Doran and Keyes and Anor
[2017] FamCAFC 255
•24 November 2017
FAMILY COURT OF AUSTRALIA
| DORAN & KEYES AND ANOR | [2017] FamCAFC 255 |
| FAMILY LAW – APPLICATION IN AN APPEAL – application for an extension of time to file a Notice of Appeal – where there was a reasonable explanation for the delay but there was no merit in the substantive appeal – application dismissed. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) Federal Circuit Court Rules 2001 (Cth) |
| Bant & Clayton [2014] FamCAFC 108 Brown & Brown (Costs) [2007] FamCA 353 Colgate-Palmolive Company and Anor v Cussons Pty Limited (1993) 46 FCR 225 Gallo v Dawson (1990) 93 ALR 479 Harris and Harris (1991) FLC 92-254 Jackamarra and Krakouer and Anor (1998) 195 CLR 516 Joshua v Joshua (1997) FLC 92-767 Latoudis v Casey (1990) 170 CLR 534 Lenova & Lenova (Costs) [2011] FamCAFC 141 Manotis & Manotis and Ors (Security for Costs) [2017] FamCAFC 191 Paret & Paret and Ors [2017] FamCAFC 199 Penfold v Penfold (1980) 144 CLR 311 Robinson & Higginbotham (unreported, Full Court of the Family Court of Australia, Simpson, Nygh and Smithers JJ, 8 February 1991) Tormsen and Tormsen (1993) FLC 92-392 |
| APPLICANT: | Mr Doran |
| FIRST RESPONDENT: | Ms A Keyes |
| SECOND RESPONDENT: | Ms B Keyes |
| FILE NUMBER: | BRC | 1340 | of | 2015 |
| APPEAL NUMBER: | NA | 39 | of | 2017 |
| DATE DELIVERED: | 24 November 2017 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Murphy J |
| HEARING DATE: | 24 November 2017 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 10 July 2017 |
| LOWER COURT MNC: | [2017] FCCA 2205 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Mould |
| COUNSEL FOR THE RESPONDENTS: | Mr Cameron |
| SOLICITOR FOR THE RESPONDENT: | Atherton Tablelands Law |
Orders
The Application in an Appeal filed on 14 August 2017 be dismissed.
The applicant pay the costs of the first and second respondents fixed in the total amount of $6,000.
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 Doran & Keyes and Anor 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 APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 39 of 2016
File Number: BRC 1340 of 2015
| Mr Doran |
Applicant
And
| Ms A Keyes |
First Respondent
And
| Ms B Keyes |
Second Respondent
EX TEMPORE REASONS FOR JUDGMENT[1]
[1]As was stated would occur when this judgment was delivered orally, citations, quotations and the like referred to during oral delivery of these reasons have been added to the settled reasons. Headings have also been added to the settled reasons for ease of reference.
In these ex tempore reasons I will refer to the parties as the “husband” and “wife”, notwithstanding the fact that they were never married but were, rather, in a de facto relationship. I mean no disrespect by that reference and do so purely for the purposes of convenience.
On 14 August 2017, the applicant husband filed an Application in an Appeal seeking an extension of time to file a Notice of Appeal against orders for costs made by Judge Willis on 10 July 2017. The wife and her mother, who are, respectively, the first and second respondents in the prospective appeal and in the proceedings before this Court, oppose that application.
It is important to understand for the purposes of the determination of this application that the orders for costs made by her Honour derive from orders for settlement of property made by her Honour after a trial. There is no appeal against those orders. As a consequence, as a matter of law, her Honour’s orders are presumed to be just and equitable and her Honour’s findings made within her Honour’s reasons for judgment are presumed to be correct.
Pursuant to the costs orders, the husband was required to pay the wife’s costs of and incidental to the substantive property proceedings assessed pursuant to Schedule 1 of the Federal Circuit Court Rules 2001 (Cth) with the amount of the costs to be paid from the approximately $58,000 that the wife was ordered to pay the husband in the substantive proceedings.
