Whitehead & Whitehead
[2025] FedCFamC2F 1027
•28 July 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Whitehead & Whitehead [2025] FedCFamC2F 1027
File number(s): NCC 2868 of 2022 Judgment of: JUDGE SUTHERS Date of judgment: 28 July 2025 Catchwords: FAMILY LAW – Costs application – where final property and parenting orders were made by consent – conduct contrary to overarching purpose – whether there were exceptional circumstances to warrant an order for indemnity costs against the respondent husband as sought by the applicant wife – where the respondent’s conduct has been poor – just to make a costs order – special costs order made against the respondent husband Legislation: Family Law Act 1975 (Cth) ss 95, 96, 105, 117 & 117C
Family Law (Fees) Regulations 2022 reg 2.08 & Schedule 1
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Chapter 12
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) Schedule 1
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) r 17.1
Cases cited: Albert & Plowman [2022] FedCFamC1F 243
Cassidy v Murray [1995] FamCA 91; (1995) 19 Fam LR 492; (1995) FLC 92-633
Colgate-Palmolive Co. v Cussons Pty Ltd [1993] FCA 536; (1993) 118 ALR 248
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania v Fish)) [2005] FamCA 158
In the Marriage of Munday & Bowman [1997] FLC 92-784; (1997) 22 Fam LR 321
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; (1990) 7 ALR 45
Lawson & Glenning [2021] FedCFamC2F 118; (2021) 64 Fam LR 414
Lombardi & Rider [2021] FedCFamC2F 57; (2021) 64 Fam LR 103
Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157
Penfold v Penfold [1980] HCA 4; (1980) 5 Fam LR 579; (1980) FLC 90-800
Division: Division 2 Family Law Number of paragraphs: 93 Date of hearing: 9 May 2025 Place: Newcastle Solicitor for the Applicant: Dakin Law Counsel for the Respondent: Mr Moutasallem Solicitor for the Respondent: Cole & Butler Solicitors ORDERS
NCC 2868 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS WHITEHEAD
Applicant
AND: MR WHITEHEAD
Respondent
ORDER MADE BY:
JUDGE SUTHERS
DATE OF ORDER:
28 JULY 2025
THE COURT ORDERS THAT:
1.Pursuant to r 12.28 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the FLR’), the Court certifies that at the hearing on 9 May 2025, it was reasonable for the respondent, MR WHITEHEAD (‘the respondent’), to engage counsel to attend on their behalf.
2.By 4.00pm Monday 25 August 2025, the respondent is to pay the costs of the applicant, MS WHITEHEAD’S (‘the applicant’), fixed in the sum of $26,000 as directed in writing by the applicant.
3.If by the due date in Order 2, the respondent fails to pay all or part of the costs awarded THEN the outstanding sum (together with default interest) shall be deducted from the respondent’s share of the sale proceeds of B Street, Town C in the State of New South Wales (‘B Street’) and paid to the applicant as directed in writing by them before the respondent receives the balance.
4.To facilitate these Orders and better explain Notation B, the applicant is permitted to provide a copy of the Judgment to the solicitor/conveyancer appointed to conduct the sale of B Street.
THE COURT DIRECTS THAT:
5.All outstanding applications are dismissed.
THE COURT NOTES THAT:
A.Order 1.f.v.2. made 9 August 2024 specifies the percentage adjustment payable to the respondent from the nett sale proceeds of B Street.
B.If Order 3 is triggered as a result of the respondent’s default and the parties are in dispute about what the quantum of default interest looks like; to avoid further litigation between the parties at the expense of access to justice being available to other members of the community, the Court expects the parties to co-operate to arrange either-
i.the lawyer/conveyancer having conduct of the sale of B Street, or
ii.another lawyer,
to calculate the default interest component with any costs incurred in doing so being the sole responsibility of the respondent and deducted from the respondent’s share of the sale proceeds of B Street before the respondent receives the balance.
C.Calculation of default interest is specified within rr 12.19 and 10.17 of the FLR. The reason the Court has had to identify these provisions is to support the parties’ lawyers engaging co-operatively (should the need arise) because the evidence to-date would suggest that to varying degrees each of them has lost some of the objectivity expected of lawyers.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE SUTHERS
INTRODUCTION
Last year during the course of a trial, the parties were able to resolve both their parenting and property disputes. The applicant subsequently sought indemnity costs against the respondent because (in part) their position was untenable and/or their was conduct poor. The respondent resisted the application and sought their costs of defending the application. Is it just for me to make a costs order and if so against whom?
Out of respect for each person’s gender and social status, other than parties, persons will be identified by their surnames and where possible there will be an avoidance of the use of gendered pronouns.
The costs application was initiated by MS WHITEHEAD (‘the applicant’). A response to the application was filed by MR WHITEHEAD (‘the respondent’). Costs are sought for the parenting and property proceeding (‘the substantive proceeding’), the recusal application and the costs application (with the latter two collectively described as ‘the summary proceedings’).
