TALBOTT & TAPP
[2020] FamCA 391
•25 May 2020
FAMILY COURT OF AUSTRALIA
| TALBOTT & TAPP | [2020] FamCA 391 |
| FAMILY LAW – COSTS – Where the de facto husband seeks an order that the de facto wife pay his costs in respect of interim proceedings on an indemnity basis or in the alternative on a party/party basis– Where the de facto wife opposes the Application for costs – Where the de facto wife was wholly unsuccessful in pursuing her Application in the Family Court of Australia – Consideration of the conduct of the parties in the proceedings – Where the de facto wife has been made redundant – Consideration of the financial circumstances of the parties – Orders made for costs on a party/party basis in favour of the de facto husband payable upon conclusion of property proceedings. |
| Family Law Act 1975 (Cth) s 117. Family Law Rules 2004 (Cth) ch 13, r 19.18, sch 3. |
| Byrnes v Brisconnections Management Company Ltd (No. 2) [2009] FCA 1432 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Cales v Talbott [2020] NSWSC 380 Fennessy & Gregorian (2009) FLC 93-399 Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123 Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 Kohan and Kohan (1993) FLC 92-340 Lambert& Jackson [2011] FamCA 275 Limousin v Limousin (Costs) (2007) 38 Fam LR 478 Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 Melville & Dent (No.2) [2009] FamCA 81 Penfold v Penfold (1980) 144 CLR 311 Pierson & Romilly [2020] FamCAFC 91 Ryan v Primesafe [2015] FCA 8 Stoian & Fiening (Costs) [2014] FamCA 944 Tapp & Talbott [2020] FamCA 57 Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 Yunghanns & Yunghanns (2000) FLC 93-029 |
| APPLICANT: | Mr Talbott |
| RESPONDENT: | Ms Tapp |
| FILE NUMBER: | SYC | 2557 | of | 2017 |
| DATE DELIVERED: | 25 May 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland DCJ |
| HEARING DATE: | 1 April 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Roberts |
| SOLICITOR FOR THE APPLICANT: | Anne Einfeld Solicitor |
| COUNSEL FOR THE RESPONDENT: | Mr Dura |
| SOLICITOR FOR THE RESPONDENT: | Walter & Elliott Family Lawyers |
Orders
The de facto wife is to pay costs of the de facto husband assessed at the fixed amount of $34,080.28 with that amount to be payable by the de facto wife immediately upon finalisation of the proceedings between the parties in the Family Court of Australia, whether by way of settlement or judgment.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Talbott & Tapp has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 2557 of 2017
| Mr Talbott |
Applicant
And
| Ms Tapp |
Respondent
REASONS FOR JUDGMENT
Introduction
This decision concerns an Application by Mr Talbott (“the de facto husband” for the purpose of these proceedings) for costs in respect to an Application in a Case filed by Ms Tapp (“the de facto wife” for the purpose of these proceedings) on 18 November 2019.
The de facto wife’s Application was heard on 4 February 2020 and my reasons for judgment dismissing the matter were delivered on 10 February 2020. By way of summary, the de facto wife, in her Application, primarily sought an injunction against Mr Cales (“the Second Respondent”) restraining him from enforcing a default judgment in the Supreme Court of New South Wales (“the Supreme Court”) against herself, the removal of a caveat that had been placed upon the former matrimonial home and orders for further and better disclosure on the part of the de facto husband and the Second Respondent. The de facto wife was unsuccessful in respect to each aspect of her Application.
By consent Orders made on 28 February 2020, the parties agreed that no order as to costs was to be made against the Second Respondent. Accordingly, the only issue to be decided in these proceedings is whether an order for costs should be made against the de facto wife for the costs of the de facto husband and, if so, on what basis.
Background
A detailed summary of the background to this matter is outlined in my reasons for judgment dated 10 February 2020 (“the February Judgment”).[1] I will, however, subsequently set out the relevant background to this decision in respect to costs.
[1]Tapp & Talbott [2020] FamCA 57.
On 10 July 2019, consent Orders were made by Senior Registrar Campbell. Order 16 of those Orders joined the Second Respondent as a party to the proceedings.
On 14 October 2019, the Second Respondent filed a Statement of Claim in the Supreme Court seeking to recover a loan allegedly advanced to the parties in December 2011. The parties did not file a defence to the Second Respondent’s Statement of Claim.
