Conrad & Conrad

[2020] FamCAFC 255

FAMILY COURT OF AUSTRALIA

CONRAD AND ANOR & CONRAD [2020] FamCAFC 255

FAMILY LAW – APPEAL – COSTS – Offers of settlement – Scope of s 117(2A)(f) of the Family Law Act 1975 (Cth) – Not limited to offers “plainly more favourable” than the outcome – Offers of settlement one factor relevant to costs – Third party joined – Respondent abandoned action against third party – Where third party sought relief against the respondent – Costs application by third party dismissed – No error established – Appeal dismissed – Costs order made against the appellants in favour of the respondent.

Family Law Act 1975 (Cth) s 117

Family Law Rules 2004 (Cth) Sch 3

Anison & Anison (2019) FLC 93-908; [2019] FamCAFC 108
Browne v Green (2002) FLC 93-115; [2002] FamCA 791
Farmer & Panshin (2014) FLC 93-587; [2014] FamCAFC 78
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
Harris and Harris (1991) FLC 92-254; [1991] FamCA 124
House v The King (1936) 55 CLR 499; [1936] HCA 40
Pennisi v Pennisi (1997) FLC 92-774; [1997] FamCA 39
Prantage & Prantage (2013) FLC 93-544; [2013] FamCAFC 105
Robinson and Higginbotham (1991) FLC 92-209; [1991] FamCAFC 5
Steele & Stanley [2009] FamCAFC 39
Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681

FIRST APPELLANT: Mr Conrad

SECOND APPELLANT: Ms Stocks

RESPONDENT: Ms Conrad

FILE NUMBER: BRC 5264 of 2013

APPEAL NUMBER: NOA 113 of 2019

DATE DELIVERED: 15 October 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Brisbane (via video link)

JUDGMENT OF: Strickland, Ryan & Watts JJ

HEARING DATE: 28 July 2020

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 19 November 2019

LOWER COURT MNC: [2019] FamCA 849

REPRESENTATION

COUNSEL FOR THE APPELLANTS: Mr Wilson QC (direct brief)

COUNSEL FOR THE RESPONDENT: Mr Williams QC

SOLICITOR FOR THE RESPONDENT: Hopgood Ganim Lawyers

Orders

1. The appeal be dismissed.

2. The first appellant and the second appellant are jointly and severally liable to pay the wife’s costs in the appeal in the amount of $31,051.05, which amount is to be paid within twenty-eight (28) days.

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 Conrad and Anor & Conrad 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 BRISBANE

Appeal Number: NOA 113 of 2019
File Number: BRC 5264 of 2013

Mr Conrad

First Appellant

And

Ms Stocks

Second Appellant

And

Ms Conrad

Respondent

REASONS FOR JUDGMENT

Introduction

1. By Notice of Appeal filed on 11 December 2019, Mr Conrad (“the husband”) and Ms Stocks (“the husband’s sister”) (collectively “the appellants”) appeal from the refusal of their applications for costs against Ms Conrad (“the wife”).  The husband also appeals from an order for costs made against him in favour of the wife.

2. After a marriage of almost 25 years, the husband and wife separated.  In 2013, the wife commenced proceedings under the Family Law Act 1975 (Cth) (“the Act”) for property settlement and spousal maintenance. Because the husband’s and his sister’s financial circumstances were closely intermingled, when the husband and the wife were unable to agree on the settlement of their property, the wife applied to join the husband’s sister to the proceedings. There was a serious dispute between the wife on the one hand and the husband and the husband’s sister on the other hand, about the husband’s control of three discretionary trusts and whether the husband held a 50 per cent beneficial interest in residential units in Region E or whether they were beneficially owned by the husband’s sister. Furthermore, it was contentious whether the spouse parties were indebted to N Pty Ltd (a company owned and operated by the husband’s sister) and if so, the treatment of that liability.

