Rimac & Rimac (No 2)
[2022] FedCFamC1F 159
•18 March 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Rimac & Rimac (No 2) [2022] FedCFamC1F 159
File number(s): SYC 1540 of 2014 Judgment of: MCCLELLAND DCJ Date of judgment: 18 March 2022 Catchwords: FAMILY LAW – COSTS – Where the husband rejected a formal offer of settlement – Imprudent refusal of offer – Costs ordered on party/party basis up until date of offer – Indemnity costs ordered from date of offer. Legislation: Family Law Act 1975 (Cth) ss 79(2), 79(4), 117, 117C, 117(2A)
Family Law Rules 2004 (Cth) rr 1.04, 19.18
Cases cited: Byrnes v Brisconnections Management Co Ltd(No. 2) [2009] FCA 1432
Colgate-Palmolive Company and Anor v Cussons Pty Limited (1993) 46 FCR 225; [1993] FCA 801
D & D (Costs)(No. 2) (2010) FLC 93–435; [2010] FamCAFC 64
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123; [2005] FamCA 158
Harding v Deputy Commissioner of Taxation (2008)172 FCR 206; [2008] FCA 1403
Hunter v Roberts (No 2) [2019] NSWCA 235
I and I (No. 2) (1995) FLC 92–625
Idoport Pty Limited v National Australia Bank Limited & Ors [2007] NSWSC 23
Kohan and Kohan (1993) FLC 92–340; [1992] FamCA 116
Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93–664; [2015] FamCAFC 157
Munday v Bowman (1997) FLC 92–784
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Rimac & Rimac [2021] FedCFamC1F 333
Salfinger v Niugini Mining (Australia) Pty Ltd (No 4) [2007] FCA 1594
Somers & Ettridge [2020] FamCAFC 37
Stoian v Fiening (Costs) [2014] FamCA 944
Vink v Tuckwell (No 3) (2008) 67 ACSR 547; [2008] VSC 316
Division: Division 1 First Instance Number of paragraphs: 42 Date of last submission: 24 December 2021 Date of hearing: On the papers Place: Sydney Solicitor for the Applicant: Hughes & Taylor Respondent: No submissions received ORDERS
SYC 1540 of 2014 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS RIMAC
Applicant
AND: MR RIMAC
Respondent
ORDER MADE BY:
MCCLELLAND DCJ
DATE OF ORDER:
18 MARCH 2022
THE COURT ORDERS THAT:
1.The respondent husband is to pay the costs incurred by the wife on a party/party basis in respect to the period from 24 March 2016 to 3 May 2021.
2.The respondent husband is to pay the costs incurred by the wife on an indemnity basis in respect to the period as and from 3 May 2021.
3.The costs payable pursuant to Orders (1) and (2) above are to be paid within 28 days of those costs being agreed or assessed.
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 a pseudonym Rimac & Rimac has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ:
INTRODUCTION
This matter concerns an application for costs arising from property settlement orders made by the Court on 21 December 2021, Rimac & Rimac [2021] FedCFamC1F 333. After a relationship of 11 years the parties were engaged in extensive litigation for a period of six years. The outcome of the proceedings was, essentially, that the applicant wife, Ms Rimac (“the wife”) retains in her possession property that had been acquired substantially as a result of her own efforts and the respondent husband, Mr Rimac (“the husband”) retained property acquired both through his own efforts and utilising funds obtained from a personal injury damages settlement in the sum of $3,750,000.
Significantly, the wife did not seek a portion of those settlement monies received by the husband and she had repeatedly made offers of settlement to the husband for the matter to be resolved on that basis. It became apparent during the course of the proceedings that settlement on that basis was unattractive to the husband as result of the fact that those funds received by the husband had been accessed and substantially depleted by the husband’s brother and his nephew. That access was, however, provided by and with the consent of the husband. The outcome of the decision was such that the wife has not been found accountable for the extent to which the settlement monies received by the husband have been depleted by the husband’s brother and the husband’s nephew.
The end result was that orders were made in terms of those sought by the wife, which resulted in the wife receiving a lesser sum than I had determined that she was appropriately entitled to, having regard to those matters set out in s 79(4) of the Family Law Act 1975 (Cth) (“the Act”).
