Shipman & Shipman (No 2)
[2023] FedCFamC1F 1080
•15 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Shipman & Shipman (No 2) [2023] FedCFamC1F 1080
File number(s): SYC 8192 of 2018 Judgment of: ALTOBELLI J Date of judgment: 15 December 2023 Catchwords: FAMILY LAW – COSTS – Where the husband seeks indemnity costs – Where the wife opposes the application and seeks that each party pay their own costs – Order for each party to pay their owns costs. Legislation: Evidence Act 1995 (Cth) s 128
Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17(1)
Cases cited: Anison & Anison (2019) FLC 93-908; [2019] FamCAFC 108
Bhatt & Acharya (Costs) [2017] FamCAFC 71
Cross & Beaumont (2008) 39 Fam LR 389; [2008] FamCAFC 68
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish & Another (2005) 33 Fam LR 123; [2005] FamCA 158
In the Marriage of Higginbotham (1991) FLC 92-209; [1991] FamCA 5
In the Marriage of I & I (No. 2) (1995) FLC 92-625; [1995] FamCA 80
Lenova & Lenova (Costs) [2011] FamCAFC 141
Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664; [2015] FamCAFC 157
Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Pennisi v Pennisi (1997) FLC 92-774; [1997] FamCA 39
Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28
Shipman & Shipman [2023] FedCFamC1F 152
Division: Division 1 First Instance Number of paragraphs: 54 Date of last submission/s: 21 November 2023 Date of hearing: In Chambers Place: Sydney Solicitor for the Applicant: Newnhams Solicitors Solicitor for the Respondent: Barkus Doolan Winning ORDERS
SYC 8192 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR SHIPMAN
Applicant
AND: MS SHIPMAN
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
15 DECEMBER 2023
THE COURT ORDERS THAT:
1.The Applicant Husband’s Application in a Proceeding filed 18 May 2023 is dismissed.
2.The Respondent Wife’s Response to Application in a Proceeding filed 27 September 2023 is dismissed.
3.Each party is to pay their own costs of the proceedings including the present costs application.
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 Shipman & Shipman has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
The applicant husband (“the husband”) seeks an order for costs against the respondent wife (“the wife”) in respect of the costs incurred from 7 September 2021 to the conclusion of the final hearing of this matter on 8 September 2022, and in respect of this Application in a Proceeding filed 18 May 2023. The orders for costs are sought on an indemnity basis in the sum of $135,628.42, or in the alternative, to be fixed in the sum of $100,000 or as agreed or assessed. The precise orders sought are as follows:
1. That the Respodent Wife pay the costs of the Applicant Husband on an indemnity basis in respect of costs incurred from 7 September 2021 in the sum of $135,628.42.
2. In the alternative to Order 1, that the Respondent Wife pay the costs of the Applicant Husband in the proceedings from 7 September 2021 fixed in the sum of $100,000.
3. That in the alternative to Orders 1 and 2, that the Respondent Wife pay the costs of the Applicant Husband in these proceedings as and from 7 September 2021 as agreed or assessed.
4. That the Respondent Wife pay the costs of the Applicant Husband in respect of this Application in a Proceeding.
The wife opposes the application for costs and seeks for the husband to pay her costs incidental to the application as agreed in writing or as assessed. The precise orders sought are as follows:
1. The Applicant Husband's Application in a Proceeding filed 18 May 2023 be dismissed
2. The Applicant Husband pay the Respondent Wife's costs of and incidental to the Application in a Proceeding filed 18 May 2023 as agreed in writing, or failing agreement within 14 days from the date of these Orders, as assessed.
BACKGROUND
This matter was listed for final hearing between 5–8 September 2022 regarding property matters only. My reasons for judgment were provided on 16 March 2023: Shipman & Shipman [2023] FedCFamC1F 152 (“my reasons for judgment”). Orders were made on the same day requiring the parties to provide the Court with orders which effected my reasons for judgment, and final orders were made on 20 April 2023 in accordance with a joint Minute of Order provided by the parties.
