McLaughlin & McLaughlin (No 2)
[2023] FedCFamC2F 1440
•9 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
McLaughlin & McLaughlin (No 2) [2023] FedCFamC2F 1440
File number(s): SYC 3839 of 2022 Judgment of: DEPUTY CHIEF JUDGE MCCLELLAND Date of judgment: 9 November 2023 Catchwords: FAMILY LAW – COSTS – Review of an arbitral award – Application for stay and enforcement – Application for indemnity costs – Where the applicant wife was wholly unsuccessful in the proceedings – Applicant wife ordered to pay respondent husband’s costs 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: Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432
Colgate-Palmolive v Cussons Pty Limited (1993) 46 FCR 225; [1993] FCA 801
Collins and Collins (1985) FLC 91-603; [1985] FamCA 15
D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64
Fitzgerald (as Child Representative for A (Legal Aid Commission of Tasmania) v Fish (2005) 191 FLR 294; [2005] FamCA 158
Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23
Kohan and Kohan (1993) FLC 92-340; (1992) 112 FLR 151
McLaughlin & McLaughlin [2023] FedCFamC2F 1160
McLaughlin & McLaughlin (No 2) [2023] FedCFamC1F 516
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Prantage v Prantage (Costs) [2014] FamCA 850
Stoian v Fiening (Costs) [2014] FamCA 944
Wagner & Oakley [2023] FedCFamC1F 687
Division: Division 2 Family Law Number of paragraphs: 19 Date of last submissions: 26 September 2023 Date of hearing: Determined on the papers Place: Sydney Solicitor for the Applicant: Santone Lawyers Counsel for the Respondent: Mr Heazlewood Solicitor for the Respondent: John & Co Lawyers ORDERS
SYC 3839 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS MCLAUGHLIN
Applicant
AND: MR MCLAUGHLIN
Respondent
ORDER MADE BY:
DEPUTY CHIEF JUDGE MCCLELLAND
DATE OF ORDER:
9 NOVEMBER 2023
THE COURT ORDERS THAT:
1.Within 28 days of the date of these orders, the applicant is to pay the costs of the respondent in and in connection with proceedings SYC 3839 of 2022 in both the Federal Circuit and Family Court of Australia (Division 1) and the Federal Circuit and Family Court of Australia (Division 2) in the fixed sum of $27,381.64.
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 McLaughlin & McLaughlin has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
DEPUTY CHIEF JUDGE MCCLELLAND:
INTRODUCTION
This judgment concerns an application for costs arising from an unsuccessful application made by the applicant wife for review of an arbitral award made on 11 April 2023 (“the Award”). The application for costs is in two parts. Firstly, the respondent husband seeks an order for costs in respect to orders made by Campton J sitting as a judge of the Federal Circuit and Family Court of Australia (Division 1) dismissing the wife’s application for a stay of the orders made consequent to the registration of the Award and upholding an application by the respondent husband for an enforcement order.[1] Secondly, the application for costs arises from orders that I made on 5 September 2023, dismissing the wife’s application for review of the Award.[2]
[1] McLaughlin & McLaughlin (No 2) [2023] FedCFamC1F 516.
[2] McLaughlin & McLaughlin [2023] FedCFamC2F 1160.
The orders made by Campton J on 27 June 2023 outlined that “the costs of each of the husband and the wife of the stay and enforcement applications shall be reserved to the review hearing before McClelland DCJ at 2.15 pm on 19 July 2023”. Further, in the orders made on 5 September 2023, I ordered for the parties to file written submissions in respect to the issue of costs within 14 days of the date of the orders, with a further 7 days provided for the parties to file any written submissions in reply.
The respondent husband filed his written submissions in respect to costs on 18 September 2023. The applicant wife filed her response to the husband’s written submissions in respect to costs on 26 September 2023.
I heard and determined the application for review sitting as a judge of the Federal Circuit and Family Court of Australia (Division 2). The proceedings had been commenced in Division 2, but subsequently transferred to Division 1 to be included in the National Arbitration List. As discussed in my judgment delivered 5 September 2023, the proceedings required a transfer to Division 2 to determine the application for review of the Award.[3] Consequently, I consider that I have jurisdiction to make costs in respect to the totality of the proceedings in both jurisdictions, including those incurred prior to the matter being transferred to Division 2.
[3] McLaughlin & McLaughlin [2023] FedCFamC2F 1160 at [34]–[38].
RELEVANT LEGAL PRINCIPLES
The issue of costs is to be determined in accordance with s 117 of the Family Law Act 1975 (Cth) (“the Act”), which relevantly provides that:
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(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.
