Diglen and Keartley (No 2)
[2020] FamCAFC 181
•28 July 2020
FAMILY COURT OF AUSTRALIA
| DIGLEN & KEARTLEY (NO. 2) | [2020] FamCAFC 181 |
| FAMILY LAW – APPLICATION IN AN APPEAL – COSTS – Where the respondent seeks her costs calculated on an indemnity basis – Where orders were made for the filing of written submissions in relation to that application but the applicant failed to comply with the orders and no written submissions were filed by or on his behalf – Where there is no basis to find that the respective financial circumstances of the parties prevent an order for costs being made – Where the respondent has incurred significant legal costs as a result of the failure of the applicant to file appeal books on time, his appeal being deemed abandoned as a result and him then seeking reinstatement of the appeal which was wholly unsuccessful given the appeal he sought to pursue was found to be without merit – Where there are circumstances justifying an order for costs – Where those circumstances are exceptional and justify awarding costs on an indemnity basis in lieu of the usual party/party basis – Costs ordered in the amount as sought by the respondent. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) r 19.08(3) |
| Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Kohan and Kohan (1993) FLC 92-340 Limousin & Limousin(Costs) (2007) 38 Fam LR 478 Munday v Bowman (1997) FLC 92-784 Yunghanns & Yunghanns (2000) FLC 93-029 |
| APPLICANT: | Mr Diglen |
| RESPONDENT: | Ms Keartley |
| FILE NUMBER: | PTW | 2140 | of | 2016 |
| APPEAL NUMBER: | WEA | 38 | of | 2019 |
| DATE DELIVERED: | 28 July 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE | Written submissions |
| LOWER COURT JURISDICTION: | Magistrates Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 27 August 2019 |
| LOWER COURT MNC: | NA – Transcript only |
REPRESENTATION
| THE APPLICANT: | In Person |
| COUNSEL FOR THE RESPONDENT: | Mr Carr |
| SOLICITORS FOR THE RESPONDENT: | Carr & Co |
Orders
The applicant husband pay the costs of the respondent wife of and incidental to the appeal and the Application in an Appeal on an indemnity basis and fixed in the sum of $18,998.
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 Diglen & Keartley (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).
| APPELLATE DIVISION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: WEA 38 of 2019
File Number: PTW 2140 of 2016
| Mr Diglen |
Applicant
And
| Ms Keartley |
Respondent
REASONS FOR JUDGMENT
Introduction
On 24 September 2019, Mr Diglen (“the applicant”) filed a Notice of Appeal against orders made by a Magistrate of the Magistrates Court of Western Australia on 27 August 2019.
On 13 December 2019, the applicant filed an Amended Notice of Appeal.
On 28 January 2020, the appeal was deemed abandoned as a result of the applicant’s failure to file his appeal books in accordance with orders made on 6 January 2020.
On 6 February 2020, the applicant filed an Application in an Appeal seeking reinstatement of the abandoned appeal.
On 2 April 2020, this Court dismissed that Application in an Appeal, and consequent upon that dismissal, Ms Keartley (“the respondent”) applied for an order for costs against the applicant calculated on an indemnity basis.
Orders were then made for the filing of written submissions in relation to that application. The respondent complied with those orders and filed written submissions on 29 April 2020, and supplementary written submissions on 11 May 2020, but the applicant has failed to comply with those orders, and no written submissions have been filed by or on his behalf.
The amount of costs sought by the respondent calculated on an indemnity basis is $18,998, but if costs are only awarded on a party/party basis, the amount sought is $14,544.31.
Discussion
The first issue to be addressed is whether an order for costs should be made at all.
The question of costs is governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”), which relevantly provides as follows:
(1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 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), (4A), 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.
As can be seen, the primary position is that each party is to bear their own costs, (s 117(1)), but if there are circumstances that justify it, an order for costs can be made (s 117(2)). In order to determine that, the factors in s 117(2A) need to be addressed. Accordingly, turning to those factors.
(a)The financial circumstances of the parties
The respondent is in full-time employment in a private firm and earns $120,000 per annum.
The applicant’s financial circumstances are unclear, and in particular as to what work he is doing and what his income is. He is able to work in a professional field, but he described himself as a “consultant” in his affidavit filed on 6 February 2020. Further, in paragraph 26 of his written submissions filed on 29 July 2019, in appeal no. WEA 47 of 2018, he said he is in “negotiations that would lead to [him] being appointed CEO of a small [overseas] company in the near future”.
As for the property that each party has, there are ongoing property settlement proceedings in the Family Court of Western Australia, and all that this Court has been told is that apart from each party being entitled to [overseas] pensions, there is [an overseas] property, which, following renovations, has been on the market for sale. In his affidavit of 6 February 2020, the applicant deposed to the property having an equity of approximately $AUD1.25 million (paragraph 17).
In these circumstances, there is no basis to find that the respective financial circumstances of the parties would prevent an order for costs being made.
(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid
This is not a relevant factor here, as neither party is in receipt of legal aid.
