Travers & Debski (No 3)
[2022] FedCFamC1F 1026
Federal Circuit and Family Court of Australia
(DIVISION 1)
Travers & Debski (No 3) [2022] FedCFamC1F 1026
File number: BRC 13687 of 2018 Judgment of: HOGAN J Date of judgment: 19 December 2022 Catchwords: FAMILY LAW – COSTS – Where the Court is persuaded that the circumstances justify the making of an order for costs – where the court is persuaded that the circumstances justify the making of an order that costs are paid on the indemnity basis. Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; [1993] FCA 801
D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64
Limousin v Limousin (Costs) 38 Fam LR 478; [2007] FamCA 1178
In the Marriage of Kohan (1993) FLC 92-340; [1992] FamCA 116
Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681
Division: First Instance Number of paragraphs: 18 Date of hearing: Determined in Chambers following the receipt of written submissions Place: Brisbane Solicitor for the Applicant: Bell Legal Group by way of written submissions contained within the Outline of Closing Submissions filed 24 November 2021 Solicitor for the Respondent: JML Rose by way of written submissions filed 14 November 2022 ORDERS
BRC 13687 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS TRAVERS
Applicant
AND: MR DEBSKI
Respondent
order made by:
HOGAN J
DATE OF ORDER:
19 DECEMBER 2022
THE COURT ORDERS THAT:
1.Pursuant to s 117(2) of the Family Law Act 1975 (Cth), Mr Debski shall pay Ms Travers’ costs:
(a)of and incidental to the adjournment of the trial ordered on 14 September 2020; and
(b)thrown away on 15 March 2021; and
(c)of and incidental to the adjournment of the trial ordered on 16 March 2021.
2.Pursuant to Rule 12.17(1)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, the costs referred to in Order 1 shall be as assessed on the indemnity basis and shall be in an amount as agreed between the parties or, failing agreement, as assessed on that basis.
3.Pursuant to Rule 12.13(5) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, Mr Debski shall pay Ms Travers’ costs within 7 days of any agreement as to the quantum of the same or within 7 days of any costs assessment order being made.
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 Travers & Debski has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
Ms Travers seeks that Mr Debski be ordered to pay her costs, calculated on an indemnity basis, of the following:
(a)the adjournment of the trial ordered on 14 September 2020; and
(b)the costs thrown away on 15 March 2021, with such costs to be fixed in the amount of $8,800 (including GST); and
(c)the adjournment of the trial ordered on 16 March 2021.
Mr Debski opposes the making of any order that would require him to pay anything to Ms Travers by way of costs.
The usual course in relation to costs in proceedings under the Family Law Act 1975 (Cth) (“the Act”) is that each party bears their own costs.[1] 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;[2] further, the Court may make an order as to costs of the type set out in in r 12.17(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) and, in making such an order, may consider the matters particularised in r 12.17(3).
[1] Family Law Act 1975 (Cth) s 117(1).
[2] Family Law Act 1975 (Cth) s 117(2).
The consequence of the orders made on 17 October 2022 (in terms which reflected the findings expressed in Reasons for Judgment published on 30 September 2022) to finalise all but the issue of costs is that Ms Travers received property valued at 22.5 per cent of the total property of the parties (which was agreed to have a value of $6,344,657) and Mr Debski received property valued at 77.5 per cent of the total property of the parties: that is, Ms Travers received property valued at $1,427,547.82 and Mr Debski received property valued at $4,917,109.18. In the circumstances, Mr Debski clearly has the financial capacity to meet any orders for costs which might be made.
Neither Ms Travers nor Mr Debski were in receipt of legal aid funding; each appeared in the proceedings by solicitor and Counsel.
I generally accept the evidence given by Ms Travers’ solicitor (Ms Miller) in support of the applications for costs. I accept her evidence about the extent of disclosure Mr Debski had provided prior to 14 September 2020, being the first date on which the proceeding was listed for trial. I accept that the adjournment of the trial on 14 September 2020 occurred because of the manner in which Mr Debski determined to approach the ongoing obligation of disclosure which the Rules[3] impose on all litigants involved in proceedings in this Court. I think it much more likely than not that the proceedings would have been able to proceed on 14 September 2020 if Mr Debski had complied with and discharged his obligation to make full and frank disclosure. I consider his conduct in the way in which he approached the overarching obligation to make proper disclosure to have caused Ms Travers’ legal representatives to apply for and be granted the adjournment of the proceedings on that date.
[3] And those which then applied.
I accept Mr Miller’s evidence about that which occurred after 14 September 2020, when the trial was adjourned to 15 March 2021.
I note that an order made by consent on 5 February 2021 required the parties, within 28 days of the same, to provide full and frank disclosure of all documents required by the relevant rule, including (but not limited to) in relation to that property listed in the specified Schedules to the Financial Agreement about which the parties were in dispute.
