Naidu & Seth (No 2)
[2023] FedCFamC2F 106
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Naidu & Seth (No 2) [2023] FedCFamC2F 106
File number(s): PAC 1632 of 2018 Judgment of: JUDGE OBRADOVIC Date of judgment: 8 February 2023 Catchwords: FAMILY LAW – COSTS – Application for indemnity costs – Whether circumstances justifying costs order - Costs order made in accordance with scale Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth)
Cases cited: Cochrane & Cochrane [2012] FMCAfam 984
Colgate Palmolive Co and Anor v Cussons Pty Ltd [1993] FCA 801
Collins & Collins [1985] FamCA 15
Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] FCA 364
Greedy and Greedy [1982] FamCA 41
I & I (No.2) [1995] FamCA 80
Jensen &Jensen [1982] FamCA 57
Kohan & Kohan [1992] FamCA 116
Latoudis v Casey [1990] HCA 59
Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157
Munday v Bowman (1997) FLC 92-784
Naidu & Seth [2021] FedCFamC2F 229
PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL [2005] FamCA 158
Penfold & Penfold [1980] HCA 4
Ragatta Developments Pty. Ltd. v Westpac Banking Corporation (unreported Federal Court, 5 March 1993)
Renald & Renald (Costs) [2018] FamCAFC 4
Stasiuk & Guild [2021] FamCAFC 62
Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd [1991] FCA 225
Division: Division 2 Family Law Number of paragraphs: 25 Date of last submission/s: 22 December 2022 Date of hearing: On the papers Place: Parramatta Solicitors for the Applicant: Juris Australia Lawyers Solicitors for the Respondent: Zra Lawyers ORDERS
PAC 1632 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR NAIDU
Applicant
AND: MS SETH
Respondent
order made by:
JUDGE OBRADOVIC
DATE OF ORDER:
8 FEBRUARY 2023
THE COURT ORDERS THAT:
1.Within 28 days the Applicant pay the Respondent’s costs in the amount of $15,520.73.
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 the pseudonym Naidu & Seth has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE OBRADOVIC
On 25 October 2021, the Court made orders and delivered its judgment in respect of Mr Naidu’s application made pursuant to s.79A Family Law Act 1975 (Cth) (“Act”) to set aside property orders made by consent on 25 September 2018. The Court’s reasons, together with the relevant background can be found at Naidu & Seth [2021] FedCFamC2F 229.
The hearing of the application to set aside the property orders was listed on 30 November 2020, when the matter was part-heard. Ms Seth’s costs for the day were reserved. The hearing concluded on 1 June 2021.
Mr Naidu’s application for relief pursuant to s.79A was dismissed on 25 October 2021.
On 6 June 2022, Ms Seth filed an application for costs, with the Court subsequently granting leave for the application to be filed (out of time) on 2 December 2022.
Consistent with the way that the parties have conducted themselves throughout the lengthy legal proceedings, commenced originally in 2018, and which the Court notes are continuing, the preparation of the evidence in respect of the costs application and the submissions which have been filed, leave a lot to be desired.
Ms Seth is seeking an order that her costs be paid on an indemnity basis, or alternatively on a solicitor-client basis with the amount being equivalent to the amount sought on an indemnity basis! Ms Seth also seeks an order for the payment of costs in respect of her costs application.
Mr Naidu seeks to set aside “costs incidental to proceedings… and ordered by the Court on 25 October 2021.” No such order for costs has been made, only an order reserving Ms Seth’s costs of the first day of hearing. Next and in the alternative, Mr Naidu seeks that the costs of Ms Seth be stayed until she “complies with the parenting orders”, and then seeks that Ms Seth’s costs be restricted to the original demand of $18,500 and that they be further assessed by the Court.
Relevant Legal Principles Relating to Costs in Family Law Proceedings
The principles in respect of costs orders in family law proceedings are well known. The starting position with respect to costs, as set out in s.117 of the Act is that, subject to sub-section 117(2), each party to proceedings under the Act shall bear his or her own costs.
The discretion to award costs is a broad discretion.[1] No one factor under s.117(2A) prevails over any other factor. It is a matter of weight that is accorded to each of the relevant factors in the trial judge’s discretion.[2]
[1] For example, Collins & Collins [1985] FamCA 15
[2] Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157 at [24] (“Medlon”)
The High Court held in Penfold & Penfold[3] that it is necessary for the Court to make a finding of justifying circumstances as an essential preliminary to the making of an order for costs. The Court is not required to specify the circumstances which justify the making of such an order.
