austlii:cth/FedCFamC1F/2025/432
General information, not legal advice.
FedCFamC1F
2025-06-30
Altobelli J
Original judgment source is linked above.
(a) Application in a Proceeding filed 22 November 2024;
(b) Amended Application in a Proceeding filed 2 April 2025;
(c) Affidavit filed 15 October 2024;
(d) Affidavit filed 22 November 2024;
(e) Cost Schedules filed 2 April 2025;
(f) Affidavit of Ms D filed 8 April 2024;
(g) Written submissions filed 2 April 2025 ("wife's written submissions");
(h) Written submissions in reply filed 8 May 2025 ("wife's written submissions in reply"); and
(i) Written submissions filed 20 May 2025 ("wife's fixed costs submissions").
(a) Response to an Application in a Proceeding filed 23 April 2025;
(b) Affidavit filed 23 April 2025;
(c) Written submissions filed 23 April 2025 ("husband's written submissions"); and
(d) Written submissions filed 20 May 2025 ("husband's fixed costs submissions").
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as the court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(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; and
(g) such other matters as the court considers relevant.
3. Such further orders that the Court deems fit and necessary.
In relation to the Application in a Proceeding filed on 10 October 2024 and amended on 2 April 2025:
1. The Application be dismissed.
- In the alternative, in the event the Court finds it appropriate to make any order for costs:
- The period for which costs be paid be from the date of the trial to 10 October 2024 only; and
- Within twenty-one (21) days of the Court's determination of this Application, the Applicant instruct a qualified Costs Consultant, at her cost to prepare a Bill of Costs for the ordered date range, calculated in accordance with Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021; and
- The Respondent pay the Applicant's costs as assessed in the Bill of Costs prepared in accordance with Order 2b above within fifty-six (56) days of the date of service of the Bill of Costs.
In relation to the Application in a Proceeding filed on 22 November 2024:
1. The Application be dismissed.
- In the event the Court orders that costs are payable in relation to the Application in a Proceeding filed on 22 November 2024 those costs be fixed in the sum of $5,000.
Section 117(2A)(a): Financial circumstances of the parties
"In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?' It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together."
[80] Where, however, there is no ready market for the asset in question, or where there may be no willing purchaser at the time when the valuation is sought or required, the method for valuing the asset generally involves hypothesising that there is a willing and knowledgeable, but not anxious purchaser. The question then becomes what a willing but not anxious vendor could reasonably expect to obtain, and what amount the hypothetical purchaser could reasonably expect to have to pay, if they got together and agreed on a price: Abrahams v Federal Commissioner of Taxation [1944] HCA 32; (1944) 70 CLR 23.
[81] That is not to say that it is always necessary to employ the hypothesis of a willing seller and purchaser. That hypothesis is merely a useful and conventional method of arriving at a market value: Boland v Yates Property Corp Pty Ltd [1999] HCA 64; (1999) 74 ALJR 209 at [83] (per Gleeson CJ, citing Minister for Public Works v Thistlethwayte [1954] AC 475). Where the asset in question has been the subject of a recent arm's length sale, it is generally unnecessary to hypothesise. If the recent sale transaction can be said to be one between a willing but not anxious seller, and willing but not anxious buyer, the price that the buyer and seller actually agreed on may generally be taken to be the market price, or at least a reliable indictor, if not the best evidence, of the market price: Inez Investments Pty Ltd v Dodd (1979) 26 The Valuer 501; Rostam Pty Ltd v Valuer General [2011] NSWLEC 1387 at [13]; Commonwealth Custodial Services Ltd v Valuer General [2007] NSWCA 365; (2007) 156 LGERA 186 at [106], [115]; Alcan (NT) Alumina Pty Ltd v Commissioner of Taxes [2007] NTSC 9; (2007) 19 NTLR 153; 65 ATR 784.
Section 117(2A)(b): Whether the parties are in receipt of legal aid
Section 117(2A)(c): The conduct of the parties
[5] This matter has a complex procedural history, owing to the husband's criminal proceedings. The wife filed an Initiating Application on 10 June 2020. On 17 May 2022 the final hearing was listed for three days commencing 28 November 2022. On 31 October 2022, the final hearing was vacated after a request for an adjournment by the husband, to allow for the husband to be sentenced in the criminal proceedings and for any criminal appeal to be filed and heard (which was estimated to be at the end of 2022). The Court notes the wife opposed this request given the uncertainty of the timeline of the criminal proceedings. The matter was listed for mention in the new year to ascertain whether there was any more clarity regarding the husband's criminal proceedings and to decide whether the matter should be re-listed for final hearing.
[6] At the next Court event on 1 February 2023, the wife pressed for the allocation of final hearing dates, given that the matter had already been on foot for two and a half years, and the husband's appeal would further delay the hearing of the matter by almost another year. The Court declined to do so, however, because this would cause injustice to the husband in circumstances where he was sentenced to incarceration with a non-parole period of [many] years and his solicitor told the Court that he had filed an "all-grounds appeal" that may be heard towards the end of 2023 at the earliest, the outcome of which would impact the Court's determinations under s 75(2) of the Act. The Court notes the husband had in fact only filed a Notice of Intention to Appeal on 28 November 2022.
