Ebner & Pappas & Anor (Costs)
[2015] FamCAFC 39
•17 March 2015
FAMILY COURT OF AUSTRALIA
| EBNER & PAPPAS AND ANOR (COSTS) | [2015] FamCAFC 39 |
FAMILY LAW ─ APPEAL ─ COSTS ─ Where the appellant’s application was “wholly unsuccessful” ─ Where the first respondent seeks costs on an indemnity basis ─ Where the appellant submits that the first respondent should have applied to the Family Court for enforcement relief ─ Where the appellant hindered the first respondent’s efforts to transfer the property ─ Where the appellant purported to transfer the property to the second respondent without warning ─ Where the appellant submits that there were other cheaper and more effective proceedings available to the first respondent ─ Where the appellant did not accept an offer to compromise ─ Appellant ordered to pay the first respondent’s costs of and incidental to the appeal as agreed or assessed and on an indemnity basis from date of offer.
| Family Law Act 1975 (Cth) s 94, s. 106A, s 106B, s 117(1) Conveyancing Act 1919 (NSW) s 37A Family Law Rules 2004 (Cth) r 1.07, r 1.12, r 22.53 |
| Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 Carpenter & Carpenter [2014] FamCAFC 100 |
Browne & Green (2002) FLC 93-115
Ebner & Pappas and Anor [2014] FamCAFC 230
| APPELLANT: | Mr Ebner |
| FIRST RESPONDENT: | Ms Pappas |
| SECOND RESPONDENT: | Mr Saran |
| FILE NUMBER: | Supreme Court of New South Family Court of Australia: |
| APPEAL NUMBER: | EA | 102 | of | 2014 |
| DATE DELIVERED: | 17 March 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | May, Ainslie-Wallace & Aldridge JJ |
| HEARING DATE: | Written Submissions |
| LOWER COURT JURISDICTION: | Supreme Court of New South Wales |
| LOWER COURT JUDGMENT DATE: | 12 December 2013 And 17 March 2014 |
| LOWER COURT MNC: | [2013] NSWSC … [2014] NSWSC … |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Ogborne; Bruce & Stewart Lawyers by written submissions |
| SOLICITOR FOR THE APPELLANT: | Bruce & Stewart Lawyers |
| COUNSEL FOR THE 1ST RESPONDENT: | Mr Einfeld QC with Ms Christie by written submissions |
| SOLICITOR FOR THE 1ST RESPONDENT: | ACA Lawyers |
| SOLICITOR FOR THE 2ND RESPONDENT: | Property Law Solutions (No appearance) |
Orders
That the appellant husband, Mr Ebner, pay the respondent wife, Ms Pappas, her costs of and incidental to the Application in an Appeal filed 7 August 2014.
Failing agreement, such costs to be assessed and to be paid on a party/party basis to 19 August 2014 and thereafter on an indemnity basis.
The appellant husband pay the respondent wife’s costs of and incidental to this costs application, filed 19 December 2014.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ebner & Pappas and Anor has been approved by the Chief Justice 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 102 of 2014
File Number: Supreme Court of NSW 2013/…
| Mr Ebner |
Appellant
And
| Ms Pappas |
First Respondent
And
| Mr Saran |
Second Respondent
REASONS FOR JUDGMENT
INTRODUCTION
On 27 November 2014 the appellant’s application seeking an extension of time in which to file an appeal was dismissed (Ebner & Pappas and Anor [2014] FamCAFC 230).
The first respondent now seeks an order that the appellant pay her costs of the application on a party/party basis and that those costs be assessed on an indemnity basis after 18 August 2014 when an offer to settle was sent to the appellant on 19 August 2014. The appellant submits that, in accordance with s 117(1) of the Family Law Act 1975 (Cth) (“Family Law Act”) each party should pay their own costs but if costs are to be paid they should be assessed on a party/party basis.
The second respondent did not play any part in the hearing and there is no application for costs to be paid by him.
We will not repeat the background of the application which is sufficiently set out in the judgment refusing an extension of time. It is enough to record that the primary judge set aside a transaction entered into by the appellant on the basis that it was an alienation of property with the intent to defraud creditors (s 37A Conveyancing Act 1919 (NSW) (“Conveyancing Act”)). We dismissed the application for an extension of time to appeal because the proposed grounds of appeal had no merit and the appellant had not adequately explained his delay in seeking to appeal.
The first issue to be determined is whether s 117 of the Family Law Act applies to this application.
In the primary judgment we discussed the difference between a matter arising under an Act and proceedings under an Act. Although the proceedings before the primary judge were a matter arising under the Family Law Act in that they concerned the implementation of orders made under that Act, we found that they were proceedings under the Conveyancing Act and not under the Family Law Act. Thus we found that the primary judge had been correct not to apply s 117 of the Family Law Act to the determination of the costs issue before him.