The general rule, as set out in s 117(1) of the Act, is that each party to the proceedings shall bear his or her own costs: Collins and Collins (1985) FLC 91-603 at 79,877. This is, however, subject to s 117(2) of the Act which provides that, if the Court is satisfied that there are circumstances justifying it, the Court may make an order as to costs as it considers just. Beyond the “essential preliminary” consideration of those matters set out in s 117(2A) of the Act, there is no “additional or special onus” on the applicant for the Court to make an order for costs: Penfold v Penfold (1980) 144 CLR 311 at 315.
In considering whether it is appropriate and just to make an order for costs in favour of a party, it is unnecessary for the Court to be satisfied in respect to each and every factor set out in s 117(2A) of the Act, nor does any factor set out in that section have priority over another: Prantage v Prantage (Costs) [2014] FamCA 850 at [12] citing Fitzgerald (as Child Representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123.
While the Court is empowered to make an order for costs on an indemnity basis, the circumstances that justify such an order should be of an “exceptional kind”.[4]
[4] D & D (Costs) (No 2) (2010) FLC 93-435 at [26]–[28] quoting Kohan and Kohan (1993) FLC 92-340 at 79,614.
CONSIDERATION
In the circumstances of this matter, the most relevant consideration justifying an order for costs in favour of the respondent is the fact that the applicant was wholly unsuccessful in respect to both the application for stay, and also in her application seeking a review of the Award (s 117(2A)(e) of the Act).
The property settlement orders made pursuant to the Award have resulted in each party receiving a distribution of property. It has not been contended that the wife would suffer hardship in the event of an order for costs being made against her: s 117(2A)(a) of the Act. In any event, as submitted by the husband in his written submissions filed 18 September 2023 citing Wagner & Oakley [2023] FedCFamC1F 687 at [13], “mere impecuniosity” is not a reason for declining to make a costs order.
There are no other relevant considerations that mitigate against an order for costs being made in favour of the respondent who was successful in respect to the review application.
Accordingly, I am satisfied that there are circumstances that justify the Court making an order for costs in favour of the husband, as the successful party in all of the relevant proceedings.
SHOULD COSTS BE ORDERED ON AN INDEMNITY BASIS OR A LUMP SUM BASIS?
The respondent referred to the manner in which the review hearing was conducted including, pressing for relief in respect to challenges based on questions of fact rather than questions of law.[5] Comparatively, the applicant, in her written submissions filed 26 September 2023 at paragraph 3, submitted that costs should not be assessed on an indemnity basis as there has not been a “wilful disregard of known facts or clearly established law”: Colgate Palmolive v Cussons Pty Limited (1993) 46 FCR 225 at 231.
[5] Husband’s written submissions in respect to costs filed 18 September 2023, paragraph 25.
While greater diligence could have been applied to the task of identifying questions of law as distinct from questions of fact, I am nonetheless satisfied that the submissions of counsel for the applicant during the course of the review hearing were relevant and concise. There is no other aspect of the manner in which the hearing was conducted by the applicant that, in my view, justifies the exceptional position of awarding costs on an indemnity basis.
In considering whether costs should be awarded on a lump sum basis Rule 12.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) sets out the methods of calculating costs. These include the Court fixing a specific amount for costs (r 12.17(1)(a)) or an order for the costs to be assessed on a particular basis (r 12.17(1)(b)).
It has been determined that it may be appropriate for the Court to order the payment of costs in a fixed sum because, by doing so, the Court can avoid further delay and inconvenience being occasioned by the requirement to tax a bill: Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432 at [51].
I am satisfied that the costs set out in the schedule of costs filed by the respondent on 19 July 2023 are “logical, fair and reasonable”,[6] in respect to both the stay and enforcement hearing and the review application. I am also satisfied that the amount sought by the respondent in respect to submissions made in support of his application for costs has been assessed in accordance with Item 108 of Schedule 3 – scale of costs in family law and child support matters as set out in the Rules.
[6] Stoian v Fiening (Costs) [2014] FamCA 944 at [91] quoting Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23 at [8]–[9] (Einstein J).
ORDERS
Accordingly, I make an order for the applicant to pay the costs of the respondent in the fixed sum of $27,381.64, being in respect to the following:
(a)$8,951.88 for the stay and enforcement hearing;
(b)$16,356 in respect of the application for review of the Award; and
(c)$2,073.76 in respect of the written submissions in support of the application for costs.
Those costs are payable within 28 days of the date of these orders.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of Deputy Chief Judge McClelland. Associate:
Dated: 9 November 2023
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