BEAU & BEAU
[2011] FamCAFC 80
•8 April 2011
FAMILY COURT OF AUSTRALIA
| BEAU & BEAU | [2011] FamCAFC 80 |
| FAMILY LAW - APPLICATION – Application to proceed without the transcript – Where the application was not opposed – Where counsel for the wife was confident that he could present the wife’s case without the assistance of the transcript – Application allowed. FAMILY LAW - APPEAL – Costs appeal – Appeal from the exercise of the Federal Magistrate’s discretion and certain findings of fact – Where it was submitted that the Federal Magistrate incorrectly considered the parties to be in similar financial circumstances – Where it was found that the financial circumstances were not the only factor taken into account by the Federal Magistrate – Where the Federal Magistrate also considered the history of the matter, the contributions of the parties and the conduct of the wife – Where the wife refused to comply with directions and orders, conduct the litigation in a proper manner and make any offer to settle on a proper basis –Where the Federal Magistrate also heard the property proceedings and was more than familiar with the matter – Where, despite the unfortunate consequence for the wife, it cannot be said that the orders made were outside the discretion of the Federal Magistrate – Where the financial burden of the legal costs for the husband is significant – Where the husband did everything he could to put an end to the litigation – Where the arguments in this appeal highlight the difficulties created by a party failing to comply with directions prior to a trial and the difficulty for the court in considering costs where the property pool is small – Appeal dismissed. FAMILY LAW - APPEAL – Costs appeal – Where the respondent husband made an offer and the wife rejected that offer without making a counter offer – Where the conduct of the wife in the litigation was a considerable factor in the costs order – Wife ordered to pay part of the costs of the husband on scale – Appeal dismissed. FAMILY LAW - COSTS – Wife to pay the costs of the husband to be assessed. |
| Family Law Act 1975 (Cth) |
| Gronow & Gronow (1979) 144 CLR 513 House v The King (1936) 55 CLR 499 In the marriage of Greedy (1982) FLC 91-250 In the marriage of Robinson (1991) FLC 92-209 Pennisi & Pennisi (1997) FLC 92-774 |
| APPELLANT: | Mrs Beau |
| RESPONDENT: | Mr Beau |
| FILE NUMBER: | LEC | 422 | of | 2008 |
| APPEAL NUMBER: | NA | 119 | of | 2010 |
| DATE DELIVERED: | 8 April 2011 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | May J |
| HEARING DATE: | 6 April 2011 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 29 September 2010 |
| LOWER COURT MNC: | [2010] FMCAfam 1019 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Priestly |
| SOLICITOR FOR THE APPELLANT: | G J Donaghy & Company |
| SOLICITOR FOR THE RESPONDENT: | Christopher Hughes & Associates |
Orders
The appeal is dismissed.
The appellant pay the respondent’s costs to be assessed.
IT IS NOTED that publication of this judgment under the pseudonym Beau & Beau is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 119 of 2010
File Number: LEC 422 of 2008
| Mrs Beau |
Appellant
And
| Mr Beau |
Respondent
REASONS FOR JUDGMENT
Introduction
The wife filed a notice of appeal on 23 December 2010 appealing the orders of Federal Magistrate Slack made 29 September 2010.
An order was made on 20 December 2010 extending the time to file the notice of appeal. This order was made by consent.
This appeal was heard by me as a single judge by direction of the Chief Justice pursuant to s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”).
The order of the Federal Magistrate dismissed the wife’s application for costs and ordered that she pay part of the husband’s costs. In particular, the wife was ordered to pay the husband’s costs on scale for the following:
a)the Conciliation Conference on 18 March 2009;
b)the Conciliation Conference on 19 March 2009;
c)the procedural hearing on 8 May 2009;
d)the procedural hearing on 14 May 2009;
e)the procedural hearing on 4 June 2009, and;
f)the proceedings as and from 8 October 2009.
Should the appeal be allowed the wife asks that the orders made by the Federal Magistrates Court on 29 September 2010 be discharged. The wife had asked for orders that the husband pay her costs but this was not pursued at the appeal.
In addition to asserting errors in the exercise of discretion, grounds 1 and 2 of the notice of appeal argue that:
1.His Honour erred in finding that the parties were in similar financial circumstances.
2.His Honour erred in finding that the wife unreasonably rejected the Husband’s offer to settle on 17 September 2009.
The arguments in this appeal highlight the difficulties created by a party failing to comply with directions prior to a trial and the difficulty for the court in considering costs where the property pool is small.
