Nellie & Nellie (No 3)
[2024] FedCFamC1F 367
•30 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Nellie & Nellie (No 3) [2024] FedCFamC1F 367
File number: SYC 8520 of 2022 Judgment of: CAMPTON J Date of judgment: 30 May 2024 Catchwords: FAMILY LAW – COSTS – Application by the wife for the husband to pay her costs of his unsuccessful objection to registration of, and unsuccessful review once registered of, an Arbitral Award in a fixed sum – Where the husband has not filed any material in the costs application – Husband ordered to pay the wife’s costs fixed in the sum of $67,000. Legislation: Family Law Act 1975 (Cth) s 13J, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.04, 12.17
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Graham & Squibb (2019) FLC 93-892; [2019] FamCAFC 33
Nellie & Nellie [2023] FedCFamC1F 1050
Nellie & Nellie (No 2) [2024] FedCFamC1F 198
Division: Division 1 First Instance Number of paragraphs: 22 Date of last submission/s: 26 April 2024 Place: Sydney Counsel for the Applicant: Mr Tabbernor Solicitor for the Applicant: Bay Legal The Respondent: Did not participate ORDERS
SYC 8520 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR NELLIE
Applicant
AND: MS NELLIE
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
30 MAY 2024
THE COURT ORDERS THAT:
1.The husband pay the wife costs of his Response to an Application in a Proceeding objecting to registration of an Arbitral Award filed 29 November 2023 and his Amended Application for Review of an Arbitral award dated 14 March 2024, fixed in the sum of $67,000, by instalments as follows:
(a)As to the sum of $33,000 within seven days of the date of this order; and
(b)As to the balance, within 60 days of the date of this order.
2.The husband forthwith do all such things as are necessary to direct the solicitors holding the sum of $33,000 on trust for him from the proceeds of sale of E Street, Suburb C to cause and direct the payment of those monies to be made to the solicitors for the wife in satisfaction of the first instalment payment pursuant to Order 1.
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.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Nellie & Nellie has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
These reasons determine an application for costs made by Ms Nellie (“the wife”) as sought against Mr Nellie (“the husband”) arising from:
(a)Orders made 8 December 2023 dismissing the husband’s objection to registration of an arbitral award (“the Award”) (see Nellie & Nellie [2023] FedCFamC1F 1050); and
(b)Orders made 26 March 2024 dismissing the s 13J of the Family Law Act 1975 (Cth) (“the Act”) review of the husband the registered Award (see Nellie & Nellie (No 2) [2024] FedCFamC1F 198). The central issues in the review determination were as to a mathematical error of the Arbitrator, the construction of questions of law by the husband on review and their determination. The Award determined the property of the parties to be $4,956,398. The mathematical error in the Award had a value of $28,256. The determination in the Award was amended pursuant to the slip rule to provide for the husband to receive the sum of $768,256, in lieu of the sum of $740,000, from the funds held by a solicitor from the proceeds of sale of a real property.
For the reasons that follow, an order is made that the husband pay the wife’s costs fixed in the sum of $67,000.
THE COMPETING RELIEF AS TO COSTS
Pursuant to Order 3 made on 26 March 2024, as extended by Order 1 made on 30 April 2024, the wife filed her material as to costs on 26 April 2024. By way of her written submissions filed 26 April 2024, she seeks for the husband to pay her costs of the proceedings fixed in the sum of $65,000, and the costs of this costs application fixed in the sum of $2,000.
The husband did not file any material in reply as to costs in accordance with Order 4 made on 26 March 2024, as extended by Order 2 made on 30 April 2024. The husband filed a Notice of Appeal from the orders made 26 March 2024 on 22 April 2024. The appeal is yet to be listed for hearing.
THE LAW
The relevant principles as to costs are well settled. While the starting position established by s 117(1) of the Act is that each party pays their own costs, s 117(2) allows the Court to make such orders as to costs as it considers just if there are circumstances which justify it doing so. In considering what order for costs, if any, should be made, the Court is required to have regard to the matters set out in s 117(2A) of the Act and give weight as it considers appropriate to any relevant factor. It is well settled that no single factor in s 117(2A) has priority, nor must more than one factor be satisfied. Rather, any one factor may be sufficient.
The wife bears the onus to establish circumstances which justify departing from the position that each party pay their own costs, for the making of a costs order in her favour. If the wife establishes there are circumstances justifying a costs order, the next consideration is on what basis should costs be paid.
The Full Court has made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters. I shall refer to such s 117(2A) matters as are relevant and engaged here.
CONSIDERATION
The wife submitted that the circumstances justifying a costs order arise from a consideration of the parties’ financial circumstances, the conduct of the parties in relation to the proceedings, whether any party has been wholly unsuccessful in the proceedings, and the offers of settlement of the parties.
