Jess & Ors & Jess & Ors (Costs)
[2015] FamCAFC 184
•23 September 2015
FAMILY COURT OF AUSTRALIA
| JESS AND ORS & JESS AND ORS (COSTS) | [2015] FamCAFC 184 |
| FAMILY LAW – APPEAL – COSTS – Indemnity costs – Where the appeal was wholly unsuccessful – Where the respondents sought indemnity costs and the appellants opposed any order for costs – It is appropriate that costs follow the event, and the appellants have capacity to pay – The respondent husband’s failure to provide information about the extent of his costs is fatal to his application for indemnity costs – The outcome of the appeal was not as clear as submitted by the respondents – Order for the appellants to pay the respondents’ costs, but not on an indemnity basis. FAMILY LAW – APPEAL – COSTS – Practice and procedure – Written costs submissions should generally only be made if there has been an offer of settlement that cannot be disclosed prior to the delivery of judgment. |
| Family Law Act 1975 (Cth) – s 117 |
| Jess and Ors & Jess & Ors (2014) FLC 93-620 Nada & Nettle (Costs) (2014) FLC 93-612 Prantage & Prantage (2013) FLC 93-544 |
| 1ST TO 10TH APPELLANTS: | Mr Jess Jnr and others |
| 1ST RESPONDENT: | Ms Jess |
| 2ND RESPONDENT: | Mr Jess |
| 3RD TO 20TH RESPONDENTS: | H Company and others |
| FILE NUMBER: | MLF | 3444 | of | 2006 |
| APPEAL NUMBER: | SOA | 74 | of | 2013 |
| DATE DELIVERED: | 23 September 2015 |
| PLACE DELIVERED: | Perth |
| PLACE HEARD: | In chambers |
| JUDGMENT OF: | Bryant CJ, Thackray & Ainslie-Wallace JJ |
| HEARING DATE: | By way of written submissions |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 5 November 2013 |
| LOWER COURT MNC: | [2013] FamCA 863 |
REPRESENTATION
| COUNSEL FOR THE APPELLANTS: | Mr Waller QC, Mr Strum & Mr Mereine |
| SOLICITOR FOR THE APPELLANTS: | HWL Ebsworth Lawyers |
| COUNSEL FOR THE 1ST RESPONDENT: | Dr Ingleby |
| SOLICITOR FOR THE 1ST RESPONDENT: | Kenna Teasdale Lawyers |
| COUNSEL FOR THE 2ND RESPONDENT: | Mr McCormick |
| SOLICITOR FOR THE 2ND RESPONDENT: | Goldsmiths Lawyers |
| COUNSEL FOR THE 3RD TO 20TH RESPONDENTS: | Unrepresented |
| SOLICITOR FOR THE 3RD TO 20TH RESPONDENTS: | Unrepresented |
Order
The appellants pay the costs of the first and second respondents of and incidental to the appeal as agreed, and in default of agreement, as assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Jess and Ors & Jess and Ors (Costs) 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 MELBOURNE |
Appeal Number: SOA 74 of 2013
File Number: MLF 3444 of 2006
| Mr Jess Jnr and others |
1st to 10th Appellants
And
| Ms Jess |
1st Respondent
And
| Mr Jess |
2nd Respondent
And
| H Company and others |
3rd to 20th Respondents
REASONS FOR JUDGMENT
On 27 November 2014, we made orders dismissing the appellants’ application for leave to appeal against an anti-anti-suit injunction: Jess and Ors & Jess and Ors (2014) FLC 93-620. The orders contained a timetable for filing of costs submissions.
Submissions were filed by:
·the first respondent (“the wife”) on 18 December 2014, seeking that the appellants pay her costs on an indemnity basis;
·the second respondent (“the husband”) on 18 December 2014, seeking that the appellants pay his costs on an indemnity basis;
·the appellants on 13 February 2015, in response; and
·the wife on 20 February 2015, in reply.
The husband did not file submissions in reply to those of the appellant. By letter dated 12 March 2015, the Appeal Registrar wrote to the parties noting that the submissions filed by the appellants (like those of the husband) failed to state the date on which they were served. The letter from the Appeal Registrar said, “I assume that the appellant’s submissions have been served on the 2nd respondent and that they do not wish to reply”. As no response was received, we will proceed on the same assumption.
