Goudarzi & Bagheri (Costs)
[2017] FamCAFC 268
•14 December 2017
FAMILY COURT OF AUSTRALIA
| GOUDARZI & BAGHERI (COSTS) | [2017] FamCAFC 268 |
| FAMILY LAW – APPEAL – COSTS – Application for costs in the appeal – Where the appellant was partially successful – Where an offer of settlement was made – Where the appellant fared no better in the appeal than in the offer of settlement – Application for costs on a party/party basis granted – Amount of costs fixed. FAMILY LAW – APPEAL – COSTS – Application for costs in the costs application – Application for costs on a party/party basis granted. FAMILY LAW – APPEAL – COSTS – Application for costs in application to adduce further evidence – Where the evidence could have formed part of the application for costs – Application for costs dismissed. |
| Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 Lenova v Lenova (Costs) (2011) FLC 93-467 Parke & the Estate of the Late A Parke (2016) FLC 93-748 |
Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 19.18(1)
| APPELLANT: | Ms Goudarzi |
| RESPONDENT: | Mr Bagheri |
| FILE NUMBER: | EA | 66 | of | 2016 |
| APPEAL NUMBER: | SYC | 7646 | of | 2008 |
| DATE DELIVERED: | 14 December 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Thackray, Ryan & Forrest JJ |
| HEARING DATE: | 14 December 2017 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 4 April 2016 |
| LOWER COURT MNC: | [2016] FamCA 205 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Williams |
| SOLICITOR FOR THE APPLICANT: | Barkus Doolan Family Lawyers |
| THE RESPONDENT: | No appearance |
Orders
The appellant wife contribute to the respondent husband’s costs of and incidental to the appeal fixed in the sum of $22,790.34, payable within 28 days.
The appellant wife contribute to the respondent husband’s costs of and incidental to the application for costs fixed in the sum of $2,750, payable within 28 days.
The respondent husband’s application for costs of the application to adduce further evidence be dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Goudarzi & Bagheri (Costs) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: SYC 7646 of 2008
File Number: EA 66 of 2016
| Ms Goudarzi |
Appellant
And
| Mr Bagheri |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
Ryan J
This appeal by the wife was heard before us on 8 August 2017. On 15 September 2017 orders were made allowing the appeal in part. Order 3 of those same orders enabled the parties to make an application in respect of costs by way of written submissions to be filed and served within 14 days of the date of the orders. The husband sought his costs of the appeal by way written submissions filed on 29 September 2017.
By order 4 of the same orders, the other party, in this case the wife, was given 14 days within which to file and serve written submissions in answer thereto. No submissions have been filed by the wife.
Indeed the wife did not appear today. By reference to the affidavit of service filed in court today and correspondence between the Appeal Registrar and the wife as recently as yesterday, I am satisfied that the wife is aware that the husband’s application to adduce evidence and for costs are listed for hearing before us today. There is no explanation for the wife’s failure to appear and no application was made by her to adjourn the hearing. It was appropriate that the matter proceed as listed.
On 28 September 2017 the husband filed an application seeking leave to adduce further evidence in his application for costs, being an offer of settlement dated 15 December 2016 and related evidence. The evidence was undoubtedly relevant and the application was granted. However, in my view the offer of settlement could properly have been attached to the written submissions and at first blush the application to adduce further evidence was unnecessary. I will say more about this issue shortly.
In any event, the husband’s solicitors served the offer on the wife by email dated 15 December 2016. At that time the wife was representing herself. There was no response. Upon a Notice of Address for Service being filed by solicitors for the wife, in an email addressed to those solicitors dated 8 February 2017 the offer of settlement was again served on the wife. Once again there was no response.
In the offer of settlement the husband proposed that that the appeal be settled with the following variation of the property orders under appeal:
a)Order 7.3 of the Orders made on 4 April 2016 be deleted and replaced by the following:
“7.3 in payment of 55% of the balance then remaining to the wife; and
7.4in payment of a further sum of $785,585 to the wife; and
7.5in payment of a further sum of $178,886.60 to the wife; and
7.6in payment of the balance then remaining to the husband.”
b)That the Notice of Appeal filed 29 April 2016, as amended on 20 September 2016, be dismissed.
c)That each party pay their own costs of and incidental to proceedings number EA 66/2016.