Application to proceed without the transcript
On 2 March 2011 the wife filed an application in an appeal asking that the matter proceed without the transcript of the proceedings before the Federal Magistrate on 27 August 2010.
The application was not opposed by the husband.
It was said by counsel for the wife that he was confident he could present his argument without relying on the transcript.
The application was allowed and the matter proceeded without the transcript.
Reasons for costs order
After referring to the respective applications of the parties the Federal Magistrate then set out the background of the proceedings. An appreciation of these matters is central to the appeal, as much of the argument centred around what the Federal Magistrate said about the history of the litigation and his perception of the parties respective positions:
Background
5.On 18 August 2008 the wife commenced proceedings for alteration of property interest orders. In her application the wife sought a sale of the husband’s caravan and an equal division of the net proceeds from the sale and that the balance of the marital pool be divided as to 50% to the wife and 50% to the husband.
6.The husband filed his response and material in support on 30 October 2008.
7.In his response the husband sought orders that each party retain all the property they had in their possession and that there be no adjustment of property or superannuation between the parties.
8.The matter first came before the Court on 30 October 2008 and procedural directions were made including listing the matter for a Conciliation Conference at 10.30am on 28 January 2009. Those procedural orders are adopted for the purposes of these reasons.
9.The wife did not, in accordance with those directions, serve upon the husband a schedule of the assets and liabilities that she contended ought to be taken into account in these proceedings, despite requests by the husband for her to do so.
10.There was correspondence exchanged between the parties regarding the appointment of a joint valuer for the husband’s mobile home.
11.No agreement was reached about the joint valuer and for the purposes of the Conciliation Conference the husband obtained a valuation report.
12.The wife engaged a real estate agent to value the property on her behalf for the purposes of the conference but no report from that agent was ever produced and the wife, at the conference, relied upon some insurance schedules in relation to the value of the husband’s caravan.
13.At the Conciliation Conference the wife asserted that the caravan had a value of $100,000 relying upon the insurance schedule produced by the husband.
14.The matter did not resolve at the Conciliation Conference and Registrar Turner reserved costs.
15.The matter was listed on 8 May 2009 for further procedural hearing and trial directions.
16.The matter was adjourned to 14 May 2009.
17.On 4 June 2009 I discharged the orders and directions made on
30 October 2008 and trial directions were made listing the matter for hearing in the Lismore circuit commencing 19 October 2009.18.[In] August 2009 the husband’s mother passed away.
19.On 17 September 2009 the husband, via his solicitors, made a written offer to the wife to settle the matter.
20.On 24 September 2009 the husband’s solicitor provided details to the wife’s solicitor about the husband’s interest in the estate of his late mother.
21.On 8 October 2009 the wife, through her solicitor, rejected the husband’s offer to settle.
22.On 14 October 2009 the wife filed an application in a case and an affidavit seeking to vacate the trial date and that these proceedings be adjourned pursuant to s.79(5) of the Family Law Act.
23.The wife’s application in a case was heard in the Lismore Registry on 19 October 2009 by Federal Magistrate Spelleken.
24.On 20 October 2009 Federal Magistrate Spelleken adjourned the hearing of the matters for final hearing on 11 February 2010.
25.The matter was mentioned on 5 February 2010 on the application of the wife to adjourn the hearing and the hearing was adjourned to
22 March 2010.26.The final hearing was conducted on 22 March 2010 and orders and reasons for judgment were published on 29 April 2010. Those orders and reasons are adopted for the purposes of these reasons. (original emphasis)
The final property orders made on 29 April 2010 were as follows:
(1)That the following property vest in the Husband (to the intent that the Wife shall relinquish all right, title or interest that she may have in any of the property):
(a)the Husband’s caravan/mobile home;
(b)any chattels currently in the Husband’s possession including but not limited to … motor vehicle, furniture and chattels;
(c)any monies standing to his credit in any account in his name.
(2)That the following property vest in the Wife (to the intent that the Husband shall relinquish all right, title or interest that he may have in any of the property):
(a)Motor vehicle;
(b)any monies standing to his credit in any account in her name.
(c)any chattels currently in her possession.
(3)That the Husband shall remain liable for and meet all instalments in relation to any liabilities currently in his name and indemnify the Wife and keep her indemnified with respect to any liability she may have with respect to those liabilities.
(4)That the Wife shall pay all liabilities currently in her name and indemnify the Husband and keep him indemnified with respect to any of those liabilities including but not limited to the GE Credit debt.
