Nagel & Clay

Case [2021] FedCFamC1F 134

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)

Nagel & Clay [2021] FedCFamC1F 134

File number(s): SYC 7861 of 2015
Judgment of: HARPER J
Date of judgment: 15 October 2021
Catchwords: FAMILY LAW – COSTS – Between parties – Where the father seeks an application for costs following dispute regarding interpretation of final parenting orders – Where costs are sought on an indemnity or party/party basis – Where the mother is self-represented only for costs dispute – Where the mother argues she is in financial hardship – Where the mother’s interpretation of the final parenting orders was wrong but not unreasonable – Conduct of the parties considered – Where the mother was wholly unsuccessful – Indemnity costs not justified in the circumstances – Order made for fixed costs.
Legislation: Family Law Act 1975 (Cth) s 117
Cases cited:

Atkins & Hunt [2017] FamCAFC 131

B v J (2006) FLC 93-259; (2006) 35 Fam LR 222; [2006] FamCA 256

Bell Lawyers Pty Ltd v Pentelow (2019) 372 ALR 555; [2019] HCA 29

Brown & Brown (1998) 145 FLR 431; (1998) 23 Fam LR 349; (1998) FLC 92-822; [1998] FamCA 115

Cachia v Hanes (1994) 179 CLR 403; (1994) 120 ALR 385; [1994] HCA 14

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 191 FLR 294; (2005) 33 Fam LR 123; [2005] FamCA 158

Harris & Dewell (No 2) [2018] FamCAFC 180

Latoudis v Casey (1990) 170 CLR 534; (1990) 97 ALR 45; [1990] HCA 59

Medlon & Medlon (No 6) (Indemnity Costs) (2015) 54 Fam LR 1; (2015) FLC 93-664; [2015] FamCAFC 157

Nagel & Clay [2021] FamCA 358

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Parke & Estate of the Late A Parke (2016) 314 FLR 322; (2016) FLC 93-748; [2016] FamCAFC 248

Penfold v Penfold (1980) 144 CLR 311; (1980) 5 Fam LR 579; (1980) FLC 90-800; [1980] HCA 4

Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184; (1998) FLC 92-812; [1998] HCA 44

Stoian & Fiening (Costs) [2014] FamCA 944
Division: Division 1 First Instance
Number of paragraphs: 41
Date of last submission/s: 21 September 2021
Date of hearing: On the papers
Place: Sydney
Counsel for the Applicant: Ms Vohra SC
Solicitor for the Applicant: Pearson Emerson Family Law
Solicitor for the Respondent: Ms Clay in person

ORDERS

SYC 7861 of 2015

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

MR NAGEL

Applicant
AND:

MS CLAY

Respondent

ORDER MADE BY:

HARPER J

DATE OF ORDER:

15 OCTOBER 2021

THE COURT ORDERS THAT:

1.Within 28 days of the date of this order, the Respondent Mother pay the Applicant Father’s costs of the Application in a Case filed on 4 May 2021, fixed in the amount of $15,000.

2.The Application in a Case filed on 4 May 2021 be otherwise dismissed.

Note:   The form of the order is subject to the entry…

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AGLC
Nagel & Clay [2021] FedCFamC1F 134
Case
[2021] FedCFamC1F 134
Decision Date

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, the case of Nagel v Clay involved a dispute regarding the interpretation of final parenting orders. The father sought an application for costs following the dispute, claiming costs on an indemnity or party/party basis. The mother was self-represented only for the costs dispute and argued that she was in financial hardship. The court had to decide whether the father had established a factor or factors that justified the extremely rare order for indemnity costs, and whether the mother’s interpretation of the final parenting orders, though incorrect, was not unreasonable. The conduct of the parties was also considered.

The court found that the father had not established a factor or factors which would justify the extremely rare order for indemnity costs. The mother’s interpretation of the final parenting orders was wrong but not unreasonable. The court concluded that a costs order in favour of the father was appropriate. The court noted that the father also claimed costs of this application for costs, and a mention on 13 July 2021, which he quantified at $4,400. The court considered that the costs order should include a component for dealing with the volume of irrelevant evidence relied upon by the wife. The court found that a fixed amount for costs was appropriate and ordered the mother to pay the father’s costs in the amount of $15,000.

