Morad & Tulun (No. 2)
[2020] FamCA 896
•23 October 2020
FAMILY COURT OF AUSTRALIA
Morad & Tulun (No. 2) [2020] FamCA 896
File number(s): SYC 8420 of 2019 Judgment of: GILL J Date of judgment: 23 October 2020 Catchwords: FAMILY LAW – Costs – where the Husband seeks a costs order against the Wife – where the Wife was wholly unsuccessful - indemnity costs not appropriate – where an order is made for the Wife to pay the Husband’s costs on a party/party basis. Legislation: Family Law Act 1975 (Cth) ss 79, 117 Cases cited: Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248
Munday v Bowman (1997) FLC 92-784
Penfold v Penfold (1980) 144 CLR 311
Quickley &Pelissier [2016] FamCAFC 124
Renald & Renald (Costs) [2018] FamCAFC 4
Number of paragraphs: 15 Date of hearing: 23 October 2020 Place: Canberra Counsel for the Respondent: Mr G Stapleton Solicitor for the Respondent: Robertson Saxton Osborne Solicitor for the Applicant: Hall Partners ORDERS
SYC 8420 of 2019 BETWEEN: MS MORAD
Applicant
AND: MR TULUN
Respondent
ORDER MADE BY:
GILL J
DATE OF ORDER:
23 OCTOBER 2020
THE COURT ORDERS THAT:
1.I order that pursuant to s 117(2) of the Family Law Act 1975 the Wife pay the Husband's costs of and incidental to these proceedings in an amount as agreed by the parties or determined by the Court on a party party basis.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (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 <pseudonym> has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX-TEMPORE REASONS FOR JUDGMENT
GILL J
In this matter, the Respondent Husband seeks costs of the proceedings in which the Wife unsuccessfully sought to establish that a Binding Financial Agreement entered into by the parties was not binding, as a precursor to seeking leave to apply for relief under s 79 of the Family Law Act 1975 (Cth) (the Act) out of time.
Costs are governed by s 117(1) of the Act which provides a starting point that each party is to bear his or her own costs. A departure from that starting point requires the Court to conclude there are circumstances that justify it doing so, as set out by s 117(2) of the Act.
In Penfold v Penfold (1980) 144 CLR 311, the High Court observed that s 117(1) is not paramount to s 117(2) and that a finding of justifying circumstances does not require a special onus or a clear case or even an explanation of the circumstances that justify the making of a costs order by the judicial officer who makes that determination.
In finding circumstances to justify the making of a costs order and the terms of such costs order, the Court is to have regard to the mandatory considerations set out in s 117(2)(a) as they arise in a particular case. In pursuing his costs here, the Husband relied primarily on the financial circumstances of the parties and the fact that the Wife was wholly unsuccessful in the case, along with the conduct of the Wife in the proceedings.
The Wife also pointed to the financial circumstances of the parties, observed that neither was in receipt of Legal Aid, pointed to the conduct of the parties, although strayed beyond the conduct of the parties in relation to the proceedings to additionally criticise the Husband's conduct more broadly, for example, as to his manner of compliance with the Binding Financial Agreement. The Wife identified that there is no relevant failure to comply with orders, accepted that she has been wholly unsuccessful, positing that the binary nature of the possible outcomes rendered this of lesser weight in this particular case. She noted that there were no relevant offers to settle or other relevant matters.
Regarding the financial circumstances, although the Husband's assets far outstrip those of the Wife's, both are holders of significant assets in a sense that does not speak against an order for costs to be made.
Regarding the issue of a party being wholly unsuccessful, it may be seen that the Wife has been wholly unsuccessful in her pursuit of a conclusion that she was not bound by the Binding Financial Agreement and that she should be permitted to commence the s 79 proceedings.
It was submitted that the result is binary in this case, that is, its only productive of the stark yes or no, rather than an assignment of weight as to whether or not the financial agreement was binding. It is not clear why this would be productive of lesser weight being assigned to this particular issue. Whether or not an application is open to a wide range of outcomes which perhaps may be the case in child-related proceedings which are contingent upon factual determinations and heavily reliant on the exercise of discretion, or as in a case such as here, where there is a narrow range of outcomes that are largely contingent on factual findings, the impact of such an unsuccessful application on the other party in the terms of the necessity to defend the application is the same, a need that is pointed to as being unwarranted by the complete lack of success of an Applicant.
Regarding the conduct of the parties to the proceedings, the Full Court observed in Renald & Renald (Costs) [2018] FamCAFC 4 that this consideration is directed to the conduct as a litigant rather than some broader notion of moral blameworthiness. For example, it can include circumstances such as the provision of misleading or false evidence or pursuing issues that are unsuccessful. Without being exhaustive, in this case, the Wife pursued issues such as a failure to be provided with the requisite legal advice, providing, at best, misleading evidence regarding such, in which issue she was unsuccessful. The Wife pursued issues regarding separation in the face of her own previous sworn testimony in divorce proceedings to the contrary. The Wife pursued proceedings as to unconscionability in large part upon the false factual basis of a lack of legal advice. Although the Wife complains of the Husband's lateness in procuring her former solicitor as a witness, that witness gave evidence consistent with the executed certificates, of matters that were well within the knowledge of the Wife. These matters are justifying circumstances for the making of a costs order.
The Husband seeks an order that departs from the usual party party order. He seeks as his primary relief indemnity costs.
The Wife correctly points to the most extreme nature of such an order as identified in cases such as Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 and which has been adopted by the Full Court of this Court in Quickley &Pelissier [2016] FamCAFC 124. It has also been discussed in Munday v Bowman (1997) FLC 92-784. In that judgment Chief Justice Holden extracted a series of circumstances which have been thought to warrant the exercise of the discretion to award costs on an indemnity basis, being
(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; and
(e) An imprudent refusal of an offer to compromise.
It should be recognised that the Chief Justice was dealing with extreme examples in citing this list.
It is here alleged by the Husband that the Wife was pursuing an ulterior motive, and if properly advised should have known that she had no chance of success. Although in pursuit of some of the bases that she outlined for relief this may be seen as so, for example, in her pursuit of a claim that she had not received the requisite legal advice. It is not so extreme an example, in relation to other aspects of the claim. For example, although unsuccessful on the issue of the date of separation and despite giving contrary evidence on oath at the divorce, this was an issue that was wrapped in some ambiguity, given the particular evidence of both parties as to their conduct of their relationship post the date that I found they separated upon.
It may also be seen that the Wife failed in her claim of impracticability, but it should be recognised that this failure was in circumstances of long-term non-compliance on the part of the Husband with the Binding Financial Agreement. Taking these matters as a whole, they do not reach the extremity to conclude that there is an ulterior motive in pursuit of the claim overall. It is true also that the Wife made allegations regarding lack of legal advice that should never have been made. However, again approaching the matter overall, the case does not reach the extremity required to make an order for indemnity costs as an exercise of discretion in this matter.
Orders will be made in accordance with Order 3 sought by the Husband and will be made accordingly.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill. Associate:
Dated: 27 October 2020
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