GARRETT & COWELL
[2013] FamCAFC 91
•7 June 2013
FAMILY COURT OF AUSTRALIA
| GARRETT & COWELL | [2013] FamCAFC 91 |
| FAMILY LAW – APPEAL – Appeal against dismissal of an application for the costs of an interlocutory application and the substantive proceedings – Where the wife asserts that the trial Judge failed to give reasons for dismissing her application for the costs of the interlocutory application – The trial Judge failed to give reasons in relation the costs of the interlocutory application albeit in circumstances where the wife’s submissions were confusing – Where the wife asserts that the trial Judge erred in taking into account comments about the wife’s conduct made by a Judicial Registrar – The trial Judge’s comments about the wife’s conduct have been misconstrued by the wife – The trial Judge’s reasons do not adequately explain why an order was not made against the husband for some of the costs of the substantive proceedings. FAMILY LAW – RE-EXERCISE OF DISCRETION – The husband’s lack of success in the interlocutory application does not alone warrant a costs order against him – The issue involved in the interlocutory application was finely balanced – There is inadequate information to allow the Court to determine what order for costs to make in relation to the substantive proceedings arising out the husband’s non-disclosure – No order for costs made – Appeal therefore dismissed. |
| Family Law Act 1975 (Cth), s 117 Family Law Rules 2004, r 19.08(2) |
| CDJ v VAJ (1998) 197 CLR 172 Gronow v Gronow (1979) 144 CLR 513 Harris and Harris (1991) FLC 92-254 House v The King (1936) 55 CLR 499 Norbis v Norbis (1986) 161 CLR 513 |
| APPELLANT: | Ms Garrett |
| RESPONDENT: | Mr Cowell |
| FILE NUMBER: | SYF | 3566 | of | 2006 |
| APPEAL NUMBER: | EA | 115 | of | 2011 |
| DATE DELIVERED: | 7 June 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | May, Thackray and Johnston JJ |
| HEARING DATE: | 6 June 2013 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 20 September 2011 |
| LOWER COURT MNC: | [2011] FamCA 117 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | In person |
| SOLICITOR FOR THE APPELLANT: | Self-represented litigant |
| COUNSEL FOR THE RESPONDENT: | No appearance |
Orders
The appeal be dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Garrett & Cowell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 115 of 2011
File Number: SYF 3566 of 2006
| Ms Garrett |
Appellant
And
| Mr Cowell |
Respondent
REASONS FOR JUDGMENT
Introduction
The appellant, Ms Garrett, and the respondent, Mr Cowell, were involved in property settlement proceedings which were commenced in August 2006 and concluded in June 2011.
For convenience, we will refer to Ms Garrett as “the wife” and to Mr Cowell as “the husband”, notwithstanding they are divorced.
The wife has appealed some of the orders made by Ryan J on 20 September 2011 dealing with her application for costs relating to the property settlement proceedings.
Ryan J ordered the husband to pay the wife’s costs of four interlocutory applications and the costs of a conciliation conference, but dismissed the balance of the wife’s application for costs.
The wife contends that Ryan J should have also ordered the husband to pay:
·her costs incurred in defending the husband’s application for the dismissal of her property settlement application; and
·40% of her costs of the substantive proceedings.
The husband lives in the Middle East and has not participated in the appeal. We are satisfied he was served with the Notice of Appeal and we are also satisfied notice of the hearing was sent to him at the address for service given in the substantive proceedings.
Procedural history
The somewhat complicated history of the proceedings is set out clearly in the reasons of Ryan J and does not bear full repetition.
It is sufficient to record that:
·in July 2006 the husband filed an application for property orders in Germany;
·on 3 August 2006, the wife filed her application for property settlement in Australia;
·on 16 October 2006, the husband filed an Application in a Case seeking the wife’s application be dismissed (“the forum application”);
·on 16 July 2007, Moore J dismissed the forum application, finding that the Australian court was not a “clearly inappropriate forum”;
·the husband’s appeal against Moore J’s order was abandoned;
·the substantive proceedings went to trial before a Judicial Registrar who made final orders in December 2008, which resulted in the wife receiving approximately $225,000 less than she sought and the husband receiving approximately $400,000 less than he sought;
·on 18 December 2008, the husband filed an Application for Review of the Judicial Registrar’s orders and, on the following day, applied for a stay of those orders;
·on 13 January 2009, the wife filed an Application in a Case seeking orders for the husband to disclose certain information;
·on 7 July 2009, the wife filed an Application in a Case seeking that the Application for Review filed by the husband be dismissed;
·on 3 June 2011, the husband was given leave to discontinue his Application for Review of the orders of the Judicial Registrar;
·on 1 July 2011, pursuant to directions made by Ryan J, the wife filed costs submissions;
·on 4 July 2011, the husband filed costs submissions (albeit, on their face, not responding to the wife’s submissions); and
·on 11 July 2011, the wife filed submissions in reply.
