Toohey & Dantes (No 2)

Case [2022] FedCFamC1F 140

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Toohey & Dantes (No 2) [2022] FedCFamC1F 140

File number(s): SYC 6702 of 2019
Judgment of: HARPER J
Date of judgment: 14 March 2022
Catchwords: FAMILY LAW – COSTS – Mother’s application for indemnity costs of interim application for recusal – Whether the father’s recusal application had no reasonable prospects of success – Factors to be taken into consideration in making order for costs – Where the mother seeks that the father pay her costs on an indemnity basis – Financial circumstances of parties – Order for costs fixed in the amount of $1,500  
Legislation:

Family Law Act 1975 (Cth) s 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.13(1) and r 12.17

Cases cited:

Colgate-Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225; [1993] FCA 801

D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64

Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; [1988] FCA 364

Hadlow & Davis (No 2) [2020] FamCA 925

Harris & Dewell (No 2) [2018] FamCAFC 180

Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48

Kohan & Kohan (1992) 112 FLR 151; [1993] FLC 92-340

Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCa 1178

Medlon v Medlon (No 3) [2015] FamCAFC 37

Medlon & Medlon (No 6) (Indemnity Costs) (2015) 54 Fam LR 1; [2015] FamCAFC 157

Moorcroft & Moorcroft (2020) 60 Fam LR 361; [2020] FamCAFC 83

Nagel & Clay (2020) 60 Fam LR 550; [2020] FamCA 326

PBF v TRF (2005) 191 FLR 294; [2005] FamCA 158

Prantage & Prantage (Costs) [2014] FamCA 850

Ragata Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175; [1993] FCA 115

Division: Division 1 First Instance
Number of paragraphs: 45
Date of last submission/s: 10 December 2021
Date of hearing: On the papers
Place: Sydney
Solicitor for the Applicant: Santone Lawyers
The Respondent: In person

ORDERS

SYC 6702 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS TOOHEY

Applicant
AND:

MR DANTES

Respondent

ORDER MADE BY:

HARPER J

DATE OF ORDER:

14 MARCH 2022

THE COURT ORDERS THAT:

1.Within 60 days, Mr Dantes (“the father”) pay Ms Toohey’s (“the mother”) costs of and incidental to his Application in a Proceeding filed 15 October 2021 and the mother’s submissions on costs filed 10 December 2021, the subject of this judgement, fixed in the amount of $1,500.

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…

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AGLC
Toohey & Dantes (No 2) [2022] FedCFamC1F 140
Case
[2022] FedCFamC1F 140
Decision Date

CaseChat Overview and Summary

In the matter of Toohey & Dantes (No 2), the father contested the mother's application for a costs order against him, arguing that he acted in the best interests of the child by lodging a recusal application. The mother sought the order on the basis of the father's conduct in relation to the recusal application, which she argued had no reasonable prospect of success and was brought primarily for his own forensic benefit. The court was required to determine whether the mother had established circumstances justifying a departure from the usual position that each party pays their own costs, and whether there were circumstances justifying a costs order on an indemnity basis.

The court considered the financial circumstances of both parties, noting that while both claimed to be impecunious, impecuniosity was not a bar to adverse costs orders. The court then focused on the conduct of the parties in relation to the recusal application. The father's late service of the recusal application, which resulted in the mother incurring significant costs to brief counsel at short notice, was considered a factor in favour of the mother's application. The court accepted the mother's submission that this conduct wasted costs but was in relation to the father's review application. The court concluded that the father's conduct in persisting with an application which had no reasonable prospect of success, after being invited to withdraw it with no risk as to costs, justified a costs order against him. However, the court did not consider the recusal application exceptional enough to justify indemnity costs.