The issues and outcomes for determination by me are –
(a)What findings should I make about each party’s conduct?
(b)Has either party been wholly unsuccessful in either the substantive or summary proceedings?
(c)Have offer(s) been made to settle the substantive or summary proceedings and if so, what were the terms?
(d)If it is just to make a costs order, on what basis should it be made and upon what terms including whether an enforcement provision should be built-in?
A costs dispute invokes:
(a)Sections 95, 96, 105, 117 and 117C of the Family Law Act 1975 (Cth) (‘the Act’);
(b)Chapter 12 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Div 1 Rules’); and
(c)Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) (‘the Div 2 Rules’).
Informing this decision are the following uncontroversial circumstances, with the inclusion of some initial observations by me.
In September 2022, the applicant commenced parenting and property proceedings. At the time that the applicant’s current lawyer took over conduct of the case, in summary, the applicant was seeking –
(a)Sole parental responsibility for the subject children,
(b)The subject children to live with the applicant when not attending boarding school,
(c)Undefined time to be spent between the subject children and the respondent,
(d)Liberal but undefined telephone communications between the subject children and the respondent, and
(e)Sole occupancy of a home in B Street, Town C (‘B Street’).[1]
[1] Affidavit of SUSANNA MICHELLE DAKIN filed 03.10.2024 at paragraphs [5] & [6]. For convenience, future references to this affidavit shall be identified as ‘SMD’ with paragraphs in square parenthesis.
Broadly speaking, through the affidavit of their lawyer, SYLVESTER MARTIN RODRICK CLAUDIUS JOSEPH (‘JOSEPH’), the respondent contended that in commencing proceedings the applicant engaged in poor conduct. The respondent contended that the applicant failed to comply with their obligations pursuant to the Court’s Central Practice Direction[2] and the pre-action procedures set out in Schedule 1 of the Div 1 Rules.[3]
[2] ‘Central Practice Direction: Family Law Case Management’, Federal Circuit and Family Court of Australia Division 1 and 2 (Webpage) <Central Practice Direction: Family Law Case Management | Federal Circuit and Family Court of Australia>.
[3] Affidavit of SYLVESTER MARTIN RODRICK CLAUDIUS JOSEPH filed 04.10.2024 at paragraph [28]. For convenience, future references to this affidavit shall be identified as ‘SMJ’ with paragraphs in square parenthesis.
Exhibit ‘H3’ is the applicant’s filed Genuine Steps Certificate which declares that any failure to take ‘genuine steps’ to resolve or narrow the issues in dispute was due to their view that it was unsafe to do so because there were allegations of child abuse or family violence or risks of one (1) of those circumstances occurring.
Despite this submission taking up time during the costs hearing, from the evidence, it is not apparent to me that at the time of responding in October 2022[4], the respondent sought any adverse relief against the applicant for alleged poor conduct. Instead, and despite the applicant’s process being jurisdictionally out of time, the evidence suggested he too sought parenting and property relief with the affidavit of SUSANNA MICHELLE DAKIN (‘DAKIN’) suggesting their relief included –
(a)Shared parental responsibility of the subject children,
(b)The subject children to live with each parent week-about,
(c)The respondent to retain B Street,
(d)The applicant to return to the respondent a motor vehicle and trailer.[5]
[4] SMJ-[32].
[5] SMD-[7].
Some of the controversies between the parties were quelled by a series of consent orders made in October 2022 including leave to commence property proceedings out of time.[6] In these circumstances one wonders as to the relevance of the respondent’s criticism which spilled over from evidence into submissions, and the possible inefficient use of both the respondent’s capital and the court’s time in hearing about it.
[6] SMJ-[33].
The respondent makes other allegations of poor conduct against the applicant post-filing, including that in mid to late 2022, the applicant filed or served material late, asserting that as a result, an interlocutory hearing was adjourned by three (3) weeks.[7] DAKIN says that at some unspecified time before the adjourned interim hearing, they took over carriage of the proceeding because of the former lawyer suffering from ill-health.[8]
[7] SMJ-[37]-[40].
[8] SMD-[4].
An interim hearing occurred with orders made in late December 2022 (‘the December 2022 orders’). Orders 10 to 12 permitted the respondent to have sole occupation of B Street and be responsible for day-to-day maintenance, maintain and pay for various ongoing obligations such as insurance, rates, and mortgage repayments with the latter to be deducted from the respondent’s bank account.
Based on DAKIN’s evidence[9], it is safe to say that neither party’s position was entirely made out, but as Austin J was quick to point out, that is not the test embedded within s 117(2A)(e).[10]
[9] SMD-[11] to [13].
[10] Marvis & Marvis [2023] FedCFamC1A 34; (2023) 67 Fam LR 16 at [25].
With a procedural hearing coming up, and a s 62G child impact report (‘the CIR’) pending, the Court enquired whether the parties wished to retain the pre-existing procedural hearing event or adjourn the event until after the CIR had been released. In the face of the respondent pressing for the retention of the existing event, the applicant instructed their lawyer to reach out to the respondent in an effort to resolve any outstanding procedural issues and avoid the cost of appearing.[11]
[11] Exhibit ‘W11’.
An exchange of communications occurred,[12] but ultimately the procedural hearing on 25 January 2023 took place with somewhat generic orders made about disclosure and the filing of consolidated affidavits.
[12] Exhibit ‘W12’.
On 21 March 2023, the respondent’s review application of the December 2022 orders was determined with a consent parenting order made increasing the children’s time with the respondent and the respondent abandoning their interim property relief.[13]
[13] SMJ-[59].
A costs order was made in favour of the applicant requiring the respondent to pay $1,760 by 23 June 2023 (‘the costs order’).[14]
[14] SMD-[26].
Without any apparent remorse for their conduct, the respondent (through the evidence of their lawyer) says that their failure to make multiple mortgage repayments as per the December 2022 orders was because of their decision to change their banking details and (presumably) their failure to update their information as held by the mortgagee.[15]
[15] SMJ-[47].
DAKIN says that the applicant informed the respondent of this situation on 26 April 2023.[16] So at that point, the respondent was aware that they were in default less than five (5) months after they got what they wanted out of the December 2022 orders (that is exclusive occupation of B Street provided they paid the outgoings).
[16] SMD-[35].
Remarkably given their occupation, JOSEPH, appeared to adopt the old chestnut that “the best form of defence is attack”. I make this observation because it seemed that the point of their evidence was to deflect blame for the non-payment of the B Street outgoings upon the applicant for not asking their lawyer to do something sooner to bring the default to the attention of either the respondent or JOSEPH.[17]
[17] SMJ-[63].
In reality, it appeared that the applicant had brought the default position to the respondent’s attention a month earlier than disclosed in JOSEPH’s affidavit, and frankly, the obligation to comply with court orders falls on the party the subject of the coercive order and not on anyone else!
On 4 May 2023, the applicant instructed their lawyer to provide the respondent with a written offer[18] which appeared to:
[18] Exhibit ‘W8’.
(a)identify a non-exhaustive list of property that was either “in” or “out”,
(b)provide for the sale of assets although not particularised in a way as to be certain,
(c)provide for sale proceeds to be held on trust,
(d)provide for two-pool property adjustment regime such that:
(i)the parties each have the benefit of one-half of all nett (unspecified) assets excluding B Street,
(ii)the applicant received 60% of the value of B Street and the respondent 40% - although it is unclear what that actually looked like and how it was to be achieved,
(‘the two-pools offer’).
In that same document, reference is made to a tipper trailer (‘the tipper trailer’) including a possible transfer of ownership. The applicant asked for some clarity about what the respondent allegedly had communicated to themselves, including the production of a copy of the registration for the tipper trailer. There was no evidence that a response was forthcoming and into that vacuum, in September 2023[19], the applicant made another offer and again referred to the respondent allegedly paying out an $18,000 debt owed to their parents by way of transfer of the tipper trailer.
[19] Exhibit ‘W13’.
Despite the respondent being formally on notice (via legal correspondence from DAKIN to JOSEPH), the applicant was forced to initiate interlocutory proceedings. The applicant was successful (second-time given they initially and unsuccessfully sought for similar relief in 2022). More costs were incurred and in July 2023 Orders were made discharging Orders 10 – 12 of the December 2022 orders so that the applicant secured sole occupation of B Street and all the responsibilities that came with that.
As part of this new tranche of Orders, the respondent was to leave B Street …in a clean and tidy state, free from further damage, or rubbish in order to allow the applicant to take up possession upon handover.[20] DAKIN (when it should have been the applicant’s evidence) contended that B Street was not left in a state fit for their client to take up occupation, although the exhibited photos were not adduced through the sworn testimony of the person who allegedly took the photos and so the weight to be attributed to them was limited because there is no context, and the Court was being asked to accept the hearsay evidence of DAKIN.[21]
[20] Order 3.c. made 18 July 2023.
[21] SMD-[39] to [40].
JOSEPH countered by alleging that the applicant’s decision not to move in was a voluntary one, again this was not evidence, but a snide submission which had the potential to muddy the waters.
Neither deponent lawyer could sensibly give the evidence they tried to adduce - wasting their client’s money and my time.
On the morning of yet another procedural hearing and at the instigation of the applicant who had re-opened their previous two-pools offer, the respondent finally responded with their own alternative offers by way of email communication on 18 August 2023.[22]
[22] Exhibits W15’ & ‘W10’.
Following the procedural hearing, the respondent made another offer and the applicant responded on 13 September 2023 with a critical analysis of the respondent’s last offer (which the applicant[23] calculated amounted to a 97:3 property adjustment in favour of the respondent, as well as providing a further offer which essentially was another “two-pools approach” identifying the property being disbursed 60:40 in the applicant’s favour and the rest of the property being sold with the proceeds distributed 50:50 between the parties.[24]
[23] Through DAKIN’s correspondence.