By the orders made on 21 December 2021, the Court provided the parties with the opportunity to make written submissions in respect to the issue of costs. The wife, through her legal representatives, has filed such submissions. The husband, however, has not.
As a result of the manner in which the proceedings were conducted, the wife seeks an order for the husband to pay her costs in respect to the entirety of the proceedings on an indemnity basis.
I have determined that the circumstances of this matter are not such that an award of costs on an indemnity basis is justified in respect to the entirety of the proceedings. I have, however, awarded costs on a party/party basis in respect to the majority of the proceedings and on an indemnity basis in respect to costs incurred after the wife made an open offer to the husband during the course of the proceedings.
LEGAL PRINCIPLES
The issue of costs in respect to proceedings under the Act is to be determined in accordance with s 117. That section relevantly provides that:
(1) Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(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.
(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.
Of further relevance is s 117C of the Act, which provides that:
(1)This section applies to proceedings under this Act other than the following proceedings:
(a) proceedings under Part VI;
(b) proceedings under Division 6, 9 or 13 of Part VII;
(c)proceedings to enforce a decree or injunction made under Division 6, 9 or 13 of Part VII.
(2) If:
(a)a party to proceedings to which this section applies makes an offer to the other party to the proceedings to settle the proceedings; and
(b) the offer is made in accordance with any applicable Rules of Court;
the terms of the offer must not be disclosed to the court in which the proceedings are being heard except for the purposes of the consideration by the court of whether it should make an order as to costs under subsection 117(2) and the terms of any such order.
The general rule, as set out in s 117(1) of the Act, is that each party to the proceedings shall bear his or her own costs. This is, however, subject to s 117(2) of the Act which provides that, if the Court is satisfied that there are circumstances justifying it, the Court may make such order as to costs as it considers just. Beyond the “essential preliminary” consideration of those matters set out in s 117(2A) of the Act, there is no “additional or special onus” on the applicant for the Court to make an order for costs: Penfold v Penfold (1980) 144 CLR 311 at [13].
The Full Court has held, in I and I (No. 2) (1995) FLC 92–625 at 82,277, that the relevant matters in s 117(2A) of the Act “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”.
No one factor under s 117(2A) of the Act prevails over any other factor. Rather, it is a matter of weight that is accorded to each of the relevant factors in the trial judge’s discretion: Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93–664 (“Medlon No. 6”) at [24] per Strickland J.
In Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 (“Fitzgerald v Fish”), the Full Court confirmed that it was not necessary for each of the factors listed in s 117(2A) to be met in order for the Court to make a costs order. The Full Court per Kay, Warnick and Boland JJ stated, when referring to s 117(2A) at [41]:
A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
CONSIDERATION
I propose to consider this matter in terms of those matters set out in s 117(2A) in seriatim.
In terms of s 117(2A)(a), the financial circumstances of each of the parties was considered in my reasons for judgment dated 21 December 2021. While the Court found that the property of the husband had been substantially reduced by the conduct of his brother and his nephew, it was the husband’s evidence that he retained access to funds held on his behalf by his nephew. In those circumstances, the financial circumstances of each party is not such that it precludes the Court from making an order for costs.
Section 117(2A)(b) is not relevant as neither party is in receipt of assistance by way of Legal Aid.
In terms of s 117(2A)(c), despite guidance and direction provided by the Court on several occasions, including 24 September 2020 and 3 May 2021, the husband failed to engage in these proceedings in a manner that facilitated the just and timely resolution of this matter consistent with the main purpose of the then applicable Family Law Rules 2004 (Cth), (“2004 Rules”) stipulated in r 1.04. This included the failure on the part of the husband to provide full and frank disclosure as well as comply with directions and orders of the Court. Significantly, the husband was granted the indulgence of several adjournments to enable him to properly prepare his case including, in circumstances where he had access to substantial financial resources, the opportunity to engage appropriately qualified legal advisers. The husband did not utilise those opportunities, but rather elected to be represented by his brother in the final hearing.