The offer addressed a substantive issue raised by the wife in her grounds of appeal. The offer was open for 42 days and foreshadowed the husband’s intention to seek a costs order against the wife if the appeal was dismissed. The appeal was not dismissed but as I will explain, the wife fared no better in the appeal than the husband proposed by way of settlement.
As I said at the outset, the appeal was allowed in part and, in accordance with s 94(2) of the Family Law Act 1975 (Cth) (“the Act”), this court varied the orders by way of re-exercise “so as to give effect to the intention of the primary judge concerning the percentage distribution of the parties’ property” [63].
Relevantly, it was ordered:
(2)That Order 7.3 made on 4 April 2016 by Cleary J be varied by:
(a)Discharging Order 7.3; and
(b) Ordering in lieu as follows:
7.3In payment of 55 per cent of the balance then remaining to the wife;
7.4In payment of a further sum of $964,471.60 to the wife;
7.5In payment of such sums as are necessary to discharge St George residential loan #100 and residential loan #700; and
7.6In payment of the balance then remaining to the husband.
In now seeking costs the husband contends that the appeal was allowed in those respects conceded by him in his summary of argument filed 25 November 2016 (see paragraphs 19-22) and substantially in the form of the order proposed in the offer of settlement. This is not strictly correct as the primary position adopted in the summary of argument was that the appeal should be dismissed without variation to the orders.
Be that as it may, the application for costs is primarily pressed on the basis of the offer of settlement.
The applicable law
Section 117(1) of the Act is the governing provision concerning costs and provides the general rule that that subject to s 117(2) each party to proceedings under the Act shall bear his or her own costs. Section 117(2) requires a finding of justifying circumstances as an essential preliminary to the making of an order for costs. If there are circumstances that justify it in so doing, the court may make such order for costs as the court considers just. In considering what order, if any, should be made the court is required to have regard to the provisions of s 117(2A). It is not necessary for a court to be satisfied that all of the factors referred to in s 117(2A) are met before an order for costs can be made.
Relevantly s 117(2A) of the Act provides:
(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.
Discussion
As is evident from our reasons given in the appeal both parties are of substantial means [4], [6]. It is correct that, as a consequence of the substantive orders as varied in the appeal, the wife has significant property including cash standing to her name (s 117(2A)(a)). There is no doubt that the wife has the capacity to meet an order for costs in the amount sought by the husband.
The husband submits that the wife’s success in the appeal is eroded by the concessions as to order 7.3 made in his offer of settlement. Thus, given that the wife failed to establish any other ground of appeal, it cannot be said that she has been partially successful (s 117(2A)(e)). Section 117(2A)(e) is in fact addressed to whether any party has been wholly unsuccessful, which the wife was not. Nonetheless, the submissions made under the rubric of s 117(2A)(e) can be considered under ss 117(2A)(f) and (g).
In support of his application for costs, the husband points to the offer of settlement (s 117(2A)(f)). It is submitted that the offer of settlement proposed a variance to order 7.3 was “substantially identical” to the orders ultimately made by this court. Orders 7.3 and 7.6 of the offer are identical to that which was ordered by this court. Orders 7.4 and 7.5 of the offer, when read together, propose payment to the wife of $964,471.60 ($785,585 plus $178,886.60). Order 7.4 provides for payment to the wife of $964,471.60.
The husband concedes that the offer of settlement did not include the variation ordered by this Court by the inclusion of order 7.5, that is, “in payment of such sums as are necessary to discharge St George residential loan #100 and residential loan #700”. However, his submission that he did not challenge this order is well made. These loans were discussed by the primary judge at [77] and a finding was made that the husband was solely liable for them.
It follows that the effect of the orders made by the primary judge was that the husband would solely meet payment of the loans from his share of the sale proceeds. In other words, the submission of the husband that the combined effect of the undisturbed orders made by the primary judge and the offer of settlement, is that the offer implicitly provides for the same priority of payments to the wife as was ordered in the appeal should be accepted.
I am satisfied that it was not necessary for the husband to include order 7.5 in his offer for his submission that the wife did no better in the appeal that his offer of settlement to be made out.
In Lenova v Lenova (Costs) (2011) FLC 93-467 the Full Court said:
10. In this jurisdiction, costs do not “follow the event”; the Act prescribes, relevantly, that “subject to subsection (2) … each party to proceedings under this Act shall bear his or her own costs” (s 117(1)). As a result, a litigant, or prospective litigant, cannot rely upon a costs order following upon success in the action as a means of dissuading the other party from pursuing unmeritorious litigation or as a means of seeking to persuade the other party from pursuing litigation.
