Garibaldi & Wootten and Anor
[2008] FamCAFC 90
•3 July 2008
FAMILY COURT OF AUSTRALIA
| GARIBALDI & WOOTTEN AND ANOR | [2008] FamCAFC 90 |
| FAMILY LAW - APPEAL – Costs – where third party instituted proceedings against husband and wife – husband conceded substance of application before trial – costs order made against husband in relation to entirety of proceedings – whether trial Judge took into account concession made – whether costs order was outside a reasonable exercise of discretion – extent of costs order unreasonable – appeal allowed FAMILY LAW - APPEAL – Re-exercise of discretion – costs – circumstances justifying order |
|
| APPELLANT: | MR GARIBALDI |
| FIRST RESPONDENT: | MR WOOTTEN |
| SECOND RESPONDENT: | MS GARIBALDI |
| INTERVENER: | PATERSON & DOWDING (A firm) |
| APPEAL NUMBER: | WA | 5 | of | 2007 |
| FILE NUMBER: | PTW | 1417 | of | 2004 |
| DATE DELIVERED: | 3 July 2008 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Coleman, Warnick and Penny JJ |
| HEARING DATE: | 29 January 2008 |
| LOWER COURT JURISDICTION: | Family Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 2 February 2007 |
| LOWER COURT MNC: | [2007] FCWA 21 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Self represented |
| SOLICITOR FOR THE APPELLANT: | N/A |
| COUNSEL FOR THE FIRST RESPONDENT: | Mrs N Owen-Conway |
SOLICITOR FOR THE FIRST RESPONDENT: | MacKinlays Solicitors |
COUNSEL FOR THE SECOND RESPONDENT: | Dr A Dickey QC |
| SOLICITOR FOR THE SECOND RESPONDENT: | Paynes |
| COUNSEL FOR THE INTERVENER: | Mr M Corboy SC |
| SOLICITOR FOR THE INTERVENER: | Pynt and Partners |
Orders
That the appeal be allowed.
That order 5 of the orders made on 2 February 2007 be set aside.
That the appellant, [Mr Garibaldi], pay one third of the first respondent’s costs in the proceedings from 1 March 2005 until 9 December 2005 inclusive.
(a) That the appellant, [Mr Garibaldi], pay Paterson and Dowding’s professional fees on a solicitor/client basis as agreed or assessed.
(b)That rule 19.18 of the Family Court Rules 2004 not apply to the calculation of those costs.
That the Court grants to the first respondent, [Mr Wootten], a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the first respondent in respect of the costs incurred by the first respondent in relation to the appeal.
That the Court grants to the second respondent, [Ms Garibaldi], a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the second respondent in respect of the costs incurred by the second respondent in relation to the appeal.
IT IS NOTED that publication of this judgment under the pseudonym Garibaldi and Wootten and Anor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH |
Appeal Number: WA 5 of 2007
File Number: PTW 1417 of 2004
| MR GARIBALDI |
Appellant
And
| MR WOOTTEN |
First Respondent
And
| MS GARIBALDI |
Second Respondent
And
| PATERSON & DOWDING (A firm) |
Intervener
REASONS FOR JUDGMENT
The appellant husband seeks to appeal an order made on 2 February 2007 that he pay one third of the costs incurred by the first respondent. His wife, the second respondent, was ordered to pay two thirds of the first respondent’s costs. She did not appeal the order as it related to her.
The circumstances in which the first respondent became involved in proceedings against the husband and the wife in this court were unusual.
The husband and wife separated in September 2003. In March 2004 the wife filed an application seeking an alteration of property interests against the husband. One of the properties the subject of the application was […] a property registered in the name of the husband. The husband placed the property on the market for sale in late 2004. The wife became aware the property was on the market and did not seek to prevent the sale. The first respondent made an offer to purchase the property for $345,000, which the husband accepted on 14 November 2004. The contract for sale became unconditional when the first respondent paid the deposit of $5,000. In late November the wife lodged a caveat against [the] property claiming an interest as a beneficial owner.
