Barbieri & Barbieri (No 3) [2025] FedCFamC1F 573 (21 August 2025)

(a) The financial circumstances of each party to the proceedings

1. In relation to the financial circumstances of the parties, I have had regard to the findings I have made as to the net pool of assets which was something in the order of approximately $22 million of which the husband received 42 percent and the wife received 58 percent.
2. The husband's counsel quite properly concedes that by the terms of the orders each party received a substantial distribution from the matrimonial pool. He also submits that the wife received interest on the orders as a consequence of the stay application, however that was the subject of a consent order and the price of the stay the husband sought.
3. I accept the husband's counsel's submission that the husband is 67 years old and has dependants, whereas the wife is 59 years old and has no dependants. His counsel submits that if a costs order is made, the husband will have to liquidate non-cash assets and may have to sell his home, contending that this was a powerful factor weighing against a costs order.
4. I am not satisfied that it is a powerful factor. That is merely a consequence of how the husband seeks to arrange his financial affairs. In that respect, the husband has not elected to file any updated Financial Statement as to his financial position and otherwise merely relies upon an affidavit sworn 10 June 2025. No aspect of that affidavit sets out what is the husband's current financial position. Despite clearly being conscious of the fact that his financial circumstances would be a relevant factor in the determination of the application, he has elected to place no updated evidence before the Court. I thus infer that there is no substantial change to the financial position as found by the Court on 1 November 2024 save that he has had to meet various interest payments, payment of the judgment sums, and the payment of legal fees on the appeal.
5. Either way, the husband is hardly impecunious. That said, even impecuniosity is not a bar to the making of a costs order (Nada v Nettle (Costs) [2014] FamCAFC 207; (2014) FLC 93-612; Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164).

1. What is relevant is conduct of a party which in some way or other leads to an increase in costs by the other party. Such factors may include uncooperative behaviour, obstruction, prolonging litigation or the bringing of unreasonable or unmeritorious applications.
2. Each party makes various complaints about the conduct of the other. The husband submits that issue of conduct in the Consent Order Proceedings is irrelevant as they are not 'the proceedings' within the meaning of s 117(2A)(c) of the Act. I do not accept that submission for the reasons given earlier. The husband's failure to make a disclosure is very relevant to the question of costs but will be addressed in dealing with s 117(2A)(f) of the Act.
3. It is not explained how the Court could make findings as urged by the husband's counsel that the wife made "multiple unnecessary and overlapping requests for disclosure", or that she had issued multiple subpoenas for information that had been disclosed or had objected to subpoena issued by the husband (I assume it is asserted unnecessarily) in circumstances where there was no cross-examination nor request to cross-examine. They are a series of assertions about which it is impossible to make a finding. No part of any counsel's submission took the Court to a finding made in the 79A Proceedings that reflected adversely upon the conduct of either party in relation to those proceedings.
4. As to these matters, together with contentions such as having multiple solicitors attend court which it was asserted was unnecessary, are all matters that can be considered within the rubric of reasonableness in any assessment. I am not satisfied that any inference adverse to the husband in the context of "conduct" arises from an adjournment of the proceedings which was in the end appropriate and consistent with authority or the ill health of the husband's counsel nor am I satisfied that those matters are relevant in the determination as to whether to order costs.
5. The inability of the parties to reach agreement about chattel values or the appointment of a valuer is a consequence of their own dysfunction and inability to compromise. The paucity of the evidence together with the election not to test the assertions renders futile the process of making findings to support the conclusions the wife urges. Again, these are matters that can be addressed in ascertainment of the reasonableness of the costs in any assessment.

(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. The term "wholly unsuccessful" refers to a situation in which proceedings as a whole have been unsuccessful, rather than necessarily an application or a form of relief (Bant & Clayton (Costs) [2016] FamCAFC 35; (2016) 56 Fam LR 31).
2. While the wife submits that the husband was wholly unsuccessful given that orders were made against the case he advanced, the submission is reductive. The husband was not "wholly unsuccessful" in that he resisted successfully the wife's assertions under s 79A of the Act which relied upon a finding of fraud and/or the giving of false evidence and the wife ultimately abandoned a claim for duress.

(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

1. Each party has made offers of settlement in the proceedings albeit I note the husband's submissions that none of the offers made by the husband exceeded the value of any sum ultimately ordered by the Court.
2. I accept that the wife's offers to settle dated March and May 2024 were less than the amount ultimately ordered and included no order as to costs. I am satisfied they are a relevant consideration in the exercise of discretion to order costs and are part of the circumstances justifying an order for costs. In the context of the litigation and the pool of assets, the wife's offers were a realistic and genuine compromise, particularly where they sought no order for costs (Ananda Marga Pracaraka Samgha Ltd v Tomar (No 7) (2013) FCA 863 at [68]) and which if accepted would have saved the parties a significant sum of money.

