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 2019FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: 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 been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ, BAUMANN & CHRISTIE JJ:
On 1 February 2022, a judge of the Federal Circuit and Family Court of Australia (Division 1), made an order that “the wife pay the husband’s costs on an indemnity basis in the amount of $42,108 within 90 days.”
The appellant wife filed an appeal against that order which the respondent husband resisted. However, prior to the hearing, the parties produced a signed minute where the respondent conceded the appeal on terms agreed by the parties.
At the direction of the Appeal Judicial Registrar, the parties were required to file an agreed submission identifying why the appeal should be allowed and why the Full Court should re-exercise the discretion. Those submissions were filed on 17 November 2022 and have been considered, together with the Notice of Appeal filed 28 February 2022 and the earlier submissions filed by each party relating to the grounds of appeal.
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
In circumstances where the appellant has been successful, an order for costs in her favour may ordinarily be anticipated. However, we are informed (in the joint submissions)[1] that:
Both parties have exchanged numerous offers in respect of the [a]ppeal. The [r]espondent put an offer on 28 April 2022 in terms of the parties’ present agreement. It follows that the parties have agreed that the [a]ppellant pay the costs of the [r]espondent on a party/party basis from this date...
[1] Joint Written Submissions filed 17 November 2022, paragraph 5.
The failure to accept a reasonable offer made in the appeal justifies an order for costs. The respondent’s Further Amended Schedule of Costs filed 14 November 2022 sets out a quantification of costs.
We find that fixing costs in the sum of $23,719.86 is just (as agreed per paragraph 1 of the Joint Written Submissions filed 17 November 2022).
For the reasons given, the orders at the commencement of these reasons are now pronounced.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland and Justices Baumann & Christie. Associate:
Dated: 24 November 2022
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