Schaber & Joseph (No 2)
[2022] FedCFamC1F 1050
Federal Circuit and Family Court of Australia
(DIVISION 1)
Schaber & Joseph (No 2) [2022] FedCFamC1F 1050
File number(s): BRC 8664 of 2021 Judgment of: HOGAN J Date of judgment: 21 December 2022 Catchwords: FAMILY LAW – COSTS – Where the Court is persuaded that the circumstances justify the making of an order for costs but is not persuaded that it is just to make an order for costs on an indemnity basis – Where costs are ordered in a fixed amount. Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; [1993] FCA 801
D & D Costs (No. 2) (2010) FLC 93-435; [2010] FamCAFC 64
Idoport Pty Limited v National Australia Bank Limited & Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23
In the Marriage of Kohan (1993) FLC 92-340; [1992] FamCA 116
Limousin v Limousin (Costs) (2008) 38 Fam LR 478; [2007] FamCA 1178
Nevins & Urwin (No 3) [2022] FedCFamC1F 201
Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248
Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: First Instance Number of paragraphs: 12 Date of hearing: Determined in Chambers following the receipt of written submissions Place: Brisbane Solicitor for the Applicant: Hartley Family Law by way of written submissions filed 26 October 2022 Solicitor for the Respondent: Lander & Rogers (Brisbane) by way of written submissions in response filed 9 November 2022 ORDERS
BRC 8664 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SCHABER
Applicant
AND: MR JOSEPH
Respondent
order made by:
HOGAN J
DATE OF ORDER:
21 DeceMBER 2022
THE COURT ORDERS THAT:
1.Pursuant to s 117(2) of the Family Law Act 1975 (Cth), the Respondent pay, within 28 days of the date of this order, the Applicant’s costs of and incidental to applications determined at the hearing on 15 October 2021.
2.Pursuant to Rule 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the costs referred to in Order 1 shall be fixed in the amount of $19,740.86.
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 Schaber & Joseph has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J
On 28 September 2022, I made interim orders disposing of the Applicant’s application for interim relief.
The Applicant now seeks an order that the Respondent pay her costs of and incidental to the hearing that day, on either the indemnity or party/party basis, and that an order be made fixing the amount of costs payable by the Respondent. The amount sought if costs are assessed on the indemnity basis is $33,883.31; the amount sought if costs are assessed on the party/party basis is $19,740.86.
The Respondent opposes the making of any order as to costs. His alternative position is that the question of costs be reserved to trial and be left to be determined after the hearing of the substantive issues in dispute. In the event that that position does not find favour and the Court is persuaded that it is appropriate to deal with the Applicant’s application for costs now and concludes that the circumstances justify the making of an order as to costs, he submits that the Court will be persuaded that it is just for the same to be calculated or assessed on the party/party basis (and any costs related to the issue of the jurisdictional issue arising from the commencement of the Federal Circuit and Family Court of Australia Act 2021 (Cth) be excluded from the calculation) and be the subject of an assessment or, alternatively (if the Court determines it is appropriate to make an order for costs in a fixed amount) that the costs be limited to the sum of $15,736.22.
In arriving at the conclusions expressed in these Reasons I have had regard to the written submissions filed on behalf of each of the Applicant[1] and the Respondent.[2] On balance, I am unpersuaded that it is just to make an order reserving the costs until the determination of the trial – I consider it more appropriate to resolve this application for costs sooner rather than later and I am confident that, if the prejudice asserted in the Respondent’s written submissions is in fact established at the final hearing, appropriate measures can be then be taken to recognise the impost of the order as to costs which I intend to make today.
[1] filed 26 October 2022.
[2] filed 9 November 2022.
Discussion of applicable legislation and principles
Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to proceedings under the Act shall bear his or her own costs. However, if the Court is satisfied there are circumstances which justify it, the Court may make such order as to costs as it considers just.[3] In considering what order, if any, as to costs should be made, the Court must have regard to the matters set out in s 117(2A) of the Act.
[3]Family Law Act 1975 (Cth) s 117(1).
Neither party was in receipt of legal aid. Each appeared represented by privately engaged lawyers at the hearing of the application. It is accepted that the application was not necessitated by the Respondent’s failure to comply with previous orders of the Court.
The written submissions filed on behalf of the Applicant contend that the Court would be persuaded that the circumstances justify the making of an order that the Respondent pay her costs of and incidental to the interim application because, in essence:
(a)his financial circumstances are such that the Court would be persuaded that he has the financial capacity to meet an order for costs in either of the amounts sought because, amongst other things, he has controlled the bulk of the parties’ assets since separation; and
(b)of his conduct in relation to what is described as “the extremely late disclosure” and/or in failing to make disclosure in as timely a manner as would have been possible; and
(c)he refused to accept an offer to settle the application made by the Applicant on 13 October 2021, the terms of which provided, in summary, that:
(i)injunctions be made against him in the same terms that were ultimately ordered on 28 September 2022; and
(ii)he be at liberty to cause B4 Pty Ltd to enter into a 12 month commercial tenancy agreement with B1 Pty Ltd as trustee for the B2 Trust such that the land be recognised as property for the business; and
(iii)he draw upon a B2 Trust line of credit in the sum of $112,200 (to be characterised as a partial property settlement received by the Applicant) and pay the same to the Applicant’s solicitor’s trust account for payment of her legal fees; and
(iv)he be at liberty to draw upon the B2 Trust line of credit to meet the payment of his legal fees (with this amount to be characterised as a partial property settlement), the costs associated with mediation and the engagement of the single expert; and
(v)all outstanding applications otherwise be dismissed,
and which would have resulted in him achieving an outcome better than was ordered on 28 September 2022 because:
(i)the order made on that day required that he pay the Applicant the sum of $112,200, to be used to pay her legal costs, pursuant to s 117(2) of the Act and involved the exercise of the costs power as opposed to the sum being received by the Applicant by way of partial property settlement; and
(ii)acceptance of the offer would have allowed him to proceed in relation to some of the property transaction in the manner that he requested; and
(d)he was wholly unsuccessful in relation to the interim applications disposed of by the order made on 28 September 2022 in that:
(i)orders were made in the terms sought by the Applicant; and
(ii)the Court declined to make orders in the terms sought by the Respondent in relation to the removal of caveats, the transfer of land from the B2 Trust to be parties’ self-managed superannuation fund and the sale of the partially completed Motor Vehicle 1; and
(iii)his application for review was dismissed.
Having regard to the matters summarised in paragraphs 8(a), (c), and(d) above (which I accept), I am persuaded that the circumstances here justify the making of an order that the Respondent pay the Applicant’s costs and that it is just that he be required to do so.
Such conclusions do not, of course, determine the basis upon which the costs ordered to be paid should be calculated. Well-known authority makes it clear that, unless there are exceptional circumstances, an order for costs should be made on the party and party basis. I accept that to order that costs be paid on an indemnity basis is something which is a “very great departure” from the “normal standard” in this and other jurisdictions.[4]
[4]See D & D Costs (No. 2) (2010) FLC 93-435; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; Yunghanns v Yunghanns (2000) FLC 93-029; In the Marriage of Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J.
Despite the submissions made on behalf of the Applicant, I am not persuaded that the circumstances here are exceptional[5] or as such as to justify the making of an order that the Respondent pay the Applicant’s costs as calculated on an indemnity basis. It is, I consider, appropriate and just that the costs be as calculated on the party and party basis.
[5]Yunghanns v Yunghanns (2000) FLC 93-029; In the Marriage of Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J.
I am also not persuaded that it is just for these parties to be required to undertake the assessment process prescribed under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) – a consequence which I think is much more likely than not to occur if I decline the Applicant’s request to fix the amount of costs payable to her by the Respondent.
Instead, having regard to:
the evidence led by the Applicant in support of her application for an order as to costs, including that the costs actually incurred by her in relation to the interim applications are in the amount of $33,883.31 and that, when calculated in accordance with Schedule 3 of the Rules, such costs amount to $19,740.86; and
(a)the comments expressed by Einstein J in Idoport Pty Limited v National Australia Bank Limited & Ors, Idoport Pty Limited v Donald Robert Argus[6] – which I consider apposite to the exercise of the power provided by r 12.17(1)(a) of the Rules to order that a party is entitled to costs of a specific amount; and
[6] [2007] NSWSC 23
(b)the comments made by Murphy J in Parke & The Estate of the Late A Parke[7] at [127] to [131], with which I agree,
[7] (2016) FLC 93-748.
I consider that, in this case, the order for costs which is just is an order which specifies the amount to be paid by the Respondent to the Applicant and that the sum of $19,740.86 is just. In arriving at the latter conclusion I decline to reduce the amount sought by $1,347.95 on the basis that it is attributable to unspecified “attendances on file” and I reject the submission made by the Respondent that there is no basis for the costs to include the response to the Court’s request to consider the matters raised in Nevins & Urwin (No 3)[8] – as noted, the situation was novel and the parties being afforded the opportunity to be heard in relation to the same is, in my view, nothing more than a consequence of them being engaged in litigation at the time the issue arose.
[8] [2022] FedCFamC1F 201.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 21 December 2022
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