Leeson & Gosley (No 2)

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Federal Circuit and Family Court of Australia

(DIVISION 1)

Leeson & Gosley (No 2) [2022] FedCFamC1F 998

File number: MLC 12653 of 2020
Judgment of: HARTNETT J
Date of judgment: 15 December 2022
Catchwords: FAMILY LAW – COSTS – Where the husband sought costs on an indemnity basis or in the alternative on a party/party basis – Where the costs of the husband and Independent Children’s Lawyer were reserved – Where the Independent Children’s Lawyer no longer sought costs – Where the wife’s conduct has caused the husband to incur unnecessary legal costs – Costs order made in favour of the husband – Costs order in a fixed sum.
Legislation:

Family Law Act 1972 (Cth) s 117

Federal Circuit and Family Court of Australia (Family Law) Rules sch 3, r 12.13

Cases cited:

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

Collins and Collins (1985) FLC 91-603

Kohan & Kohan (1993) FLC 92-340

Munday v Bowman (1997) FLC 92-784

Nada and Nettle (Costs) (2014) FLC 93-612

Penfold v Penfold (1980) 144 CLR 311

Sfankianakis & Sfankianakis [2019] FamCAFC 54

Yunghanns & Yunghanns (2000) FLC 93-029
Division: Division 1 First Instance
Number of paragraphs: 28
Date of last submissions: 6 September 2022
Date of hearing: 6 September 2022
Place: Melbourne
The Applicant: Litigant in person
Counsel for the Respondent: Ms Byrnes
Solicitor for the Respondent: Kennedy Partners
Counsel for the Independent Children's Lawyer: Mr Taghdir
Solicitor for the Independent Children's Lawyer: Creative Family Law Solutions

ORDERS

MLC 12653 of 2020

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

MS LEESON

Applicant
AND:

MR GOSLEY

Respondent

INDEPENDENT CHILDREN'S LAWYER

order made by:

HARTNETT J

DATE OF ORDER:

15 December 2022

THE COURT ORDERS THAT:

1.The applicant pay the respondent’s costs of and incidental to the hearing on 22 July 2022 fixed in the sum of $17,000.00.

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 Leeson & Gosley has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

HARTNETT J

Introduction

  1. On 22 July 2022, the Court reserved the costs of the husband and the Independent Children’s Lawyer (“ICL”) in relation to the hearing that day which pertained to the wife’s Amended Application in a Proceeding filed 20 July 2022, and on 24 August 2022 adjourned the matter of…

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Details
Case
[2022] FedCFamC1F 998
Decision Date

CaseChat Overview and Summary

In the Family Court of Australia, the case of Leeson & Gosley (No 2) involved a dispute between the husband and wife regarding orders 19-21 of a parenting application. The wife had filed an application on 20 July 2020, and at the hearing, the parties resolved these orders by consent. The primary legal issue before the court was whether to grant the husband's application for indemnity costs, which he sought in the sum of $31,532.20, or alternatively, his costs in accordance with Schedule 3, which amounted to $12,344.70. The wife opposed the husband's application for indemnity costs, arguing that the court should exercise its discretion to dismiss it in part due to her status as a litigant in person. She also sought that if a costs order were to be made, it should be at scale.

The court considered the general rule that costs are payable on a party/party basis unless the court decides to exercise its discretion to order costs on other terms, including indemnity costs. The court noted that it should not depart lightly from the ordinary rules relating to costs, and the circumstances justifying such a departure should be exceptional. The court reviewed the circumstances that may warrant an order for indemnity costs, such as where an action has been commenced or continued without a chance of success, or where there has been misconduct causing a loss of time to the court and other parties. The court also referred to the Full Court's observation in Sfankianakis & Sfankianakis that the court has the flexibility to fashion an order that is apt to the circumstances, which could include a "special costs order" that is more generous than party and party costs but falls short of an indemnity.

After considering the evidence and arguments presented, the court was satisfied that the circumstances warranted an order for indemnity costs in the husband's favour. The court noted that the wife had engaged three different law firms before proceeding as a litigant in person, and that her conduct had caused a significant loss of time to the court and the husband. The court ordered that the husband's costs be paid in the sum of $31,532.20, which represented indemnity costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The parties did, however, at the hearing resolve orders 19-21 as sought by the wife in her Application in a Proceeding filed 20 July 2020 by consent. Conclusions as to costs I am satisfied in the circumstances as described above that an order for costs in the husband’s favour is warranted. The costs sought by the husband are indemnity costs in the sum of $31,532.20 or in the alternative his costs in accordance with Schedule 3 in the sum of $12,344.70 be awarded. The wife sought that the Court exercise its discretion to dismiss the husband’s costs application in part as she was a litigant in person. She is so now, having previously engaged three different law firms. In the alternative, the wife sought that if a costs order were to be made, that it be at scale. The general rule in this Court is that costs are payable on a party/party basis unless the Court decides to exercise its discretion to order costs on other terms, including indemnity costs. The Court “should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be an exceptional one”.[5] [5] Kohan & Kohan (1993) FLC 92-340. The circumstances justifying an order for indemnity costs are not closed.[6] The Court in exercising its discretion must be satisfied that the circumstance of the case “warrant the making of an order for the payment of costs other than on a party/party basis”.[7] Circumstances which may warrant such an order were summarised by Holden CJ in Munday v Bowman (1997) FLC 92-784 at page 84,660, as identified in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, as follows:•Where 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;•The making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;•Evidence of particular misconduct causing loss of time to the court and to other parties;•The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;•An imprudent refusal of an offer to compromise. [6] Yunghanns & Yunghanns (2000) FLC 93-029. [7] Yunghanns & Yunghanns (2000) FLC 93-029. In the more recent decision of Sfankianakis & Sfankianakis [2019] FamCAFC 54, the Full Court observed at [10] that:…It is however, a mistake to think that if a costs order is made, that order can only be on a party and party basis or on an indemnity basis. The words “such order as to costs as the Court considers just” permit the Court to fashion an order that is apt to the circumstances. One such well known example is assessment on a trustee basis, which is more generous than party and party costs, but fall short of an indemnity. Orders for a partial indemnity or for a particular period are obvious possibilities. The Court may also fix costs in a particular sum, taking account of all relevant circumstances; that type of order too is neither one for party and party cost nor an indemnity costs order. For convenience, in these reasons we shall refer to such orders as a “special costs order”.

Ratio Decidendi

Legal Principle Established

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