Riain & Dohman (No 3)
[2025] FedCFamC1F 434
•27 June 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Riain & Dohman (No 3) [2025] FedCFamC1F 434
File number(s): SYC 2118 of 2021 Judgment of: CHRISTIE J Date of judgment: 27 June 2025 Catchwords: FAMILY LAW – COSTS – Where husband seeks indemnity costs – Where failure to obtain the adjustment for which you contended cannot be described as being wholly unsuccessful – Where the husband made offers to settle the proceedings – Where the terms of these offers were unclear and uncertain – Husband's costs application dismissed – Where wife seeks indemnity costs of the husband's costs application – Where husband’s application was wholly unsuccessful – Where wife did not provide a precise schedule of costs – Where circumstances of the case justify the wife's costs being fixed. Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17, sch 3
Cases cited: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123; [2005] FamCA 158
Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157
Division: Division 1 First Instance Number of paragraphs: 40 Date of last submission/s: 16 June 2025 Date of hearing: Determined in Chambers Place: Sydney The Applicant: Litigant in person Solicitor for the Respondent: Mr Bistolaridis ORDERS
SYC 2118 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR RIAIN
Applicant
AND: MS DOHMAN
Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
27 JUNE 2025
THE COURT ORDERS THAT:
1.The husband’s application for costs filed on 20 September 2024 is dismissed.
2.Within 28 days the husband pay the wife’s costs of the application for costs in the amount of $4,202.
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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
On 22 August 2024 I made final orders, amended under the slip rule on 26 September 2024, following a contested hearing concerning property adjustment on marriage breakdown.
On 4 March 2025 the Full Court allowed an appeal against my decision and re-exercised the discretion such that the wife received approximately $100,000 more than by operation of the appealed order.
The husband seeks his costs of the hearing before me.
The wife resists the making of an order for costs.
THE LAW
The general rule is that each party pays his or her own costs: s 117(1) of the Family Law Act 1975 (Cth) (“the Act”).
The applicant husband seeks a departure from the usual rule, such the wife pay costs of the husband from a specific date. The wife seeks that the usual rule apply.
Section 117(2) of the Act creates exceptions to the usual rule. It provides:
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Sections 117(1) and section 117(2) read together make clear that, while the general rule in family law proceedings is that each party bears his or her own costs, the court may order a party to pay the costs of another where there are circumstances justifying the making of such an order.
Regard must be had to the considerations set out in s 117(2A) of the Act in determining whether or not to order a party to pay the costs of another. For the respondent to be successful in his costs applications, he must establish that the justice of the case requires an order for costs, by reference to the non-exhaustive list of statutory considerations set out in s 117(2A) of the Act:
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
No one factor under s 117(2A) prevails over any of the other factors. It is a matter of weight that is accorded to each of the relevant factors in the judge’s discretion (Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 per Strickland J).
While there is “nothing to prevent any factor being the sole foundation for an order for costs” being made (Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123 at [41]) the factor must constitute the justifying circumstances.
In some cases, the justifying circumstances may be the financial circumstances of each of the parties.
The manner in which costs are to be assessed is dealt with in r 12.17(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules"), which provides:
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b) as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c) to be calculated in accordance with the method stated in the order; or
(d) for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
Rule 12.17(3) sets out matters that may be considered in the determination of the quantum of costs, providing that:
(3) In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness of each party's behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable proceedings;
(d) whether a lawyer's conduct has been improper, unfair, unreasonable or disproportionate;
(e) the time properly spent on the proceedings, or in complying with pre-action procedures;
(f) whether expenses (paid or payable) are fair, reasonable and proportionate.
The provisions of the Act and the Rules confer a broad discretion on a judge hearing and determining a costs application.
CONSIDERATION
This costs application is beset with the same difficulties which plagued the decision at first instance – namely the fact that the parties were cavalier about the actual ownership of real estate – effectively treating it (from time to time) as though personally owned when in fact it was owned by a corporate entity.
The husband seeks indemnity costs (or in the alternative fixed costs). The wife resists this application and seeks her costs of the costs application itself.
The matters which the husband relies upon in seeking a costs order are set out in the written submissions. He says:
(a)The wife was wholly unsuccessful;
(b)The wife’s conduct in the proceedings was productive of delay (and cost);
(c)The wife imprudently refused an offer of settlement.
