Monforte & Saunders (No 2)
[2022] FedCFamC1F 821
Federal Circuit and Family Court of Australia
(DIVISION 1)
Monforte & Saunders (No 2) [2022] FedCFamC1F 821
File number(s): MLC 6341 of 2020 Judgment of: MCGUIRE J Date of judgment: 27 October 2022 Catchwords: FAMILY LAW – COSTS – following discrete application as to jurisdiction in substantive property proceedings pursuant to s90SM of the Family Law Act – determination of jurisdiction finely balanced with evidence weighing for and against declaration of de facto relationship – where ‘wholly unsuccessful’ not of itself determinative of justifying circumstances but just one factor to take into account – no order for costs Legislation: Family Law Act (1975) (Cth) Cases cited: Penfold & Penfold [1980] 144 CLR 311 Division: Division 1 First Instance Number of paragraphs: 20 Date of hearing: 6 October 2022 Place: Hobart Counsel for the Applicant: Mr Moisidis Solicitor for the Applicant: Oakleys Legal Counsel for the Respondent: Mr Nicholson Solicitor for the Respondent: Davison Family Law ORDERS
MLC 6341 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MONFORTE
Applicant
AND: MR SAUNDERS
Respondent
order made by:
MCGUIRE J
DATE OF ORDER:
27 october 2022
THE COURT ORDERS THAT:
1.The application for costs 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 a pseudonym Monforte & Saunders (No 2) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUSTICE McGUIRE
application
The respondent to the substantive proceedings, Mr Saunders, now applies for an order for costs against the applicant in those proceedings, Ms Monforte. He does so on a party/party basis with costs to be assessed or taxed.
The application is opposed.
The substantive proceedings involved an application by Ms Monforte for a property settlement following a de facto relationship. The issue of jurisdiction was challenged by Mr Saunders. The hearing took place on a preliminary basis and I ultimately found and declared that there was no de facto relationship.
There had been proceedings in the State Court in respect of jointly held property. Those proceedings were stayed pending my determination. I understand that they are now to proceed.
relevant law
s117(1) of the Family Law Act (1975) (Cth) (‘the Act') provides a general rule that each party to proceedings shall bear his or her own costs subject to s117(2), subsections 45A (6) and 70NFB(1), s117AA and s 17AC.
Subsection (2) provides:
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 interlocutory order or otherwise, as the court considers just.
Consequently, the Court is armed with a broad discretion to make an award of award for costs but constrained by a finding of ‘justifying circumstances'. It is well-established that the term ‘justifying' it is not to be read as synonymous with 'extraordinary'.
Subsection 2(A) provides: –
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.
In Penfold & Penfold[1] the High Court held that s117(1) is not paramount to subsection (2) and where their Honours said:
Sub–section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this, there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional special onus on an applicant for an order for costs.
Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgement under appeal that an order can only be made under s117 (2)(n) ‘a clear case'
Whilst consideration of the factors under subsection bracket (2A) are each mandatory, the weight to be accorded to any of those considerations is wholly discretionary and hence the court has a wide ambit of discretion when considering an application for costs.
consideration
S117(2A) factors:-
[1] [1980] 144 CLR 311
(a)Financial circumstances of each party
I am not required to conduct a detailed financial audit or examination of the parties finances. Suffice to say that that there are significant assets, including I understand to be a partial release of monies, such that the respondent to the costs application is not impecunious and would not be unable to meet a costs order and any disparity in the financial circumstances between the parties is not a weighty consideration for me.
(b) Receipt of legal aid
Neither party is in receipt of a grant of legal aid.
(c) Conduct of the parties
There is no evidence before me that either of the parties suffered prejudice by way of the conduct of the other party in the sense of dilatory response to procedural orders. No issues of discovery of any significance were raised before me. I place no weight on Ms Monforte commencing proceedings in this court rather than continuing an application in the State Court where this court clearly has jurisdiction to deal with the property of parties to a defacto relationship once jurisdiction is established. The affidavits of each of the parties were succinct and contained relevant material. There is no evidence of either party causing delay to the hearing of the application.
(d) Failure to comply with previous orders
This consideration is not relevant on the factual platform before me.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
This consideration is at the crux of Mr Saunders' application for costs. He is indeed correct that Ms Monforte brought the application and was 'wholly unsuccessful'. In my view, however, the nature of the application is relevant. This was a discrete application as to jurisdiction argued prior to any agitation of the broader property settlement issues pursuant to s90SM of the Act.
As such, it is inevitable that one or other of the parties would be successful and the other unsuccessful. There are no grey areas. It follows, in my view, that some consideration should be given to the bona fides of the application and whether or not it was without merit. I have no doubt that the application was justifiably brought to this court being one charged with the determination of parties interests in property and altering those interests conditional upon there being a de facto relationship. The application was not without merit. My reasons make it clear that my determination was 'finally balanced' and that there were factors which weighed both for and against a declaration of a de facto relationship. As such, and whilst whether or not one or other of the parties has been wholly successful or unsuccessful is a consideration, it is not the case in this jurisdiction that costs follow the event which is made abundantly clear by s117 (1). It is, of course, the very function of Courts to make a determination of a bona fide justiciable controversy and to do so without one or other of the parties proceeding in the face of unnecessary consequence of costs following the event.
(f) Offer to settle
The applicant for costs tendered a letter waiving privilege purporting to be an offer to settle. I do not read it as such where the proposal relates to the substantive proceedings rather than the issue before me. I say this noting the pending proceedings in the State Court which offers a jurisdiction which differs from that under the Family Law Act. Consequently, I place little weight on this letter of offer where my determination was discreetly as to the jurisdiction of this Court.
(g) any other relevant matters
No other relevant matters were put before me in support of or defence of the costs application.
conclusion
Whilst there is superficially some merit to the force of the Mr Saunders' argument that he has been wholly successful in defending Ms Monforte's application and was successful at the stage of determining jurisdiction, it remains that Ms Monforte’s application was not unmeritorious and where there were many evidentiary factors which are, in fact, weighed towards a finding of a de facto relationship. Ultimately I did not determine the Court to have jurisdiction but only on a finely balanced consideration and determination and where this factor is not in itself determinative of the issue of costs but rather simply one factor in the recipe of consideration.
In those circumstances, and with emphasis upon this factor but taking into account all of the other factors under subsection 2(A), I am not persuaded that there are justifying circumstances such that the Court should move from the general Rule under s117(1) that each party should be was responsible for his or her own her own costs.
The application for costs is dismissed.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McGuire. Associate:
Dated: 27 October 2022
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