Orders were also made against the husband in respect of the wife’s mother, the second respondent, but those orders were to be assessed pursuant to Schedule 3 of the Family Law Rules 2004 (Cth) (“the Rules”). Order 1 of her Honour’s orders provided that the order for the payment of money arising from the substantive proceedings were to be suspended pending the assessment of the costs to which I have just referred.
I am told in the proceedings before me this morning that no assessment of the costs has yet taken place.
Legal Principles
Rule 22.03 of the Rules prescribes a time limit of 28 days after the date the order appealed from was made. The original draft Notice of Appeal attached to the husband’s Application in an Appeal was dated 14 August 2017. It is, accordingly, seven days overdue.
In his written outline of argument, Mr Cameron on behalf of the first and second respondents accepts, with respect properly, that the delay is very short and that it is adequately explained. I think it appropriate to quote that concession:[2]
2.The Appellant should have filed his Notice of Appeal by 7 August 2017. For various reasons the Appellant, who was then acting for himself, did not file the Notice within the 28-day period provided for in r. 22.03 of the Rules. It is accepted that the Appellant can demonstrate a reasonable excuse for not having filed the Notice of Appeal in time. In any event, the delay is minimal and the Respondents do not point to any specific prejudice arising out of the Appellant’s failure to file the Notice of Appeal in time. Whilst those matters point to the exercise of this Court's discretion in favour of an extension of time, such matters are not decisive. Those matters are not the only ones relevant to the exercise of this Court's discretion to extend time that the Appellant must satisfy.
[2]Respondents’ Summary of Argument filed 20 November 2017, paragraph 2.
Importantly, in respect of the reasons why the husband did not file his Notice of Appeal on time, it should be noted that, at the time when he represented himself, for various reasons unnecessary to be traversed in these reasons, the husband did not receive the written reasons for judgment which were settled by her Honour subsequent to the delivery of her ex tempore reasons.
As a result of the proper concession made by Mr Cameron, this application to extend time very much turns, then, on the assertion that the proposed appeal has no substantive merit.
It is well settled that the principles governing an application for an extension of time to file a Notice of Appeal emanate from what was said by McHugh J in Gallo v Dawson.[3] In the later decision of this Court by Lindenmayer J in Joshua v Joshua,[4] his Honour said:
The first and most important question to be determined … is whether the applicant has established that there is a substantial issue to be raised on appeal. If not, the application must fail. If so, then other considerations may become relevant to the exercise of the discretion, namely: the extent of the delay and the reasonableness of any explanations offered for it; any hardship or prejudice flowing to the respondent from the applicant’s delay which cannot be compensated for by orders as to costs or otherwise; and the desirability, in the public interest, that there be finality to litigation …
[3](1990) 93 ALR 479.
[4](1997) FLC 92-767 at 84,440.
With the greatest of respect to his Honour, I would prefer to have reference to what McHugh J said in Gallo v Dawson, in particular:[5]
In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal.
(Citations omitted)
[5]At 480.
The search, in my view, in an application of this type is always for the justice of the case. Quoting McHugh J again, his Honour said “[t]he discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties”.[6] Importantly, however, within that context his Honour also said “[t]he grant of an extension of time under this rule is not automatic”.[7]
[6]Ibid (emphasis added).
[7]Ibid.
Equally importantly, the considerations outlined by Lindenmayer J and by McHugh J are “not to be treated as legislative directions” because, as McHugh J made plain, the issue ultimately is one for judicial discretion.[8]
[8]Bant & Clayton [2014] FamCAFC 108 at [10] – [11]; See also, Tormsen and Tormsen (1993) FLC 92-392 at 80,017-8.
Context for the Husband’s Application
By way of broad background, the husband and wife lived in a de facto relationship which ended in 2014. Shortly after their separation, the wife commenced proceedings for settlement of property which ultimately resulted in the orders by her Honour to which I have earlier referred.