In her Application in a Case filed 18 November 2019, the de facto wife sought, inter alia, the following order:
3. That the Second Respondent be restrained by injunction from proceeding with his Statement of Claim filed on 14 October 2019 in the Supreme Court of New South Wales at Sydney (Case Number 2019/…) and that within 21 days he do all acts and things necessary to discontinue the proceedings.
On 23 December 2019, the Second Respondent applied, by Notice of Motion filed in the Supreme Court, for judgment against both parties to these proceedings.
On 30 December 2019, default judgment for $830,302.31 was entered against both parties to these proceedings.
On 10 February 2020, I made the following Orders:
(1) The de facto wife’s Application in a Case filed 18 November 2019 is dismissed.
…
(3) The parties have liberty to apply in respect to the question of costs.
The de facto wife relies on events which have occurred in the period subsequent to my delivering judgment on 10 February 2020 as being relevant to the issue as to whether I should award costs in respect to the proceedings. Save to the extent that I recognise that the de facto wife has been made redundant from her employment, I have not accepted the merit of that argument advanced by the de facto wife. However, for completeness, I will set out those events by way of summary.
On 19 February 2020, the de facto wife filed a Notice of Motion in the Supreme Court seeking to set aside the default judgment. The de facto husband did not, however, contest the default judgment.
On 28 February 2020, following agreement between the parties and the Second Respondent, I made consent Orders removing the Second Respondent as a party to the proceedings and listing the matter for hearing in respect to costs between the de facto husband and the de facto wife on 1 April 2020.
On 6 March 2020, the Notice of Motion filed by the de facto wife on 19 February 2020 was heard in the Supreme Court.
On 30 March 2020, the de facto wife was made redundant from her employment as a professional. Her employer advised her that she would receive a redundancy payout equivalent to 12 weeks of pay plus annual leave and notice, however, the date of that payment is not known.
In April 2020, the decision was delivered. His Honour made an Order for the default judgment entered against the de facto wife to be set aside. In arriving at his decision, his Honour stated:
In the end result, I am satisfied that [the de facto wife] has a bona fide defence to the case that is pleaded. To the extent that there is material suggesting that [the Second Respondent] can enunciate a different basis on which [the de facto wife] is liable and in respect of which she appears to have acknowledged an indebtedness then until such a basis is properly pleaded it cannot be determined whether she has a bona fide defence.
As such, his Honour made a further Order granting leave for the Second respondent to file and serve an amended statement of claim.
In his reasons, his Honour stated that “even if the judgment against [the de facto wife] is set aside, [the Second Respondent] will retain a judgment against [the de facto husband]”. Accordingly, the default judgment remains against the de facto husband.
Applications
Orders sought by the de facto husband
In his Response to an Application in a Case filed 31 January 2020, the de facto husband sought the following orders:
1. The Application in a Case filed by the [de facto wife] on 18 November 2019 be dismissed with costs.
2. Further to Order 1, [the de facto husband] seeks an order that such costs be immediately assessed by the Court and awarded in a fixed sum payable by the [de facto wife] to the [de facto husband].
The de facto husband, in his “Outline of Submissions” provided electronically, to the Court by his solicitor on 31 March 2020, clarified the orders he seeks as follows:
2. The de facto Husband sought in his Response filed 31 January 2020 at both Order 1 and 2 of the Response for the de facto Wife to pay his costs.
3. The de facto Husband seeks that the de facto Wife pay costs on an indemnity basis in the sum of $41,110.13.
4. In the alternative, if the Court does not make an order for costs on an indemnity basis then those costs to be in the sum of $34,080.28 in accordance with Schedule 3 of the Family Law Rules 2004.
Orders sought by the de facto wife
As outlined in her Case Outline document, provided electronically by counsel for the de facto wife on 15 April 2020, the de facto wife seeks an order that the de facto husband’s Application for costs be dismissed.
Evidence
The de facto husband relied upon the following documents:
a)Response to Application in a Case filed 31 March 2020;
b)Affidavit of the de facto husband filed 31 March 2020;
c)Tender bundle of annexures to the Affidavit of the de facto husband;
d)Letter from the solicitors for the de facto husband to the solicitors for the de facto wife dated 21 January 2020; and
e)Written submissions of the de facto husband in reply to the written submissions of the de facto wife provided to the Court on 29 April 2020.
The de facto wife relied upon the following documents:
a)Affidavit of the de facto wife filed 31 March 2020;
b)Tender bundle of annexures to the Affidavit of the de facto wife;
c)Financial Statement of the de facto wife filed 13 June 2019;
d)Judgment dated April 2020; and
e)Written submissions of the de facto wife provided to the Court on 15 April 2020.
