Mavrotis & Mavrotis
[2022] FedCFamC1F 959
•7 December 2022
Federal Circuit and Family Court of Australia
(DIVISION 1)
Mavrotis & Mavrotis [2022] FedCFamC1F 959
File number: MLC 2810 of 2018 Judgment of: CARTER J Date of judgment: 7 December 2022 Catchwords: FAMILY LAW – COSTS – where the wife sought indemnity costs – consideration of factors in s 117 of the Family Law Act 1975 (Cth) – where the husband sought to rely on affidavits from unilaterally appointed experts – non-compliance with Chapter 7 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) – costs ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Cases cited: Colgate-Palmolive Company & Cussons Pty Limited [1993] FCA 801
D & D (Costs) (No. 2) [2010] FamCAFC 64
Kohan & Kohan [1992] FamCA 116
Limousin & Limousin (Costs) [2007] FamCA 1178
Munday & Bowman (1997) FLC 92-784
Division: Division 1 First Instance Number of paragraphs: 25 Date of hearing: 1 December 2022 Place: Melbourne Counsel for the Applicant: Mr John Salamanca Solicitor for the Applicant Madison Branson Lawyers Counsel for the First Respondent: Mr Laurence Fudim Solicitor for the First Respondent Klonis Kirby & Co Counsel for the Second, Third and Fourth Respondents: Mr Antonio Scriva ORDERS
MLC 2810 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MAVROTIS
Applicant
AND: MR J MAVROTIS
First Respondent
MR K MAVROTIS
Second RespondentMR L MAVROTIS
Third Respondent
order made by:
CARTER J
DATE OF ORDER:
6 DECEMBER 2022
THE COURT ORDERS THAT:
1.The husband pay the wife’s costs of $5,500 within 30 days.
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 Mavrotis & Mavrotis has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUSTICE CARTER
The applicant wife seeks an order for costs against the first respondent husband, in relation to an interim hearing that took place on 1 December 2022. The hearing that day dealt with a number of matters including:
(a)the joinder of the fifth and sixth respondent to the proceedings. That application was brought by the first respondent husband. It was ultimately not opposed by the applicant wife, or the other respondents. An order was made for the joinder of those additional parties as they are necessary parties to resolve the issues in dispute;
(b)orders for the production of discoverable documents, sought by the applicant wife, from the husband. That application was similarly not really opposed by the husband. An order was made for the husband to produce specific documents that are in his power, possession or control;
(c)whether certain affidavits purporting to be from experts could be relied upon by the husband in circumstances where they are not compliant with the processes and procedures articulated in Chapter 7 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). The wife sought the husband be prevented from relying on those documents. That was opposed by the husband;
(d)the question of valuations of various properties, including whether D Group (“D Group”), previously engaged as the single expert should complete the task of valuing the properties, which properties are to be valued and how the costs of those valuations are to be met; and
(e)the husband’s application seeking an injunction against the second, third and fourth respondents dealing with the property situated at E Street, Suburb F, Victoria, and the application of the second, third and fourth respondent’s for summary dismissal of the husband’s application for injunctive relief. This aspect did not require adjudication as the husband abandoned that part of his application during the luncheon adjournment.
In relation to the issue of who would prepare the valuations, I found in favour of the wife, and ordered that all properties be valued by D Group. That was on the basis that the parties had jointly appointed D Group to prepare valuations of some of the properties earlier in the proceeding, and that no defect or deficiency was articulated in relation to those valuations.
In relation to the affidavits sought to be relied upon by the husband from other experts, I determined that the husband would not be entitled to rely on that material. That related to affidavits of:
(a)Mr B (“Mr B”), valuer. He had produced a valuation in relation to one of the parties’ real properties;
(b)Mr C (“Mr C”), occupational therapist, who was not the husband’s treator. His evidence included a consideration of the husband’s ongoing needs in terms of treatments and support and the costs of same; and
(c)Ms G (“Ms G”), forensic accountant. Her evidence included an assessment of the wife’s bank accounts.
I have excluded that material on the basis that the husband unilaterally appointed each of those deponents. Each of those deponents had only the information provided to them by the husband, with no input from the wife. Each of the affidavits were filed despite non-compliance with the Rules. There was nothing articulated by counsel for the husband that persuaded me that the evidence adduced should appropriately be from his own adversarial, rather than a jointly appointed single expert in relation to the various issues. Nor was there any reason advanced that could satisfy me that this was a matter on which the court would be assisted by allowing the wife to adduce her own evidence on the same issues. Rather, these matters should be considered by an appropriately qualified and jointly appointed single expert.
Upon my determination of those matters, the wife sought a costs order, on an indemnity basis. Counsel sought his fees for two days at $5,500 per day, being for a day’s preparation and a hearing ($11,000 in total). Counsel sought a further $7,300 by way of solicitor’s fees. I was not provided with a costs agreement, or details of how those additional solicitors’ costs were calculated.
That was opposed by counsel for the husband. Whilst he opposed the order for costs, including indemnity costs, he did not address me as to the quantum of costs, if a costs order was to be made.
No order for costs was sought by the other parties.