11. A timely offer in writing genuinely made might, then, be seen as an important part of a limited armoury available to prospective litigants seeking to avoid the costs of litigation. Conversely, where, consequent upon success in an action, a litigant can point to the making of a genuine and timely offer having been made, that offer might be seen as an important (albeit not the only) matter in the exercise of the discretion as to the ordering of costs.
The husband has presented a strong case for an order for costs in his favour. Although the husband’s financial circumstances make it plain that he does not need funds by way of costs in order to meet expenses, he has clearly established that as a consequence of the wife’s failure to respond to the offer of settlement and the outcome of the appeal, he has incurred unnecessary significant legal expenses. These factors amount to justifying circumstances for an order for costs in his favour, calculated from the date of service of the offer of settlement.
An order for costs in favour of the husband should be made. The question of quantum thus arises. Wherever practicable, the Full Court now fixes the costs payable. This process is supported by r 19.18(1) of the Family Law Rules 2004 (Cth) (“the Rules”) which provides that we may order costs payable in a specific amount.
As was said in Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 at 162, the purpose of rules enabling an order for costs in a specific amount, without formal assessment or taxation, is to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”.
Murphy J observed in Parke & the Estate of the Late A Parke (2016) FLC 93-748 (citations omitted):
130. If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court”… The process does not “by its very nature … envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”…
In exercising the power to award a lump sum, the court must act judicially, but that does not mean it must exercise the power in any “scientific or formulaic manner”: Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [10].
The husband’s solicitor claims costs in the appeal calculated in accordance with Schedule 3 of the Rules in the amount of $10,502.23. However, this includes costs which predate the offer of settlement. Excluding those items, the solicitor’s costs sought are $4,372.16. The items claimed were itemised on a solicitor/client basis. Before us it was acknowledged that calculated on a party/party basis the amount should be reduced to $3,750. Having considered such information as was provided, and taking a broad brush approach, I would fix those costs at $3,750.
The next part of the claim for costs relates to the costs of the senior counsel who prepared the summary of argument. This work was all done prior to the offer of settlement. I would not make an order for costs for any of this work.
Different senior counsel appeared on the appeal for which the amount of $27,000.00 (exclusive of GST) is sought. Again this is calculated by reference to a costs agreement reached with the husband and bears no relationship to the amount payable under the Rules. Calculated by reference to Schedule 3 the amount sought is $19,040.34. I am satisfied this amount is appropriate, as there were 8 volumes of appeal books and the issues raised in the appeal were legally and factually complex.
The husband also seeks his costs of the application for costs, including briefing counsel to appear at this hearing. In our reasons given on the appeal it was made clear that we intended to address the question of costs without the necessity of an oral hearing, thus avoiding the time and expense for the parties and the court inherent in a court appearance. The details of the offer could have been addressed in the written submissions and the offer of settlement annexed to it. However, as it transpired questions arose about the quantum of costs sought and in relation to the date from when an order for costs could properly run. I accept that procedural fairness to the husband meant that an attendance before us was thus required.
Having regard to the schedule of fees provided by counsel who appeared before us and who prepared the written summary in support of the application, measured against Schedule 3 rather than a costs agreement, I would allow $2,000 for counsels fees.
In relation to the solicitor fees, these are calculated by reference to Schedule 3, and again include matters that are properly in the domain of a solicitor/client bill of costs. I would allow the solicitor fees fixed in the amount of $750.
I would allow the wife 28 days within which to pay the total sum.
Forrest J
I agree and would make the same orders as Justice Ryan has proposed for all the reasons she has given.
Thackray J
I also agree with her Honour’s reasons and the orders she proposes. Therefore, the formal orders of the Court are as follows:
1.The appellant wife contribute to the respondent husband’s costs of and incidental to the appeal fixed in the sum of $22,790.34, payable within 28 days.
2.The appellant wife contribute to the respondent husband’s costs of and incidental to the application for costs fixed in the sum of $2,750, payable within 28 days.
3.The respondent husband’s application for costs of the application to adduce further evidence be dismissed.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Thackray, Ryan & Forrest JJ) delivered on 14 December 2017.
Associate:
Date: 15 December 2017
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