Baker & Bond (No 2)
[2023] FedCFamC1A 26
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Baker & Bond (No 2) [2023] FedCFamC1A 26
Appeal from: Baker & Bond [2022] FedCFamC2F 862 Appeal number: NAA 143 of 2022 File number: MLC 749 of 2021 Judgment of: AUSTIN, MCGUIRE & CAMPTON JJ Date of judgment: 17 March 2023 Catchwords: FAMILY LAW – APPEAL – COSTS – Where the costs were reserved – Where the appeal was dismissed – Where the appellant husband has been wholly unsuccessful in his appeal – Where the appellant husband did not file written submissions in opposition to an application for costs – Where costs submissions were made only by the respondent wife – Consideration of s 117 of the Family Law Act 1975 (Cth) – Consideration of indemnity costs – Costs ordered in a fixed sum on a party/party basis. Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Baker & Bond [2022] FedCFamC1A 219
Colgate Palmolive Co and Another v Cusson Pty Ltd (1993) 46 FCR 225; [1993] FCA 801
Jensen and Jensen (1982) FLC 91-263
Munday v Bowman (1997) FLC 92-784
Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4
Number of paragraphs: 25 Date of last submissions: 25 January 2023 Date of hearing: Heard by way of written submissions Place: Heard in Chambers, delivered in Newcastle Counsel for the Applicant: Dr Smith Solicitor for the Applicant: VFG Legal The Respondent: Litigant in person ORDERS
NAA 143 of 2022
MLC 749 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR BAKER
Appellant
AND: MS BOND
Respondent
order made by:
AUSTIN, MCGUIRE & CAMPTON JJ
DATE OF ORDER:
17 March 2023
THE COURT ORDERS THAT:
1.The appellant pay the respondent’s costs of the appeal fixed in the sum of $17,158.65.
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 of Baker & Bond (No 2) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AUSTIN, MCGUIRE & CAMPTON JJ:
APPLICATION
The respondent wife to the appeal, Ms Bond, makes an application for costs against the appellant husband, Mr Baker following the dismissal of his appeal on 21 December 2022 (Baker & Bond [2022] FedCFamC1A 219).
The wife’s application seeks the payment of costs on an indemnity basis fixed in the amount of $32,688 or, in the alternative, costs on a party/party basis fixed in an amount of $17,158.65.
Following the hearing of the appeal with judgment to be reserved an indication was given that matters of costs would be dealt with by written submissions. The appeal judgment of 21 December 2022 directed written submissions in relation to costs from the successful respondent wife to the appeal within 14 days and from the unsuccessful appellant husband within 14 days thereafter (Order 3). Those time frames were extended by order of 19 January 2023 by a further 21 days.
The solicitors for the successful respondent wife to the appeal filed written submissions on 25 January 2023. The unsuccessful appellant husband has provided no submissions.
The wife here relies on an affidavit of Ms O, lawyer, affirmed 25 January 2023.
Matters of costs are provided for at s 117 of the Family Law Act 1975 (Cth) (“the Act”) where subsection (1) sets out a general principle that each party bear their own costs.
Subsection (2) of s 117 however enlivens a discretion in the Court to make an award of costs to a party if there are justifying circumstances. It is well-established that the discretion in the Court is a broad one and that “justifying” circumstances is not to be read as synonymous with “exceptional” circumstances. The general rule at subsection (1) is not paramount to subsection (2) where the wording of this section makes it clear that the former must yield to the latter upon a finding of justifying circumstances (Jensen and Jensen (1982) FLC 91-263; Penfold v Penfold (1980) 144 CLR 311).
Section 117(2A) provides relevant considerations to be referenced in determining justifying circumstances and what, if any, order for costs is to be made.
CONSIDERATION
By reason of hearing the appeal the Court is apprised of the financial circumstances of the parties including, on the dismissal of the appeal, the distribution of the property pool between them. The husband was in employment with an income of around $74,000 per annum. The parties are each to receive 50 per cent of the pool of net tangible assets of value of $537,788 with the husband also to retain his superannuation entitlement of $250,000. We find, therefore, that the husband has the capacity to meet any anticipated costs order.
Neither party has been in receipt of a grant of legal aid.
The wife here argues that the conduct of the parties to the proceedings is a relevant consideration and specifically that the husband failed to comply with a procedural order made by the Appeals Registrar on 15 July 2022 to obtain, file and serve a transcript of the trial by 12 August 2022. The husband’s failure to comply resulted in his appeal being abandoned. He then sought, and obtained, an indulgence from the Court to reinstate the appeal. The implication of this argument is that the wife here was put to unnecessary cost.
