Caffyn and Caffyn and Anor
[2018] FamCAFC 259
•19 December 2018
FAMILY COURT OF AUSTRALIA
| CAFFYN & CAFFYN AND ANOR | [2018] FamCAFC 259 |
| FAMILY LAW – APPEAL – COSTS – Application for costs of a discontinued appeal – Where the discontinued appeal sought to challenge consent property orders – Financial circumstances of the parties – Conduct of the parties – Whether the discontinued appeal was wholly unsuccessful – Consideration of other relevant matters under s 117(2A)(g) of the Family Law Act 1975 (Cth) – Wife ordered to pay the husband’s costs of the discontinued appeal – Where the costs cannot be quantified – Costs as agreed or assessed on a party/party basis. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) r 22.42 |
| Anderson & Anderson (1982) FLC 91-251; [1982] FamCA 36 Bant v Clayton (Costs) (2016) 56 Fam LR 31; [2016] FamCAFC 35 Bhatt & Acharya (Costs) [2017] FamCAFC 71 Caffyn & Protz [2018] FamCA 499 Caffyn & Protz Group (No. 2) [2018] FamCAFC 199 Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84 Parke & the Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6 Sharman v Evans (1977) 138 CLR 563; [1977] HCA 8 Tsay & Lou (No. 2) [2018] FamCAFC 245 |
| APPLICANT: | Mr Caffyn |
| FIRST RESPONDENT: | Ms Caffyn |
| SECOND RESPONDENT: | Mr Protz as liquidator of B Pty Ltd (in liq) |
| FILE NUMBER: | PAC | 3892 | of | 2015 |
| APPEAL NUMBER: | EA | 72 | of | 2018 |
| DATE DELIVERED: | 19 December 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge, Austin & McClelland JJ |
| HEARING DATE: | 27 November 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT ORDERS MADE: | 26 April 2018 |
REPRESENTATION
| THE APPLICANT: | In person |
| THE FIRST RESPONDENT: | In person |
| THE SECOND RESPONDENT: | Did not participate |
Orders
The wife pay the husband’s costs of the discontinued appeal EA 72 of 2018, other than those which were the subject of a costs order made on 23 October 2018 or those relating to this application, such costs to be paid within 28 days of those costs being agreed or assessed on a party/party basis.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Caffyn & Caffyn and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 72 of 2018
File Number: PAC 3892 of 2015
| Mr Caffyn |
Applicant
And
| Ms Caffyn |
First Respondent
And
| Mr Protz as liquidator of B Pty Ltd (in liq) |
Second Respondent
REASONS FOR JUDGMENT
Introduction
By Application in an Appeal filed on 25 September 2018, Mr Caffyn (“the husband”) seeks that an order be made for Ms Caffyn (“the wife”) to pay his costs associated with a discontinued appeal. Those costs are sought on an indemnity basis.
That application is made in circumstances where the wife has discontinued an appeal commenced by Notice of Appeal filed on 22 May 2018, by which she sought to appeal property orders that were made with the consent of the parties on 26 April 2018. The parties were legally represented in those proceedings.
Application in an Appeal
The Application in an Appeal filed by the husband sought the following orders:
1. That the [wife] to pay the costs of the [husband] of these proceedings on an indemnity basis.
2. The [wife] to pay the advertising fees thrown away as a result of the withdrawal of the property from sale situate and known as [D Street, Suburb E] in the sum of $7,474.78 which costs were thrown away as a result of the lodgement by the [wife] of the Notice of Appeal and the granting of the stay in the court below which funds are by default coming off the husband’s share as a result of the Orders made by consent on 26 April, 2018 being the Orders the subject of Appeal and which would not have been deducted from the husbands share had in not been for the actions of the [wife].
3. The [wife] to pay the costs of the [husband] of the Stay Application in the proceedings below which were thrown away as a result of the [wife] discontinuing the Appeal in this matter which costs would not have arisen had in not been for the lodgment of the Appeal in these proceedings.
4. The [wife] to repay to the [husband] the sum of $7000 for the one half share of the furnishing taken by the [wife] directly from the purchaser without the knowledge or consent of the [husband].
5.The costs of the [husband] be charged against the property at [B Street, Suburb C]. In the event that the costs are not paid within a period of 28 days from the date of Orders made by this Court then the [wife] is to do all acts and things necessary to list for sale and sell the property situate and known as [B Street, Suburb C]. The proceeds of sale of the [Suburb C] property once sold are to be disbursed as follows:
(i) In payment of agent’s commission on the sale and legal fees;
(ii) In payment of outstanding Council and Water rates and Strata Levies;
(iii) In payment to the [husband] of the amount of $7,474.78.
(iv) In payment to the [husband] of the amount of $7,000.00.
(v) In payment to the [husband] the sum of $29,975.00 being the costs thrown away as a result of the lodgement of the Appeal in this matter and the costs thrown away as a result of the Stay Hearing in the court below as a result of the Lodgement of the Appeal by the [wife].
(vi) The balance thereafter to be paid to the [wife].
6. Pending payment of the costs ordered by the court the costs of the [husband] are to be protected by a continuation of the Caveat currently lodged against the title to the property at [B Street, Suburb C] which Caveat was lodged in accordance with the Order 6 of the orders made on 4 July, 2018.
7. The [wife] to pay the [husband’s] costs of this Application.
(As per the original)
The only aspects of the husband’s application that we deal with in this decision are proposed order 1, wherein he seeks an order that the wife pay his costs on an indemnity basis, and proposed order 7, by which he seeks his costs of this application. At the commencement of the hearing we advised the parties that we would not consider the remaining aspects of the husband’s application because:
·paragraphs 2, 4, 5 and 6 of the application seek orders in the nature of enforcement and damages and cannot be dealt with in the context of an appeal, and
·paragraph 3 of the application has already been the subject of consideration by Rees J in her decision dated 3 July 2018 (Caffyn & Protz [2018] FamCA 499).