The wife’s mother became an intervenor in the proceedings. That occurred, it seems, when the husband contended that an amount of slightly more than $150,000 advanced by the mother to the parties was not a loan but, rather, a gift. By reference to her Honour’s reasons in the property proceedings it seems clear that the husband continued to maintain that the $150,000 sum was a gift rather than a loan. Her Honour determined to the contrary.
In the substantive proceedings, the wife sought orders for settlement of property that related to interests in property of the parties or either of them that included the loan to which I have just made reference as a liability of the parties. Her calculation that she should receive 80 per cent of the property interests of the parties, or either of them, was based on that premise. Ultimately, her Honour made such an order.
It can be seen that the wife was successful in obtaining both the amount of the property settlement that she sought and was successful in her contention that the $150,000 was a loan rather than a gift.
Significantly, as it seems to me, the husband did not obtain a property settlement in accordance with the percentage entitlement sought by him and nor did he receive a property settlement consistent with an offer to settle in writing which he had made.
In simple terms the offer by the husband was that he should receive an amount approximately one and a half times more than that which her Honour ordered. I repeat that, by reason of there being no appeal against her Honour’s substantive orders, her Honour’s determination and ultimate orders must be presumed to be a just and equitable settlement of property as between the parties.
The husband’s proposed grounds of appeal
The grounds of appeal in the initial Notice of Appeal proposed to be filed by the husband were very brief and unparticularised. Subsequently, it appears that the husband engaged Mr Mould of counsel on a direct brief and a proposed amended Notice of Appeal is annexed to the written submissions by Mr Mould in this application.
The application before me proceeded on the assumption that the grounds contained in that amended Notice of Appeal would be the grounds upon which the proposed appeal would proceed. It is important, I think, to quote those grounds of appeal:
1. That the learned judge’s discretionary decision miscarried when considering the financial circumstances of the parties:
a) The learned judge failed to place any or any adequate weight upon the future care of the children of the relationship.
b) The learned judge had no grounds to find that find that the Respondent could not expect financial assistance from the Appellant in relation to their two dependent children.
c) The learned judge placed inadequate weight upon the capacity of the Appellant to pay a costs order in excess of the monies received to be received from the judgment.
2. The learned judge erred at law in relation to the finding that the Appellant was whollly [sic] unsuccessful in the proceedings.
3. The learned judge wrongly attributed to the Appellant the fact that a trial occurred.
4. The learned judge erred at law in assessing the costs of the intervenor on the Family Court scale.
5. The learned judge erred at law by making an order with which the Applicant could not comply.
6. The learned judge erred at law by making an order that was unjust and inequitable in the circumstances.
(Errors as per original)
The emphasis, both in the grounds and in the written and oral arguments on behalf of the husband, is on the financial circumstances of the parties. In particular, it is asserted that, by reason of the modest amount of money received by the husband pursuant to the orders, together with other orders made by her Honour, including, for example, that the husband pay one half of relevant school fees, the order for costs is punitive in nature.[9]
[9]Latoudis v Casey (1990) 170 CLR 534.
I reject that submission. The order for costs is not punitive; it simply records a finding that justifying circumstances were substantiated in this case by reference to the factors referred to in s 117(2A) of the Family Law Act 1975 (Cth) (“the Act”).
It is important, I think, to quote what the Full Court said in Lenova & Lenova (Costs):[10]
11. A timely offer in writing genuinely made might, then, be seen as an important part of a limited armoury available to prospective litigants seeking to avoid the costs of litigation. Conversely, where, consequent upon success in an action, a litigant can point to the making of a genuine and timely offer having been made, that offer might be seen as an important (albeit not the only) matter in the exercise of the discretion as to the ordering of costs.
12. That consideration must, of course, be balanced against a litigant having a limited capacity to meet a costs order, as well as any other relevant considerations. But, a limited financial capacity to meet an order can not be determinative; if it were, a party would always be able to plead impecuniosity as a means of avoiding a costs order in circumstances where pursuit of the litigation has continued in the face of a reasonable offer to cease that litigation and the incurring of its attendant costs.
