Beach Petroleum NL v Johnson

1. The husband is to pay the costs of Mr E as liquidator of F Pty Ltd incurred in and in connection with these proceedings on a party and party basis, within 28 days of those costs being agreed or assessed.

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 the pseudonym Gotti & Gevorgyan has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. This judgement concerns the determination of three separate applications for costs arising from proceedings determining objections to subpoenas that were heard on 1 and 2 July 2025. Specifically, the applicant wife seeks costs in respect to the dismissal of objections filed by the respondent husband to six subpoenas that had been issued by her and also in respect to successful objections she made in respect to two subpoenas issued by the husband. Additionally, applications for costs are made by two third parties to the litigation who successfully upheld objections to subpoenas issued by the respondent husband to those third parties.
2. For reasons which follow, I have made orders that the respondent husband pay the costs of the wife and also the third parties. I have, however, rejected the respective applications for those costs to be paid on an indemnity basis.

1. On 22 December 2023: The husband filed a subpoena to D Pty Ltd. Documents were produced in response.
2. On 26 July 2024: The husband filed a second subpoena to D Pty Ltd. It was set aside by a Senior Judicial Registrar, with a costs order made in favour of the objector.
3. On 23 December 2024: A Senior Judicial Registrar ordered the husband to pay $6,090.80 in costs to D Pty Ltd for the second subpoena. This remains unpaid.
4. On 1 May 2025: Mr E's solicitor sent a letter to the husband outlining defects in the subpoena and offering compromise (Affidavit of Mr CC filed 15 August 2025, Annexure A at paragraph 8).
5. On 3 April 2025: A third subpoena was issued by the husband to D Pty Ltd. In my judgment dated 31 July 2025, I found that subpoena to be oppressive and a "fishing expedition" and that the documents sought lacked apparent relevance to the proceedings.
6. On 16 April 2025: D Pty Ltd filed a Notice of Objection to the husband's third subpoena directed to D Pty Ltd.
7. On 27 May 2025: D Pty Ltd invited the husband to withdraw the subpoena, however he failed to do so (Affidavit of Ms DD filed 14 August 2025, paragraph 8).
8. On 27 June 2025: D Pty Ltd made a written offer to the husband to resolve the issue. This included proposing amended subpoena terms and payment of costs at a reduced rate. The husband did not accept the offer (Affidavit of Ms DD filed 14 August 2025, paragraphs 12-14).
9. On 30 June 2025: The husband sent a proposal to Mr E with a view to resolving his request for documents (Husband's affidavit filed 14 August 2025). These were not responded to prior to the hearing date on 1 July 2025.
10. On 1 July 2025: The first day of the two-day subpoena hearing was listed. The husband emailed chambers 42 minutes before the hearing indicating that medical issues prevented his attendance. As a result, the hearing was adjourned to 2 July 2025.
11. On 2 July 2025: The subpoena hearing resumed, and the husband withdrew his objection to subpoenas issued by the wife to:
    • EE Pty Ltd
    • FF Pty Ltd
    • GG Pty Ltd
    • H Pty Ltd
    • S2 Pty Ltd
    • HH Pty Ltd
12. Also at the subpoena hearing, the husband resolved the subpoena objection filed by J Pty Ltd.
13. Further, on 2 July 2025 the husband agreed to reword his subpoena's addressed to the following:
    • C Pty Ltd
    • Z Pty Ltd

• AA Pty Ltd, ACN [...] ATF Gotti Family Trust
• BB Bank Ltd

1. On 31 July 2025: I made orders upholding objections in respect to subpoena's directed to:
   • D Pty Ltd; and
   • Mr E as Liquidator of F Pty Ltd

REASONS FOR UPHOLDING THE OBJECTIONS TO SUBPOENAS

1. In my reasons for judgment dated 31 July 2025, I explained why I upheld the objections. By way of summary those reasons were that the information sought lacked apparent relevance to the proceedings, the subpoenas were fishing for information rather than being appropriately focussed, and the subpoenas were oppressive.
2. The subpoena to D Pty Ltd was found to be oppressive because:
   • The subpoena was broad and burdensome, requiring D Pty Ltd to search for documents across multiple years and formats.
   • D Pty Ltd had already incurred costs responding to earlier subpoenas, and the husband had not paid court-ordered costs of $6,090.80.
   • D Pty Ltd estimated compliance with the third subpoena would cost $4,400, which the husband stated that he could not pay.
   • I found it oppressive to require a non-party to incur further costs without reimbursement, especially given the history of non-payment by the husband.
3. The subpoena to Mr E as liquidator of F Pty Ltd was found to be oppressive because:
   • The husband largely failed to establish relevance of the documents sought.
   • The cost of compliance would cost approximately $7,500, which would be borne by creditors, not the parties.
   • The subpoena's definition of "documents" was extremely broad, including "anything on which there are marks, figures, symbols...".
   • The subpoena was an abuse of process as it was used for the predominate purpose of ascertaining whether the husband had any cause of action against Mr E.
   • This level of burden on a non-party was unjustified, particularly when the husband indicated he had no ability to pay for compliance.
   • The husband had alternative statutory avenues under the Corporations Act 2001 (Cth) to pursue his concerns about the liquidation.

1. Unlike other civil litigation where costs usually follow the event, the Family Law Act 1975 (Cth) ("the Act") includes a presumption that, as a general rule, each party to proceedings bears their own legal costs (s 114UB(1) of the Act).
2. However, the Court retains a discretion to order costs where it considers that the circumstances justify doing so (s 114UB(2) of the Act). That discretion must be exercised judicially and in accordance with the considerations set out in s 114UB(3), which include:

(a) The financial circumstances of each party;

(b) Whether a party is receiving legal aid (and the terms of any grant);

(c) The conduct of the parties in the proceedings;

(d) Whether the proceedings were necessitated by a party's failure to comply with prior orders;

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

(f) Any written offers of settlement and the terms of such offers; and

(g) Any other matters the court considers relevant.

1. The High Court in Penfold v Penfold (1980) 144 CLR 311 at 315 confirmed that a party seeking costs bears no additional or special onus beyond considering the factors set out in the then applicable s 117(2A) of the Act (now s 114UB(3)). These factors must be considered and assessed holistically. However, no single factor is determinative, nor is it necessary that all factors be present: I & I (No 2) (1995) FLC 92-625; Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish [2005] FamCA 158; (2005) 33 Fam LR 123 at 130 [41].
2. While the financial circumstances of the parties must be considered under s 114UB(3)(a) of the Act, the court has repeatedly held that impecuniosity is not a bar to the making of a costs order and that a party's limited means does not preclude an order for costs where other factors justify it: Nada & Nettle (Costs) [2014] FamCAFC 207 at [11]. The inability to pay may, however, be relevant to the quantum or timing of payment, but it does not immunise a party from the obligation to pay costs if the circumstances justify such an order being made.
3. An applicant for indemnity costs carries the onus of establishing that the case falls within the "exceptional" category of cases, where such an order is justified: Kohan & Kohan [1992] FamCA 116; (1993) FLC 92-340 at 79,614; D & D (Costs) (No 2) (2010) FLC 93-435 at 1,470 - 1,471 [26]-[28] and Phillips & Hansford [2020] FamCAFC 28; (2020) FLC 93-941. In considering whether to make such an order, as a general rule, the court is reluctant to order indemnity costs against an unrepresented litigant: Kristiansen & Kristiansen [2025] FedCFamC1A 129 at [92].
4. Costs will generally be awarded at the scale set out in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules"). Pursuant to the Rules, the Court retains the discretion to award costs in a fixed sum. In that respect, r 12.17(1)(a) of the Rules permits the Court to order costs in a specific amount. The power to do so is to "avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation": Graham & Squibb [2019] FamCAFC 33; (2019) FLC 93-892 at 78,858 [92] quoting Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120.
5. If the fixed sum approach is taken the amount identified must be "logical, fair and reasonable;" Stoian v Fiening (Costs) [2014] FamCA 944 at 15 [91] citing Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [8] and Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at [16].