(g) Any other matter the court considers relevant

1. I am satisfied that the husband's failure to make a full and frank disclosure in the Consent Order Proceedings which led to the 79A Proceedings is a highly relevant and persuasive factor in the circumstances justifying a costs order. As the husband's counsel properly and frankly conceded the "non-disclosures took place in the s 79 Proceedings and were the foundation for the s 79A proceedings."
2. A party who fails to comply with their disclosure obligations undermines the integrity of the Court process. In my reasons for judgment, I found that the husband well knew that the information he failed to disclose was information the wife wanted to know and that his decision not to disclose was deliberate at [91]. I found the husband's evidence as to when he engaged the real estate agent did not represent the whole truth at [101], that he failed to disclose to the wife that he intended on selling the units and was taking active steps to do so at [99], that he only intended to sell when he was ensured of keeping the benefit to the exclusion of the wife at [100] and [105], and that failure was deliberate and egregious at [103]. I found the husband's failure to disclose constituted a miscarriage of justice such that the wife's consent to the orders was unjustly obtained at [133].
3. The husband's conduct in failing to comply with his disclosure obligations led upon its discovery to the 79A Proceedings. His failure to disclose went to the very heart of whether the Consent Orders were a just and equitable determination. In Nemeth v Nemeth [1987] FamCA 12; (1987) FLC 91-844 Evatt C.J., Smithers and Baker JJ said at 76,385:

The failure of a party to be completely open and forthcoming as to his or her financial position, should always place that party at risk in relation to an order for costs.

1. While the Full Court of the Federal Circuit and Family Court of Australia very recently in Zha and Wun (No. 2) (2025) FLC 94-258 re-emphasised the consequences which flow from non‑disclosure can include orders for costs, where their Honours observed as follows:
   1. Thus, it may be seen from the outset that where failures of disclosure obscure the identification of the assets of the parties to the marriage, then the process by which the court determines whether its resulting orders are just and equitable is compromised. As the Full Court has observed in Cantrell & North [2020] FamCAFC 175; (2020) FLC 93-976 at [81]:

The obligation on parties to give accurate and full disclosure is of single importance in maintaining the integrity of the judicial process.

1. The importance of the requirement is expressed through its inclusion in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules"), particularly Pt 6.1.

2. The authors of "The Importance of Full and Frank Disclosure in Family Law Financial Proceedings and the Many Consequences of Non-Disclosure" helpfully identify categories of consequences which arise from non-disclosure as follows:

(1) Evidential consequences (including drawing inferences, prohibitions on tender of non disclosed documents, inability to withdraw admissions);

(2) Procedural consequences (including issue of subpoena and making of Anton Piller orders, and dismissing, striking out or dealing with a matter on an undefended basis); and (3) Final order and related consequences (including alteration of property interests, setting aside orders, financial agreements or awards, costs orders, referrals and contempt proceedings).

1. From the time the husband made the deliberate decision not to disclose, the wife was negotiating in the Consent Order Proceedings at a disadvantage as she only knew part of the information and not all of the information known to the husband, such that it was found that her consent to the orders was not informed consent. The 79A Proceedings arose entirely as a consequence of the husband's failure to make a full and frank disclosure in the Consent Order Proceedings. The 79A Proceedings was focussed upon establishing that which the husband failed to disclose and that which he asserted he had no obligation to disclose.
2. The failure to make a full and frank disclosure put the wife to substantial and in many respects unnecessary cost for which she should be compensated. I am satisfied for the above reasons that his non-disclosure justifies the making of a costs order for the entirety of the 79A Proceedings subject to the exclusions referred to below.
3. I am not however satisfied that means that a costs order should be made for the entirety of the wife's costs in the Consent Order Proceedings. The documents that the husband should have disclosed to the wife came into his possession on 6 September 2021. The parties were to attend a mediation on 26 October 2021.
4. On 25 October 2021, his solicitors submitted a balance sheet to the wife which omitted any reference to the information only the husband knew. His deliberate decision not to disclose was certainly formed by the evening before the mediation if not earlier as evidenced by his evidence that he feared providing the documents to her would derail the mediation at [25]. I am satisfied where his non-disclosure was deliberate and in breach of his obligation of full and frank disclosure and where the wife was thereafter negotiating without knowledge of all the relevant information as a consequence of his deliberate and egregious conduct means the wife should be compensated for the costs incurred by her in the Consent Order Proceedings from 25 October 2021 to the making of the Consent Orders on 16 September 2022, subject to the exclusions referred to below.

