Collingridge and Aiolfi (No. 2) - [2019] FamCAFC 143

FAMILY COURT OF AUSTRALIA

COLLINGRIDGE & AIOLFI (NO. 2)

[2019] FamCAFC 143

FAMILY LAW – APPEAL – COSTS – Application for costs – Costs determined in chambers on written submissions – Where an offer for settlement in substantially similar terms to the outcome achieved in the appeal was rejected by the respondent – Where the risk of a costs order resulting from opposing the appeal was clearly articulated to the respondent at the outset – Where other factors contained in s 117 of the Family Law Act 1975 (Cth) cannot be attributed greater weight than those raised by the appellant in favour of the application – Application granted.

Family Law Act 1975 (Cth) s 117

Family Law Rules 2004 (Cth) Sch 3

Collingridge & Aiolfi [2019] FamCAFC 88

APPELLANT:

Mr Collingridge

RESPONDENT:

Ms Aiolfi

FILE NUMBER:

ADC

3940

2017

APPEAL NUMBER:

106

2018

DATE DELIVERED:

20 August 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Ryan, Aldridge & Watts JJ

HEARING DATE:

In chambers on submissions

LOWER COURT JURISDICTION:

Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE:

9 July 2018

LOWER COURT MNC:

[2018] FCCA 1986

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Othen

SOLICITOR FOR THE APPELLANT:

Adelta Legal

COUNSEL FOR THE RESPONDENT:

Mr Livingstone

SOLICITOR FOR THE RESPONDENT:

Taylor & Scott Lawyers

Orders

The respondent pay the appellant’s costs of and incidental to the appeal in the amount of $7,500 within twenty-eight (28) days from the date of these orders.

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 Collingridge & Aiolfi (No. 2) 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 106 of 2018
File Number: ADC 3940 of 2017

