Morse & Duarte (No 8)

Case [2024] FedCFamC1F 639

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Morse & Duarte (No 8) [2024] FedCFamC1F 639

File number(s): SYC 737 of 2014
Judgment of: HARPER J
Date of judgment: 20 September 2024
Catchwords:

FAMILY LAW – COSTS – Where the husband seeks costs in a fixed amount for parenting proceedings between November 2013 and December 2017, and on an indemnity basis for court events subsequent to November 2022 – Where the husband also seeks enforcement of prior costs orders made against the wife in fixed amounts which she has failed to pay – Where the wife was wholly unsuccessful in parenting proceedings – Where the wife’s refusal of a settlement offer was unreasonable – Where the wife’s numerous unmeritorious applications and belligerent conduct throughout proceedings was obstructive and time wasting – Where the actions of the wife caused the husband to incur unnecessary legal costs – Wife ordered to pay costs of the husband for the period November 2013 to December 2017 in the fixed sum of $250,000 – Wife ordered to pay costs of the husband for the period after November 2022 on an indemnity basis in the fixed sum of $133,979 – Existing orders for costs against the wife must be complied with – Power of the Court to prevent dissipation of money in aid of enforcement pursuant to r 11.07 in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) – All costs orders to be satisfied from the wife’s share of proceeds from sale of matrimonial property.

FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband seeks vexatious proceedings order against the wife pursuant to s 102QB of the Family Law Act 1975 (Cth) (“the Act”) – In the alternative the husband seeks harmful proceedings order pursuant to s 102QAC of the Act – Where wife has history of instituting applications without reasonable grounds – Where wife has obdurate inability to accept principle of finality – Where wife’s conduct inimical to public interest – Where wife has frequently instituted vexatious proceedings in Australian courts – Order made under s 102QB of the Act – Where if it had been necessary orders would also have been made under s 102QAC of the Act.

Legislation:

Family Law Act 1975 (Cth) Pt VIII, ss 4(1), 64B, 102Q(1), 102QAC, 102QAG, 102QB, 102QG, 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 11.07

Explanatory Memorandum, Family Law Amendment Bill 2023 (Cth)
Cases cited:

Atkins & Hunt (Costs) [2017] FamCAFC 131

D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64

Duarte & Morse [2016] FamCA 381

Duarte & Morse (No 4) (2024) FLC 94-192; [2024] FedCFamC1A 95

Duarte and Anor & Morse (2019) FLC 93-902; [2019] FamCAFC 93

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish (2005) 33 Fam LR 123; [2005] FamCA 158

Harris & Dewell and Anor (No. 2) (2018) FLC 93-863; [2018] FamCAFC 180

In the Marriage of Schwarz (1985)…

Continue reading Morse & Duarte (No 8)

Sign in free to access the full text

Details
AGLC
Morse & Duarte (No 8) [2024] FedCFamC1F 639
Case
[2024] FedCFamC1F 639
Decision Date

CaseChat Overview and Summary

The matter before the court involved an application by the husband, Mr. Morse, for costs arising from parenting proceedings and subsequent court events, as well as an application for an injunction to restrain the wife, Ms. Duarte, from instituting further proceedings against him. The wife was also required to comply with prior costs orders which she had failed to satisfy. The court had to determine whether the wife’s conduct throughout the proceedings justified an order for costs and whether she should be restrained from instituting further proceedings against the husband.

The legal issues included whether the wife’s conduct justified the imposition of costs on an indemnity basis, whether the wife should be restrained from instituting further proceedings against the husband, and how to enforce the existing costs orders. The court considered the wife’s history of instituting applications without reasonable grounds, her obdurate refusal to accept the principle of finality, and her conduct which was inimical to the public interest. The court also had to decide on the appropriate source of funds for satisfying the costs orders.

The court found that the wife’s conduct throughout the proceedings was obstructive, time-wasting, and specious, justifying the imposition of costs on a fixed basis for the period November 2013 to December 2017, and on an indemnity basis for subsequent events. The court also found that the wife’s conduct warranted the imposition of a vexatious proceedings order against her under s 102QB of the Family Law Act 1975 (Cth). The court considered that if it had been necessary, orders would also have been made under s 102QAC of the Act. The court ordered that the wife pay the husband’s costs for the specified periods in fixed amounts and restrained the wife from instituting further proceedings against the husband without leave of the court. The court further ordered that the wife’s liabilities be met from the proceeds of the sale of their matrimonial property.