At paragraph 58 of her reasons for judgment, Ryan J referred to the wife having filed “an application for costs and written submissions”; however the file reveals that the application for costs was contained in the submissions. This will assume importance for reasons we will explain.
The reasons of Ryan J
Ryan J commenced her reasons by setting out the factual background, including the procedural history of the litigation.
As her Honour made her way through the procedural history she referred, at paragraphs 18, 19, 23, 24, 29, 37, 42, 43, 45 and 50, to her intention either to make or not make a costs order relating to various parts of the proceedings. In each instance, her Honour said that the reasons for her decision would be explained later in her judgment.
For present purposes, it is necessary to recite only paragraph 24, where her Honour mentioned the husband’s unsuccessful forum application:
24.On 16 October 2006, the husband filed an Application in a Case seeking the wife’s application be dismissed and costs. The husband’s application was dismissed by Moore J on 16 July 2007. Although the husband filed a notice of appeal, the appeal was deemed abandoned in February 2008. For reasons I explain below, a costs order will not be made for the costs associated with the hearing before Moore J, nor the abandoned appeal. (emphasis added)
After completing her survey of the procedural history, her Honour referred to the costs submissions in these terms (emphasis added):
59.The wife seeks an order that the husband pays her costs of the substantive proceedings, of his appeal against the decision of Moore J, of his Application for Review, and of his [German] property proceedings which continued in breach of injunction.
60.In her submissions, the wife has included the following costs incurred:
Caveat$760.22
Initial stages $8,891.65
Husband’s Application to Dismiss $48,597.00
Husband’s Appeal $4,834.65
Wife’s Application for Contempt $2,612.60
Preparation for hearing before Loughnan JR $31,137.50
Proceedings is [sic] [Germany] $52,894.40
Husband’s Application for Review $37,349.25
61.Throughout her submissions, the wife includes costs incurred from a law firm referred to as ‘[B&K]’, who were her legal representatives in the [German] proceedings. In addition to the costs in relation to the proceedings in [Germany], the costs being claimed in relation to the Application to Dismiss and the Application for Review include not insignificant amounts paid to her [German] legal representatives.
62.In her submissions, the wife claims she has incurred significant costs due to the husband’s failure to give disclosure, including costs involved in taking alternative steps including inquiries, investigation and the issue and service of subpoenas to obtain information for trial that would have otherwise been available if proper disclosure had been made.
63.The wife also claims her costs were significantly increased due to the husband’s repeated failure to comply with orders, including orders that he pay the mortgage payments and arrears and to discontinue the [German] proceedings. The wife also incurred significant costs in preparation for the hearing of the husband’s Application for Review which he discontinued.
Her Honour, at paragraph 65 and following, explained that she was only able to deal with the costs of the proceedings in Australia and that she was also unable to deal with the costs associated with the husband’s abandoned appeal against the orders made by Moore J (as it was for the Full Court to determine the costs of an abandoned appeal).
Her Honour then continued:
68.I am thus limited to costs orders with respect to the substantive proceedings undertaken in this Court, namely the Applications to Dismiss and for Contempt as well as the husband’s Application for Review. (emphasis added)
It would seem there was a minor infelicity of expression in paragraph 68 in that Ryan J did not intend to limit the costs issues to the applications she named, as it is evident her Honour acknowledged she was dealing with an application for costs of the substantive proceedings.
In any event, her Honour continued:
69.Taking into account the circumstances surrounding the husband’s noncompliance with orders and his late notice at which he chose to discontinue his Review application I am of the opinion that there are circumstances that justify the making of a cost order in favour of the wife.