I accept that Mr Debski provided some further disclosure to Ms Travers on 24 February 2021, 2 March 2021, 10 March 2021 and 14 March 2021. I also accept that he served a 260 page affidavit (containing 38 annexures) on Ms Travers on 15 March 2021 – the first day of the adjourned trial. I accept that the day of 15 March 2021 was lost as a consequence of this late service of such a substantial affidavit; whilst I also accept that the subsequent provision of further documents to Ms Travers’ legal representatives on 16 March 2021 occurred in the manner described by Ms Miller, I consider that the underlying cause of the subsequent adjournment of the trial on 16 March 2021 was the manner in which Mr Debski approached the provision of his evidence and the discharge of his ongoing obligation to provide full and frank disclosure in a timely manner.
In an overall sense, his response to the requirement to provide disclosure was, in my view, tardy and, often, delinquent. His conduct in relation to the implementation of terms of Orders and/or Directions which had been made by consent was also desultory and, I consider, causative of the delay which attended the finalisation of the proceedings.
Having regard to Ms Miller’s evidence and for the reasons expressed above, I consider, in the exercise of the broad discretion accorded to judges at first instance in relation to the issue of costs, that the circumstances justify the making of an order that Mr Debski pay Ms Travers’ costs of and incidental to the adjournment of the trial on 14 September 2020 and 16 March 2021 and that he be required to pay her costs thrown away because 15 March 2021 was taken up in her legal representatives attempting to deal with the affidavit served that morning. In the circumstances and having regard to the matters outlined above, I am also persuaded that it is just that an order is made to require Mr Debski to pay such costs.
Conclusions that the circumstances justify the making of an order for costs and that it is just that a party pay the costs of the other party does not axiomatically mean that such costs should be paid on the indemnity, rather than the party and party, basis. Well-known authority makes it clear that:
(a)unless there are exceptional circumstances, an order for costs should be made on the party and party basis; and
(b)to order that costs be paid on an indemnity basis is something which is a “very great departure” from the “normal standard” in this and other jurisdictions.[4]
[4]See D & D Costs (No. 2) (2010) FLC 93-435; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; Yunghanns v Yunghanns (2000) FLC 93-029; In the Marriage of Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J.
Further, in In the Marriage ofKohan[5] the Full Court commented to the effect that the degree to which the costs, which would be payable if an indemnity costs order is made, depart from the established norm may itself be a reason for not ordering costs on an indemnity basis.
[5] (1993) FLC 92-340.
It is, I think, difficult on the evidence before me to assess the extent to which the costs sought by Ms Travers on the indemnity basis would exceed those which would likely be allowed if costs were assessed on the standard party and party basis. What I do know though, as a consequence of the provision on 15 March 2021 of the Notice of Costs required by the Rules is that, as at that date, Ms Travers had paid $100,653 in legal fees, outlays and Counsel’s fees and that her costs not then paid for the three day trial were anticipated to be a further $55,000. I also know – because the submissions filed in support of the application for an order for costs inform of it – that Ms Travers’ legal representatives quantified the costs thrown away on 15 March 2021, calculated on the indemnity basis, in the amount of $8,800 (inclusive of GST).
I note that, even if an order is made for costs to be paid on the indemnity basis, a Judicial Registrar who undertakes the costs assessment process provided for in the Rules must allow all costs reasonably incurred and of a reasonable amount having regard to, among other things: the scale of costs in Schedule 3; any costs agreement between the party to whom costs are payable and the party’s lawyer and the charges ordinarily payable by a client to a lawyer for the work.[6] That is, the assessment of reasonable costs calculated on the indemnity basis involves appropriate recognition of the amounts that would have been allowed according to the party and party scale of costs, the charges ordinarily payable by a person to a lawyer for the work done and the terms of any costs agreement between the party and their legal representatives. Given this, I consider that the inability to determine the exact amount which Mr Debski may be required to pay to Ms Travers by way of costs if the same are ordered on the indemnity basis is not fatal to the consideration of her application for an order to that effect.
[6] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 12.47(2).
What I regard as Mr Debski’s absence of regard for the ongoing obligation to make disclosure of all relevant documents in a timely manner was, in my view, responsible for the adjournments in September 2020 and March 2021 and the costs thrown away on 15 March 2021. Had he complied with his obligation to make disclosure in the manner in which he clearly should have and had he done other than serve a substantial affidavit on the first morning of the March 2021 trail, such costs would not, in my view, have been incurred.
Consequently, even taking into account the clear pronouncements in the authority to which reference has been made above, I am persuaded that the circumstances here justify the making of an order for costs on the indemnity basis and that it is just that Mr Debski pay Ms Travers’ costs of and incidental to the adjournment of the trial granted on 14 September 2020 and 16 March 2021 and the costs thrown away on 15 March 2021 on the indemnity basis.
In order to minimise the possibility of further discord and to maximise the prospect of the litigation between these parties finally coming to an end, it is appropriate and just that the orders made clearly prescribe the time within which Mr Debski is to pay to Ms Travers the costs that he will be ordered to pay.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 19 December 2022
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