C & C

[2005] FamCA 294

[2005] FamCA 294

FAMILY LAW ACT 1975

IN THE FULL COURT OF
THE FAMILY COURT OF AUSTRALIA

AT SYDNEYAppeal Nos. EA 9L of 2001

and EA 71 of 2003

File No. CAF 988 of 2001

BETWEEN:

C

Appellant Husband

-and -

C

Respondent Wife

REASONS FOR JUDGMENT IN RELATION TO COSTS

CORAM:  Finn, Holden and Warnick JJ
DATE OF HEARING:  10 December 2003
DATES OF WRITTEN SUBMISSIONS:   14 September 2004 and 5 October 2004

DATE OF JUDGMENT:  28 April 2005

Introduction

1. On 10 December 2003 this Full Court heard an appeal by the husband against an order for property settlement made by Coleman J on 4 August 2003.  We also heard an application by the husband for leave to appeal and an appeal, assuming leave was granted, against an order also made by his Honour on the same day for interim spousal maintenance. 

2. His Honour’s order for property settlement gave effect to a division of the parties’ property in the proportions 65% to the wife and 35% to the husband based on a finding as to contributions of 55% to 45% in the wife’s favour and with a 10% adjustment also in her favour on account of matters contained in s 75(2) of the Family Law Act 1975 (“the Act”). The order required (amongst other things) that the wife pay to the husband the sum of $55,390 in exchange for the transfer of a rural property to the wife. His Honour’s interim spousal maintenance order provided for the payment of $171 per week to the wife by the husband.

3. In a judgment delivered on 3 September 2004, we allowed the appeal against the property settlement order and varied the trial Judge’s order to require the wife to pay the husband the sum of $81,697 (less any sum already paid by the wife to the husband pursuant to the trial Judge’s order).  Also, having granted leave to appeal the interim spousal maintenance order, we allowed the appeal against, and set aside, that order.

Submissions of the parties in relation to costs

1. At the conclusion of the hearing of the appeal, it was agreed that the any applications for the costs of the appeals and the application for leave to appeal would be the subject of further written submissions.  We incorporated directions for the filing of such submissions into our orders which were made when we delivered our judgment on 3 September 2004. 

2. Written submissions were filed on behalf of the appellant husband on 14 September 2004 and on behalf of the respondent wife on 5 October 2004. 

3. The successful appellant husband sought that the respondent wife pay his costs of the appeal, while the respondent wife sought that both parties receive certificates under the Federal Proceedings (Costs) Act 1981.

4. In his submissions in support of the husband’s application for costs, Counsel for the husband relied principally on the terms of an offer by the husband contained in a letter of 15 August 2003 written by the husband’s solicitors to the wife’s solicitors prior to the filing of the husband’s appeal (and a copy of which was attached to the written submissions filed on behalf of the husband).  The terms of that letter included the following:

   …our client is content not to appeal on the following basis:

   1.That the orders of Justice Coleman dated 4 August 2002 [sic semble 2003] in so far as they relate to a property settlement remain;

   2.That the interim orders for spousal maintenance be discharged;

   3.That the application for final orders relating to spousal maintenance be withdrawn and dismissed;

   4.That there be no order as to costs as between the husband and wife; and

   5.That payment be made within 35 days.

   In that regard we refer you to our client’s offer to accept $58,200 contained in our letter of 11 December 2001 and note your client failed to make any written offers.

   Please obtain your client’s instructions as soon as possible so that [the] parties can avoid the expense of the appeal.

5. The solicitors for the respondent wife replied by letter dated 22 August 2003 in which they effectively rejected the offer by saying:

   …We have had the benefit of perusing the Reasons for Judgment by His Honour Justice Coleman and we do not consider that his decision is appealable.  Accordingly, our client does not consent to the variation of the Court Orders sought.

