Cook and Langford (Costs)
[2010] FamCAFC 69
•7 April 2010
FAMILY COURT OF AUSTRALIA
| COOK & LANGFORD (COSTS) | [2010] FamCAFC 69 |
| FAMILY LAW - COSTS – Costs of appeal – Where the respondent wife sought that the appellant husband pay her costs of and incidental to the appeal – Where the appellant husband sought that each party bear their own costs – Where the husband was wholly unsuccessful in his appeal – Where it was therefore not necessary for the Court to deal with the Notice of Contention filed by the wife – Where the appeal grounds raised serious and substantial issues – Where it could not have been said that the appeal was filed entirely without any prospect of success – The matters raised in the wife’s submissions are not such as to enliven the discretion to depart from s 117(1) – Where it is appropriate that each party pay their own costs of and incidental to the appeal. |
| Family Law Act 1975 (Cth) – s 117(1), s 117(2), s 117(2A) |
| Jensen & Jensen (1982) FLC 91-263 Kelly & Kelly (No 2) (1981) FLC 91-108 Marinko & Marinko (1983) FLC 91-307 |
| APPELLANT: | Mr Cook |
| RESPONDENT: | Ms Langford |
| FILE NUMBER: | SYF | 4494 | of | 2003 |
| APPEAL NUMBER: | EA | 3 | of | 2007 |
| DATE DELIVERED: | 7 April 2010 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | Finn, Boland & Collier JJ |
| HEARING DATE: | By way of written submissions filed 11 July 2008 and 14 July 2008 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 December 2006 |
| LOWER COURT MNC: | [2006] FamCA 1366 |
REPRESENTATION
| SOLICITOR FOR THE APPELLANT: | Adrian Twigg & Co |
| COUNSEL FOR THE RESPONDENT: | Mr Lethbridge SC with Mr Johnson |
| SOLICITOR FOR THE RESPONDENT: | Swaab Attorneys |
Orders
That each party pay their own costs of and incidental to the appeal.
IT IS NOTED that publication of this judgment under the pseudonym Cook & Langford (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 3 of 2007
File Number: SYF 4494 of 2003
| Mr Cole |
Appellant
And
| Ms Langford |
Respondent
REASONS FOR JUDGMENT
Introduction
On 20 June 2008 we delivered our reasons for judgment in respect of the husband’s appeal against orders made by Moore J on 11 December 2006. Her Honour’s orders were made in property proceedings between the husband and the wife.
In our orders of 20 June 2008 in addition to dismissing the husband’s appeal, we also dismissed a Notice of Contention filed by the wife. We made provision for the parties to file written submission as to costs. The wife filed her submissions on 11 July 2008 and the husband filed his submissions on 14 July 2008.
Shortly after receipt of those submissions we received a copy of an application filed in the High Court by the husband in which he sought special leave to appeal our orders.
Accordingly, we delayed dealing with the parties’ costs submissions pending the outcome of the application for special leave.
We received no further communication from the parties’ legal representatives about the application for special leave. We arranged administratively for enquiries to be made at the High Court Registry, and were recently informed that the husband’s application for special leave lapsed on 19 January 2009.
In these circumstances we now propose to deal with the issue of costs arising from the husband’s appeal.
In paragraph 1.1 of her submissions, the wife set out the orders sought by her as follows:
1.1.1That the Appellant Husband pay the Respondent Wife’s costs of and incidental to the appeal in the amount as agreed or assessed.
1.1.2That to the extent necessary, the Court certify for both senior and junior counsel.
For his part, the husband sought that each party should be responsible for their own costs.
Relevant background
In the introduction to our reasons (paragraph 1) we noted:
[Mr Cook] (“the husband”) and [Ms Langford] (“the wife”) cohabited for approximately five and a half years. The dispute about a just and equitable division of their net property and financial resources totalling $66,574,187.00 was subject of proceedings under s 79 of the Family Law Act 1975 (Cth) (“the Act”), heard over eight days before Moore J. On 11 December 2006 her Honour made orders that the wife pay to the husband $2 million and release him from any debt owing to any company controlled by the wife. It is from those orders that the husband appeals.
Thus it may be seen that the husband received an entitlement of approximately $2,472,000.00 and the balance of the parties’ assets in excess of $64,000,000.00 were retained by the wife.
The husband’s grounds of appeal were directed to an asserted lack of reasons in respect of the trial Judge’s contribution assessment and an assertion that the adjustment made in his favour under s 75(2) was inadequate, given his restricted earning capacity due to a back injury. It was further asserted that the orders made in the husband’s favour were not just and equitable.