(5)That the Wife shall retain any interest in any superannuation fund which she currently is a member (to the intent that the Husband will relinquish any right, title or interest that he may have in such account).
(6)That the Husband shall retain any interest in any superannuation fund which he currently has an accumulated amount (to the intent that the Wife shall relinquish any right, title or interest that she may have in that account).
(7)That the Husband shall pay to the Wife within three (3) months from the date of these orders the sum of $26,050 and the Husband’s mobile home shall be charged as security for the payment of the monies.
The Federal Magistrate made an order on 27 August 2010 staying the operation of order 7 made 29 April 2010.
Returning to the costs judgment, the Federal Magistrate set out the provisions of s 117(1), (2) and (2A) highlighting those parts of the provisions he regarded as the most relevant.
In paragraph 29 of the reasons after noting that neither party was in receipt of legal aid and neither party could be said to have been wholly unsuccessful, the Federal Magistrate found that the following provisions were relevant:
… Of relevance to the various applications in this case are the following provisions of s.117(2A):
a)the financial circumstances of the parties (s.117(2A)(a);
b)the conduct of the parties in the proceedings (s.117(2A)(c);
c)any offers of settlement (s.117(2A)(f).
Before dealing with each application discretely his Honour referred to the financial circumstances of the parties. It was the submission on behalf of the wife that his Honour was in error in this respect and that this error affected the whole of the judgment.
In view of the argument in ground 1 it is necessary to repeat part of the reasons in this respect:
33.It should be noted that this was a relatively small property pool. The non-superannuation assets consisted largely of chattels and the pool was worth less than $100,000. Neither party was left with any significant financial assets or resources at the conclusion of these proceedings. I accept that the wife is not in a strong financial position but I do not accept that the husband is in any significantly superior position. It is true that he has accommodation but that is in the form of a mobile home which he owned at the commencement of the marriage.
34.I consider that, as a result of the proceedings, the parties circumstances were not significantly dissimilar and whilst I acknowledge that both parties have very little property and financial resources, I do not consider that fact alone should disqualify an order for costs being made against a party in appropriate circumstances.
35.I intend to take into account both parties financial circumstances in this application and acknowledge that they have very limited property and financial resources.
The Federal Magistrate was familiar with the parties’ financial circumstances having dealt with the property settlement proceedings. In the judgment leading to final property orders being made the Federal Magistrate made findings about the property pool.
There were two issues. The first being the value of the mobile home which was resolved because the husband obtained a valuation. The second being whether a sum should be “added back” by reason of moneys available to the husband from his superannuation, although expended by him. In this respect the wife had some success because the sum of $63,000 was included, a not insignificant amount in view of the size of the pool.
It is useful in view of the arguments about the parties’ financial circumstances to set out some of the paragraphs from the property judgment as follows:
45.For the reasons I will give, I intend to take into account the following non-superannuation property in relation to this matter.
46.What I regard as the non-superannuation property consists of the following:
Husband’s caravan
$35,000
Husband’s … motor vehicle
$16,100
Plant and equipment used in mowing business
$5,000
Proceeds of sale of husband’s boat
$4,000
Husband’s furniture, furnishings and personalty
$2,000
Wife’s motor vehicle
$4,000
Wife’s furniture, furnishings and personalty
$2,000
Total
$68,100
47.I intend to take into account what I regard as the superannuation assets of the parties:
Wife’s Australian Superannuation Account
$68,546
Husband’s Hesta Superannuation Fund
$757
Husband’s State Super Personal Retirement Plan
$4,189
Remainder of the superannuation payout of Husband at date of separation
$63,000
48.The liabilities of the parties that I intend to take into account are as follows:
Wife’s car loan to Credit Corp Group (formerly GE Finance Australasia)
$23,241
It was accepted by the Federal Magistrate that the husband will receive approximately $56,000 from his late mother’s estate. It was not included in the pool for the following reasons given by the Federal Magistrate:
56.Although I acknowledge that in the context of this dispute between the parties, it is a significant amount of money, nevertheless the amount has not yet been received and it is entirely attributable to the husband’s contribution made well after the separation of the parties. I consider that although it is a property interest of the husband, it ought be left out of the pool for the purposes of considering the contributions between the parties and then taken into account as a relevant s.75(2) factor.
In relation to the parties’ respective financial circumstances his Honour said:
89.The husband is now 61 years. He is currently employed on contract as a gardener and earns approximately $660 per week. There is some uncertainty about that employment. It seems unlikely the husband will achieve any greater level of employment and his working life is limited.