3. The husband’s sister consented to the joinder application. Ultimately, the wife withdrew her claim that the property of the trusts could be subject to adjustment between the spouse parties but maintained that the trusts were financial resources of the husband [36]. Notwithstanding this turn of events, the husband’s sister did not seek to be removed as a party and on 17 January 2019, she filed an Amended Response seeking orders, described by the primary judge in his reasons for judgment of 1 March 2019 as follows:

   236.… [T]hat the wife pay N Pty Ltd $2,193,460 and an order that the husband pay her that much as well. She also sought an order that the Suburb F property be transferred to N Pty Ltd (or to her) in partial discharge of the liability for that amount. The husband sought orders to the same effect in respect of the transfer of the Suburb F property and orders that the wife pay the half of $2,193,460 less the value of the Suburb F property ($740,000) to N Pty Ltd.

4. Following a five day hearing, the primary judge determined that the husband’s beneficial interest in the residential units was at home with his legal interest and that no account was to be taken of the debt that the husband’s sister (and the husband) claimed the spouse parties owed N Pty Ltd.  Two of the three discretionary trusts were found to be financial resources of the husband.  The husband’s sister’s application against the wife failed and the husband was ordered to indemnify the wife against all liabilities for debts to the husband’s sister (including N Pty Ltd) and that he said either of them owed, and upon the wife transferring to him her interest in the family home, to pay her $780,000.

5. The primary judge then received competing applications for costs. For the wife, costs were sought in accordance with Sch 3 of the Family Law Rules 2004 (Cth) (“the Rules”). The wife’s application was based on her offer to settle the proceedings made on 20 June 2018, her successful defence of the husband’s application filed on 20 February 2017 to discharge an order for interim spousal maintenance, and his application filed on 15 November 2017 to review the outcome of that decision. The husband opposed the wife’s application for costs and sought an order that the wife pay his indemnity costs from 30 October 2013. The significance of 30 October 2013 is that on this day, the spouse parties attended mediation where they reached an in principle agreement for a financial settlement [13].

6. The husband’s sister sought indemnity costs against the wife from when she was joined to the proceedings.

7. The husband was ordered to pay the wife’s costs of and incidental to his unsuccessful application to discharge the interim spousal maintenance order, and the application to review that decision. The husband was also ordered to pay the wife’s costs of and incidental to the property proceedings from 9 July 2018. The significance of this date is that it is approximately three weeks from when the wife made the offer to settle referred to above. It assumes some importance in the appeal that the offer to settle was addressed to the husband’s sister and was not directly addressed to the husband. However, the primary judge was satisfied that the offer was conveyed to the husband who had ample time to take advice in relation to it [69].

8. If there was any doubt that the husband and the husband’s sister approached the litigation as a joint enterprise, this is dispelled by their having been represented by the same counsel at trial, by the same firm of solicitors in the costs application, and joining in a single Notice of Appeal. On a proper application of the Rules, there should have been a Notice of Appeal filed by each of them. However, the wife took no issue with this procedural defect and the husband’s sister’s appeal was permitted to proceed notwithstanding.

The grounds of appeal

1. Before considering the grounds in detail, it needs to be understood that this is an appeal against an exercise of discretion to be determined in accordance with the principles set out in House v The King (1936) 55 CLR 499. A different view by an appellate court only on matters of weight by no means justifies a reversal of a decision of the primary judge (Gronow v Gronow (1979) 144 CLR 513 at 519).

2. In Harris and Harris (1991) FLC 92-254 this Court said at 78,711:

   … Orders for costs are peculiarly a matter which are within the discretion of the trial judge and it is only in the rarest of cases that the Full Court should interfere with a costs order.

3. Although this may state the proposition “at its highest” (Browne v Green (2002) FLC 93-115 at 89,162), this Court is usually most reluctant to interfere with a decision of a primary judge in relation to costs (Robinson and Higginbotham (1991) FLC 92-209). However, decisions such as Prantage & Prantage (2013) FLC 93-544 and Steele & Stanley [2009] FamCAFC 39 show there are cases where the result is plainly unjust or the discretion was exercised on the wrong principles, where the Full Court has intervened.

