Scott & Munayallan (No 13)
[2023] FedCFamC1F 666
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Scott & Munayallan (No 13) [2023] FedCFamC1F 666
File number: SYC 59 of 2010 Judgment of: HENDERSON J Date of judgment: 11 August 2023 Catchwords: FAMILY LAW – COSTS – Where the respondent filed an Application in a Proceeding seeking damages against the applicant – Where the applicant is a real estate agent and his employer – Where the respondent has been declared a vexatious litigant in the Supreme Court of New South Wales with respect to the applicant and a property – Where the respondent has also been declared a vexatious litigant in this Court – Where the Application in a Proceeding was dismissed on various grounds – Where the applicant seeks costs on an indemnity basis – Circumstances justifying order – Where the Application in a Proceeding was doomed to fail, an abuse of process, and offends common decency – Jurisdiction and generally – Whether section 117 of the Family Law Act 1975 (Cth) applies – Where section 69(4)(d) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) provides the Court power to make an order for costs – Consideration of principles in relation to indemnity costs – Circumstances justify an order for indemnity costs – Order made for indemnity costs in a fixed sum. Legislation: Family Law Act 1975 (Cth) ss 102QB, 117, 117(2A), 117(2A)(a), 117(2A)(b), 117(2A)(c), 117(2A)(e).
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 67, 67(1)(a), 67(1)(b), 68, 69, 69(4)(d), 69(4)(e).
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.04(1), 1.31, 1.31(1), 12.13, 12.13(4), 12.17(1)(a).
Vexatious Proceedings Act 2008 (NSW) s 8(7)(b).
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCR 801.
Kohan & Kohan (1993) FLC 92-340; [1992] FamCA 116.
Munayallan & Scott (No 5) [2022] FedCFamC1F 284.
Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28.
Rankin & Rankin (No 3) [2019] FamCAFC 133.
Scott & Munayallan (No 9) [2023] FedCFamC1F 106.
Sfakianakis & Sfakianakis (2019) 59 Fam LR 419; [2019] FamCAFC 54.
Smith & Fields (third party costs) [2013] FamCA 505.
Division: Division 1 First Instance Number of paragraphs: 58 Date of last submissions: 20 February 2023 Date of hearing: In chambers on the papers Place: Sydney Solicitor for the Applicant: Clyde and Co The Respondent: Litigant in person (no submissions received) ORDERS
SYC 59 of 2010 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: AQ REAL ESTATE AND AR PTY LTD
Applicant
AND: MR SCOTT
Respondent
ORDER MADE BY:
HENDERSON J
DATE OF ORDER:
11 AUGUST 2023
THE COURT ORDERS THAT:
1.Pursuant to rule 1.31(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the requirement for Mr AS and AR Pty Ltd to provide a costs agreement pursuant to rule 12.13(4) is dispensed with.
2.The respondent, Mr Scott, is to pay the costs of the applicant in relation and incidental to the Application in a Proceeding filed on 20 January 2023 on an indemnity basis in the sum of $7,000.00.
3.The costs to be paid by Mr Scott pursuant to Order 2 are to be paid within 28 days.
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 Scott & Munayallan has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HENDERSON J:
This is a costs application arising out of a failed Application in a Proceeding filed by Mr Scott on 20 January 2023 (“the Application”) seeking damages from AR Pty Ltd and Mr AS , who was an employee of AR Pty Ltd, in relation to the sale of a property at J Street, Suburb E (“the Suburb E property”). I heard the response on behalf of AR Pty Ltd and Mr AS to dismiss the Application in Mr Scott’s absence during the substantive hearing. I dismissed the Application on 20 February 2023 in his absence and delivered ex tempore Reasons.[1] This is the costs application made by AR Pty Ltd and Mr AS arising out of that dismissal.
[1] Scott & Munayallan (No 9) [2023] FedCFamC1F 106 (Henderson J).
The substantive matter of Scott and Munayallan was listed for final hearing commencing on 20 February 2023 in relation to the breakdown of the marriage between Mr Scott and Ms Munayallan. Two sets of proceedings in the Supreme Court of New South Wales were transferred to this Court on 14 October 2022 and 21 October 2022 (“the Supreme Court proceedings”) and heard at the same time as the family law proceedings.
