Cerny and Seidler
[2019] FamCAFC 257
•20 December 2019
FAMILY COURT OF AUSTRALIA
| CERNY & SEIDLER | [2019] FamCAFC 257 |
| FAMILY LAW – APPEAL – COSTS – Where the appeal settled during the hearing – Where error established in relation to quantifying costs – Where there is no discernible reasoning in the judgment which supports the costs figure reached by the primary judge – Appeal allowed – Appealed order varied by consent – Costs certificates granted. |
| Federal Proceedings (Costs) Act 1981 (Cth) s 6 and s 9 |
| Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148 Robinson and Higginbotham (1991) FLC 92-209; [1991] FamCA 4 |
| APPELLANT: | Mr Cerny |
| RESPONDENT: | Ms Seidler |
| FILE NUMBER: | SYC | 6696 | of | 2014 |
| APPEAL NUMBER: | EA | 59 | of | 2019 |
| DATE DELIVERED: | 20 December 2019 |
| PLACE DELIVERED: | Cairns |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ryan, Austin & Tree JJ |
| HEARING DATE: | 12 December 2019 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 13 June 2019 |
| LOWER COURT MNC: | [2019] FamCA 381 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Fermanis |
| SOLICITOR FOR THE APPELLANT: | Family Law 4 Men |
| COUNSEL FOR THE RESPONDENT: | Ms Clifford |
| SOLICITOR FOR THE RESPONDENT: | Karras Partners Lawyers |
Order made on 12 December 2019
The appeal be allowed.
Order 1 of the Orders dated 13 June 2019 be varied by consent, by deleting the figure $80,000 and inserting the figure $35,000.
There be no order as to costs in the appeal.
The Court grants to the appellant a costs certificate pursuant to section 9 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by him in relation to the appeal.
The Court grants to the respondent a costs certificate pursuant to section 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by her in relation to the appeal.
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 Cerny & Seidler 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 59 of 2019
File Number: SYC 6696 of 2014
| Mr Cerny |
Appellant
And
| Ms Seidler |
Respondent
REASONS FOR JUDGMENT
Introduction
On 30 January 2019, the primary judge finally determined parenting and property proceedings between Ms Seidler (“the wife”) and Mr Cerny (“the husband”). Then, on 13 June 2019, the primary judge made an order for costs in those proceedings which required the husband to pay to the wife’s solicitor the sum of $80,000 within 21 days. From that order, the husband appealed. However, during the course of the hearing of the appeal, it settled on terms which proposed that the appeal be allowed, and the quantum of the costs order reduced to $35,000. Although we then pronounced orders in accordance with that settlement, we reserved our reasons for allowing the appeal. These are those reasons.
The primary judgment
Before the primary judge, the wife sought that the husband pay her costs of the parenting proceedings from 7 June 2018 until 30 January 2019 on an indemnity basis, and 50 per cent of her costs of the parenting and financial proceedings between 18 May 2015 and 30 January 2019. To the extent that there was an overlap between the two periods, the wife accepted that there should not be any double recovery. The primary judge determined that there should be a costs order made in favour of the wife.
The wife’s costs totalled $384,182.54. However, in her material, there was no detail as to the division of those costs between either the different proceedings, or the relevant periods. Moreover, some of that total related to applications in which a costs order had been made against the wife, and applications which post‑dated the trial. Recognising that, but desirous of not further contributing to the ongoing disputation between the parties, his Honour sought to accommodate the evidentiary deficiency by ultimately making a global order for costs in the wife’s favour in the sum of $80,000.
Relevant legal principles
An order for costs is discretionary and, therefore, the principles enunciated in House v The King (1936) 55 CLR 499 apply. Further, generally, there will be appellate reluctance to disturb orders in relation to costs (Robinson and Higginbotham (1991) FLC 92-209). That said, the exercise of the discretion in relation to costs must be undertaken judicially, only take into account relevant considerations, and not be an arbitrary exercise of power (Northern Territory v Sangare (2019) 372 ALR 117 at [24]).
Why the appeal succeeds
Given the settlement of the appeal, it is unnecessary to traverse all of the many grounds of appeal in these reasons, several of which had merit. Rather, we will restrict these reasons to addressing one error, relating to the primary judge’s quantification of the costs, raised under various guises by Grounds 21 to 26.
At [98]-[100] of the reasons for judgment, the primary judge said as follows:
98. I would like to award costs in a fixed sum [pursuant to r 19.18(1)(a) of the Family Law Rules (2004) Cth)]. Whatever the parameters, I am confident that the parties will neither be able to agree about the quantum of costs or efficiently manage the process of an assessment by a taxing officer. An order expressed in the style of the mother’s application would involve an enormous amount of work for a taxing officer even after a bill was submitted in taxable form. There would be significant additional costs in the process of taxation and potentially a further resultant costs dispute. There is a theme in the mother’s case about the adverse impact on her of the litigation and her conflict with the father. I do not want to prolong the litigation or the potential for that conflict.
99. The problem in relation to fixing a sum is that there is little detailed information on which to base the assessment I would make. There is no itemised bill.
100. I have the evidence about the costs imposts made on the parties. That reveals the difference in their costs burdens for these proceedings. I will make an order for costs in the fixed sum of $80,000. That does not result in the burden of costs being shared equally between the parties but provides an adjustment, a partial indemnity, which is warranted based on the s 117(2A) factors set out above. I am confident that the sum is substantially within the ambit of (less than) the mother’s claim. To the extent that the sum is greater than a party and party award, the circumstances described above warrant such an order.
(Footnotes omitted)
Whilst there is much to be said for the primary judge’s laudable desire to bring finality to the parties’ long running and extremely expensive disputation, the reality was that the paucity of material before his Honour simply did not permit any proper estimate, much less assessment, of the appropriate quantification of the wife’s costs.
Unsurprisingly therefore, there is no discernible reasoning in the primary judgment which sufficiently supports the selection of the figure of $80,000. Indeed, the primary judge at [100] recognised the complete imprecision of that figure, by acknowledging that it may or may not be greater than what the wife would be entitled to on a party/party basis. However that recognition cannot replace the need for an adequate exposure of reasoning for its selection (Bennett and Bennett (1991) FLC 92-191).
That error alone justifies allowing the appeal, as sought by the parties, and accordingly we so ordered.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ryan, Austin & Tree JJ) delivered on 20 December 2019
Associate:
Date: 20 December 2019
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