The court ordered that the mother receive a costs order in her favour but did not award indemnity costs. The court emphasised the rarity of such orders and the need for exceptional circumstances to justify them. The court noted that the recusal application was just one of many interlocutory applications in the proceedings and found no exceptional circumstances present in this case.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Although the father argued he acted at all times in the best interests of the child, in connection with a recusal application, this could only indirectly be the case. Whatever the outcome of the recusal application, the child could be affected in only the most tangential way. I infer it is more likely that the father brought the recusal application more for his own perceived forensic benefit.CONCLUSION ON JUSTIFYING CIRCUMSTANCES I am satisfied that, in the circumstances, despite his possible impecuniosity, the conduct of the father persisting with an application which had no reasonable prospect of success after being invited to withdraw the application with no risk as to costs, justifies a costs order against him: Medlon v Medlon(No 3) [2015] FamCAFC 37. It is therefore justified that the mother receive a costs order in her favour.INDEMNITY COSTS The mother submits the Court should consider making an order for indemnity costs, citing the authorities set out above, particularly the well-known decision in Colgate-Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225. The award of indemnity costs in this Court has regularly been called a significant departure from the normal standard, is rare and requires something exceptional: Harris & Dewell (No 2) [2018] FamCAFC 180, the full Court said at [23]–[25]: In Kohan and Kohan, the Full Court held, in applying the principles expounded by Sheppard J in Colgate-Palmolive, that an order for indemnity costs represents a “very great departure from the normal standard”. In the later decision of the Full Court in Prantage & Prantage, Thackray and Ryan JJ referred to Kohan and other authorities in the Full Courts of both this Court and the Federal Court of Australia as well as the state appeal courts. Their Honours concluded (at [86]) that the “usual rule” continued to apply in respect of awards of costs in this Court notwithstanding the Full Court accepting that the difference between party/party costs and a party’s actual costs has continued to grow significantly.That proposition also derives support from what Callinan J said in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation. His Honour said that an order for indemnity costs should “be exceedingly rare, as they have a tendency to encourage extravagance and put the quantum of legal fees beyond the effective scrutiny of the courts and their taxing officers”. The rarity of an order for indemnity costs can also be seen illustrated by the comments of Lindgren J in NMFM Property Pty Ltd v Citibank Ltd (No 2), referred to by their Honours in Prantage (at [102] – [103]). Lindgren J said that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation.”(Footnotes omitted) The recusal application is but one interlocutory application among many in these proceedings. While the number of interlocutory applications is regrettable, there is nothing in the circumstances which make the recusal application relevantly exceptional, so as to justify indemnity costs.

Ratio Decidendi

Legal Principle Established

The question is whether the mother has established any circumstances justifying a departure from the position that each party pay their own costs, for a costs order in her favour. The second question is whether there are circumstances justifying a costs order on an indemnity basis.SECTION 117(2A) CONSIDERATIONSSection 117(2A)(a) – the financial circumstances of each of the parties The mother submits that she is unemployed, and has had to borrow substantial amounts of money from her parents in order to pay the legal costs associated with the proceedings thus far. The mother contends that the father also has access to substantial sums of money that he has loaned to entities controlled by his parents and therefore has the financial means to pay costs as sought. The father submits that the mother has sufficient financial resources to fund her legal costs associated with this application and the proceedings. He said the mother is supported by her wealthy family and engages with a private law firm and senior counsel which he cannot afford. The father submits in the affidavit in respect of his financial situation, that he cannot meet the costs for the following reasons:(1)He receives Jobkeeper pension payments;(2)He has had early access to super;(3)He has minimal savings;(4)He is in receipt of partial legal aid for related matters;(5)He is a self-represented litigant because he cannot afford representation;(6)He has a court filing costs exemption;(7)He has previously been exempted from ICL costs and is in no position to pay for those costs at any time.(8)The legal costs between the parties are commensurate with the filed costs notices. Clearly both parties claim to be impecunious. On the sparse evidence available, I am unable to form a sensible view about the competing claims by each that the other was lent money by or loaned money to extended family. However, impecuniosity is no bar to adverse costs orders being made, even if the assertions of the father about his financial position are accepted (Hadlow & Davis (No 2) [2020] FamCA 925 at [70]).Section 117(2A)(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; Both parties made wide ranging claims about the other parties’ conduct generally in the proceedings. The conduct relevant for this judgment is limited, in my view, to conduct in connection with the recusal application. The father served the recusal application at 4.29pm on 15 October 2021, seeking a listing on the next business day, being 18 October 2021, when the review application was listed. The mother submits that the late service of the recusal application resulted in significant costs being incurred. The mother instructed her solicitors to brief counsel at short notice. In the event, on 18 October 2021 the father was unprepared to proceed which resulted in the adjournment to 8 November 2021. The mother argues, and I accept, this wasted costs, but in relation to the father’s review application.