The court’s orders included a fixed sum for costs from November 2013 to December 2017 of $250,000 and indemnity costs from November 2022 of $133,979. The court also directed that existing costs orders be complied with and restrained the wife from instituting further proceedings against the husband without leave of the court. The source of funds for these orders was to be the wife’s share of the proceeds from the sale of their matrimonial property.

Orders

Orders of the court

SYC 737 of 2014

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR MORSE

Applicant

AND:

MS DUARTE

First Respondent

MR TOLMAN (DECEASED)

Second Respondent

ORDER MADE BY:

HARPER J

DATE OF ORDER:

20 SEPTEMBER 2024

THE COURT ORDERS THAT:

Costs of the parenting proceedings - November 2013 to 1 December 2017

1. That the First Respondent Wife (“wife”) pay the Applicant Husband’s (“husband”) costs of and associated with the parenting proceedings in the fixed sum of $250,000, for the period from November 2013 to December 2017.

Costs incurred with Lander & Rogers – as and from November 2022

2. That the wife pay the husband’s costs of and associated with these proceedings as and from November 2022 on an indemnity basis in the fixed sum of $133,979.

Costs order dated 14 February 2018

3. That the wife pay the husband the sum of $5,750, pursuant to the orders made 14 February 2018, plus interest calculated pursuant to r 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“Rules”).

Costs order dated 1 September 2020

4. That the wife pay the husband the sum of $7,853.34, pursuant to the orders made 1 September 2020, plus interest calculated pursuant to r 10.17 of the Rules.

Costs order dated 7 September 2023

5. That the wife pay the husband the sum of $15,000, pursuant to the orders made 7 September 2023, plus interest calculated pursuant to r 10.17 of the Rules.

Costs order dated 2 February 2024

6. That the wife pay the husband the sum of $1,650, pursuant to the orders made 2 February 2024, plus interest calculated pursuant to r 10.17 of the Rules.

Costs order dated 18 April 2024

7. That the wife pay the husband the sum of $1,500, pursuant to the orders made 18 April 2024, plus interest calculated pursuant to r 10.17 of the Rules.

Costs order dated 7 June 2024

8. That the wife pay the husband the sum of $15,000, pursuant to the orders made 7 June 2024, plus interest calculated pursuant to r 10.17 of the Rules.

9. That pursuant to s 102QB of the Family Law Act 1975 (Cth) (“the Act”), the wife be restrained from instituting proceedings under the Act against the husband without leave of the Court pursuant to s 102QG.

Costs

10. That the wife pay the husband's costs of and incidental to his Applications in a Proceeding filed on 12 July 2024 and 25 July 2024 fixed in the sum of $5,000.

Source of funds

11. That the wife's liabilities, individually and in total, pursuant to these orders be met, to the extent possible, from the balance of the proceeds of sale of B Street, Suburb C, NSW (“Suburb C”) to be retained by the wife pursuant to Order 10(e) of the orders made 18 January 2024. For the purposes of this order, the total sum of $435,732.34 ordered in favour of the husband arising from these Applications in a Proceeding, is to be paid, to the extent possible, directly to the husband (from the wife's entitlement pursuant to Order 10(e)) from the trust account of the conveyancing solicitor engaged by the husband to act as the conveyancer for the sale of the Suburb C property.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