Costs
The Law – Concepts and Principles
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out the basis upon which the Court is empowered to award costs. That section relevantly provides:
(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.
Those provisions make clear that, while the general rule in family law proceedings is that each party bears his or her own costs, the Court may order a party to pay the costs of another where there are circumstances justifying the making of such an order.
As such, a litigant seeking a costs order must establish that the justice of the case requires an order for costs, by reference to the non-exhaustive list of statutory considerations set out in s 117(2A) of the Act, before such an order is made. Although the applicant for costs must establish circumstances which would justify such an order, it is not the case that a costs order can only be made in what has been described as “a clear case”: Penfold v Penfold (1980) 144 CLR 311 at 315.
The considerations set out in s 117(2A) of the Act must be taken into account in deciding whether or not to order a party to pay the costs of another. No one factor under s 117(2A) prevails over any other factor. It is a matter of weight that is accorded to each of the relevant factors in the trial judge’s discretion: Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 per Strickland J.
Accordingly, there is “nothing to prevent any factor being the sole foundation for an order for costs” being made: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123 at 130.
Contentions
Submissions of the de facto husband
In making submissions in respect to whether the circumstances justify the making of a costs order against the de facto wife, the de facto husband, primarily, relied upon ss 117(2A)(c) and (f) of the Act, which provide that the Court is to consider the conduct of the parties in relation to the proceedings and any offer that may have been made by either party. In further support of his Application, the de facto husband submitted that the “other matters” provision, that is s 117(2A)(g), is also relevant to the consideration of his Application for costs.
The substance of the submissions, made by counsel for the de facto husband in regard to ss 117(2A)(c) of the Act, relates to the de facto wife’s lack of participation in the proceedings commenced in the Supreme Court by the Second Respondent. In making his oral submissions, counsel for the de facto husband emphasised, to the Court, that the de facto wife did not file any defence in the Supreme Court addressing the Second Respondent’s Statement of Claim or Notice of Motion, which resulted in the default judgment being entered against the parties.
In terms similar to those expressed by myself at [58] of the February Judgment, the de facto husband states that the de facto wife did not challenge the validity of the documents which were asserted to give rise to the loan until her Application was filed on 18 November 2019. The de facto husband further contends, by reference to [71] of the February Judgment, that the de facto wife failed to present evidence and put forth submissions with sufficient detail particularising her position in support of her Application and, specifically, she failed to adequately particularise the basis upon which she asserted that she had a legitimate defence to the proceedings commenced by the Second Respondent in the Supreme Court.
The de facto husband provided a copy of a letter dated 21 January 2020 to the Court in support of his contentions in relation to s 117(2A)(f). The letter, written by the de facto husband’s solicitor and addressed to the solicitors for the de facto wife, summarises the circumstances before the parties following the default judgment and responds briefly to allegations of non-disclosure by the de facto wife against the de facto husband. Significantly, the solicitors for the de facto husband also made the following request:
In the event your client does not dispute the amount owing we request you kindly confirm your client’s instructions to proceed to completion of the sale without the necessity for the matter to proceed to hearing on 4 February.
…
This is an open letter to be relied upon by my client as to the issue of costs pursuant to the Calderbank principle.
Counsel for the de facto husband, in his oral submissions, cited the letter as an offer in writing to settle the proceedings, pursuant to ss 117(2)(f) of the Act.
In addressing ss 117(2A)(g) of the Act, the de facto husband reiterated his contention regarding the de facto wife’s lack of engagement with the proceedings commenced in the Supreme Court and stated that, instead of so participating, the de facto wife “unjustly sought to prevent the Supreme Court resolving that issue”. The de facto husband also asserted that the de facto wife has not provided any particularisation regarding her allegations that the de facto husband and Second Respondent failed to provide proper disclosure pursuant to their obligations under ch 13 of the Family Law Rules 2004 (Cth) (“the Rules”).
In that respect, reference was made to the letter dated 21 January 2020 from the de facto husband’s solicitor to the de facto wife’s solicitor in which it was stated, “In closing, kindly provide particulars of what further documents, if any, you seek by way of disclosure.” The de facto husband was not challenged on his assertion that his solicitor received no reply to that invitation.
Submissions of the de facto wife
In written submissions filed on behalf of the de facto wife, it was contended that the Court could not be satisfied that the circumstances of this case justified an award of costs against the de facto wife. By way of summary, those submissions were as follows.
The de facto wife acknowledges that she was wholly unsuccessful in pursuing her Application. However, the de facto wife relies upon ss 117(2A)(a) and (c) of the Act to contend that no order for costs should be made against her. As outlined, those provisions direct the Court to have regard to the financial circumstances and conduct of each party to the proceedings, respectively.
The de facto wife contends that she does not have the capacity to meet any order that the Court may make for costs against her. In that respect, the de facto wife attests to being made redundant on 30 March 2020. As stated in her Affidavit filed 31 March 2020 and Financial Statement filed 13 June 2019, prior to her redundancy, the de facto wife was employed as a professional and was earning approximately $118,000 per annum. The de facto wife further states that she does freelance work, earning approximately $8,000 per year, however, she anticipates earning significantly less than that amount in 2020 due to the decrease in freelance work as a result of the global COVID-19 pandemic.
In disclosing her current financial circumstances, the de facto wife contends that her redundancy payout, being equivalent to 12 weeks’ worth of pay plus annual leave as advised by her employer, together with the child support that she receives from the de facto husband in the amount of approximately $460 per week, “is the only source of funds [she] has to support [herself] and the children for the foreseeable future”. In contrast, the de facto wife states that the de facto husband earns “around $500,000 to $550,000 gross per annum”.
Accordingly, the de facto wife submits that her reduced income and the disparity between her earning capacity and that of the de facto husband ought to be considered as mitigating against the making of an order for costs.
In addressing s 117(2A)(c) of the Act, the de facto wife contends that the conduct of the de facto husband gave rise to the Application filed by the de facto wife. Specifically, the de facto wife submits that the Order made on 10 July 2019 joining the Second Respondent to the proceedings was made upon the request of the de facto husband. I note that, in making oral submissions, counsel for the de facto husband noted to the Court that the Order made on 10 July 2019 by Senior Registrar Campbell joining the Second Respondent to the proceedings was consented to by the de facto wife. That fact is confirmed on the sealed copy of the Orders.
The de facto wife further alleges that the de facto husband and Second Respondent failed to adduce evidence in respect to the circumstances surrounding the loan that the Second Respondent sought to recover through the proceedings in the Supreme Court. The de facto wife, therefore, submits that she “was left with little option other than to pursue her Application”.
In my February Judgment, when detailing the reasons why I dismissed the Application for injunctive relief against the Second Respondent, I noted that the Second Respondent had the benefit of a default judgment, issued in the Supreme Court against the parties and, in the proceedings before me, the de facto wife had failed to adequately particularise the basis upon which she asserted that she had a valid defence to the Second Respondent’s claim. The de facto wife has referred the Court, however, to the decision of the Supreme Court, delivered in April 2020, in which the default judgment as entered against the de facto wife was set aside. At paragraph 20 of her outline of submissions provided to the Court on 15 April 2020, the de facto wife cites paragraphs of the judgment in which his Honour supported the de facto wife’s submissions in that respect. The de facto wife therefore submits that she acted reasonably in filing her Application in a Case on 18 November 2019.
Consideration
It is necessary to determine whether the de facto husband, who seeks an order for costs, has established circumstances justifying such an order which displaces the position articulated in s 117(1) of the Act. It is not necessary to establish extraordinary or exceptional circumstances, however, there must be circumstances which, at the absolute discretion of the Court, justify a costs order: Stoian & Fiening (Costs) [2014] FamCA 944 at [19] (“Stoian”) having regard to the matters set out in s 117(2A) of the Act.
Subsection (2A)(a) – The financial circumstances of each of the parties to the proceedings
In this matter, I note the superior financial resources of the de facto husband. However, I also note that the de facto wife has adequate financial resources from which she is able to satisfy an order for costs. A consideration of relevance is, however, that the de facto wife is the primary carer of the parties’ two (2) children and she has ongoing financial commitments arising from that important responsibility. It is also of relevance that the de facto wife has been made redundant from her employment and it is uncertain as to what her employment prospects will be in the future.
Subsection (2A)(b) – Whether any party to the proceedings is in receipt of assistance by way of legal aid
Neither party was legally aided and, accordingly, s 117(2A)(b) of the Act is not a relevant consideration.
Subsection (2A)(c) – The conduct of the parties to the proceedings in relation to the proceedings
Paragraph (c) relates to the conduct of the parties in these proceedings and, accordingly, I have not had regard to the conduct of the parties in respect to the proceedings commenced in the Supreme Court.