(Emphasis added)
[10][2011] FamCAFC 141.
There, the Full Court seeks to emphasise that, within the context of the Act and proceedings conducted within it, offers in writing to settle a case can be seen as critically important.
There are two means and only two means by which a party can avoid the potential of significant costs orders being made against them. The first means by which that can be done is to resolve the matter rather than leaving it to a court to determine it. Of course, resolution requires the free consent of both parties to a resolution that they can agree to. If that is not possible, there is but one method by which a prospective litigant can seek to avoid the prospect of a costs order being made against them by reason of justifying circumstances being found, that is, to make a timely, genuine and serious offer to settle the proceedings.
I repeat that the offer to settle the proceedings in this case made by the husband saw him receiving an amount one and a half times that which it must be presumed was just and equitable by reason of her Honour’s orders.
I make the point also that genuine and timely offers to settle should make clear the basis upon which the offer to settle is made. Here, it was important that any offer to settle referred to or made clear what was asserted in respect of the loan from the mother; it was an important factual issue that stood between the parties and was necessary for her Honour to determine. I am told by Mr Mould on behalf of the husband that the offer to settle made by him at the trial did not make clear what was to occur with respect to the loan. That made the offer to settle difficult to comprehend and to assess by reference to likely results.
It will be clear from what I have earlier said that I consider that the grounds which refer to the husband’s financial circumstances sit at the centre of his proposed appeal. I am not persuaded of their substantive merit. Ground 5, which asserts an error of law, namely, the “making of an order with which the Applicant could not comply”, is, as the argument developed – at least, as it seems to me – simply another argument in respect of financial circumstances under another name. I consider it too has no merit and I am unable to see what error of law, properly so described, is asserted by reference to that ground.
There can be no doubt that, on the material before me, the costs orders made by her Honour will be a financial burden upon the husband, but, to repeat, there were two means and two means only of avoiding that potential financial burden. Relevantly, the offer to settle made by him was the means by which that financial burden could have been avoided to the extent that it could have been.
Secondly, and importantly, as I have also sought to make clear, the financial burden, or more broadly the financial circumstances of the husband, is but one factor in her Honour’s determination of whether a costs order should be made. I will refer in a moment to broader considerations with respect to appeals against costs orders. For present purposes, I am not persuaded that the asserted errors in the mooted Notice of Appeal, insofar as they apply to financial circumstances, have any substantive merit.
Ground 2 of the proposed Notice of Appeal asserts an error in law by her Honour in finding that the husband was wholly unsuccessful. Counsel for the husband in his Summary of Argument stated the following:
42.Being wholly unsuccessful must look not just at the outcome but the position adopted by the party as well.
43. The Husband relied upon his submissions at first instance:
The Husband has not been wholly unsuccessful in these proceedings. He was awarded a modest amount by way of property adjustment.
44.The Husband’s position regarding the advance was not that it was to be discounted entirely if declared a gift but that, if it was declared a gift, it would be regarded as a contribution by the Wife. He was effectively recognising that his portion of the property settlement would have to be reduced in either event.
45.The legal arguments of the Husband were advanced upon the expectation that facts would be found in his favour. That not having occurred in the initial Judgment, the arguments fell away.
(Footnotes omitted)
The husband did not achieve, in any respect, what he sought in his application for settlement of property. He also did not achieve anything like the property settlement contained in his offer to settle, assuming for the moment that the provision in it of a significantly larger cash sum than that which he was awarded can be seen as directly comparable to the order that her Honour made. The husband was singularly unsuccessful in asserting that the loan between the wife’s mother and the parties was a gift.
I am unable to see any merit in the argument advanced in support of Ground 2 and I consider it has no substantive merit as a ground of appeal.