The second respondent was the wife’s former partner, Mr Tolman, who passed away this year. Subject to one proposed order for costs, none of the applications determined by this judgment affect Mr Tolman or his estate. I do not propose to make any orders against the estate. However, it will be necessary to mention Mr Tolman’s involvement during the course of these reasons.BACKGROUND For present purposes, it is necessary to refer to some aspects of the lengthy and convoluted procedural history. Final judgment was delivered by Le Poer Trench J (as he then was) on 1 December 2017 (Morse & Duarte (2017) 58 Fam LR 131 (“Morse & Duarte”)). As a result of this judgment the children of the relationship were placed in the sole care of the husband. Orders were also made for division of matrimonial property. Specifically, Le Poer Trench J concluded B Street, Suburb C NSW (“Suburb C”), which was purchased by the wife and Mr Tolman, was held by them on constructive trust for the husband and the wife in equal shares as tenants in common. This conclusion was overturned on appeal and the proceedings remitted for further hearing on property issues only (Duarte and Anor & Morse (2019) FLC 93-902 (“Duarte & Morse”)). On 18 January 2024, I delivered final judgment in the remitted property proceedings. A more detailed background is set out in that judgment: Morse & Duarte (No 5) [2024] FedCFamC1F 7 (“remitter judgment”). Some other relevant background is set out in an earlier judgment, Morse & Duarte (No 2) [2022] FedCFamC1F 152 (“Morse & Duarte (No 2)”) at [4]–[31] wherein I dealt with a summary dismissal application by the wife which was unsuccessful. I refer to but will not repeat what I have set out in earlier judgments unless necessary for this judgment. This judgment deals with two Applications in a Proceeding filed by the husband. The first is a Third Amended Application in a Proceeding filed on 25 July 2024, seeking costs arising from the original parenting proceedings between November 2013 and December 2017, and court events subsequent to November 2022 (“costs application”). The second is an Application in a Proceeding filed on 12 July 2024 which seeks that the wife be restrained from instituting proceedings against the husband pursuant to s 102QG of the Act as a vexatious litigant, or in the alternative, as harmful proceedings pursuant to s 102QAG and costs arising from that application (“injunction application”). In relation to the costs application filed by the husband the wife relied on the following material:(a)Response to Application in a Proceeding filed 17 April 2024;(b)Affidavit of Ms Duarte filed 24 July 2024; and(c)Amended written submissions sent to my chambers on 26 August 2024. The wife did not file a Response to the costs application filed on 25 July 2024, but relied upon a response filed in answer to an earlier version of the husband’s costs application. She did file written submissions resisting any order for costs against her. Although the wife filed her amended written submissions out of time, I have had regard to them.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The husband pointed out that the wife’s claim to be medically unfit to participate in the final hearing listed for 15 January 2024 was inconsistent with her nonetheless continuing to file multiple applications in the following weeks. The husband argued her request for an adjournment, and later applications for stay pending appeal, constituted conduct which intended to deliberately prolong proceedings and waste the Court’s resources at cost to the husband. I accept this is correct.CONCLUSION ON JUSTIFYING CIRCUMSTANCES Generally throughout the proceedings, the persistent applications of the wife which mostly failed and many of which were specious and time wasting, her obstructive and belligerent conduct generally and her unreasonable refusal of the offer made on 15 March 2023 are all factors which justify a costs order against her. For the period November 2013 to December 2017 in relation to parenting issues, the wife was wholly unsuccessful. In relation to that period, the evidence of the husband satisfies me that the figure of $288,366 represents approximately two thirds of his costs in that period. He proposed an order that he be paid this amount as a fixed sum. I accept that in the long difficult history of these proceedings it is appropriate to fix a sum for costs rather than compel the parties to undertake further litigation and disputation through an assessment of costs. However, I consider a discount to $250,000 is the appropriate amount bearing in mind the considerable difficulty, if not impossibility, of reaching a sensible degree of precision for the husband’s costs as between property and parenting issues, even for the period between November 2013 and December 2017. The wife’s written submissions did not advance any alternative propositions which undermined the force of the factors justifying a costs order against her. At the interim hearing she made oral submissions which were largely irrelevant to the question of costs. Her general argument was that as the husband was, in her words, the “winner” in the proceedings and she had not “wronged” him there was no normative basis by which to depart from the presumption that each party shall bear their own costs. I reject this argument. The wife will be ordered to pay the husband’s costs of the proceedings for the period November 2013 to December 2017 fixed in the sum of $250,000.INDEMNITY COSTS The husband also sought an order for his costs after November 2022 be paid on an indemnity basis in the fixed amount of $133,979. The award of indemnity costs in this Court has regularly been called a significant departure from the normal standard, rare, and requires something exceptional: Harris & Dewell and Anor (No. 2) (2018) FLC 93-863, where the Full Court said: 23. In Kohan and Kohan, the Full Court held, in applying the principles expounded by Sheppard J in Colgate-Palmolive, that an order for indemnity costs represents a “very great departure from the normal standard”. In the later decision of the Full Court in Prantage & Prantage, Thackray and Ryan JJ referred to Kohan and other authorities in the Full Courts of both this Court and the Federal Court of Australia as well as the state appeal courts. Their Honours concluded (at [86]) that the “usual rule” continued to apply in respect of awards of costs in this Court notwithstanding the Full Court accepting that the difference between party/party costs and a party’s actual costs has continued to grow significantly.24. That proposition also derives support from what Callinan J said in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation. His Honour said that an order for indemnity costs should “be exceedingly rare, as they have a tendency to encourage extravagance and put the quantum of legal fees beyond the effective scrutiny of the courts and their taxing officers”. 25. The rarity of an order for indemnity costs can also be seen illustrated by the comments of Lindgren J in NMFM Property Pty Ltd v Citibank Ltd (No 2), referred to by their Honours in Prantage (at [102] – [103]). Lindgren J said that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation.”(Footnotes omitted)

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.