[7] When the matter came back before the Court on 30 November 2023, the solicitor for the husband again requested a further adjournment until the finalisation of the criminal proceedings (including any appeal) due to the impact that the outcome of those proceedings would have on the Court's determinations under s 75(2) of the Act. She indicated that the husband was in the process of obtaining new legal representation in respect of the criminal proceedings. The Court declined to grant the adjournment request in circumstances where the husband's interests needed to be balanced with those of the wife. The matter was listed for final hearing on 22 April 2024. The husband filed a Notice of Appeal on 22 December 2023, seeking for the orders made 30 November 2023 to be dismissed and for the matter to be listed for mention after the hearing of the husband's appeal in the criminal proceedings (which would be heard no earlier than March 2024). He filed a Notice of Discontinuance of that appeal on 19 January 2024.
[8] The husband then filed an Application in a Proceeding on 27 March 2024 seeking for the final hearing to be vacated once again, because he had been transferred from one correctional facility to another and had not been able to properly confer with his legal representatives, give instructions, or prepare the required Court documents. The wife opposed this application. The matter was listed for mention on 9 April 2024 where I made orders pursuant to s 77 of the Crimes (Administration of Sentence) Act 1999 (NSW) for the husband to be produced to Court on 18 and 19 April 2024 in order for his legal representatives to obtain instructions and finalise his trial material. This occurred successfully and the application for an adjournment can be taken to have been abandoned.
Order 3(k) of the final reasons & the removal of personal property
[3] The Husband asserts that he incurred $147,943 removing his belongings from the property and these costs were exacerbated by the Wife's conduct and the short window to remove the items. The Wife's Amended Initiating Application filed 21 June 2021 sought final orders for the sale of the [Suburb D] Property. She maintained this position at the final hearing. Therefore, since 21 June 2021, the Husband ought to have foreseen that there was a likelihood that he would be required to remove his personal belongings from the property. As set out above, the Wife requested that the Husband remove his belongings to be leased. This did not occur. The Husband was again on notice that his belongings had to be removed at the time of judgement and then when the stay application did not succeed.
The Husband asserts that his plant and equipment (including the [machinery]) are valued at $163,260. On or around 26 November 2024, the purchasers of the [Suburb D] Property offered to purchase the Husband's plant and equipment for the sum of $40,000. The Husband would have been in a better financial position had he agreed to sell the items, given the costs he asserts he incurred to remove same. It was the Husband's decision to remove the items having regard to the relevant costs associated with same and the Wife cannot be attributed blame for the Husband's decision to do so.
[29] The period from the date I first proposed through my solicitors that the [Suburb D] property should be leased to the date the [Suburb D] property was sold was approximately 171 weeks. If the property had been rented out during that period at $1,800 per week this would have resulted in approximately $307,800 in rental income being received by [Ms Dajani] and I. However [Ms Dajani] did not agree to the [Suburb D] property being rented out, and no rental income was ever received.
Section 117(2A)(d): Failure to comply with orders of the Court
Section 117(2A)(e): Whether a party has been wholly unsuccessful in the proceedings
... a proceeding in a court, whether between parties or not, and includes cross - proceedings or an incidental proceeding in the course of or in connection with a proceeding.
...wholly unsuccessful means there was no justified basis for the position adopted having regard to the outcome of the proceedings. Being "wholly unsuccessful" must look not just at the outcome but the position adopted by the party as well.
To be unreasonable, the response to an offer must take into account the recipient's perception of the sense of the outcome. It would be unreasonable to continue on with litigation after an offer was made if the intention of the recipient was to just make life unpleasant or to run up legal costs for the other party. A court can take into account that the recipient has legal advice and even though the exercise of the s 79 power is highly discretionary, making the outcome uncertain, lawyers are trained to make predictions within parameters.
The Wife made an offer of settlement [in mid]-2021, while the Husband's criminal proceedings were unresolved. It was reasonable for the Husband not to accept this offer in circumstances where he had not been convicted, and absent convictions a 60% division to the Wife may not have been just and equitable considering the superior initial contributions of the Husband. The [...] offer lapsed [in mid-2021 and was not open for acceptance when the Husband was convicted [in mid]-2022. The Husband had also not been sentenced and did not know his incarceration period.
At the time this offer was made, and throughout the family law matter the husband still pursued attempts to overturn his convictions. He maintains his innocence. These circumstances make resolution of the matter difficult. This is a unique case where much turns on proceedings in another jurisdiction and a different outcome there could have changed the course here.
