Kasun & Kasun
[2021] FamCAFC 111
•16 July 2021
FAMILY COURT OF AUSTRALIA
Kasun & Kasun [2021] FamCAFC 111
Appeal from: Kasun & Kasun [2020] FCCA 2505
Kasun & Kasun [2021] FCCA 513
Appeal number(s): EAA 131 of 2020
EAA 19 of 2021File number(s): SYC 5874 of 2015 Judgment of: ALDRIDGE, WATTS & AUSTIN JJ Date of judgment: 16 July 2021 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Appeal from property settlement orders – Claims that the respondent deceived and defrauded the appellant by failing to make mortgage payments – No deceit established – No error by the primary judge in not giving weight to the appellant’s summary of finances due to vagueness – No evidence put forward by the appellant to substantiate grounds of appeal –
Appellant must identify errors that the primary judge made in an appeal hearing – Open on the evidence to make property orders – Appeal dismissed – Appellant to pay the respondent’s costs in a fixed sum.FAMILY LAW – APPEAL – COSTS – Where the primary judge ordered the appellant to pay the respondent’s costs of the property proceedings – Akin to indemnity costs – Where the primary judge did not take the wrong approach – Appeal dismissed – Appellant to pay the respondent’s costs in a fixed sum.
Legislation: Evidence Act 1995 (Cth) s 50
Family Law Act 1975 (Cth) ss 79, 117(2A), 119
Family Law Rules 2004 (Cth) Sch 3
Cases cited: Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd [1982] QB 84
Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30
Briese and Briese (1986) FLC 91-713; [1985] FamCA 23
Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 536
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
House v The King (1936) 55 CLR 499; [1936] HCA 40
Magill v Magill (2006) 226 CLR 551; [2006] HCA 51
Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21
Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19
Division: Appeal Division Number of paragraphs: 104 Date of hearing: 10 June 2021 Place: Sydney The Appellant: Litigant in person Counsel for the Respondent: Ms Coulton Solicitor for the Respondent: Kevin O’Kane & Co ORDERS
EAA 131 of 2020
EAA 19 of 2021
SYC 5874 of 2015APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MR KASUN
Appellant
AND: MS KASUN
Respondent
ORDER MADE BY:
ALDRIDGE, WATTS & AUSTIN JJ
DATE OF ORDER:
16 JULY 2021
THE COURT ORDERS THAT:
1.Appeal No. EAA 131 of 2020 be dismissed.
2.Appeal No. EAA 19 of 2021 be dismissed.
3.The appellant pay the respondent’s costs fixed in the sum of $13,169.56.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kasun & Kasun has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE, WATTS & AUSTIN JJ:
INTRODUCTION
This is the hearing of two appeals.
The first is an appeal from property settlement orders made by a judge of the Federal Circuit Court of Australia on 24 August 2020 in proceedings between Ms Kasun (“the appellant”) and Ms Kasun (“the respondent”). The orders had the effect of dividing the parties’ property so that the appellant received 58 per cent and the respondent received 42 per cent.
The second is an appeal from a costs order made on 19 February 2021 which required the appellant to pay the respondent’s costs of the property hearing fixed in the sum of $75,000.
THE PROPERTY APPEAL
Background
In order to understand this appeal it is helpful to set out the salient history.
The parties met in approximately 2003 and married in 2005. They separated in April 2011 and were divorced in November 2015.
The parties’ only child was born in 2006. She has lived with the respondent since the separation of the parties. At the time of the property settlement hearing in 2020, the child had not spent any overnight time with the appellant for two years.
The parties purchased a property at Suburb C (“the Suburb C property”) on 5 September 2005. A loan was obtained from a bank for $405,141.85. The primary judge found that the deposit was made up by the appellant’s contribution of $32,000, the respondent’s contribution of $11,000, a loan from the respondent’s mother of $3,000 (which was later repaid by the respondent) and the First Home Buyer’s Grant of $7,000. As the deposit was only $46,000, perhaps some of those funds were used on other aspects of the purchase.
The respondent had a car at that time, valued at $4,600, along with some household furnishings and an interest in a property in Country D. This property was later sold and the majority of the proceeds of $41,000 were given to the respondent’s three adult children from an earlier marriage.
The appellant continued to live in the Suburb C property after separation and where he remains. He has made all of the mortgage payments since that time.
The primary judge found that the appellant had between $90,000 and $92,000 available to him in cash at the time of separation which he had accumulated during the relationship. This enabled him to enter the property investment market. At the time of the final hearing, he owned nine houses and four residential units with a total gross value of $3,313,000 and total liabilities of $1,858,480 (which includes his half of the mortgage over the Suburb C property and his credit card liabilities).
In 2012, the respondent and her daughter purchased a property in Suburb J (“the Suburb J property”) as tenants in common. The respondent’s interest in the property was $350,000, with her share of the mortgage being $165,000. At the hearing, the appellant did not agree with this and contended that the respondent had the sole interest in the Suburb J property.
Taking the above into account, together with the parties’ other liabilities and assets including superannuation, the primary judge found that the parties had net assets of $2,062,030 (at [24]). The appellant held just over 70 per cent of those assets.
The property settlement orders provided for the appellant to retain the Suburb C property, and obliged him to discharge the mortgage so as to remove any liability on the part of the respondent to the bank. In addition, he was to pay the respondent $572,000 within three months. Otherwise, each was to retain the property held by each of them. Thus, the property was divided so that the appellant received 58 per cent and the respondent 42 per cent.
The Appeal
The appellant raises nine grounds of appeal, many of which are difficult to understand. He acted for himself and although he is a practising solicitor, the evidence was that he spent most of his employment engaged as a professional in another industry. Even so, it is for him to identify the errors that he asserts the primary judge made and not for us to trawl through the evidence and seek to identify error for ourselves. As the Full Court of the Federal Court of Australia said in Bahonko v Sterjov (2008) 166 FCR 415:
3.Notwithstanding the obligation of an appeal court, where it is able to do so, to make its own evaluation of the material at first instance, it is a fundamental aspect of the appellate process that appeals are made available for the correction of error … This basic principle imposes an obligation upon an appellant to identify where error is to be found in a judgment under appeal, whether it be an error of fact, law or general principle. It is not necessary for an appeal court to hunt through all the material at first instance and recanvass every aspect of it unless an occasion arises for suspecting, on reasonable grounds (generally those provided by the appellant), that such an examination may yield a conclusion of appellable error.
(Citations omitted)
Did the respondent deceive and defraud the appellant by promising to pay one week of the monthly mortgage payments and ceasing to do so two months after marriage? (Ground 1)
The appellant submitted that the respondent “wilfully deceived him” by promising to make mortgage payments and subsequently failing to do so (at [50]).
At the time of the purchase of the Suburb C property in September 2005, neither party was in a position to borrow significant funds, but they decided that they could do so if they pooled resources. It was not in dispute that in the course of discussions the respondent said that “[w]e will pay one week’s payment” (Transcript 20 August 2020, p.59 line 1) and “[w]hen we bought a house – yes, we verbally agreed but it didn’t work well after that” (Transcript 20 August 2020, p.59 lines 27–28).
It is not clear whether those conversations occurred before or after the parties were legally committed to the purchase of the Suburb C property. The contract for the sale of land was signed on 19 July 2005. The appellant’s evidence was that the conversation took place before the loan application was lodged (which was approved on 25 July 2005), in June or July, but that he could not remember the exact date (Appellant’s affidavit filed on 1 April 2016, paragraph 9).
A fundamental difficulty for the appellant is that although he relied on the tort of deceit, he did not take proceedings for it by way of accrued jurisdiction in the primary proceedings, or indeed elsewhere, which are courses expressly permitted by s 119 of the Family Law Act 1975 (Cth) (“the Act”). He nonetheless sought, in effect, to rely on the asserted tort as a consideration under s 79 of the Act.