The Supreme Court proceedings were in relation to relief sought by Mr Phong and Ms Phong (“the Phongs”) against Mr Scott for specific performance of a contract for sale in relation to the Suburb E property entered into in 2014, and the consequences of and following the winding up and subsequent liquidation of I Pty Ltd. The winding up arose from the company refusing to pay a costs order made by the Supreme Court of New South Wales in proceedings initially between the Phongs and Mr Scott. In those proceedings, findings were made that a transfer of the Suburb E property from I Pty Ltd to CC Pty Ltd was fraudulent and carried out to defeat the transaction for sale between the Phongs and Mr Scott. This finding resulted in an order for specific performance of the sale of the Suburb E property to the Phongs, inter alia.
These Reasons for Judgment will be delivered contemporaneously with the Reasons for Judgment in the substantive proceedings. It is important that a brief background is provided to explain how this oral application for costs came to fruition.
BACKGROUND
As it will become apparent, virtually the identical relief sought in the Application dismissed on 20 February 2023 was brought in the Supreme Court of New South Wales by Mr Scott and dismissed with costs by Rothman J in mid-2022. It is appropriate to provide some of the chronology set out by his Honour:
10The plaintiff alleges that in 2014 the defendants pressured him into signing a contract of sale for the Property in [Suburb E] and that, against his express instructions, the defendants proceeded to exchange contracts with the purchaser of the property. In particular the plaintiff alleges that the defendants, against instructions, reduced the required deposit of 10% to 5% and dispensed with the cooling off period. On the face of it, given that ultimately, and I use the word “ultimately” with caution, the matter proceeded to be exchanged, it is unclear what, if any, damage would have been, or was, occasioned by a reduction of the deposit and/or the absence of a cooling off period.
11The matter has a significant history. By a Statement of Claim in the current proceedings which was filed on 22 September 2021, the plaintiff seeks damages in the amount of $700,000 for “selling the property 700,000 market value (sic)”; it is unclear what is intended by that. The plaintiff further seeks an order, although it is spelled D-R-D-E-R (I assume it is a typographical error) of damages of $1,400,000 for out-of-pocket expenses on the ostensible basis of breach of statutory duty, negligence, breach of fiduciary duties and unconscionable conduct.
12The plaintiff was granted leave on three occasions to file an amended Statement of Claim which he has not done. The defendants filed the motion, the subject of this hearing, on 31 January 2022.
13It is necessary to deal with previous proceedings involving the plaintiff. The plaintiff was subject to a number of proceedings by the purported purchasers of the Property in [Suburb E], who were [Mr and Ms Phong]. [Mr and Ms Phong] brought proceedings against the plaintiff (in these proceedings) for specific performance of the contract for sale dated […] 2014, which the plaintiff had signed and provided authority to exchange prior thereto but subsequently sought to resile from.
14The plaintiff, after the exchange of the contracts with [Mr and Ms Phong], purported to transfer the property to [P Pty Ltd] which his brother and/or sister, perhaps both, was or were the sole directors. The purchasers, [Mr and Ms Phong], then brought proceedings against that company. The proceedings were determined by his Honour Pembroke J of this Court against the plaintiff (in these proceedings) and in favour of the purchasers being [Mr and Ms Phong] […].
15In the course of his judgment, Pembroke J made the following findings. First, Pembroke J held that the transfer of the property to the company was fraudulent as its intent I was to cheat [Mr and Ms Phong] of their existing rights to the property. Secondly, the judgment records that the plaintiff in these proceedings made various statements to the defendants in these proceedings affirming his intention to sell the property to the purchasers, but that he appeared to resile from that intention the following day. Apparently, the plaintiff received legal advice at the time that he was bound to the contract with [Mr and Ms Phong], despite his subsequent attitude to the sale to them.