Of additional relevance is the nature of the case presented by the husband, which included making unfounded and scurrilous allegations against the wife that she had mistreated him and that she had accessed and misapplied funds he had received in the damages settlement, to which I have referred, for her own purposes. Each of the husband’s allegations in that respect were rejected.
The advocacy on behalf of the husband by his brother, who the husband was adamant that he required as his representative, failed to constructively engage in the issues that required adjudication and prolonged the proceedings by way of unnecessary and inflammatory cross examination of the wife in respect to matters which were not germane to the issues to be determined.
In terms of s 117(2A)(d), it is significant that over the six-year period that this matter was before the Court, the husband, on numerous occasions, failed to comply with orders of the Court. As result of the husband’s conduct, costs orders were made against him on several occasions. Save to the extent that, on one occasion, those costs have been paid, the balance of costs payable pursuant to those orders remain outstanding. The costs orders which remain outstanding are those made on 8 October 2018, 15 July 2016, 24 March 2016 and, in addition, the order for costs made by the Full Court of the Family Court dated 21 March 2019.
In terms of s 117(2A)(e), the applicant was successful in obtaining the totality of final orders as sought by her and, consequently, the respondent was wholly unsuccessful. Indeed, as noted, the orders made in terms of the wife’s application resulted in the wife receiving a settlement that was less than the amount that the Court determined was a just and equitable outcome pursuant to the provisions of s 79(2) of the Act, having regard to those matters set out in s 79(4) of the Act.
In terms of s 117(2A)(f), the Court notes the evidence that, on 30 September 2020, the solicitor for the wife sent to the husband documents that had been prepared in anticipation of the wife conducting an undefended hearing. Those documents included a draft minute of order dated 7 August 2020 (Transcript 3 May 2021, p.20 lines 20–31). That draft minute of order was in terms similar to that of the outcome of the proceedings. Further, on 3 May 2021, counsel for the wife made an open offer of settlement, which was communicated to the respondent and the Court in terms that were reflected in the ultimate outcome of the proceedings. The Court adjourned the proceedings on 3 May 2021 for the specific purpose of enabling the husband to consider that open offer of settlement. That offer was, however, rejected with no counter-proposal being submitted by the husband.
In terms of s 117(2A)(g), it is relevant that the husband failed to comply with case management directions that were made throughout the proceedings with a view to assisting the parties to identify issues, provide full and proper disclosure and to present evidence in a logical and relevant manner. Rather than complying with those directions with a view to ensuring the matter was resolved in a fair and timely manner, the husband applied for several adjournments, which had the effect of extending the duration of the proceedings and increasing the financial and emotional burden borne by the wife.
CONCLUSION IN RESPECT TO S 117(2A) CONSIDERATIONS
For all these reasons, I am satisfied that it is appropriate for the husband to be required to pay the costs incurred by the wife in these proceedings. The question then becomes on what basis such orders should be made.
SHOULD COSTS BE ORDERED ON AN INDEMNITY BASIS?
The Full Court, in D & D (Costs)(No. 2) (2010) FLC 93-435 at [26] – [28], conducted a useful review of authorities dealing with the issue of indemnity costs in the following terms:
In Limousin & Limousin (Costs) [2007] FamCA 1178; [2007] 38 Fam LR 478, the Court reviewed the authorities in relation to indemnity costs. Reference was there made to the judgment of the Full Court in Kohan and Kohan (1993) FLC 92-340. It was recorded at 79,614 (citations omitted) in which it was said that:
The intent of s 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the court may make such order as the court considers just. As we have pointed out, the court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges. By O 38 r 2, the provisions of O 38 apply to costs ordered to be paid or taxed, and costs payable or to be taxed between solicitor and client. O 38 r 7 makes provision for the allowance of additional amounts for complexity, difficulty or novelty and special skill, knowledge or responsibility. Consequently, the Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind. See Degmam v Wright (No 2) [1983] 2 NSWLR 354]; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534; Hobartville Stud v Union Insurance Co (1991) 25 NSWLR 358 at 368–70.
Indemnity costs orders are still an exception in this and other jurisdictions.
