Luna & Luna (No 5)
[2023] FedCFamC1F 118
FEDERAL CIRCUIT AND
FAMILY COURT OF AUSTRALIA (DIVISION 1)Luna & Luna (No 5) [2023] FedCFamC1F 118
File number(s): BRC 11516 of 2019 Judgment of: HOGAN J Date of judgment: 3 March 2023 Catchwords: FAMILY LAW – COSTS – Where the Court is not persuaded that the circumstances justify the making of an order that the Respondent pay the Applicant’s costs – Where the Respondent’s costs are reserved Legislation: Family Law Act 1975 (Cth) Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; [1993] FCA 801
D & D Costs (No. 2) (2010) FLC 93-435; [2010] FamCAFC 64
In the Marriage of Kohan (1993) FLC 92-340; [1992] FamCA 116
Kite & Kite [2010] FamCAFC 107
KLD & SCVG [2009] FamCAFC 56
Limousin v Limousin (Costs) (2008) 38 Fam LR 478; [2007] FamCA 1178
Rayburn & Pritchard (2014) FLC 93-573; [2014] FamCAFC 13
Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: First Instance Number of paragraphs: 19 Date of last submission/s: 2 March 2023 Date of hearing: Determined in Chambers following the receipt of written submissions Place: Brisbane Solicitor for the Applicant: Feeney Family Law by way of written submissions filed on 27 January 2023 and by way of written submissions in reply filed on 2 March 2023 Solicitor for the Respondent: Alroe Somers & O’Sullivan Solicitors by way of written submissions filed in response on 23 February 2023 ORDERS
BRC 11516 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS LUNA
Applicant
AND: MR LUNA
Respondent
order made by:
HOGAN J
DATE OF ORDER:
3 MARCH 2023
THE COURT ORDERS THAT:
1.The applicant has leave to rely on the affidavit of Ms Luna sealed at 5.32 pm on 27 January 2023 and the costs (interim) submissions sealed at 5:40 pm on 27 January 2023 notwithstanding the terms of order 3(a) of the order made on 16 December 2022 which required that any affidavit and written submissions relied on in support of an application for costs be filed and served by 4.00 pm on 27 January 2023.
2.The Application in a Proceeding filed at 5:32 pm on 27 January 2023 (and sealed at 9:04 am on 10 February 2023) is dismissed.
3.Save as is ordered above, the Amended Application in a Proceeding sealed on 17 February 2023 is dismissed.
4.The respondent’s costs of and incidental to the Application in a Proceeding filed 20 October 2022 (sealed on 31 October 2022) are reserved.
5.Save as is ordered above, the Response to Application in a Proceeding filed and sealed on 23 February 2023 is dismissed.
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 Luna & Luna has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
On 16 December 2022 I made an order (“the December 2022 order”) which required the respondent to pay the sum of $70,000 to be held as security for any costs awarded to the applicant in the substantive proceedings between the parties. I also made an order that if the respondent failed to comply with the requirement to pay such funds to the Registry Manager of the Brisbane Registry of the Court by 4.00 pm on 16 January 2023, the substantive proceedings between the parties (being those in which the respondent seeks an order setting aside a Binding Financial Agreement dated 23 February 2017) would be stayed pending payment by him of the said sum.
The December 2022 order also afforded to the parties the opportunity to seek an order for costs by filing, by a specified time, any affidavit sought to be relied on in support of such application, together with any written submissions upon which the applicant for costs sought to rely. The order provided that, upon receipt of such submission, the respondent to an application for costs would be afforded the opportunity to respond to the same; then, the applicant would be afforded the opportunity, limited strictly to replying to any contentions made by the respondent, to reply and the issue of costs would otherwise be determined in Chambers. The December 2022 order did not require any party by whom an order as to costs was sought to file an Application in a Proceeding.
In particular, the December 2022 order provided that if an order for costs was sought then the party seeking the same should, by 4.00 pm on 27 January 2023, file and serve any affidavit necessary to support such an application and any written submissions in support of such an application.
An affidavit by the applicant and submissions prepared on her behalf were filed at 5:32 pm (ACT time) and 5:40 pm (ACT time) respectively on 27 January 2023. Whilst an Application in a Proceeding was also filed (at 5:32 pm on 27 January 2023), this was not sealed by the Court until 10 February 2023.
By email sent at 10.00 am on 17 February 2023, the respondent’s solicitors advised the applicant’s solicitors that, as a consequence of the service of the application for costs being received at 4:56 pm on 27 January 2023 and the relevant material in support of the same having been filed between 4:30 pm and 4:40 pm that day, the applicant’s material was filed out of time and in breach of order 3(a) of the December 2022 order.
At 3:51 pm on 17 February 2023, the applicant filed an Amended Application in a Proceeding: the amendment was to seek an order, pursuant to r 15.06(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, extending the time within which compliance with order 3(a) of the December 2022 order could occur and that such extension be made to 4.00 pm on 30 January 2023 so that the applicant would be able, in prosecuting her application for an order for the costs of and incidental to the Application in Proceeding filed 16 October 2022, to rely on her affidavit and written submissions sealed by the Court on 27 January 2023.
Whilst I accept that the applicant’s affidavit and written submissions were not filed and served before 4.00 pm on 27 January 2023, I intend to give her leave to rely on the same notwithstanding this non-compliance. I do so because I am satisfied that extending time as sought enables the Court to do justice between the parties.[1]
[1]See, for example: KLD & SCVG [2009] FamCAFC 56; Kite & Kite [2010] FamCAFC 107; Rayburn & Pritchard (2014) FLC 93-573.
