Theodore & Theodore (No. 2)

[2021] FamCA 347

FAMILY COURT OF AUSTRALIA

Theodore & Theodore (No. 2) [2021] FamCA 347

File number(s):

PAC 5789 of 2014

Judgment of:

FOSTER J

Date of judgment:

28 May 2021

Catchwords:

FAMILY LAW – COSTS – SUBPOENA OBJECTION BY THIRD PARTY – where objection to subpoena upheld and subpoena struck out – where application for costs – where consideration of applicable principles – where order for costs in favour of objecting party made.

Legislation:

Family Law Act 1975 (Cth) s 117, 117(2A)

Family Law Rules 2004 (Cth) r 19.18(1)

Cases cited:

Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160

Collins & Collins (1985) FLC 91-603

Greedy & Greedy (1982) FLC 91-250

Hawkins & Roe [2012] FamCAFC 77

Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23

Luadaka & Luadaka (1998) FLC 92-830

Parke & the Estate of the Late A Parke (2016) FLC 93 748

Penfold v Penfold (1980) 144 CLR 311

Number of paragraphs:

24

Date of last submission/s:

24 February 2021

Date of hearing:

27 January 2021

Place:

Parramatta

Counsel for the Applicants:

Mr Todd

Solicitor for the Applicants:

Williamson & Learmonth

Counsel for the Respondent:

Mr Batey

Solicitor for the Respondent:

Madison Marcus Law Firm

ORDERS

PAC 5789 of 2014

BETWEEN:

MR STAVROU
First Applicant

AA PTY LTD
Second Applicant

AND:

MR THEODORE
Respondent

ORDER MADE BY:	FOSTER J
DATE OF ORDER:	28 MAY 2021

THE COURT ORDERS THAT:

1.Within one month from this date the husband pay the costs of AA Pty Ltd and Mr Stavrou of and incidental to the Notices of Objection to Subpoena filed in these proceedings in the total sum of $5,000 with such sum to be paid to the solicitors for the Objectors or as such solicitors may otherwise direct in writing.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Theodore & Theodore has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

FOSTER J:

1. On 27 January 2021, on the application of AA Pty Ltd and Mr Stavrou, a subpoena for production of documents that was issued by the husband in the primary proceedings directed to the Proper Officer, BB Company, CC Street, Suburb DD was struck out as a consequence of a Notice of Objection filed by those third parties.

2. Reasons for judgment in relation to the objection to subpoena were delivered concurrently with reasons for judgment in the primary proceedings on 21 May 2021.

3. Those reasons for judgment include the following:

   44It is readily apparent that the subject matter of the impugned Subpoena has no apparent relevance to the issues for determination in the current proceedings and in all probability it was issued in the pursuit of an ulterior motive. The Objection was upheld and the Subpoena was struck out.

4. The objectors seek an order that the husband pay their costs of and incidental to the objection proceedings on a party/party basis.

5. Subsequent to the filing of the Notice of Objection, the issue was listed before a registrar on 21 January 2021 and on that date adjourned to the final hearing before the Court on 27 January 2021 to be dealt with as a preliminary issue.  The objectors seek their costs in relation to the objection proceedings.

   Costs

6. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to the proceedings shall bear his or her own costs.

7. That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.

8. Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: Penfold v Penfold (1980) 144 CLR 311.

9. The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They are as follows:

   (a)       the financial circumstances of each of the parties to the proceedings;

   (b)      whether any party has legal aid and the terms of any grant of aid;

   (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 answers, 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.

10. In Collins & Collins (1985) FLC 91-603 (at 79,877), the Full Court described the discretion conferred by s 117 of the Act as being a “broad” one and held that the factors set out in s 117(2A) of the Act are not to be read in a restrictive way.

11. The Full Court in Hawkins & Roe [2012] FamCAFC 77 said:

    17.With respect to the application of the section, in Penfold v Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:

    1.Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".

    2.Sub-section (2) 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 (Kent v Kent). 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.

    18.The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:

    … A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.

12. In Greedy & Greedy (1982) FLC 91-250 and Luadaka & Luadaka (1998) FLC 92-830, the Full Court made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters.

13. The provision relating to the calculation of costs is set out in r 19.18(1) of the Family Law Rules 2004 (Cth) (“the Rules”) which states:

    Method of calculation of costs

    (1)      The court may order that a party is entitled to costs:

    (a)       of a specific amount;

    (b)as assessed on a particular basis (e.g. lawyer and client, party/party or indemnity);

    (c)       to be calculated in accordance with the method stated in the order; or

    (d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.

14. It was said in Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 at [162] that the purpose of the rule enabling an order for costs in a specific amount, without formal assessment or taxation is, commonly with other courts, to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”.

15. In Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 the Court said at [10] that the Court must act judicially, but that does not mean that it must exercise the power to award a lump sum in any “scientific or formulaic manner”.

16. Murphy J observed in Parke & the Estate of the Late A Parke (2016) FLC 93‑748 at [130]:

    If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court”… 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”…

17. The Court has regard to all the considerations required, noting that in circumstances where there is an application for costs by third parties to the proceedings most of the considerations have no application.

18. As the present application for costs is made by third parties to the proceedings the applicants rely upon subparagraphs (c) and (e) of the relevant considerations.  The husband was completely unsuccessful in the issue relating to the subpoena and in the circumstances of this matter, noting that the objectors were third parties to the proceedings, that is sufficient to displace the general rule as to costs.

19. As to quantum, the applicants for costs assert that actual legal fees incurred by the Objectors are in the sum of $9,548.  By adopting a discount approach or a part party basis, 70 per cent of such fees is in the sum of $6,683.60. An order for costs is sought in that sum.

20. The husband, respondent to the application, concedes that he is not impecunious.

21. In all, the Court is satisfied that there should be an order that the husband meet the costs of the third-party objectors in the sum as assessed by the Court.

22. The objectors seek an order for costs in the sum of $6,683.60.  The objections were first before a registrar for directions and were adjourned to the first day of the final hearing between the primary parties.  The objections were heard and determined early in the morning of the first day of trial and thereafter legal representatives for the objectors were excused.

23. In all the circumstances, the Court is satisfied that an order for costs in the sum of $5,000 is appropriate.

24. An order will be made accordingly.

I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Foster.

Associate:       

Dated:       28 May 2021