The Court in Limousin (supra) also referred to the judgment of Shephard J in Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 118 ALR 248 upon which learned Counsel for the Wife relies in support of the present application. Shephard J said in Colgate-Palmolive (supra) (at 256):
2. The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis ...
3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it ...
4. In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course ...
Reference was made to the later decision of the Full Court of Yunghanns v Yunghanns [2000] FamCA 681; (2000) FLC 93-029 in which is [sic] was said (at 87,471, par 31):
“It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.”
In Munday v Bowman (1997) FLC 92–784 (“Munday v Bowman”) at 84,660, Holden CJ drew from the decision of Sheppard J in Colgate-Palmolive Company and Anor v Cussons Pty Limited (1993) 46 FCR 225 (“Colgate-Palmolive”) in providing some examples of circumstances that might warrant the exercise of discretion to award indemnity costs, including:
(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 (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] FCA 202; [1988] 81 ALR 397.)
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra).
(c)Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v Westpac Banking Corporation (unreported Federal Court, 5 March 1993)).
(e) An imprudent refusal of an offer to compromise [Medlon No. 6 (supra)].
More recently, in Somers & Ettridge [2020] FamCAFC 37 (“Somers & Ettridge”), Strickland J at [18] confirmed that “an imprudent refusal of an offer of compromise” might, in an appropriate case, warrant the exercise of discretion to award indemnity costs.
Insofar as the Full Court has cited, with approval, Munday v Bowman and the decision of Sheppard J in Colgate-Palmolive, where it was held that “the imprudent refusal of an offer of compromise” may be a basis for an award of costs on an indemnity basis, the principles of what are known, in other jurisdictions, as “Calderbank offers” provide some assistance in determining whether the recipient of an offer has been “imprudent” in their refusal of that offer.
A useful summary of the principles of Calderbank offers is set out in the following statement of the New South Wales Court of Appeal in Hunter v Roberts (No 2) [2019] NSWCA 235 at [6]–[7]:
…The making of an offer of compromise in the form of a Calderbank letter may justify a departure from the ordinary basis on which costs are awarded and assessed and, as Giles JA observed in SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37], the ultimate “question is whether the offeree’s failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule”. Subsequent authorities (including Leichhardt Municipal Council v Green [2004] NSWCA 341) have proceeded on the basis that such a departure will not be justified unless in all the circumstances it was unreasonable for the offeree not to accept the offer.
The relevant principles are not in issue and sufficiently summarised in the following statements of the Court in Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [14], [16] and [60]:
[14] There is no presumption that an offeree who does not accept an informal offer and does not obtain a judgment more favourable than the offer, will necessarily pay indemnity costs from the date of the offer: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [19] (Santow JA, Stein AJA agreeing); Jones v Bradley (No 2) [2003] NSWCA 258 at [6]-[9]; Ambulance Service of New South Wales v Worley (No 2) [2006] NSWCA 236; 67 NSWLR 719 at [18] and Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 (Miwa) at [8].
…
[16] It has been said an assessment of the reasonableness of a party’s conduct in not accepting an offer must be made on a summary basis: Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 (Elite v Salmon) at [148] (Basten JA). The factors relevant to the question whether a rejection of an offer is unreasonable include whether the offeree had an adequate opportunity to enable it to consider and deal with the offer: Elite v Salmon at [99] (McColl JA) citing Donnelly v Edelstein (1994) 49 FCR 389 at 396.
…
[60] Considerations relevant to the determination of an unreasonable refusal are identified in Miwa (at [12]), based on Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; 13 VR 435 at [25], and include:
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d)the offeree's prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed;
(f)whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejecting it.
As previously indicated, for reasons which I have set out, I am satisfied that the manner in which the husband has conducted these proceedings justifies an order for costs being made against him in respect to all costs subsequent to the first costs order made against him on 24 March 2016.
