Neibert & Featherstone [2025] FedCFamC1A 45 (14 March 2025)

1. These reasons explain the dismissal of an appeal from a costs order in the modest sum of $4,746.91, even though the respondent wife filed a Submitting Notice and did not actively contest the appeal.

1. The parties are engaged in financial proceedings under Pt VIII of the Family Law Act 1975 (Cth) ("the Act"), commenced by the wife in March 2024.
2. With the parties' consent, the registrar made procedural orders between them on 29 May 2024. Then, on 24 July 2024, the registrar made a second set of procedural orders between the parties, though such orders were not consensual. On 11 August 2024, the husband filed an Application for Review, seeking the review of the latter orders.
3. The review application was entertained and determined by a judge of the Federal Circuit and Family Court of Australia (Division 2) on 2 September 2024. The review application was partially successful, but only to the extent the review met with the wife's consent. The balance of the review application was dismissed.
4. The wife foreshadowed making an application against the husband for her costs unnecessarily incurred in the review hearing and so procedural orders were made to facilitate the parties filing material to enable the costs dispute to be determined. The wife's costs application, opposed by the husband, was determined by the primary judge on the papers some weeks later, as envisaged by the procedural orders. Judgment was pronounced on 6 November 2024. The primary judge ordered the husband to pay the wife's party/party costs of the review hearing, fixed in the sum of $4,746.91.
5. The wife had preferably sought indemnity costs in the sum of $21,242.73 (at [1]), but alternatively party/party costs in the sum of $8,682.61 (at [31]). Both assessments were rejected by his Honour, who found the lesser sum of $4,746.91 more properly reflected the wife's party/party costs.
6. After correctly citing the applicable legal principles (at [4]-[7]), summarising the parties' submissions (at [9]-[12]), and individually addressing the factors prescribed by s 117(2A) of the Act (at [13]-[28]), his Honour said this to justify the award of costs:
   1. In my view, the circumstances of this case warrant the making of a costs order. In particular, I am satisfied that the financial circumstances of the wife, combined with the conduct of the husband, his failure to comply with the order to value the Property (which he again sought to effectively relitigate before me) and his relative lack of success in the Review Application are circumstances that justify the Court making an order for costs against him.
7. On 3 December 2024, the husband appealed from the costs order made on 6 November 2024.

1. The grounds of appeal are as pleaded in the Amended Notice of Appeal filed on 11 February 2025.
2. Ground 1 alleges the primary judge fell into legal error by the way in which his Honour conducted the review hearing on 2 September 2024. It will be addressed first.
3. Grounds 2, 4, 5 and 6 allege the primary judge fell into legal and/or factual error by the way in which his Honour applied various sub-sections of s 117(2A) of the Act to make the costs order on 6 November 2024.
4. Lastly, Ground 3 alleges his Honour fell into legal error by the way in which s 117(1) and s 117(2) of the Act were applied to make the costs order.

1. This ground alleges the primary judge fell into legal error by failing to conduct the review hearing on 2 September 2024 as an "original hearing" in the manner required by r 14.07(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
2. It is unnecessary to consider the merit of this complaint because, suffice to say, this is an appeal from only the costs order made on 6 November 2024. No appeal was brought from the orders made on 2 September 2024, following the review hearing conducted on that date.
3. The husband's apparent attempt to now go behind the orders made on 2 September 2024 and to discharge the orders formerly made by the registrar in May 2024 and July 2024 is misguided. This ground is incompetent.

1. This ground alleges the primary judge erred at law by the manner in which his Honour applied s 117(2A)(c) of the Act, which provision requires the Court to consider, as a salient factor, the parties' conduct of the proceedings within which the costs order is sought.
2. This ground alleges the primary judge failed to consider the conduct of both parties, but the complaint is rejected.
3. The primary judge concluded this under the rubric of s 117(2A)(c) of the Act:
   1. ...The other matters above, however, lead me to the view that the husband, by his conduct, is frustrating the proceeding by raising irrelevant or resolved matters, which in turn are causing the wife to incur costs.

...

1. In all the circumstances, the conduct of the husband has been inimical to the efficient conduct of the proceeding. It weighs towards making a costs order in favour of the wife.

