Massalski & Riley (No 4)

Case [2022] FedCFamC1F 832

Federal Circuit and Family Court of Australia

(DIVISION 1)

Massalski & Riley (No 4) [2022] FedCFamC1F 832

File number(s): SYC 496 of 2015
Judgment of: HARPER J
Date of judgment: 28 October 2022 
Catchwords: FAMILY LAW – COSTS – Husband seeks costs of proceedings since 24 December 2019 – Where orders for costs had previously been made for the proceedings up to 25 May 2020 – Wife recommenced proceedings in 2021 seeking final property orders be varied – Where wife has subsequently filed numerous interim applications seeking to impugn previous orders – Orders previously made summarily dismissing wife’s applications and declaring wife a vexatious litigant – Wife continues to refuse to accept the principal of finality – Costs ordered on indemnity basis.
Legislation: Family Law Act 1975 (Cth) s 117
Cases cited:

Atkins & Hunt (Costs) [2017] FamCAFC 131

Colgate Palmolive Co and Anor v Cussons Pty Ltd [1993] FCA 801

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

PBF as Child Representative for AF (Legal Aid Commission of Tasmania) and TRF and LKL (2005) 33 Fam LR 123; [2005] FamCA 158

Han & Ngo [2021] FamCAFC 97

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

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

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

Massalski & Riley (2022) 65 Fam LR 73; [2022] FedCFamC1F 36

Massalski & Riley (No 2) [2021] FamCAFC 152

Massalski & Riley (No 3) [2022] FedCFamC1F 562

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

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

Prantage & Prantage (Costs) [2014] FamCA 850

Robinson and Higginbotham (1991) FLC 92-209; [1991] FamCA 5

Sfakianakis & Sfakianakis (2019) 59 Fam LR 419; [2019] FamCAFC 54

Vlug v Poulos (1997) FLC 92-778; [1997] FamCA 47

Worth & Worth (No 2) [2019] FamCAFC 126
Division: Division 1 First Instance
Number of paragraphs: 65
Date of last submission/s: 14 October 2022
Date of hearing: On the papers
Place: Sydney
The Applicant: Self-represented litigant
Solicitor for the Respondent: Byrnes Legal

ORDERS

SYC 496 of 2015

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

MS MASSALSKI

Applicant
AND:

MR RILEY

Respondent

order made by:

HARPER J

DATE OF ORDER:

28 October 2022

THE COURT ORDERS THAT:

1.The Applicant Wife, Ms Massalski (“the wife”) pay the costs of the Respondent Husband, Mr Riley (“the husband”), assessed on an indemnity basis, of the following applications:

(a)Application in a Case filed by the wife on 27 May 2021;

(b)Application in a Case filed by the husband on 28 July 2021;

(c)Initiating Application and Application in a Case filed by the wife on 10 August 2021, and the summary dismissal proceedings; and

(d)Application in a Proceeding filed by the wife on 3 December 2021.

2.The Response filed by the wife on 6 October 2022 be dismissed.

Note:   The form of the order is subject to the entry in…

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AGLC
Massalski & Riley (No 4) [2022] FedCFamC1F 832
Case
[2022] FedCFamC1F 832
Decision Date

CaseChat Overview and Summary

In Massalski & Riley (No 4), the husband, Mr Riley, sought costs from the wife, Ms Massalski, for various applications made since 24 December 2019. The court had previously made orders for costs up to 25 May 2020. Ms Massalski recommenced proceedings in 2021 seeking to vary final property orders. She has since filed numerous interim applications, many of which have been summarily dismissed and resulted in her being declared a vexatious litigant. Ms Massalski has refused to accept the principle of finality in these proceedings.

The legal issues before the court included whether Ms Massalski’s refusal to accept the principle of finality justified an order for costs and, if so, whether the circumstances warranted indemnity costs. The court considered that Ms Massalski’s conduct, her failure to comply with previous orders, and her unsuccessful applications justified an order for costs against her. The court also considered the exceptional circumstances required for an indemnity costs order, as outlined in previous judgments. The husband cited examples of such circumstances, including the imprudent refusal of an offer to compromise.

The court found that the circumstances of this case warranted an order for indemnity costs against Ms Massalski. This decision was based on her persistent refusal to accept the principle of finality, her failure to comply with previous orders, and her unsuccessful applications. The court emphasised that indemnity costs are a significant departure from the norm and require exceptional circumstances, as previously established in case law.

The court ordered that Ms Massalski pay Mr Riley’s costs on an indemnity basis for specified applications. Additionally, the court dismissed Ms Massalski’s response filed on 6 October 2022.

Orders

Orders of the court

1. The Applicant Wife, Ms Massalski (“the wife”) pay the costs of the Respondent Husband, Mr Riley (“the husband”), assessed on an indemnity basis, of the following applications:

(a) Application in a Case filed by the wife on 27 May 2021;

(b) Application in a Case filed by the husband on 28 July 2021;

(c) Initiating Application and Application in a Case filed by the wife on 10 August 2021, and the summary dismissal proceedings; and

(d) Application in a Proceeding filed by the wife on 3 December 2021.

2. The Response filed by the wife on 6 October 2022 be dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The wife argued that her rejection of two written offers, dated 23 December 2015 and 24 February 2017, were not unreasonable. Even if true, this is entirely irrelevant to the applications the subject of this judgment.CONCLUSION ON JUSTIFYING CIRCUMSTANCES Having regard to the wife’s conduct, the fact that the proceedings were necessitated by her failure to comply with previous orders, and that she was wholly unsuccessful in respect of her applications, I am satisfied that costs should be ordered against the wife for the following applications:(a)Application in a Case filed by the wife on 27 May 2021;(b)Application in a Case filed by the husband on 28 July 2021;(c)Initiating Application and Application in a Case filed by the wife on 10 August 2021, and the summary dismissal proceedings; and(d)Application in a Proceeding filed by the wife on 3 December 2021. The question, then, is the basis upon which costs should be ordered.INDEMNITY COSTS The husband argues that the circumstances are such that the Court should award indemnity costs in his 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 husband relied upon the judgment of Watts J in Coulter & Geraldine [2015] FamCA 287, citing Sheppard J in Colgate Palmolive Co and Anor v Cussons Pty Ltd [1993] FCA 801 (“Colgate Palmolive”), and the examples provided therein of the types of “exceptional circumstances” where indemnity costs may be awarded. These include:(a)Action commenced or continued where a party, properly advised, should have known he had no chance of success;(b)The making of allegations of fraud knowing to be false;(c)Evidence of particular misconduct causing loss of time;(d)The making of allegations which ought never have been made; (e)The undue prolongation of a case by groundless contentions; and(f)An imprudent refusal of an offer to compromise.

Ratio Decidendi

Legal Principle Established

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