The competing applications for costs
The applicant seeks an order that the respondent pay her costs of and incidental to the Application in a Proceedings filed 20 October 2022 (sealed on 31 October 2022) and that such costs be assessed on an indemnity basis. She does so for the reasons expressed in the written submissions filed on her behalf.[2]
[2]Costs (interim) submissions sealed 27 January 2023; Costs (Interim) Submissions in Reply filed 2 March 2023.
The respondent seeks an order dismissing that application. He also seeks, at least as I understood the relief sought in the Response to an Application in a Proceeding sealed 23 February 2023, an order that his costs of and incidental to the October 2022 Application in a Proceeding are reserved. He does so for the reasons expressed in the written submissions filed on his behalf.[3]
[3] Costs (interim) submissions sealed 23 February 2023.
Discussion of applicable legislation and principles
Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to proceedings under the Act shall bear his or her own costs. However, if the Court is satisfied there are circumstances which justify it, the Court may make such order as to costs as it considers just.[4] In considering what order, if any, as to costs should be made, the Court must have regard to the matters set out in s 117(2A) of the Act.
[4]Family Law Act 1975 (Cth) s 117(1).
Neither party here is in receipt of assistance by way of legal aid;[5] it is not suggested that the proceedings have been necessitated by the failure of a party to comply with previous orders of the Court;[6] there is no evidence to suggest that either party made an offer in writing to the other to settle the proceedings.[7]
[5] Family Law Act 1975 (Cth) s 117(2A)(b).
[6] Family Law Act 1975 (Cth) s 117(2A)(d).
[7] Family Law Act 1975 (Cth) s 117(2A)(f).
The evidence (to which reference was made in the Reasons for Judgment delivered in support of the December 2022 order) appears to me to establish that the applicant’s financial circumstances are superior to those of the respondent. That is not, though, determinative of the competing applications.
Whilst it was submitted that the applicant was wholly successful on her application for an order for security for costs, such submission needs to be considered in circumstances where the sum originally sought to be paid by way of security for costs was $397,423.15 and later $200,000 and Counsel on her behalf accepted, quite properly it seems to me, at the hearing that any sum ordered to be paid by way of an order for security for costs should more properly relate to the costs it was anticipated she would incur if the matter proceeded to final hearing. As discussed in the December 2022 Reasons for Judgment, the evidence as to those costs was that the range of the same was between $70,000 and $150,000: the order ultimately made was for the payment by the respondent of the sum of $70,000 by way of security for the applicant’s costs.
Given the above, I am not persuaded that the applicant was “wholly successful” – whilst she obtained an order for security for costs, the quantum of such order was significantly less than that which was sought by way of the application determined by the December 2022 order.
It was also submitted on behalf of the applicant that the respondent’s conduct in relation to the proceedings was such as to persuade the Court that the circumstances justify the making of an order as to costs and that it is just that such order be made on an indemnity basis. In particular, it was submitted that the respondent’s conduct in advancing:
(a)assertions of fraud (constituted by an alleged failure to disclose material matters prior to the parties executing the Binding Financial Agreement in 2017); and
(b)assertions that the applicant’s conduct prior to the execution of the Binding Financial Agreement was such as to give rise to the application of the principles of undue influence and unconscionability,
was such as to persuade that circumstances justify the making of an order that the respondent pay her costs of and incidental to the application determined by the December 2022 order.
The submissions made on behalf of the applicant advanced that because of the applicant’s occupation, the making of such assertions in the absence of clear evidence establishes the necessary justifying circumstances and also constitutes circumstances necessary to justify making an order for costs on an indemnity basis: that is, that the circumstances here are exceptional[8] and such as to warrant departing from “the usual course” of ordering the payment of costs on the party and party basis to order that the same be paid on an indemnity basis – something which, as has been said in well-known authority, is a “very great departure” from the “normal standard” in this and other jurisdictions.[9]
[8]Yunghanns v Yunghanns (2000) FLC 93-029; In the Marriage of Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J.
[9]D & D Costs (No. 2) (2010) FLC 93-435; Limousin v Limousin (Costs) (2008) 38 Fam LR 478; In theMarriage of Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J.
I am not persuaded that this is the case.
I am not persuaded that the matters referred to in the written submissions filed on behalf of the applicant persuade of the existence of exceptional circumstances such as to make it appropriate or just to make an order for the payment of costs on an indemnity basis. In fact, given my conclusions about the applicant not being wholly successful on her application for an order that the respondent pay an amount by way of security for costs and the financial disparity between the parties, I am not persuaded that the circumstances of this case are such as to justify the making of an order that the respondent pay the applicant’s costs of and incidental to the application determined by the December 2022 order.
Whilst the proceedings are stayed and will remain so until the respondent complies with the order requiring him to pay $70,000 into Court by way of security for the applicant’s future costs, the proceedings have not been dismissed. In fact, the applicant’s attempt to do so by way of oral application made on 27 January 2023 was unsuccessful. In such circumstances, I consider that the order as to the respondent’s costs of and incidental to the application in a proceeding filed 20 October 2022 (which was determined by the December 2022 order) which is just is that the same be reserved.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 3 March 2023
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