... [He] requested the Wife not sell [Suburb D] pending the Appeal (3 October 2024), offered to stay the sale by consent (14 October 2024), and offered to purchase [Suburb D] (15 November 2024). The Wife refused these proposals, acceptance of any of which would have prevented costs being incurred in the Stay Application.
12.17 Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b) as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c) to be calculated in accordance with the method stated in the order; or
(d) for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
(3) In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness of each party's behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c) the rates ordinarily payable to lawyers in comparable cases;
(d) whether a lawyer's conduct has been improper, unfair, unreasonable or disproportionate;
(e) the time properly spent on the proceeding, or in complying with pre‑action procedures; and
(f) whether expenses (paid or payable) are fair, reasonable and proportionate.
[11] ... it is not an arbitrary exercise of power for the Court to weigh up competing factors and make a determination, even if, as is often the case, the task cannot be undertaken in a mathematical or precise manner. As the Court of Appeal found in Norris v Blake (by his Tutor Porter) [No (1997) 41 NSWLR 49 mathematical weightings of potential outcomes in loss of chance cases might be unsustainable and reliance rather should be placed on more intuitive methods to determine loss: (1997) 41 NSWLR 49 at 71-73. Similarly, the courts are frequently required to estimate damages that are not capable of precise quantification and require a degree of approximation and even guesswork. [Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 at 83 and 138 and 153; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257 at [37]-[38]]
[12] The Court is no stranger to intuitive determinations, or determinations made without absolute precision, arrived at by acting judicially: cf Murray v Shillingsworth [2006] NSWCA 367 per Santow JA at [10]. It is misconceived to suggest that such determinations or approaches are arbitrary.
[41] ...In circumstances where these parties have been engaged in litigation over a long period, including now two failed appeals, we propose to adopt the approach taken by the Full Court in Warbrick & Warbrick (No. 2) (2021) FLC 94-030 where the Full Court observed that it did "not intend to permit the costs question to become, in effect, satellite litigation" at [13]...
[3] The wife seeks costs on an indemnity basis and, failing that, in accordance with Schedule 3 of the Family Law Rules 2004 (Cth) ("the Rules"). Schedule 3 is an itemised scale of costs that sets out the maximum amount of party/party costs a person may recover unless the court fixes the amount (r 19.19 of the Rules). Calculated on an indemnity basis, the wife claims costs in the amount of $45,359.74. Calculated in accordance with Schedule 3, the wife's costs as set out in the Schedule of Costs filed 3 September 2020 are said to be $45,150. The similarity between the two amounts is obvious and even the most rudimentary examination of the wife's Schedule 3 costs, reveals that it is not what it purports to be. Indeed it is obvious that no attempt was made by the wife to calculate her party/party costs. In this respect, the so called Schedule 3 costs simply claims for work undertaken, whether necessary or not, which is charged at a rate other than in accordance with Schedule 3. Senior Counsel's estimated fee of $10,000 to prepare the wife's Summary of Argument establishes the point. It bears no relationship with Schedule 3.
...
[13] Regrettably, the wife has not provided her properly quantified party/party costs. In the event that we determined such an order should be made, the wife proposed that the husband pay her party/party costs as agreed or assessed. We do not intend to permit the costs question to become, in effect, satellite litigation. It is appropriate that the wife's costs are fixed and this issue is brought to a close.
I am satisfied that it was open to the trial Judge to make the order for costs which he made, although it may not have been in the terms which the respondent actually sought, or in the terms which the appellant considered an order may have ultimately been made. However, the fact remains that His Honour considered the submissions of both parties and considered all relevant factors. I am not persuaded, following the authority of the High Court in Penfold's case, that any error has been demonstrated. I would also, therefore, dismiss the appeal in relation to the question of costs.
I certify that the preceding one hundred and twelve (112) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli.
[1] The Court addresses this point under the heading s 117(2A)(a) for ease of reference to the husband's submissions. In reality, the point advanced is better characterised as a s 117(2A)(g) factor, and has been substantively considered as such.
Federal Commissioner of Taxation v Miley [2017] FCA 1396; (2017) 106 ATR 779
Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59
Peake & Benedict (Costs) (2014) 53 Fam LR 476; [2014] FCCA 2723
Randwick City Council v Fuller [1996] NSWCA 444; (1996) 90 LGERA 380
Spencer v The Commonwealth (1907) 5 CLR 418; [1907] HCA 82
(2008) 39 Fam LR 389
(2012) 47 Fam LR 526
(1988) 81 ALR 397
(1991) 174 CLR 64
(1980) 144 CLR 311
(1996) 90 LGERA 380
(1944) 70 CLR 23
(1999) 74 ALJR 209
(1993) 46 FCR 225
(2005) 33 Fam LR 123
(1990) 170 CLR 534
(2014) 53 Fam LR 476
(1907) 5 CLR 418
(2007) 156 LGERA 186
(2007) 19 NTLR 153
(2007) 38 Fam LR 478
(1997) 41 NSWLR 49
(2003) 196 ALR 257