It is not otherwise argued here that the proceedings were necessitated by the failure of a party to comply with previous orders of the Court.
The wife here argues correctly that the appeal was “wholly unsuccessful”. The appeal comprised of 10 separate grounds where each was considered and the appeal ultimately dismissed.
The wife alerts the Court to an offer of compromise made to the husband on 17 October 2022 with provision for a reduction in the cash adjustment ordered by the primary judge to be paid by the husband to the wife so as to accommodate a small mathematical error noted in the appeal but where it was also noted that such mathematical error may have operated in the husband’s favour. In any event, the offer was to reduce the cash payment by $3,226.73. The letter of offer was made 17 October 2022 and included the following inter alia:
Our client’s offer will remain open until 4.00pm Monday, 22 October 2022, after which time it will be withdrawn. If you agree, we are content to prepare the consent minutes for signing and filing with the court.
If you do not agree, we will rely on this and all other relevant correspondence in support of our application that you pay our client’s further costs of and incidental to the proceedings on an indemnity basis.
(Wife’s affidavit filed 25 January 2023, p.35) (Emphasis in original)
The offer of compromise was not accepted.
Section 117(2A)(g) permits the Court to take into account such other matters as the Court considers relevant. The wife here argues that the Court should take into account the de minimis complaint made by the husband, where our reasons at [7] and [8] in the appeal decision state:
7.The husband sought at trial that he retain the former matrimonial home having an agreed equity of $418,500, that he have the benefit of an offset account valued at $34,910 and that he pay to the wife the sum of $200,000. The primary judge adjusted the tangible property pool so that the husband had the opportunity to retain the home if he paid to the wife the sum of $190,000 and for the wife to retain the benefit of the offset account. The husband agreed in the hearing of the appeal that the difference between the value of what he sought at trial and what was determined by the primary judge pursuant to s 79 of the Act (and hence the value of the complaints on appeal) was $24,910. Importantly, a highly contentious issue at trial, grounded from the husband’s borrowing capacity to enable him to retain the former matrimonial home, was determined in his favour permitting him the opportunity to pay monies to the wife …
8.In the appeal it was submitted, without challenge from the husband and apparently mathematically correctly, that the primary judge’s orders provided for the husband to retain the equity in the home ($418,500), a motorboat ($40,000) and a categorised partial property settlement ($10,000) being a total of $468,500 with the primary judge then ordering a payment of $190,000 from the husband to the wife which would leave the husband with property of net value of $278,500. This, in fact, amounts to 51.79 per cent of the relevant pool which provides an advantageous discrepancy to the husband of $9,626. …
We calculate, therefore, that in reality the issue before us was in respect of $15,284. It is argued that the wife, as against the husband who was at all times self-represented, expended some $34,688 being a disproportionate amount relative to the issue.
With particular reference to and weight given to the husband being completely unsuccessful on the grounds of appeal raised and where there was an entirely proper offer by the wife to resolve the proceedings in circumstances where the quantum in dispute was ultimately disproportionate to the legal costs incurred by at least one party, we are of the view that there are circumstances justifying an order for costs in favour of the wife here.
The question remains as to whether such costs ought to be paid on an indemnity, as opposed to party/party, basis as sought by the wife.
It is well-established that an order for indemnity costs requires some “special or unusual feature” to justify the Court departing from the ordinary practice of party/party costs (Colgate Palmolive Co and Another v Cusson Pty Ltd (1993) 46 FCR 225).
Given the exceptional circumstances required to justify an order for indemnity costs, the Full Court in Munday v Bowman (1997) FLC 92-784 at 84,660 helpfully identified circumstances warranting costs orders on an indemnity basis including but not limited to:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] 81 ALR 397).
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra)).
(c)Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v. Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v. Westpac Banking Corporation (unreported, Federal Court, 5 March 1993)).
(e)An imprudent refusal of an offer to compromise.
The husband at the appeal was self-represented. While some of his arguments on the appeal are noted in the decision as “confused and convoluted”, the husband did not have legal training or experience and made some appropriate concessions when challenged by the Court at the hearing of the appeal.
Whilst ultimately unsuccessful, the grounds of appeal did identify and address portions of the transcript of the original trial where challenge was understandable as for instance where the primary judge articulated preliminary views. As a consequence we are unable to find that the appeal was brought out of mala fides or without attention to the transcript and the primary judge’s reasons.
DISPOSITION
Taking all these matters into account, we are not persuaded that there are exceptional circumstances warranting an order for indemnity costs.
There will be an order that the husband to this application pay the costs of the wife set in a quantum of $17,158.65 on a party/party basis.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Austin, McGuire & Campton. Associate:
Dated: 17 March 2023
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