16Thirdly, his Honour made clear that a number of emails that the plaintiff proposed to send to the second defendant were, in his Honour’s word, “questionable”, and accepted the second defendant’s evidence that he did not receive them. His Honour found that, even if the emails did exist, the plaintiff’s conduct clearly evinced an intention to sell which gave rise to estoppel to prevent him from denying he was bound by the contract. Fourthly, his Honour made a comment about the plaintiff in the following terms:
“I had a considerable opportunity … to form an opinion as to his motives, his honesty and his credibility. The plaintiff represented himself … I gave him every indulgence to explain his actions and every opportunity to justify his conduct. Ultimately, I formed the view that his evidence was unreliable and that his defence is unmeritorious.” […]
17Subsequent orders were the subject of submissions and Pembroke J delivered a further judgment ordering that the fraudulent transfer be set aside […]. An appeal against the judgments of his Honour was dismissed […].
…
23There are a number of aspects of the proceedings which need to be the subject of detailed comment. I have not yet completed the history of proceedings. The plaintiff has filed similar statements of claim against the two defendants in two previous proceedings in the District Court. The first proceedings, which are Annexures A to E of the Affidavit of [Mr BW] in Court Book Tab 3, were commenced by Statement of Claim filed by the plaintiff in the District Court [in] January 2020. [In] February 2020 the defendants filed a motion on notice to dismiss the proceedings. [In] 7 April 2020 the plaintiff filed an amended Statement of Claim. [In] April 2020 Wilson DCJ, as her Honour then was, dismissed the proceedings and struck out the amended Statement of Claim.
24The second set of proceedings, which are Annexures F to L in the Affidavit of [Mr BW] at Court Book Tab 3, were commenced by Statement of Claim by the plaintiff in the District Court [in] November 2020. [In] January 2021 the defendants filed a motion on notice to dismiss the proceedings. [In] April 2021 Hatzistergos DCJ of the District Court struck out the Statement of Claim and granted leave for the plaintiff to file an amended Statement of Claim. That judgment is Annexure H to the aforesaid Affidavit of [Mr BW].
25[In] May 2021 the plaintiff filed, I hesitate to say somewhat oddly, two Amended Statements of Claim. [In] June 2021 the defendants filed a motion on notice to strike out the amended statements of claim [It was determined by status conference that the plaintiff relied on the first amended Statement of Claim filed]. [In mid] 2021 Coleman DCJ of the District Court struck out the amended Statement of Claim and issued a judgment on costs in favour of the defendants.
(As per the original with footnotes inserted)
The orders of Rothman J made on 6 June 2022 were as follows:
50 The Court, as a consequence of the foregoing, makes the following orders:
(1)Pursuant to rule 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), the proceedings are dismissed.
(2)Pursuant to section 8(7)(b) of the Vexatious Proceedings Act 2008 (NSW), [Mr Scott] is prohibited from instituting proceedings in New South Wales:
(a) against:
(i)[BU Pty Ltd], its subsidiaries, its agents, staff and consultants; and
(ii) [Mr AS]
(b)relating to or in any way connected with the sale of property situated at [J Street], [Suburb E] NSW.
(3)For the avoidance of doubt, nothing in Order 2 prohibits [Mr Scott] from instituting proceedings within the meaning of the Vexatious Proceedings Act 2008 (NSW):
(a)in any criminal proceedings brought against him as an accused;
(b) seeking relief in the nature of a writ of habeas corpus;
(c) appeal against this judgment.
(4)The Plaintiff pay the Defendants’ costs of this motion and these proceedings on an indemnity basis and such costs are payable forthwith.
(5) Orders to be entered forthwith.
(As per the original)
In terms of the chronology of the Application in this Court, the Application was accepted for filing on 20 January 2023. Mr Scott has been declared a vexatious litigant in this Court pursuant to section 102QB of the Family Law Act 1975 (Cth) with respect to Ms Munayallan and their children.[2]
[2] Munayallan & Scott (No 5) [2022] FedCFamC1F 284 (Henderson J).
At the time of filing the Application on 20 January 2023, Mr Scott had been declared a vexatious litigant in the Supreme Court of New South Wales in respect of AR Pty Ltd, Mr AS, and relating to or connected to the sale of the Suburb E property.[3] I note the Application has Ms Scott, who is Mr Scott’s mother, listed as the first applicant. Ms Scott has a litigation guardian appointed, which is not Mr Scott, and he had no standing to file the Application on her behalf as he did. Nonetheless, the Application was still accepted for filing.