In the present application the appellant relied upon r 1.14 of the Family Law Rules 2004 (Cth) (“the Rules”) which empowers the court to extend time limits prescribed by the rules including the time limits prescribed for the lodging of an appeal. If granted, the court would then exercise the jurisdiction to hear and determine the appeal and exercise the powers granted by s 94 of the Family Law Act. Quite clearly, both are proceedings under the Family Law Act and the present costs application falls to be determined by the application of s 117.
Notwithstanding the statement in s 117(1) that in proceedings under the Family Law Act each party shall bear his or her own costs, the court has a discretion to make an appropriate costs order where there are circumstances that justify such an order. In considering whether a costs order should be made the court is to take into account the relevant matters prescribed by s 117(2A) of the Family Law Act.
MATERS RELEVANT TO A COSTS ORDER
The financial circumstances of the parties (s 117(2A)(a))
The first respondent asserts that the appellant has significantly more assets than her and a significantly greater income. In doing so she seeks to rely on material that was before this court in another appeal between the same parties. The appellant did not submit that regard could not be had to that material. She also asserts that her position is affected by her being the primary care provider for the parties’ children.
The appellant relies upon an assessment of child support made on 18 June 2014 by the child support registrar. It shows that the registrar determined the adjusted taxable income of the appellant to be $348 819 and the first respondent’s to be $147 000.
If the consideration of an order for costs was left there, this factor would seem to favour the first respondent but, in the absence of recent statements of her financial position, this consideration is not decisive.
The conduct of the parties in relation to the proceedings (s 117(2A)(c))
The appellant made a deliberate decision to appeal to the Court of Appeal of New South Wales rather than to this court. He pursued that appeal even after he became aware of the difficulties with that court’s jurisdiction. Having so elected, the appellant was always required to seek an extension of time in which to appeal to this court if the Court of Appeal did not entertain the appeal before it. However, even after the Court of Appeal dismissed his appeal, the appellant did not promptly file an application for extension of time in which to appeal but waited six weeks. That delay was not adequately explained.
As we have said in the judgment refusing the extension, the consequence of the appellant maintaining his appeal to the Court of Appeal is that the first respondent has been faced with two appeals although the expense has been ameliorated to some extent by the costs order made in her favour by the Court of Appeal. This consideration supports an order for costs in favour of the first respondent.
The appellant asserts that the first respondent:
… should, in the ordinary (and unremarkable) course, have applied to the Family Court of Australia within the trial proceedings for enforcement relief pursuant to s. 106A of the Family Law Act and Regulation 20.01 (1)(b) of the Rules (and seeking relief such as an order for a Registrar to execute the relevant form of Transfer on behalf of the Husband). Such an application would have been just, cheap and quick.
(Appellant’s submissions on costs filed 22 January 2015, at [9])
There are a number of difficulties with this submission.
First, it was not merely a matter of having a registrar sign a transfer. The first respondent did not know the payout figure for the mortgage and the appellant did what he could to hinder her finding this information, even to the extent of directing his bank not to communicate with her or her lawyers. He raised false issues such as unpaid rates and an improperly fenced swimming pool.
Secondly, having delayed the provision of the payout figure and the preparation of discharge of mortgage and transfer, the appellant suddenly and without warning, purported to transfer the property to the second respondent. It was then no longer a matter merely of having the appellant, or a registrar of the court on his behalf, execute a transfer. It was necessary to have the transaction set aside.
It is correct that instead of the application that was made, the first respondent could have made an application to the Family Court of Australia under s 106B of the Family Law Act to have the transfer of the property set aside. However, as events have proven, the application that the first respondent made to the Supreme Court of New South Wales under s 37A of the Conveyancing Act was well founded and successful.
Thirdly, there is no reason to think that any application made under s 106A would have been disposed of quickly and cheaply. The appellant was doing what he could to hinder and delay the first respondent. When he was ultimately faced with proceedings, the appellant opposed them, unsuccessfully and then appealed, again unsuccessfully. There is no reason to think he would have taken a different course in relation to any other application.
Finally, it was the appellant’s actions that led to these proceedings. It was he who effected the alleged transfer. Having taken steps that required the first respondent to seek to set aside the transaction and having unsuccessfully opposed her application, it is now not open to the appellant to assert that there were other cheaper and more effective proceedings available to the first respondent to deal with his wrong doing.
Wholly unsuccessful (s 117(2A)(e))
The appellant was wholly unsuccessful in the proceedings.
Offer of settlement (s 117(2A)(f))
On 19 August 2014 the lawyers acting for the first respondent wrote to the appellant’s lawyers enclosing an offer of settlement. At that time there were two applications concerning separate appeals before the court. The first respondent offered that both appeals and all applications in relation to them be dismissed with no order as to costs. The offer was not accepted.
In Browne & Green (2002) FLC 93-115 the Full Court said at [57]:
We think that whilst s 117(2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made. The insertion of s 117C into the legislation is a clear indication of the desire of parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it a proper consideration, is something to which very significant weight indeed ought normally be given. This again supports a costs order in favour of the first respondent.
This factor is, in our view, particularly powerful and in this case of itself drives an order for costs.
Taking all these matters into account the appropriate order is that the appellant pay the first respondent’s costs.
Indemnity Costs
The first respondent seeks that costs incurred after the offer of settlement was sent be paid on an indemnity basis.
In Carpenter & Carpenter [2014] FamCAFC 100 May, Thackray and Strickland JJ said at [132]:
The relevant authorities tell us that the usual approach of calculating costs on a party/party basis should only be departed from where there are exceptional circumstances (Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248, at 256; Kohan & Kohan (1993) FLC 92-340, at 79,614; Yunghanns v Yunghanns (2000) FLC 93-029, and D & D (Costs) (No 2) at [25]-[29]). There have been attempts to provide examples of circumstances that would warrant the awarding of indemnity costs (e.g. Colgate-Palmolive Co v Cussons Pty Ltd; Munday v Bowman (1997) FLC 92-784) but it is accepted that the categories of such circumstances are not closed (Yunghanns, at [31]).
In Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 Sheppard J said at 257:
… it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud …; evidence of particular misconduct that causes loss of time to the court and to other parties…; the fact that the proceedings were commenced or continued for some ulterior motive… or in wilful disregard of known facts or clearly established law…; the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions…; an imprudent refusal of an offer to compromise…; and an award of costs on an indemnity basis against a contemnor… The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
(Citations omitted)
The appellant did not accept the offer to compromise referred to earlier.
We are satisfied that the proposed appeal had no merit and that the delay in bringing his application for an extension of time in which to appeal was not adequately explained.
The primary judge in the Supreme Court proceedings said at [4] and [5]:
On 13 August 2013, the [first respondent] made an urgent application to this court and obtained an interlocutory injunction which restrained the [appellant] from proceeding with the sale to the second [respondent]. On 15, 19 and 20 August 2013, Robb J conducted a lengthy interlocutory hearing. There was no cross-examination. His Honour’s subsequent careful and extensive judgment contained many interlocutory findings that were adverse to the [appellant]. Those findings included, among others, preliminary conclusions that the [appellant] had decided to be obstructive and that the outcome which ensued was entirely his fault because he failed to co-operate with the [first respondent] to enable her to pay out the mortgage.
I have had the added benefit of observing and listening to the [appellant] in the witness box over an extended period. That additional opportunity has enabled me to reach firm conclusions about the matters on which Robb J made preliminary findings. I have concluded that the adverse findings of Robb J were amply justified. For the reasons that follow, I have regrettably formed the view that the [appellant] has acted towards the [first respondent] in a manner that was unfair to the point of being vindictive. His conduct was unco-operative, unreasonable and unjustified; his behaviour was obdurate and obstinate.
Of the transfer of the property to the second respondent the primary judge said at [41]:
… The husband wanted to prevent his [first respondent] having the benefit of that order. Although he had originally agreed to her having that right, he showed no willingness to implement Order 3 except by reference to a construction of it that denied any obligation by him to act reasonably in order to ensure that she have the benefit of the order. His intransigence was a pretext for denying [the first respondent’s] rights. His belief in his own legal rights was not the dominant factor. His overriding intention was to hinder, delay or defeat. His intention towards [the first respondent] was not merely unreasonable, it was dishonest by the standards of ordinary, decent people.
The primary judge was undoubtedly correct. Those findings alone would support an award of indemnity costs.
The three matters taken together constitute exceptional circumstances which amply justify the award of indemnity costs in favour of the first respondent.
The appellant correctly submits that the first respondent has not complied with r 22.53(3) of the Rules. He submits, therefore, the application for indemnity costs must fail. That rule provides that a person applying for indemnity costs must inform the court if the party is bound by a costs agreement in relation to those costs and, if so, inform the court of its terms.
The purpose of the rule, or at least in part, is to guard against an unjustified bill of costs being presented to be paid on an indemnity basis.
Having regard to the above circumstances and to the objectives set out in r 1.07 we will, pursuant to r 1.12, dispense with compliance with r 22.53(3).
We will order that the costs be assessed, if not agreed.
We will order the appellant pay the first respondent’s costs of and incidental to the appeal and on an indemnity basis from 19 August 2014 as asked in the application. The first respondent should also have the costs of and incidental to this costs application.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, Ainslie-Wallace & Aldridge JJ) delivered on 17 March 2015.
Legal Associate:
Date: 17 March 2015
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