Orozco & Bonilla (No 2)

Case [2024] FedCFamC1F 317

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Orozco & Bonilla (No 2) [2024] FedCFamC1F 317

File number(s): WOC 201 of 2021
Judgment of: CURRAN J
Date of judgment: 20 May 2024
Catchwords: FAMILY LAW – COSTS – Where there is an application by first and second applicants for costs – Whether costs should be ordered on an indemnity basis – Where the respondent brought proceedings and was wholly unsuccessful – Where costs awarded on a party and party basis – Where application for indemnity costs refused – Where the respondent’s application for costs as against the first and second applicants dismissed
Legislation:

Family Law Act (Cth) s 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 Sch 3

Cases cited:

Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397

I & I (No 2) (1995) FLC 92-625

Madin & Palis (Costs) (2016) 55 Fam LR 59

Meldon & Meldon (No. 6)(Indemnity Costs) [2015] FamCAFC 157

Munday v Bowman (1997) FLC 92-784

Nada & Nettle (Costs) (2014) FLC 93-612

Orozco & Bonilla [2023] FedCFamC1F 1018

Pavlic & Pavlic (No 2) [2023] FedCFamC1A 97

Quickley & Pelissier [2016] FamCAFC 124

Ragatta Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175

Robinson & Higginbotham (1991) FLC 92-209

Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd [1991] FCA 187
Division: Division 1 First Instance
Number of paragraphs: 63
Date of last submission/s: 11 March 2024
Date of hearing: Determined on the papers
Place: Sydney
Solicitor for the Applicants: Maguire & McInerney Lawyers
Counsel for the Respondent: Mr Scarlett
Solicitor for the Respondent: Johnson Vardanega Lawyers

ORDERS

WOC 201 of 2021

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

MS C BONILLA

First Applicant

MR B BONILLA

Second Applicant
AND:

MR OROZCO

Respondent

ORDER MADE BY:

CURRAN J

DATE OF ORDER:

20 MAY 2024

THE COURT ORDERS THAT:

1.The Respondent pay the costs of the First and Second Applicants on a party and party basis as agreed or assessed.

2.The application of the Respondent for the First and Second Applicants to pay the Respondent’s costs is 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).

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 Orozco & Bonilla

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Details
AGLC
Orozco & Bonilla (No 2) [2024] FedCFamC1F 317
Case
[2024] FedCFamC1F 317
Decision Date

CaseChat Overview and Summary

In the matter of Orozco & Bonilla (No 2), the Federal Circuit and Family Court of Australia considered an application for costs by the first and second applicants, Ms C Bonilla and Mr B Bonilla, against the respondent, Mr Orozco. The applicants sought an order for costs on an indemnity basis, arguing that Mr Orozco’s unsuccessful litigation had caused them unnecessary expense and distress. The dispute arose from family law proceedings, where Mr Orozco had commenced proceedings against the applicants, who were subsequently joined as third parties. The applicants contended that Mr Orozco’s litigation was without merit and was pursued despite clear offers of settlement, thus warranting indemnity costs. The court had to determine whether the exceptional circumstances were present to warrant an order for indemnity costs rather than the usual party and party costs.

The legal issues before the court included whether the unsuccessful party’s conduct justified an order for indemnity costs and whether the significant financial disparity between the parties warranted such an order. The court examined the authorities on indemnity costs, considering the principles of proportionality and fairness in the award of costs. It was necessary to assess the nature of Mr Orozco’s claims, the offers of settlement, and the financial circumstances of all parties. The court also evaluated whether Mr Orozco’s conduct was egregious enough to warrant an indemnity order. After careful consideration, the court found no exceptional circumstances justifying an indemnity costs order.

The court ruled that while the applicants were successful and Mr Orozco was wholly unsuccessful, there were no exceptional circumstances present that warranted an order for indemnity costs. The court was not satisfied that Mr Orozco's conduct was so egregious or exceptional to warrant such a departure from the general rule. Instead, the court ordered that Mr Orozco pay the applicants’ costs on a party and party basis, as agreed or assessed. The court also dismissed Mr Orozco's application for the applicants to pay his costs. This decision balanced the principle of proportionality in costs with the court's recognition of the financial burden on the applicants due to the unsuccessful litigation.

The orders made by the court included that Mr Orozco pay the costs of the first and second applicants on a party and party basis. Additionally, the court dismissed Mr Orozco's application for the applicants to pay his costs. The decision underscored the importance of assessing each case on its unique facts and circumstances, ensuring that the costs orders reflect both fairness and proportionality.

Orders

Orders of the court

WOC 201 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS C BONILLA

First Applicant

MR B BONILLA

Second Applicant

AND:

MR OROZCO

Respondent

ORDER MADE BY:

CURRAN J

DATE OF ORDER:

20 MAY 2024

THE COURT ORDERS THAT:

1. The Respondent pay the costs of the First and Second Applicants on a party and party basis as agreed or assessed.

2. The application of the Respondent for the First and Second Applicants to pay the Respondent’s costs is 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).

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

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In light of the authorities, I am not satisfied that there are exceptional circumstances that warrant an order for costs on an indemnity basis as there is no particular facts and circumstances of the case in question warranting the making of an order for the payment of costs other than on a party and party basis.CONCLUSION Having regard to all of the factors set out under s 117 of the Act, for the reasons set out herein it is appropriate that costs are ordered against the respondent on a party to party basis as agreed or assessed. Litigation in this Court is extraordinarily expensive, evidenced by the respective costs of each of the parties to this litigation. The circumstances in this case where a party embarks upon litigation and is ultimately wholly unsuccessful, and the consequence is that the other party is put to costs, is a justifying circumstance that warrants departure from the general rule that each party pay their own costs. I am not satisfied that the respondent’s conduct, or pursual of his claim against the first and second applicants, was so egregious or exceptional to warrant an order for costs on an indemnity basis. I am, however, satisfied that an order should be made for the respondent to pay the applicants costs on a party and party basis, given he was wholly unsuccessful in the proceedings, given the offers of settlement that were made, given the financial circumstances of the parties and given the nature of the applicants as third parties joined to proceedings against their will.COSTS APPLICATION MADE BY THE RESPONDENT In consideration of the relevant s 117 factors above, there is no basis to make an application for costs on behalf of the respondent. It is an extraordinary application that is entirely without merit. For the reasons set out above the application must fail. The respondent’s application for costs is dismissed.

Ratio Decidendi

Legal Principle Established

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