Sanders & Sanders (No 6)

Case [2023] FedCFamC1F 141

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Sanders & Sanders (No 6) [2023] FedCFamC1F 141

File number(s): SYC 7660 of 2020
Judgment of: CHRISTIE J
Date of judgment: 10 March 2023
Catchwords: FAMILY LAW – PRACTICE & PROCEDURE – COSTS – Where final property and parenting orders were made – Where the wife seeks costs at scale and on an indemnity basis – Where the husband seeks costs in a fixed sum – Where the circumstances do not warrant an order for indemnity costs – Where the wife is awarded a portion of costs at scale.
Legislation:

Family Law Act 1975 (Cth) s 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Cases cited:

Colgate-Palmolive Co v Cussons Pty Ltd [1993] 119 CLR 118; [1993] FCA 801

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123; [2005] FamCA 158

Sanders & Sanders [2022] FedCFamC1F 213

Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157

Munday v Bowman (1997) FLC 92-784; (1997) 22 Fam LR 321

Prantage & Prantage (2013) FLC 93-544; (2013) 49 Fam LR 197
Division: Division 1 First Instance
Number of paragraphs: 80
Date of hearing: 22 February 2023
Place: Sydney
Solicitor for the Applicant: Ms Ward, Minors Family Law
The Respondent: Litigant in Person

ORDERS

SYC 7660 of 2020

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

MS SANDERS

Applicant
AND:

MR SANDERS

Respondent

order made by:

CHRISTIE J

DATE OF ORDER:

10 March 2023

THE COURT ORDERS THAT:

1.The husband pay the wife’s costs of the Application in a Proceeding for a recovery order in the sum of $2,228 in five instalments:

(a)the sum of $500 per week for four consecutive weeks from the date of this order; and

(b)the sum of $228 on or before 14 April 2023,

to the bank account nominated by the wife in writing.

2.The husband’s Response to an Application in a Proceeding filed 21 February 2023 is dismissed.

3.The wife’s Application in a Proceeding filed 19 February 2023 is otherwise 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).

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 Sanders & Sanders has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

CHRISTIE J:

  1. This matter…

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AGLC
Sanders & Sanders (No 6) [2023] FedCFamC1F 141
Case
[2023] FedCFamC1F 141
Decision Date

CaseChat Overview and Summary

The case of Sanders & Sanders (No 6) involves a dispute between the husband and wife over costs incurred during their final parenting and financial proceedings, which concluded on 7 April 2022. The wife is seeking costs from the husband for the period from 1 December 2021 to 12 April 2022, including an indemnity basis for specific periods. She also requests a garnishee order for recovery of these costs. In contrast, the husband is seeking an order for the wife to pay his costs, amounting to $250,000. The court must determine whether to grant either party's request for costs and, if so, the extent of the costs to be awarded. The central legal issues revolve around the general rule that each party bears their own costs and the circumstances under which the court may order a party to pay another party's costs, as outlined in section 117 of the Family Law Act 1975 (Cth).

The court considered the statutory considerations set out in section 117(2A) of the Family Law Act, including the financial circumstances of the parties, their conduct during the proceedings, and whether either party had been wholly unsuccessful. The court found that while the husband’s financial circumstances do not justify an order for him to pay the wife’s trial costs, the wife’s application for a recovery order should be granted in part. The court rejected the husband’s contentions regarding the wife’s conduct and the potential for bias, as these issues were not substantiated by the evidence. The court decided that the husband should pay a specific sum of $2,288 for the costs associated with the recovery order application. The husband's application for the wife to pay his costs was dismissed.

In conclusion, the court ruled that the husband should pay $2,288 for the costs of the recovery order application. The husband’s application for the wife to pay his costs was dismissed, and no further orders were made regarding the other aspects of the husband's application.