[24] Exhibit ‘W13’.
Follow-up correspondence about the payment of the costs order was sent to the respondent on 8 November 2023.[25] The respondent’s evidence was silent on this follow-up correspondence.
[25] Exhibit ‘W16’.
On 8 January 2024 and still not having received their costs as ordered, the applicant brought enforcement proceedings which (it seems) led to payment of the costs order on 2 February 2024, almost six (6) months’ late.[26] So, another interlocutory application was instituted because of the respondent’s failure to comply with an Order of the Court.
[26] SMD-[50] to [51].
The enforcement application was returnable on 5 February 2024 but was ultimately dismissed on the same day as the payment was made by the respondent with a notation to the Order observing that the application was …not supported by an Affidavit addressing the requirements of Rule 11.06. No default interest appeared to have been sought by the applicant, despite them being entitled to it.
This is unsurprising given the respondent’s attitude to-date, which may well have caused the applicant to conduct a cost-benefit analysis about throwing good money (more legal costs in asking for the default interest) after bad (having to spend the money to institute the enforcement proceeding in the first place). If that is what happened, that is not what the proper administration of justice looks like. I cannot make any finding because there is insufficient evidence upon which to do so or upon which a reasonable inference can be drawn; but a party should not have to contract away or resile from their rights as enshrined within the law just because another party is being intransigent.
Following release of a s 62G family report, further attempts to resolve the parenting proceeding occurred without success. Despite trying to mitigate against the applicant’s time and money being needlessly spent on trial material, ultimately the state of negotiations required the applicant to file their trial material substantially in compliance with the trial directions made 6 May 2024.[27]
[27] SMD-[60] to [61].
In June, July and then August 2024 the respondent made various offers to resolve some, if not all of the outstanding substantive proceedings listed for trial.[28]
[28] SMJ-[87] to [91].
Inexplicably, the respondent’s material was filed about nine (9) days out from the trial, set to commence on 7 August 2024.[29] I am unsure why the respondent was so tardy in the filing of their trial material, but again it was another act of non-compliant conduct causing (at the very least) inconvenience to the applicant and the Court and at worst a strategy meant to impinge on the administration of justice.
[29] SMD-[62].
Part of the respondent’s material included an Undertaking as to Disclosure. DAKIN says that on the first morning of the trial, she approached JOSEPH querying the respondent’s reliance upon the Undertaking because …in fact, no documents had been received despite multiple repeated requests.[30]
[30] SMD-[63].
In his affidavit, JOSEPH made this bald assertion –
73.The Husband had complied with his duty of disclosure and provided documents by way of disclosure to the wife up to and until the commencement of the hearing.
No evidence is proffered in support of that contention. It is mere puffery.
In fact what did occur and only after-hours on the first day of the trial, was that JOSEPH sent email correspondence to DAKIN with limited disclosure. I make that finding because there is no other evidence proffered by the respondent to discount what DAKIN says was the extent of the respondent’s efforts at making disclosure when clearly the respondent was on notice that this was a going to be argued against them.[31]
[31] SMD-[66].
Then, consistent with DAKIN’s evidence about the respondent’s non-disclosure about the tipper trail (including I infer, who owned it)[32], on the final day of the trial, an order was made joining Ms D (‘Ms D’) as second respondent, after which final property consent orders (‘the final property consent orders’) were made disposing of the proceeding which included the tipper trailer being transferred back to the respondent and then for that asset to be sold (along with other specified assets) at auction.[33]
[32] SMD-[68].
[33] See orders 5 to 7 of the final property consent orders.
Despite the substantive proceedings being finalised, the question of costs was unresolved by way of any Order of the Court, and it was common ground that the parties’ were entitled to prosecute a costs application. As required, I will return to the terms of two (2) final consent orders made by the Court on 7 August 2024 and then 9 August 2024.
On 6 September 2024, the respondent was served with the applicant’s costs application which had been set down for hearing on 8 October 2024. On 4 October 2024, the respondent filed a recusal application, which resulted in the costs hearing being adjourned to a different judicial officer, notwithstanding that the recusal application was dismissed. Costs were reserved. There was no persuasive explanation about why the recusal application was filed four (4) days’ out from the costs hearing when it would have been prudent to at least put the applicant on notice of the respondent’s intentions so as to ameliorate the applicant throwing legal costs away in preparing for a hearing that may not happen because the recusal application would need to be resolved first.
During the course of submissions, it became evident that the respondent had not distributed to the applicant their 60% entitlement in the sale proceeds achieved from the sale of the various assets including the tipper trailer. I heard that JOSEPH had released funds to the respondent, and that because the applicant had not provided account details but rather had disputed the respondent’s contended 50:50 distribution, nothing had happened with whatever was left in the respondent’s lawyers’ trust account.
As a result of this extraordinary admission, the relevant account details were provided during the hearing and as I understand it $10,197.75 would be transferred to the applicant after the hearing concluded.