[3] Pursuant to the Vexatious Proceedings Act 2008 (NSW) s 8(7)(b).
On 20 February 2023, ex tempore Reasons were delivered dismissing the Application and after delivery of those Reasons, Mr BW, who appeared as solicitor advocate for Mr AS and AR Pty Ltd, made an oral application for Mr Scott to pay their costs on an indemnity basis, and provided a schedule of costs in support of that application. Costs were ordered to be paid with the quantum of costs stood over for submissions, given Mr Scott’s absence.
Mr Scott was to provide written submissions in relation to the quantum of costs by 4.00pm on 17 March 2023, and Mr AS and AR Pty Ltd (“the applicant”) were to reply by 4.00pm on 24 March 2023, if they found it appropriate to do so.
THE EVIDENCE
The applicant relied upon the following in their submissions in relation to costs:
(1)Response to an Application in a Proceeding filed on 8 February 2023;
(2)Affidavit of Mr BV (with annexures) filed on 8 February 2023; and
(3)A schedule of costs provided to the Court on 20 February 2023.
Mr Scott was to provide written submissions in response by 17 March 2023. This has not occurred. This behaviour is not unique in this matter and has occurred previously in the family law proceedings and also in proceedings before Rothman J.
The only evidence before me is that submitted by the applicant.
The affidavit of Mr BV is more in the form of submissions, but nonetheless, highlights that this Court had no jurisdiction to entertain the Application as filed. There were a multitude of issues with the Application, which was doomed from the outset.
Mr BW highlighted that the Application was, in essence, the same relief sought in the Statement of Claim filed and determined by Rothman J on 6 June 2022.
The judgment delivered by Rothman J highlights several issues with the Statement of Claim filed in those proceedings, which issues plague the current Application filed by Mr Scott:
27The defendant submits that it is difficult – and I think, with respect, they are being kind – to identify a cause of action from the pleadings and the particulars contained in the Statement of Claim. The relief sought is not of the kind which the Court ordinarily would give or should consider giving, in their submission.
28Further, the defendant submits that the Statement of Claim filed in these proceedings is a reiteration of the claims that were sought to be made in the first and second proceedings and, if there were one, any subsequent appeal. I hasten to add no appeal has been filed or sought to be filed against the orders of her Honour Wilson DCJ or of the orders of his Honour Coleman J striking out the amended statements of claim in the District Court.
29Over and above the foregoing matters the defendants in their motion in these proceedings claim that the issues pleaded have been finally determined in the first and second proceedings, and that any further attempts to allow the plaintiff to bring or amend proceedings in any court are precluded by any one of res judicata, issue estoppel and/or abuse of process, and perhaps all three.
30Further, the defendant submits that the matters alleged in the Statement of Claim have already been subject to judgment in this Court. Further, that the Statement of Claim pleaded in these proceedings is barred by the Limitation Act 1969 (NSW). To the extent that the plaintiffs allege a claim in contract or tort, plainly it is out of time.
31To the extent that the plaintiffs allege unconscionable conduct, they do not allege in the Statement of Claim any special disability upon which any such unconscionability would be based or could be based.
32Further, if, and it is certainly not expressed in the Statement of Claim, a claim for unconscionability were said to be based upon the provisions of the Contract Review Act, that would be out of time. The time limit being, from memory, two years.
(As per the original)
Further issues that are specific to the Application in this Court were identified in the ex tempore Reasons dismissing the Application:
8This Court has no jurisdiction to entertain the claim brought by [Mr Scott] for damages. I exercise power under the Family Law Act 1975 (Cth) and various other acts such as the Corporations Act 2001 (Cth). I can have jurisdiction conferred upon me such as has occurred with the Supreme Court transferring their proceedings to this Court to be determined. [Mr Scott’s] application was filed many months after those proceedings were transferred to this Court by way of order. I can have jurisdiction accrued to me if it is important and necessary to exercise jurisdiction in order to determine substantive proceedings. I need not determine the issues in the filed application as it has nothing to do with the liquidation or the matrimonial cause. It is an inter partes dispute between [Mr Scott] and a real estate agent for damages and nothing to do any of the matters before me.
