CKC and RRC (Costs)

[2007] FamCA 66

FAMILY COURT OF AUSTRALIA

CKC & RRC (COSTS [2007] FamCA 66

Family Law Act 1975 (Cth)
Federal Proceedings (Costs) Act 1981 (Cth)

APPELLANT: CKC

RESPONDENT: RRC

FILE NUMBER: SYF 303 of 2004

APPEAL NUMBER: EA 109 of 2005

DATE DELIVERED: 15 FEBRUARY 2007

PLACE DELIVERED: Sydney

JUDGMENT OF: KAY, WARNICK & MAY JJ

HEARING DATE: BY WAY OF WRITTEN SUBMISSIONS

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 22 August 2005

LOWER COURT MNC: [2005] FamCA 935

REPRESENTATION

COUNSEL FOR THE APPELLANT:

SOLICITORS FOR THE APPELLANT: KELLS THE LAWYERS

COUNSEL FOR THE RESPONDENT: MR MILLAR

SOLICITORS FOR THE RESPONDENT: RITA THAKUR & ASSOCIATES

Orders

1. The time to appeal against the costs order made by Mullane J on 23 February 2006 be extended until 1 January 2007.

2. The need to file a further notice of appeal be dispensed with.

3. The appeal be allowed and the order made by Mullane J on 23 February 2006 be varied by inserting the words “one half” after the words “the wife must pay”. 

4. The Court grants to the appellant a costs certificate pursuant to the provisions of s.9 of the Federal Proceedings (Costs) Act 1981 (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 the appellant in relation to the appeal against the orders made 22 August 2005.

5. The Court grants to the respondent a costs certificate pursuant to the provisions of s.6 of the Federal Proceedings (Costs) Act 1981 (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 the respondent in relation to the appeal against the orders made 22 August 2005.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as CKC & RRC (Costs)

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 109  of 2005
File Number: SYF 303  of 2004

CKC

Appellant

And

RRC

Respondent

REASONS FOR JUDGMENT

1. On 1 December 2006 we allowed an appeal against property orders made by Mullane J.

2. We made the following orders:

   1.        That the appeal be allowed.

   2.That order 9.5 of the orders of 22 August 2005 be varied by deletion of the words “to pay 49.12 percent of the balance to the husband” and the insertion in lieu of the words “to pay to the husband $256,134 plus or minus 30 percent of the difference between the balance and $582,413.”

   3.That each of the parties be at liberty to make, by way of written submissions filed and served within 21 days of the date hereof;

   (i)application with respect to the costs of the appeal;

   (ii)application for extension of time within which leave to appeal the costs orders made at first instance;

   (iii)submissions in support of any proposed appeal against the costs orders.

   4.That each party have a further 14 days from service upon that    party to provide an answer in writing, to any submissions served upon that party.

   5.That each party have a further 7 days to file and serve a written  reply to any answer served upon that party.

   6.That each party endorse upon any submissions, answer or reply the date and means of service on the other party.

3. We have now received submissions from both parties concerning the costs appeal and the costs of the appeal.

The Costs Appeal

1. This entails an application to extend time to appeal as well as the appeal itself.  The costs judgment was delivered on 23 February 2006.  It required the wife to pay the husband’s costs in the following terms:

   (1)the wife must pay the husband's costs of the proceedings concluded by the orders of 22 August 2005 incurred by him in the period since 18 August 2004, including his costs of the costs application, such costs to be as agreed, and in default of agreement, as certified by a Registrar pursuant to the rules.

2. The reasons given for the costs order include:

   (a)      Financial Circumstances of the Parties.

   4.…the wife will still be in a much stronger position as to property and liabilities than the husband.  The husband, however, is in a slightly stronger position than the wife as to earning capacity according to the findings made in the Judgment.

   (c)      Conduct of the Parties in Relation to the Proceedings. 

   6.The stands the wife took in the proceedings on some issues unreasonably prolonged the hearing.  ..

   7.Another area was the wife's evidence ...  She was not frank, open and honest.  She was evasive and at times dishonest. 

   8.It should also be noted that in some areas the husband's evidence was unreliable but the wife was found to be significantly less reliable than the husband and also dishonest.

   (e)      Whether a party was wholly unsuccessful in the proceedings. 

   11.Neither party to the proceedings was wholly unsuccessful.  The wife, in her opposition to the husband's proposals for shared care of the children and in her application for very limited contact by the children with the husband, could be considered to have been wholly unsuccessful.

   (f)       Settlement Offers. 

   12.On 18 August 2004 the husband made a settlement offer to the wife. 