Pursuant to the registered Award as amended, the wife has the benefit of 80 per cent of the property of the parties, having a value in the range of $3.95 million, and the husband has the benefit of 20 per cent, having a value in the range of just under $1 million. The husband has not worked in paid employment since 1999. The wife ceased paid employment a few months subsequent to the commencement of the relationship in 1988. A major issue between the parties was as to the husband’s gambling activities. The arbitrator concluded that there was a “strong inference that he has lost money gambling”, due to his inability to account for $172,000 that he had received in interim property settlements. The financial circumstances of the parties are a factor to be given some weight.
The wife submitted that she conceded the mathematical error in the Award at the first listing subsequent to its publication, such that the error could have been disposed of consensually and expeditiously. There is no reason not to accept that contention.
The husband was wholly unsuccessful in his objection to the registration of the Award and in his Application for Review. I am mindful that this is not affirming that the husband has been wholly unsuccessful in the proceedings. I find that this absence of success is a factor identified as relevant pursuant to s 117(2A)(g) of the Act, attracting very significant weight.
The wife further submitted that she made an offer of settlement on 4 April 2023. This was prior to the arbitration. It is not relevant to this costs application.
On 21 November 2023, the husband made an offer to the wife for him to receive 35 per cent of the property of the parties to resolve the impasse at that time as to the objection to registration. She submits, and I accept, that his offer was optimistic in circumstances where he had an entitlement to 20 per cent of the property of the parties pursuant to the Award. The terms of the offer, subsequent to the dismissal of the s 13J review, is otiose.
For the above reasons, I find that the wife has established circumstances which justify departure from the position that each party pay their own costs, and as to the making of a costs order in her favour.
The wife sought indemnity costs fixed in the sum of $65,000 for the proceedings, and $2,000 for the costs of the costs application. The husband has failed to engage in the costs proceeding by filing any affidavit material or submissions. As recorded in the reasons delivered 8 December 2023, the husband’s application objecting to the registration of the Award was misconceived. The husband was provided indulgences, by way of adjournments, to amend his Application for Review to identify questions of law, leading to further unnecessary court appearances. As recorded in the reasons delivered 26 March 2024, the husband failed in his material as filed to pose a question of law. His prospects of success in his s 13J review were at all times poor.
I find the circumstances are of such “an exceptional kind” as expounded in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, that an indemnity costs order is warranted. The husband elected to challenge the determination of the arbitrator, being the person he and the wife agreed to finalize their property adjustment dispute. The husband put the wife to significant legal expense by way of his post-Award applications. It would not be just for the wife to be out of pocket by way of legal fees incurred in responding to the husband’s ill-advised challenges. He continued to persist in the prosecution of his applications in what, on a proper construction of his material filed, was a despairing case.
The costs agreements entered by the wife with her solicitors and her counsel are exhibited to her affidavit with itemised invoices of the solicitors’ costs particularising each item of costs identified on an indemnity basis. The costs she has incurred for counsel are not far outside the parameters from that allowable pursuant to the costs schedules in the Rules.
Rule 12.17(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) permits the court to adopt a course to fix costs, although it is accepted that the fixing of costs is entirely a matter for discretion. I have considered the amounts claimed by the wife by reference to her solicitors and barristers’ costs, the costs agreements and the basis for their calculation compared to what would be the broadly applied scale prescribed in the Rules for those items. I am mindful of the requirements of r 1.04 and that to order costs in a specified amount avoids the expense, delay and aggravation arising out of an assessment of costs (Graham & Squibb (2019) FLC 93-892 at [92]). I am satisfied that this is a case in which it is appropriate to fix the costs of the wife in the sum of $67,000.
As to the costs sought of the costs application, the husband was unsuccessful in resisting the making of a costs order. He knew or ought to have known, especially when he did not file any material as to costs in response, that the wife enjoyed a reasonable prospect of achieving a costs order in her favour. There was no evidence of the husband making any offer, let alone a reasonable offer, to compromise the costs dispute. These circumstances justify the husband paying the wife’s costs of the cost application. It is appropriate to fix the costs of the wife of the costs application at the reasonable sum by reference to the schedule in the Rules and her solicitors costs agreement, at $2,000.
Accordingly, the husband will be ordered to pay the wife’s costs of the objection to registration and the Application for Review in the sum of $65,000, and the costs of this costs application in the sum of $2,000, totalling $67,000.
TIME TO PAY THE COSTS ORDERED AND SECURITY FOR PAYMENT
The wife submitted that approximately $33,000 remains in the conveyancers trust account from the sale of the real property at E Street, Suburb C, as payable to the husband and is readily releasable. She sought that this sum in the trust account be paid to her within seven days, and for the shortfall to be paid by the husband within 60 days of the date of any order. The husband did not oppose the making of that order. The order does not appear unreasonable. I will make an order broadly in those terms.
For all of the above reasons, I make the orders as set out at the forefront of these reasons.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 30 May 2024
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