9Even if I could accrue jurisdiction, I would be estopped from so doing because there has been a decision of the Supreme Court of Rothman J [in mid] 2022 on the very issues [Mr Scott] seeks to agitate again today. His application is almost word-for-word the same application before Rothman J, whereby his Honour dismissed the application then against [AR Pty Ltd] and [Mr AS], and importantly, proceeded to name [Mr Scott] as a vexatious litigant, that he was estopped, prevented, prohibited from continuing proceedings against or bring any proceedings against [AR Pty Ltd], [Mr AS], relating or in any way connected with the sale of the property at [J Street], [Suburb E].
10What has [Mr Scott] done? Commenced those same proceedings in this Court. This is most disgraceful conduct and behaviour. It is an abuse of processes of all courts. It offends all common decency and the proceedings must be dismissed. [Mr Phong] has nothing to do with the proceedings. [Mr Phong] is the registered owner of [J Street], [Suburb E], having expended an extraordinary amount of money to have that property transferred to his name.[4]
(As per the original with footnotes omitted)
[4] Scott & Munayallan (No 9) [2023] FedCFamC1F 106 at [8]–[10].
THE LAW ON COSTS
Before coming to the law on costs, parties seeking an order for costs must comply with rule 12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”):
12.13 Order for costs
(1) The court may make an order for costs on its own initiative.
(2) A party may apply for an order that another person pay costs.
(3) An application for costs may be made:
(a) at any stage during a proceeding; or
(b)by filing an Application in a Proceeding within 28 days after the final order is made.
(4)A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement or costs agreements in relation to those costs and, if so, the terms of the costs agreement or costs agreements.
(5)In making an order for costs in a proceeding, the court may set a time for payment of the costs, which may be before the proceeding is concluded.
Since an order for costs on an indemnity basis was sought, pursuant to sub-rule 12.13(4), the applicant was required to provide the Court with a costs agreement and the terms of this costs agreement.
However, rule 1.31 of the Rules provides the following:
1.31 Court may make orders or dispense with these Rules
(1)The court may, in the interests of justice, dispense with compliance, or full compliance, with any of these Rules at any time.
(2)If, in a proceeding, the court gives a direction or makes an order that is inconsistent with any of these Rules, the direction or order of the court prevails in that proceeding.
Further, rule 1.04 of the Rules states, and more particularly, Note 1 in sub-rule 1.04(1):
1.04 Overarching purpose
(1)The overarching purpose of these Rules, as provided by section 67 of the Federal Circuit and Family Court Act, is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
Note 1:These Rules must be interpreted and applied, and any power conferred or duty imposed by them must be exercised or carried out, in the way that best promotes the overarching purpose (see subsection 67(3) of the Federal Circuit and Family Court Act).
…
These rules, together with the fact that the Application was a clear and egregious abuse of process, satisfy me that I should dispense with compliance of sub-rule 12.13(4) for AR Pty Ltd and Mr AS.
Section 117 of the Family Law Act 1975 (Cth) provides the following:
117 Costs
(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.
Further, section 69 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCOA Act”) provides the following:
69 Power of the Federal Circuit and Family Court of Australia (Division 1) to give directions about practice and procedure in a civil proceeding
(1)The Federal Circuit and Family Court of Australia (Division 1) or a Judge may give directions about the practice and procedure to be followed in relation to a civil proceeding, or any part of a civil proceeding, before the Court.
…
(4)In particular, the Federal Circuit and Family Court of Australia (Division 1) or Judge may do any of the following:
…
(d) award costs against a party;
(e)order that costs awarded against a party are to be assessed on an indemnity basis or otherwise.
Additionally, section 68 of the FCFCOA Act provides the following:
68 Parties to act consistently with the overarching purpose
(1)The parties to a civil proceeding before the Federal Circuit and Family Court of Australia (Division 1) must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.
(2)A party’s lawyer must, in the conduct of a civil proceeding before the Federal Circuit and Family Court of Australia (Division 1) (including negotiations for settlement) on the party’s behalf:
(a) take account of the duty imposed on the party by subsection (1); and
(b) assist the party to comply with the duty.
…
(4)In exercising the discretion to award costs in a civil proceeding, the Federal Circuit and Family Court of Australia (Division 1) or a Judge must take account of any failure to comply with the duty imposed by subsection (1) or (2).