At Ground 4, it is said that her Honour erred in law in assessing the costs of the intervenor on the Family Court scale. As I have earlier referred to, her Honour distinguished between the costs payable by the wife and those payable by her mother in the orders that she made.
It should be observed that family law litigation in respect of property pursuant to the Act is quintessentially litigation between parties to a marriage. The wife’s mother was a third party to those proceedings. She intervened, on all of the material before me, because of the husband’s implacable position that an amount of $150,000 advanced to the parties was advanced by way of gift rather than loan. Her Honour plainly determined that it was necessary for the mother to intervene in the proceedings so as to protect her rights independent of any rights that might be determined as between the husband and the wife.
A question arises as to whether her Honour provided sufficient reasons for distinguishing between the bases upon which the costs should be assessed in respect of each of the wife and her mother.
In that respect, I should quote what her Honour said at [33] of the costs reasons as follows:
In relation to those costs, for all of the reasons set out in the submissions of Mr Cameron of Counsel, I am satisfied that the de facto husband concocted a story involving falsehoods about being under pressure signing documents, and about him not knowing that it was a loan and running a false argument that it was a gift. These issues put the costs application for the intervenor in a different category to that of the de facto wife. I am satisfied that, in relation to the intervenor, for the reasons that I have referred to (I adopt the submissions of Counsel for the intervenor), that the costs ought to be assessed on the Family Court scale, which is a higher scale than the Federal Circuit Court scale. I will make an order that the costs of the intervenor be assessed according to the Family Court scale. I have certified for counsel.
It is necessary in this context to repeat what I have earlier said about the substantive orders and reasons made by her Honour. There is no challenge to those orders and, thus, to her Honour’s reasons. Thus, her Honour’s findings as to the husband’s credit evident from those proceedings cannot be challenged insofar as they arise from those reasons and the trial proceedings in which the substantive orders were made.
I am unable to see any merit in that ground and do not consider that it is fairly arguable.
Finally, it is, I think, important to observe what has been said more generally in respect of appeals against orders for costs.
In making reference to the principles that have been referred to, it is important to distinguish between appeals against orders for costs that are made coterminously with challenges to substantive orders. Here, to repeat, the substantive orders stand and the costs and the challenge to the costs order stands or falls in respect of the reasons and the bases for those orders alone. In that respect, Nygh J said:[11]
As [counsel for the husband] rightly submitted, this Court should be very reluctant indeed to interfere with the exercise of discretion in respect of costs.
[11]Robinson & Higginbotham (unreported, Full Court of the Family Court of Australia, Simpson, Nygh and Smithers JJ, 8 February 1991).
With great respect to his Honour, that statement can be seen to be – in my view, at least – entirely consistent with the decision of the High Court in Penfold v Penfold.[12] Further and in any event, his Honour’s statement can be seen to have been applied in later decisions of the Full Court of this Court, including, for example, in Harris and Harris[13] and Brown & Brown (Costs).[14]
[12](1980) 144 CLR 311.
[13](1991) FLC 92-254.
[14][2007] FamCA 353.
It can be seen by reference to those principles that, in seeking to overturn a decision in respect of costs, the search is for a plain and manifest injustice in respect of the exercise of the discretion. To the extent that an injustice is identified broadly in this case it seems to me to be centred upon the fact that the husband cannot afford, he says, the orders for costs. My earlier comments in that respect pertain.
Finally, it should be recognised, I think, that applications of this type involve a balance. Strickland J referred to that balance in Paret & Paret and Ors[15] at [37] and [38]. Consistent with the balance to which his Honour there refers, I would also in this case add that the concession made by counsel for the first and second respondents as to delay and the explanation for delay means that this application is judged by reference to the fact that a right of the husband to appeal cannot be availed of by reason of being but a week late and in circumstances where I accept that the reasons for being late occur through no fault of his own.
[15][2017] FamCAFC 199.