When read in context, we take the reference in paragraph 69 to “the husband’s noncompliance with orders” to be a reference to orders made after the trial and during the course of the Review proceedings.
Her Honour then proceeded to deal with the matters in s 117(2A) of the Family Law Act1975 (Cth) (“the Act”), which a court is required to consider when dealing with an application for costs.
After a brief examination of the parties’ finances, her Honour concluded that their “financial circumstances are modest and the application of [s 117(2A)(a)] is moot”. She also found that s 117(2A)(b) was not relevant, as neither party had been in receipt of legal aid.
Importantly for this appeal, in dealing with s 117(2A)(c) her Honour said:
76.In relation to subsection (c), the husband’s conduct in relation to disclosure caused the judicial registrar in his reasons for judgment to conclude that “the husband was a poor witness” whose “non-disclosure was deliberate” (paragraphs 100-101). It is the wife’s case that this conduct significantly increased her legal costs. However, the judicial registrar also found cause to make the following remarks about the adequacy of the wife’s disclosure (at paragraph 99):
…There are unsatisfactory aspects to her disclosure that suggest that the wife has not always been careful about her representations made to Courts…
In dealing with s 117(2A)(d), her Honour said:
77.Subsection (d) relates to whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court. The husband’s failure to give adequate disclosure and, in particular to comply with orders and directions, attracts the application of the subsection in favour of the wife.
In dealing with s 117(2A)(e), her Honour said:
78.Subsection (e) requires the Court to consider whether any party to the proceedings has been wholly unsuccessful. The husband was wholly unsuccessful in his Application in a Case filed in 16 October 2006 seeking the wife’s initial application be dismissed and his Application for Review of the final property orders filed which was discontinued. However, as I have already noted the husband was not wholly unsuccessful in the substantive proceedings before the judicial registrar in November 2008. (emphasis added)
Having observed that there were no offers of settlement to be taken into account, and no other relevant matters, her Honour completed her reasons with the following paragraphs (emphasis added):
82.While I am satisfied that the wife has established circumstances which justify making an order for some of her costs, the circumstances are such that the wife has not established a basis for an order that the husband pays all of her costs of the proceedings. In the substantive proceedings neither party was wholly or substantially successful or wholly unsuccessful. Moreover both parties received unfavourable comment in relation to the adequacy of their disclosure.
83.However, the wife has incurred not insignificant costs in relation to the husband’s Application for Review filed on the 18 December 2008. The husband was granted a stay provided he diligently prosected this Review. This he did not do and indeed the Notice of Discontinuance was filed some 17 months after the Application for Review was filed.
84.The wife incurred costs in relation to the conciliation conference which the husband failed to attend. His breach of orders/directions in relation thereto warrants a costs order in the wife’s favour.
85.I am therefore satisfied that the wife has established circumstances which justify making an order for costs in relation to the husband’s Application in Review on party/party basis as agreed or assessed. The evidence is insufficient for me to determine the specific amount payable. Although it appeared she sought costs on an indemnity basis I am not satisfied that such a departure from the usual order is appropriate.
Her Honour then went on to order the husband to pay the wife’s costs of:
·the husband’s application for review filed 18 December 2008;
·the husband’s application for a stay filed 19 December 2008;
·the wife’s application in a case filed 13 January 2009;
·the wife’s application in a case filed 7 July 2009; and
·the conciliation conference.
No provision was made for the payment of costs relating to the forum application, nor was the husband ordered to pay any of the wife’s costs of the substantive proceedings.
Grounds of appeal
The wife relies on two grounds of appeal, namely:
1.The Learned Judge failed to give consideration, or failed to give proper consideration, to the wife’s application for her costs of the hearing before Moore J being the husband’s application filed 16 October 2006.
2.In declining to make an order that the wife have any of her costs of the substantive proceedings for property settlement the Learned Judge:
2.1failed to give consideration, or failed to give proper consideration, to the extent to which husband’s conduct had increased the costs of the proceedings; and
2.2misdirected herself by interpreting the comments of the Judicial Registrar as equating the wife’s conduct to that of the husband when there was no basis for such a finding.