4. The husband presents two grounds of appeal (Ground 3 was abandoned) which, stated broadly, assert that the primary judge erred:

   ·in determining that the outcome of the settlement reached at mediation on 30 October 2013 and later offers were not more favourable to the wife than the orders made at trial (Ground 1); and

   ·in finding that the offer addressed to the husband’s sister would have been conveyed to the husband, and that the offer was more favourable to the husband than the orders made at trial (Ground 4).

5. The husband’s sister contends that the primary judge erred in dismissing her application for costs when, as a third party, she was joined to the proceedings and the wife abandoned her claim for relief against her (Ground 2).

Offers of settlement – Ground 1

1. By this ground, the husband challenges his Honour’s analysis of various offers of settlement and the costs involved in securing a supposedly more favourable outcome.

2. The spouse parties attended mediation on 30 October 2013 where they agreed in principle concerning property settlement and spouse maintenance [13]. The wife signed terms of settlement at the mediation but because the husband wished to obtain legal advice before signing, he did not. The terms provided that:

   ·on or before 31 January 2014 the husband transfer his interest in the family home at Suburb F to the wife;

   ·the husband would “take over” the mortgage secured against Suburb F and indemnify the wife in relation thereto;

   ·within seven days from the date of the orders, the husband pay the wife $20,000;

   ·the husband pay the wife $830 per week for two years ($86,320); and

   ·the husband indemnify the wife in relation to various loans, including any due to the husband’s sister and N Pty Ltd.

3. A few days later, the husband returned the terms of settlement signed by the wife at mediation with certain amendments, namely:

   ·    extending the time by which the husband would transfer his interest in the home;

   ·    the husband would pay the mortgage on Suburb F and its outgoings until settlement;

   ·    deleted a few items of personal property in the list to be retained by the wife; and

   ·    the $20,000 to be categorised as lump sum spousal maintenance.

4. The primary judge was not able to determine whether a clause which required the parties to enter into consent property orders and a Binding Financial Agreement as to spousal maintenance was agreed at mediation or was an amendment made by the husband.

5. When the wife did not respond to the amended terms, on 5 November 2013 the husband’s solicitors informed the wife’s solicitors that he would settle the matter in accordance with the terms reached at mediation and a signed copy of the original terms was provided to the wife’s solicitors.

6. The wife resiled from the terms signed at mediation and on 13 November 2013, she made an unrealistic counter offer.  The husband made another offer on 24 February 2014, which in combining spouse maintenance and property settlement, the primary judge said amounted to “a total of $780,000” to the wife [19] and the husband retaining his interests in the trusts.

7. In support of the husband’s application for costs, counsel who appeared at the costs hearing analysed the terms executed by the wife at mediation compared to the orders made at trial.  The comparison was tabulated as set out below:

   38.…

Component	Mediation Agreement	Judgment
Property Settlement	$780,000	$780,000
Spouse maintenance	$20,000 + $830/week for 2 years = $106,320	$62,565
Wife retain:
·    Monies in bank accounts	$73,977	$200
·    Horse	$1,500	$1,500
·    Horse Float	$8,000	$8,000
·    Car	$4,500	$4,500
·    Funds transferred to her son	$24,200	-
·    Withdrawal from RR account	$10,000	-
Total	$1,008,497	$856,765

(Appellants’ Case Outline filed 11 April 2019, paragraph 38) (Footnotes omitted)

1. In the trial reasons, the primary judge acknowledged the wife’s withdrawal from the RR account, which occurred prior to separation, and rejected the husband’s contention that the amount be notionally added back as the wife’s property. Nor was the $24,200 treated as property. Otherwise, it is common ground in the appeal that the figure attributed to the wife’s bank accounts should be $36,977. It appears that everyone missed this mistake but even so, the primary judge noted that the orders gave the wife $780,000 in cash rather than the Suburb F property which had an agreed value at trial of $740,000, some five years after mediation, and in relation to which the parties then had different opinions about what it was worth. In addition, the effect of the orders was that the wife received spousal maintenance worth $194,750 [46]. Thus, the husband’s contention that the agreement at mediation was more favourable to the wife than the outcome she received was rejected [47].

