Acland & Grohl (No 2)
[2022] FedCFamC1A 137
Federal Circuit and Family Court of Australia
(DIVISION 1) APPELLATE JURISDICTION
Acland & Grohl (No 2) [2022] FedCFamC1A 137
Appeal from: WOC 692 of 2016 File number: NAA 112 of 2022 Judgment of: MCCLELLAND DCJ, GILL & CAMPTON JJ Date of judgment: 30 August 2022 Catchwords: FAMILY LAW – APPEAL – COSTS – Where the appellant discontinued the appeal on the morning of the appeal hearing – Where the respondent seeks an order for costs on an indemnity basis – The appellant concedes costs should be ordered, albeit on a party/party basis – Financial circumstances of the parties do not adversely impact the making of a costs order – Where the appeal was not “wholly unsuccessful” under s 117(2A)(e) of the Family Law Act 1975 (Cth) because it was not heard and determined on its merits – Grounds to be prosecuted had little merit – Where the appellant’s prospects of success were remote – Order for the appellant to pay the respondent’s costs on an indemnity basis – Fixed costs. Legislation: Family Law Act 1975 (Cth) ss 90SM, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Anderson & Anderson (1982) FLC 91-251; [1982] FamCA 36
Bant & Clayton (Costs) (2016) 56 Fam LR 31; [2016] FamCAFC 35
Caffyn & Caffyn [2018] FamCAFC 259
Colgate-Palmolive v Cussons (1993) 46 FCR 225; [1993] FCA 801
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6
Zappacosta & Zappacosta (1976) FLC 90-089; [1976] FamCA 56
Number of paragraphs: 18 Date of hearing: 30 August 2022 Place: Sydney Counsel for the Appellant: Mr Eardley Solicitor for the Appellant: S & R Lawyers Pty Ltd Counsel for the Respondent: Mr Batey Solicitor for the Respondent: Sydney Family Law Specialists ORDERS
NAA 112 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR ACLAND
Applicant
AND: MS GROHL
First Respondent
MS LIVINGSTONE
Second Respondent
order made by:
MCCLELLAND DCJ, GILL & CAMPTON JJ
DATE OF ORDER:
30 AUGUST 2022
THE COURT NOTES THAT:
A.This matter has been discontinued by way of a Notice of Discontinuance filed at approximately 9.35 am this morning, 30 August 2022, being the date upon which the matter had been listed for hearing of the appeal.
B.The appellant was present via video link from the commencement of the appeal, at which time the Court’s attention was drawn to the Notice of Discontinuance having been filed.
C.Subject to the question of costs, the appeal proceedings between the parties were finalised upon the filing of the Notice of Discontinuance.
AND IT IS ORDERED THAT:
1.Within 28 days of the date of these orders, the appellant pay the costs of the first respondent in the fixed sum of $39,991.80.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Acland & Grohl has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
The respondent in this matter makes an application for costs of a Notice of Appeal filed on 19 May 2022, that notice being from orders made by the primary judge pursuant to s 90SM of the Family Law Act1975 (Cth) (“the Act”) on 21 April 2022. The appeal was discontinued by the appellant at 9.35 am this morning, being the morning of the appeal hearing.
The second respondent did not participate in the trial before the primary judge and has not participated in the appeal.
The parties’ proposals
The respondent seeks that the appellant pay her costs of the appeal, as sought on an indemnity basis, in the sum of $39,991.80 within 28 days. The appellant concedes that the making of an order as to costs in favour of the respondent is just. However, he contends the costs sought should be payable by him on a party/party basis at the quantum recorded in the respondent’s costs notice filed on 22 August 2022, being $23,610.49, within 60 days. In the event of costs being ordered on an indemnity basis, the appellant agrees to the quantification of those costs as sought by the respondent at $39,991.80.
Discussion
While the default position established by s 117(1) of the Act is, as identified by the appellant, that each party should bear their own costs, s 117(2) permits the Court to make such orders as to costs as it considers just if there are circumstances which justify doing so. Section 117(2A) of the Act then lists the considerations which the Court must have regard to in determining whether to make a costs order. I shall make reference to such of those matters as are relevant and engaged here.
The financial circumstances of each party
The reasons of the primary judge record that the property of the parties available for adjustment is in the range of $13.65 million (at [35]). By way of the primary judge’s findings, the appellant will receive all but twice the value of the property of the parties when compared with the respondent. Further, the findings of the primary judge, unchallenged for the purposes of the appeal, record as follows:
(a)That the appellant had not engaged in a full and frank disclosure of his relevant financial circumstances in the primary proceedings (at [17]); and
(b)That the evidence in the case led the primary judge to the conclusion that the appellant had taken funds and was likely to have held funds in places unknown, or in the alternative, to have applied them for his own use (at [24]).
For the purposes of these reasons, it is accepted that the financial circumstances of the appellant do not adversely impact on the exercise of the cost discretion as to either end of the range of costs sought.