Nevertheless, it is relevant that, in the proceedings giving rise to my February Judgment, the de facto wife sought orders restraining the Second Respondent from enforcing a judgment which he had obtained in the Supreme Court against the de facto husband and de facto wife. This argument was advanced in circumstances where, in the proceedings in this Court, the de facto wife had failed to adequately particularise the basis upon which she contended she had a defence to the claim made by the Second Respondent in the Supreme Court proceedings.
Further, the de facto wife sought orders for disclosure, relevantly, for the purpose of this Application, against the de facto husband. This was done in circumstances where it is apparent that, by letter dated 21 January 2020, the solicitor for the de facto husband specifically invited the de facto wife’s solicitor, on behalf of the de facto wife, to nominate, in addition to the documentation which had been provided by the de facto husband as at that date, what additional documentation the de facto wife sought. While the de facto wife contends that the invitation was “improper and unreasonable” as the de facto husband exercised control of the parties’ finances, the de facto wife was provided with an opportunity to better particularise her request so as to gain access to any documentation which she asserts the de facto husband has in his possession. Accordingly, I do not accept that submission advanced by the de facto wife.
Subsection (2A)(d) – Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
Both parties agree that the provision of s 117(2A)(d) is not relevant and, accordingly, I will not consider this factor.
Subsection (2A)(e) – Whether any party to the proceedings has been wholly unsuccessful in the proceedings
Both parties agree that the de facto wife was wholly unsuccessful in respect to her Application against the de facto husband and the Second Respondent.
Subsection (2A)(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
As noted by the de facto husband in these proceedings, by letter dated 21 January 2020, the solicitors for the de facto husband invited the de facto wife to discontinue the proceedings arising from her Application in a Case filed on 21 November 2019 in the following terms:
In the event your client does not dispute the amount owing we request you kindly confirm your client’s instructions to proceed to completion of the sale without the necessity for the matter to proceed to hearing on 4 February.
In the proceedings on 4 February 2019, the de facto wife disputed the amount owing by herself and the de facto husband to the Second Respondent and she continues to do so in the Supreme Court proceedings. Accordingly, it cannot be said that, at the time that I delivered judgment on 10 February 2020, the de facto wife had been unsuccessful in respect to the subject matter of the offer set out in the letter from the de facto husband’s solicitors dated 21 January 2020.
Subsection (2A)(g) – Such other matters as the Court considers relevant
There are no other matters that the Court considers to be relevant to the determination of this costs Application.
Conclusion – an order for costs to be made.
Having regard to each factor set out in s 117(2A) of the Act to which I have referred, I am satisfied that an order for costs against the de facto wife in relation to her Application should be made.
Indemnity Costs
The Law – Concepts and Principles
In Melville & Dent (No.2) [2009] FamCA 81 at [33], Cronin J discussed the basis upon which the question of indemnity costs arises and referred to the decision of Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (“Colgate-Palmolive”) as providing a “pertinent observation” of the “court-endorsed costs structure of litigation”, wherein his Honour said:
For present purposes it is enough to say that the position is as it is because members of the profession, both solicitors and counsel, and also professional witnesses, have refused to accept as a proper or sufficient guide to their costs and fees the provisions of scales of costs and charges provided for in schedules … Taxing officers have been obliged to tax bills on the basis of the Rules and the Schedule. The fact that the scales themselves provided ranges of fees of charges for various items depending on degree of difficulty, levels of responsibility and time involved, has not overcome the practical problem which exists.
In Kohan and Kohan (1993) FLC 92-340 at 79,614 (“Kohan”), the Full Court noted that “an exceptional kind” of circumstances must exist for the Court to justify departing from the general rule that costs, if awarded, should be on a party/party basis and, instead, making a costs order on an indemnity basis. In Yunghanns & Yunghanns (2000) FLC 93-029 at 87,471, the Full Court applied Kohan (supra) to confirm that an order for the payment of indemnity costs is “a very great departure from the normal standard”.
Nevertheless, as confirmed by the Full Court in Limousin v Limousin (Costs) (2007) 38 Fam LR 478 (“Limousin”) and subsequently in Fennessy & Gregorian (2009) FLC 93-399, referring to the decision of Sheppard J in Colgate-Palmolive (supra), there are circumstances which may arise that “warrant the court in departing from the usual course” of awarding party/party costs and, instead, awarding costs on an indemnity basis.
While the categories in which indemnity costs may be awarded are not closed, examples of “special circumstances” which may justify that course of action were usefully set out by Harper J in Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 at [7] as including where:
(i) The making of an allegation, known to be false, that the opposite party is guilty of fraud: Fountain Selected Meats (Sales) Pty. Ltd. v International Produce Merchants Pty. Ltd. (1988) 81 A.L.R. 397.