Around this time negotiations took place between the husband and the wife in relation to the issue of property settlement. They reached an agreement and signed a minute of consent orders. The minute was forwarded to the court on 7 December 2004 with a letter from the wife’s solicitors asking that the minute be dealt with urgently. Final orders in terms of the minute were made on 9 December 2004. The consent orders allowed for a transfer by the husband to the wife of [the] property. The wife was aware at the time the orders were made of the agreement entered into by the husband to sell the property to the first respondent. Neither party advised the court that such an agreement was in existence. The first respondent was given no notice of the consent orders.
The wife moved into the property in late February 2005 and made improvements to it.
On 1 March 2005 the first respondent filed an application seeking an order that the husband sign all documents necessary to transfer to him [the] property and the wife take all steps to remove the caveat registered on the property.
On 3 August 2005 the first respondent filed a further amended application for final orders. In this application he sought for the first time an order in the following terms:
1The Family Court order made by consent on 9 December 2004 between the [husband and wife] be set aside pursuant to s 79A(1)(a) of the Family Law Act 1975 on the that basis [sic] that the [husband and wife’s] failure to disclose the [first respondent’s] interest in the property constitutes suppression of evidence giving rise to a miscarriage of justice at the time the consent orders were made.
He also sought a declaration that he was the beneficial owner of [the] property pursuant to the agreement entered into by himself and the husband on 14 November 2004.
On 26 August 2005 the husband filed a response to the amended application seeking orders that the first respondent’s Amended Form 1 be dismissed and orders as to costs.
On 9 December 2005 the husband filed an amended response to the amended application for final orders. In that response the husband stated as follows:
Agree with order 1 sought in amended application filed 3/8/05.
Neither consent nor oppose orders 2-7 of amended application filed 3/8/05.
In a further amended application for final orders filed by the first respondent on 23 December 2005 he continued to seek orders that the consent orders of 9 December 2004 be set aside and amended his claim to seek specific performance and/or damages.
The wife at no time conceded that the consent orders should be set aside and sought that the first respondent’s application be dismissed, or in the event that the court set aside the orders made on 9 December 2004 and found that the applicant had a beneficial interest in [the] property, then she sought orders that the entire right, title and interest of the first respondent in [the] property vest in her pursuant to s 90AE or s 90AF of the Family Law Act 1975 (Cth) (“the Act”). She sought further orders as to property settlement between herself and the husband if the consent orders were set aside.
After a hearing of the competing applications, the trial Judge found that the failure by the husband and wife to give the first respondent notice of the consent orders constituted a miscarriage of justice and led “to the inevitable conclusion that the orders ought to be set aside”.
He refused to make any orders in relation to the first respondent’s application for specific performance and/or damages, or in relation to the wife’s application pursuant to sections 90AE, 90AF and 90AK of the Act. In his conclusion he stated as follows:
I conclude that the only appropriate order to be made is that the orders dated 9 December 2004 be set aside.
The trial Judge then sought written submissions from the parties as to the form of the final orders and as to costs. The first respondent sought an order that the husband, the wife and the wife’s former solicitors, Paterson & Dowding, pay his costs on an indemnity basis. The husband and wife both filed submissions opposing the orders sought by the first respondent.
In his judgment in relation to costs the trial Judge referred to the provisions of s 117 of the Act and addressed the matters set out in s 117(2A). After having considered the financial circumstances of the party, their conduct and whether the proceedings were necessitated by the failure of a party to comply with previous orders, he then stated:
22The most important matter I must take into account is whether any party to the proceedings has been wholly unsuccessful in the proceedings. The applicant, Mr [Wootten], advanced various arguments and sought various heads of relief that were unsuccessful. At the end of the day, his only success was that the orders of 9 December 2004 be set aside. He advanced various other arguments without success.
23The same can be said of the wife. She was wholly unsuccessful for the following reasons:
(a)she persisted in her argument that the applicant was not a person affected by an order;
(b)she was unsuccessful in her argument with respect to s 90AE, 90AF and 90AK;
(c)she was unsuccessful in her application to have the contract between the applicant and the husband set aside.