[3] [1980] HCA 4 (“Penfold”)
As long as there is an essential preliminary finding that there are justifying circumstances to make a costs order, there is no additional or special onus which the applicant needs to establish for an order for costs. It is not the law that a costs order can only be made in what has been described as a “clear case”.[4]
[4] Penfold; Jensen &Jensen [1982] FamCA 57
Any one of the factors in s.117(2A) may be the sole foundation for an order for costs.[5] Nevertheless, the relevant matters in s.117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”.[6]
[5] PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL [2005] FamCA 158 at [41]; Renald & Renald (Costs) [2018] FamCAFC 4 at [11] (“Renald”)
[6] I & I (No.2) [1995] FamCA 80; Renald at [11]
In Latoudis v Casey[7] the High Court stated as follows:
… in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of an unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.
[7] [1990] HCA 59 (“Latoudis”) at [13]; also, referred to in the context of family law proceedings by Judge Kemp in Cochrane & Cochrane [2012] FMCAfam 984 at [17]
In determining what order, if any, should be made under s.117(2) the Court must have regard to the prescriptive but non-exhaustive list of considerations in sub-section (2A).
The Court has the power to order costs on an indemnity basis.[8] An order for indemnity costs in proceedings to which s.117 applies is exceptional.[9]
[8] Kohan & Kohan [1992] FamCA 116 (“Kohan”); Latoudis
[9] Kohan; Stasiuk & Guild [2021] FamCAFC 62
The principles in respect of indemnity costs orders are also well known,[10] relevantly: [11]
(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;[12]
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud;[13]
(c)Evidence of particular misconduct causing loss of time to the court and to other parties;[14]
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions;[15] and/or
(e)An imprudent refusal of an offer to compromise.
[10] See generally Sheppard J in Colgate Palmolive Co and Anor v Cussons Pty Ltd [1993] FCA 801
[11] Medlon at [28] referring to Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660
[12] See Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] FCA 364 (“Fountain Selected Meats (Sales) Pty. Ltd”)
[13] Fountain Selected Meats (Sales) Pty. Ltd
[14] Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd [1991] FCA 225
[15] Ragatta Developments Pty. Ltd. v Westpac Banking Corporation (unreported Federal Court, 5 March 1993)
It is unnecessary to spell out detailed reasons for decisions in costs matters.[16]
[16] Greedy and Greedy [1982] FamCA 41; Renald at [12]
Determination
Neither party has addressed, in their evidence or submissions the matters relevant under s.117(2A)(a), (b), (c) or (d). Ms Seth has made a demand for her costs and the parties have entered into correspondence detailing the costs incurred by Ms Seth. There was an offer made for Ms Seth’s costs to be paid which is less than the amount of her itemised costs bill. However, there is no evidence of any offers to settle the substantive proceedings which were the subject of the judgment delivered on 25 October 2021.
Mr Naidu’s application to set aside the consent orders made in 2018 was wholly unsuccessful.
Ms Seth’s costs of the first day of hearing have already been reserved.
During the s.79A hearing, Mr Naidu made admissions in respect of moneys he still owed to Ms Seth in respect of the property adjustment orders or rather, in respect of the way that the parties decided to vary those orders. These matters were noted in the Court’s earlier judgment at [27] and [71]-[72]. While the Court noted that it expected Mr Naidu to make the payment due to Ms Seth forthwith, the payment was not made until about early December 2021, but at least it was made with interest.
The Court finds that there are circumstances justifying the making of a costs order.
In respect of the amount of costs to be ordered, the Court is satisfied having regard to the relevant s.117(2A) considerations that an order that Mr Naidu pay Ms Seth’s costs in accordance with Schedule 1 of Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) is an order that is in all of the circumstances appropriate. Such costs total $13,427.11 and are made up as follows:
Item 1: opposing an application up to the completion of the first court date: $2,512.26 plus daily hearing fee in item 13 (2 days) $4,305.12
Item 8: preparation for final hearing – 1 day matter (in respect of 30 November 2020 only, no additional preparation given): $5,353.45
Item 14: Advocacy Loading: $1,256.28
TOTAL: $13,427.11
Mr Naidu is also to pay Ms Seth’s costs of the costs application, once again in accordance with the scale, being Item 3 initiating an application for interlocutory orders in the amount of $2,093.62, but given that the matter was dealt with mostly on the papers, no hearing fee will be granted.
For all of those reasons, orders as set out at the forefront of these Reasons for Judgment will be made, that is a costs order in Ms Seth’s favour in the total amount of $15,520.73 is to be made.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Obradovic. Associate:
Dated: 8 February 2023
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