Fowles & Fowles (No 5)
[2024] FedCFamC1A 188
•17 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Fowles & Fowles (No 5) [2024] FedCFamC1A 188
Appeal from: Fowles & Fowles (No 4) [2023] FedCFamC1F 819 Appeal number: NAA 305 of 2023 File number: MLC 8587 of 2015 Judgment of: ALDRIDGE, CAMPTON & SCHONELL JJ Date of judgment: 17 October 2024 Catchwords: FAMILY LAW – APPEAL – COSTS – Application in an Appeal for a stay partly allowed – Where the respondent seeks indemnity costs for the that application – Consideration of offers to resolve the stay application – Applicant has incurred significant legal costs – Where the stay interferes with the respondent’s right to enforce the fruit of the judgment – Where it is just for the applicant to pay the respondent’s costs – Matters do not justify an order for indemnity costs – Applicant to pay the respondent’s costs 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
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681; [1986] HCA 84
Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116
Number of paragraphs: 21 Date of last submissions: 10 October 2024 Date of hearing: Determined in chambers, on the papers Place: Sydney Solicitor for the Applicant: Nicholes Family Lawyers Solicitor for the Respondent: Lander & Rogers ORDERS
NAA 305 of 2023
MLC 8587 of 2015FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR FOWLES
Applicant
AND: MS FOWLES
Respondent
ORDER MADE BY:
ALDRIDGE, CAMPTON & SCHONELL JJ
DATE OF ORDER:
17 OCTOBER 2024
THE COURT ORDERS THAT:
1.The applicant pay the respondent’s costs of the Application in an Appeal filed 12 September 2024 fixed in the sum of $13,122.41 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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Fowles & Fowles has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE, CAMPTON & SCHONELL JJ:
On 3 October 2024 we made the following orders in an Application in an Appeal seeking a stay of property division orders pending the determination of an application for special leave to appeal to the High Court of Australia:
1.Order 1(b) of the orders of 6 October 2023 is stayed pending the hearing of the application for special leave to appeal to the High Court of Australia and any subsequent appeal or further order of this Court.
2.Upon the applicant paying the sum of $1,240,231 to the respondent’s solicitors to be held on trust in a controlled monies account until further order of this Court, or upon securing payment of that sum to the written satisfaction of the respondent, Order 3 of the orders on 6 October 2023 is stayed pending the determination of the application for special leave to the High Court of Australia and any subsequent appeal or further order of this Court.
3. The Application in an Appeal is otherwise dismissed.
4.Written submissions of no more than three pages dealing with the question of costs are to be filed and served within seven days.
The issue of costs remains to be resolved.
In his written submissions, the applicant proposed that each party bear his or her own costs. The respondent sought the payment of her costs on an indemnity basis, or alternatively on a party/party basis or as fixed.
Pursuant to s 117 of the Family Law Act 1975 (Cth) each party is to bear his or her own costs unless the Court is satisfied that, in all of the circumstances, a costs order is just. In considering such an order, the Court must take into account the matters set out in s 117(2A).
The financial position of the applicant is unknown. He did not disclose it for the purpose of this application. The primary judge found that the full nature and value of the applicant’s property and business interests could not be ascertained due to his non-disclosure (at [390]).
Since 21 August 2024 the applicant has “incurred and paid” legal fees of $257,276.56 (applicant’s Schedule of Costs filed 3 October 2024). His total legal fees for these proceedings are in excess of $3 million. He clearly has the means to make those payments.
The respondent is on Centrelink benefits. She presently lives in an apartment at X Street (“the X Street property”) which, under the primary judge’s orders, the applicant is required to transfer to her. She owes $1,181,103.22 to her lawyers, unbilled fees for counsel and $323,993.51 to a litigation lender.
The respondent made much of the conduct of the applicant in failing to comply with any of the orders of the primary judge which included payment of $2,200 per month in spousal maintenance and a cost order in the sum of $6,250 even though these orders have never been the subject of a stay. His non-disclosure and his being described as a “difficult witness” were also relied upon.
This is not, however, conduct within the meaning of s 117(2A)(c) which is concerned with conduct of the application in the proceedings in which costs are sought – in this case the stay application.
These matters may be considered under s 117(2A)(g) but do not attract significant weight in this matter because the purpose of costs is compensatory, not punitive.
On 19 August 2024, the respondent’s lawyers wrote to the applicant’s then lawyers proposing the following:
Accordingly, we would propose resolving any proposed stay of the orders as follows:
1.That your client forthwith discharges the mortgage over the [X Street property] pursuant to order 1(a);
2.That order 1(b) requiring your client to transfer the [X Street property] to our client be stayed, pending his special leave application and High Court appeal;
3.That your client forthwith pay all amounts (including interest) owing under orders 4, 6, and 10; and
4.That your client pays $1,240,231 (plus $96,014.55 in interest) to our office pursuant to order 3, to be held on trust pending determination of his appeal/special leave application; and
5. That all other orders remain in full force and effect.
(Annexure “B” to the respondent’s written submissions filed 10 October 2024)
Leaving aside paragraph 3 and the reference to interest, these are in substance, save for one matter, the orders that were made by the Court. The difference of substance relates to paragraph 4 as Order 2, as made, stayed the primary judge’s order for payment only upon payment into the trust account, and that payment was left in the control of the Court. Those differences are in the respondent’s favour. The fact that the proposed order in paragraph 3 was not made is of no moment as the orders requiring the applicant to make the payments referred to in that paragraph remain in force.
The above offer was repeated to the applicant’s new lawyers on 27 August 2024. It was rejected on 30 August 2024.
One of the grounds put forward was the interest component which was said to be incorrect. The applicant did not say what he considered the correct amount to be.
Although the respondent pressed for an order for payment of interest at the hearing of the application for a stay there was no evidence adduced as to the quantum so that aspect of the proposed order was not considered.
The applicant submits that these matters establish that Order 2 as made by the Court was substantially different to that proposed by the respondent and he was fully justified in rejecting it. Whilst there is force in that submission, the applicant would have been on stronger ground if he had indicated agreement with those orders, save for the interest component, rather than rejecting them outright, or indicated the amount of interest that he agreed was payable.
It must be borne in mind that the obtaining of a stay pending the determination of an application for special leave is rare and applicants face a high bar (Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681 at 68). Such a stay is for the benefit of the applicant and interferes with the rights of the respondent to enforce the fruits of her judgment.
Taking these matters into account it is just that the applicant pay the respondent’s costs.
Indemnity costs are awarded only in exceptional cases (see Kohan and Kohan (1993) FLC 92-340). The respondent identified the “special or unusual feature” (Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233 per Sheppard J) which justified such costs as the matters identified above. We are not persuaded that they justify indemnity costs.
No challenge was raised by the applicant to the respondent’s claimed costs. He could hardly do so given he spent, albeit as the applicant, many times as much on the application.
The applicant will pay the respondent’s costs fixed in the sum of $13,122.41.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, Campton & Schonell. Associate:
Dated: 17 October 2024
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