Appellate principles
The appeal is against a discretionary order. The principles governing such appeals are not in doubt; see House v The King (1936) 55 CLR 499, Gronow v Gronow (1979) 144 CLR 513, Norbis v Norbis (1986) 161 CLR 513 and CDJ v VAJ (1998) 197 CLR 172 where at 230 Kirby J said:
Neither this Court, nor the Full Court in relation to appeals to it, has authority to disturb a decision under appeal simply because the appellate judges, faced with the same material, would have reached a conclusion different from that under appeal. To approach the appellate function in such a way would contravene established authority. It would involve one level of the judicial hierarchy, without lawful warrant, intruding into the decisions of another. To authorise appellate disturbance, where the decision under appeal is discretionary or involves quasi-discretionary evaluation, it is necessary for those mounting the challenge to demonstrate that, in reaching the orders the subject of the appeal, the court below has acted on a wrong principle or (although the precise error of principle cannot be identified) has reached a conclusion which is plainly wrong. Obviously, what is “plainly wrong” will vary in the eyes of different beholders. It is not necessary for an appellant to demonstrate the kind of unreasonableness that must be shown to authorise judicial intervention in the decision of an administrator otherwise acting within power. The reference to “plainly wrong” is designed to remind the appellate court of the need to approach an appeal with much caution in a case where an error of principle cannot be clearly identified. (footnotes omitted])
The Full Court said in Harris and Harris (1991) FLC 92-254 at 78,711 that costs orders are “peculiarly a matter which are within the discretion of the trial judge” and that “only in the rarest of cases” should an appeal court interfere with such orders. Although we accept this may state the proposition “at its highest” (Browne v Green (2002) FLC 93-115 at [50]), there is nevertheless a long line of authority emphasising the extent to which costs orders are protected from appellate interference.
It is important, however, to recognise that Ryan J was not the “trial Judge” in the sense that her Honour was the last of many judicial officers to deal with the matter over many years. Her only involvement, other than to deal with the costs issue, was to make the order on 3 June 2011 giving leave to the husband to discontinue. As her determination of the costs issue was therefore undertaken entirely “on the papers”, her Honour enjoyed no advantages that are not also available to us.
Ground 1 – Costs of the forum application
By this ground it is contended that Ryan J failed to give proper consideration to the wife’s application for the costs of successfully defending the husband’s forum application. This is a significant issue, given that the wife claimed to have incurred costs of $48,597.
The wife’s submissions in support of Ground 1
In support of this ground, the wife draws attention to paragraph 24 of the reasons, where Ryan J said she would later explain why she would not make an order for costs of the hearing at which the husband’s forum application was dismissed. However, as the wife points out, save for the reference at paragraph 78 to the husband’s forum application having been wholly unsuccessful, there was no further reference to the wife’s application for costs of that application, apart from the recitation at paragraph 60 of the quantum of costs the wife had incurred.
In her submissions on appeal, the wife drew our attention to her written submissions before Ryan J where she said:
8.Husband’s application to dismiss
8.1In October 2006 the husband applied to have the proceedings dismissed asserting that he had commenced proceedings in [Germany]. The application was vigorously argued before Moore J early in 2007 and dismissed after a reserved decision in July 2007.
8.2The husband was wholly unsuccessful in his application.
8.3The application was not an application in the ordinary-course of the proceedings but was a stand-alone application.
8.4There was nothing in the reasons for judgment that suggested any conduct by the Wife that would preclude an order for costs in her favour.
8.5The husband sought to mislead the Court to the effect that he had commenced property proceedings in [Germany] more than a year before the wife’s Australian proceedings in an attempt to persuade the court that the lengthy duration of the [German] proceedings was a factor in favour of his application.
Paragraph 8.6 of the wife’s costs submissions before Ryan J then went on to provide a breakdown of the $48,597 in fees said to have been incurred in opposing the forum application.
We note that the costs submissions filed by the husband before Ryan J made no reference to the wife’s submissions. Her Honour correctly described his submissions as being of little, if any, assistance.
Discussion of Ground 1
We accept there is an internal inconsistency in her Honour’s treatment of the application for costs relating to the forum application.
The inconsistency can be seen between:
· paragraph 59 of the reasons where her Honour sets out what the wife was seeking by way of costs, and in which no mention is made of the forum application, save for the costs of the husband’s appeal against its dismissal; and
· the other parts of the reasons, in particular paragraphs 24 and 68, where her Honour appears to accept that the wife was pursuing an application for costs of the forum application, which her Honour intended to dismiss for reasons to be given later, but which were not ultimately given.