The oral submissions
Costs do not follow the event in proceedings under the Family Law Act 1975 (Cth) (“the Act”), and it is the usual practice of the Full Court to take costs submissions at the conclusion of the oral argument. As the outcome is not known, submissions are sought on the basis that the appeal, or application for leave to appeal, will either succeed or fail.
This practice saves the Full Court the time and inconvenience otherwise caused by taking costs submissions after the primary judgment is delivered, and then having to provide a separate judgment dealing with costs. Importantly, the practice also saves the additional costs associated with written submissions.
While there are other reasons, we consider that written submissions should ordinarily only be required where there has been an offer, the terms of which cannot be revealed prior to the delivery of judgment.
As the following extract reveals, we sought to follow our usual practice in this matter (transcript, 30 June 2014, p 80-82; emphasis added and transcription errors corrected):
BRYANT CJ: Can we just take submissions about costs at this stage, but we will start with Mr Waller, perhaps. Mr Waller, in the event that the matter is successful – do you seek an order for costs if the appeal is successful?
MR WALLER [senior counsel for the appellants]: I think we would seek an order that, yes, if we’re successful, the costs ought follow that event.
BRYANT CJ: All right. And I will let you respond to any ‑ ‑ ‑
MR WALLER: In the event that we’re unsuccessful, and that could occur in different circumstances - your Honours may find that his Honour was mistaken and seek to reapply the discretion in some way - we might seek a right to be heard if possible on costs. If it’s a complete win or a complete loss, then we would be content for costs to follow the event. If it’s something in between, we might wish to be heard.
...
BRYANT CJ: Yes. Thank you. That’s satisfactory. Thank you.
THACKRAY J: When you say “complete loss” or “complete success”, if the appeal is dismissed for whatever reason ... a fairly comprehensive loss, you would agree costs would follow the event? Even if we thought some of your arguments weren’t all that bad, you still lost.
MR WALLER: Given the tone with which your Honour is asking me … perhaps I could ‑ ‑ ‑
BRYANT CJ: Of course, you could just leave it up to our discretion, Mr Waller.
MR WALLER: Yes. It’s difficult to deal with costs issues in a hypothetical sense. We accept that if the appeal was dismissed comprehensively, then we would have difficulty resisting an order for costs.
BRYANT CJ: It would be difficult to argue against an order. I understand that. Yes.
MR WALLER: Indeed. And then we take advantage of perhaps – well, we might be able to take advantage, in certain circumstances, of the certificate if there was said to be an error of law, but if the court went on to exercise the discretion differently applying the appropriate test, it could be that we lose, but we’re still entitled to a certificate.
BRYANT CJ: Yes, yes. That’s fine.
MR WALLER: That’s why I say there are permutations here that we can’t ‑ ‑ ‑
BRYANT CJ: I understand that. And we would normally consider all of those matters.
MR WALLER: If your Honour pleases.
THACKRAY J: Forgive us for taking the submissions before the whole thing is resolved, but given the nature of the discretion we have here, it saves a very, very busy Full Court ‑ ‑ ‑
BRYANT CJ: It does if we ‑ ‑ ‑
THACKRAY J: ‑ ‑ ‑ a very annoying outcome of the matter then lingering on with further written submissions ‑ ‑ ‑
BRYANT CJ: We usually end up having to come back and getting – yes. It’s easier to ‑ ‑ ‑
MR WALLER: Indeed. We appreciate that and we see the wisdom of it. It’s just difficult in committing oneself to different possibilities.
BRYANT CJ: No, yes. We understand and we will exercise our discretion appropriately. Mr Glick.
MR GLICK [senior counsel for the wife]: Ms Vohra will ‑ ‑ ‑
BRYANT CJ: Ms Vohra.
MR VOHRA [junior counsel for the wife]: Your Honour, our position is similar to our learned friends. In the event that we are successful and Berman J’s judgment is upheld, we would be seeking costs from the appellants … applicants for leave to appeal. In the event your Honours were to find that Berman J had committed an error of law, but vitiated the exercise of his discretion, then, in my respectful submission, a costs certificate would be appropriate.
BRYANT CJ: Okay. And Mr McCormick.
MR McCORMICK [counsel for the husband]: I am, it would seem at the moment, your Honour, to be in the habit of adopting submissions, your Honour. If I could adopt my learned friend, Mr Glick’s junior’s submission. And there may be some issues which arise from correspondence which has been exchanged between the parties, but if we get to that stage, we will get to that stage.
BRYANT CJ: All right. I mean, there’s always the opportunity to let us know that, I suppose. Well, there might not be, I suppose.
THACKRAY J: Well, not normally. If someone has made a proposal, then, regrettably, our normal position is that we don’t ... take costs submissions at this point and we wait until the outcome and then we get the correspondence, then we get the submissions, then we hand down the decision.
MR McCORMICK: That’s what I’m saying.
BRYANT CJ: Well, if there are, then we will have to then deal with it ‑ ‑ ‑
MR McCORMICK: It’s not – I’m not saying anything else.
BRYANT CJ: All right.
MR McCORMICK: If the court pleases.
BRYANT CJ: Okay. Yes. All right. Well, thanks for bringing that to our attention, Mr McCormick. ...
It will accordingly be seen that at the time of the hearing:
·neither the wife nor the husband foreshadowed seeking indemnity costs in the event the application for leave to appeal was dismissed;
·senior counsel for the appellants conceded that in the event of a “complete loss”, costs should follow the event; and
·the costs submissions were not completed on the day of the hearing only because of advice from counsel for the husband that there were “some issues which arise from correspondence which has been exchanged between the parties” that would be relied upon in relation to costs issues.
Given what was said at the hearing, it is now most regrettable for us to learn from the written submissions that:
·the husband and the wife now both seek indemnity costs;
·the appellants have resiled from their senior counsel’s concession that costs should follow the event (there being no doubt that they suffered a “complete loss”); and
·the “correspondence” relied upon by the husband appears to say nothing that could not have been revealed in oral submissions (at least with the consent of the appellants, given it was marked “without prejudice”).
None of the parties has complained about these matters and we will therefore deal with the submissions on their merits.
The wife’s application for costs
The wife’s submissions (which were settled by counsel who had not taken part in the appeal) proceeded on the basis that the wife “anticipates that the Full Court will accept that an unsuccessful Appellant should pay the costs of an appeal; and that the more contentious question is whether those costs should be ordered on an indemnity or party-party basis”.
In support of the application for costs to be awarded on an indemnity basis, counsel for the wife primarily relies on the fact that the appellants were wholly unsuccessful, and on the findings of the Full Court that:
·the injunction which was the subject of the application for leave to appeal was extremely limited in both scope and time;
·the appellants proceeded on an erroneous interpretation of the cross-vesting legislation; and
·the application for leave to appeal was deficient on its face because it did not respond to the requirement to clarify what constituted the alleged error of principle and/or substantial injustice.
Citing Prantage & Prantage (2013) FLC 93-544 at [79], the wife submits that these findings all support a further finding that the appellants, if properly advised, should have known they had no chance of success, which should lead to an order for indemnity costs, notwithstanding this is “a very great departure from the normal standard”.
The wife’s submissions contained a schedule of costs. On scale, the amount claimed was $25,130, whereas on an indemnity basis the amount was $40,871. In addition, the wife incurred disbursements of $61,764.
The husband’s application for costs
The husband’s submissions recite the contents of a letter dated 19 June 2014 from his solicitors to the appellants’ solicitors, which stated, inter alia:
…we are of the view that your appeal is doomed to fail. Indeed we would go so far to say that it appears to us that your clients are forum shopping...
We accordingly invite your clients to discontinue the appeal. If you do discontinue in the next 7 days our client will not seek costs against your client.
If, however, you do not discontinue the appeal within the next 7 days, we shall rely upon this letter for an application for indemnity costs.
Noting that no reply was received to this letter, the husband’s submissions went on to claim that:
Properly advised, the Appellants would have known that the appeal was … “doomed to fail”. The misconceptions are basic, and … represent arguments that should not have been advanced.
Particular emphasis was placed on the proposition that the appeal was pursued in “disregard of established law”, namely “the cross-vesting misconception”, and also in “disregard of known facts”, namely that the order appealed did not have the effect contended by the appellants.
The husband’s submissions did not indicate what costs he had incurred or the basis on which his costs would be calculated.
The appellants’ submissions in response
As previously noted, the appellants now resist any order for costs, notwithstanding the concession made at the hearing.
While not disputing that they were unsuccessful, the appellants rely in part on the fact that their arguments in relation to the appropriate test to be applied in applications for leave to appeal found favour. Indeed, they went so far as to claim that their argument “paved the way for a reconsideration of the proper test to be applied”, and hence argued that the “general principle in sec 117(1) of the Act should prevail and that there should be no orders as to costs”.
In opposing the application for costs to be awarded on an indemnity basis, the appellants submitted that there was no basis to presume that the appeal had been commenced or continued for some ulterior motive or because of some wilful disregard of known facts. It was further submitted that the appeal concerned a controversy about the meaning of the injunction, which turned on the meaning to be given to the word “jurisdiction”. The appellants noted that this controversy was:
dealt with by the Full Court over four pages of the Reasons for judgment with reference to transcript of the hearing before Berman J (that took place over three non-consecutive days) as well as commentary and authorities which had not been raised by the Wife in either her written or oral submissions.
It was also submitted that the resolution of the controversy about the meaning of the injunction “also formed a part of the Full Court’s reasoning in disposing of the Appellants’ contentions in relation to the cross vesting legislation”.
In responding specifically to the husband’s application for costs, the appellants went further in observing that the husband’s involvement at the hearing was “minimal” and that it would have been “reasonably open to the Husband either to not be heard ... or to be heard by his solicitor, merely to adopt the submission of the Wife”.
In dealing with the letter of 19 June 2014, the appellants conceded that the letter might be relevant, although not determinative, in considering whether to make any order for costs, but argued that the fact that an application for indemnity costs had been foreshadowed in the letter did not strengthen the application for costs to be awarded on that basis.
The appellants also drew attention to the fact that the letter of 19 June 2014 made no mention of what the husband now submits was a “fundamental misconception” about the meaning of the cross vesting legislation. Similarly, the letter did not assert any misconception by the appellants about the interpretation of the injunction. On the contrary, it was pointed out that the letter itself was premised on an inaccurate assertion that the issue raised in the Supreme Court of Victoria could only be agitated in the Family Court.
Finally, it was submitted that the husband’s application for indemnity costs was “fundamentally and fatally flawed” because of the husband’s failure to disclose the costs he had incurred and how his costs differed from those which would be assessed on scale. This submission was supported by reference to Prantage, where the Full Court observed that the Family Law Rules 2004 (Cth) now enshrine the requirement for the Court to be informed of the terms of the relevant costs agreement.
Wife’s submissions in reply
In reply, the wife observed that it was the Full Court rather than the appellants who had initiated the discussion of the test for leave to appeal, and correctly submitted that this ultimately had no bearing on the outcome.
Discussion
The law concerning costs applications has been discussed recently in Nada & Nettle (Costs) (2014) FLC 93-612 at [7]-[8] and does not require repetition.
We have had regard to the governing principle in s 117(1) of the Act, and have considered all of the matters set out in s 117(2A) which can be taken into account in determining whether or not there are circumstances justifying the making of a costs order.
In our view, the fact that the appellants were wholly unsuccessful in seeking leave to appeal is not only a sufficient basis for requiring them to pay costs but also the appropriate outcome. In determining that the appellants should pay costs, we have had regard to the fact that the appellants between them have a more than adequate capacity to meet a costs order. The fact that the respondents may also have the capacity to meet their own costs does not persuade us that it is appropriate that they do so.
In arriving at our decision, we reject the proposition advanced on behalf of the appellants that we should be influenced by the fact that their arguments in relation to the test for leave to appeal found greater favour than those advanced by the other parties. As has been pointed out, this issue was raised by the bench during the hearing, and the ultimate outcome did not depend on the tentative view we expressed concerning the appropriate test.
It is true, as was submitted, that the husband played only a minor role in the appeal; however, little was left for his counsel to add after senior counsel for the wife had completed his submissions. It is easy to be wise after the event, and we do not consider that it could have been confidently predicted that there would be so little for the husband to say. This factor therefore does not persuade us that the husband should be denied an order for costs.
The only real question, as submitted by counsel for the wife, was whether the order for costs should be made on an indemnity basis. It is unnecessary to discuss the principles relating to indemnity costs, as these have been comprehensively considered in Prantage. It is sufficient to say that we are not in any way satisfied that costs should be awarded on an indemnity basis. First, in the case of the husband, his failure to provide the required information concerning the extent of his costs is, in our opinion, fatal to his application. Second, in the case of the both the husband and wife, we do not consider that the outcome of the matter was as clear-cut as suggested in their submissions.
Order
We therefore propose to order the appellants to pay the costs of the first and second respondents, to be assessed if not agreed.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Thackray & Ainslie-Wallace JJ) delivered on 23 September 2015.
Associate:
Date: 23 September 2015
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