That, as it seems to me, is a highly important consideration in deciding whether a right that would otherwise be availed of, and indeed untrammelled, subject to applications for security for costs or striking out (as to which see, respectively, Manotis & Manotis and Ors (Security for Costs),[16] a recent decision of Thackray J, and the decision of the High Court in Jackamarra and Krakouer and Anor[17]).
[16][2017] FamCAFC 191.
[17](1998) 195 CLR 516.
The interference with what would otherwise be a democratic right consistent with the proper conduct of litigation in circumstances where it is conceded that there has been no recalcitrance or deliberate delay on the part of a litigant is, in my view at least, a highly important matter.
In this case, though, that must be balanced against what is plainly an important consideration by reference both to the authorities and the particular circumstances of the case. I have concluded that this appeal is so lacking in merit that the application to extend time should be dismissed and I will so order.
Costs
At the conclusion of the delivery of oral reasons for judgment in this application, Mr Cameron who appears on behalf of the first and second respondent makes an application for costs. The application that is made is that the husband should pay costs on an indemnity basis. That is said to be founded in an affidavit on behalf of his clients that I gave leave to read and file this morning. That affidavit insofar as it seeks to support an application for indemnity costs does not comply with the Rules. There is no basis upon which I can see, for the calculations of the costs.[18]
[18]r 22.53 of the Rules.
That said, if I was minded to dispense with the Rules’ requirements, I consider by reference to my experience in this jurisdiction that the solicitor’s costs are modest.
In support of the application for indemnity costs more broadly, whether to be assessed or fixed in the sum referred to in the affidavit being a total of $10,450 (comprising solicitors costs of $2,750 and counsel fees of $7,700), Mr Cameron repeats effectively the submissions made in respect of the application for an extension of time, namely, that the application never had any real merit and that properly advised the husband would not have pursued it.
He also seeks to place reliance upon an offer in writing within the meaning of s 117(2A) that is contained in a letter dated 10 November 2017 addressed, I note, to the husband who at that stage was representing himself.
That offer was that his application for extension of time to bring the appeal be dismissed and that each party pay their own costs of the application. The husband was given five days within which to accept that offer. He did not. It is said in that letter that:
Our clients put you on notice that in the event you do not accept the Offer by the Nominated Time then they reserve their rights to seek a costs order against you, including an order that they have their costs of the application on the indemnity basis.
I agree with the submissions by Mr Mould on behalf of his client that nothing in the husband’s conduct in and about this application suggests that an order for indemnity costs should be made.
In all of the circumstances of this case, I am not persuaded that the circumstances are exceptional as that expression has been used in the authorities.[19]
[19]See, Colgate-Palmolive Company and Anor v Cussons Pty Limited (1993) 46 FCR 225 at 232–234 per Sheppard J; See also decisions in this Court that have applied that well-known dicta: Keehan & Keehan (Costs) [2015] FamCAFC 231 and Valdez & Frazier (No. 2) [2017] FamCAFC 208.
I decline to make an order for indemnity costs.
Counsel for the husband repeats, effectively, what was said about the husband’s financial circumstances in respect of the substantive application seeking to oppose any order for costs. I repeat what I have earlier said emanating from the decision of the Full Court in Lenova.
The figure to which I have earlier referred of $10,450 is, it is accepted, an indemnity or solicitor and client figure. It is contended effectively that a figure of 60 per cent of that should be fixed as being by way of party-party costs so as to obviate the need for the parties to incur yet further expense by assessing the costs.
As has been said on numerous recent occasions, this Full Court is seeking to have parties make submissions so as to permit the Full Court to fix the amount of costs where that is possible. Sensibly, both counsel have suggested the means by which that can be done in this case. I propose to adopt the broad figure in accordance with those submissions and I propose to fix costs in the sum of $6,000.
By reason of all of the circumstances to which I have referred, I make the following orders:
1.The Application in an Appeal filed on 14 August 2017 be dismissed.
2.The applicant pay the costs of the first and second respondents fixed in the total amount of $6,000.
I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 24 November 2017.
Associate:
Date: 6 December 2017
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