1. The authorities make plain that an order for indemnity costs is not one that is lightly made, and there should be circumstances of an exceptional kind that warrant orders for costs on an indemnity basis (Kohan and Kohan [1992] FamCA 116; (1993) FLC 92-340). Justice Sheppard in Colgate‑Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 identified various guidelines as to the circumstances in which a court might entertain an order for indemnity costs. The category of cases in which a court may make an indemnity costs order are not closed and are not limited to those identified by Sheppard J (Yunghanns & Ors v Yunghanns & Ors and Yunghanns [2000] FamCA 681; (2000) FLC 93-029 at 87,471).
2. In Johnson v Johnson (No 2) (Costs) [1999] FamCA 959; (2000) FLC 93-040, the Full Court of the Family Court of Australia observed as follows:
   1. In our view, there are good reasons why the husband should bear those costs on an indemnity basis. As was identified by the trial Judge, had there been a full and frank disclosure on behalf of the husband these proceedings would have been of much shorter duration. Whilst the failure to give such full and frank disclosure may not axiomatically incur the wrath of an indemnity costs order, having regard to the financial circumstances of the parties in this case, and the very nature of the case presented by the husband, there are special and unusual features which justify the court in departing from the ordinary practice that each party should bear their own costs.
3. I am satisfied that the circumstances of the husband's non-disclosure and its consequence amply satisfy the descriptor of exceptionality such as to warrant an order for indemnity costs. The simple fact of the matter is that the Consent Order Proceedings were as and from 25 October 2021 concluded in circumstances were there had been a suppression of evidence and the 79A Proceedings were a consequence of the husband's failure to comply with his obligation of full and frank disclosure. The extent of the non-disclosure was significant and was compounded by a failure to comply with a court order and led to the Court setting aside the orders and making an adjustive order in favour of the wife in excess of $3 million. I am not satisfied that the fact that the wife was unsuccessful on aspects of the 79A Proceedings detracts from or is a factor militating against the making of an indemnity cost order in circumstances where the foundation for the proceedings arouse entirely as a consequence of his failure to comply with his obligations of disclosure.
4. It would be an inappropriate measure of compensation for the wife to receive a costs order on a party and party basis and accordingly the costs of the wife, subject to the matters set out below, should be met on an indemnity basis.
5. The wife seeks orders in a fixed amount and the Rules and authorities make plain that I can fix an amount for costs. The question therefore becomes whether costs should be fixed in a set sum or left to be fought out between the parties by way of agreement (which I consider given the history to be unlikely) or assessment.
6. I am not satisfied that I am in a position to be able to fix the wife's costs. To attempt such an assessment in circumstances where the wife's counsel made certain concessions as to what should not be included in the wife's costs and where there is an overall challenge to the reasonableness of her costs means that I could not be confident that my assessment would be "logical, fair and reasonable" (Stoian v Fiening (Costs) [2014] FamCA 944; Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23).
7. Recognising that the inevitability of failing to do so will involve the parties in further litigation the melancholic fact is that there is little I can do that would prevent them from embarking upon further litigation given their propensity to engage in same.
8. I will order the husband to pay the wife's costs of the Consent Orders Proceedings in the period referred to above and for the entirety of the 79A Proceedings as agreed or assessed on an indemnity basis up until 23 August 2024 being the last day of the hearing. There is no basis for the husband to pay the wife's costs thereafter. The costs however will include the wife's costs of the Points of Claim and any amendment to them which I am satisfied were a necessary incident of the proceedings.
9. In Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 Justice Hayne observed as follows
   1. On its face, then, the reference in s 117 to "costs" is a reference to "costs" as that word is ordinarily understood in the law: the amount which the person to whom the order is directed must pay to some party to the litigation as partial indemnity for the professional legal fees and expenses incurred by that party in the course of the litigation. Section 117(1) provides, in effect, a prima facie rule that each party is to bear his or her own costs of the proceeding but that prima facie rule is subject to the operation of s 117(2) which, in turn, is dependent upon the court concluding ``that there are circumstances that justify'' the making of an order.
   2. Section 117(2) enables the Family Court to make orders "as to" costs and that may well enable a broad range of orders to be made. The subject matter of those orders must, however, be "costs": a power to make orders "as to" costs does not enable the court to make orders dealing with something other than costs.
10. I am not satisfied that the costs incurred by the wife in making a complaint to the Law Society of NSW about the husband's solicitor could ever be described as part of the subject matter of costs and such costs will be excluded. Nor am I satisfied that interest incurred by the wife on a loan to pay legal fees falls within the description of legal costs. If the wife was obliged to borrow money to meet her legal fees, then that was a consequence of private arrangements between her and her solicitors. Similarly, I am not satisfied that the wife's costs of obtaining accounting advice falls within the description of costs particularly where no report was relied on or filed and if necessary, could have been the subject of an application for a single expert.
11. Complaints about the reasonableness or otherwise of the number of subpoenas is a matter that can be determined in the assessment process. The parties in a rare moment of compromise agreed that the costs associated with any reservation or cancellation fee charged by counsel would not be included in any assessment of costs.
12. I am not satisfied that a costs order should be made in favour of any party for the costs of this application as each have had varying degrees of success and failure. The wife was unsuccessful in an application for costs of the entirety of the Consent Order Proceedings, and the husband was unsuccessful in an order for costs of the 79A Proceedings. I am not satisfied that there are any circumstances that justify a departure from the usual order that each party pay their own costs of the costs application.

I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell.