Fadden and Fadden (Costs)
[2010] FamCAFC 148
•18 August 2010
FAMILY COURT OF AUSTRALIA
| FADDEN & FADDEN (COSTS) | [2010] FamCAFC 148 |
| FAMILY LAW - COSTS – Appeal was dismissed – No ground of appeal made out – Husband’s application for leave to adduce further evidence unsuccessful – Extension of time to file submission as to costs – Husband failed to file submissions as to costs – Wife offered to settle for an amount less than what the Federal Magistrate ordered –Application for costs heard despite husband’s failure to respond – Husband to pay the wife’s costs of the appeal – Costs to be assessed on an indemnity basis |
| Family Law Act 1975 (Cth) s 79; s 117 |
| Browne v Green (2002) FLC 93-115 Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 Collins and Collins (1985) FLC 91-603 Harris and Harris (1991) FLC 92-254 Penfold v Penfold (1980) FLC 90-800 Yunghanns & Ors v Yunghanns & Ors; Yunghanns (2000) FLC 93-029 |
| APPELLANT: | Mr Fadden |
| RESPONDENT: | Mrs Fadden |
| FILE NUMBER: | BRM | 15285 | of | 2006 |
| APPEAL NUMBER: | EA | 124 | of | 2008 |
| DATE DELIVERED: | 18 August 2010 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Coleman, May and Strickland JJ |
| HEARING DATE: | By way of written submissions |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 23 September 2008 |
| LOWER COURT MNC: | [2008] FMCAfam 1032 |
REPRESENTATION
| SOLICITOR FOR THE APPELLANT: | Byrnes & Cox Lawyers |
| SOLICITOR FOR THE RESPONDENT: | Fishburn Watson O’Brien |
Orders
The wife have leave to file submissions in relation to costs out of time. The time be extended to 2 October 2009.
The husband pay the wife’s costs of the appeal to be assessed.
Those costs be assessed on an indemnity basis from 14 May 2009.
IT IS NOTED that publication of this judgment under the pseudonym Fadden & Fadden (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 124 of 2008
File Number: BRM 15285 of 2006
| Mr Fadden |
Appellant
And
| Mrs Fadden |
Respondent
REASONS FOR JUDGMENT
Introduction
On 26 August 2009 the Full Court dismissed the husband’s appeal and application for leave to adduce further evidence against the orders of Federal Magistrate Scarlett made on 23 September 2008. The application by the wife for costs of the appeal and responding to the application to adduce further evidence were reserved.
The Full Court ordered that the wife file and serve submissions in support of her application within 21 days and that the husband file and serve submissions in opposition within 21 days thereafter.
On 16 September 2009 the solicitor for the wife filed an application in an appeal and an affidavit in support. In that application the wife sought an order that the husband pay her costs on an indemnity basis from 14 October 2008, as agreed or as assessed. The affidavit annexed various documents filed in the appeal together with letters sent to the husband. Otherwise there were no submissions in relation to the wife’s costs. In an affidavit sworn 21 September 2009, the solicitor for the wife annexed a further letter that had been sent to the husband in the proceedings.
The solicitor for the wife forwarded to the Appeals Registry Eastern Region, a further application in an appeal and an affidavit on 2 October 2009. An extension of time of two days was sought in which to file and serve the costs submissions in the appeal. In the accompanying affidavit the wife’s solicitor explained the events surrounding the application for extension of time:
2.I briefed Mr Priestley of Counsel to draft the necessary costs submissions
…
4.Due to Mr Priestley’s other Chambers and Court commitments he was unable to attend to drafting the costs submissions in accordance with the directed timetable and accordingly they were filed 2 days late.
…
9.On the 21st of September I received a telephone call from the Appeals Registrar’s assistant advising they could not file the submissions because they were filed 2 days late and I would need to get the consent of the other side or file an extension of time application to file them.