As part of the 9 August 2024 consent orders, B Street was to be sold and when I heard the costs application, the properly remained on the market. The consent orders provided that upon settlement any nett balance was to be divided 60:40 in favour of the applicant.[34]
[34] Order 1.f.v.1 & 2 of the final property consent orders.
Before turning more closely to the costs dispute:
(a)In the substantive proceeding, the applicant contended for an indemnity costs order fixed in the sum of $37,997 and $7,150 for the summary proceedings, and
(b)The respondent said that no costs orders should be made in the substantive proceeding and that a party and party costs award should be made in their favour if they succeeded in having the applicant’s claim for costs in the substantive proceeding dismissed.
There was no dispute that it was reasonable for counsel to appear at the costs hearing given the complex nature of the dispute and the contentious evidence of each party’s lawyer which may have caused one (1) or both of them during the costs dispute to lose their objectivity at the risk of their client’s interests becoming secondary.
I have a broad discretion in exercising the costs jurisdiction, including that I do not have to find a clear case to make out a costs order pursuant to s 117(2) of the Act: Penfold v Penfold [1980] HCA 4; (1980) 5 Fam LR 579; (1980) FLC 90-800 (‘Penfold’) at pp 75,053-75,054.
The High Court of Australia in Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; (1990) 7 ALR 45 at [13] stated as follows:
...in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.
In this regard, I also take note of the Full Court decision (Fogarty, Kay, and Hase JJ) of Cassidy v Murray [1995] FamCA 91; (1995) 19 Fam LR 492; (1995) FLC 92-633 at [35].
I have considered all of the s 117(2A) matters, but for the sake of efficiency, I will only reflect on those that had a significant bearing in relation to the parties' circumstances and the decision to be made. In that regard I note that no one consideration under s 117(2A) prevails over any other and the weight to be accorded to each of the relevant factors is at my discretion.[35]
[35] Medlon & Medlon (No. 6) (Indemnity Costs) [2015] FamCAFC 157 (‘Medlon’) at [24].
There is nothing to prevent just one (1) consideration as set out in s 117(2A) being the sole foundation for an order for costs.[36]
[36] Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania v Fish)) [2005] FamCA 158.
I turn then to the issues.
THE ISSUES
What findings should I make about each party’s conduct?
Weighing up each party’s contentions about the other’s conduct and noting that neither party accepted the opportunity to cross-examine the other, I should act cautiously in making findings about contentious issues unless the evidence is inherently unreliable.[37]
[37] Austin J in Albert & Plowman [2022] FedCFamC1F 243 at [26].
Although s 117(2A)(c) is limited to conduct “in relation to” the proceedings, s 117(2A)(g) enables me to have regard to conduct that I consider to be relevant that would otherwise not fall within the earlier paragraph.
The family law jurisdiction has for a long time been concerned about the effect of a party's conduct on case management. In a bid to reinforce the importance of the efficient, cost-effective and equitable management of the Court's caseload (and the inherent benefits to families in doing so), parties can face costs orders if the Court is satisfied that there has been a failure to comply with the duty to conduct proceedings in a way that is consistent with the overarching purpose: see ss 95 and 96.
To paraphrase Alstergren CJ in Lombardi & Rider [2021] FedCFamC2F 57; (2021) 64 Fam LR 103 at [44] to [46] – elements of the overarching purpose (now found within the Act) seek to ensure the efficient use of judicial and administrative resources to ensure the timely disposal of cases. The Court’s obligation to pursue the overarching purpose is the driving force behind the Rules of Court and the Central Practice Direction.
In fulfilling their duty towards the overarching purpose - it is imperative that parties (and their lawyers) need to focus on the just resolution of their case quickly and …in a manner that does not cause unnecessary use of Court resources or their own resources.[38]
[38] See Judge Reithmuller (as he then was) in Lawson & Glenning [2021] FedCFamC2F 118; (2021) 64 Fam LR 414 at [9].
Reflecting on the evidence, and despite the written contention of the respondent[39], I am satisfied that the respondent’s conduct has been poor, and some examples are set out below –
(a)Despite being the subject of Orders of the Court made about their obligation to be responsible for the maintenance of B Street including the payment of outgoings, the respondent has been reluctant to make disclosure of their compliance (or attempts at compliance) or has engaged in a pattern of behaviour aimed at deflecting blame onto the applicant for their own failings, causing costs to be expended in replying to the allegations and addressing the allegations during the hearing before me.[40]
(b)The applicant has been forced to initiate two (2) separate interlocutory applications to address the respondent’s default with Orders of the Court raising the applicant’s costs, wasting the Court’s time, and denying members of the community better access to justice because judicial resources were being otherwise taken up as a result of the filings.
(c)The respondent has failed in their duty of disclosure by not providing fulsome and continuing disclosure in a timely manner which resulted in the parties being unable to engage in genuine settlement negotiations and culminating in a settlement only being achieved once a third party was joined to the substantive proceeding on the last day of the trial so that minutes of consent could then be considered by the Court to resolve the property dispute (‘the final property consent orders’).
