Fielder & Kirby
[2022] FedCFamC1A 32
•10 March 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Fielder & Kirby [2022] FedCFamC1A 32
Appeal from: Fielder & Kirby [2021] FCCA 2151 Appeal number(s): NOA 50 of 2021 File number(s): LEC 343 of 2019 Judgment of: ALDRIDGE J Date of judgment: 10 March 2022 Catchwords: FAMILY LAW – APPEAL – COSTS – Appeal against an order for costs thrown away – Quantum of costs – Where the appellant’s solicitors withdrew from the proceedings at the trial hearing – Conduct of the appellant to the proceedings – Whether the costs order was wrong in principle – Weight challenges – Procedural fairness – No error established – Appeal dismissed – Appellant to pay costs of respondent in a fixed sum. Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Federal Circuit Court Rules 2001 (Cth) r 21.02(2)(a)
Cases cited: Beach Petroleum NL v Johnson (1995) 135 ALR 160
Cassimatis v Australian Securities and Investments Commission (2016) 334 ALR 350; [2016] FCA 131
House v The King (1936) 55 CLR 499; [1936] HCA 40
Leary v Leary [1987] 1 All ER 261
Stasiuk & Guild [2021] FamCAFC 62
Robinson and Higginbotham (1991) FLC 92-209; [1991] FamCA 4
Number of paragraphs: 41 Date of hearing: 16 February 2022 Place: Sydney (via video link) Counsel for the Appellant: Ms Murphy Solicitor for the Appellant: Hannigans Solicitors Counsel for the Respondent: Mr Haddrick Solicitor for the Respondent: Parker & Kissane ORDERS
NOA 50 of 2021
LEC 343 of 2019FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS FIELDER
Appellant
AND: MR KIRBY
Respondent
ORDER MADE BY:
ALDRIDGE J
DATE OF ORDER:
10 MARCH 2022
THE COURT ORDERS THAT:
1.The Application in an Appeal on 10 February 2022 is dismissed.
2.The appeal is dismissed.
3.The appellant is to pay the respondent’s costs of the appeal fixed in the sum of $20,204.24
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).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fielder & Kirby has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE J:
INTRODUCTION
This is an appeal against an order for costs made by a judge of the Federal Circuit Court of Australia (as it was then known) on 27 July 2021 in property settlement proceedings between Ms Fielder (“the appellant”) and Mr Kirby (“the respondent”). That was the second day of a final hearing which the primary judge found could not continue due to the conduct of the appellant.
This led the primary judge to order:
1.That ninety (90) days from today’s date, the [appellant] pay the [respondent] the sum of FIFTY THOUSAND DOLLARS ($50,000.00) as directed by the [respondent] due to costs thrown away due to the preparation and attendance at the final hearing commencing 26 July 2021.
The parties had been in a de facto relationship for some 6–7 years which ended in late 2018. The matter came on for hearing before the primary judge on 26 July 2021, having been set down for three days.
At the hearing, difficulties immediately arose in the appellant’s case. It emerged that the appellant’s health practice had recently leased a car with a value of just over $170,000 and the appellant had not disclosed the acquisition to the respondent. She had not fully disclosed her recent income tax returns. The appellant’s counsel tendered a bundle of documents comprising of 100 pages which had not previously been disclosed to the respondent.
Matters did not improve when the cross-examination of the appellant commenced. It became apparent that there were a number of discrepancies between the contents of her affidavit and her oral evidence. This led to the appellant failing to adopt some of the contents of her affidavit, saying that the information contained within her affidavit had not been set out by her but extracted from documents by her solicitors, that she had not read it and had just signed what was put in front of her without checking the figures to see if they were correct.
This led to the primary judge standing the matter down for the appellant to confer with her solicitors because her Honour had serious doubts about the appellant’s understanding of her affidavit (at [21(n)]). At 3.12 pm the matter was adjourned until the following day.
At the outset of the proceedings on 27 July 2021 the appellant’s legal representatives withdrew from the proceedings. It was apparent that the appellant could not continue to conduct the proceedings as they were then constituted. The respondent sought an adjournment and an order for costs thrown away by reason of that adjournment in the sum of $50,000.
Her Honour described the basis of the costs order in the following terms:
33. I find that the basis for making the costs order is as follows:
(a) The [appellant’s] failure to disclose the acquisition of the new motor vehicle prior to the final hearing.
(b) The [appellant] providing after the commencement of the hearing a large number of documents that had not been formerly disclosed to the [respondent].
(c) The [appellant] failing to provide sufficient information as to her tax returns.
(d) The [appellant] failing to read, understand and take responsibility for the content and quality of the affidavit material filed by the [appellant].
(e) The [appellant] being vague in her responses in court respect to her financial position.
34.Overall it is the [appellant’s] conduct that resulted in the final hearing not being able to proceed resulting in costs incurred by the [respondent] being thrown away.
35.I find given the complexity of the matter that $50,000 was a fair figure especially given the [appellant’s] costs in preparing for trial exceeded $80,000.
THE APPEAL
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.
Further, appeal courts are reluctant to interfere with a trial judge’s discretion as to costs, but will do so if the requisite error is demonstrated (Robinson and Higginbotham (1991) FLC 92- 209; Stasiuk & Guild [2021] FamCAFC 62 at [6]).
Ground 1
The appellant relies on four grounds of appeal, although Ground 1 raises four separate complaints.
Contrary to the first of those complaints, there was in fact an application by the respondent for an adjournment of the proceedings. Counsel for the respondent envisaged that there would be an application for an adjournment by the appellant and implicitly by what followed, accepted that such an adjournment would have to be granted (Transcript 27 July 2021, p.3 lines 9–38). Further, counsel for the respondent sought that the matter go over part-heard (Transcript 27 July 2021, p.4 lines 10–11). At no time was it suggested that the hearing could continue and, indeed, the appellant informed her Honour that she was not in a position to conduct the rest of the hearing herself.
The main complaint raised by Ground 1 is that there was “no assessment of what costs were properly ‘thrown away’” and that her Honour failed to engage in any enquiry as to what, if any, costs had in fact been wasted.
Whilst it is true that by the time the application for costs was made, in the fixed sum of $50,000, the appellant was unexpectedly now representing herself and she raised no objection to the quantum and indeed informed the primary judge that she had “incurred considerable legal fees of $88,000 in the last week” (Transcript 27 July 2021, p.5 line 1). That immediately suggests that the amount claimed by the respondent was reasonable.
In support of her submissions, the appellant relied on the remarks of Edelman J in Cassimatis v Australian Securities and Investments Commission (2016) 334 ALR 350 at [56]–[57] where his Honour referred to well-known authority to the effect that costs thrown away are those that have been reasonably incurred and which relate to work done and wasted.
It is true that the primary judge did not conduct any enquiry as to how the sum of $50,000 was arrived at. However, her Honour is an extremely experienced trial judge who was entitled to bring that experience to bear on the issue and do so in the knowledge that the appellant’s own costs for the same period exceeded those claimed by the respondent by a considerable margin.
The task before her Honour was to fix a sum for costs that her Honour considered to be just in all of the circumstances and was entitled under r 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) to set the amount herself (at the time being r 21.02(2)(a) of the Federal Circuit Court Rules 2001 (Cth), which was to the same effect). In the circumstances where the costs of the proceedings were already escalating out of proportion having regard to the property of the parties available for division, it cannot be said that her Honour was in error in fixing the costs, rather than conducting a detailed and costly enquiry as to what was an appropriate figure.
The appellant did not contend that there should have been no order as to costs or that the order that was made for costs in the sum of $50,000 was unreasonable or plainly unjust. The complaint is as to the process by which it is arrived. However, the Rules permit a judge to fix the costs without a formal assessment. Where there was no objection to the amount claimed at the time when the matter was raised and where it is not suggested the fixed sum was unreasonable, it is impossible to see error on the part of the primary judge.
There is also no substance in the next point which was that the matter was adjourned part-heard. Such an adjournment can result in costs being thrown away. It was also suggested that in such a case not all the costs incurred would be wasted but, in the above circumstances, it is difficult to see what they might be.
The appellant submitted that the circumstances of the matter did not justify an order for costs thrown away because the matter was going over part-heard with the appellant being partly cross-examined. That may be so, although the cross-examination was of little value because it was largely about the accuracy of the appellant’s affidavit which was thrown in doubt, but did little to advance knowledge of the appellant’s actual financial position, in circumstances where the respondent had prepared and paid for a three day hearing which, through no fault of his, was to be adjourned for another three days.
At best, this submission goes to the quantum of the sum fixed. Such a submission faces the difficulties already discussed. Importantly, the primary judge is the person best placed to assess the utility of the proceedings so far.
The errors asserted by Ground 1 have not been established.
Ground 2
The next challenge raised by the appellant was that her Honour had erred by taking into account, or affording too much weight to the matters set out in [33] of her Honour’s reasons, which I have already quoted. It is submitted that none of those matters justified an adjournment.
The first submission raises a question of principle whereas the second is merely a weight challenge. It is an error to take into account matters that are not relevant to the issue being determined.
The matters set out by her Honour were clearly relevant because they were the reasons why the matter could not proceed on the days that it did. They also led to the withdrawal by the appellant’s lawyers and the matter not being able to proceed.
The weight to be given to them was particularly a matter for the trial judge and, unless that result can be said to be unreasonable or plainly unjust, no error will be identified. As I have said, the outcome is not unreasonable or plainly unjust.
Ground 3
Ground 3 returns to the quantum of $50,000 and correctly asserts that there was no evidence as to the quantum of fees actually incurred by the respondent.
The point of the rule permitting the Court to fix costs is for “the avoidance of expense, delay and aggravation involved in a protracted litigation arising out of taxation” (Leary v Leary [1987] 1 All ER 261 at 265). The Court’s determination is to be “logical, fair and reasonable” (Beach Petroleum NL v Johnson (1995) 135 ALR 160 at 164). To repeat, there is no complaint that the sum arrived at was unfair and it would be difficult to mount such an argument in circumstances where the appellant’s costs for the same period were higher by a significant margin.
Ground 4
Finally, the appellant complains that the primary judge denied her procedural fairness by failing to give the appellant “an explanation of the procedure to be adopted or what options might be available to her, given that her lawyers had withdrawn in the middle of a trial” (Appellant’s Summary of Argument filed on 10 December 2021, paragraph 31). The submissions of the appellant do not indicate what those options might have been. Clearly, the hearing could not proceed and therefore the only option was an adjournment.
The primary judge asked the appellant – “[d]o you have anything further you wish to say about the proposals being sought by the other side?” (Transcript 27 July 2021, p.5 lines 19–21). This caused the appellant to reply that she had incurred significant legal fees herself. The primary judge then turned the appellant’s attention to the substantive proceedings themselves and asked the appellant what she thought a fair outcome of the proceedings might be. Counsel for the respondent, without prompting, then indicated an outcome with which “[the respondent] is prepared to walk away with” (Transcript 27 July 2021, p.6 lines 20–21). This led her Honour to comment:
[HER HONOUR]: …So, we’re at currently $250,000 apart. You have already spoken about spending $88,000 preparing for the trial. I take it you’re going to get further legal representation. I don’t think this is a matter where you would take it on yourself.
(Transcript 27 July 2021, p.6 lines 24–27)
The appellant agreed she would not.
Her Honour then quite fairly pointed out the realities of the situation for the benefit of both parties. If there was going to be an order for costs of $50,000, then the difference between the parties would be $150,000 with a four day hearing still to come. The force of her Honour’s comments are compelling.
The parties then had a discussion, but were ultimately unable to resolve the proceedings.
As the primary judge observed herself, this was an unusual conversation (Transcript 27 July 2021, p.7 line 15) but her Honour said she undertook this process because she “needed the [appellant] to be aware that if this matter goes ahead, there are ramifications” (Transcript 27 July 2021, p.7 line 16). Under the circumstances, that was not an unfair process to undertake with a litigant in person, with the primary judge making it absolutely plain that the financial consequences for both parties, who were close to resolving the proceedings, would be substantial if they could not do so.
I do not accept the submission of counsel for the appellant that in doing so, her Honour improperly descended into the arena of the proceedings.
I am not satisfied that any error has been shown. It follows that the appeal will be dismissed.
APPLICATION TO ADDUCE FURTHER EVIDENCE
Shortly prior to the hearing of the appeal, the respondent filed an Application in an Appeal on 10 February 2022, seeking to rely on further evidence, which was an affidavit from his solicitor to the effect that the actual costs thrown away by his client at the hearing were $55,372.
It is well established that further evidence can be called to bolster the correctness of the orders under appeal. Such evidence must, of course have probative value.
Here, however, the affidavit simply refers to professional costs, presumably of the respondent’s solicitors, and quantifies them at $35,000 in a one line entry. That limited evidence takes the issue of quantum no further.
The evidence is otiose in any event, given that the appeal will be dismissed. However, the application also fails because of the lack of utility of the evidence.
COSTS
No submissions were advanced as to why a costs order ought not to be made against the appellant in the event that the appeal was unsuccessful, and there was no challenge to the amount claimed by the respondent. There will therefore be an order that the appellant pay the respondent’s costs of the appeal fixed in the sum of $20,204.24.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Aldridge. Associate:
Dated: 10 March 2022
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