The court found that the father had not established any circumstances which justify departing from the position that each party pay their own costs, and the making of a costs order in his favour. The court also found that the wife should not pay the father’s costs on an indemnity basis. The court considered the financial circumstances of the parties and found that the mother was burdened by ongoing expenses in her professional life, and, like so many in Sydney communities, was likely to have been adversely affected in her ability to generate income because of NSW Government lockdowns. However, the court was unable to find that her financial position was as dire as she asserted. The court also found that the mother’s claims about the father’s financial position were unsubstantiated.

The court ordered that the mother pay the father’s costs of the Application in a Case filed on 4 May 2021, fixed in the amount of $15,000. The court also ordered that the Application in a Case filed on 4 May 2021 be otherwise dismissed.

Orders

Orders of the court

SYC 7861 of 2015

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR NAGEL

Applicant

AND:

MS CLAY

Respondent

ORDER MADE BY:

HARPER J

DATE OF ORDER:

15 OCTOBER 2021

THE COURT ORDERS THAT:

1. Within 28 days of the date of this order, the Respondent Mother pay the Applicant Father’s costs of the Application in a Case filed on 4 May 2021, fixed in the amount of $15,000.

2. The Application in a Case filed on 4 May 2021 be otherwise 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.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

I do not accept the father has established a factor or factors which would justify the “extremely rare” order for indemnity costs.CONCLUSION I find that there should be a costs order in favour of the father. I note here that he also claimed costs of this application for costs, and a mention on 13 July 2021. He quantified these costs at $4,400. In my view, the costs order should include a component for dealing with the volume of irrelevant evidence relied upon by the wife. The Court has discretion to fix an amount for costs. The father seeks a fixed amount, whilst the mother made no submissions on this question. In my view, this should be done to bring any further argument about costs to an end by this judgment. As already noted, the father estimated and claimed an amount of $25,683.96 for costs, assessed on a party/party basis. I am unable to form a view as to whether the father would succeed for this amount fully if an assessment was undertaken. I consider a discounted and fixed amount for costs is appropriate. The Court has a broad and absolute discretion to award costs. In my view, it would not be an appropriate use of Court resources or in the interests of the parties to make an order for costs which would require more Court resources and costs to be incurred in an assessment. Taking account of the factors and principles discussed in these reasons, but, particularly, the father’s likely stronger financial position on the one hand, and the mother’s complete lack of success and the costs of the application for costs on the other, I will order the mother to pay the father’s costs in the amount of $15,000.

Ratio Decidendi

Legal Principle Established

The first question is whether the father has established any circumstances which justify departing from the position that each party pay their own costs, and the making of a costs order in his favour. The second question is whether, if there are circumstances justifying a costs order, the wife should pay the father’s costs on an indemnity basis.SECTION 117(2A) CONSIDERATIONSSection 117(2A)(a) – financial circumstances of the parties The father placed no reliance on the financial circumstances of the parties, except to submit that both parties were well resourced, having briefed senior counsel to put forward their contentions about enforcement of the final parenting orders. The mother claimed to be struggling financially and could not afford representation to resist the father’s application for costs. The mother gave some detailed evidence about her financial position, saying it is dire. She stated her weekly income was $2,409, while her weekly expenses totalled $7,734. This includes $12,074.56 for a loan for equipment and fit out for work. She has outstanding tax liabilities of $115,979, unpaid legal fees of $86,212.91, a liability for overpaid child support, an unpaid loan owing to her father of $681,248, and little by way of cash at bank. She also claimed her income is presently unstable. She was asked to vacate one of her professional practices in March 2021, and has had to reduce her hours at another practice because she has been unable to find child care. She has established a new practice in the Greater Western Sydney region, which has taken her time away from other practices. The Covid-19 pandemic has also caused cancellation of her work in NSW. The father disputed much of the mother’s evidence about her financial position. He pointed out that under the agreed property settlement, the mother received a valuable property in Suburb N, Sydney. The mother also makes no clear distinction between personal and business expenses, the latter of which would reduce her tax liabilities. I accept the mother is burdened by ongoing expenses in her professional life, and, like so many in Sydney communities, is likely to have been adversely affected in her ability to generate income because of NSW Government lockdowns. However, I am unable, on the basis of her untested, and, at times confusing evidence, to find that her financial position is as dire as she asserts. The mother gave some detailed evidence about her understanding of the father’s financial position as being “significantly greater” than hers. She relied upon a financial statement filed by him in October 2020 and some evidence by a single expert valuing the parties’ business interests, entities, and companies, which had been prepared for a final hearing which never took place because the parties settled their property dispute. I am unable to form a view about this evidence. It may well be out of date. I have not taken it into account. I do not accept the mother’s assertions about the detail of the father’s financial position.