Conduct
The Full Court in Caffyn & Caffyn & Anor [2018] FamCAFC 259, recorded that the weight of authority suggests that a discontinued appeal should not be regarded as one that has been wholly unsuccessful for the purposes of s 117(2A)(e) because the appeal has not been heard on its merits. That said, the fact of the discontinuance was identified by the Full Court as remaining a relevant matter, in that the respondent has incurred costs unnecessarily (see Bant & Clayton (Costs) (2016) 56 Fam LR 31).
The circumstances in which this matter was discontinued are relevant pursuant to s 117(2A)(c) of the Act, as seen in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622, where McHugh J held that a Court considering an application for costs in discontinued proceedings should not try a hypothetical action in order to determine whether the matter was likely to have been successful. That said, his Honour acknowledged that in some circumstances, the Court may feel confident that “one party was almost certain to have succeeded if the matter had been fully tried” (at 625). That determination, however, should only be made by reference to known circumstances not in dispute between the parties.
For the purposes of this matter, it is not controversial that the grounds made by way of complaint as to the primary judge’s findings were cloaked as challenges of inadequate or insufficient reasons. The conclusions of the primary judge did not expose any matter that the primary judge failed to consider. The reasons of the primary judge exposed the resolution of the critical contests between the parties. The appellant did not challenge the disclosure findings made by the primary judge.
As to the ground challenging the primary judge’s contribution finding, there was no absence of clarity in the evaluation of the parties’ respective contributions by the primary judge nor how they were reflected in the ultimate division of property. The Full Court in Jabour & Jabour (2019) FLC 93-898 considered a situation where a property owned by a husband (in that case prior to the parties’ relationship) was fortuitously rezoned, resulting in a substantial increase in its value. Their Honours referred with approval to the decision of McCall J in Zappacosta & Zappacosta (1976) FLC 90-089, where it was found that the rapidly accelerated value of a property, due to rezoning, was a mere windfall to which neither party had a greater or lesser claim. The challenge to the finding of the primary judge reflecting that same circumstance in this matter exposed little merit.
Offers of settlement
Exhibit A before the Court today records an offer of settlement in relation to the appeal proceedings made by the respondent to the appellant under cover of a letter dated 15 August 2022. That correspondence invited the appellant to discontinue the appeal on or before 4.00 pm, Monday 22 August 2022 and confirmed that, in that circumstance, the respondent would accept payment of her costs associated with the appeal in the amount of $26,000. Importantly, the letter put the appellant on notice that, in the event the appeal was not discontinued on or before the specified time, costs would be sought on the conclusion of the appeal on an indemnity basis. There is no evidence of any response by the appellant to the offer. After the offer had expired, the respondent complied with the directions of the appeals registrar and filed her Summary of Argument.
Other factors
It is observed that the appellant has not filed a cost notice in compliance with the directions made for the purposes of the preparation of the appeal and, in those circumstances, his costs of the appeal are unknown.
Indemnity costs
The relevant indicia as to indemnity costs are well-known and are identified in Colgate‑Palmolive v Cussons (1993) 46 FCR 225. The reference in that authority to exceptional circumstances is understood to be circumstances that are out of the ordinary.
The circumstances that colour this matter with an exceptional nature and that ground indemnity costs as being just are as follows:
(a)The preparedness of the appellant to maintain his position in relation to the appeal until the eleventh hour. In engaging in that conduct, he put the respondent to the immense trouble and cost of conducting appellate litigation;
(b)There is some force to the submission made on behalf of the respondent that the appellant knew, or ought to have known, that the prospects of success on the appeal were remote (see Anderson & Anderson (1982) FLC 91-251);
(c)The fact and terms of the offer of settlement made by the respondent, and the failure of the appellant to engage with that offer; and
(d)The provisions of the Act and the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) which mandate that parties to litigation in the Court are subject to an overarching obligation to advance that litigation in a cost-effective and efficient manner, and to focus on the issues in dispute. There is some force to the respondent’s submission that the conduct of the appellant stands in stark contrast to that overriding obligation.
Conclusion
Having regard to the parties’ financial circumstances, as identified by the primary judge, and recorded in these orders, there is an insufficient evidentiary foundation to exercise a discretion as to costs to be payable by the appellant, other than by way of what might be described as the usual time period of 28 days, and an order will be made to that effect.
It is otherwise just in the circumstances to fix the costs as sought by the respondent on an indemnity basis in the sum of $39,991.80 and orders will be made accordingly.
GILL J:
I agree with the reasons provided by Campton J.
MCCLELLAND DCJ:
I also agree with the reasons provided by Campton J. The notations and order of the Court will therefore be as set out at the forefront of this judgment.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Deputy Chief Justice McClelland and Justices Gill & Campton. Associate:
Dated: 5 September 2022
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