The husband seeks that the wife pay his costs of the proceedings as and from 7 September 2021, at which date he filed a Second Further Amended Initiating Application (Annexure F of the husband’s affidavit filed 18 May 2023) and parenting proceedings were resolved by consent (Annexure E of the husband’s affidavit filed 18 May 2023), until the conclusion of the final hearing on 8 September 2022. The wife seeks for each party to bear their own costs of the proceedings and that the husband pay her costs incidental to this application.
PRESENT APPLICATION
Orders were made on 5 September 2023 providing for the wife to file and serve a Response to the husband’s Application in a Proceeding filed 18 May 2023 as well as any affidavit material in support. Further orders were made for both parties to file and serve written submissions.
In support of his case, the husband relies upon the following material:
(a)Application in a Proceeding filed 18 May 2023;
(b)His affidavit filed 18 May 2023;
(c)Written submissions filed 17 October 2023;
(d)His affidavit filed 17 October 2023;
(e)Written submissions in reply filed 21 November 2023; and
(f)His affidavit filed 21 November 2023.
In support of her case, the wife relies upon the following material:
(a)Response to an Application in a Proceeding filed 27 September 2023;
(b)Her affidavit filed 27 September 2023;
(c)Her affidavit filed 14 November 2023; and
(d)Written submissions filed 15 November 2023.
LEGAL PRINCIPLES
The law relating to costs in family law proceedings is well settled and is set out in detail in the Full Court decision of Parke & The Estate of the Late A Parke (2016) FLC 93-748.
An application for costs is governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). Section 117(1) of the Act sets out the general presumption that each party to the proceedings shall bear their own costs. This is subject to s 117(2), which provides that:
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) and (5) and the applicable Rules of Court, make such order as the court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Section 117(2A) sets out the matters that the Court is to have regard to:
(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.
Although the Court is required to consider each of the abovementioned factors, it is plain that their relevance to a particular matter will depend upon the circumstances of that case and they should be considered in that light. That is, no one factor prevails over another and it is a question of the weight that is to be afforded to each of the relevant factors depending on the circumstances of the matter (Medlon & Medlon (No. 6) (Indemnity Costs) (2015) FLC 93-664 at [24]). There is also “nothing to prevent any factor being the sole foundation for an order for costs” (Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish & Another (2005) 33 Fam LR 123 at [41]).
Whilst the applicant in a costs application must establish the circumstances justifying the making of a costs order, the Court is not limited to making such an order only in what has been described as a “clear case” (Penfold v Penfold (1980) 144 CLR 311).
DISCUSSION
Costs orders are made at the Court's discretion based on the factors listed in s 117(2A) of the Act. The Court must consider all the factors in s 117(2A), and no one factor takes precedence over another (In the Marriage of I & I (No. 2) (1995) FLC 92-625). A discussion of these considerations follows.
Section 117(2A)(a): Financial circumstances of the parties
A party’s inability to pay costs is not a bar to a costs order being made if that party’s conduct is found to warrant such an order (Cross & Beaumont (2008) 39 Fam LR 389) and mere impecuniosity is not a reason per se for declining to make a costs order (see, e.g., Lenova & Lenova (Costs) [2011] FamCAFC 141; Bhatt & Acharya (Costs) [2017] FamCAFC 71).
The husband submits that neither party is impecunious and that the wife will be able to meet any costs order made by the Court. He refers to the amount of money the wife will receive from the sale of the property at K Street, Suburb G NSW (“the Suburb G property”), being either $1,767,142.65 or $1,644,642.65 (less 35 per cent of the selling costs) depending on whether the Suburb G property is sold in accordance with the “Put and Call Option” Deed (“P&C Deed”). He also asserts that the wife has received approximately $400,000 from the superannuation splitting order made on 20 April 2023 in relation to his P Super Fund, although it is acknowledged that she could not use this to meet any costs order.
The wife submits that she has not yet received her “settlement payout” and that it is unclear when her entitlements will be paid out and what amount she will ultimately receive. The husband negates this issue in his reply by submitting that although he contends the wife is likely to be able to meet any costs prior to the settlement of the sale of the Suburb G property, he is not opposed for any costs order to be payable simultaneously with any cash payment to the wife in satisfaction of the property settlement, the net effect of which would be to reduce the payment she receives at settlement by the quantum of any costs order.
The Court finds that there is no sufficient evidence to indicate that a costs order should not be made against either party due to their financial circumstances.
Section 117(2A)(b): Whether the parties are in receipt of legal aid
Neither party was in receipt of legal aid.
Section 117(2A)(c): The conduct of the parties
The husband’s submissions
The husband submits that the wife’s conduct alone justifies a costs order in his favour, and in conjunction with other grounds, the wife’s conduct justifies a costs order being made on an indemnity basis. He asserts that the wife’s conduct is exceptional in that she deliberately fabricated evidence and annexed it to her affidavit to “seek to gain an advantage” in the proceedings. This fabrication was in the form of an email annexed to her trial material and referred to in her affidavit sworn 14 October 2021, which was purportedly written by the husband, but in fact written by her after creating an email address and sending an email impersonating the husband. During cross-examination and after receiving a certificate under s 128 of the Evidence Act 1995 (Cth), the wife accepted that she created the email account and used it to send an email purporting to be the husband.
The husband concedes that the wife ultimately did not rely on the annexure or relevant paragraph of her affidavit at the final hearing, but he asserts this is immaterial. The husband states that the wife lied and swore an oath on three separate occasions, seeking to rely on the fabricated evidence or saying that she did not fabricate such evidence. He suggests that this had a significant impact on the outcome of both the parenting and property proceedings, to his detriment, because: the Single Joint Expert Dr QQ “appeared to place significant weight on that evidence” and may have made different recommendations if the email did not exist or he knew it was fabricated; had Dr QQ made different recommendations because of this (for example that the children spend less time with the mother), the outcome of the parenting consent orders may have been different; and if the outcome was that the mother spend less time with the children, the husband may have received a greater adjustment under s 75(2) of the Act for future needs. The husband submits he ultimately viewed the cessation of the parenting proceedings on the terms set out in that report to be more beneficial for the children than continuing the parenting proceedings at final hearing in order to be able to put to Dr QQ that a substantial basis of his report was incorrect.
The wife’s submissions
The wife submits that the impact of the fabricated evidence had no implications or effect on the property proceedings or the ultimate decision of the Court, in the circumstances where the evidence was in the context of the parenting dispute between the parties which was finalised by consent on 7 September 2021.
The wife further submits that the husband substantially misled the Court during the property proceedings in that he continually maintained that he wanted to retain the Suburb G property, until he filed an affidavit on 8 February 2021(the day before an interim hearing) indicating that he had entered into a P&C Deed in early 2021 with a third party to sell and develop the Suburb G property. She asserts that the husband’s resulting application undermined her own Initiating Application and Application in a Case to sell the Suburb G property, which were both stood over to the final hearing, and that her costs incurred in respect of that claim were therefore wasted. The wife further submits that the legal fees that she ultimately incurred were significantly higher than originally estimated as a consequence of the impact resulting from the husband’s conduct (including failing to consult or inform her, failing to make full and frank disclosure, and ascribing a low maximum value of $4 million to the Suburb G property despite entering into a contract for sale for $7 million, necessitating the appointment of an expert valuer), although she concedes that a portion of her increased costs arose in circumstances outside her control, where the final hearing had to be vacated as her senior counsel was appointed to the bench shortly before the hearing and new senior counsel had to be engaged.
The wife submits that she has also incurred legal costs associated with her commercial lawyers, RR Lawyers in relation to advice and amendments to the contract entered into by the husband, and ongoing legal costs associated with trying to advance and facilitate compliance with existing Court orders and payment of her entitlement pursuant to those orders. In circumstances where the P&C Deed has been exercised but the sale of the Suburb G property has not been completed, the wife says she has had to recommence urgent property proceedings by way of Application in a Proceeding filed 23 October 2023. Ex parte orders were made by Henderson J on 26 October 2023 (Annexure MSS3 of the wife’s affidavit filed 14 November 2023) regarding disclosure and putting restraints on the husband and the other third parties involved in the P&C Deed. The wife states that this compelled the husband to disclose communications between himself and Mr FF, which she suggests evidences attempts at entering into a further agreement without her knowledge or consent. An interim hearing for the wife’s Application in a Proceeding is listed for early 2024. The wife submits that because of the above circumstances, it is unclear what will happen with the Suburb G property or when she will receive her entitlements, and that the two-year-old valuation is likely to now be inaccurate.
The wife asserts that the abovementioned events which occurred after the final hearing are relevant to the husband’s costs application because they are directly relevant to the representations made by himself and Mr FF during the substantive proceedings in relation to the Suburb G property and development application, the position adopted by the wife as to the shortcomings of that deal, and my reasons for judgment and the orders made by the Court.
She concludes that the husband should bear his own costs in these proceedings, as his conduct has frustrated the property proceedings.
The husband’s reply
Regarding the wife’s submissions in relation to the fabricated evidence, the husband submitted that she is effectively taking a “no harm, no foul” approach which cannot be supported as it would be a “beacon” to litigants to fabricate evidence and simply not rely on the evidence if they are caught out, knowing they will not face any rebuke. He maintained that the wife’s fabrication had a significant impact on proceedings.
Regarding the wife’s submissions in relation to his own conduct, the husband submitted that: the wife consented to the orders of 5 September 2022, and if the deal for the sale of the Suburb G property was flawed she would not have consented; the husband accepted that the value of the Suburb G property was $7 million (albeit in segments of $4 million as per a single expert valuation and $3 million for the P&C Deed, which the Court considered should be combined as one balance sheet item); that she did not need to recommence urgent property proceedings and should have engaged in pre-filing negotiations; that the subsequent proceedings are irrelevant to the husband’s present costs application (which seeks costs for the period September 2021–September 2022); that the wife “ignores” relevant communications between the husband and Mr FF indicating that he is cognisant he needs her agreement to change the deal between himself and Mr FF; and that it is the wife’s actions that have further prevented the parties from selling the Suburb G property as there are now injunctions in place until her Application in a Proceeding filed 23 October 2023 is heard.
The Court’s findings
The Court does not find the abovementioned conduct of either party to be relevant to the present costs application.
Firstly, there is no evidence to support the husband’s contention that the wife’s fabricated evidence, whether considered by Dr QQ or not, may have had an impact on the ultimate outcome of the property or parenting proceedings. The Court acknowledges what is essentially a “snowball effect” argument regarding litigants using fabricated evidence, but s 117 of the Act is focussed on the costs of, and conduct in the proceedings, of parties to individual cases. The section has no express or implied deterrent purpose.
Secondly, while the Court does not doubt that the husband may have conducted himself (to some extent) in the way described by the wife, much of this conduct did not occur during the period in question, that being 7 September 2021 to 8 September 2022, and in any event it is not entirely relevant in circumstances where the wife is seeking that each party pay their own costs (besides costs incidental to this application).
The Court places minimal weight on the conduct of both parties in the proceedings.
Section 117(2A)(d): Failure to comply with orders of the Court
Neither party specifically asserted that the other failed to comply with orders of the Court.
Section 117(2A)(e): Whether a party has been wholly unsuccessful in the proceedings
The husband submits that the wife should be considered as wholly unsuccessful in the context of this case. He acknowledges that in property proceedings it is difficult to say that any party is wholly unsuccessful if an order has been made altering property interests but still asserts that he was wholly successful in the proceedings despite the wife receiving a property settlement pursuant to s 79 of the Act. This is because the Court made final orders which had the effect of effecting his application where he sought to receive 65 per cent of the net property pool, and the wife received 35 per cent of the property pool in circumstances where she sought 55 per cent. He submits that it was open to the wife to file a Submitting Notice in respect of his proposal and that if she chose to utilise this course the parties could have saved over $750,0000 in legal fees between them.
The wife submits that she was not wholly unsuccessful in the proceedings, and the husband was not wholly successful. She submits that the determination of the property pool was only achieved at the conclusion of the proceedings with the delivery of my reasons for judgment and that the outcome of the determination of the property pool on the balance sheet was more favourable to her despite the percentage split being in favour of the husband.
While the Court does not agree with the wife’s latter contentions, the Court does accept that until the final balance sheet had been decided by the Court, little sense can be made of the competing proposals. Thus, it cannot be said that the wife was wholly unsuccessful in these proceedings. Justice Nygh (with whom Simpson & Smithers JJ agreed) in In the Marriage of Higginbotham (1991) 103 FLR 110 at 111–112 (followed by the Full Court in Anison & Anison (2019) FLC 93-908) stated that s 117(2A)(e) “deals with a situation in which proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed”. There were significant issues in dispute between the parties and the wife’s case was not without merit.
The Court finds that neither party was wholly unsuccessful.
Section 117(2A)(f): Offers of settlement
The husband relies on an offer in writing dated 29 June 2021 (“the offer”) which was supported by a schedule of effect detailing the balance sheet he adopted for the purpose of the offer (Annexure D of the husband’s affidavit filed 18 May 2023). In his written submissions filed 17 October 2023 the husband outlines the net asset pool calculated by him and by the Court, what the wife would have received based on the offer (using the Court’s balance sheet) and what she will ultimately receive. He asserts that the wife is $1,235,255.45 worse off by electing not to accept the offer, which equates to 14.7 per cent of the net asset pool as determined by the Court. He further submits that had the wife accepted the offer, there would have been no further costs in the proceedings as and from 7 September 2021.
The husband accepts that the form of the offer on 29 June 2021 was different to that ultimately made but asserts that at the time it was a prudent offer that a reasonable litigant would have taken in the circumstances. Regardless, he submits that at a minimum the offer indicated his view of the balance sheet at the time (which did not materially change at the final hearing) and that can be taken into account to determine whether it was imprudent for the wife to continue the proceedings after the filing of his Second Further Amended Initiating Application on 7 September 2021.
The wife, citing the Full Court’s decision in Pennisi v Pennisi (1997) FLC 92-774 at 84,547 (“Pennisi”), submitted that it was “near impossible” for her to properly consider the effect of the offer made by the husband in the face of the documents entered into by him with Mr FF and EE Pty Ltd and a lack of full and frank disclosure, and in light of the significant dispute between the parties in relation to the property pool. In her affidavit filed 27 September 2023 she stated that she would not have been better off accepting the offer or submitting to the orders proposed in his Second Further Initiating Application filed on 7 September 2021. She further submits that it is unclear how the husband maintains that his proposal in his Second Further Amended Initiating Application filed on 7 September 2021 was based on the schedule of effects in the offer as he did not indicate this at the time, he maintained a value of $4 million for the Suburb G property and continued to adopt a differing balance sheet during the proceedings predicated on particular values for certain items.
The Court accepts the wife’s argument that it would have been difficult to properly consider the effect of any offer given the substantial issues still in dispute between the parties. Repeating a passage cited in the wife’s written submissions, the Full Court in Pennisi stated at 84,547 that:
There are also cases where the contents of the offer are in themselves the subject of disputed value and legitimate subject matter for determination. These and other features of the context of offers must be taken into account when considering whether it was reasonable or not to accept an offer, no matter how close to the ultimate result the offer may be.
In light of the above, the Court places little weight on the wife not accepting the offer and the Court does not consider it would be appropriate to make a costs order on this point alone.
The Court does not accept the husband’s submission that the Court should nevertheless take into account the husband’s view of the balance sheet at the time to determine whether the wife was imprudent in continuing proceedings after 7 September 2021 for the same reason – there were still significant issues in dispute, especially regarding the balance sheet.
Section 117(2A)(g): Any other relevant matters
The husband submits that the Court should consider the significant disparity in the costs of the parties, as the wife spent almost triple the legal fees of the husband ($1,231,867 compared to $437,087). He says that there was nothing unique about the wife’s position necessitating greater expense. The husband explains that his conduct which she complains of (which is largely refuted) primarily occurred prior to 7 September 2022, and in any event it is unclear how this resulted in the costs she incurred. He further explains that in the period from 7 September 2021 to the conclusion of the final hearing the wife incurred almost five times the costs than that of the husband in circumstances where there were no interim applications, she did not complain of any of the husband’s conduct and the matter was scheduled for hearing in November 2021.
The husband asserts that the above should be taken into account in the context of the wife’s evidence and submissions that suggest she has been put to additional cost as a result of the husband’s actions, when the reality is that she chose to spend more on legal fees than a prudent litigant would. He submits that the cause of her legal fees cannot fall onto him.
The relevance of this is not immediately apparent to the Court. The wife simply seeks for each party to bear their own costs of the proceedings and that the husband pay her costs incidental to this costs application. The wife’s allegedly “extravagant” legal fees have no bearing on whether the Court will make a costs order against her in circumstances where she is not herself seeking costs for the proceedings.
INDEMNITY COSTS
It is well settled that when costs are ordered by this Court, such costs are payable on a party‑party basis. It has been held that the Court should not lightly depart from the ordinary rule (Kohan and Kohan (1993) FLC 92-340).
The provision relating to the calculation of costs is governed by r 12.17(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) which is as follows:
12.17 Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c) to be calculated in accordance with the method stated in the order; or
(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
The rule further provides that:
(3) In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre‑action procedures; and
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
In relation to an award of indemnity costs, the Full Court decision of Phillips & Hansford (2020) FLC 93-941, helpfully summarises the position as follows:
35. Indemnity cost orders are made only in exceptional cases (Kohan and Kohan (1993) FLC 92-340; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; D & D (Costs) (No. 2) (2010) FLC 93-435).
36. Whilst the categories of cases in which indemnity cost orders may be awarded are not closed, it is accepted that such costs may be ordered where a case was pursued with “wilful disregard of known facts or clearly established law” and where there has been “an imprudent refusal of an offer to compromise” (Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233).
37. In relation to the first category, it has been said that indemnity costs may be awarded where “the applicant, properly advised, should have known that he had no chance of success” (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401) and where “a party persists in what should on proper consideration be seen to be a hopeless case” (J Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers – Western Australian Branch & Anor [1993] FCA 70 per French J at 5).
The husband does not propose that the wife’s conduct fits into either of the two categories outlined above, that is, where a case was pursued with “wilful disregard of known facts or clearly established law” and where there has been an “imprudent refusal of an offer to compromise”, although the Court acknowledges that these categories are not closed. Instead, the husband submits that the wife’s conduct in deliberately fabricating evidence and swearing to the veracity of this evidence on multiple occasions, and that evidence potentially having the effect of impacting the final outcome in both the parenting and property proceedings, is an exceptional circumstance.
As stated earlier in these reasons, the Court finds that there is no evidence supporting the husband’s contention that the wife’s conduct had a significant impact on the outcome of the proceedings, and this conduct thus has little weight in the context of the present costs application. Indemnity costs will not be awarded.
CONCLUSION
For these reasons, I am not satisfied it is in the interests of justice for an order for costs to be made in favour of either party. On balance, the combined circumstances above are insufficient to displace the starting position that each party will bear their own costs in proceedings as set out under s 117(1) of the Act. Each party will bear their own costs relating to the period between 7 September 2021 and 8 September 2022.
In relation to the costs of the present costs application, the Court also considers that s 117(1) applies.
All applications are dismissed.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 15 December 2023
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