Moretto & Cosola (No 3)

Case [2023] FedCFamC1F 360

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Moretto & Cosola (No 3) [2023] FedCFamC1F 360

File number(s): PAC 3192 of 2019
Judgment of: SCHONELL J
Date of judgment: 11 May 2023
Catchwords: FAMILY LAW – COSTS – Where the applicant sought a costs order against the respondent following a final hearing in which the respondent was wholly unsuccessful – Where the respondent opposed the costs order – Where the circumstances are not exceptional to warrant an indemnity costs order – Consideration of factors in s 117(2A) of the Family Law Act 1975 (Cth) – Where the applicant made offers that were rejected – Costs ordered on a party/party basis as agreed or assessed.
Legislation:

Family Law Act 1975 (Cth) ss 90SM, 117

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)

Cases cited:

Bant & Clayton (Costs) (2016) 56 Fam LR 31; [2016] FamCAFC 35

Colgate Palmolive Company and Another v Cussons Pty Ltd (1993) 118 ALR 248; [1993] FCA 801

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

Moretto & Cosola (No 2) [2022] FedCFamC1F 924

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

Penfold and Penfold (1980) 144 CLR 311; [1980] HCA 4

Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029; [2000] FamCA 681

Division: Division 1 First Instance
Number of paragraphs: 51
Date of last submissions: 28 April 2023
Date of hearing: Determined on the papers 
Place: Sydney
Solicitor for the Applicant: Mr Wahhab, York Law
Solicitor for the Respondent: Ms Punjabi, Michael Vassili Barristers & Solicitors

ORDERS

PAC 3192 of 2019

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

MR MORETTO

Applicant
AND:

MS COSOLA

Respondent

order made by:

SCHONELL J

DATE OF ORDER:

11 MAY 2023

THE COURT ORDERS THAT:

1.The respondent pay the applicant’s costs as agreed or assessed of the hearing held on 12 and 13 October 2022 including the cost of any preparation for such hearing from 1 October 2022 on a party/party basis.

2.The respondent pay the applicant’s costs as agreed or assessed of the Application in a Proceeding filed 22 December 2022 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 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…

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AGLC
Moretto & Cosola (No 3) [2023] FedCFamC1F 360
Case
[2023] FedCFamC1F 360
Decision Date

CaseChat Overview and Summary

In Moretto & Cosola (No 3), the matter involved a dispute between the parties, Moretto and Cosola, which was brought before the Family Court of Australia. The primary issue at hand was whether an adjustive costs order should be made against the respondent, Cosola, and if so, the extent of such an order. The applicant, Moretto, sought an adjustive costs order, arguing that Cosola had unreasonably prolonged the proceedings and failed to accept reasonable settlement offers.

The court needed to determine whether the respondent’s conduct during the proceedings warranted an adjustive costs order. Specifically, the court had to consider whether Cosola’s actions were consistent with the overarching purpose of the Family Law Act, which requires parties to conduct themselves in a manner that is conducive to the just, expeditious, and economical resolution of the real issues. The court also had to assess the reasonableness of the offers made by Moretto and whether Cosola's refusal to accept these offers was justified.

In reaching its decision, the court found that Moretto had made prudent and reasonable settlement offers aimed at avoiding the costs and risks of prolonged litigation. The court was satisfied that these offers should not have been rejected, especially given that the pool was reasonably certain by the time Cosola had the updated valuation. Cosola’s decision to proceed with the litigation despite being aware of the risks was deemed unreasonable. Consequently, the court determined that an adjustive costs order was warranted. However, the court was not convinced that the circumstances justified an order for the entirety of the proceedings. Instead, the court decided that it was appropriate to order that Cosola pay Moretto's costs from 1 October 2022, the date from which Cosola had the updated valuation and should have been aware of the litigation risks.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The overarching purpose is reinforced by the Rules and the Central Practice Direction – Family Law Case Management (CPD), especially the core principles which include that parties must conduct the proceedings (including negotiations for settlement of the dispute) in a way that is consistent with the overarching purpose. CONCLUSION These were proceedings in which at all times the applicant contended that the Court should not make an adjustive order. The factual matrix was largely not disputed and called for prudent consideration by the respondent of the perils of the litigation given the potential risks attenuated by the outcome. I am satisfied that the applicant made prudent offers of settlement in an attempt to reduce the costs of the litigation and bring it to an end. I am not satisfied that the respondent adopted a similar approach. Her reasonable belief is in my view irrelevant given the findings that were ultimately made. As I said, if that belief is informed by advice then she may have remedies elsewhere. I am satisfied that, where the respondent has been wholly unsuccessful and the applicant made offers of settlement at a time when the pool was reasonably certain, the circumstances are such as to warrant the making of a costs order. I am not satisfied, however, that the circumstances justify the making of an order of the type that the applicant seeks for the entirety of the proceedings. I am satisfied that in all the circumstances it is justified to make an order that the respondent pay the applicant’s costs as and from 1 October 2022. By that date, the respondent had the updated valuation from Mr BB and, properly advised, should have been aware of the risks in the litigation. She nevertheless proceeded. The applicant had made what in the context of the outcome were generous offers which should not have been rejected and the respondent was wholly unsuccessful in the proceedings.

Ratio Decidendi

Legal Principle Established

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