(c) The conduct of the parties in relation to the proceedings
The relevant matters here are as follows:
a)The result of the failure by the applicant to file his appeal books on time was the deemed abandonment of the appeal, and then the filing of an Application in an Appeal seeking reinstatement of the same, has led to the respondent incurring significant legal costs in relation to the Application in an Appeal.
b)The pursuit of an appeal which was ultimately found to have no merit, has also led to the respondent incurring legal costs prior to the abandonment of that appeal. As at the date of the deemed abandonment, the appeal had been tentatively listed for hearing in the April 2020 sittings of the Full Court of the Family Court of Australia.
(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
This factor is also not relevant. It applies where proceedings are instituted by one party as a result of the other party failing to comply with orders of the court. That is not the case here.
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings
This clearly applies here. The applicant was wholly unsuccessful in seeking reinstatement of the appeal. And, importantly, he was unsuccessful, because the appeal he sought to pursue was found to be without merit.
(f) Offers of settlement
There were no relevant offers of settlement made in this matter.
(g) Any other relevant matters
There are no other matters to be taken into account.
Plainly, there are sufficient circumstances here to justify an order for costs, and this Court so finds. Indeed, there only needs to be one circumstance arising from the factors in s 117(2A) to provide a basis for an order for costs being made, and here, that circumstance would be the applicant being wholly unsuccessful in his application.
Of course, making an order for costs still entails an exercise of discretion, even if there are relevant circumstances present, but there can be no doubt here that an order for costs is warranted.
The next issue is on what basis that order should be calculated. The usual basis is party/party, but the respondent here primarily seeks that it be on an indemnity basis.
The principle applicable to whether indemnity costs will be awarded is well settled, namely there must be exceptional circumstances as to why the usual approach of costs being calculated on a party/party basis should be departed from (Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Kohan and Kohan (1993) FLC 92-340; Munday v Bowman (1997) FLC 92-784; Yunghanns & Yunghanns (2000) FLC 93-029; and Limousin & Limousin (Costs) (2007) 38 Fam LR 478).
As to what might constitute an exceptional circumstance, specific reference can be made to the decision of Sheppard J in Colgate-Palmolive Co, where his Honour detailed circumstances that might qualify. Usefully, Holden J in Munday v Bowman, at 84,660, drew from the decision of Sheppard J the following examples:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts. …
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud. …
(c)Evidence of particular misconduct causing loss of time to the court and to other parties. …
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions. …
(e)An imprudent refusal of an offer to compromise.
(Citations omitted)
It is also important to note that the category of circumstances which enliven the discretion to award indemnity costs are not closed, and thus the circumstances do not need to come precisely within the examples provided by Sheppard J.
Here, the respondent sets out in paragraph 13 of her written submissions filed on 29 April 2020, the following, as demonstrating the exceptional circumstances:
In this case, it is the submission of the [respondent] that indemnity costs are appropriate, having regard to the following exceptional circumstances:
(a)At the hearing on 2 April 2020, Hon. Justice Strickland dismissed the [applicant’s] application to reinstate the appeal on the basis that the substantive appeal was entirely without merit.
(b)The [applicant] has a … degree and [can work overseas]. He should therefore have known that his appeal was without merit.
(c)The [applicant] made a number of scandalous and irrelevant allegations in his documents, including:
(i)False allegations regarding misconduct on the part of the [respondent], accusing her at paragraph 26 of his Summary of Argument filed 1 April 2020 (in relation to the parties’ pensions) of ‘dishonestly misleadingly detailed at high undervalue by the [respondent] throughout’ [sic] and, at paragraph 28, of attempting to ‘conceal’ their true value.
(ii)That the [respondent’s] solicitor was in contempt of the court by attempting to ascertain the position with respect to the [overseas] property and draft material that was, at paragraph 52, described as giving a ‘wholly misleading impression’.
(iii)[The applicant] accused the [respondent’s] solicitor, at paragraph 59, of having ‘committed a criminal act in these proceedings’.
(iv)Allegations regarding the Family Court of Western Australia’s handling of the case.
(d)The allegations made were without substance and, during the hearing on 2 April 2020 the [applicant] was invited to withdraw his allegations against the Court (which he reluctantly did).
It is readily apparent that these circumstances come within the examples set out in paragraphs (a) and (d) in [25] above. Accordingly, this Court finds that those circumstances are exceptional and justify awarding costs on an indemnity basis in lieu of the usual party/party basis.
As referred to above, the amount of costs sought is $18,998. In that regard, and as is required by r 19.08(3) of the Family Law Rules 2004 (Cth), the costs agreement entered into by the respondent is annexed to her written submissions, and a schedule of her costs and disbursements are also annexed thereto. Included in the amount sought are the counsel fees charged by the Queen’s Counsel instructed in the appeal prior to its deemed abandonment.
This Court is satisfied that the costs and disbursements set out are reasonable in the circumstances, and an order will be made as sought by the respondent.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 28 July 2020.
Associate:
Date: 28 July 2020
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