24In my view, the fact that the applicant was unsuccessful in many of the arguments he advanced and was unsuccessful in seeking certain of the relief he sought, does not necessarily preclude me making an order for costs in his favour. There having been no offers to settle the proceedings, the only other matter I am required to take into account is any other matter that I consider relevant. What I consider to be relevant is the fact that the whole of these proceedings were as a result of the actions of the husband and wife in conspiring to circumvent the rights of an innocent and bona fide purchaser for value of the property in dispute. In my view, that is sufficient for me to order that they pay the costs of the applicant. I say that, notwithstanding that he was unsuccessful in certain aspects of his case because if the husband and wife had not taken the action that they did, there would not have been a case. In my view, parties cannot expect to behave in the way that the husband and wife did, which included as I found in the principal reasons for judgment, misleading the Court and not expect financial consequences.
25Three questions then remain and they are:
(a)the apportionment of the costs between the husband and the wife;
(b)whether costs should be awarded on an indemnity basis; and
(c)whether or not the then solicitors for the wife, Paterson and Dowding, ought to have an order for costs made against them.
26In answering the first of those questions, I have already made observations as to the manner in which the wife ran her case. The husband, as far as I can ascertain, at all material times, conceded that the orders of 9 December 2004 should be set aside. That is precisely the result of my judgment. As I have already indicated, the wife persisted with her jurisdictional argument and other arguments which were unsuccessful. In my opinion, costs ought to be apportioned two-thirds to the wife and one-third to the husband.
27As to whether or not costs should be awarded on an indemnity basis, I answer that in the negative. At first blush, there are powerful reasons why costs should be awarded on an indemnity basis. I decline to make such an order, having regard to the arguments that the applicant ran before me, most of which were largely unsuccessful.
In relation to the application by the first respondent that the wife’s former solicitors, Paterson & Dowding, make a contribution towards his costs, the trial Judge stated as follows:
28Finally, I deal with the application for costs against the solicitors. Again, at first blush, it appears that there are arguments of strength that should be included in an order for costs. Although tempted to make such an order, I decline to do so because:
(a)I have not been directed to any formal application that they should bear costs. As far as I can see the proposal that they should pay costs only occurred during written submissions on costs. Those submissions were prepared at a time when they had ceased to act. Although the applicant’s written submission were copied to the solicitors, it is not clear, in my view, whether they were given any specific notice that an order for costs was being sought against them; and
(b)the husband and wife, between them, have the capacity to meet an order for costs. Whether or not the solicitors ought to indemnify them against any order made against them is, in my view, a matter between them and the solicitors. I have an incomplete knowledge of what instructions were given to the solicitors, and the extent to which they entered into the conspiracy.
The appeal
The husband, who is a legal practitioner, set out his grounds for appeal as follows:
1.The Learned Chief Justice erred in law in failing to provide the [husband] with procedural fairness as to costs.
2.The Learned Chief Justice erred in law in misinterpreting and/or misapplying the provisions of section 117(2A) in that he, inter alia
(i)Applied s 117(2A) as a punitive provision when no such interpretation is open and/or against the intention of s 117(1) & (2).
(ii)Concluded that there was no offers to settle the proceedings when there was no evidence to support this conclusion.
(iii)Took into account an irrelevant consideration, which was not in issue at the substantive hearing, in considering that there was some form of conspiracy.
(iv)Made findings on matters, such as the existence or otherwise of a conspiracy, when such findings were irrelevant to the issues between the parties, and were not supported by probative evidence.
(v)Misapplied the provisions of s 117(2A)(e) after making findings that the [first respondent] had been unsuccessful in a number of his remedies sought, and the [husband] had at all material times conceded the only order ultimately made by the Chief Justice.
3.The Learned Chief Justice erred in law in altering the correct legal test as to costs as set out in s 117 of the Act, to one of a test of blame or fault directed at, the Chief Justice’s view of the conduct of the parties before litigation commenced, summarised by him as being “…if the husband and wife had not taken the action that they did, there would not have been a case.”
The orders sought by the husband in relation to the appeal were
1.Orders 4 and 5 made by the Honourable Chief Justice on 2/2/07 be quashed.
2.The [wife’s] solicitors pay the costs on a party/party basis that were reasonably incurred by the [first respondent] OR
3.Pursuant to s 117(1) of the Act, each party shall bear his/her own costs.
Legislative framework
The relevant provisions of the Act relating to costs are set out in s 117:
(1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
In discussing the relationship between s 117(1) and (2) the High Court in Penfold v Penfold (1980) FLC 90-800, stated at 75,053-75,054:
It is an accurate description of sec. 117(1) to say that it expresses a general rule, provided that it is firmly understood that the subsection is not paramount to sec. 117(2). As subsec. (1) is expressed to be subject to subsec. (2), the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Subsection (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs.
In I and I (No 2) (1995) FLC 92-625, the Full Court stated that s 117 confers upon the court a broad discretion in relation to costs. In deciding whether the circumstances justify the making of an order for costs, the discretion must be exercised having regard to the matters set out in s 117(2A).
Appeal ground 1
The Learned Chief Justice erred in law in failing to provide the [husband] with procedural fairness as to costs.
The husband did not address this ground of appeal in his written submissions but the ground related to the husband having no opportunity to make oral submissions as to costs. In his reason for the orders under appeal Holden J recorded that, upon delivery of his reasons for judgment on 5 May 2006:
A timetable was arranged for the parties to file submissions with respect to the orders which would flow from those reasons for judgment and with respect to the issue of costs.
It is a common and entirely permissible approach to take submissions as to costs in writing, without any submissions being taken orally. Indeed, were oral submissions following written submissions to be taken as of course, that would largely defeat the purpose of providing for written submissions.
The husband filed both written submissions and an affidavit with respect to costs which, including annexures, ran to 188 pages. The matter was dealt with by the trial Judge on the papers. There is no evidence that the husband sought a hearing in relation to the issue. In our view, there is no merit in this ground of appeal.
Appeal grounds 2 and 3
2.The Learned Chief Justice erred in law in misinterpreting and/or misapplying the provisions of section 117(2A) in that he, inter alia
(i)Applied s 117(2A) as a punitive provision when no such interpretation is open and/or against the intention of s 117(1) & (2).
(ii)Concluded that there was no offers to settle the proceedings when there was no evidence to support this conclusion.
(iii)Took into account an irrelevant consideration, which was not in issue at the substantive hearing, in considering that there was some form of conspiracy.
(iv)Made findings on matters, such as the existence or otherwise of a conspiracy, when such findings were irrelevant to the issues between the parties, and were not supported by probative evidence.
(v)Misapplied the provisions of s 117(2A)(e) after making findings that the [first respondent] had been unsuccessful in a number of his remedies sought, and the [husband] had at all material times conceded the only order ultimately made by the Chief Justice.
3.The Learned Chief Justice erred in law in altering the correct legal test as to costs as set out in s 117 of the Act, to one of a test of blame or fault directed at, the Chief Justice’s view of the conduct of the parties before litigation commenced, summarised by him as being “…if the husband and wife had not taken the action that they did, there would not have been a case.”
The issue in this appeal is whether the trial Judge took into account and gave proper weight to all the matters set out in s 117(2A) of the Act and, in particular, the concession made by the husband early in the proceedings. The husband alleges the trial Judge took into account irrelevant considerations, particularly in relation to the conduct of the parties before the commencement of the litigation.
The following are the matters the trial Judge took into account when determining whether there were circumstances which would justify an order for costs:
·there had been a number of adjournments and amendments to the pleadings;
·the first respondent was unsuccessful in relation to all the relief sought by him except the setting aside of the orders of 9 December 2004;
·the wife was wholly unsuccessful in the relief sought by her;
·there were no offers to settle;
·the whole of the proceedings were as a result of the husband and wife conspiring to circumvent the rights of the first respondent, a bona fide purchaser for value; and
·this fact alone was sufficient for the trial Judge to order costs to the first respondent, even though he had been unsuccessful in certain aspects of his claim.
We disagree with the husband's submission that the trial Judge was not able to take into account his conduct and that of the wife (see B & J [2006] FamCA 256, paragraphs 28-34). The trial Judge was entitled to take into account the circumstances which led to the first respondent filing his application. However, in our opinion, the trial Judge should have taken into account the manner in which the husband and wife, individually, chose to litigate the matter thereafter. The wife did not concede that the consent orders should be set aside and sought other remedies. The husband, 14 months before trial, stated that he would consent to an order in terms of that finally ordered in favour of the first respondent.
The first respondent’s counsel submitted that the fact that the husband was ordered to pay only a third of the costs, reflects a reduction given by the trial Judge for the fact that the husband agreed to the appropriate orders. We do not agree. The trial Judge made a finding that the wife was wholly unsuccessful in relation to all matters raised by her at trial. The first respondent was wholly unsuccessful as to most of the matters raised by him at trial. The husband consented to the only orders made in favour of the first respondent 14 months before the trial. If the trial Judge took this matter into account, it is not sufficiently reflected in the order made by him, even taking into account the wide discretion available when determining the issue of costs. See Robinson and Higginbotham (1991) FLC 92-209.
In our view, the only appropriate costs orders which should have been made against the husband, taking into account his conduct before the proceedings commenced, the concession made early in the proceedings by him and the final result achieved by both the first respondent and the wife, was that he should pay a portion of the first respondent’s costs from the commencement of the proceedings until he filed his response in December 2005. With the greatest respect to the trial Judge, the order for costs, to the extent it extended over the period after the husband conceded to the application, fell outside the ambit of the reasonable exercise of discretion open to him.
During her submissions, counsel for the first respondent stated that should the husband's liability to pay costs be reduced, then the proportion of the costs the wife should pay should be increased.
Dr Dickey, Queen’s Counsel for the wife, stated that he would like the opportunity to be heard if the wife’s share of the costs were to be increased. The wife did not object to the order that she pay two thirds of the first respondent’s costs.
Subsequently, counsel for the first respondent changed her position and stated that even if the costs order against the husband was varied on appeal, the first respondent would not challenge the orders made in relation to the costs the wife should pay.
The husband in his appeal seeks to quash orders numbered 4 and 5. Order 4 only related to the costs order made against the wife who has no objection to that order standing.
The appeal in relation to order 5 should be upheld. The husband, in his Notice of Appeal, had originally sought we re‑exercise the trial Judge’s discretion in the event his appeal was allowed. In any event, the additional costs and delay associated with remitting this matter for rehearing would not be justified.
Given the position of the first respondent set out in paragraph 30 and his Honour’s findings, the order we make on a re-exercise of discretion is that the husband be liable for the first respondent’s costs to the extent of one third of the costs from the date of filing of the application until the date of filing of the husband’s amended response in December 2005. In our opinion, this is the only order we should make to reflect the early concession of the husband. The wife has agreed that she should be liable for two thirds of the entirety of the first respondent’s costs. The first respondent is not seeking to have the costs order against the wife increased. The effect of a variation of the order in these terms will be that the first respondent will have the entirety of his costs paid from the commencement of proceedings until 5 December 2005 and thereafter the wife will be responsible for two thirds of his costs.
Costs
At the outset, the husband indicated that, since he had represented himself, he had not incurred significant costs in the appeal. He declined to seek a costs certificate in the event his appeal was allowed. The first respondent and the wife sought costs certificates in relation to the appeal if the husband was successful. Whilst the husband did not seek any orders against the wife in the appeal, the first respondent initially sought for the wife to pay a higher proportion of the costs if the husband was successful in his appeal. It was appropriate for the wife to be represented at the hearing. In these circumstances, we propose to grant costs certificates to both the first respondent and the wife.
At the hearing of the appeal, after some discussion in relation to the issue, the husband amended his Notice of Appeal and no longer sought an order in terms of paragraph 2 or any other order against Paterson & Dowding.