(d)The applicant’s costs were thrown away because four (4) days out from the original costs hearing, the respondent filed a recusal application which caused the adjournment of the costs hearing to a future date before me.
(e)The respondent incorrectly calculated the applicant’s entitlement to sale proceeds in accordance with the final property consent orders and acted with disregard for the applicant’s protestations about the calculation error, leading to an impasse in the applicant receiving their entitlement which was only addressed in the midst of the costs hearing wasting more of the Court’s time and the parties’ legal costs.
[39] Exhibit ‘H1’ at 24.a.
[40] See Orders 11 and 15 of the December 2022 orders and exhibit ‘W8’.
Some of these findings were based on controversial evidence but where there was controversy I found in favour of the applicant’s contentions, because the respondent’s evidence was inherently unreliable because it was inconsistent with the tendered material and Orders made by the Court.
I also observe that in making these findings I was sorely tempted to make an adverse conduct finding against not only the respondent, but also JOSEPH, who in my view, gave evidence beyond his remit and at the risk of becoming a mouthpiece for his client and causing the Court to be misled.
It is overly concerning to me that JOSEPH thought it proper to conclude that his client had …complied with his duty of disclosure … up to and until commencement of the trial, when on day three (3) Ms D was not only joined, but then ordered to transfer an asset to the respondent in circumstances where the applicant had enquired about the state of ownership of the tipper trailer over a year before. Whether this evidence meets the colloquial term of “sharp practice” is not a matter I wish to waste more time on now.
In addition, and whether on instructions or not, it was breathtaking to me that JOSEPH decided to do nothing about the controversy regarding the distribution to the applicant of their share of the sale proceeds in accordance with the final property consent orders, despite being made aware of the error in their calculation.
Overall, and despite the respondent (on multiple occasions) consenting to orders to resolve disputes; the respondent’s conduct caused the applicant to bring two (2) interlocutory applications and denied the applicant the ability to properly negotiate to resolve some, if not all, of the property dispute prior to the trial commencing almost two (2) years after the substantive proceeding was initiated.
The respondent’s conduct caused the incurrence of significant costs to the applicant and impaired the community’s access to justice because, had full disclosure been made when it was required, the substantive proceeding may have had a far greater chance of a timely resolution or at least a reduction in the issues to be prosecuted, resulting in less court time being allocated and costs incurred.
Where there were issues of poor conduct about the applicant, I am unable to make any findings of substance that would inform the exercise of my discretion.
Has either party been wholly unsuccessful in either the substantive and/or summary proceedings?
The respondent’s recusal application was dismissed.
Although both parties sought to make submissions about the substantive proceeding, I am not satisfied that it was a key issue in the exercise of my discretion. Overall, I accept the thoughtful written submissions of the respondent’s counsel as to the substantive proceedings.
As to the costs application, I will return to that issue later.
Have offer(s) been made to settle the substantive proceedings or summary proceedings and if so, what were the terms?
In circumstances where I have made adverse findings about the respondent’s failure to disclose that impugned genuine property settlement negotiations taking place, I am not going to spend much time reflecting on this issue.
As for parenting, I accept the written submissions of the respondent’s counsel.
For these reasons, I am not satisfied that I can making any findings over and above that the applicant’s ability to make a genuine offer was impeded by the respondent’s poor conduct.
If it is just to make a costs order, on what basis should it be made and upon what terms including whether an enforcement provision should be built-in?
In exercising my discretion, I must have regard to s 117 of the Act which sets out the Court’s jurisdiction as far as costs are concerned including a rebuttable principle that each party should bear their own costs. I say rebuttable, because if the Court is satisfied that in the circumstances of the case it would be just to do so, then a costs order against a party may be made.
I am satisfied that it is just for me to make a costs order against the respondent[41] primarily because their conduct has been so poor (as reflected in the findings previously made) and that this conduct then infected not only the process of engaging in genuine property settlement negotiations but also in the overall case management of the proceeding including –
(a)right up to day three (3) of the trial when a new party had to be joined to allow the parties’ rightful property interests to be adjusted, and
(b)the late adjournment of the hearing of the applicant’s costs application because of the respondent’s filing of a recusal application just days before that hearing was to occur, and
(c)the hearing before me running longer than it should have because arrangements had to be made to ensure the respondent belatedly complied with their obligation to pay the applicant their 60% share of the sale proceeds of property sold months earlier.
[41] See Penfold.
In relation to the indemnity costs aspect, the applicant’s evidence does not meet the bar set by r 12.13(4) of the Div 1 Rules.
As far as the trial was concerned, it is regrettable that no one prepared a schedule for party and party costs for either the substantive proceeding or either of the summary applications brought afterwards. Doing the best I can, from the Court Record of court hearings, I am satisfied that the combined costs would have been in excess of $65,000[42] as calculated below:
Table 1 – Estimate of party and party costs for the trial
[42] See for example, items 1, 3, 4, 6, 8, 9, 11, 13, 14 of Sch 1 of the Div 2 Rules.