1. Despite being wholly unsuccessful the husband opposes an order for costs being made against him for the following reasons.
2. The husband contends that the Court should apply the default position under s 114UB of the Act, that is that each party bears their own costs and that the circumstances of the case do not justify departing from that default position.
3. The husband contends that he made repeated and genuine efforts to confer with third party objectors before the hearing, as directed by the Court. He contends these efforts included narrowing subpoena categories and proposing alternatives, with a view to reducing burden and costs. He contends that the objectors failed to engage meaningfully in that process.
4. The husband also contends that a costs order would cause him financial hardship. He states that he is unemployed, has no income, and is burdened with significant debt (over $130,000 in credit card debt and $752,099 owed to his parents). He contends he has no financial resources to meet a costs order and is in the process of applying for legal aid. The husband contends that a costs order could lead to bankruptcy, affecting his ability to care for his children and maintain professional qualifications.
5. The husband states that, on the first day of the hearing, he suffered an hypertensive emergency and was hospitalised. He states that he was under sedating medication during the hearing and this impaired his cognitive function.
6. The husband challenges the quantum and justification of costs claimed, contending there are inconsistencies and lack of itemisation.
7. Finally, the husband contends that if the Court finds costs payable, they should be limited to scale costs only, as per Schedule 3 of the Rules.

1. I have considered each of the matters referred to in s 114UB(3) of the Act in the context of the parties' respective written submissions, including those of the husband which I have summarised above. Having done so, I am satisfied that the submissions of the husband should be rejected and an order for costs should be made in favour of the wife and also the third parties, D Pty Ltd, and Mr E as Liquidator of F Pty Ltd.
2. In determining that costs should be awarded I have had regard to the following.
3. In terms of s 114UB(3)(e), the husband was wholly unsuccessful in resisting the objections filed by the third parties and the wife.
4. In terms of s 114UB(3)(c), the husband's late withdrawal of his objections in respect to subpoenas issued by the wife, on the second day of the listed hearing, necessitated her retaining lawyers to resist the husband's application and consequently incur legal costs even though the matter was finally resolved by consent at the hearing.
5. Also in terms of s 114UB(3)(c), it is of concern that the husband has issued multiple subpoena's against D Pty Ltd. This was in the context where a subpoena that has previously been issued was set aside.
6. In terms of s 114UB(3)(g), I have also had regard to the fact that the subpoenas issued by the husband to D Pty Ltd and Mr E as Liquidator of F Pty Ltd have imposed significant burdens in terms of time and cost on parties who are third parties to the primary dispute between the husband and the wife. This burden has been imposed in circumstances where the husband states that he has no capacity to re-imburse the third parties for the costs that they have incurred, including, in respect to obtaining legal representation.

1. The wife seeks an order for indemnity costs based on the following.
   • The husband has had a complete lack of success in the proceedings.
   • The subpoenas were issued by the wife only after the husband failed to comply with disclosure orders made on 25 October 2024. In that respect the wife contends that the documents she sought were akin to bank statements and should have been disclosed voluntarily.
   • The wife has incurred substantial legal costs due to the husband's conduct resulting in her exhausting her funds and credit to pay for legal representation, and the wife is now self-represented.
   • The husband filed multiple objections that were without merit.
   • The husband has unnecessarily engaged in litigious behaviour including sending over 33 emails to the wife's legal team in a short period. The wife argues that this was intended to inflate her legal costs.
   • The husband refused offers of compromise from third party objectors and made no substantive counterproposals.
2. The difficulty I have in considering the wife's arguments is that, in these interlocutory proceedings, I am unable to adjudicate in respect to the contentious issues regarding the alleged lack of disclosure and the motivations of the husband for engaging in what she believes is overly litigious behaviour. The failure of the husband to accept offers of compromise is a matter that I have considered in respect to the awarding of costs but does not itself justify an order for indemnity costs.
3. Accordingly, the wife has failed to satisfy me that this case falls into the exceptional category where an award of indemnity costs is appropriate.