Paterson & Dowding were represented at the hearing. They sought an order that the husband pay their costs of the preparation for and attendance upon the hearing of the appeal on an indemnity basis. The husband did not dispute that Paterson & Dowding were entitled to their costs, but said they should be paid on a party/party basis.
The parties were given a short time to provide written submissions in relation to this issue.
In the husband’s submissions, he stated that Paterson & Dowding should not have acted for the wife after they filed the Minute of orders sought and failed to advise the Court of the offer signed by the first respondent. In addition, he stated that the trial Judge made an error in paragraph 28 of his decision when he stated that no party had made an application for costs against Paterson & Dowding when, in fact, the husband had sought such an order in 2005. He submits that, because of these matters, he was justified in seeking the order that Paterson & Dowding pay his costs.
Whether, in fact, these matters would ever have been a basis for an order against Paterson & Dowding we cannot say because, as Paterson & Dowding indicated in their written submissions, the husband never formulated any ground of appeal, either in his Notice of Appeal or at the hearing of the appeal, specifically pertaining to his Honour’s decision not to make an order for costs against Paterson & Dowding.
The husband, even though he is a lawyer, did not abandon the order he sought against Paterson & Dowding until the hearing. In his oral submissions, the husband indicated that a reason he had sought orders against Paterson & Dowding was because he considered there would have to be consequential orders in the event his appeal was successful and his liability for the first respondent’s costs was reduced. In our view, this does not follow. The husband should have pressed the appeal only insofar as it related to the costs order made against him and left it to the first respondent to determine whether, in the event of the husband’s success in the appeal, the first respondent would seek remission of the matter for rehearing or consequential orders against the wife or the wife’s former solicitors.
The husband was never going to succeed in his claim that Paterson & Dowding pay his costs when no challenge was made to the trial Judge’s findings and conclusions in relation to his Honour’s refusal to make a costs order against them.
Shepherd J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 set out a number of matters, the presence of which may enliven the discretion to award indemnity costs. One of those matters is where it appears that the action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success.
Woodward J in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd & Ors (1988) 81 ALR 397 at 401 stated:
I believe that it appropriate to consider awarding ‘solicitor and client’ or ‘indemnity’ costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare stock but when they occur, the court will need to consider how it should exercise its unfettered discretion.
As stated previously, the husband was a legal practitioner. The submissions of Paterson & Dowding filed before the appeal was heard should have alerted him, if he was not aware previously, that there were no grounds to support the order sought by him.
Although a claim has been made for an order that costs be awarded on an indemnity basis no costs agreement has been tendered from which a calculation can be made as to the extent of the costs claimed. It is generally accepted however that parties to proceedings reasonably incur costs over and above those awarded by party/party costs. In this case Paterson and Dowding instructed a barrister to appear on their behalf and make written submissions both as to the merits of the appeal and as to the issue of costs. An order that they be awarded only party/party costs is likely to see them out of pocket for a large portion of those expenses.
Coleman J in Lasic & Lasic [2008] FamCA 80 and Guest J in A & A [2006] FamCA 102 considered the use of r 19.19 of the Family Law Rules 2004 (Cth) (“the Rules”) was appropriate in these circumstances. At paragraph 41 in A & A (supra) Guest J stated:
That [the inapplicability of indemnity costs] however, does not end the matter. Pursuant to Rule 19.19 of the rules I may order that Rule 19.18 does not apply and that a party is entitled to costs as assessed on a lawyer and client basis (Rule 19.19(1)(b) of the Rules). Rule 19.19(2) sets out some of the considerations that may be taken into account in making an order under that sub-rule which includes the importance, complexity or difficulty of the issues (Rule 19.19(2)(a); the reasonableness of each party’s behaviour (Rule 19.19(2)(b) and expenses properly paid or payable (Rules 19.19(2)(f).
In this matter it was appropriate for Paterson and Dowding to instruct counsel to appear on their behalf. The husband’s application for orders against them was never likely to succeed. In these circumstances they should be able to recover their professional fees incurred on a solicitor/client basis with the further order that r 19.18 of the Rules do not apply.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 3 July 2008
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