Substantive proceeding
Item 2
Initiating or opposing an application that includes interim orders (other than procedural orders) up to the completion of the first court date before a judicial registrar (‘JR’) on 26.10.2022*
(a) $2,947
(b) Daily hearing fee as per item 13(a) @ $321
(c) Advocacy loading 50% of the daily hearing fee specified in item 13 that applies to the hearing @ $160.50
Item 4
Summary (interim) hearing – as a discrete event before a Senior Judicial Registrar (‘SJR’) on 01.12.2022
$1,964
Item 4
Summary (interim) hearing – as a discrete event before a Senior Judicial Registrar (‘SJR’) on 22.12.2022
$1,964
Item 10
Attendance at hearing on 23.12.2022 to take judgment and explain orders
(a) $321
(b) Daily hearing fee as per item 13(a) @ $321
Item 5
Conciliation conference (including preparation) on 23.12.2022
$1,964
Item 4
Procedural or summary hearing before a JR on 25.01.2023
$2,093.62
Item 3
Initiating or opposing an application for interlocutory orders (including an interim hearing) before a Judge that is not otherwise described in item 1 or 2 on 21.03.2023**
(a) $2,093.62
(b) Daily hearing fee as per item 13(b) @ $1,255.75
(c) Advocacy loading 50% of the daily hearing fee specified in item 13 that applies to the hearing @ $627.88
Item 4
Procedural or summary hearing before a JR on 31.05.2023
$2,093.62
Item 6
Other dispute resolution (including preparation) on 10.07.2023
$2,093.62
Item 6
Other dispute resolution (including preparation) on 13.07.2023
$2,093.62
Item 3
Initiating or opposing an application for interlocutory orders (including an interim hearing) before a SJR that is not otherwise described in item 1 or 2 on 18.07.2023***
(a) $2,093.62
(b) Daily hearing fee as per item 13(b) @ $1,255.75
(c) Advocacy loading 50% of the daily hearing fee specified in item 13 that applies to the hearing @ $627.88
Item 4
Procedural or summary hearing before a JR on 21.08.2023
$2,093.62
Item 11
Application for location order, recovery order or enforcement of an order (other than an application for enforcement by a Registrar under item 12) filed on 16.01.2024^
$1,062.80^
Item 4
Procedural or summary hearing before a Judge on 06.05.2024
$2,093.62
Item 8
Preparation for final hearing – 2 day matter
$6,637.98
Item 9
Preparation for final hearing – each additional hearing day after the second hearing day
$1,422.04
Item 13
Daily hearing for 3-day trial between 07.08.2024 and 09.08.2024 with counsel for the applicant
$2,512.56
x 3
$7,537.68
Item 14
Advocacy loading for 3-day trial between 07.08.2024 and 09.08.2024 with counsel for the applicant
50% of $7,537.68 =
$3,768.84
Item 16
Court fees and other fees and payments to the extent that they have been reasonably incurred which, in the absence of a formal assessment have been constrained to court filing fees for the initiating application filed on 21.09.23 and the application in a proceeding filed on 26.05.2023^^ and trial fees on 07.08.2024. 08.08.2024 and 09.08.2024 that were paid for by the applicant
Filing fee $385
Filing fee $130
Trial fee
$745 x 3 = $2,235
Total
$53,658.06
Summary proceedings
Item 2
Initiating or opposing an application for interlocutory orders (including an interim hearing) for costs filed by the applicant on 03.09.2024 and up to completion of the first court date before a Judge on 08.10.2024
(a) $3,141.50
(b) Daily hearing fee as per item 13(b) @ $1,255.75
(c) Advocacy loading 50% of the daily hearing fee specified in item 13 that applies to the hearing @ $627.88
Item 2
Initiating or opposing an application for interlocutory orders (including an interim hearing) for recusal filed by the respondent on 04.10.2024 and up to completion of the first court date before a Judge on 08.10.2024
(a) $3,141.50
(b) Daily hearing fee as per item 13(b) @ $1,255.75
(c) Advocacy loading 50% of the daily hearing fee specified in item 13 that applies to the hearing @ $627.88
Item 4
Summary hearing before a Judge on 09.05.2025
$2,093.62
Item 16
Court fees and other fees and payments to the extent that they have been reasonably incurred which, in the absence of a formal assessment have been constrained to the hearing fees on 08.10.2024 and 09.05.2025^^^
Hearing fee $0 (exempted)
Hearing fee $0 (interim hearing)
Total
$12,143.88
* Initiating Application filed by applicant on 21 September 2022.
** Review application filed by the respondent on 26 January 2023.
*** Application in a proceeding filed by applicant on 26 May 2023 as a result of respondent defaulting.
^ Enforcement application filed by the applicant was dismissed in chambers on 02.02.2024 prior to formal hearing so no daily hearing fee applied.
^^ Noting that a fee mentioned in Schedule 1 of the Family Law (Fees) Regulations 2022 (‘the Regulations’) is not payable in relation to a proceeding under the Act when it is an application for an enforcement of an order: reg 2.08(1)(3)(k).
^^^Noting that the court filing fees for the costs application were not included because a fee mentioned in Schedule 1 of the Regulations is not payable in relation to a proceeding under the Act when it is an application for costs: reg 2.08(1)(3)(o).
Self-evidently, the legal costs incurred by the applicant are less than what the Court assesses to be fair, reasonable and proportionate party and party costs which are to be managed via the Div 1 Rules.[43] That is to the credit of DAKIN in appropriately managing their costs notwithstanding the difficult conduct of the respondent and (to a lesser degree) the respondent’s lawyer.
[43] Rules 12.01 & 12.08 of the Div 1 Rules and Sch 1 of the Div 2 Rules.
To make an order for indemnity costs (as sought by the mother) I must be satisfied that there are exceptional circumstances, see for example Medlon. However in my view, and notwithstanding that the sums claimed are less than party and party costs, the circumstances of this case do not reach such a high bar as identified within the case law including In the Marriage of Munday & Bowman [1997] FLC 92-784 at 84,661; (1997) 22 Fam LR 321 at 323 and Colgate-Palmolive Co. v Cussons Pty Ltd [1993] FCA 536; (1993) 118 ALR 248.
Notwithstanding the above, I am satisfied that there are justifying circumstances to rebut the presumption that each party bear their own costs, see Penfold.
Using my broad discretion in making costs orders, in relation to the substantive proceeding, I consider that it is just to award special costs fixed at $19,000 payable by Monday 25 August 2025.
This calculation reflects:
(a)the claimed costs reflecting the work conducted for both the parenting and property case but the findings about conduct being constrained to the property aspect only, and
(b)as foreshadowed above, my condemnation of the manner in which the respondent conducted themselves including repeated failures to make disclosure (including the extraordinary outcome on day three (3) of the trial), multiple defaults of Court Orders and their unsuccessful prosecution or defence of interlocutory proceedings and their recusal application.
As for the summary proceedings that have been generated since the substantive proceeding was resolved by consent, I also intend to award special costs fixed at $7,000 payable by Monday 25 August 2025.
The reasons for doing so reflect two (2) main findings.
Firstly, the respondent’s conduct was once again poor including –
(a)The respondent causing to file a recusal application just days before the applicant’s costs application was due to be determined at the expense of the applicant who incurred legal costs for their lawyer’s preparation for that event,
(b)The respondent failing to pay out the applicant in accordance with the final property consent orders, and
(c)The wasting of time during the costs hearing to try and resolve the above default.
Secondly, the respondent’s recusal application was wholly unsuccessful when it was heard on 8 October 2024.
In total, the respondent is to pay the applicant $26,000 in costs. The usual time period to pay costs is about four (4) weeks and I see no reason to order any differently, particularly given neither party made any compelling submissions about either their financial circumstances or “time to pay” more broadly.
Irrespective of what time period I set for costs to be paid, the respondent’s past history of compliance suggests that they are likely to default. Given the respondent’s repeated failure to comply with Orders of the Court, it is likely that default interest will accrue in accordance with rr 12.19 and 10.17.
Accordingly, I am satisfied that to properly manage the Court’s own process, should B Street settle before the respondent makes payment, then pursuant to s 105 I will make provision for a distribution to be made to the applicant out of the respondent’s 40% net proceeds with the applicant permitted to provide a copy of these Orders to the lawyer/conveyancer having carriage of the sale (should neither party’s lawyer be so appointed).
CONCLUSION
By now it should be unsurprising how unimpressed I am with how the two (2) lawyers have chosen to conduct this dispute. They should know better than to give evidence that is not directly within their knowledge. They should know better than to include in an affidavit, information which is conclusionary, speculatory or a submission. Every useless line of text they commit to publish costs their clients’ money and to waste their intelligence and their clients’ money in a useless exercise of chest-beating is concerning. That said, it was refreshing to see that DAKIN constrained their legal costs to less than as calculated for party and party costs.
For JOSEPH, the conduct was so egregious as to cause me to wonder whether to have him referred for acting as a ‘mere mouthpiece’ for the respondent.[44] I have carefully considered my options and have decided to refrain from doing so. I take very seriously the obligation imposed upon me, parties and officers of the Court to conduct ourselves in accordance with the overarching purpose.[45] Engaging in trenchant warfare that simply hikes up the billable word counts of documents and elevates the emotional dysregulation already likely to be experienced by vulnerable clients in the midst of family law disputes is not what the Act expects of us.
[44] See r 17.1 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) and ss 95 & 96 of the Act.
[45] Sections 95 & 96 of the Act.
For the above reasons I am satisfied that the Orders, Directions and Notations I will make are just, proper, and otherwise appropriate given the parties’ circumstances.
I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Suthers. Associate:
Dated: 28 July 2025
0
10
5