90.The wife has continued in similar employment to that she engaged in during the marriage up until 2009. She ceased her employment because of a shoulder injury. She now has had surgery and the evidence is, and it is the wife’s expectation, that she will be able to recommence employment towards the middle of 2010. The wife has limited prospects of improving her employment circumstances.
91.The wife has a number of outstanding liabilities that she will need to discharge.
92.The wife has retained her superannuation entitlement. The husband has very little superannuation entitlement but as I have already found, he spent much of his entitlement and much of it was spent on assisting family members. The fact that the husband does not now have the same superannuation as the wife is not a factor that I take into account as requiring an adjustment in his favour.
93.The husband will receive his interest in his mother’s estate which will be realistically the capital he will need to rely upon to sustain himself once his working life ends.
94.In the context of this matter, notwithstanding that the husband will now receive the benefit of his mother’s estate, I am not persuaded that there ought to be any adjustment for any relevant s.75(2) factors. I regard the circumstances of the parties after the contributions based adjustment as being relatively similar.
In concluding that the husband should pay the wife $26,050 his Honour said:
95.The result of my conclusions is that the wife should receive 30% of the non-superannuation assets and she should retain her superannuation assets. There should be an adjustment to the wife for half of the debt to Credit Corp and thereafter she will be responsible for the debt.
In the written submissions on behalf of the wife in this appeal it was argued:
a)that when one has proper regard to the financial circumstances of both parties, it is clearly the husband who is in the stronger financial position than the wife who is largely impecunious;
b)to make any orders for costs against the wife would reduce her circumstances even further and render any property settlement that she achieved in these proceedings as largely nugatory.
As it was not pressed, the appeal by the wife in relation to costs need not be considered, other than to note that on the wife’s application the trial had been adjourned on two occasions.
It is of some interest to note what the Federal Magistrate said in the costs judgment in that context:
40.I do not consider the husband’s opposition to the application to be unreasonable. I can accept that he wanted to finalise the matter. This was to be the second adjournment of a final hearing.
41.In the light of the history of the wife failing to comply with directions and her lack of readiness in relation to the hearing in any event, allows me to conclude that the husband was entitled to explore and indeed oppose the wife’s application.
42.I would also note that the wife at that time had taken no steps to prepare for the hearing. She had not filed any updating material and had not filed any further affidavit material apart from the affidavits filed in 2008.
The husband’s applications were then dealt with under headings. The Federal Magistrate was rightly concerned that the wife did not comply with directions. Counsel for the wife on the appeal properly did not attempt to submit otherwise. Nor was any issue taken as to his Honour recording of the history of the litigation and his conclusions, with the notable exceptions of paragraphs 33 and 34 to which I have already referred.
The Federal Magistrate highlighted the small size of the property pool and that the wife continued to deny the value of the mobile home as asserted by the husband, but provided no evidence to the contrary. The wife had refused to contribute to a joint valuation.
The reasons for ordering that the wife pay the costs of the conciliation conference were as follows:
50.Given the wife’s failure to comply with procedural directions and the attitude she adopted at the conference with respect to the mobile home, I am not satisfied that she made any genuine effort to resolve the matter. Whilst there is some argument between the parties as to what, if any, offer was made by the husband for the purposes of the conference, it is clear that the wife did not make any offer to settle and her attitude to the value of the husband’s mobile home was, in my view, unreasonable. I do consider that the conduct of the wife was such as to constitute a justifying circumstance to make an order as to costs against her for the costs thrown away by the husband upon his appearance at the two Conciliation Conferences in this matter.
As to the costs of the procedural hearings on 8 May and 14 May 2009 the Federal Magistrate also decided that the wife should pay those costs referring to the reasons already given in relation to the conciliation conference.
In addition, the Federal Magistrate said:
53.When the matter came before the Court on 8 May 2009, the wife had still not complied with the procedural directions made on 8 October 2008. She did not produce, in accordance with those orders, a schedule of the agreed property and the disputed property. The Court was unable to determine what the wife’s position was with respect to the value of the caravan.
54.Again, it is critical for parties to comply with procedural directions such that at the directions hearing in the matter there can be an understanding of the issues in dispute between the parties. That is important so that the Court can allocate appropriate time for the determination of the matter. In this case the wife’s failure to comply with directions resulted in the matter proceeding without a joint Court appointed expert. The husband was given leave to rely upon his own expert and the wife was given leave to produce her own expert evidence. Those actions unnecessarily complicated this dispute.