The overarching purpose is prescribed in section 67 of the FCFCOA Act:
67 Overarching purpose of family law practice and procedure provisions
(1)The overarching purpose of the family law practice and procedure provisions is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
(2)Without limiting subsection (1), the overarching purpose includes the following objectives:
(a)the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 1);
(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c) the efficient disposal of the Court’s overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
(3)The family law practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.
(4)The family law practice and procedure provisions are the following, so far as they apply in relation to civil proceedings:
(a) the Rules of Court;
(b)any other provision made by or under this Act, or any other Act, with respect to the practice and procedure of the Federal Circuit and Family Court of Australia (Division 1).
Section 69(4)(d) of the FCFCOA Act provides costs are awarded for “proceedings”. Section 117 of the Family Law Act 1975 (Cth) refers to proceedings “under this Act” and not proceedings simpliciter.
The Application filed by Mr Scott was not a matrimonial cause. The Application had no prospects of success under accrued jurisdiction principles and was not related to the liquidation of I Pty Ltd,[5] which proceedings had been transferred to this Court from the Supreme Court of New South Wales.
[5] Scott & Munayallan (No 9) [2023] FedCFamC1F 106 at [8].
The Application was not a proceeding under the Family Law Act 1975 (Cth), but was a proceeding within the meaning of section 69(4)(d) of the FCFCOA Act.
Therefore, a question arises whether section 117 of the Family Law Act 1975 (Cth) is applicable to my determination. Had the Application been filed in the Supreme Court proceedings prior to their transfer to this Court, this question may not have arisen.
Regardless, I can exercise jurisdiction under section 69(4)(d) of the FCFCOA Act to make an order for costs, including under section 69(4)(e) as to an order for costs on an indemnity basis and the matters listed in 117(2A) of the Family Law Act 1975 (Cth) are appropriate matters to consider in any event and I will have regard to them where appropriate.
The resolution of disputes according to law (s 67(1)(a))
I have addressed the significant deficiencies in the Application, particularly the lack of jurisdiction of this Court, as contained in the extract of the ex tempore Reasons above.[6]
[6] See above [17].
Although the Phongs, who were the purchasers of the Suburb E property from Mr Scott, were listed as respondents in the Application, Mr Phong appeared self-represented and appropriately conceded that he could not seek costs.
Mr Scott sought the following relief:
Orders
[Mr Phong] & [Ms Phong]
…
2.That all costs orders made against [Mr Scott] in favour of [Mr Phong] & [Ms Phong] in case …, Supreme Court of NSW should be set-a-side.
That these costs are to be returned to [Mr Scott].
(As per the original)
Mr Scott sought for this Court to set aside orders made by judges in the Supreme Court of New South Wales. Mr Scott continues to attempt to have other judicial officers re-hear decisions and orders he does not agree with and that is entirely improper. There is a pathway; it is called review and appeal and Mr Scott has availed himself of all those rights, both in this Court and the Supreme Court of New South Wales, and has yet to be successful in any substantive way.
What is apparent is that Mr Scott does not accept a decision and the consequent orders made with which he disagrees and there have been many such decisions made. Not accepting a decision is not a reason to re-agitate the cause of action by commencing new proceedings in another court.
While it may appear that Mr Scott feels strongly about having the Application heard, when it was time for determination of the Application, he was not present in Court, instead choosing to attend another set of proceedings in the New South Wales Court of Appeal that he had no standing in.[7] He chose this course rather than presenting his case and making arguments to this Court, even when he was told the matter would proceed in his absence.
[7] Scott & Munayallan (No 9) [2023] FedCFamC1F 106 at [11].
There is no basis at law for the causes of action contained in the Application, and it offends this aspect of the overarching purpose.
The resolution of disputes as quickly, inexpensively and efficiently as possible (s 67(1)(b))
With respect to dispensing with the requirement for the applicant to provide a costs agreement, I am mindful that the applicant had dealt with similar, if not, the same causes of action in the Supreme Court of New South Wales, and requiring the applicant to comply with all rules and requirements would not satisfy this aspect of the overarching purpose.