   …

   14.She has in fact then received at most about $19,600 more than the settlement offer and she has been denied the use of the funds for more than a year.   She has lost the interest the funds could have produced by investment or the gains she could have achieved from real estate investment.  She has put the parties to a delay of 12 months in the determination of their property interests and to the expense of a further 12 months of legal costs, including the costs of a defended hearing.  On the balance of probabilities, the wife has incurred close to $20,000 in legal costs since the offer was made and the hearing did not provide her with a better outcome than the settlement offer would have provided.

   …

   17.The wife's rejection of the husband's settlement offer in the property proceedings and her failure to make any reasonable counter offer demonstrate a lack of bona fides in terms of resolving the proceedings by negotiation.  She has forced the husband to incur the unnecessary costs, stress and delay involved in a defended hearing.

   CONCLUSIONS

   23.It is clear that the wife has not complied with her obligation to assist with achieving the main purpose of the Rules.  She has not embraced bona fide negotiation for settlement.  She has obstructed the just, timely and cost effective disposal of the case. 

   24.The wife is in a stronger financial position than the husband.  Her conduct at the hearing prolonged the hearing and added to the costs.  She was wholly unsuccessful in her opposition to a shared residence arrangement and in seeking orders for very limited contact by the children with their father. 

   25.She unreasonably rejected the husband's settlement offer and did not honour her obligations under the rules to assist with the just, timely and cost effective disposal of the proceedings.  By her unreasonable stance in relation to the orders she sought for the children and the attitude she took in relation to the settlement negotiations in respect of property she unreasonably rejected the husband's settlement offer.

3. The effect of the orders made by the Full Court in allowing the appeal was to increase the wife’s share of the pool of assets by about $30,000.  The Full Court were also critical of the trial judge’s findings as to the wife’s earning capacity.  These matters significantly impact upon several of the reasons relied upon by the trial judge as the basis for his costs order.  In particular the following passages cited above are no longer valid:

   The husband, however, is in a slightly stronger position than the wife as to earning capacity…

   She has in fact then received at most about $19,600 more than the settlement offer…

   … the hearing did not provide her with a better outcome than the settlement offer would have provided.

   … she unreasonably rejected the husband's settlement offer.

4. Clearly, there are grounds for revisiting the issue of the costs of trial.

5. The only basis upon which the husband resisted an extension of time within which to appeal the costs order was that the proposed appeal should not succeed.

6. Having regard to our view of the justice in revisiting the costs of trial and to the dilemma facing an appellant of a primary order about financial matters, as to whether to appeal a consequential costs order, in anticipation of a favourable result in the primary appeal, or to await the outcome of the primary appeal, we consider that the time within which to appeal ought be extended.

7. The course of events also renders it appropriate not to require the filing of a formal notice of appeal, the grounds of appeal being apparent in submissions.

8. While remission of the issue over costs of trial to the trial judge is an option, that course was not urged upon us and avoidance of further costs is a sound reason against that action.  We consider that we can re-exercise the discretion and ought do so.

9. In that re-exercise, we, of course, take account of the new circumstances set out above arising out of the appeal.

10. However, several of his Honour’s other considerations still stand, in particular his Honour’s observations about matters of conduct in the course of the proceedings and in relation to the husband’s success in the children’s matters.

11. In light of those findings and the relative financial position of the parties brought about by the capital disparity that strongly favours the wife, it is appropriate that she remain liable for some part of the husband’s costs at trial.  We think she should pay one-half of these costs.

The costs of the appeal

1. Although the wife primarily seeks an order that the husband pay her costs of the appeal, given that she only partially succeeded in relation to the relief sought by her in the Notice of Appeal, it is not appropriate that there be an costs order made in favour of either party.  It is however appropriate that each party receive a costs certificate.

Orders:

1. The time to appeal against the costs order made by Mullane J on 23 February 2006 be extended until 1 January 2007.

2.The need to file a further notice of appeal be dispensed with.

3.The appeal be allowed and the order made by Mullane J on 23 February 2006 be varied by inserting the words “one half” after the words “the wife must pay”. 

4.The Court grants to the appellant a costs certificate pursuant to the provisions of s.9 of the Federal Proceedings (Costs) Act 1981 (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 the appellant in relation to the appeal against the orders made 22 August 2005.

5.The Court grants to the respondent a costs certificate pursuant to the provisions of s.6 of the Federal Proceedings (Costs) Act 1981 (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 the respondent in relation to the appeal against the orders made 22 August 2005.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of this Honourable Full Court

Associate: 

Date:  15 February 2007