Telfer & Telfer (No 2)
[2023] FedCFamC1F 1130
•22 December 2023
FEDERAL CIRCUIT AND
FAMILY COURT OF AUSTRALIA (DIVISION 1)Telfer & Telfer (No 2) [2023] FedCFamC1F 1130
File number(s): BRC 5098 of 2020 Judgment of: HOGAN J Date of judgment: 22 December 2023 Catchwords: FAMILY LAW – COSTS – Where final orders were made to finalise the property and parenting proceedings between the parties – Where the applicant’s application to set aside a Binding Financial Agreement was unsuccessful – Where the respondent’s application for an order for costs is dismissed – where there is no order as to costs in relation to the proceedings, including the application for costs Legislation: Family Law Act 1975 (Cth) Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; (1993) 46 FCR 225
D & D (Costs) (No. 2) (2010) FLC 93-435
Kohan and Kohan (1993) FLC 92-340
Limousin & Limousin (Costs) [2007] 38 FamLR 478
Trevi & Trevi(No. 3) (2019) 60 Fam LR 15Yunghanns & Yunghanns (2000) FLC 93-029
Division: First Instance Number of paragraphs: 21 Date of hearing: Determined in Chambers upon receipt of written submissions Place: Brisbane Solicitor for the Applicant: Evans Brandon Family Lawyers by way of written submissions Solicitor for the Respondent: Pullos Lawyers by way of written submissions ORDERS
BRC 5098 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS TELFER
Applicant
AND: MR TELFER
Respondent
ORDER MADE BY:
HOGAN J
DATE OF ORDER:
22 DECEMBER 2023
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed 25 August 2022 is dismissed.
2.There is no order as to costs in relation to the proceedings, including the Application in a Proceeding filed 25 August 2022.
3.All outstanding applications are otherwise dismissed and removed from the pending cases list.
IT IS NOTED THAT:
A.There is no Court known by the name “Federal Circuit and Family Court of Australia”.
B.The design of the seal affixed to this order issued by the Federal Circuit and Family Court of Australia (Division 1) has been determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
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 under the pseudonym Telfer & Telfer has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J
On 29 July 2022, orders (‘the final orders’) were made to finalise the property and parenting proceedings between the parties.
By way of broad summary, those orders provided for:
(a)the children to live with the applicant and spend time with the respondent for no less than 10 nights in each 28-day period of the respondent’s roster; and
(b)other than in relation to the children’s education, the parents were accorded equal shared parental responsibility; and
(c)the applicant was accorded sole parental responsibility in relation to the children’s education; and
(d)the Financial Agreement into which the parties entered on 6 December 2018 was declared binding.
The applicant had also sought that, pursuant to ss 90K(1)(b), 90K(1)(c), 90K(1)(d), and/or 90K(1)(e) of the Family Law Act 1975 (Cth) (“the Act”), the court set aside a Financial Agreement into which the parties had entered on 6 December 2018 (“the Financial Agreement”). When the respondent filed a Response to this relief on 9 June 2020, he also sought that the court make parenting orders in relation to the parties’ two children; the applicant responded to the parenting aspect of the proceedings in an Amended Initiating Application filed on 29 June 2020.
The hearing occupied five days; oral submissions were taken on another day.
The applicant’s application to set aside the Financial Agreement was unsuccessful for the reasons delivered in support of the final orders. The parenting orders which were made largely reflected those ultimately sought by the applicant – in particular, the court preferred her proposal for the orders which regulate the children’s time with the respondent and her opposition to him being allowed to remove them from school to spend holiday time with him. The court also rejected the respondent’s application that the parents be allocated equal shared parental responsibility for all of the major long-term issues relating to the children and instead ordered that the applicant have sole parental responsibility in relation to the children’s education.
The application for costs[1]
[1]In determining this application in Chambers I have had regard to the material filed on behalf of each of the parties.
The respondent seeks an order that the applicant pay his costs of and incidental to the Initiating Application on an indemnity basis or, failing that, on a party/party basis in such amount agreed between the parties, as may be assessed, or in such sum fixed by the Court upon the provision of expert evidence yet to be provided.
On the evidence relied on by the respondent, his solicitors rendered invoices in the total amount of $407,069 (which included the costs of Counsel, obtaining valuations and expert reports and disbursements). Of this amount, $219,943.02 is said to be the costs associated with the aspect of the proceedings which involved the applicant’s application to set the Financial Agreement aside.
The applicant opposes any order for costs being made.
The starting point in relation to costs under the Act is that each party bears their own costs.[2] However, if it is of the opinion that there are circumstances that justify it in doing so, the Court may, subject relevantly to s 117(2A) of the Act, make such order as it considers just.[3] In considering what order, if any, as to costs should be made, the Court must have regard to the matters set out in s 117(2A) of the Act.