As it was clear that the Application was an abuse of process, to order the applicant to incur further costs is inappropriate.
The applicant would have thought that the judgment of Rothman J on 6 June 2022 would have been the end of their involvement with Mr Scott. Unfortunately, this was not the case.
In any event, the applicant supplied a schedule of costs on the first day of the hearing in the substantive proceedings and I find that to be sufficient.
These matters are also relevant when considering the question of costs and quantum. By filing this Application, and filing it under his mother’s name to circumvent the barrier that he has been declared a vexatious litigant twice, it is clear that Mr Scott intended to agitate an issue already dealt with by another court.
The filing of a multiplicity of proceedings agitating issues that have been dealt with to finality is contrary to this aspect of the overarching purpose.
Should costs be awarded?
Mr Scott was wholly unsuccessful in the Application,[8] and he failed to attend Court to prosecute it.[9]
[8] Family Law Act 1975 (Cth) s 117(2A)(e).
[9] Family Law Act 1975 (Cth) s 117(2A)(c).
Mr Scott’s financial position remains a mystery. However, he may receive some money after delivery of the Reasons for Judgment in the substantive proceedings.[10]
[10] Family Law Act 1975 (Cth) s 117(2A)(a).
No party had a grant of legal aid and the Application was a commercial pleading.[11]
[11] Family Law Act 1975 (Cth) s 117(2A)(b).
A consideration of the reasons above offends both aspects of the overarching purpose of proceedings in this Court and an order for costs is warranted.
The applicant sought that costs be awarded on an indemnity basis, and I will consider that now.
Indemnity costs
Indemnity costs are only ordered in exceptional circumstances. The matters of Kohan & Kohan[12] and Smith & Fields (third party costs)[13] are both authority for this proposition. The category of cases in which indemnity costs may be awarded are not closed. Costs on this basis have been ordered in matters where an application is pursued with wilful disregard of known facts or clearly established law, or where there has been an imprudent refusal of an offer to compromise.[14]
[12] (1993) FLC 92-340 (Strauss, Lindenmayer and Bulley JJ).
[13] [2013] FamCA 505 (Murphy J).
[14] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (Sheppard J).
In relation to pursuing an application with wilful disregard to known facts or clearly established law, the decisions of Phillips & Hansford,[15] Rankin & Rankin (No 3),[16] and Sfakianakis & Sfakianakis,[17] reiterate that indemnity costs may be awarded where a party should have known they had no chance of success and where a party persists in what should, on a proper consideration, be seen to be a hopeless case.
[15] (2020) FLC 93-941 (Strickland, Ainslie-Wallace and Aldridge JJ).
[16] [2019] FamCAFC 133 (Strickland, Kent and Austin JJ).
[17] (2019) 59 Fam LR 419 (Aldridge, Watts and Austin JJ).
From the above discussion of the overarching purpose of this Court, it is clear that the Application was a hopeless case. There was no jurisdiction to hear the causes of action raised, the relief sought in the Application had been dealt with to finality in another court and Mr Scott was estopped from pleading the same cause of action against the same parties by the orders of Rothman J and the Application was doomed to fail at the outset.
It is now some years after the proceedings in relation to the Suburb E property were finalised, and yet, Mr Scott is still aggrieved by the outcome, and has used this final hearing to file yet another application in relation to the Suburb E property and the applicant.
It is very clear that this is an exceptional case that warrants costs to be awarded on an indemnity basis.
CONCLUSION
Adult choices have adult consequences; Mr Scott may not be willing to accept consequences that are contrary to his desires, but this is the reality of life.
Another reality of life for Mr Scott is that as the Application was a clear abuse of process, was doomed to fail, and as stated in the ex tempore Reasons dismissing the Application, “[i]t offends all common decency”,[18] it is appropriate that I make an order for costs on an indemnity basis.
[18] Scott & Munayallan (No 9) [2023] FedCFamC1F 106 at [10].
I fix these costs payable in the sum of $7,000.00,[19] which being close to the amount sought and it being a reasonable sum in all the circumstances.
[19] Pursuant to r 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
I will make an order that these costs are to be paid within 28 days.
I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson. Associate:
Dated: 11 August 2023
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