In considering the amount of costs to be awarded in this matter, it is significant that the respondent has been unrepresented throughout a substantial part of the proceedings. Courts are generally reluctant to order indemnity costs against an unrepresented litigant but, in an appropriate case, considerations of justice to all parties may require such an order to be made. In that respect in Salfinger v Niugini Mining (Australia) Pty Ltd (No 4) [2007] FCA 1594 Heerey J relevantly observed at [7]:
[7] In Spalla v St George Motor Finance Ltd [2006] FCA 1537 Kenny J at [26] recently noted that courts have from time to time overcome a reluctance to order indemnity costs against self-represented litigants: Bhagat v Global Custodians [2002] FCAFC 51 and Ogawa v The University of Melbourne (No 2) [2004] FCA 1275. Kenny J considered the competing interests in determining whether to make an award of indemnity costs against a self-represented litigant. A lack of knowledge of the law, unfamiliarity with court practice and a lack of objectivity are common traits of unrepresented litigants. A person’s ability to get redress should not depend on lawyerly skills or an ability to pay for legal representation. However, the Court owes a duty to all parties to ensure that the trial is conducted in a fair and timely fashion (at [28]) and without significant difficulties and unnecessary expense for the parties against whom an unrepresented litigant proceeds. see Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 at [13] per Hodgson CJ. …
See also: Vink v Tuckwell (No 3) (2008) 67 ACSR 547 at [103]–[108] per Robson J and Harding v Deputy Commissioner of Taxation (2008)172 FCR 206 at [61].
For the following reasons I am satisfied that such an order is justified in this case.
On 30 September 2020, the husband was served with the wife’s minute of order proposing an outcome equivalent to the outcome that she obtained in the final proceedings. However, that offer was not communicated as a formal offer of settlement with notice given in accordance with the Calderbank principles to which I have referred.
That was not the case, however, in respect to the formal offer made by the wife’s legal representative in open Court on 3 May 2021, at which time the respondent was expressly advised that his decision to reject the offer may have cost consequences for him.
The husband’s failure to accept the wife’s offer at that point in time was imprudent in terms of the decision of Strickland J in Somers & Ettridge. Given that the offer was presented to the husband at the onset of the final hearing, which was subsequently adjourned to allow the husband to consider such offer and with the husband being advised of potential cost consequences, the husband’s rejection of the offer was imprudent.
Accordingly, I have determined that the husband should pay the wife’s costs on a party/party basis in respect to the period subsequent to 24 March 2016 and that he should pay the wife’s costs on an indemnity basis in respect to the period subsequent to 3 May 2021.
CAN COSTS BE QUANTIFIED?
Rule 19.18 of the then applicable 2004 Rules provided for the methods of calculating costs. These include, in r 19.18(1)(a), the Court fixing upon a specific amount for costs or, in r 19.18(1)(b), an order for the costs to be assessed on a particular basis.
In Stoian v Fiening (Costs) [2014] FamCA 944 at [91], Kent J endorsed the principles for applying a rule equivalent to r 19.18 of the 2004 Rules as adumbrated by Einstein J in Idoport Pty Limited v National Australia Bank Limited & Ors [2007] NSWSC 23 at [9]. Those principles include:
i. the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation;…
ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable;…
iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available;…
iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place;…
v. the gross sum “can only be fixed broadly having regard to the information before the Court”;…
(Citations omitted)
Consistent with those principles, it has been determined that, where a Court orders a party to pay costs, it may be appropriate for the Court to fix a lump sum. By doing so, the Court can avoid further delay and inconvenience being occasioned by the requirement to tax a bill: Byrnes v Brisconnections Management Co Ltd (No. 2) [2009] FCA 1432 at [51].
The difficulty that I have in this case is that the wife’s reference to having incurred legal costs in the sum of $128,157.14 represents a figure assessed on an indemnity basis for the entirety of the proceedings. It does not enable the Court to make a determination as to the amount of costs reasonably incurred by the wife in respect to the period covered by the costs order, including prior to the period for which indemnity costs are being awarded (as and from 3 May 2021).
In those circumstances, it is not possible to make an assessment as to what costs should be payable by the husband to the wife on a lump sum basis. It will, therefore, be necessary for those costs to be assessed in circumstances where the history of these proceedings is such that it is unlikely that costs will be agreed to by the husband.
In those circumstances, for all of the above reasons, I make the orders as set out at the commencement of these reasons for judgment.
I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland. Associate:
Dated: 18 March 2022
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