The husband also says the wife is in breach of an order but I am not satisfied the evidence permits me to make that finding nor am I satisfied that it is a “justifying circumstance” for the purpose of s 117(2A) of the Act.
It is necessary to understand the findings from the trial about the identity and value of the assets (as modified by the appeal decision). The table below represents the findings at trial as modified on appeal:
Ownership Description Value 1 J F Street, Suburb G $1,485,000 2 J D Street, Suburb E, NSW $2,350,000 3 H Shares in L Pty Ltd $1,839,817 4 W Shares in H Pty Ltd ATF P Trust $550,000 5 W Shares in J Pty Ltd $161,157 6 W Motor Vehicle 1 $20,000 7 H Motor Vehicle 2 $60,000 Total $6,465,974 Ownership Description Value 8 J ANZ Mortgage secured over F Street, Suburb G $405,277 9 J DD Bank mortgage secured over D Street, Suburb E $874,825 10 W CBA & ANZ accounts secured over B Street, Town C $271,631 13 H ANZ overdraft and fit out loan (K Pty Ltd) $196,396 14 H O Financial Services car loan secured over husband’s motor vehicle $113,001 16 W Car Loan Q Bank $19,400 W Wife’s liability to J Pty Ltd $118,417 Total $1,998,947 Member Name of fund Type of interest Value 23 H Super Fund 1 – as at 30 June 2024 Accumulation $261,665 24 W Super Fund 2 Accumulation $71,283 Total $332,948 NET TOTAL ASSETS (including Superannuation) $4,799,975
At [87] – [90] of the appeal decision their Honours set out the resulting distribution to the parties as follows:
[87] By way of the orders of the primary judge, less the cash adjusting sum, the husband has the benefit of the following property:
ASSETS Ownership Description Value 1 H F Street, Suburb G $1,485,000 3 H Shares in P Pty Ltd $1,839,817 7 H Motor Vehicle 2 $60,000 Total $3,384,817 LIABILITIES Ownership Description Value 8 H ANZ Mortgages secured over F Street, Suburb G $405,277 13 H ANZ overdraft and fit out loan (K Pty Ltd) $196,396 14 H O Financial Services car loan secured over husband’s motor vehicle $113,001 Total $714,674 Member Name of fund Type of interest Value 23 H Super Fund 1 – as at 30 June 2024 Accumulation $261,665 Total $261,665 NET TOTAL ASSETS (including Superannuation) $2,931,808 [88] To achieve 52.5 per cent of $4,799,975, the husband by way of the orders of the primary judge, needs to receive $2,519,987. He currently has $2,931,808. The husband therefore ought to pay the wife $411,821.
[89] By way of the orders of the primary judge, less the cash adjusting sum, the wife has the benefit of the following property:
ASSETS Ownership Description Value 2 J D Street, Suburb E $2,350,000 4 W Shares in H Pty Ltd ATF P Trust $550,000 5 W Shares in J Pty Ltd $161,157 6 W Motor Vehicle 1 $20,000 Total $3,081,157 LIABILITIES Ownership Description Value 9 J DD Bank mortgage secured over D Street, Suburb E $874,825 10 W CBA and ANZ accounts secured over B Street, Town C $271,631 16 W Car Loan Q Bank $19,400 17 W Wife’s liability to J Pty Ltd $118,417 Total $1,284,273 Member Name of fund Type of interest Value 24 W Super Fund 2 Accumulation $71,283 Total $71,283 NET TOTAL ASSETS (including Superannuation) $1,868,167 [90] To achieve 47.5 per cent of $4,799,975, the wife by way of the orders of the primary judge, needs to receive $2,279,988. She currently has $1,868,167. The husband therefore ought to pay the wife $411,821.
In dollar terms the final orders provide the wife with net assets of $2,279,988 and the husband with net assets of $2,519,987.
Ordinarily one would then turn to consider what the offers of settlement would have provided the parties in dollar terms. The problem with this step in the circumstances of this case is that the offers were not sufficiently clear – as discussed below.
Wholly unsuccessful
The wife’s application sought that she retain a property and otherwise receive an amount of money from the husband. That occurred. The wife did not receive an adjustment which was a large as that for which she contended but that is not the same as the conclusion that a party has been wholly unsuccessful.
Offers of settlement
The husband made an offer of settlement on 12 October 2021. By that offer the husband offered that the wife receive the following:
Shares in J Pty Ltd $2,400,000
H Pty Ltd $190,000
The husband’s 2021 offer would see him receive:
D Street, Suburb E equity $900,000
F Street equity $900,000
W Pty Ltd & L Pty Ltd $500,000.
The values were not agreed and significantly different from the ultimate findings.
The husband made an offer to settle the proceedings on 14 February 2022. In simple terms by that offer the wife was to receive:
Equity in M Street, Suburb N $3,266,265
Shares J Pty Ltd $732
Super Fund 2 $66,743
Total: $3,333,740.
In simple terms (according to the offer) the husband was to receive:
Equity in F Street, Suburb G $1,023,000
Equity in D Street, Suburb E $1,575,000
Equity in B Street, Town C $116,000
Super Fund 1 $258, 430
Total: $2,972,430
The difficulty with reliance on the simple terms of the second offer is multi-factored:
(a)The values of assets were not agreed;
(b)Real property was owned by corporate entities not individuals;
(c)Shareholding in the corporate entities was not limited to the husband and wife;
(d)Liabilities of the entities were not addressed;
(e)The value of assets and liabilities at established trial (and on appeal) differed markedly from those in the offer.
(f)Offers need to be clear, unambiguous and capable of acceptance;
(g)It is not possible to look merely at the percentage division ordered at trial without considering the dollar value (having regard to the ultimate findings concerning value).
Were I to assume that the husband proposed, by his second offer, to secure transfer of the property to the wife (subject only to the mortgage, valued at $1,225,102) then the wife would have received $2,124,898 (and not $3,266,265 as the husband’s offer suggested). Even if I consider the fact that the shares in J Pty Ltd had a greater value at trial, when regard is had to the amount the wife owned J Pty Ltd, the amount in real terms which the wife was to have received under the offer was still less than ordered at trial. The difference arises out of the value attributed to the property at trial. While the husband says he adopted the wife’s figure it is of little moment for a number of reasons:
(a)The valuation evidence demonstrated a significantly lower value;
(b)The wife put forward the figure while proposing sale (which would have fixed the value).
The husband’s submissions properly raise that the wife made no apparent response to the offer.
However, on the face of the offer itself the husband appears to be offering that the wife retain a property owned by a company. He proposed either a transfer of the asset by the company or a share transfer. In that case the husband owned 60% of the shares in the property which owned the Suburb N property. The offer does not address the shareholding in the name of the parties’ minor children. It is not clear what was to happen to the other liabilities of the company.
The wife was not seeking to retain the Suburb N property or the shareholding in the company which owned the property.
Amongst the issues which persuade me that the offer has little significance is the fact that the husband’s affidavit and written submissions filed 23 May 2025 indicated that his offer was a 47%/53% division of the net assets in favour of the wife. The wife’s submissions in response drew the court’s attention to the fact that the offer inconsistently referred to a cash payment to achieve an equal division. The husband in his written submissions in response takes up the concept that the offer was for 50/50 (notwithstanding the lack of clarity). I accept the it refers to a 50/50 division but cannot find that this was clear or that the value of the assets was agreed or known with sufficient certainty.
I consider that the parties’ financial circumstances, including that the wife received litigation funding, are neutral in my determination of this application. Each party has income and received assets from the property adjustment proceedings.
Having found that none of the matters relied upon by the applicant to justify departure from the usual rule persuade me that it is appropriate to make a costs order in favour of the husband I propose to dismiss the application. If the application were to be dismissed the respondent wife sought her costs of the costs application.
While the husband had the right to file submissions in reply – and took advantage of this right, he was silent as to the wife’s application for costs of the costs application. The wife’s submissions appear to seek indemnity costs. I am not persuaded that the husband’s application, while wholly unsuccessful, warrants indemnity costs. I take into account the fact that the application has been wholly unsuccessful. I am persuaded that the wife should recover some of her costs.
The wife did not provide evidence breaking down her costs. This is a case in which it is important to fix costs to bring litigation to an end as opposed to having the parties embark on satellite litigation. I have had regard to the scale of costs in Schedule 3 of the Rules and compared it to the costs the wife’s affidavit claim. Using a broad-brush approach, I accept that in responding to the husband’s application some of the material would have to have been read and the annexures scanned.
Doing the best I can with the material before the Court, I propose to fix the wife’s costs of the costs application at 50% of the amount claimed by her.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 27 June 2025
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