The application for costs connected with the husband’s offer to settle made 17 September 2009 was dealt with separately. In that offer the husband proposed that the parties retain their property and chattels, including their own superannuation and that the husband pay to the wife the sum of $25,000.
Of this the Federal Magistrate said:
55.Again I have taken into account the financial circumstances of the wife but I do not consider that that factor changes my view that the wife should meet the costs of those appearances.
56.The husband made an offer to settle on 23 September 2009 [sic]. It was then $1015 less than the amount he was ultimately order to pay by the Federal Magistrates Court.
57.That offer was $1,050 less than what the husband was required to pay the wife as a result of the judgment in these proceedings.
58.The wife contends that the husband did not better his offer and therefore is not entitled to his costs.
…
60.In this matter I accept that the offer made by the husband was made after the death of his mother and the wife had to consider the offer in the light of the fact that his financial circumstances were likely to change. However, whilst the wife may not have been in a position to consider the offer, not having all of the details on 27 September 2009, she was sufficiently confident on 8 October 2009 to reject the offer. I am satisfied that the offer was sufficiently meaningful and close to the ultimate result that the wife ought to have given the offer appropriate and genuine consideration particularly in light of the size of the property pool in this matter. It must have been very clear to both parties that the cost of litigation would have a very significant impact on the ultimate award that they might obtain.
61.It is also notable in this matter that the wife never made a formal written offer and indeed did not particularise the orders that she sought in this application until after the final hearing commenced.
62.Whilst the wife may have not had precise details of the value of the husband’s interest in his mother’s estate, it is not submitted that he withheld information about the estate or did not comply with his obligation to disclose. Although there was cross-examination at the hearing about the value of the husband’s mother’s home, there was no evidence called by the wife to support a contention that the husband’s interest in the estate was other than what he asserted.
63.Even if the wife may not have been in a position to consider the offer on 27 September 2009, the offer was never withdrawn and it was the wife who rejected the offer on 8 October 2009. I am entitled to assume that she rejected the offer after proper consideration of it.
…
65.I am satisfied that I ought to give significant weight to the offer. I also take into account the other conduct by the wife in these proceedings to which I have already referred including the fact of her non-compliance with procedural directions.
…
67.In that regard I do consider that the wife should make a contribution to the husband’s costs incurred although only after 8 October 2009.
The Federal Magistrate correctly referred to Pennisi & Pennisi (1997) FLC 92-774 in relation to offers to settle.
The significance of 8 October 2009 in the order was not the date of the offer but rather the date the wife rejected it. The trial was heard on 22 March 2010.
The Federal Magistrate provided some guidance to the assessment of the costs. In addition it was ordered that the wife pay the husband’s costs of the costs application:
75.The husband has been largely successful in his application and successfully resisted the wife’s applications.
Submissions of the wife
The primary submission is that the findings of his Honour in relation to the parties respective financial circumstances contained in paragraphs 33 and 34 was in error and caused his Honour to wrongly exercise his discretion.
In relation to the parties’ financial circumstances attention was drawn to the orders made by the Federal Magistrate and the composition of the property retained by each party.
It is certainly correct that the main asset retained by the parties are the mobile home in the case of the husband, giving him a place to live, whereas the wife retained her superannuation, which is not of immediate benefit to her as she is aged 48 years.
The parties otherwise have cars and other possessions of modest value.
It was submitted correctly that when the wife’s liabilities are deducted from her assets she is in a negative position.
The husband’s position is not a strong one either, as the mathematical figures used to conclude how much he should pay the wife included property which he has in part expended.
If the Federal Magistrate had concluded that the asset and liability positions of the parties was similar and for that reason alone ordered costs then that would have been an error.
However, it is clear that there were two other factors. In considering the financial circumstances of the parties that must have included their capacities to earn income. The Federal Magistrate also had evidence contained in the husband’s affidavit filed 21 July 2010 of the substantial costs incurred by the litigation exceeding $50,000. Secondly, it is quite clear from the wording of paragraph 35 that the financial circumstances of the parties were not the only factor.
The error in relation to the financial circumstances was the only argument in relation to the orders about matters prior to trial. This argument was also of significance in relation to the order about costs post the rejection by the wife of the offer.
The other arguments in relation to the offer were as follows:
· the offer fell short of the amount ordered to be paid by the husband;
· although the amount appears to be little, the difference between the offer and the order is of significance as it amount to approximately 4 per cent of the pool;
· the offer was made at a time when early estimates were given as to what the husband might receive from his late mother’s estate and a party should not be punished for putting the other to proof;
· the words used in paragraph 67 being “contribution” are inconsistent with the order and create uncertainty;
· in making such an order too much weight was given to the wife’s refusal to accept the offer;
· the wife was not obliged to accept less than that which she was entitled for fear that a costs order could be made, and;
· such an order was unjust and punitive and must have in effect double counted the conduct element where the wife had already been ordered to pay the costs of pre-trial proceedings.