2. Before us, counsel for the appellants said the offer should be evaluated without regard to spousal maintenance.  With the correct figure attributed to the wife’s bank accounts, this meant the mediated agreement gave her $790,977.  As this includes the failed add-back figures, $34,200 must be deducted from this amount.  Nonetheless, the wife’s claim for spousal maintenance and the extent of the husband’s obligation to pay it were important elements of the financial dispute and we do not agree that spousal maintenance should have been excluded from analysis of the terms and orders.  The husband’s amendments to the terms signed at the mediation establish that spousal maintenance was pivotal to the resolution.  But more importantly, the primary judge could not have erred by failing to evaluate the comparative outcomes by a method he was not asked to adopt.  This is sufficient to reject the husband’s contention that the primary judge miscalculated the terms reached at mediation and thus failed to appreciate that they were more favourable to the wife than the orders.  Even so, when calculated by reference to the facts as found, they were not.

3. The husband contends that the primary judge wrongly applied s 117(2A)(f) of the Act and, in effect, restricted the application of the provision to offers of settlement “plainly more favourable to the party than the ultimate Court ordered outcome” (husband’s Summary of Argument filed 23 April 2020, paragraph 15). Furthermore, in evaluating the provision, his Honour should have taken into account the costs incurred to obtain the orders.

4. In relation to these issues, the primary judge said:

   47.With respect to counsel for the husband, I reject the submission that the outcome for the wife had she stuck to the terms of the agreement reached at the mediation was a “more favourable” outcome than that which she obtained by rejecting the deal and taking the matter to trial. Clearly, taking into account the legal costs she has spent along the way, a retrospective cost-benefit analysis will inform the wife and any observer that she would have been better off financially right now if she had stuck to that first agreement having regard to all of her legal costs, even though she would not have received as much from the husband as she did through the Court process. I bear that in mind, but I do not consider that is the principal purpose of including in s 117(2A)(f) reference to written settlement offers and their terms. Critically, it would have to be clear, in my judgment, for the written terms of an offer to be plainly more favourable to the party than the ultimate Court ordered outcome without consideration to money spent on costs in the meantime, for it to be a determinative factor in the consideration of whether a costs order is justified. Otherwise, the Court would likely be called upon to undertake the cost/benefit analysis in every case, even those where a written offer did not provide a better outcome than the ordered outcome but, nevertheless, in which more than the difference between them was spent on legal costs in order to achieve the better outcome.

   48.In any event, even if the terms of a written offer are plainly better for a party than the terms of the Orders, consideration of that factor is still but part of the discretionary exercise of determining if a costs order is justified and nothing more. It is not determinative in itself. I do not consider that the terms of that 2013 agreement reached at the mediation provided a plainly more favourable outcome for the wife than that which she obtained in the long run by taking the matter to Court, such that supports a costs order against her being justified in all the circumstances of this case. Neither do I consider the terms of the offer put in writing by the husband to the wife soon after that mediation would have provided an outcome more favourable for the wife than that which she obtained in the long run, such that makes a costs order against her now justifiable.

5. Counsel for the husband contends that the gravamen of these passages is that s 117(2A)(f) would only apply to an offer “plainly more favourable” than the outcome. We agree that such an approach would be erroneous. The approach to s 117(2A)(f) is as stated in Pennisi v Pennisi (1997) FLC 92-774 (“Pennisi”) at 84,547, where the Full Court said:

   The requirement to take account of certain types of offers is mandatory, providing of course the fact of those offers are in evidence. The relevant portion of s. 117(2A) is as follows:

   “In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   …

   (f) whether either party to the proceedings has, in accordance with section 117C or otherwise, made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer”

   (emphasis added).