The general rule in relation to costs is that each party will bear their own costs. That is set out in s 117(1) of the Family Law Act1975 (Cth) (“the Act”). However, that rule is subject to the provisions of s117(2) which provides that a court may make such order for costs as it considers just if “…the court is of opinion that there are circumstances that justify it in doing so…”
Subsections 117(2A)(a)-(g) of the Act set out the matters the Court must consider in determining whether to exercise its discretion and make an order as to costs. No one factor must be present, and no particular factor is to be given more or less weight than any other. The factors to which the court must have regard are as follows:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
In terms of the financial circumstances of the husband and wife, I was advised the asset pool on the wife’s evidence is around $3,000,000 – 4,000,000. According to the husband, who asserts that various properties registered in the name of other entities and his adult children ought be included in the pool, the pool of assets available for distribution between them may be as high as $17,000,000. The husband has control of the two properties in Suburb H. I understand they are unencumbered. The husband has the benefit of being able to live in one of the Suburb H properties. The wife asserts the husband has been in receipt of rental income from the other Suburb H property, which the husband denied through his counsel. The wife has to meet the costs of housing herself.
Neither the husband or the wife are in receipt of legal aid.
In terms of the conduct of the parties, that consideration requires me to take into account the parties’ conduct as litigants. In that regard, I note that the matters that required my determination at the interim hearing were the appointment of the single expert valuer (which had been opposed by the husband) and the ruling on the husband’s additional expert witnesses.
In relation to the valuer, I note that I intended to make orders for the preparation of updated and other valuations at the case management hearing, but overlooked doing so. Had I raised the matter at case management hearing, I anticipate the matter would have been resolved that day. However, I also note that absent any genuine complaint about the previously appointed valuer, there was no reasonable basis for the husband not to agree to reappoint D Group, which could have been attended to by the parties, without the necessity for the court’s intervention. Whilst the parties did not agree as to re-appointing D Group, to their credit all parties were readily able to agree as to how the valuations by D Group should be funded at first instance. That aspect did not require the court’s adjudication.
There was no basis for the husband to unilaterally appoint Mr B to value the one property he wants to retain, and to expect to be able to rely on that valuer. Similarly, there was no reasonable basis advanced as to why the proper processes and procedures had not been complied with in relation to the husband adducing evidence by Mr C and Ms G. It remains unclear why the husband did not follow the processes and procedures set out in Chapter 7 of the Rules. This was a long standing dispute – with the reports of Mr B and Mr C having originally been filed in 2021, and objected to at that time by the wife. Regrettably that dispute was not resolved last year. I understand there was considerable correspondence exchanged between the parties and their solicitors on this issue, in which requests were made for the husband to withdraw that material, which he declined to do. It is plain that the wife has been put to additional expense as a result of having to deal with this evidence.
The interim hearing was not necessitated by the failure to comply with orders.
The disputes regarding discovery, the appointment of D Group and the exclusion of the other experts were all determined in favour of the wife. The husband did not pursue his application for injunctive relief.
I note the hearing was not limited only to the issues in relation to which I found in favour of the wife. The husband’s joinder application was also before me.
I was not provided with any explicit letter of offer.
It is not an answer to a costs application to assert that the husband is an immigrant, and trying his best, but perhaps not fully understanding the court processes.
In relation to indemnity costs, it will only be in exceptional circumstances – where there is some special or unusual feature – that the court will depart from the general rule that costs are calculated on a party-party basis (Kohan and Kohan [1992] FamCA 116; D & D (Costs) (No. 2) [2010] FamCAFC 64; Limousin & Limousin (Costs) [2007] FamCA 1178; Colgate-Palmolive Company & Cussons Pty Limited [1993] FCA 801 (“Colgate”)). That means I must be satisfied that there is something special or unusual in the matter that might justify the awarding of indemnity costs before determining to exercise my discretion to do so.
In Colgate, Shepherd J provided some examples of circumstances that might justify the awarding of indemnity costs, and usefully, Holden CJ in Munday & Bowman (1997) FLC 92-784, at 84,660, drew from his Honour’s decision those examples:
(a)Where it appears that 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…
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud…
(c)Evidence of particular misconduct causing loss of time to the court and to other parties…
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions…
(e) An imprudent refusal of an offer to compromise.
In the exercise of what has been described as a wide discretion, and taking all of the factors into account, it does seem to me there are circumstances that justify departing from the usual rule that each meet their own costs, and instead require that the husband contribute to the wife’s costs. Much of the argument before me was focussed on the issues of valuations and expert evidence, both being issues the husband ought to have conceded. Both of those matters have caused additional expense to the wife, which should have been avoided. However, I am not satisfied this is a matter that could properly attract an order for indemnity costs.
In terms of the quantum, I am able to fix an amount for costs. Rule 12.17 of the Rules makes that plain. This enables the parties to avoid the expense, delay and inconvenience involved in taxation. In making an order under r 12.17(1), as I am, I may consider:
(a) the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable proceedings;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre-action procedures;
(f) whether expenses (paid or payable) are fair, reasonable and proportionate.
There is some degree of complexity in this matter. There is certainly a substantial amount of material that has been filed, and I accept that reading and assimilating the volume of material would take counsel considerable time. As already noted the hearing before me was not confined only to the matters in which the wife was successful and the husband was not.
Taking all these matters into account, and in the exercise of my very broad discretion, I have determined it is appropriate to make a costs order against the husband in the sum of $5,500. That sum is to be paid within 30 days.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carter. Associate:
Dated: 7 December 2022
SCHEDULE OF PARTIES
MLC 2810 of 2018 Respondents
Fourth Respondent:
MS M MAVROTIS
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