Orders

Orders of the court

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Background

Background to the litigation

Accordingly, I dealt with the husband’s Response insofar as it related to his proposed orders 4, 7 and 8.BACKGROUND The parties were involved in parenting and financial proceedings which were determined on a final basis on 7 April 2022. The wife seeks the costs of those proceedings for the period commencing 1 December 2021 to 12 April 2022. She seeks those costs on an indemnity basis for the period 20 January to 7 February and 7 and 11 to 14 April 2022. If a costs order is made she seeks a garnishee order for recovery of those costs. The husband seeks the wife pay his costs in the sum of $250,000. It is necessary to understand the parties’ respective financial positions. At paragraph 219 of Sanders & Sanders [2022] FedCFamC1F 213 (“the reasons”) I found: 219 … Overall the agreed assets, liabilities and superannuation should be divided so as to provide that the wife receives 58 per cent of the net pool (and the husband receives 42 per cent). That requires that in addition to the agreed superannuation split the husband should pay to the wife the sum of $632,290 or in default there should be a sale of the [Suburb E] property. 220The effect of the above findings is that the assets, liabilities and superannuation should be divided as follows: And further at paragraph 221 that from the funds she was to receive “[t]he wife will be required to repay the funds belonging to the parties’ children from the funds she receives from the husband”. Each of the parties had outstanding debts for monies borrowed to pay legal fees. The husband says he is not currently employed although he accepts he is likely to obtain work in the near future. The wife is employed and earns about $2,000 net per week.THE LAW The general rule is that each party pays his or her own costs. Each party seeks a departure from the usual rule and, the wife, in respect of specified periods, seeks an order for indemnity costs. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out the basis upon which the Court is empowered to award costs. The relevant subsections provide:(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. Those provisions 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 wife to be successful in her costs application, she 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.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The matters which would seem to be engaged in this case are as set out above: offers of settlement, conduct of the litigation and whether a party has been wholly unsuccessful. There is also a disparity in the parties’ financial circumstances as regards income.CONCLUSION I decline to make an order that the husband pay the wife’s costs of the preparation for trial and the trial. I find that the husband’s financial circumstances are such that I should decline the application in respect of the trial costs. Different considerations arise in respect of the application for the recovery order. The amount necessary to indemnify the wife in respect of the recovery order application according to annexure C to the wife’s affidavit would have been $7,359. As I have indicated that I do not intend to make an indemnity costs order I will make a costs order in a specific sum as permitted by r 12.17(1)(a) of the Rules. I have considered the sums set out by the wife in her affidavit and on the basis that the husband should be responsible for the costs of drafting the application and affidavit and the costs of the attendances before the Court, I find that the appropriate sum is $2,288. The husband has not satisfied me that there are any justifying circumstances which would warrant departure from the usual rule such that the wife should pay his costs and accordingly his application will be dismissed.

Ratio Decidendi

Legal Principle Established

The provisions of the Act and the Rules confer a broad discretion on a judge hearing and determining a costs application.CONSIDERATION The husband filed an affidavit in support of his Response. The wife took formal objections to that affidavit largely on the grounds of relevance. In the main, I accepted that the objections taken by the wife were valid and large portions of the affidavit were not admitted. I allowed some material to remain as submissions. I permitted the husband to give evidence of matters relating to offers of settlement, his current financial circumstances, the success or otherwise of past applications and matters relating to the conduct of the proceedings. The husband’s affidavit was largely concerned with contending that the wife had misled the Court. I understand this evidence to be in support of a submission by the husband that the wife’s conduct is relevant to her application for costs. I accept, if I had found that the mother had lied or misled the Court, it may be relevant to her application for costs or the husband’s own application for costs. The difficulty with the husband’s argument is that no such findings were made at the final hearing and were not open on a costs application which was being determined without cross-examination. The affidavit also appears to raise an issue of bias, although I note there is no formal application for me to recuse myself. It is necessary to say something about the contention of bias before considering the application proper. The husband’s assertion appears to be grounded in the findings in the final reasons (i.e. that the husband disagrees with the conclusions and resulting orders). He does not point to any matter which constitutes either actual or apprehended bias. The wife filed an affidavit in support of her application for costs. The wife provided a copy of the costs agreement with her solicitors in support of her application for indemnity costs. As discussed above, the husband’s application, as it relates to financial orders, parenting orders and child support, will be dismissed in circumstances where the final property and parenting orders remain in place and no application for child support orders on a final basis has been made nor have any of the prerequisites to this Court hearing and determining a child support application been met.The competing costs applications The husband and wife both ask that I depart from the usual rule which provides that each party bear his or her own legal expenses. The husband seeks a lump sum of $250,000 largely in reliance on his contention that the wife’s conduct would constitute justifying circumstances. He also seeks to be relieved of past costs orders and to pay existing (and any subsequent) orders in instalments. It is necessary to consider the different periods set out in the wife’s application separately:(a)1 December 2021 to 19 January 2022 (pre-trial);(b)20 January 2022 to 7 February 2022 (pre-trial and trial), 7 April 2022 (delivery of reasons) and 12 April 2022; and(c)11, 13 and 14 April 2022 (recovery order application).