There is no doubt that the source of this confusion is the wife’s own submissions to Ryan J, which commenced with this paragraph (emphasis added):
The wife seeks an order that the husband pay her costs of:
I.the substantive proceedings;
II.the husband’s appeal against the decision of Moore J;
III.the husband’s application for review:
IV.the husband’s [German] property proceedings continued in breach of injunction.
There is no mention in this opening paragraph of any application by the wife for the costs of opposing the husband’s forum application. Paragraph 59 of her Honour’s reasons is therefore an entirely accurate statement of how the wife formulated her costs application.
Were it not for her Honour’s references at paragraphs 24 and 68 to the wife having an application before the Court for the costs of opposing the forum application, we would have formed the view that her Honour regarded the wife as being bound by the opening paragraph of her own costs submissions. However, because of the content of paragraphs 8.1 to 8.6 of the wife’s costs submissions, we consider her Honour was right to have taken the view, at least at some points in her judgment, that she was being asked to rule on the costs of the forum application.
Her Honour’s failure to give reasons for dismissing that application for costs, in circumstances where she said she would give reasons, constitutes appellable error, albeit an entirely understandable one given the confusing manner in which the application had been made.
Re-exercise of the discretion relating to the costs of the forum application
Given that the costs dispute has been conducted entirely on the papers, there is no reason we should not re-exercise the discretion.
Save for one issue to which we will refer shortly, there is nothing to indicate that any of the matters referred to in s 117(2A) of the Act have relevance to the issue of the costs relating to the forum application, save for the fact that the husband’s application was wholly unsuccessful.
The fact that a party has been wholly unsuccessful in one discrete part of the proceedings does not lead automatically to a conclusion that they should pay the other party’s costs. It must be remembered that at the time the forum application was made there were simultaneous proceedings dealing with property issues in Australia and in Germany, and the proceedings in Germany were first in time.
Our review of the reasons for judgment delivered by Moore J suggests that the matter was fairly finely balanced, in that there were a number of factors that were seen as supporting the husband’s contention, albeit her Honour found those were outweighed by other factors that supported the wife’s position. The fact the decision was not an easy one might be seen as being reinforced by the fact that the judgment was not delivered until nearly three months after receipt of the final written submissions.
We are therefore not satisfied that the husband’s lack of success in this stand-alone application is sufficient reason to justify departure from the principle stated in s 117(1) of the Act that each party to proceedings should bear their own costs.
The only other issue relied upon by the wife in support of her claim for costs of the forum application was that identified in paragraph 8.5 of her submissions, which we have set out above. Apart from the bald assertion, there was no reference in that submission to any document or any finding to ground the claim that the husband had endeavoured to mislead the court about the status of the proceedings in Germany.
In conclusion, we note that while rule 19.08(2)(b) of the Family Law Rules 2004 permits the filing of a costs application up until 28 days after the final order is made, rule 19.08(2)(a) does allow such an application to be made “at any stage during a case”. In our view, especially with a “stand-alone application”, any costs application should ordinarily be made promptly after the disposition of the application – and made to the judicial officer who dealt with the matter. We recognise, however, the difficulty the wife had in pursuing an application for costs at the time, given that she was overseas.
Ground 2 – Costs of the substantive proceedings
By this ground the wife complains about the failure of Ryan J to make any order for costs in her favour relating to the substantive proceedings.
The wife’s submissions in support of Ground 2
The complaint is directed entirely to the way in which her Honour dealt with the conduct of the parties, and in particular focuses on the finding at paragraph 82 of the reasons that “both parties received unfavourable comment in relation to the adequacy of their disclosure”.
In her oral submissions, the wife made clear that her primary purpose in pursuing the appeal was not to obtain any financial benefit, but rather to correct the impression she considers Ryan J had formed that her conduct in the substantive proceedings before the Judicial Registrar had been as bad as the conduct of the husband. She feared that, left uncorrected, this impression may have a negative impact on future proceedings she wishes to bring to vary and/or enforce the substantive property settlement orders.
As the wife pointed out in her written submissions, paragraph 82 of the reasons of Ryan J appears to have been based on paragraph 76 of her Honour’s reasons where reference was made to the Judicial Registrar’s comment that:
There are unsatisfactory aspects to her disclosure that suggest that the wife has not always been careful about her representations made to Courts.
The wife submits that her Honour’s reference to the “unfavourable comment” of the Judicial Registrar appears to have “coloured” the approach she took to her application for costs. She argues that the Judicial Registrar’s remark was misunderstood or was treated in isolation without examining the whole of his judgment.
It was further submitted that her Honour had used the quotation from the Judicial Registrar’s reasons for the purpose of comparing the parties’ conduct about the disclosure of documents, when in fact the Judicial Registrar was not referring to the wife’s disclosure of documents but rather to disclosure of relevant factual matters.
The wife’s submissions went on to refer to three factual matters the Judicial Registrar had in mind when mentioning the “unsatisfactory aspects” of the wife’s “disclosure”. These were:
·the wife’s statement in her application for property settlement about cohabitation having commenced in March 1997, compared to her evidence in court that cohabitation had commenced in December 1996;
·the omission of any mention by the wife in her property settlement application of the proceedings in Germany; and
·conflicting evidence about who had paid a deposit on a property.
The wife’s submissions sought to challenge or minimise the findings made by the Judicial Registrar in relation to these factual matters. We do not consider it necessary to discuss those submissions. It is sufficient to say that we accept there appears some merit in the wife’s contention that these were not matters of great moment and were not directed to the failure to disclose documents.
The wife also drew attention to the “most important” findings made by the Judicial Registrar that she had given her evidence “clearly and carefully” and had not been “successfully challenged on any issue”, whereas the husband was a “poor witness” whose recollection was not as clear as that of the wife and who had been deliberately vague when responding to questions. Reference was also made to the Judicial Registrar’s finding that the husband’s failure to make full disclosure had been “deliberate”. Again we accept the merit in the wife’s proposition that the Judicial Registrar’s reasons make clear that he had a very favourable view of the wife as a witness, and a far less favourable view of the husband.
The wife submitted that the husband’s conduct had caused her to incur increased costs by having to seek other means to deal with the non-disclosure and also caused the trial to be prolonged. The wife argued that while Ryan J had acknowledged that the circumstances, including the husband’s non-compliance with orders, warranted the making of a costs order, she had made no order for costs that took into account the husband’s non-compliance. (This is not entirely correct as Ryan J did order the husband to pay the costs of the wife’s application of 13 January 2009 to obtain disclosure of information).
The wife also made submissions about alleged errors of fact made by Ryan J. In her oral submissions the wife very properly acknowledged that these were all minor matters, and in fact we consider most of the perceived errors were not errors at all. The wife did not suggest that the claimed errors had any direct impact on the outcome.
Discussion of Ground 2
Just as it would have been wrong if her Honour had read one paragraph of the Judicial Registrar’s reasons in isolation, it is wrong for the wife to focus on paragraph 76 of her Honour’s reasons in isolation from the balance of her judgment.
Her Honour was quite correct in pointing out in paragraph 76 that the wife had received some criticism from the Judicial Registrar. But her Honour also recorded that the Judicial Registrar had found the husband to be “a poor witness whose non disclosure was deliberate”. Her Honour also recorded that it was the wife’s case that the husband’s non-disclosure had caused her to incur significant additional legal costs, but at no point did her Honour suggest that it was claimed that the wife’s non-disclosure had caused the husband any additional costs.
Thus there can be no basis for concluding that Ryan J considered that the husband’s unsatisfactory conduct had somehow been “cancelled out” by the conduct of the wife. Indeed, as we have recorded, her Honour said that “the husband’s failure to give adequate disclosure and, in particular to comply with orders and directions, attracts the application of [s 117(2A)(d)] in favour of the wife”. No similar finding was made in favour of the husband.
Accordingly, we have no difficulty with her Honour’s reasoning until we come to paragraph 82, where her Honour said that while she was satisfied that the wife had established circumstances which justified making an order for “some of her costs”, the circumstances were not such that she had established a basis for an order that “the husband pays all of her costs of the proceedings”. (emphasis added)
The difficulty we have with this paragraph is that it is not clear whether her Honour, in accepting there was a basis for an order for payment of “some” of the wife’s costs, was referring to those specific matters which became the subject of the costs orders, or whether she was referring to the costs of the substantive proceedings.
If the latter interpretation is the correct one, then we respectfully consider her Honour erred in failing to go on to explain what other factors had persuaded her there should be no costs order at all, other than costs associated with specific applications.
If the former interpretation is the correct one, then we respectfully consider her Honour erred in apparently considering only whether the husband should pay all of the wife’s costs, in circumstances where her findings would suggest there was some basis for the husband to pay at least portion of the wife’s costs of the substantive proceedings
In this context it is important to observe that her Honour did not reject the wife’s assertion, recorded at paragraph 62 of the reasons, that she had:
incurred significant costs due to the husband’s failure to give disclosure, including costs involved in taking alternative steps including inquiries, investigation and the issue and service of subpoenas to obtain information for trial that would have otherwise been available if proper disclosure had been made.
We have no doubt her Honour was right in concluding that the wife had not made out a claim for all of her costs of the substantive proceedings, given that the result fell so far short of what she had sought. However, in light of the findings made about the husband’s level of non-disclosure, and the absence of any finding rejecting the wife’s assertion about her increased costs, we have concluded that her Honour’s reasons do not adequately explain why she did not make an order for the husband to pay at least portion of the wife’s costs of the substantive proceedings.
Re-exercise of the discretion relating to the costs of the substantive proceedings
In seeking to re-exercise the discretion relating to the costs of the substantive proceedings, we have only the same material available to us as was available to her Honour. This was contained in paragraph 13 of the wife’s submissions, which read as follows:
13. Failure to give disclosure as ordered
13.1The Husband failed to give disclosure within six weeks and, despite on-going requests, he did not do so till shortly before the trial.
13.2 The Husband’s purported disclosure was grossly inadequate and contained no evidence of employment, income nor overseas bank accounts.
13.3 At trial the Husband asserted that – despite being employed by an international corporation – he was paid in cash.
13.4 The Wife incurred costs seeking the husband’s compliance with the orders.
13.5 When the Husband continued to fail to comply – and ultimately complied inadequately – the Wife was obliged to take alternative steps to attempt to obtain information for trial that would have otherwise been available through proper disclosure. This included inquiries and investigations, the issue and service of subpoenae-to-produce and subpoenae to give evidence, inspection and consideration of documents produced. These costs were included in the Wife’s costs of the trial as were the costs in 14 & 15 below.
Lawyer X $ 5,760.00
Barrister Y $16,000.00
Law Firm Z $ 9,377.50
$31,137.50
It will be observed that no effort was made in these submissions to identify with precision the additional work undertaken as a result of the husband’s non-disclosure, nor was any attempt made to identify the proportion of the costs incurred that was related to this work.
Given that Ryan J had not conducted the substantive hearing, it was unreasonable for the author of the costs submissions to expect that her Honour might somehow be in a position to “pluck a figure out of the air” to represent the quantum of costs, or even the proportion of the costs, attributable to the husband’s conduct. Any attempt to do so would, in our view, itself have represented appellable error as there was no principled way in which such a decision could be reached (save perhaps by the judicial officer who had conducted the trial).
Thus, the best Ryan J could have done, and the best we could do, would be to seek to craft some form of order identifying the type of costs for which the husband should be responsible and then leave the parties to agree the costs or have an assessment undertaken by somebody else. Given the improbability of agreement being reached, we have concluded it would be unrealistic to attempt to craft an order that would be sufficiently clear to allow a principled costs assessment.
As a fallback position, the wife suggested in her oral submissions that we could make a “nominal” order for costs against the husband arising out of his failure to make proper disclosure. She suggested this “nominal” order could be pitched at the bottom end of the range. Although we are not entirely unsympathetic to this proposition, we have concluded we do not have sufficient information to allow us to arrive at a principled determination.
In coming to our decision, we have also taken account of the fact that the wife candidly acknowledged in her oral submissions that she holds out little prospect of being able to recover the costs from the husband, given that he has apparently failed to comply with even the substantive orders for property settlement.
The outcome
Although we have identified elements of the wife’s complaint that had some merit, we have found on the re-exercise of the discretion that there should be no additional orders for costs.
The appeal will therefore be dismissed.
I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 7 June 2013.
Associate:
Date: 7 June 2013
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