6. The husband’s notice of appeal was sent to the solicitors for the wife with a letter dated 1 September 2003 to which there was no reply on behalf of the wife and which (in addition to enclosing the notice of appeal, application for leave to appeal and supporting affidavit) stated:

   We note that our client had previously offered to not proceed with the Appeal on the basis that your client agree to discharge the interim orders relating to spousal maintenance.  We note your client did not consent to that.  Please note our client will only agree to his Appeal(s) being withdrawn on the basis that your client pay our client’s costs of and incidental to the Appeal(s).

7. The submissions on behalf of the husband argue that, in circumstances where the appellant’s offer to resolve the question of further proceedings was made prior to the institution of the appeal, where the appeal was allowed, and where the appellant achieved a more favourable result than the sum of $58,200 (which he had been prepared to accept prior to the trial) and succeeded completely in having the spousal maintenance order discharged, he is entitled to have his costs incurred in relation to the appeal paid by the wife.

8. Further, it is submitted by Counsel for the husband that a reimbursement pursuant to a costs certificate granted under the Federal Proceedings (Costs) Act 1981 would be inadequate to cover the husband’s costs of the appeal.

9. Finally, in his written submissions Counsel for the husband suggests that the fact that the wife has received $171 per week by way of spousal maintenance since the orders of Coleman J made 4 August 2003 (totalling approximately $8,900) is a relevant consideration in determining any costs award. 

10. In the written submissions filed on behalf of the respondent wife it is simply submitted that this is an appropriate case for the granting of costs certificates because “but for the errors of principle the Trial Judge’s decision would have stood.” 

Discussion of the costs of the appeals and the application for leave to appeal

1. The general rule in this Court in relation to costs, contained in s 117(1) of the Act, is that each party shall bear their own costs of proceedings unless, under s 117(2), the Court is satisfied that the circumstances of the case justify the making of an order for costs. The relevant considerations in determining if the circumstances justify an order are contained in s 117(2A). Those matters include the parties’ financial circumstances, any receipt of legal aid by the parties, the conduct of the parties throughout proceedings, the outcome of the proceedings, whether one party has been wholly unsuccessful in the proceedings, whether any offers in writing has been made to settle the proceedings and the terms of such offers and any other matters.

2. Given that under our orders the husband was entitled to receive $81,697 (rather than the $55,390 awarded by the trial Judge) and in addition has the benefit of the discharge of the interim spousal maintenance of $171 per week, it is clear that the wife is in a far less favourable position as a result of our orders than she would have been had she accepted the offer for settlement made by the husband on 15 August 2003 (whereby the husband would not appeal, but would accept the $55,390 awarded by the trial Judge provided the wife agreed with him to discharge the interim spousal maintenance orders).  The difference is in excess of $26,000. 

3. We are therefore of the view that this is clearly a case in which, having regard to the husband’s offer of settlement in the letter from his solicitor dated 15 August 2003 (which can be seen as extremely favourable to the wife relative to our orders), the husband’s success in relation to both the property settlement and spousal maintenance aspects of the appeal and the wife’s lack of success, a costs order in the husband’s favour is justified.  We arrive at this conclusion notwithstanding that it can be assumed that the wife’s financial circumstances are limited, having ultimately been awarded a 62% share of a modest pool of assets valued at approximately $400,000.  We do not understand the wife to be in receipt of legal aid.

4. Given that we have concluded that the circumstances justify a costs order in the favour of the husband, no question arises concerning the grant of costs certificates (see Wright v Barry (1992) FLC 92-323).

5. There has been no material provided to us on behalf of the husband which gives an estimate of his costs. Therefore our order will be that in default of agreement the costs are to be assessed under Division 19.6.2 of Chapter 19 of the Family Law Rules 2004.

Order

1. That the wife pay the husband’s costs of and incidental to the appeal against the order of the Honourable Justice Coleman with respect to property settlement made 4 August 2004 and the application for leave to appeal and the appeal against the order of the Honourable Justice Coleman with respect to interim spousal maintenance made 4 August 2004, with such costs to be assessed under Division 19.6.2 of Chapter 19 of the Family Law Rules 2004 in default of agreement.

I certify that the preceding 18 paragraphs are a true copy of the reasons for judgment of this Honourable Full Court

Associate