Talton & Talton (No 2) [2025] FedCFamC1F 349 (27 May 2025)

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

1. On 14 November 2024, I published Reasons for Orders made altering property interests found to be held by the wife, Ms Talton ("the wife") and the husband, Mr Talton ("the husband") (see Talton & Talton [2024] FedCFamC1F 754). On 30 January 2025, further directions were made for the filing of further submissions so as to enable the Court to consider the wife's Application in a Proceeding for costs filed on 24 December 2024.
2. In respect of the Application by the wife, I have read and considered the:

(a) Application in a Proceeding filed 24 December 2024 seeking the following orders:

1. That the Respondent pay the Applicant's costs of these proceedings on an indemnity basis with such sum to be fixed at $235,680, or other such sum as the Court determines or otherwise indemnity costs as assessed.
2. In the alternate to Order 1 the Respondent pay the Applicant's costs of these proceedings on a party/party basis with the amount set at $150,000 and if the Court is not minded to order a fixed sum then party/party costs as assessed.
3. In the alternate to Order 1 and Order 2 the Respondent pay the Applicant's costs of these proceedings based on the scale set out in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
4. In the event costs are ordered against the Respondent those costs be paid within 30 days of the date Orders are made by the Court with the payment to be made by way of electronic funds transfer to the wife care of the Russell Kennedy Trust Account.
5. That the Respondent bear the costs of the Applicant relating to this costs application set at the amount of $6,000 plus GST.

(b) affidavit of Ms V filed 24 December 2024;

(c) written costs submissions (comprising a total of 12 pages and 191 pages of annexures) filed 20 February 2025; and

(d) parties' Financial Statements filed 4 October 2024 (the husband) and 16 September 2024 (the wife).

1. The husband relies upon, and I have read and considered:

(a) his Response filed 19 February 2025 seeking that the wife's Application filed 24 December 2024 be dismissed, or in the alternative, there be no orders as to costs. The husband further seeks costs of the Application for costs, on an indemnity basis;

(b) affidavit of the husband filed 17 February 2025;

(c) written submissions filed 13 March 2025;

(d) Wife's affidavit filed 12 March 2024;

(e) wife's Costs Notice filed 29 April 2024 and 22 October 2024;

(f) case outlines filed by the parties for the final hearing; and

(g) paragraphs 77 and 82 of the husband's affidavit filed 4 October 2024.

1. The principles that apply to a costs application are well settled and hardly controversial.
2. Section 117(1) of the Family Law Act 1975 (Cth) ("the Act") provides that, subject to s 117(2), each party shall bear their own costs.
3. However, s 117(2) of the Act empowers the Court to make an order for costs as it considers just in the opinion of the Court and after considering, in particular, the factors set out in s 117(2A), provided there are circumstances which justify the Court making an order for costs.
4. It is necessary for the Court to consider whether circumstances exist for a departure from s 117(1) and only then would the Court consider the quantum of the costs (on an indemnity basis or otherwise) as might be just.

CONSIDERATION OF S 117(2A) FACTORS

The financial circumstances of each of the parties to the proceedings

1. The parties' financial positions post the relevant property orders, is the starting point for the comparative analysis of the parties' respective financial circumstances.
2. In that regard, the Orders made on 27 November 2024 perfected the division of interests in the following way (and consistent with options identified in the Reasons for Judgment at [50] to [56]), namely:

(a) The wife retains (as at [54(b)]) approximately:

(b) The husband retains (as at [53(a)]) approximately:

1. A feature of the pool of interests at the trial was the absence of significant debt. No adjustment was made for the relevant s 75(2) factors (see paragraphs 42 to 49) in circumstances where at the trial the Court found, on the evidence that:

(a) the husband's medical prognosis was that he would die by early 2025, with any more optimistic outcome reliant to some degree on expensive medical treatment. He had his share of the property division, some of which earns income, and his affidavit deposes to an income of $9000 per month from his disability insurance due to cease in May 2026. Because he chose to invest funds into an interest in the house at Suburb R (and created a mortgage balance at this time of $1,400,000), he has a mortgage payment of $9,000 per month. This is entirely due to decisions made by the husband; and

(b) the wife, an educator, at the age of 54 years would be able to work for another 10 years, with an income at the trial of approximately $2650 (gross) per week.

1. In written submissions, the wife contends that the husband "is in a far superior financial position as compared to the wife". I do not agree, although I accept the husband has a greater income (before the mortgage payment), with both parties having similar shares of the pool of interests - albeit in different asset classes.
2. Both parties incurred (or still have a liability for) legal expenses. Although the wife's submissions (at paragraph 46) say the husband "has the ability to meet any costs order made by this Court, even an order for indemnity costs", that is not the test - as even impecunious litigants can be ordered to pay costs.
3. Neither party is in receipt of legal aid.

The conduct of the parties to the proceedings in relation to the proceedings

1. At paragraphs 48 to 55 of the wife's submissions, the wife contended that the husband's failure to provided disclosure "significantly increased the costs of the wife" by, inter alia:

(a) disregarding the Rules regarding disclosure, even prior to the commencement of the proceedings;

(b) failing to provide disclosure as ordered on 15 August 2024 by 23 August 2024;

(c) his admission at paragraph 29.7(g) and (h) of his affidavit of a failure to provide documents at any time during these proceedings;

(d) a failure to provide "full and frank" disclosure in the pre-action period;

(e) not making required disclosure before a mediation in December 2023;

(f) the husband failed to disclose, in a timely manner his withdrawal of $1,500,000 in March and April 2024 from his superannuation until July 2024;

(g) the husband failed to disclose, in a timely manner his purchase of the Suburb R property in April 2024, until July 2024;

(h) the husband's insistence on a sale of the Suburb P property (until final submissions), when the wife sought it be transferred to her - an order ultimately made; and

(i) unreasonable objection to an interim release of funds, until further letters were sent by the wife's lawyers. The wife says that the husband's "conduct in refusing this and putting the wife to the cost of having to put the request in writing rather than simply allowing the issue to be resolved over the telephone between the lawyers is supportive of an order for costs".