…
12.The appellant husband is not likely to consent to an extension of time. We have sought their consent but they are yet to advise us.
The affidavit also annexed the wife’s submissions in relation to the costs of the appeal prepared by counsel for the wife, Mr Priestley.
On 5 November 2009, the Appeals Registrar of the Eastern Region sent a letter to the husband’s solicitors in relation to the wife’s application and submissions in the following terms:
I have been instructed by the Full Court to write to you regarding the wife’s application to extend time to file submissions as to costs.
Would you kindly advise the appeal registry in writing within 14 days of the date hereof, and copy same to the wife’s solicitors, as to following:
1.Is there any objection to the Full Court accepting the affidavit of the wife’s solicitor which was received by the appeal registry on 22 September 2009?
2.Is there any objection to the Full Court accepting the costs submissions of the wife out of time? These submissions are annexed to the affidavit of the wife’s solicitor received on 2 October 2009.
3.At what time can the Full Court expect the submission of the husband as to costs?
There has been no reply from the husband or his solicitors. We are of the view that the application should be heard despite his failure to respond.
The appeal was from orders made by way of property settlement. The orders made by the Federal Magistrate were those as proposed by the wife in her amended application. The value of the assets to be retained by the wife together with the payment by the husband was less than what might have been paid to her as a result of the percentage division as found by the Federal Magistrate pursuant to the provisions of section 79 of the Family Law Act 1975 (Cth) (“the Act”). The Federal Magistrate made the order as asked by the wife.
The appeal principally involved a challenge to the exercise of discretion. It was also submitted that the asset pool as found by the Federal Magistrate at $888,128.55, was incorrect. The grounds of appeal were found to have no merit. Consequently the appeal was dismissed.
We will repeat here part of our conclusions in the judgment in dismissing the appeal:
106.No ground of appeal having been made out, and the husband’s application for leave to adduce further evidence being unsuccessful, his appeal should be dismissed. Although it is unnecessary to do so, we consider it appropriate to record that, even if the husband had made out his challenges to the learned Federal Magistrate’s determination of the value of the property of the parties, his appeal would not be entitled to succeed. Our reasons for so concluding can be briefly stated. As is not in doubt, the effect of the learned Federal Magistrate’s decision was that the wife received assets approximating $480 000.00 in value. That represented 54 per cent of the value of the property determined by the learned Federal Magistrate to be $888 128.55. As we have earlier recorded, the contention of counsel for the husband before us was that the property of the parties should have been found, or be found by this Court, to have been $798 772.10. It is apparent that $480 000.00 represents 60 per cent of property having a net value of $798 772.10.
107.The unchallenged findings of fact of the learned Federal Magistrate, and his undisturbed conclusions with respect to contributions, and an adjustment of 5 percent pursuant to s 75(2) would in our view comfortably accommodate orders being made in the re-exercise of discretion which resulted in substantially the same outcome as resulted from the hearing before the learned Federal Magistrate. Thus, even if, contrary to our conclusions, the husband’s complaints with respect to ‘pool issues’ and/or s 75(2) were successful, no different outcome would result if this Court re-exercised his Honour’s decision.
The application for costs
Section 117(1) of the Act provides that, subject to sub-section (2), each party shall bear their own costs. For this general rule to be displaced, it is necessary for the Court to be of the opinion that there are circumstances that justify an order for costs.
Section 117(2A) provides the factors that the Court in ordering costs should have regard to. Of relevance in this case are the following:
· the financial circumstances of the parties;
· the conduct of the proceedings; and
· any offers of settlement.
It is well established that decisions to award costs attract a wide discretion (see Penfold v Penfold (1980) FLC 90-800 at 75,053 – 75,054; Collins and Collins (1985) FLC 91-603 at 79,877; Harris and Harris (1991) FLC 92-254 at 78,711; and Browne v Green (2002) FLC 93-115 at 89,162).
Submissions
The wife first sought costs in her response to an application in an appeal filed on 13 May 2009.
Of some significance it seems from the correspondence attached to the affidavits to which we have referred, offers to settle the appeal were made. By way of a letter dated 14 May 2009, an offer was made that the wife receive a sum $21,000 less than that ordered by the Federal Magistrate. This was calculated on the basis of the suggestion that there had been a miscalculation of the asset pool and that the percentage found in favour of the husband, being 35 per cent, would mean that he should pay to the wife a sum less $21,000. That offer was reduced to a formal offer to settle dated 18 May 2009. We should add that the terms of that offer included not only that the wife be prepared to reduce the amount payable to her by the sum of $21,000, but also that the appellant pay the respondent’s costs of the appeal. That offer was served on the solicitors for the husband on 26 May 2009. On 3 June 2009 the solicitors for the husband rejected the offer. A further offer was made dated 4 June 2009 as follows:
1.That the amount to be paid to Mrs [Fadden] pursuant to the original Orders of the Court at first instance be reduced from $300,000.00 to $260,000.00.
2.That each party bear their own costs of and incidental to these appeal proceedings.
3.That this offer is available for acceptance until 10.00am on 5 June 2009 at which time it will be withdrawn.
The offer was served upon the solicitors on 4 June 2009, and was only available for acceptance until 10.00am the following morning. The previous offer was then renewed for another day. It is important to understand that the appeal was heard on 5 June 2009 so that the offer remained open until that morning.
In the affidavit filed on behalf of the wife on 22 September 2009, a letter to the husband dated 4 May 2006 was attached, characterised as “WITHOUT PREJUDICE SAVE AS TO COSTS”. In the letter it was asserted that the net value of the parties’ assets was $882,500 and that the wife would be entitled to 60 per cent of that net pool of assets. In addition to the assets the wife received as a result of the orders made by the Federal Magistrate she asked for a cash payment in the sum of $218,500. The Federal Magistrate ordered that the husband pay to the wife the sum of $300,000.
In the written submissions filed on 2 October 2009, attached to the affidavit of the wife’s solicitor, reference was made to these offers. It was on that basis that the wife seeks an order for indemnity costs. In addition, it was submitted that the orders made by the court were more favourable to the wife than any of the offers, that neither party was legally aided, that the husband has property of some substance in his possession after the orders were made, and that the husband was wholly unsuccessful in the appeal.
It is also asked that we consider the conduct of the husband in the first instance proceedings. We do not see that as appropriate when considering the costs of the appeal, and we do not propose to take this into account.
The date upon which it is asked that the order for indemnity costs be made is 14 October 2008, which is the date of the filing of the Notice of Appeal. In the alternative it is asked that the husband pay the wife’s costs in relation to the appeal up until 14 May 2009, as assessed, and thereafter on an indemnity basis, being the date on which the offer was first made.
Conclusion
In this matter there is no doubt that an order for costs should be made and that the unsuccessful appellant should pay the whole of the respondent’s costs. As we have mentioned previously, the particular reasons for this are the respective financial circumstances of the parties, the conduct of the proceedings and offers of settlement.
Indemnity costs
Whether such costs should be ordered on an indemnity basis is a question to which we now turn.
The principles in relation to indemnity costs are well settled (see Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 and Yunghanns & Ors v Yunghanns & Ors; Yunghanns (2000) FLC 93-029). We were of the opinion that there was no merit in the appeal. We also found there was no real utility in the appeal in respect of the challenge to the calculation of the pool of assets.
Conclusion
In our view the making of the offers on behalf of the wife is a compelling circumstance, particularly in view of the relatively small pool of assets of the parties, the no doubt very significant costs incurred by the wife in opposing the appeal and the absence of any proper grounds.
The proper order in this case is that the husband pay the wife’s costs of the appeal to be assessed and that from 14 May 2009 those costs be assessed on an indemnity basis.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 18 August 2010
0
3
2