) [2011] FamCAFC 141 at [12], albeit made in the context of the consideration of the costs of an appeal, although I consider such comment apposite to the present circumstances.
I accept that Ms Layton was wholly unsuccessful in her attempt to joint C Pty Ltd to these proceedings;[11] I also accept that, whilst not successful on all of the arguments advanced as providing reasons why it should not be joined to the property settlement proceedings between Ms Layton and Mr Layton, C Pty Ltd was wholly successful in resisting being joined to the same.
[11] Family Law Act 1975 (Cth) s 117(2A)(e).
I do not accept, as may have been implied in an aspect of the submissions made on behalf of Ms Layton, that the Application not being dismissed on the bases that it was “hopeless” or “misconceived” ought persuade the Court that the circumstances in which the Application was unsuccessfully prosecuted do not justify the making of an order as to costs.
I am not persuaded that the difficulties and/or issues associated with Ms Layton’s capacity to meet an order for costs (as outlined in the submissions filed on her behalf[12]) mitigate against the conclusion that I have otherwise reached that, given that she was wholly unsuccessful in her attempt to join C Pty Ltd to the property settlement proceedings in the circumstances which pertained (as discussed in the Reasons for Judgment delivered on 23 September 2022 and as established by the evidence C Pty Ltd relied on in its successful opposition to being joined to the property settlement proceedings), the circumstances justify the making of an order that she pay C Pty Ltd’s costs of and incidental to the Application on the party and party basis.
[12]Written submissions filed on behalf of Ms Layton on 14 October 2022 at paragraph 20.
Given the apparent disagreement between C Pty Ltd and Ms Layton about the manner in which the appearance before the Judicial Registrar on 14 June 2022 proceeded (namely: argument about whether the Judicial Registrar had the delegated jurisdiction to determine the Application, as advanced by Ms Layton, as opposed to the Court being asked to make directions to facilitate the Application being listed before a judge on the basis that the Judicial Registrar does not have jurisdiction to determine the Application, as advanced by C Pty Ltd), I think it just and appropriate that the order issue in the terms set out at the commencement of these Reasons.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 27 October 2022
0
3
0