Submissions of the husband
Mr Hughes emphasised the considerable costs to his client of this litigation and the difficulties generally in the matter. In the affidavit of the husband filed 21 July 2010 for the costs hearing at paragraph 35 and 36 it was said:
35.Mr Donaghy maintained his abovementioned view about the value of my caravan throughout the Conference, notwithstanding he contents of the Valuation Report prepared by Mr [O], Certified Practising Valuer, on my instructions and certain advices conveyed to Mr Donaghy by Registrar Turner about the evidentiary value of the Home Insurance Renewal Schedule in so far as the market value of my caravan was concerned.
36.Also in issues between the wife and I at the Conciliation Conference on 19 March 2009 were the market values of my … motor vehicle, the contents of my caravan and [business] equipment, valuations in respect of which had not been prepared prior to the Conciliation Conference as a result of the wife’s refusal to comply with Orders 1 and 4 of the October 2008 Orders.
The valuation of the mobile home was provided to the wife on 13 March 2009, prior to the first conciliation conference.
It was apparently only two weeks prior to the hearing that the wife accepted the value of the mobile home.
Further, the wife’s application at trial was that the whole of the property pool be transferred to her. A document (Exhibit 1) before me was provided to the Federal Magistrate. The orders sought by the wife were as follows;
(1) That the Husband Transfer to the Wife forth with:
(a)All this right title and interest in the mobile home registered in the name of the Husband and situated at … Caravan Park, [in the Far North Coast of] NSW,
(b)The … motor vehicle registered in the Husband’s name.
(2) That the Husband pay to the Wife the sum of $35,000.
It can be seen from the history of the matter and the findings made by the Federal Magistrate about contribution, which were not challenged, was that on any view this was an unreasonable claim.
The solicitor correctly submitted that throughout these proceedings he did all he could, including filing an offer. As he said this was litigation “out of control”.
It was submitted that the words of the Federal Magistrate in paragraph 34 “as a result of the proceedings” must refer to the result of the litigation including the legal costs.
Relevant law
This is an appeal from a decision made by a Federal Magistrate who heard the property proceedings and who was more than familiar with the matter.
The nature of a discretionary decision and the basis on which there can be a successful appeal is not in doubt (see House v The King (1936) 55 CLR 499 and Gronow & Gronow (1979) 144 CLR 513).
Although an appellate court should be very reluctant to interfere with the exercise of discretion in respect of costs, it can and should interfere when the result is “plainly unjust or if the discretion was exercised on wrong principles” (see In the marriage of Robinson (1991) FLC 92-209).
It is also accepted that, an appellate court will uphold an exercise of direction to order costs if it is apparent that there are appropriate reasons on which the judge could rely (see In the marriage of Greedy (1982) FLC 91-250).
The decision in Greedy is helpful in two respects. First at 77,381 that “[a]n award of costs ought to bear some relation to the conduct of the proceedings by the parties or to their relative circumstances at the time of the application and hearing of the matter.” Of particular relevance in this case, it was further said:
…There may be situations where refusal to negotiate, to make an offer or to put forward an alternative order may be a factor justifying an order for costs. The failure of a party to take part in negotiations in a genuine manner may contribute to delay and cost and obstruct the proper resolution of the matter.
Secondly, the recognition given to the position of the trial judge at 77,383.
Conclusion
Despite the unfortunate consequence for the wife, it cannot be said that the orders made by the Federal Magistrate were outside his discretion. The justifying circumstances were clearly and properly identified by the Federal Magistrate in a comprehensive judgment. The financial burden of the legal costs for the husband is also significant, especially by reference to the nature of his assets and otherwise limited financial circumstances.
It is clear that the husband and his solicitor did everything they could to resolve the matter, limit the costs and bring the matter to an end. Their efforts were fruitless because the wife refused to comply, conduct the litigation in a proper manner and make any effort to settle on a proper basis.
Costs
At the conclusion of the hearing of the appeal submissions as to costs were heard.
It was argued, in effect, that costs should follow the event. I would add that the wife should pay the husband’s costs of the appeal, there being little merit in an appeal of this nature.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 8 April 2011.
Associate:
Date: 8 April 2011
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