   The plain words of the paragraph do not limit a Court’s attention to offers which are greater than the amount awarded. Nor does the paragraph state what consequences flow from whether the offer is greater or lesser than the amount awarded, or how much that is the case. Words of limitation should not be imported into the provision and nor should it be read as though offers in proceedings under the Act carry the same consequences as payments into Court in common law matters.

6. On a fair reading of [47] and [48] of the costs reasons, the approach adopted by the primary judge accords with Pennisi. The primary judge did not approach the application on the basis that only offers of settlement, which give a plainly more favourable outcome, could justify an order for costs. His Honour said that, in his view, an offer of settlement would need to have those characteristics for it to be determinative of whether a costs order is justified [47]. Properly construed, the primary judge correctly explained that offers of settlement are but one of a number of factors relevant to the exercise of discretion in relation to a question about costs.

1. There can be no doubt that in addition to the offers of settlement, the primary judge took into account the context of the case (see Farmer & Panshin (2014) FLC 93-587 at 79,220) and the following matters in particular:

   ·damning findings about evidence given by the husband and the husband’s sister [41] and [57];

   ·many of the disputed issues were decided in the wife’s favour [42];

   ·the husband is in a far superior financial position to the wife [53];

   ·the husband and the wife were both litigation “miscreants”, the husband failed to pay spousal maintenance as ordered and was unsuccessful in related applications [56]; and

   ·had the wife not incurred the expense of legal representation she may have ended up with nothing [29] and [59].

2. These were all relevant matters and further demonstrate that the primary judge did not approach the provision on the basis that an order for costs could be made only if an offer for settlement was “plainly more favourable” than the outcome.

3. In challenging the approach taken to s 117(2A)(f), the husband contends that in assessing the offers of settlement, the primary judge should have taken into account the costs incurred after the offer was made. In other words, there should have been a costs benefits analysis, which showed that, when the costs of obtaining the orders were factored in, the wife did not fare better than the various offers and the mediation terms. Anison & Anison (2019) FLC 93-908 (“Anison”) at [44] and [45] is relied on in support of the proposition. However, no offers of settlement were made in Anison and we agree with the submission by counsel for the wife that Anison says nothing about the operation of s 117(2A)(f). Rather, Anison is concerned with s 117(2A)(e) and the meaning of the words “wholly unsuccessful”, and the catch-all in s 117(2A)(g).

4. We agree with the submission by counsel for the wife that s 117(2A)(f) speaks to a comparison of the offer and the outcome achieved (Pennisi at 84,547). As to the costs of achieving the outcome, we also agree with the husband that this is a relevant consideration (s 117(2A)(g)). So did the primary judge, who agreed with the husband that the wife would have been “better off financially right now” had she adhered to the mediated terms or accepted his offer [47]. However, as we have already explained, greater weight was given to factors that tipped the balance in favour of the order made.

5. The challenges raised by Ground 1 have not been established.

The offer served on the husband’s sister – Ground 4

1. By an email dated 20 June 2018, the wife’s solicitors provided an offer of settlement to the husband’s sister.  The husband, as is his sister, is a legal practitioner with many years of post‑admission experience.  The husband acted on his own behalf and his sister retained a firm of solicitors to represent her.  By June 2018, it was understood that the husband’s sister would advance the funds which the husband would pay to the wife as property settlement.  Hence, this offer of settlement was communicated to the husband’s sister’s lawyer.  By this ground, the husband challenges the finding that the offer was communicated to him and thus it could not found an order for costs against him.

