Suris & Suris (No 2)
[2023] FedCFamC1F 89
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
FIRST INSTANCE
Suris & Suris (No 2) [2023] FedCFamC1F 89
File number(s): BRC 6911 of 2022 Judgment of: CAREW J Date of judgment: 24 February 2023 Catchwords: FAMILY LAW – ENFORCEMENT - application for enforcement of a sale order, enforcement of interest payable on a money order and enforcement of two costs orders – where property proceedings were finalised in 2019 – enforcement of sale order dismissed – enforcement of interest on money order and costs orders with interest
FAMILY LAW – COSTS – leave sought to bring a costs application for the substantive proceedings out of time – where the applicant seeks indemnity costs – where the conduct of the respondent impeded the orderly progress of the parenting proceedings – costs order justified however circumstances do not justify an order for indemnity costs
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) 46 FCR 225
Fitzgerald vFish sub nom PBF v TRF (FLR) (2005) 191 FLR 294
Gallo v Dawson (1990) 93 ALR 479
Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23
In the Marriage of I and I (No 2) (1995) FLC 92-625
Kohan and Kohan (1993) FLC 92-340
Lenova & Lenova (Costs) [2011] FamCAFC 141
McMillan & McMillan [2016] FamCA 387
Nada & Nettle (Costs) (2014) FLC 93-612
Parke & the Estate of the Late A Parke (2016) FLC 93–748
Penfold v Penfold (1980) 144 CLR 311
Re Wilcox, Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151
Number of paragraphs: 69 Date of hearing: 12 December 2022 Place: Brisbane Counsel for the Applicant: Mr Baston Solicitor for the Applicant: Lillas & Loel Lawyers Counsel for the Respondent: Ms Laylee Solicitor for the Respondent: Ogge Law ORDER
BRC 6911 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SURIS
Applicant
AND: MR SURIS
Respondent
order made by:
CAREW J
DATE OF ORDER:
24 February 2023
THE COURT ORDERS THAT:
1.The application to enforce the sale order as contained in the order made by consent on 26 July 2019 is dismissed.
2.By way of enforcement of the money order made by consent on 26 July 2019:
(a)Mr Suris (“the respondent”) pay to Ms Suris (“the applicant”) interest on the sum of $105,000 calculated from 26 July 2020 being the date it was due for payment to 15 July 2022 being the date of payment fixed in the sum of $12,931.82; and
(b)The said sum of $12,931.82 be paid within 60 days.
3.By way of enforcement of the costs order made on 6 October 2020:
(a)The respondent pay the principal sum of $7,973;
(b)Interest thereon in the sum of $631.59 up to and including 25 July 2022;
(c)Additional interest on the principal sum calculated in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) from 25 July 2022 to the date of payment; and
(d)The principal sum and interest thereon be paid within 60 days.
4.By way of enforcement of the costs order made on 31 March 2022:
(a)The respondent pay the principal sum of $8,042.99;
(b)Interest thereon in the sum of $33.60 up to and including 25 July 2022;
(c)Additional interest on the principal sum calculated in accordance with the Rules from 25 July 2022 to the date of payment; and
(d)The principal sum and interest thereon be paid within 60 days.
5.The applicant be granted leave nunc pro tunc to apply for costs of and incidental to the substantive proceedings concerning parenting matters and the respondent’s application to set aside the order made 26 July 2019.
6.The respondent pay the applicant’s costs of those proceedings fixed in the sum of $46,762 within 60 days.
7.The respondent pay the applicant’s costs of the application for enforcement filed 22 June 2022 fixed in the sum of $6,600 within 60 days.
8.Contemporaneously with the payment of the sums referred to in paragraphs 2, 3, 4, 6 and 7 of this Order the applicant sign all documents and do all things necessary to release Caveat number U Street … registered on the former matrimonial home at U Street Suburb V more particularly described as Lot … on Registered Plan …, Local Government of W Region (“the property”).