(ii) The making of an irrelevant allegation of fraud: Thors v. Weekes (1989) 92 A.L.R. 131.
(iii) Conduct which causes loss of time to the Court and to other parties: Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd. (unreported, Federal Court, French J, 3 May 1991).
(iv) The commencement or continuation of proceedings for an ulterior motive: Ragata Developments Pty. Ltd. v. Westpac Banking Corporation (unreported, Federal Court, Davies, J., 5 March 1993).
(v) Conduct which amounts to a contempt of Court: EMI Records Ltd. v. Ian Cameron Wallace Ltd. [1983] Ch 59.
(vi) The commencement or continuation of proceedings in wilful disregard of known facts or clearly established law: J-Corp. Pty. Ltd. v. Australian Builders Labourers Federation Union of Workers (WA) Branch (No. 2) (1993) 46 IR 301.
(vii) The failure until after the commencement of the trial, and without explanation, to discover documents the timely discovery of which would have considerably shortened, and very possibly avoided, the trial: National Australia Bank v. Petit-Breuilh (No 2) (unreported, [1990] VSC 395, 18 October 1999).
A similar summary of the kinds of circumstances justifying an order for indemnity costs can be found in Colgate-Palmolive (supra) at 233 to 234. In setting out those circumstances, Sheppard J stated:
Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
Those principles have generally been applied in this Court: see for instance the useful analysis by the Full Court of the Family Court in Limousin (supra); Watts J in Lambert&Jackson [2011] FamCA 275 and Mortimer J in Ryan v Primesafe [2015] FCA 8 at [110].
Consideration of Indemnity Costs
I have earlier set out the concerns that I have in respect to the manner in which the de facto wife conducted her Application in a Case which was heard before me on 4 February 2020. Those circumstances do not, however, constitute circumstances justifying an order for indemnity costs. It is noted that, in this jurisdiction, such an order is the exception and costs are ordinarily made on a party/party basis.
Costs in a fixed amount
Rule 19.18 of the Rules provides for the methods of calculating costs. These include, in r 19.18(1)(a), the Court fixing upon a specific amount for costs or, in r 19.18(1)(b), an order for the costs to be assessed on a particular basis.
In Stoian (supra), Kent J endorsed the principles for applying a rule equivalent to r 19.18 of the Rules as adumbrated by Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23. Those principles are:
i. the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation;
ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable;
iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available;
iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place;
v. the gross sum “can only be fixed broadly having regard to the information before the Court”;
…
(Citations omitted)
Consistent with those principles, it has been determined that, where a court orders a party to pay costs, it may be appropriate for the court to fix a lump sum. By doing so, the court can avoid further delay and inconvenience being occasioned by the requirement to tax a bill: Byrnes v Brisconnections Management Company Ltd (No. 2) [2009] FCA 1432 at [51].
More recently, in Pierson & Romilly [2020] FamCAFC 91, the Full Court said:
85. It is the policy of this Court to attempt to fix costs at the conclusion of the hearing in order to save the parties the cost, time and resources of a taxation, as well as to save the time of a Registrar in taxing the costs.
The de facto husband prepared two (2) itemised bills of costs: one on an indemnity basis and the other “at scale” in accordance with Sch 3 of the Rules. In circumstances where I have decided not to make an order for costs on an indemnity basis, I have not had regard to the costs account assessed on an indemnity basis.
The bill of costs assessed pursuant to Sch 3 of the Rules is annexure A to the de facto husband’s Affidavit. Counsel for the de facto wife took issue with several items listed in the account and submitted that the sum of costs awarded, if any, should not exceed $12,000.
In terms of the principles applied by Kent J in Stoian (supra), having regard to the detail set out in the de facto husband’s Affidavit and the exhibits to that Affidavit, including particulars setting out the basis upon which costs have been incurred by him in respect to these proceedings together with the amount of those costs, I am satisfied that the amount sought is logical, fair and reasonable.
I will, therefore, make an order for the de facto wife to pay the costs of the de facto husband on a party/party basis assessed in the sum of $34,080.28 which sum, I note, has been calculated in accordance with Sch 3 of the Rules.
In circumstances where the de facto wife has recently been made redundant from her employment, I will specify that those costs are payable by the de facto wife immediately upon finalisation of the proceedings between the parties in the Family Court of Australia whether by way of settlement or judgment.
I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 25 May 2020.
Associate:
Date: 25 May 2020
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