Fernsby & Zhao (No 2)
[2023] FedCFamC1A 131
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Fernsby & Zhao (No 2) [2023] FedCFamC1A 131
Appeal from: Fernsby & Zhao (No 2) [2023] FedCFamC2F 79 Appeal number(s): NAA 41 of 2023 File number(s): BRC 11937 of 2020 Judgment of: TREE J Date of judgment: 11 August 2023 Catchwords: FAMILY LAW – APPEAL – COSTS – Where the husband’s appeal from final property settlement orders was unsuccessful – Where costs submissions were sought from the parties – Where the wife seeks her costs of the appeal on an indemnity basis, or alternatively, on a party/party basis in a fixed sum – Where the wife relies on offers of settlement made to the husband – Conduct of parties – Where the appeal was wholly devoid of merit – Where the circumstances do not justify an indemnity costs order – Where costs ordered on a party/party basis in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801
Fernsby & Zhao [2023] FedCFamC1A 107
Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25
Number of paragraphs: 18 Date of last submissions: 26 July 2023 Date of hearing: Determined on the papers Place: In Chambers The Appellant: Self-represented litigant Counsel for the Respondent: Mr Linklater-Steele Solicitor for the Respondent: Cooper Grace Ward Lawyers ORDERS
NAA 41 of 2023
BRC 11937 of 2020FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR FERNSBY
Appellant
AND: MS ZHAO
Respondent
order made by:
TREE J
DATE OF ORDER:
11 august 2023
THE COURT ORDERS THAT:
1.The appellant pay the respondent’s costs in the sum of $15,000 within 28 days.
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 Fernsby & Zhao (No 2) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE J:
INTRODUCTION
On 5 July 2023, for reasons then delivered (Fernsby & Zhao [2023] FedCFamC1A 107) I dismissed an appeal by Mr Fernsby (“the husband”) from final property settlement orders made by the primary judge on 2 February 2023. In the event the appeal failed, Ms Zhao (“the wife”) sought an order for costs, but foreshadowed an intention to rely on offers to settle the proceedings in support of her application. I therefore gave the parties an opportunity to file further material but otherwise reserved my decision as to costs.
By her written submissions filed 12 July 2023, the wife seeks an order that the husband pay her costs of the appeal on an indemnity basis in the sum of $50,616.50, or alternatively, on a party/party basis fixed at $24,185.67. The husband opposes any costs order and submits that the Court should not depart from the general rule pursuant to s 117 of the Family Law Act 1975 (“the Act”) that the parties bear their own costs.
For the reasons that follow, the husband will be ordered to pay the wife’s party/party costs fixed in the sum of $15,000.
CONSIDERATION
Whilst the default position established by s 117(1) of the Act is that each party should bear their own costs, s 117(2) permits the Court to make such costs order as it considers just if there are circumstances which justify doing so. Section 117(2A) lists the considerations which the Court must have regard to in determining whether to make a costs order.
Ordinarily, costs orders are only for party/party costs, and in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233, Sheppard J emphasised that the Court should be satisfied there are “particular facts and circumstances of the case in question [which] warrant the making of an order for the payment of costs other than on a party and party basis”.
The wife relies upon offers of settlement or proposals to finalise the appeal which she made to the husband, and his conduct in the appeal, as warranting an indemnity costs order.
By letter dated 5 May 2023, the wife proposed to the husband that she would not seek to enforce any costs order made by the primary judge following the property trial, if the husband immediately discontinued his appeal. By that time, following orders to do so, the wife had filed written submissions seeking costs in the substantive proceedings against the husband on an indemnity basis in the sum of $73,728.38. The husband did not accept the offer of 5 May 2023.
On 7 June 2023, and again on 20 June 2023, the wife made further proposals to the husband to immediately discontinue the appeal, otherwise she would seek indemnity costs against him. The husband did not respond to either proposal.
The conduct of the husband which the wife relies upon in support of an indemnity costs order, is firstly that he failed to file his Amended Notice of Appeal on time as ordered by the Appeal Judicial Registrar on 13 April 2023, in consequence of which the wife incurred unnecessary costs. However the husband’s error was that he filed his Amended Notice of Appeal after close of business on 12 May 2023 (the due date) and thus was advised by the appeals registry to file an Application in an Appeal seeking leave to rely on it. I gave that leave on 22 June 2023 when I heard the appeal.
Next, the wife points to the reasonableness of her conduct in repeatedly proposing to the husband that the appeal be finalised by each party “walking away”. Lastly, the wife submits the husband’s conduct in advancing arguments in the appeal about the primary judge’s order of 1 November 2022, which was not being appealed, and the wife having to respond to such submissions, warrants an order for indemnity costs.
The wife’s submissions as to her financial circumstances were substantially the same as I had found in the appeal judgment, namely she has significant liabilities, and her weekly living expenses exceed her income.
The husband submitted his financial circumstances see him able to earn approximately $900 USD per week, that he has been provided temporary accommodation in Country D, that he is liable for rent and expenses in an unidentified sum, and he has outstanding loans to friends and family in the sum of $55,000 and owes his former lawyers $114,000.
In response to his Amended Notice of Appeal being filed out of time, the husband submits the delay was only five or six hours, which I accept, and that he sought the wife’s consent to rely upon it which was not forthcoming. Lastly, the husband submits the wife has not disclosed the fact she is acting for her former company as a shadow director. The husband provides no evidence of this besides a screenshot of the wife’s LinkedIn profile.
The appeal was wholly devoid of merit, and was bound to fail. Even if the husband is in an equally poor financial situation as the wife, indigent circumstances are not a bar to a costs order (Northern Territory v Sangare (2019) 265 CLR 164). I am satisfied that an order for costs is appropriate here.
The husband’s conduct relied upon by the wife as justifying an indemnity costs order simply does not do so. Hence the only substantial reason proffered for costs being ordered on anything other than the usual basis are the offers which the wife made to settle the appeal. The value of the first offer, namely not to enforce any trial costs order, was then, and on the state of the evidence remains, impossible to measure, as no trial costs orders had been made, and may not have ever been made. The evidence does not permit me to be satisfied that the husband has ended up in a worse situation than if he had accepted that offer.
The other two offers were simply not to seek costs in the appeal. None of the three offers are of a kind which, if refused or not accepted, lend much support for an order for costs on an indemnity basis and I decline to make any such order.
The party/party costs claimed by the wife in her submission filed 12 July 2023 total $24,185.67 although the wife’s (non-itemised) costs schedule filed 15 June 2023 claimed $32,328.34, a difference not explicable on the material, save that it appears that the first costs schedule must have included solicitor/client items. However it seems to me that the (itemised) schedule annexed to the wife’s 12 July 2023 submissions continues to do so, for instance the work claimed for 25 May, 1 June (all items), 7 June and 20 June 2023 do not appear to properly be party/party costs.
Although it might be rather rough justice, I fix the wife’s costs in the sum of $15,000. They should be payable within 28 days.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Tree. Associate:
Dated: 11 August 2023
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