9.In default of payment of all of the sums required to be paid pursuant to this Order by the due date, the following occur:
(a)The respondent do all acts and things and sign all documents necessary to effect the sale of the property and for that purpose the following shall apply:
(i)The property be listed for sale by private treaty with a real estate agent as agreed between the parties and failing agreement as nominated by the respondent within seven days of receiving a panel of three agents from the applicant, failing which as nominated by the applicant;
(ii)This Order authorises the applicant to liaise with the agent and for the applicant to be notified of all interest in the property and offers for the purchase of the property both oral and in writing;
(iii)The list price of the property shall be $750,000 or such amount as is agreed between the parties;
(iv)The respondent shall co-operate in every way with the real estate agent in relation to the marketing for sale of the property including making the key(s) readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer;
(v)The parties shall equally pay to the agent and/or solicitor acting for the parties in the sale transaction any sums requested for advertising, legal or other expenses during the sale process, as and when they fall due;
(vi)The sale price shall be 97.5% of the listing price or such other sum as agreed between the parties;
(vii)The respondent shall execute the contract of sale and all other documents required to complete the sale of the property, including all transfer documentation, forthwith upon its submission to him by the agent or the solicitor for the purchaser with the respondent providing a copy of the contract of sale to the applicant upon execution;
(viii)The proceeds of sale of the property shall be paid in the following manner and priority:
A.In discharge of the Commonwealth Bank of Australia mortgage number …16;
B.In payment of the agent’s commission, advertising and other expenses;
C.In payment of the legal costs and outlays relating to the sale;
D.In payment of local authority adjustments;
E.To the respondent the sum of $43,000;
F.The balance to be divided equally between the parties with the respondent paying from his share to the applicant the amounts required to be paid pursuant to paragraphs 2, 3, 4, 6 and 7 of this Order or any sum that remains outstanding.
10.If the respondent refuses or neglects to execute a deed or instrument as required by this Order, a registrar of the Family Circuit and Family Court of Australia Division 1 is hereby appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute the deed or instrument in the name of the respondent and to do all acts and things necessary to give validity and operation to the deed or instrument.
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 Suris & Suris has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Carew J.
The applications for determination concern enforcement of a sale order, enforcement of interest payable on a money order, enforcement of two costs orders together with interest, and leave to bring a costs application for the substantive proceedings out of time, and if granted, costs of those proceedings and costs of the enforcement proceedings.
For reasons which will become apparent, I propose to order:
(a)Dismissal of the enforcement of the sale order other than by way of default;
(b)Enforcement of the money order by payment of interest in the sum of $12,931.82;
(c)Enforcement of the interim costs order dated 6 October 2020 in the sum of $7,973 together with interest thereon;
(d)Enforcement of the appeal costs order dated 31 March 2022 in the sum of $8,042.99 together with interest thereon;
(e)Leave be granted to file an application for costs in the substantive proceedings (involving parenting and setting aside a property order) nunc pro tunc and for the respondent to pay costs fixed in the sum of $46,762;
(f)Costs of the enforcement application fixed in the sum of $6,600; and
(g)In default of payment of all the above sums, the former matrimonial home to be sold.
BACKGROUND
By way of brief background, Ms Suris (“the applicant”) and Mr Suris (“the respondent”) were married in 2003 and separated in 2017. They have three children aged 19, 17 and 14. By an order made on 2 September 2021, the respondent is restrained from having any contact or communication with the children unless it is initiated by them.
The applicant is 45 years of age and works in two service industries.
The respondent is 52 years of age and unemployed. The respondent was discharged medically unfit from the Public Service in 2017 having acquired a condition. The respondent receives a pension.
On 26 July 2019, the applicant and respondent finalised their property settlement proceedings by consent and an order was made reflecting their agreement (“the 2019 order”). The settlement of the property dispute in 2019 occurred in circumstances where the parties were significantly apart on what should be included in the property pool to be divided and the result represented a significant compromise by each party on their respective positions. The applicant contends that she only received about 15 per cent of what should have been in the pool while the respondent contends that the applicant received more than the total property pool and that he had to borrow money to meet his obligations under the 2019 order. A significant issue between the parties related to the ownership of a property at T Town that the respondent had purchased but registered in his brother’s name.
In my Reasons for Judgment delivered on 2 September 2021, I noted the respondent’s concessions about this property. I set out below the relevant paragraphs from the Reasons:
128. Included in [the] above table is a property at [T Town]. It is common ground that the [respondent] paid for the property using part of his lump sum […] monies. The property is registered in his brother’s name. During cross-examination the [respondent] denied he registered the property in his brother’s name in order to keep secret what he had earlier said was intended as a gift to his parents. However in the [respondent’s] affidavit filed 9 April 2019 the [respondent] said the following:
49. Following the receipt of the first instalment, I bought my parents a unit at [T Town] (registered in my brother’s name so as to surprise my parents) at a cost of [over $130,000] in recognition of the significant financial assistance they rendered to me in earlier years. I wanted my parents to have their own place to stay when visiting my [Suburb V] home as it was too small. I manage the property for my parents and extended family who use the unit. I do not pay any of the expenses for the unit.
