Elias & Elias (No. 2) - [2019] FamCAFC 92

FAMILY COURT OF AUSTRALIA

ELIAS & ELIAS (NO. 2)

[2019] FamCAFC 92

FAMILY LAW – APPEAL – COSTS – Where the respondent seeks costs of the appeal on an indemnity basis – Where the appellant submits that no order for costs should be made – Where the parties’ forwarded documents to the Court at will and contrary to the directions of the Court – Where neither party is in a good financial position – Where the respondent made a written offer to settle the appeal and for each party to bear their own costs of the appeal and cross-appeal two working days before the appeal was heard – Appeal was wholly unsuccessful – Respondent to pay the appellant’s costs – Order for costs limited to the appeal itself and each party to bear their own costs of the costs application – Where the costs are not able to be fixed because the respondent has not provided the Court with a schedule of costs – Costs to be agreed, and if they cannot be agreed, they are to be assessed on a party and party basis.

Family Law Act 1975 (Cth) ss 117, 117(2A), 117(2A)(a), 117(2A)(e), 117(2A)(f)

Family Law Rules 2004 (Cth) r 22.53(3)

Colgate Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 536
D & D (Costs) (No.2) (2010) FLC 93-435; [2010] FamCAFC 64
Kohan and Kohan (1993) FLC 92-340
Lenova & Lenova (Costs) [2011] FamCAFC 141
Limousin & Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCA 1178

APPELLANT:

Mr Elias

RESPONDENT:

Ms Elias

INDEPENDENT CHILDREN’S LAWYER:

Legal Aid NSW

FILE NUMBER:

SYC

7597

2013

APPEAL NUMBER:

2018

DATE DELIVERED:

6 June 2019

PLACE DELIVERED:

Melbourne

PLACE HEARD:

In chambers

JUDGMENT OF:

Ainslie-Wallace, Aldridge & Austin JJ

HEARING DATE:

Heard by way of written submissions

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

20 April 2018

LOWER COURT MNC:

[2018] FamCA 244

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Schonell SC

SOLICITOR FOR THE APPELLANT:

Willis & Bowring Solicitors

COUNSEL FOR THE RESPONDENT:

Ms Clifford

SOLICITOR FOR THE RESPONDENT:

Gordon & Barry Lawyers

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:

Ms Neville

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER:

Legal Aid NSW

Orders

The appellant is to pay the respondent’s costs of the appeal, excluding the costs of the costs application, as agreed, or in default of agreement as assessed on a party and party basis.

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 Elias & Elias 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 SYDNEY

Appeal Number: EA 68 of 2018
File Number: SYC 7597 of 2013

Mr Elias

Appellant

And

Ms Elias

Respondent

And

Independent Children’s Lawyer

REASONS FOR JUDGMENT

On 28 March 2019, we dismissed the appeal in this matter. The respondent now seeks an order that the appellant pay her costs, on an indemnity basis, in the sum of $57,822.71. The appellant submits that no order for costs should be made.
Procedurally, the matter is more complicated than that.
Pursuant to the directions made by the Court, the respondent filed her written submissions on 11 April 2019. The submissions attached a truncated summary of her costs. It did not attach a Financial Statement or her Costs Agreement with her lawyers. The latter is significant because a costs agreement must be provided to the Court where a party seeks indemnity costs, as the respondent does here (Rule 22.53(3) of the Family Law Rules 2004 (Cth) (“the Rules”)).
The appellant did not file submissions within the time provided by the Court and sought an extension. His submissions were lodged with the Court on 2 May 2019 and provided to the respondent. The submissions criticised the respondent for failing to provide a Financial Statement or Costs Agreement.
Stung by this criticism and before the Court had determined whether an extension of time would be granted, the respondent lodged a further set of submissions on 15 May 2019 which attached a Financial Statement, Costs Agreement and a letter from the Child Support Agency.
Unsurprisingly, the appellant sought the opportunity to respond to these documents.
This is not the way that litigation should proceed with parties forwarding documents to the Court at will and contrary to the directions of the Court. That is particularly so when the proffered documents are in response to justified criticism of the inadequacies of the original submissions. Of course, that criticism was itself outside the time limit for submissions.
The upshot was that all documents were accepted for filing and the appellant given a further seven days for submissions in reply to be filed. Litigants should not assume that similar indulgences will be given in the future.
Pursuant to s 117 of the Family Law Act 1975 (Cth) (“the Act”), parties to proceedings under the Act are to bear their own costs unless the court is of the opinion that circumstances exist which would justify such a costs order as the court considers just. In considering such an order the court must have regards to the matters raised by s 117(2A) of the Act.
The first consideration is the parties’ financial position (s 117(2A)(a) of the Act).
The respondent’s Financial Statement indicates that she has an income of $3,493 per week and expenses of $3,815. She owns property with an estimated value of $787,703 with liabilities of $746,655. She has a superannuation entitlement of $265,985.
The appellant’s Financial Statement revealed a weekly income of $2,008 and expenses of $2,906. He says that he has assets of $1,360,057 (including his business which he estimates to be worth $104), superannuation of $74,573 and liabilities of $2,510,943. The latter includes a debt to his parents of $1,420,000.
As at 6 May 2019 the appellant was in arrears of child support payments in the sum of $8,191.12.
Neither party is in a good financial position. However, that is not, of itself, decisive, as otherwise an impecunious party could litigate with impunity (Lenova & Lenova (Costs) [2011] FamCAFC 141).
The appeal was wholly unsuccessful (s 117(2A)(e) of the Act).
The respondent relies on an offer made to settle the proceedings (s 117(2A)(f) of the Act).
On Thursday, 21 February 2019, that is less than two working days before the appeal was heard on 25 February 2019, the respondent made a written offer to settle the appeal on the basis that it be dismissed with each party to bear their own costs of the appeal and the cross-appeal which was very limited in scope and was withdrawn.
The offer, if accepted, as it should have been, would have placed the appellant in a much better financial position. Had it been made earlier, it would have carried very significant weight in favour of the respondent. However, much, but not all, of that weight is lost because the offer was made at a time when it is likely that the parties would have incurred the bulk of the costs of the hearing.
Finally, we take into account the cross-appeal which was withdrawn by the respondent during the hearing of the appeal.
Taking these matters into account and, in particular, the complete failure of the appeal, we are satisfied that it is just, in all of the circumstances, that the appellant should pay the respondent’s costs.
The respondent submits that the costs should be assessed on an indemnity basis because of the “semantic manner in which the Appellant pursued his appeal” and because “[t]he Respondent is in debt to her lawyers and made [an] offer in writing on 21 February 2019” to the appellant.
Indemnity costs orders are only made in exceptional circumstances (Kohan and Kohan (1993) FLC 92-340; D & D (Costs) (No. 2) (2010) FLC 93-435; Limousin & Limousin (Costs) (2007) 38 Fam LR 478).
Whilst it is true that an imprudent refusal of an offer of settlement can be the basis of an indemnity costs order (Colgate Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233-234), it is difficult to describe the failure to accept the respondent’s offer in those terms because of the very late stage at which it was made.
Neither of the other two matters raised justifies an order for indemnity costs.
The respondent has not provided the Court with a schedule of her costs. The short list of five items of costs provided by the respondent does not identify the work carried out or the rates at which it was charged. The Court is therefore not in a position to fix the costs itself.
It follows that if the costs cannot be agreed, they will have to be assessed. As our reasons make clear, that will be on a party and party basis.
We have already highlighted the lax conduct of this costs application. The order for costs will be limited to the appeal itself with the intention that each party shall bear his or her own costs of the application for costs.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie-Wallace, Aldridge & Austin JJ) delivered on 6 June 2019.

Associate:

Date: 6 June 2019