2. It is noteworthy that the emailed letter traversed more than the offer of settlement and, proceeds on the basis that the husband’s sister’s solicitors would arrange for the husband to sign a letter of instruction to a single expert.  It is abundantly clear that the husband’s sister’s solicitors were in close contact with the husband and, although they did not take his instructions, it was understood by those acting in the proceedings, that the solicitors would transmit information about the proceedings to him. 

3. In any event, the wife’s solicitors conveyed the offer to settle on the following terms:

   1. That our client transfer her interest in the WW St property to your client;

   2. That we remove our mortgage over the WW St property;

   3. That contemporaneous with the transfer in paragraph one above, and within sixty days, [the husband] pay to our client the sum of $700,000;

   4. That the parties otherwise retain any assets in their respective possession

   5. That [the husband] is solely liable for any debt he, or any entity he has or had an interest in, owes to your client or any other party or entity.

   6. That all existing orders are discharged.

   7. That our client will not pursue any arrears in spouse maintenance owed by [the husband].

   8. That each party bear his or her own costs.

   (Annexure ‘CGS‑1’ to the affidavit of the wife’s solicitor filed 14 March 2019) (As per the original)

4. Items 3, 4, 5, 6, 7 and 8 specifically relate to the husband or affect him.  The point being, that without the husband’s agreement there could be no settlement.

5. By a letter dated 29 June 2018, the husband’s sister rejected the wife’s offer of settlement.  Relevantly, the husband’s sister referenced the agreement reached between the spouse parties at mediation in 2013 and noted the costs incurred “by all parties” since mediation.  The former specifically relates to the husband, and the latter to the husband as well as the husband’s sister.  However, the husband’s sister indicated she was willing “to facilitate a payment to [the wife] in the sum of $440,000, on the terms otherwise set out in your email” (Annexure ‘S11’ to the husband’s sister’s affidavit sworn 28 March 2019).

6. At [69] of the costs reasons, the primary judge said:

   For the wife, a written offer to settle the proceedings was made on 20 June 2018, after the adjournment of the trial in May last year. Its terms were concise and clear. She would transfer her interest in the former family home to the husband’s sister in return for payment of $700,000 and indemnity against any of the relevant debts. In addition, she would discharge all arrears of spousal maintenance. I am satisfied that its terms would have been conveyed to the husband though the letter was sent to the husband’s sister’s solicitors. The husband did not give evidence that he was not made aware of it in a timely fashion.

7. The husband contends that the inference that the terms of the offer would have been conveyed to him was not available. As the primary judge suggests in the final sentence of [69], the husband and the husband’s sister each filed affidavits in relation to the costs applications. Their affidavits were filed at a time when the husband knew about this offer and yet both he and the husband’s sister were silent about when and how the offer was communicated to him. We have already commented on the primary judge’s damning findings about the veracity of the husband and the husband’s sister’s evidence, which findings are unchallenged in the appeal. This included the creation of a document to address a perceived weakness in their case against the wife [41]. The primary judge referred to their unsatisfactory conduct in the proceedings on a number of occasions and there is little doubt this influenced his Honour’s consideration of their evidence in the costs proceedings. Furthermore, the primary judge could not have failed to appreciate that the husband and the husband’s sister engaged one counsel to appear on their behalf at trial and used the same solicitor in the costs proceedings. These all suggested a common interest, and that they approached the litigation as a joint enterprise. We agree with counsel for the wife that the inference drawn at [69] as to notice was available.

8. Turning next to the analysis of this offer, the primary judge said:

   70.The Orders I made in March this year provided for the husband to pay the wife the sum of $780,000, indemnify her against the relevant debts and also to pay her arrears of spousal maintenance that was about $63,000 at that time. In return, certain things would happen, including the delivery of a transfer of the wife’s interest in the former family home, though the orders did not specify to whom it was to be transferred, leaving open to whom that might be transferred. Plainly, in my judgment, the terms of the written offer to settle made by the wife in June last year were more favourable to the husband than the terms of the Orders I ultimately made.