1. In response, the husband's written submissions contend, inter alia, that:

(a) the husband acted in accordance with the Court Rules and the overarching purpose, as set out at paragraph 25, enabling the matter to progress quickly after he filed an Application on 27 February 2024 to a trial which commenced on 21 October 2024;

(b) the husband contends that some requests for documents were irrelevant or not in his possession;

(c) both parties were represented and neither party filed any subpoena - which draws an interference that discovery was made;

(d) at paragraphs 30 to 35 of his submissions, the husband contends that some conduct of the wife during the proceedings reflect adversely on her behaviour including:

(i) conflict about retaining a joint expert to value the Suburb K property;

(ii) failed to be available for a scheduled mediation on 11 December 2023;

(iii) filed affidavits late; and

(iv) after running a Kennon & Kennon [1997] FamCA 27; (1997) FLC 92-757 case against the husband, on the morning of the hearing, Counsel for the wife advised that those claims would not be "pressed", and significant portions of her trial affidavit were not relied upon. Both parties' affidavits of evidence in chief were subject of some objections, which the Court ruled upon.

1. Counsel for the husband asserts that the wife's conduct submissions are not intended to "point the finger" but "highlight that the parties are not model litigants, and each conducted their cases as they saw fit, each of them incurring legal fees along the way to resolution".
2. The quick case management pathway, shaped of course by the husband's diagnosis of a terminal illness, put pressure on both parties and their lawyers. I have read many of the letters between the lawyers. My sense is, at times, the lawyers were dragged into their client's conflictual attitude towards each other. The forensic issues in this case, as the Reasons for Judgment reflect, were neither difficult or extreme but the lack of trust between the parties (at least from September 2023) evidenced by them both accessing a joint account without the knowledge or consent of the other party - made for a tough and unrelating battle.
3. On balance, I do not regard the alleged conduct of either party as justifying a costs order. It is clear, that standard directions for discovery were made by a Judicial Registrar on 13 March 2024, and before the proceedings were transferred to Division 1 on 25 July 2024, that a Judge made further directions about valuations and the husband filing evidence from his specialist. Nothing in the orders is unusual in a case management sense. No applications were ever filed for further discovery or were any specific orders made - save for the general Order 5 made by me on 15 August 2025 "that no later than 4.00pm on 23 August 2024, the parties comply with any disclosure requested that has not yet been provided".
4. At the final hearing, and with competent Counsel retained, no submission was made by either party of a lack of disclosure as authorities well known, if they applied, may have allowed.
5. For completeness, the proceedings were not necessitated by the failure of a party to the proceedings to comply with previous orders of the Court (s 117(2A)(d) of the Act).

1. Whilst it is true that the husband's case was for a division of 75% in his favour; and the wife sought a 50% division - with the Court deciding the pool of interests (which was not agreed) should be altered as to 53.5% to the husband and 46.5% to the wife, it is clear neither party was "successful" - and by obtaining a division, neither party was wholly unsuccessful.

1. The wife contends that a financial agreement prepared prior to the commencement of the proceedings "is relevant as an offer". It is not. Offers need to be filed (and if maintained after commencement of the proceeding) to seek to get the possible protection of this provision. Even if I accept that the wife made genuine attempts to settle the proceedings, frankly, her insistence that the husband had perpetrated domestic violence such to warrant a Kennon adjustment in her favour, is a context that cannot be ignored. Merely pointing to percentages in a pool of interests on which there was no agreement is not sufficient.
2. Offers, if made orally before stepping into Court on the first day of a hearing are not likely to engage s 117(2A)(f). When the case began, the parties broadly maintained the positions in their case outlines - and although the wife ultimately obtained an order for the transfer of the Suburb P property, the fact remains she did not articulate a clear offer in writing, with a clear statement of the pool as ultimately ordered.
3. In response, the husband contends he made offers to settle between April to July 2024, the most favourable being that she retain 40% of the nett pool. In view of my decision, she was well advised to reject the offer - as was the husband feeling unable to accept the wife's offer for an equal distribution.
4. The husband points to the terms of the offer made by the wife on 29 April 2024, which although it was more favourable to the husband then the judgment, contained conditions which challenged s 81 of the Act.
5. Considering all the evidence now available, I am not persuaded the wife can say that the husband's rejection of her officer made 29 April 2024 was ill advised.

Such other matters as the Court considers relevant

1. The tenor of the written submissions of the wife (at paragraphs 72 to 76) incorrectly jump to an argument about indemnity costs. Such arguments only should be considered if the Court considers that circumstances exist to justify an order for costs. If that were the case, of course the matters raised might be relevant to a determination of whether costs should be calculated on an indemnity basis or otherwise. The wife submits that the husband's affidavit contains "factual errors and matters which we say mislead the Court", which is a serious allegation, but is not established.

1. In the exercise of my discretion and after considering the factors prescribed by s 117(2A) of the Act, I am not satisfied that the circumstances in this case justify an order for costs.
2. The wife, having pressed an application for costs, and where she has on this application been wholly unsuccessful, it was open to the husband to press for a costs order against the wife. As I understand his submissions at paragraphs 57 to 59, he does not do so.

I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann.