Piovene & Muhlfeld
[2024] FedCFamC1F 178
•21 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Piovene & Muhlfeld [2024] FedCFamC1F 178
File number: SYC 4211 of 2023 Judgment of: CAMPTON J Date of judgment: 21 March 2024 Catchwords: FAMILY LAW – COSTS – Where the applicant and respondent are in dispute as to having been in a de facto relationship – Where the applicant filed an Application in a Proceeding seeking an anti-suit injunction as to proceedings commenced by the respondent in the Supreme Court of NSW in which the applicant was not a party, and seeking the Supreme Court transfer its proceeding to this Court – Where the applicant withdrew that Application on his own motion – Where the respondent makes an application for costs – Costs ordered in fixed sum. Legislation: Family Law Act 1975 (Cth) ss 90RD, 90SM, and 117
Federal Circuit and Family Court of Australia 2021 (Cth) 68
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.04, 12.3, and 12.17
Cases cited: Anison & Anison (2019) FLC 93-908; [2019] FamCAFC 108
Bant & Clayton (Costs) (2016) 56 Fam LR 31; [2016] FamCAFC 35
Kohan & Kohan [1993] FLC 92-340; [1992] FamCA 17
Mansfield and Ors & Mansfield and Anor (2019) FLC 93-920; [2019] FamCAFC 186
Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28
Sfakianakis & Sfakianakis (2019) Fam LR 419; [2019] FamCAFC 54
Division: Division 1 First Instance Number of paragraphs: 36 Date of hearing: 19 March 2024 Place: Sydney Solicitor for the Applicant: Marsdens Law Group Solicitor for the Respondent: Barkus Doolan Winning ORDERS
SYC 4211 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR PIOVENE
Applicant
AND: MS MUHLDELD
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
21 MARCH 2024
THE COURT ORDERS THAT:
1.Within 28 days from the date of this order the applicant pay the respondent’s costs of and incidental to the Application in a Proceeding filed 31 October 2023 as amended on 9 January 2024 fixed in the sum of $25,000.
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 Piovene & Muhlfeld has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
These reasons determine an application for costs by Ms Muhlfeld (“the respondent”) after the withdrawal and dismissing of an Application in a Proceeding of Mr Piovene (“the applicant”) filed 31 October 2023 as amended on 9 January 2024.
For the reasons that follow, the applicant is to pay the respondent’s costs in the fixed sum of $25,000.
BACKGROUND
By way of an Initiating Application filed 14 June 2023 in the Federal Circuit and Family Court of Australia (Division 2), the applicant commenced proceedings seeking a declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”) as to a de facto relationship between he and the respondent commencing in 2010 and terminating on 26 October 2022, and upon such declaration being achieved, relief as to the adjustment of property pursuant to s 90SM of the Act. The respondent contends that no de facto relationship existed. She seeks that the Initiating Application be dismissed.
In an Application in a Proceeding filed on 31 October 2023, the applicant sought orders restraining the respondent from enforcing a loan agreement between the respondent and the applicant’s son, Mr B, dated 9 June 2022 (“the Loan Agreement”) secured by way of a mortgage over a property located at C Street, Suburb E (“the Suburb E property”). The applicant’s son is recorded as the legal owner of the Suburb E property. The applicant contends that his son holds the property on trust for him.
On 29 November 2023, the respondent commenced proceedings in the Supreme Court of NSW to enforce the Loan Agreement and mortgage. The defendant in those proceedings is the applicant’s son. The applicant is not a party to those proceedings. The applicant’s son is not a party to the proceedings in this forum.
On 6 December 2023, the proceedings in this forum were listed for directions hearing before a judicial registrar. On that day the Application in a Proceeding filed 31 October 2023 was listed for hearing on 7 February 2024.
On 9 January 2024 the applicant filed an Amended Application in a Proceeding seeking orders restraining the respondent by injunction from enforcement the loan agreement between the respondent and his son, from commencing any other proceedings against the applicant or the applicant’s son in any other jurisdiction for the repayment of the principal sum of the Loan Agreement, and for the Supreme Court of NSW to transfer its proceedings to this Court so that those proceedings may be heard together with these proceedings.
On 5 February 2024, the parties signed a consent order for the applicant to be joined as a party to the Supreme Court proceedings.
On 7 February 2024, the hearing of the Amended Application in a Proceeding did not proceed. On that day the matter was transferred to the Federal Circuit and Family Court of Australia (Division 1). The interlocutory relief prosecuted by the applicant was subsequently listed for hearing on 16 February 2024 in this forum.
On 8 February 2024, the respondent withdrew her consent for the applicant to be joined as a party to the Supreme Court proceedings.
On 16 February 2024, the applicant withdrew his Amended Application in a Proceeding and consented to its dismissal. The respondent made an oral application for costs. Orders were made for the parties to file written submissions as to costs and for the matter to be determined in chambers. This is that determination.
ORDERS SOUGHT
By way of a minute of order filed on 4 March 2024, the respondent seeks:
1.Pursuant to r 12.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules (2021), the applicant pay the respondent’s costs of and incidental to the Amended Application in a Proceeding filed 9 January 2024:
1.1On an indemnity basis fixed in the sum of $59,810, with such costs to be paid within 28 days of the orders;
1.2In the alternative to Order 1.1 on an indemnity basis as agreed or assessed, with such costs to be paid within 28 days of agreement or assessment;
1.3In the alternative to Order 1.2 on a party/party basis fixed in the sum of $14,466.77, with such costs to be paid within 28 days of the orders; or
1.4In the alternative to Order 1.3 on a party/party basis as agreed or assessed, with such costs to be paid within 28 days of agreement or assessment.
2. Certification of senior counsel.
The applicant seeks:
1.No certificate of senior counsel be granted to the Respondent pursuant to Rule 12.28 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
2.Pursuant to Section 117 of the Family Law Act 1975 and Rule 12.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021:
2.1.each party pay his or her own costs of and incidental to the Amended Application in a Proceeding filed 9 January 2024.
THE LAW
The principles as to costs are well settled. The starting position established by s 117(1) of the Act is that each party pays their own costs. Section 117(2) allows the Court to make such orders as it considers just if there are circumstances which justify 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 not a single factor has priority, nor must there be more than one factor satisfied. Rather, any one factor may be sufficient.
If the respondent establishes there are circumstances justifying a costs order, the next consideration is on what basis costs should be paid. The Full Court has made it clear that it is unnecessary to provide detailed reasons for decisions in costs matters. I shall refer to such s 117(2A) matters as are relevant and engaged here.
CONSIDERATION
The respondent 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, and whether any party has been wholly unsuccessful in the proceedings.
As to her own financial circumstances, the respondent did not file a financial statement nor adduce evidence as to her financial position. She has the capacity to meet her legal costs. The applicant submitted that he has a “modest” weekly income of $1,375 and has no significant savings. The respondent identified that the applicant has property of approximately $1.3 million.
The respondent submitted that the applicant was “wholly unsuccessful” in the application filed. She submitted that “inherent” in the applicant’s application being withdrawn and dismissed “is the fact that the respondent was wholly successful in her application given that she sought its dismissal from the outset.” The applicant submitted that the proceedings were withdrawn, and therefore not “wholly unsuccessful” referring to Bant & Clayton (Costs) (2016) 56 Fam LR 31.
The applicant’s Application in a Proceeding, as amended, was withdrawn by him on 16 February 2024 and dismissed by the Court. This is a relevant factor by reference to s 117(2A)(g) of the Act, rather than a factor pursuant to s 117(2A)(e), as submitted by the respondent. In Anison & Anison (2019) FLC 93-908 the Full Court said as to s 117(2A)(e):
37.It is well settled that paragraph (e) refers to a situation where proceedings as a whole have been unsuccessful. For example, where an application without merit has been dismissed. In the oft-cited authority in this area of Robinson and Higginbotham earlier referred to, Nygh J (with whom Simpson & Smithers JJ agreed) said:
Her Honour then makes a reference to the question of which party was wholly successful but, of course, as counsel for the mother rightly submitted, paragraph (e) deals with a situation in which the proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed.
It is not the case that the applicant has been wholly unsuccessful in the proceeding. He was unsuccessful in his Application in a Proceeding as amended. The substantive proceeding remains on foot, with the s 90RD determination awaiting the allocation of a seven-day trial.
As to the Application in a Proceeding being withdrawn and dismissed, the applicant submitted that he did not initiate or conduct an unmeritorious interlocutory application for three reasons, being:
(a)There is substantial evidence as to the existence of the asserted relationship;
(b)There is substantial evidence that the Suburb E property was purchased in the name of his son who holds the property on trust for him; and
(c)The respondent commenced the Supreme Court of NSW proceedings with full knowledge of these proceedings, and the outcome of the Supreme Court of NSW proceedings may prejudice the applicant’s rights and entitlements in these proceedings.
The applicant further submits that the need for an interlocutory application could have been eliminated had he been promptly joined as a party to the Supreme Court proceedings, however that his “efforts in this regard were frustrated” due to:
(a)The respondent agreed a “a consent approach” in December 2023 to join the applicant to those proceedings, but the delay in that approach lasted to the hearing of the Application in a Proceeding in this Court on 7 February 2024, as the applicant was not at that point a party to the Supreme Court proceedings;
(b)The respondent withdrew her consent to a joinder of the applicant on or around 8 February 2024, requiring the applicant to apply for a joinder to those proceedings on his own initiative, which he submitted would protract both the Supreme Court proceedings and these proceedings;
(c)The respondent ignored his requests on 20 December 2023 and 18 January 2024 for a consent approach to request the Supreme Court to transfer its proceedings to this Court; and
(d)The respondent refused his request on 19 January 2024 for consent to adjourn the hearing for the interlocutory application in this court pending the result of the joinder of the applicant to the Supreme Court proceedings.
The respondent contends that the applicant brought an unmeritorious Application in a Proceeding in circumstances where she denies the existence of a de facto relationship and puts into issue jurisdiction in the substantive proceedings. She also submitted that:
(a)There is no corresponding relief sought in these proceedings which engages with the subject matter of the litigation in the Supreme Court of NSW;
(b)The applicant was not a party to the Supreme Court proceedings;
(c)An anti-suit injunction would interfere with the processes of another superior court is a serious matter and an “extreme” step for the court to take only when it is absolutely essential;
(d)The applicant failed to articulate the basis upon why such an injunction should be granted; and
(e)The applicant failed to articulate jurisdictional basis for seeking an order from this Court that the Supreme Court proceedings be transferred to this Court.
The submissions of the respondent attract weight. The applicant failed to articulate the merit of the anti-suit injunctive relief he sought or the foundations underscoring the proposed transfer of these proceedings to the NSW Supreme Court. The applicant carries the onus of proof to establish jurisdiction in this forum, and if established, as to a warrant that it is just and equitable to adjust the property interests of he and the respondent. This proceeding, at this stage in the litigation, is not dissimilar to a commercial cause as between plaintiff and defendant. The applicant is required by s 68 of the Federal Circuit and Family Court of Australia 2021 (Cth) (“the FCFCOA Act”) and r 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) to litigate responsibly and in a way consistent with the overarching purpose of the FCFCOA Act and Rules. He has failed to do so.
I attach little weight to the submission of the applicant that the effect of a substantial costs order made against him at this stage of the proceedings is “likely to be significantly impactful” on his ability to conduct the proceedings going forward. There is little evidence to support that submission.
The respondent has established justifying circumstances for the making of a costs order. It cannot be in dispute that the applicant has caused the respondent to incur significant legal expense in circumstances where he implicitly, with the benefit of advice, filed his Application in a Proceeding, amended it, and then withdrew it on 16 February 2024. The costs of the respondent in meeting the interlocutory application were unnecessary and ought not to have occurred.
Rule 12.17(a) 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.
The respondent seeks indemnity costs in the first instance and in the alternative costs on a party and party basis. The difference between the fixed sums sought is $45,343.
It is well-settled that when costs are ordered by this Court, such costs are payable on a party and party basis. It has been held that the court should not lightly depart from the ordinary rule (Kohan & Kohan [1993] FLC 92-340). It has also been accepted that in proceedings under the Act, where the usual rule is that each party shall bear his or her own costs, an order for indemnity costs is even more exceptional than in jurisdictions where the usual rule is that costs follow the event (see Mansfield and Ors & Mansfield and Anor (2019) FLC 93-920 at [7]). In Phillips & Hansford (2020) FLC 93-941 the Full Court at [37] confirmed longstanding authority that indemnity costs may be awarded where “the applicant, properly advised, should have known that he had no chance of success” and where “a party persists in what should on proper consideration be seen to be a hopeless case”. Those factors are apposite to the circumstances of this case.
Rule 12.3(4) provides that a party applying for indemnity costs must inform the court if the party is bound by any costs agreements in relation to those costs and, if so, the terms of those costs agreements. The respondent did not put into evidence the costs agreements entered with her solicitors or senior counsel.
Each party filed costs notices on 6 February 2024. The respondent’s costs notice records that the costs paid to that date total $58,131, there are outstanding costs of $ 17,392, that the costs of the work done up to the hearing and attendance at the hearing listed but not determined on 7 February 2024 amounted to $41,600, and that $10,000 was held in the solicitor’s trust account. The applicant’s costs notice advises that he has paid $40,932 to date, there are costs of $14,240 not yet billed, that the costs of the appearance at the hearing including counsel would amount to $9,020 (not including the costs of the preparation of the application and affidavit evidence), and that $7,700 was held in the solicitor’s trust account. The costs actually incurred by each party for the interlocutory dispute are broadly both substantial and to some extent not dissimilar.
The costs notice of each party establishes a logical, fair, and reasonable foundation to fix costs. It is in these parties’ interests to avoid the expense, delay and aggravation involved in any protracted assessment of costs.
The interlocutory case theory proposed by the applicant was difficult to distil and potentially may have been complex. It was appropriate for the respondent to brief senior counsel to meet it. In so far as is necessary, the briefing by the respondent of senior counsel is certified.
The applicant knew, or ought to have known, that filing his Application in a Proceeding and it not succeeding may likely lead to a costs order against him looming on the horizon. That ought to reflect in the quantum of any costs order that achieved. I am mindful of what was identified in Sfakianakis & Sfakianakis (2019) Fam LR 419, that the making of such order as to costs as the court considers just permits the court to fashion an order that is apt in the circumstances of the case, such that a fixed costs quantum, other than party and party costs or indemnity costs, may be appropriate in the circumstances of this case. Such approach is appropriate in this matter and occasions a just costs determination.
In the circumstances, I am satisfied that it is just to fix the costs of the respondent in the sum of $25,000, to be paid by the applicant within 28 days. This is in the vicinity of 40 per cent of her costs incurred on an indemnity basis and in the range of just over $10,000 greater than that incurred on a party and party basis.
Orders are made as set out at the forefront of these reasons.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton.
Associate:
Dated: 21 March 2024
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