As we dismissed the husband’s appeal it was unnecessary for us to deal with the wife’s Notice of Contention. In that notice it was asserted that the trial Judge had erred in including the value of the wife’s interest in a discretionary trust as an asset at $28,628,326.00 and treating the sum of $5,000,000.00 held by the trust as a financial resource. The wife asserted the whole of the assets of this trust should have been treated as a financial resource.
The wife further contended that the trial Judge had erred in not finding the husband had committed waste in reporting to relevant State environmental protection authorities asserted breaches by her in the disposal of toxic waste, including asbestos, on rural properties under her control.
At paragraph 74 of our reasons, we noted the case before the trial Judge was a most unusual one. Later in our reasons we found no error by the trial Judge in fixing the husband’s contribution based entitlement at $1,000,000.00 rather than as a percentage of the assets, as had been asserted on his behalf at trial.
Relevant provisions
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) governs costs. The relevant provisions of the section so far as this appeal is concerned are found in s 117(1), (2) and (2A) as follows:
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, 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) and (5) 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 wife relied on four matters to support the order for costs sought by her:
·that the section did not require a clear case or exceptional circumstances to justify an order for costs;
·that it was sufficient she could satisfy the Court there were circumstances justifying the order;
·that the husband had been wholly unsuccessful; and
·both parties appeared before the Full Court with the benefit of senior and junior counsel.
In dealing with the criteria in s 117(2A)(a), it was not disputed that the wife’s wealth substantially exceeded that of the husband. Having referred to the short term of the parties’ relationship, senior counsel for the wife’s written submissions recorded:
… It is submitted therefore that financial disparity in the circumstances of this case is not a factor which weighs in the [appellant husband’s] favour but rather given that the outcome of the trial provided to him several million dollars, a reason why costs should be awarded in favour of the successful [respondent wife]. (wife’s submissions, paragraph 3.1, pp 2-3)
In his submissions, the husband’s solicitor referred to the wife’s extreme wealth and the disparity in the parties’ earning capacity. He submitted these matters were factors which favoured the husband, whether on an application by him for costs or defending an application by the wife for costs of the appeal. In support of his submissions he relied on the decision of the Full Court in Kelly & Kelly (No 2) (1981) FLC 91-108 at 76,810, where the Full Court said:
In the present case, there is a great disparity in the financial circumstances of the parties. The husband’s assets and financial resources which he controls by far outweigh those of the wife. She is not receiving legal aid. These circumstances might well have justified an order for costs in the wife’s favour whatever the conduct of the husband in the proceedings.
He also referred to the decision of Nygh J in Jensen & Jensen (1982) FLC 91-263 and Marinko & Marinko (1983) FLC 91-307.
The wife also relied on s 117(2A)(c). The wife’s submissions on this issue were directed to conduct in relation to the trial at first instance and not the appeal. In his submissions the solicitor for the husband noted that no application was made to the Full Court for costs arising from the original trial, nor was there any application for costs before the trial Judge, Moore J. He submitted there was nothing in either party’s conduct in respect of the appeal which would be a relevant factor on costs. We agree with the submissions made by the husband’s solicitor on this subsection.
The balance of the wife’s submissions were directed to the assertion that the husband had been wholly unsuccessful in relation to the appeal and that the appeal was one which had little merit. In his submissions in response, the husband’s solicitor noted that we had found the case to be a most unusual one. He submitted “it was a case almost without equivalent, certainly amongst reported cases” (husband’s submissions, paragraph e(iii), p 4).
The husband’s solicitor also referred to the wife’s Notice of Contention and submitted that the Full Court could, if it had been necessary to do so, have decided issues raised in the Notice of Contention in the same way as did the trial Judge. On the basis of his written submissions, as we have already noted, the husband’s solicitor submitted we should make no order for costs.
Conclusions
The case before the trial Judge was, as we noted, a most unusual one. Although the appeal was an appeal against a discretionary judgment we are satisfied that the grounds raised serious and substantial issues. The wife challenged aspects of the trial Judge’s reasoning in her Notice of Contention. It could not have been said that the appeal when filed was entirely without any prospect of success.
On balance, having considered the circumstances which justify a departure from s 117(1), we are not satisfied the matters identified in the wife’s submissions are such as to enliven the discretion to depart from s 117(1). Accordingly, we propose that each party should pay their own costs of and incidental to the appeal.
I certify that the preceding twenty four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 7 April 2010
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