Mr Collingridge

Appellant

And

Ms Aiolfi

Respondent

REASONS FOR JUDGMENT

On 28 May 2019, we allowed in part, an appeal by Mr Collingridge (“the appellant”) against an order for interim de-facto spousal maintenance dated 9 July 2018. By Order 3 made on 28 May 2019 in the appeal, the interim de-facto spousal maintenance order was varied and the amount payable was reduced from $1,000 per week to $617 per week.
It is our usual practice on appeal to take submissions in relation to costs of the appeal at the appeal hearing. However, we were informed that at least one of the parties wished to place additional evidence before the Court germane to the question of costs, but which the Court should not receive until the appeal had been determined. Thus, directions were made for written submissions as to costs, on the understanding that the costs issue would be determined without further hearing. In accordance with those directions, the appellant filed written submissions on 25 June 2019 and Ms Aiolfi (“the respondent”) filed written submissions on 9 July 2019. The appellant did not file submissions in reply to those of the respondent.
The appellant seeks his costs in the amount of $7,500. The respondent opposes the application for costs.
The issue of costs of an appeal is governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”), which provides that each party to a proceeding under the Act bear his or her own costs unless the Court is of the opinion that the circumstances justify the making of a costs order (s 117(2) of the Act). In determining what order, if any, should be made under s 117(2) of the Act, the Court must have regard to the relevant factors in s 117(2A) of the Act. For the appellant, it is submitted that the circumstances which justify an order for costs are:
a)The decision of the respondent to reject an offer that the appeal be withdrawn and dismissed and the maintenance payment be reduced to $600 per week. In the event the appeal was allowed in part, and the amount ordered was $617 per week; and
b)Related conduct of the respondent in the failure to make a reasonable effort to resolve the dispute, and this has particular force after the outline of submissions for the appellant was served in December 2018.
(Appellant’s Written Submissions filed on 25 June 2019, paragraph 8)
The offer of settlement referred to above, was made by the appellant on 22 October 2018 in the course of a series of offers and counter offers. The appellant proposed:
1. That the Appeal be withdrawn and dismissed;
2.That [the respondent’s] maintenance be reduced to $600 per week from the making of these Orders in Chambers until final Orders; and
3. That each party bear their own costs.
(Letter of Adelta Legal dated 22 October 2018 attached to the appellant’s Written Submissions filed on 25 June 2019)
By letter dated 31 October 2018, the respondent purported to reject the offer of settlement (which had already expired). Although the offer of settlement is not identical to the variation ordered in the appeal, the submission on behalf of the appellant that “[c]ompared with the costs to both parties of proceeding further (conservatively, more than $20,000), the difference of $17 per week ($884 per year) was de minimis” (Appellant’s Written Submissions, paragraph 9), should be accepted. We are satisfied that the close similarity between the outcome achieved on appeal and the offer of settlement amounts to justifying circumstances. Furthermore, the offer of settlement engages s 117(2A)(f) of the Act and weighs heavily in favour of the order sought.
Although the offer of settlement had expired prior to the date on which the appellant was required to file his summary of argument, it is accepted that upon receipt of the summary of argument on 5 December 2018, the respondent should have given serious consideration to the force of the argument made in support of Ground 3 and made a reasonable effort to resolve the dispute. This did not occur. The argument that this amounts to further justifying circumstances is made out and, pursuant to s 117(2A)(g) of the Act, this matter also weighs in favour of an order for costs.
It is the respondent’s submission that in considering what order as to costs, if any, should be made, greatest weight would be given to the financial circumstances of each of the parties, in particular, those of the respondent (s 117(2A)(a) of the Act). The parties’ financial circumstances were addressed in the appeal judgment (Collingridge & Aiolfi [2019] FamCAFC 88) and in relation to the respondent, she is a recipient of welfare benefits, modest child support and has savings in the amount of $29,000.
In relation to the appellant, the majority found:
52.The appellant disclosed an average weekly income of $825, compared to total personal expenditure in the amount of $1,238 (including $200 for legal fees). As we said earlier, these expenses do not take into account his regular international travel. Nor is it clear how, on an ongoing basis, he was able to support weekly expenses significantly greater than his income.
53.Otherwise, the appellant owns three parcels of real estate, five motor vehicles and has a 50 per cent share in a business in the UK. The value of his interest in the business was not in evidence, but on the estimates of value given by the appellant, his other property is worth in the vicinity of $1.425 million. One parcel of real estate is encumbered to the amount of $250,000 and, including that sum and other personal liabilities and loans, his total liabilities are in the vicinity of $435,000. Thus, the appellant has net assets worth in the vicinity of $1 million, most of which are unencumbered and could be realised without unreasonably compromising his standard of living.
Based on these findings, the submission advanced on behalf of the respondent that her financial circumstances are substantially inferior to those of the appellant is apt. However, it is not accepted that these matters should be given greatest weight, such that the application for costs would be dismissed.
In our view, the combined effect of an offer of settlement in closely similar terms to the outcome achieved in the appeal, combined with service of the summary of argument which articulated (Ground 3) the reason why appellate intervention was justified, warrants greater weight than the respondent’s limited and inferior financial circumstances. From when the respondent received the summary of argument, she can have been in no doubt that her opposition to the appeal was fraught with risk that she would be unsuccessful and vulnerable to an application for costs. Notwithstanding her modest circumstances, she elected to run that risk, the effect of which is that the appellant has incurred unnecessary expenses. The case for an adverse costs order against the respondent has been made out.
As to quantum, it is contended on behalf of the respondent that if an order is to be made, costs should be fixed in the sum of $990. How this amount was calculated is not explained. The amount bears no relationship to the schedule of fees and disbursements provided by the appellant or the costs rules contained in Schedule 3 of the Family Law Rules 2004 (Cth). The appellant incurred total costs of $19,647.80. This comprises disbursements of $2,556.40, counsel fees in the amount of $10,450.00 and the balance for solicitor fees. The disbursements are reasonable, and notwithstanding that the appellant was unsuccessful in relation to a number of the grounds of appeal, the prosecution of Ground 3 required that those expenses be incurred in their entirety. In relation to the fees incurred for solicitor and counsel, the claim represents in the vicinity of 60 per cent of the appellant’s actual costs. The combined effect of the appellant’s lack of success in the remaining grounds of appeal and, that the order for costs is calculated on a party/party basis, justifies the lesser amount and the amount sought. Orders will be made accordingly.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ryan, Aldridge & Watts JJ) delivered on 20 August 2019.

Associate:

Date: 20 August 2019