On 23 October 2018 Ainslie-Wallace J made costs orders in relation to a number of matters including the application for expedition of the appeal (Caffyn & Protz Group (No. 2) [2018] FamCAFC 199). Thus, this application is limited to the husband’s costs of the appeal other than in relation to that application.
Discussion
Rule 22.42 of the Family Law Rules 2004 (Cth) relevantly provides that:
(1)A party may discontinue an appeal, an application for leave to appeal or an application in relation to an appeal by filing a notice of discontinuance.
(2)The party may be ordered to pay the costs of all other parties.
(3)An application for costs must be filed within 28 days after the filing of the notice of discontinuance.
As with any issue of costs, this application is governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). Insofar as is relevant to the facts of this case, that section provides:
(1) Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
…
The relevant considerations in this matter are set out in paragraphs (a), (c), (e) and (g) of s 117(2A).
The first matter to consider is the financial circumstances of the parties. In this matter, each party received an adjustment of their property interests by virtue of the consent orders made on 26 April 2018. For the purposes of s 117(2A) (a), it is relevant that those orders provided for real property to be transferred into the wife’s name.
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. The fact of the discontinuance remains a relevant matter, however, as it means that the respondent has incurred costs unnecessarily (see Bant v Clayton (Costs) (2016) 56 Fam LR 31 at [21]–[23]; Parke & the Estate of the Late A Parke (2016) FLC 93-748 at 81,938; Tsay & Lou (No. 2) [2018] FamCAFC 245 at [14]; cf Bhatt & Acharya (Costs) [2017] FamCAFC 71 at [7]–[8]).
The circumstances in which the matter has been discontinued are relevant under s 117(2A)(c). In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624–625, 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. However, 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”.
That determination should, however, only be made by reference to known circumstances not in dispute between the parties (see, for example, Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84 per Basten JA at [8]; Meagher JA at [13] and Payne JA at [31]).
In this matter it is not disputed that the appeal filed by the wife was in respect to property orders that were made with the consent of the parties at a time when the parties were legally represented.
In those circumstances it would have been readily apparent to a reasonable litigant that the wife’s prospects of success on appeal were remote (Anderson & Anderson (1982) FLC 91-251).
In this case both parties had the benefit of legal advice and there is no suggestion that the parties were not conscious of those relevant matters set out in s 79(4) of the Act or that the approval of those orders in circumstances where the parties each had access to legal advice was other than proper.
Finally, in terms of s 117(2A)(g), it is relevant that costs are sought in the context of a discontinued appeal. It is in the public interest that matters should, where reasonably possible, be resolved by trial rather than appeal (Sharman v Evans (1977) 138 CLR 563 at 565–566). It is a serious matter to initiate an appeal and an applicant is not relieved of the obligation to carefully consider the merits of that course simply because they are self-represented.
Having regard to those matters we are satisfied that an order for costs should be made against the wife.
As noted, the husband is seeking that costs be paid on an indemnity basis. Orders for indemnity costs are made only in exceptional circumstances (see Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225).
The husband asserts that, in this case, the exceptional circumstances justifying an order for indemnity costs are that:
a)He has been engaged in litigation for the past four years with the wife, who was, at times, a self-represented litigant;
b)He has paid approximately $330,000 to his solicitors in legal fees over that period;
c)He received property worth $660,000 pursuant to the final consent orders, while the wife received real estate valued at $1,3000,000; and
d)He is currently in debt to the figure of $200,000.
Those matters do not, in our view, establish exceptional circumstances such that an order for indemnity costs is justified. The voluntary engagement in expensive litigation is not, in itself, a reason for the unsuccessful party to pay the successful party’s costs on an indemnity basis, even if a costs order is otherwise justified. The husband’s apparent dissatisfaction with the orders made at trial was not such as to incite an appeal by him. It follows that the fact he received a lesser share of the parties’ property has little bearing on the costs of the appeal, much less a bearing on whether costs should be payable on an indemnity basis.
Accordingly an order will be made requiring the wife to pay the husband’s reasonable costs of the appeal on a party/party basis.
During the course of the hearing, the husband tendered a bundle of documents (Exhibit 1), which included a memorandum of costs and disbursements that he has received from his legal representatives. That memorandum did not, however, enable the Court to determine which, if any, of the items of work listed in that document related to the discontinued appeal, as opposed to the Applications in an Appeal which were the subject of the costs order made by Ainslie-Wallace J on 23 October 2018. In those circumstances we are unable to quantify the husband’s costs in respect to the appeal filed by the wife.
Accordingly, we order the wife to pay costs of the husband incurred with respect to her Notice of Appeal filed on 22 May 2018 on a party/party basis, within 28 days of those costs being agreed or assessed. To avoid doubt, those costs should not include costs which were the subject of the orders made by Ainslie-Wallace J on 23 October 2018.
Finally, it is necessary to consider the husband’s application for costs in respect to this application; that is, his Application in an Appeal filed on 25 September 2018.
In considering that application it is to be noted that the husband has been only partially successful in that we have rejected his application for costs to be ordered on an indemnity basis and we have dismissed proposed orders 2–6 of his application.
In this matter the wife, appropriately in our view, agreed to orders requiring her to pay the husband’s reasonable costs on a party/party basis. If the husband’s application had been confined to that issue, the hearing of this application could have been avoided. Accordingly, we make no order as to costs in respect to the husband’s Application in Appeal filed on 25 September 2018.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Aldridge, Austin & McClelland JJ) delivered on 19 December 2018.
Legal associate:
Date: 19 December 2018
4
10
2