1. The primary judge found some aspects of the husband's conduct in the proceedings to be "troubling" (at [18]), including that he: sought to discharge orders to which he consented; made incompatible claims about property; appeared to intimidate the wife; tried to increase her costs; and raised issues in the review hearing which had not been considered by the registrar and were not therefore reviewable.
2. However, the primary judge did not disregard the submissions made by the husband about the wife's conduct, as this ground wrongly asserts. The husband alleged the wife had misconducted herself in the underlying proceedings, which allegations were acknowledged (at [12a], [12b] and [12c]), though the primary judge did not accept the submissions, for reasons there discussed. Having recited and rejected the husband's submissions, they were not overlooked.
3. The wife denied the husband's allegations of her concealment of income, deceit and false misrepresentation. The factual dispute over the nature of the wife's conduct neither was nor could be determined by the primary judge in an interlocutory hearing, save in one limited respect. His Honour rejected the husband's allegation the wife had falsely misrepresented her legal costs in a Costs Notice she filed with the Court because she voluntarily corrected an error within it (at [20]).
4. The husband's allegation of the wife's refusal to participate in family dispute resolution was deemed by the primary judge to be the husband's attempt to intimidate the wife, given her willingness to participate in a conciliation conference conducted by a registrar of the Court (at [18c] and [21]). The husband's allegation of the wife's failure to give proper financial disclosure was denied by her and she consented to the orders for extra financial disclosure he sought within the application heard by the primary judge on 2 September 2024 (at [22]-[23]).
5. The husband's submissions within his Summary of Argument reveal that the complaint under this ground is only that the primary judge failed to make findings vindicating the allegations of misconduct he made against the wife.

1. These grounds allege the primary judge erred, either at law or in fact, by the way in which his Honour applied s 117(2A)(e) of the Act, which provision requires the Court to consider whether either party had been wholly unsuccessful.
2. The husband alleges that, having found the review application was not wholly unsuccessful, the primary judge erred by then considering that it met with a "relative lack of success".
3. The primary judge acknowledged the husband's submission that the review application was "partially upheld" (at [11]) and had not been wholly unsuccessful (at [12d]). But when his Honour came to analyse the submission carefully, it became evident the husband only succeeded with his application for three of 18 orders and, in respect of the three successful applications, the wife consented to each of them at the first available opportunity (at [27]).
4. His Honour therefore accepted the review application had not been wholly unsuccessful, but nonetheless did take into account its relative lack of success as an additional consideration, which was permissible because s 117(2A)(g) of the Act entitles the Court to take into account any other relevant consideration not already covered by the preceding sub-sections.
5. His Honour said this in the reasons for judgment:
   1. Subsection 117(2A)(e) requires consideration of whether the proceeding has been 'wholly' unsuccessful. In the absence of being taken to any authority, I am not prepared to draw the conclusion that the Review Application was wholly unsuccessful given the husband obtained some of the relief he sought (with the consent of the wife). It is relevant, however, that the only relief the husband obtained was consented to by the wife, and that the majority of his Review Application was unsuccessful. I take this matter into account under subsection 117(2A)(g).
6. No error is demonstrated. The provisions of s 117(2A) of the Act do not foreclose a costs order being made against a party who has been partially successful merely because one salient consideration happens to be whether the party has been wholly unsuccessful. As here, the circumstances might be such that the measure of success enjoyed was so limited or insignificant that a costs order might still be justified for the substantive failure of success in the proceedings. In this instance, but for those portions of the husband's application conceded by the wife, he was completely unsuccessful in relation to the contested portions.
7. The husband's allied complaint about the primary judge mistakenly referring in the reasons for judgment to him making multiple applications, rather than a single application, is misconceived and is rejected. While there was only one review application filed by the husband, the single review hearing entailed determining his applications for multiple kinds of orders.

1. This ground alleges the primary judge erred at law by failing to make an anterior finding that the wife demonstrated "circumstance[s] of an exceptional kind" to justify departure from the usual rule encapsulated by s 117(1) of the Act requiring parties to proceedings under the Act to bear their own costs.
2. The submission made in support of it in the husband's Summary of Argument was to this effect:
   1. In his Reasons delivered 6 November 2024 and 16 September 2024, His Honour has made no attempt to establish any circumstance of an exceptional kind that would constitute a special or unusual feature in the case that could justify his departure from the usual rule.
3. The ground and the supporting submission erroneously assert it enjoys the jurisprudential force of the High Court of Australia in Penfold v Penfold (1980) 144 CLR 311.
4. To the contrary, in that decision, the plurality said this (at 315):

...It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the subsection is not paramount to s. 117 (2). As sub-so (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.

Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".

(Emphasis added)

...The general rule expressed in s. 117 (1) is that each party shall bear his or her own costs; this is subject to the exception expressed in sub-s. (2). The phrases, "in a particular case" and "circumstances that justify it in doing so" emphasise that s. 117 (1) expresses the general rule, which is not to be departed from unless the court forms the opinion in a particular case "that there are circumstances that justify it in doing so"...

(Emphasis added)

1. Therefore, the provisions of s 117(1) of the Act must yield to those of s 117(2) when there are "justifying circumstances" for a costs order. The provisions of s 117(2A) must be considered when resolving that tension. The circumstances need not be "exceptional", as the husband incorrectly submitted - only "justifying". The factual circumstances in Penfold v Penfold may have been exceptional, but they need not be.
2. The primary judge found the costs order was justified on account of the matters discussed under the rubric of ss 117(2A)(a), 117(2A)(c) and 117(2A)(g) of the Act. There was no error.

1. The appeal is dismissed.
2. No question of costs arises because the respondent did not contest the appeal and abandoned her request to be heard as to costs.

I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Austin.