129. During cross-examination the [respondent] contended that he owed his brother money at the time of purchase. The [respondent] produced no evidence to substantiate that claim. In any event, the [respondent] conceded that he has not only managed the property since its purchase but received all the rent from the letting of the [T Town] property and paid all of the outgoings. The [respondent] further conceded that his parents have never been to the property.
Pursuant to the 2019 order the respondent was to retain, among other things, the former matrimonial home, and the applicant was to be paid $185,000 by the respondent in two instalments. The first instalment of $80,000 was paid as required but the second instalment of $105,000 was not paid by 26 July 2020 as required. In those circumstances, the 2019 order provided for the former matrimonial home to be sold and in addition to any amounts then owing to the applicant, any net proceeds above a sale price of $360,000 were to be divided equally.
The respondent refused to comply with the default provision for sale of the former matrimonial home and on 6 August 2020 filed an application to set aside the 2019 order. The respondent’s application to set aside the 2019 order was dismissed on 2 September 2021.
On 30 September 2021, the respondent appealed against that decision. The respondent’s appeal was discontinued by him on 30 March 2022 and he was ordered to pay the applicant’s costs. Those costs (and others) remain outstanding.
On 11 June 2022, the applicant filed an Enforcement Application “after numerous requests for the [respondent] to pay the monies owing to the [applicant] plus interest”.
The second instalment of $105,000 was eventually paid in mid-2022. No interest was paid on the second instalment despite being nearly two years overdue.
For the purposes of the 2019 order, the former matrimonial home was valued at $360,000 with a mortgage balance of $270,000. The home is now valued at $750,000 with a mortgage balance of $309,000.
The applicant is seeking to enforce the default provisions of the 2019 order by a sale of the former matrimonial home and a division of the net proceeds in accordance with the 2019 order with some amendment to reflect the change in circumstances since that time i.e. the respondent has refinanced and drawn down on the loan. The parties agree on the terms of that amendment if an immediate sale order or a default sale order is made.
The respondent resists the sale of the former matrimonial home, suggesting that to force a sale now would be “inequitable”.
However, the respondent does not now oppose an enforcement order requiring the payment of:
(a)Interest of $12,931.82 on the late payment of the second instalment;
(b)The interim costs order of $7,973 together with interest thereon; and
(c)The costs in the appeal of $8,042.00 together with interest thereon,
and in default, a sale of the former matrimonial home.
The respondent seeks 30 days to pay the first payment and 60 days to pay the remaining two payments. It is conceded that the caveat registered on the former matrimonial home by the applicant can be removed by providing the release of caveat at settlement.
The applicant further seeks leave[1] to file an application for costs of the substantive proceedings, involving parenting matters and an application by the respondent to set aside the 2019 order nunc pro tunc and for the respondent to pay costs fixed in the sum of $70,054 by way of indemnity or $52,970 on scale.
[1] The applicant initially submitted that leave was not necessary but ultimately conceded the point.
The respondent submits that the applicant requires leave to bring the application out of time and that leave should not be granted but if leave is granted, that no order for costs should be made.
ENFORCEMENT – APPLICABLE PRINCIPLES
Section 105(1) of the Family Law Act 1975 (Cth) (“the Act”) provides the source of power to enforce orders. It provides:
Subject to this Part, to the regulations, and to the applicable Rules of Court, all decrees made under this Act may be enforced by any court having jurisdiction under this Act.
Rule 11.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) provides that obligations to pay money are enforceable obligations under Part 11.1 of the Rules.
In McMillan & McMillan,[2] Tree J provides a helpful overview of the relevant authorities at [37] – [60] and I adopt, with respect, his Honour’s conclusions as to the applicable principles which I summarise as follows (citations omitted):
(a)The nature of the power to enforce is discretionary as evidenced by the use of the term “may” in s 105 of the Act;
(b)Only the facts or circumstances arising since the date of order sought to be enforced will inform the discretion to be exercised pursuant to s 105 of the Act;
(c)The Court may refuse to enforce an order if it would be “inequitable” to do so;
(d)When considering whether or not it would be inequitable to enforce the order, the Court is primarily concerned with “general notions of fairness”;
(e)The party submitting that it would be inequitable to enforce the order bears the onus of so establishing;
(f)Delay in bringing an application for enforcement is a relevant factor.
[2] [2016] FamCA 387.
ENFORCEMENT OF 2019 ORDER
The relevant provisions of the 2019 order are as follows:
(1) …
(2)That within twelve (12) months from the date of these Orders, the Husband shall pay to the Wife the sum of $105,000 (one hundred and five thousand dollars).
(3) …
(4)In the event that the Husband fails to comply with Order 2, all parties shall do all acts and things and sign all documents necessary to effect the sale of the matrimonial house and for that purpose the following shall apply:
(a)That by 2 August 2020, the house shall be listed for sale by private treaty with a real estate as agreed between the parties with costs to be borne equally by the parties.
(b)These Orders authorise the Wife to liaise with the Agent and for the Wife to be notified of all interest in the house and offers for the purchase of the house.
(c)The list price of the house shall be $360,000 or such amount as is agreed between the parties.
(d)The Husband shall co-operate in every way with the real estate agent in relation to the marketing for sale of the house including making the key(s) readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer.
(e)The parties shall equally pay to the agent and/or solicitor acting for the parties in the sale transaction any sums requested for advertising, legal or other expenses during the sale process, as and when they fall due.
(f) That the sale price shall be 97.5% of the listing price.
(g)That upon agreement being reached for the sale of the house by the parties, the Husband shall execute the contract of sale and all other documents required to complete the sale of the property including all transfer documentation forthwith upon its submission to him by the agent or their solicitor with the Husband providing a copy of the Contract of Sale to the Wife upon execution.
(h)The proceeds of sale of the house shall be paid in the following manner and priority:-
(i)In discharge of the National Bank Mortgage No. …05 secured by the house (Loan account number …90);
(ii)In payment of the agent’s commission, advertising and other expenses;
(iii)In payment of the legal costs and outlays relating to the sale;
(iv) In payment of local authority adjustments;
(v)To the Wife, whatever amount is outstanding of the $105,000 referred to in Order 2 that may be owing.
(vi)The remainder to be divided equally between the parties in the event that the house sells for more than $360,000.
…
(10) That in the event that either party refuses, neglects or fails to execute any deed or instrument, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party and to do all acts and things to give validity to the operation of the deed or instrument.
It is unclear why the applicant did not rely upon paragraph 10 of the 2019 order to force the sale of the former matrimonial home rather than file an enforcement application. No doubt there are reasons for the course taken to which the Court is not privy.
The circumstances that have changed since the 2019 order are as follows:
(a)The value of the former matrimonial home has increased from $360,000 (at the time of the 2019 order) to $750,000;
(b)The mortgage to the National Bank number …05 has been repaid and refinanced with the Commonwealth Bank under mortgage number …16; and
(c)The current debt secured under the mortgage has increased from $270,000 at the time of the 2019 order to $309,088 largely it seems as a result of a drawdown of $62,700 between mid and late 2022. The balance owing under the mortgage as at 12 August 2022 was $250,617.66; and
(d)The applicant has continued to incur legal fees to enforce the 2019 order thereby limiting any benefit to her of the provisions of the 2019 order.
As already noted, the sum of $105,000 was paid in mid-2022 but no interest has been paid on that sum. The applicant is entitled to interest pursuant to s 117B (1) of the Act at the rate prescribed by r 10.17 of the Rules.
The respondent argues that to force a sale, at this time, of the home he has lived in since the 2019 order (and before) would be inequitable taking into account the following matters:
(a)The respondent has now paid the $185,000 due under the 2019 order, albeit, the second instalment was late and he has agreed to pay the interest due on the second instalment;
(b)A significant part of the delay in payment of the $105,000 relates to the period during which the respondent was challenging the 2019 order and then appealing the dismissal of his application;
(c)The applicant did not commence proceedings to enforce the 2019 order until 11 June 2022 despite the appeal being discontinued on 30 March 2022;
(d)The respondent has met all mortgage repayments and other outgoings since the 2019 order;
(e)The applicant has made no contribution to the increase in value of the former matrimonial home;
(f)For the applicant to enjoy the increase in value of the former matrimonial home would essentially reopen the deal reached in 2019;
(g)Such an increase in value was never anticipated at the time of the 2019 order, which included the provision for sale by way of default; and
(h)The respondent accepts that an enforcement order should be made in relation to the interest owing on the $105,000 and the two costs orders with interest.
The applicant presses for a sale of the former matrimonial home in circumstances where she argues:
(a)The applicant has incurred significant legal costs in seeking to enforce the 2019 order, funds that would otherwise have been available to her for her own use;
(b)Had the applicant had access to the $105,000 on 26 July 2020 as required by the 2019 order she may have been able to enter the property market and reap the benefits of an increase in her capital, as the respondent has done; and
(c)Market forces have led to the increase in value of the former matrimonial home.
It seems apparent that the reason for the applicant pressing ahead with the sale of the former matrimonial home is directly related to its increase in value. If sold, there is now substantial equity which was not the case in 2019.
While finely balanced, I have come to the conclusion that general notions of fairness require the dismissal of the application to enforce a sale of the former matrimonial home at this time. While the respondent did not obtain a stay of his obligations under the 2019 order, a significant portion of the delay in the payment coincided with the respondent seeking to set aside the 2019 order. When the respondent’s application to set aside the 2019 order and subsequent appeal concluded in March 2022, the respondent took steps to borrow the funds due but he experienced some difficulty in obtaining the funds because of his modest financial circumstances. It is common ground that the respondent suffers from a medical condition. He is unemployed and receives a pension. The respondent now consents to an enforcement order in relation to the interest and costs orders (together with interest), which partially addresses the prejudice suffered by the applicant because of the delayed payment, and I will so order.
However, if the respondent does not pay, I propose to order the former matrimonial home be sold.
EXTENSION OF TIME FOR COSTS APPLICATION
The substantive proceedings concluded on 2 September 2021 when a final order was made and the applicant had 28 days to file an application for costs (r 12.13(3)). The respondent appealed against part of the 2 September 2021 order (not against the parenting order) but the appeal was discontinued on 30 March 2022.
The applicant filed an application for costs of the substantive proceedings on 1 August 2022. On 8 September 2022, the applicant was granted leave to make an oral application for an extension of time within which to file an application for costs of the substantive proceedings pursuant to r 15.06. That application was to proceed by way of written submissions and determined by a registrar in chambers. Although written submissions were filed, the application for extension of time was not dealt with. It was agreed by the parties that the appropriate way to proceed was to dismiss the order for the matter to be dealt with in chambers by a registrar and for me to deal with the application at the same time as the enforcement application.
The applicant initially argued that an extension of time was not required because proceedings were ongoing, including the appeal and then the enforcement proceedings. Ultimately it was conceded that an extension of time was required and I consider that to be a sensible concession given that the 28 days within which an application for costs can be filed as of right runs from the date of the final order, which in this case was 2 September 2021.
Whether or not an extension of time is granted is governed by the requirement to do justice between the parties.[3] In considering any such application, the Court will have regard to any reasons for the delay, the history of the proceedings, the conduct of the parties and any prejudice that may be caused to either party from the grant or refusal of extension.[4]
[3] Gallo v Dawson (1990) 93 ALR 479.
[4] Ibid.
The fact that proceedings were ongoing is a relevant factor when considering delay. The respondent appealed on 30 September 2021 (but not in relation to the parenting order) and those proceedings did not conclude until 31 March 2022. The applicant then engaged in negotiations not only regarding the payment of the outstanding $105,000 which was not paid until 15 July 2022 but also in relation to interest and the costs of the substantive proceedings. The applicant had commenced enforcement proceedings the previous month. The applicant then mistakenly, in my view, considered that an extension of time was not necessary because proceedings were ongoing. In my view, the combination of those circumstances provide an adequate explanation for the delay.
The applicant contends that her prospects of succeeding in a costs application are substantial even though the substantive proceedings involved parenting proceedings in addition to the respondent’s application to set aside the 2019 order. The applicant contends that factors favouring an order for costs include:
(a)The respondent did not participate in the parenting proceedings as a “litigant would normally do” e.g. he recorded his interview with the family report writer (in breach of r 15.23(1) of the Rules) and turned up at his interview with the psychiatrist with a film crew;
(b)The respondent “kept advancing the Facebook posts during the proceedings to keep the children informed of what was going on”;
(c)The respondent persisted in his allegations against the applicant that she abused alcohol and illicit substances despite numerous drug and alcohol tests disproving his allegations;
(d)The respondent persisted in making a movie about his alleged experiences in the Court and was found in the Reasons for Judgment to be singularly focused on himself and not the children who asked him to desist with the movie project;
(e)The respondent “repeatedly refus[ed] or fail[ed] to comply with orders including withholding the children, failure to make payments of settlement monies and complying with cost orders”;
(f)The respondent unsuccessfully sought special leave to appeal from the High Court in relation to one matter;
(g)The respondent never really focused on the issues for trial;
(h)The respondent’s conduct had the effect of lengthening the trial and the proceedings generally;
(i)The respondent was wholly unsuccessful in the substantive proceedings;
(j)The applicant’s financial circumstances are exceptionally modest;
(k)The applicant has the sole care of the three children without any financial assistance from the respondent; and
(l)Given her legal costs, the property settlement she received was “illusory”.
The respondent resists the application for extension of time, submitting:
(a)The applicant’s delay in filing an application for costs cannot be explained by the appeal (which was not in relation to the parenting order), or the ongoing negotiations about enforcement;
(b)The applicant had not shown any intention to apply for costs until 1 August 2022;
(c)The respondent was self-represented at trial and suffers from a medical condition;
(d)The respondent was not wholly unsuccessful at trial as he succeeded in obtaining a referral of the mother to appropriate authorities for consideration of whether or not she had committed fraud in relation to receipt of social security for a period; and
(e)Costs are generally not awarded in parenting cases.
In my view, an extension of time should be granted nunc pro tunc. The explanation for the delay is adequate. The applicant did raise her intention to seek costs of the substantive proceedings prior to filing her application[5] and sought to negotiate a sum. The applicant has reasonable prospects of succeeding in a costs application given the history of the proceedings and the conduct of the respondent. To refuse an extension would cause considerable prejudice to the applicant. The exposure to a costs order is a potential prejudice to the respondent but not one that causes me to refuse the extension of time.
[5] See correspondence from applicant to respondent dated 8 April 2022 and 30 May 2022.
APPLICABLE PRINCIPLES - COSTS
In this Court, each party generally bears their own costs (s 117(1) of the Act. However, where there are circumstances that justify an order for costs, the Court is able to make such order as is considered just having regard to the matters contained in relevant subsections of s 117 and applicable Rules of Court (s 117(2)).
The list of matters to which the Court must have regard when determining a costs application are set out in s 117(2A) of the Act and since the commencement of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCOA Act”) on 1 September 2021, there are additional matters to which the Court must have regard.[6]
[6] The notation to s 117(2) of the Act refers to s 69(4)(d) and (e) of the FCFCOA Act.
The matters set out in s 117(2A) of the Act are as follows:
(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.
When considering the factors set out in s 117(2A) of the Act, it is sufficient for one factor to be present.[7]
[7] Fitzgerald vFish sub nom PBF v TRF (FLR) (2005) 191 FLR 294 at 301, [41].
Impecuniosity, of itself, is not a bar to making a costs order.[8]
[8] Nada & Nettle (Costs) (2014) FLC 93-612 at 79,589, [11]; see also Lenova & Lenova (Costs) [2011] FamCAFC 141 at 3, [12].
An additional source of power to award costs in an appropriate matter is to be found in s 69(4)(d) and (e) of the FCFCOA Act, which empowers the Court to award costs against a party and that the costs awarded be assessed on an indemnity basis or otherwise.
There is an additional mandatory requirement created by s 68(4) of the FCFCOA Act which requires the Court to take into account any failure to comply with the duty imposed by ss 68(1) or (2), which require the parties and the lawyers for the parties to conduct the proceedings in a way that is consistent with the overarching purpose of the family law practice and procedures provisions of the FCFCOA Act. The overarching purpose is set out in s 67 and requires, among other things, the proceedings to be conducted as “quickly, inexpensively and efficiently as possible”.
At the time the substantive proceedings commenced, the Rules applicable to costs applications were contained in the Family Law Rules 2004 (Cth), but those Rules were repealed on 1 September 2021 by the Family Law Repeal Rules 2021 (Cth), and replaced with the Rules, with effect from 1 September 2021. Note 1 to r 1.02(2) of the Rules states as follows:
… The new Rules apply to a proceeding that was commenced in accordance with the old Rules and was not determined before the repeal of the Rules.
Part 12.5 of the Rules deals with ‘orders for costs’ and, among other things, empowers the Court to set a time for payment.[9]
[9] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.13(5).
Part 12.6 deals with ‘calculation of costs’ and provides 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.
(2)If costs are payable under the Family Law Act or these Rules, or the court orders that costs be paid and does not specify the method for their calculation, the costs are to be assessed on a party and party basis.
(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 proceedings;
(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;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
Rule 12.08(2) (referred to in r 12.17(3)(b)) provides as follows:
(2)In considering whether a party’s legal costs have been fairly, reasonably and proportionately incurred, regard must be had to all relevant matters including, but not limited to, whether a lawyer representing the party, a lawyer representing any other party, or any self‑represented litigant has:
(a)complied with all relevant rules and orders of the court, including requirements that documents be filed or provided to other parties by a given date; and
(b)acted reasonably in raising, pursuing or contesting a particular allegation or issue; and
(c)made reasonable efforts, subject to the client’s instructions, to resolve the dispute through negotiation, mediation or arbitration; and
(d) made reasonable efforts to narrow the issues in dispute; and
(e)filed no more interlocutory applications than are reasonably necessary in the circumstances of the proceeding; and
(f)filed no more affidavits or other documents than are reasonably necessary in the circumstances of the proceeding.
When determining an application for costs, the Court may make such order as to costs as it considers just.[10] An application for costs bears no “additional or special onus” other than the establishment of “justifying circumstances”.[11]
[10] Family Law Act 1975 (Cth) s 117(2).
[11] Penfold v Penfold (1980) 144 CLR 311 at 315 (“Penfold”).
As to the identification of such circumstances by the Court, the High Court of Australia in Penfold v Penfold[12] said the following:
Sub-section (2) [of s 117] does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised. Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
[Citation omitted]
[12] Ibid at 315–316.
The Court will not lightly make an order for costs to be paid on an indemnity basis. There needs to be some circumstance of an exceptional kind to justify that course.[13]
[13] Kohan and Kohan (1993) FLC 92-340 at 79,614; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233 (“Colgate-Palmolive”).
The tensions created by the differing objectives sought to be addressed by a costs order awarded on a party and party basis as opposed to an indemnity basis were discussed in Re Wilcox, Ex parte Venture Industries Pty Ltd[14] where the Full Court of the Federal Court said at 156:
The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.
The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225.
[14] (1996) 72 FCR 151 at 156 (‘Re Wilcox’).
The Full Court went on to restate the principles from Colgate-Palmolive Co v Cussons Pty Ltd (“Colgate-Palmolive”)[15] in the following terms:
(a)the Court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the Court in departing from the usual course;
(b)the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the Court in departing from the usual course;
(c)whilst the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis. [16]
[15] Colgate-Palmolive (fn 13) at 233.
[16] Re Wilcox (fn 14) at 156–157.
While there is no exhaustive list of what circumstances may warrant an order for costs to be paid on an indemnity basis, some particular circumstances that have been found to justify such an order were identified by Sheppard J in Colgate-Palmolive[17] as follows:
(a)Making allegations of fraud knowing them to be false;
(b)Making irrelevant allegations of fraud;
(c)Evidence of particular misconduct that causes loss of time to the Court and to the other parties;
(d)Commencing or continuing proceedings for some ulterior motive or in wilful disregard of known facts or clearly established law;
(e)Making allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and
(f)An imprudent refusal of an offer to compromise.[18]
[17] Colgate-Palmolive (fn 13).
[18] Colgate-Palmolive (fn 13) at 233.
Not only does this Court have the power to order a specific amount for costs,[19] it has been the policy (at least of the former Appeal Division of this Court) for a specific amount to be ordered rather than requiring an assessment of costs.[20] This is because the latter approach will inevitably involve the parties in yet further conflict, delay, and cost.[21]
[19] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17(1)(a).
[20] Stopford Malloy & Malloy (Costs) [2018] FamCAFC 6 at 2–3, [10]–[12] (“Stopford”).
[21] Ibid.
In Parke & the Estate of the Late A Parke,[22] Murphy J quoted with approval the observations made by Einstein J in Idoport Pty Ltd v National Australia Bank Limited & Ors, Idoport Pty Ltd v Donald Robert Argus[23] when that court was considering an analogous provision to that contained in r 12.17(1)(a) of the Rules:
130.If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court” (Beach Petroleum NL v Johnson (No 2) [1995] FCA 1250; (1995) 57 FCR 119, at [24]cited in Idaport at [9]). The process does not “by its very nature ... envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”. (Idaport at [9](v), citing Harrison v Schipp[2002] NSWCA 213; (2002) 54 NSWLR 738).
131.Obviously enough, the court must act judicially in fixing or specifying a sum of costs, but:
...the requirement that the power to award a gross sum should be exercised judicially does not mean that it must be exercised in any scientific or formulaic manner. At the heart of the judicial function is the responsibility to weigh up competing factors and considerations, many of which might conflict, to reach a determination. Acting judicially carries with it an obligation to apply the rules of natural justice, to act impartially and to apply the law to the facts. ...
[22] (2016) FLC 93–748 at 81,944, [130]–[131].
[23] [2007] NSWSC 23 at [9].
SHOULD COSTS BE AWARDED?
As already noted at [37] the applicant relies upon a number of factors including her impoverished financial circumstances, the conduct of the respondent during the proceedings, and in prolonging the trial, and the respondent being wholly unsuccessful in the substantive proceedings.
I accept the applicant’s submissions that a costs order is justified in the circumstances of this case. I am not however satisfied that the circumstances are exceptional such as to justify indemnity costs.
While the substantive proceedings did include parenting issues, that of itself does not preclude a costs order being made, where there are factors that justify an order.[24] The conduct of the respondent impeded the orderly progress of the parenting proceedings e.g. the respondent did not engage in the process of assessment with the psychiatrist (at [78] of the Reasons for Judgment dated 2 September 2021); the respondent covertly recorded the family report interviews (at [80]); the respondent’s behaviour during the family report interview demonstrated his completely self-focussed approach (at [80]); the respondent’s interaction with the family report writer was described as aggressive and accusatory and whenever she attempted to speak the respondent spoke over her (at [82]).
[24] In the Marriage of I and I (No 2) (1995) FLC 92-625.
The respondent also caused the trial to take longer than it should have by pursuing matters to trial that were not supported by any evidence e.g. that the applicant was abusing alcohol and drugs, and in fact the evidence indicated to the contrary.
The respondent was wholly unsuccessful in the proceedings.
Quantum
As to quantum, the applicant’s schedule of costs on scale total $52,970.
The respondent contends that a number of the items included in the applicant’s schedule should be disallowed including:
(a)Costs incurred prior to the 2019 order;
(b)Costs in relation to the appeal against the final order which is already the subject of a costs order;
(c)Costs subsequent to the substantive proceedings relating to enforcement,
and that if costs are awarded they should be no more than $30,690.
I find that a just sum for the costs of and incidental to the substantive proceedings is $46,762. While the schedule is somewhat confusing, as are the submissions by the respondent seeking to reduce the sum claimed, I have deducted the costs incurred prior to the 2019 order from the schedule. In my view, the settlement of the property dispute at that time resolved those issues. It is not possible to differentiate between parenting and property matters prior to that date. The costs in relation to the appeal against the final order and an earlier appeal were not included in the schedule subtotals nor were the costs relating to the enforcement application filed 11 June 2022.
Costs of the Enforcement Proceedings
I also propose to award the applicant her costs of the enforcement proceedings even though she did not succeed in enforcing the sale of the former matrimonial home, at this time. The applicant has been substantially successful in the proceedings, in that interest is to be paid on the $105,000 and the costs orders are to be paid with interest. The applicant’s caveat is to be removed at settlement. The respondent did not formally make these concessions until during the hearing. The applicant’s financial circumstances are also a factor I take into account and the fact that she is solely supporting the children of the relationship. While the respondent suggested that his inability to pay the sums owing was caused by the applicant refusing to remove the caveat, that seems unlikely given that the respondent borrowed $70,000 from his brother and used $35,000 from another source to pay the $105,000 and then also drew down on his mortgage facility the sum of $62,700 over the period mid to late 2022 ostensibly to partially repay his brother although there is no evidence of that nor that his brother was pressing for repayment.
The respondent did not cavil with the quantum of $6,600 claimed and that sum will be ordered.
TIME TO PAY
I will allow the respondent 60 days to pay all sums that will be due under the order I propose to make. The respondent may well have to borrow funds from a financial institution and at least part of such a process is outside the control of the respondent. If the respondent does not pay all of the sums due under the order by the due date, I propose to make an order that the former matrimonial home be sold and the mechanism agreed to by the parties as to the distribution of the net proceeds will be adopted.
I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 24 February 2023
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