[2] Family Law Act 1975 (Cth) s 117(1).
[3] Family Law Act 1975 (Cth) s 117(2).
Consequently, the first question to be determined is whether the circumstances of the current proceedings justify departing from the statutorily prescribed starting point of each party bearing their own costs.
Neither party was in receipt of Legal Aid. Both parties engaged private solicitors to represent them in the proceedings. There is no suggestion that the proceedings were necessitated by the failure of either party to comply with previous orders.
The parties’ respective financial circumstances may be summarised as being:
(a)the respondent is employed as a transport professional – his gross annual income from that employment is approximately $201,812; he owns property with an estimated value of $2,109,612 and has an entitlement to superannuation with an estimated value of $51,068; his liabilities are estimated at $893,851; and
(b)the mother is employed in an administrative role in a business – her gross annual income from that employment is approximately $62,400; she owns property with an estimated value of $591,740 and has an entitlement to superannuation with an estimated value of $30,500; her liabilities are estimated at $815,337.
The respondent’s financial circumstances are overwhelmingly superior to those of the applicant. It is clear, I consider, that his future financial circumstances (at least in the relatively short-term) are much more likely to be significantly superior to those of the applicant: his income earning capacity vastly exceeds hers and, given this, it seems to me to be much more likely than not that his prospects of recovering financially – at least somewhat – from the vast financial impost these proceeding have had on both of the parents are overwhelmingly better than the applicant’s prospects of the same.
As authority makes clear, impecuniosity (or even relative impecuniosity) is not, of itself, a bar to an order for costs being made where it is otherwise warranted.[4] However, I consider the very significant financial disparity between the parties to this proceeding is a factor to which, in the exercise of the broad discretion afforded to judges at first instance when dealing with costs, very significant weight should be given.
[4] See, for example, D & D (Costs) (No 2) (2010) FLC 93-435.
Whilst the applicant was wholly unsuccessful in prosecuting her application that the Financial Agreement be set aside, the respondent was unsuccessful in terms of the parenting regime that he proposed as being in the children’s best interests, in relation to the manner by which he sought that the court allocate parental responsibility and in respect of his proposal that he be permitted to remove the children from school annually in order to holiday overseas with him.
The respondent submitted that, in deciding whether it is of the opinion that the circumstances justify the making of an order that the applicant pay his costs of and incidental to the proceedings, the court would place particular weight on the fact that, on 9 October 2020, he made an offer to the applicant in writing that she discontinue her application to set the Financial Agreement aside and that each party bear their own costs – the offer was expressed as being open for acceptance for seven days. It was also submitted that the court would be persuaded that, properly advised, the applicant should have known that her application to set the Financial Agreement aside had no chance of succeeding and that she, in essence, persisted in advancing a hopeless case.
Whilst others may disagree, I am not persuaded that this is the case. Whilst the application was dismissed for the reasons delivered in support of the orders made in July 2022, its disposition involved numerous assessments of the evidence, findings of fact and exercises of discretion about which reasonable minds may have differed. Given this, I am unpersuaded that the result was, at the start of the proceedings, anywhere near as clear-cut or as predictable as the respondent’s submissions suggest.
Further, I certainly cannot discount the possibility that another judge may have arrived at conclusions different to those I expressed in the reasons for judgment delivered in support of the final orders I made. Such possibility is, I think, a highly likely reason why the legislature saw fit to make the starting point in this civil jurisdiction different to that which is found in other civil jurisdictions where costs invariably follow the event.
Having regard to the matters expressed above and placing particular weight on the disparity in the financial circumstances of the parties and accepting that an order for costs made against the applicant would likely have a financial impost on the children (especially, potentially, on their education as I accept that the respondent is unlikely to make any specific financial contribution to the costs associated with this to supplement the amount he pays by way of child support), I am not persuaded that the circumstances justify the making of an order for costs.
Had I been so persuaded, I would not have been persuaded that the circumstances here constitute the exceptional circumstances needed to justify the making of an order for costs on an indemnity basis.[5]
[5]See: Kohan and Kohan (1993) FLC 92-340; Limousin & Limousin (Costs) [2007] 38 FamLR 478; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 per Shephard J at 256; Yunghanns v Yunghanns (2000) FLC 93 029; Trevi & Trevi (No. 3) (2019) 60 Fam LR 15 at [12] to [15].
Given the conclusions I have reached, I consider that the order as to costs which is just is that there is no order as to costs in relation to the proceedings including the application in a proceeding by which the respondent sought an order for costs.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 22 December 2023
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