   71.As I have already said, I am of the view that this is the significance of the inclusion of reference to written offers of settlement and their terms in s 117(2A). By my Orders, the husband was plainly $143,000 worse off than he would have been if he had accepted the wife’s offer, not to mention the legal costs he and his sister would have saved had they accepted it, if one applies the same cost/benefit analysis argument I have discussed above, though I am giving no weight to that latter fact in this discretionary exercise. I am quite satisfied the offer of settlement was plainly $143,000 more favourable for the husband than my final Orders were.

9. The husband challenges the finding that he was $143,000 worse off than he would have been if he accepted the wife’s offer.  According to the husband, the primary judge overlooked the effect of the offer that orders for costs made against the wife on 21 November 2013 and 31 May 2018 would be discharged.  The former is $8,205 and it is submitted that the latter ranges from about $100,000 to $140,000.  The first amount is not in dispute whereas it is submitted on behalf of the wife, that the second order could not exceed $85,110, being the total sum incurred, and is likely to be considerably less.  We accept that the primary judge did not take into account the benefit to the wife of items 6 and 8 and thus, the costs orders against her being discharged.  However, even with these amounts taken into account, his Honour’s ultimate finding that the husband would have been better off had he accepted the 20 June 2018 offer is correct.

10. This ground has not been established.

The husband’s sister’s costs – Ground 2

1. The husband’s sister sought costs against the wife on the basis that:

   ·she was not a party to the marriage;

   ·she was joined to the proceedings by the wife;

   ·no orders were made against her; and

   ·notwithstanding that the wife abandoned her case that the husband’s interest in the trust was property, the husband’s sister was not released as a party.

2. By reference to Yunghanns v Yunghanns (2000) FLC 93-029 (“Yunghanns”) it is contended that as a matter of principle where non-parties to the marriage are joined or included in proceedings, costs usually follow the event.  We do not accept that Yunghanns makes this point and it is better understood as establishing that where the family law proceedings are more akin to commercial proceedings, on an application for costs, pursuant to s 117(2A)(g) of the Act, the Court may take into account that in such proceedings in other jurisdictions, costs ordinarily follow the event. However, it is accepted that where a non-party to a marriage is joined to proceedings and the action against them is wholly unsuccessful, in the ordinary course this will amount to circumstances which justifies an order for costs in favour of the non-party. Whether or not an order for costs is made will depend on the myriad of factors to which s 117(2A) and the related provisions are addressed.

3. The arguments advanced for the husband’s sister were rejected by the primary judge who, at [51], [61]–[65] of the costs reasons explained why the husband’s sister was properly made a party to the proceedings.  Furthermore, the primary judge placed significant weight on the fact that the husband’s sister herself unsuccessfully sought orders against the wife in relation to the family home and something in excess of $2,000,000 in satisfaction of a debt to N Pty Ltd.

4. In deciding against the husband’s sister, the primary judge said:

   68.Once again, I also point to my rejection of the honesty of the husband’s sister’s evidence on critical facts pertaining to the disputes about the trusts, the monies owing and the beneficial ownership of the Suburb C property as another very significant factor in my rejection of her application for costs against the wife.

5. It has not been demonstrated that in relation to the husband’s sister, the primary judge failed to take into account relevant considerations, took into account irrelevant considerations or acted on a wrong principle.  In our view, there is nothing irregular about the manner in which his Honour exercised the discretion reposed in him in relation to this issue.

6. This ground has not been made out.

Conclusion and Costs

1. The husband and the husband’s sister have not established appealable error.  In these circumstances, the wife seeks her costs in the amount of $31,051.05.  The husband and the husband’s sister accept that in this appeal, costs should follow the event and do not challenge the quantum sought.  We agree and an order will be made holding the husband and the husband’s sister jointly and severally liable in the amount sought.

I certify that the preceding forty‑eight (48) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ryan & Watts JJ) delivered on 15 October 2020.

Associate:

Date:  15 October 2020