1. D Pty Ltd seeks an order for indemnity costs against the husband for the following reasons:
   • The husband has issued multiple subpoena's noting:
     • The subpoena issued to the objector was the third in the proceedings.
     • The documents requested had already been produced in response to the first subpoena.
     • A second, similar subpoena had previously been set aside with a costs order that remains unpaid.
     • The third subpoena was issued despite prior objections and rulings, and was found to be oppressive and overly broad in my judgment dated 31 July 2025.
   • The husband failed to establish the apparent relevance to the documents he sought and was found to have engaged in fishing.
   • The subpoena was oppressive in its use of excessively broad language, including the definition of 'documents' as "anything on which there are marks, figures, symbols...".
   • The husband imprudently rejected settlement proposals including:
     • The objector invited the husband to withdraw the subpoena on two occasions.
     • A written offer was made to settle the matter, including amendments to the subpoena and payment of compliance and legal costs.
   • The husband engaged in procedural misconduct and wasted costs:
     • The husband failed to attend the first day of the hearing, citing medical issues shortly before commencement.
     • This caused the hearing to be adjourned and resulted in wasted costs for the objector, including travel and counsel fees.
     • The husband did not provide adequate medical documentation as ordered.
2. The issuing of multiple subpoenas by the husband to D Pty Ltd, in circumstances where the husband has not satisfied his obligation to pay the legal costs incurred in respect to earlier subpoenas issued by the husband is a matter of great concern. However, in circumstances where the husband is self-represented I do not, in the exercise of my discretion, make an order for indemnity costs against him.

1. Mr E seeks an order for indemnity costs for the following reasons.
   • The subpoena was fundamentally defective in that it was found to be oppressive, a fishing expedition, sought discovery from a third party, and constituted an abuse of process.
   • The husband rejected early and reasonable offers to resolve the matter including:
     • On 1 May 2025, Mr E's solicitors wrote to the husband explaining the defects in the subpoena and offering to produce certain documents if the husband agreed to orders setting the subpoena aside.
     • This offer was not accepted, and the husband insisted on full compliance.
     • Further attempts to narrow the scope and settle the matter were made between 21 May 2025 and 1 July 2025, but no agreement was reached due to the husband's refusal to pay Mr E's legal costs.
   • The husband engaged in unreasonable conduct including by engaging in voluminous and often incomprehensible correspondence that significantly increased Mr E's legal costs.
   • Mr E's costs, if not paid by the husband, would fall on the creditors of F Pty Ltd.
2. The imprudent rejection of a reasonable offer of compromise can establish the basis of an order for indemnity costs; Phillips & Hansford [2020] FamCAFC 28; (2020) FLC 93-941 at 79,457 [35]-[37] citing Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233. However, again, in circumstances where the husband is self-represented I do not, in the exercise of my discretion, make an order for indemnity costs against him.

1. In considering the quantum of costs the husband contends that the court should not require him to pay the costs of the first day of the hearing which was adjourned as a result of the husband contending that he was suffering ill health.
2. The wife and recipient parties question the genuineness of the husband's claim of incapacity to attend as a result of ill health. It is, however, unnecessary to determine that issue. In the exercise of my discretion in awarding costs I am required to have regard to the overall fairness of such an award including assessing which party is responsible for the costs being incurred; Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121]. In this case, the wife and the third parties were required to attend on the first day of the allocated hearing in order to respond to the initiatives taken by the husband - namely the issuing of subpoenas to the third parties and the filing of objections to subpoenas issued by the wife. Even though those proceedings were adjourned due to the husband's claimed ill health, it would, in my view, be unfair to require to the wife and the third parties to be out of pocket in respect to the costs that they incurred in respect to that first day of hearing, where the husband's actions were ultimately found to be without merit.
3. Accordingly, I will make orders requiring the husband to pay the costs incurred by the wife and the third parties.
4. Having considered the evidence provided by the wife and D Pty Ltd in respect to the manner in which they have calculated their costs I am satisfied that, leaving aside the question of indemnity costs, the amount they have sought is in accordance with the relevant scale and is logical, fair and reasonable.
5. Accordingly, I will make respective orders for costs being:
   • In favour of the wife in the sum of $12,002.65
   • In favour of D Pty Ltd in the sum of $12,607.40
6. Unfortunately, the evidence filed on behalf of Mr E does not enable me to make the same finding that his costs have been assessed in accordance with the scale. I am therefore unable to determine that the costs he is seeking are logical, fair and reasonable. I will however make an order that the husband it to pay the costs of Mr E on a party and party basis within 28 days of those costs being agreed or assessed.

1. I make orders to give effect to these reasons for judgment.

I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland.