Falk & Falk - [2022] FedCFamC1A 195

Federal Circuit and Family Court of Australia
(DIVISION 1) APPELLATE JURISDICTION
Falk & Falk [2022] FedCFamC1A 195

Appeal from: Falk & Falk [2022] FedCFamC1F 28

Appeal number(s): NAA 33 of 2022

File number(s): SYC 4653 of 2019

Judgment of: MCCLELLAND DCJ, BAUMANN & CHRISTIE JJ

Date of judgment: 24 November 2022

Catchwords: FAMILY LAW – APPEAL – COSTS – Where the wife appeals against an order to pay the husband’s costs on an indemnity basis – Where the respondent concedes that the appeal must be allowed – Errors of law – Where the primary judge drew inferences against the appellant and failed to provide adequate reasons – Where the primary judge made factual errors on the evidence – Appeal allowed – Costs ordered.

Legislation: Family Law Act 1975 (Cth) s 117.

Cases cited:
Bhatnagar & Riju [2018] FamCAFC 144

D & D(Costs) (No. 2) (2010) FLC 93-435; [2010] FamCAFC 64

Falk & Falk (No. 2) [2021] FamCA 579

House v The King (1936) 55 CLR 499; [1936] HCA 40

Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116

Robinson and Higginbotham (1991) FLC 92-209; [1991] FamCA 5

Stasiuk & Guild [2021] FamCAFC 62

Number of paragraphs: 15

Date of last submission: 17 November 2022

Date of hearing: Determined on the papers

Place: Sydney

Solicitor for the Appellant: Dorter Family Lawyers and Mediators

Solicitor for the Respondent: ATW Family Law
ORDERS

NAA 33 of 2022
SYC 4653 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:
MS FALK

Appellant

AND:
MR FALK

Respondent

order made by:

MCCLELLAND DCJ, BAUMANN & CHRISTIE JJ

DATE OF ORDER:

24 NOVEMBER 2022

THE COURT ORDERS THAT:
1.The appeal be allowed.
2.Order 1 made by the Federal Circuit and Family Court of Australia (Division 1) on 1 February 2022 be discharged and in substitution the appellant pay the respondent’s costs associated with the Application in a Case filed 5 May 2021 on a party-party basis in the sum of $20,000, with such amount to be paid within 28 days of the date of this order.
3.The appellant pay the respondent’s costs of the appeal in the sum of $23,719.86, with such amount to be paid within 28 days of the date of this order.

Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Falk & Falk has…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Falk & Falk

Details

AGLC: Falk & Falk [2022] FedCFamC1A 195
Case: [2022] FedCFamC1A 195
Decision Date

CaseChat Overview and Summary

Falk & Falk was an appeal heard by the Full Court of the Family Court of Australia. The appellant challenged the primary judge's decision to order her to pay $1.227 million to the respondent from their self-managed superannuation fund. The primary judge's decision also included an order for the appellant to pay the respondent's costs, which the appellant contested on appeal. The Full Court was required to determine whether the primary judge's decision to award costs was erroneous and whether the appropriate costs should be fixed at $20,000, as agreed by the parties.

The legal issues the court had to decide included whether the primary judge had exercised his discretion appropriately in awarding costs and whether the appellant's conduct was exceptional or wilful. The court also had to determine if the primary judge had made a factual error in finding that the respondent had made three offers of settlement, when in fact only two offers had been made. Additionally, the court needed to assess if the appellant had $1 million of joint monies at the hearing, as found by the primary judge, when the appellant claimed she only had $215,317 remaining.

The Full Court found that the primary judge had drawn inferences against the appellant that were not raised with her or her legal representatives, and failed to provide adequate reasons for such a finding. The court also found that the primary judge had made a factual error in finding that the respondent had made three offers of settlement, and that the finding that the appellant was seized of $1 million of joint monies at the hearing was not supported by the evidence. The Full Court determined that the circumstances justified an order for costs, but that the matters relied upon by the primary judge to demonstrate exceptional circumstances were, at this interlocutory stage, controversial. The Full Court accepted that fixing the award of costs at $20,000 was just, and that this would save the parties from the further costs of taxation.

The Full Court allowed the appeal, re-exercised its discretion under s 117(2A) of the Family Law Act 1975 (Cth), and ordered that the costs of the appeal be fixed in the sum of $20,000.

Orders

Orders of the court

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Background

Background to the litigation

The parties’ consent to the appeal being allowed does not obviate the need for the Full Court to be satisfied of error justifying the success of the appeal (Bhatnagar & Riju [2018] FamCAFC 144). The reasons which follow explain why we were so satisfied and also why, in the re-exercise of discretion, the orders agreed are appropriate, including in respect of the costs of the appeal.Background In the midst of contested property proceedings where it was said that an asset pool in excess of $11 million existed, the primary judge determined at an interim hearing, that the respondent should have $1.227 million released to him from the parties’ self-managed superannuation fund and made an order to this effect. The appellant had resisted the interim application and was wholly unsuccessful in her resistance. By the time the hearing was before the primary judge, the appellant had made an offer to release $100,000 to the respondent, this offer was rejected (see Falk & Falk (No. 2) [2021] FamCA 579). Subsequent to the primary judge finding in favour of the respondent, the respondent pursued an order for costs resulting in the order referred to above.Principles A decision as to costs involves the exercise of discretion and accordingly attracts the principles set out in House v The King (1936) 55 CLR 499. This Court is generally reluctant to interfere in a decision as to costs, however “if the result is plainly unjust or if the decision was exercised on wrong principles then this Court must interfere” (Robinson and Higginbotham (1991) FLC 92-209 at 78,417 and Stasiuk & Guild [2021] FamCAFC 62 at [6]).Grounds of appeal We are satisfied that the primary judge:(a)drew inferences against the appellant (at [5] and [47]) that were not raised with the appellant or her legal representatives, specifically, the finding that the appellant’s “conduct is exceptional and borders on wilful” (at [49]) and failed to provide adequate reasons for such a finding (Ground 1 of the Notice of Appeal filed 28 February 2022); and(b)made a factual error in finding the respondent made three offers of settlement (at [25]) where the third offer did not constitute an offer. Further, the finding that the appellant “was seized of $1 million of joint monies at the hearing” (at [45]) was not open on the evidence, where the appellant’s evidence was that she had only $215,317 remaining from the funds removed from the joint account after separation (Ground 2 of the Notice of Appeal filed 28 February 2022). As Grounds 1 and 2 have merit, it is not necessary to consider Ground 3.Re-exercise of discretion The appeal should be allowed and this Court accepts it is appropriate to re-exercise the discretion under s 117(2A) of the Family Law Act 1975 (Cth). In this case, the facts compel a finding that circumstances justify an order for costs, but the matters relied upon by the primary judge to demonstrate exceptional circumstances were, at this interlocutory stage, controversial. Only where the Court can find exceptional circumstances is the discretion to calculate costs on an indemnity basis enlivened (see Kohan and Kohan (1993) FLC 92-340; D & D (Costs)(No. 2) (2010) FLC 93-435). It would save the parties the further costs of taxation, if the award of costs was in a fixed sum. In that respect, the parties agree that costs should be fixed in the sum of $20,000. We are satisfied a costs award for that sum is just.Costs of the appeal

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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NAA 33 of 2022 SYC 4653 of 2019
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA DIVISION 1 APPELLATE JURISDICTION
BETWEEN:	MS FALK Appellant
AND:	MR FALK Respondent

Appeal from:	Falk & Falk [2022] FedCFamC1F 28
Appeal number(s):	NAA 33 of 2022
File number(s):	SYC 4653 of 2019
Judgment of:	MCCLELLAND DCJ, BAUMANN & CHRISTIE JJ
Date of judgment:	24 November 2022
Catchwords:	FAMILY LAW – APPEAL – COSTS – Where the wife appeals against an order to pay the husband’s costs on an indemnity basis – Where the respondent concedes that the appeal must be allowed – Errors of law – Where the primary judge drew inferences against the appellant and failed to provide adequate reasons – Where the primary judge made factual errors on the evidence – Appeal allowed – Costs ordered.
Legislation:	Family Law Act 1975 (Cth) s 117.
Cases cited:	Bhatnagar & Riju [2018] FamCAFC 144 D & D(Costs) (No. 2) (2010) FLC 93-435; [2010] FamCAFC 64 Falk & Falk (No. 2) [2021] FamCA 579 House v The King (1936) 55 CLR 499; [1936] HCA 40 Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116 Robinson and Higginbotham (1991) FLC 92-209; [1991] FamCA 5 Stasiuk & Guild [2021] FamCAFC 62
Number of paragraphs:	15
Date of last submission:	17 November 2022
Date of hearing:	Determined on the papers
Place:	Sydney
Solicitor for the Appellant:	Dorter Family Lawyers and Mediators
Solicitor for the Respondent:	ATW Family Law

order made by:	MCCLELLAND DCJ, BAUMANN & CHRISTIE JJ
DATE OF ORDER:	24 NOVEMBER 2022