The elements of the tort of deceit where summarised by Gummow, Kirby and Crennan JJ in Magill v Magill (2006) 226 CLR 551 at [114]:
The modern tort of deceit will be established where a plaintiff can show five elements: first, that the defendant made a false representation; secondly, that the defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not; thirdly, that the defendant made the representation with the intention that it be relied upon by the plaintiff; fourthly, that the plaintiff acted in reliance on the false representation; and fifthly, that the plaintiff suffered damage which was caused by reliance on the false representation. Generally, the elements of the tort have been found to exist in cases which concern pecuniary loss flowing from a false inducement and the need to satisfy each element has always been strictly enforced, because fraud is such a serious allegation.
(Footnotes omitted)
It is impossible to find that based on the material relied upon by the appellant, that the respondent’s statement that she would pay the mortgage for one week monthly, was false at the time it was made. The appellant did not take us to any evidence that indicated that this was the case.
However, on the appellant’s own evidence, the respondent did pay one week of the mortgage in a month for at least two months. The respondent’s evidence was that she did not cease payments until her pregnancy (which was shortly after the Suburb C property was acquired) prevented her from doing so. Either way, the mere fact that the payment ceased after some time cannot give rise to an inference that the statement was false at the time it was made. To the contrary it rather suggests that the statement made by the respondent as to her intention was correct at the time it was made. The appellant’s submission to the contrary is rejected.
Further, the primary judge found that at the time of the above conversation, the appellant was well aware that the respondent was living in a Housing Commission house supporting three children. He knew what she was earning and the nature and extent of her assets (at [49]) and “[h]e knew all of the relevant facts” (at [50]). Given that knowledge, it is difficult for the appellant to establish that he relied on that statement to his detriment.
The primary judge was correct to find that deceit had not been established. This ground does not succeed.
Did his Honour fail to “discern a nexus” between the respondent’s promise to pay the mortgage payments for the matrimonial home and the provisions under s 79(4)(a) of the Act? (Ground 2)
We confess we have difficulty in understanding this ground.
The appellant submitted that the respondent “by making a promise to pay mortgage payments and reneging from that commitment, created detrimental reliance in [the appellant] and therefore is now prevented from benefitting from that detrimental reliance” (Appellant’s Summary of Argument filed on 22 April 2021, p.6–7). The appellant added that the respondent “will have to make good of the [sic] promise” (Appellant’s Summary of Argument filed on 22 April 2021, p.7).
It is not clear at all whether the appellant is seeking to rely on misrepresentation or estoppel, which are both referred to in this part of the appellant’s submissions, but obvious difficulties arise with each.
The statement made by the respondent was no more than an announcement of an expectation that she could and would, as things stood, make the planned mortgage payments. She did so for at least two months after the purchase until circumstances changed. As we have said the appellant was well aware of the respondent’s circumstances.
It therefore cannot be said that there was either a misrepresentation at all or, if there was, that the appellant “was so influenced… by the… representation… that it would be unconscionable” for the respondent to resile from her promise (emphasis in original) (per Robert Goff J in Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd [1982] QB 84 at 104–105; quoted by French CJ, Kiefel, Bell and Keane JJ in Sidhu v Van Dyke (2014) 251 CLR 505 at [72]).
This ground does not succeed.
Did the primary judge wrongly exclude a summary under s 50 of the Evidence Act 1995 (Cth) from evidence? (Ground 3)
On 6 November 2019, the primary judge directed that any party who wished to serve a bank statement in excess of 20 pages or bank statements in total exceeding 50 pages “shall be required to seek to adduce that evidence in the form of a summary…” (Order 7). Contrary to the submission of the appellant, that order did not render any summary prepared pursuant to the direction admissible regardless of its content.
The appellant prepared such a summary (Exhibit MFI 2, “Section 50 Summary” at p.137) which was objected to by the respondent on the grounds of relevance (Respondent’s Case Outline filed on 11 August 2020, p.19) and rejected by his Honour.
During the course of the hearing the primary judge said:
HIS HONOUR: Well that’s why a section 50 summary is meant to actually set out the material that’s sought to be relied upon. Not just someone’s interpretation of a summary of it.
…
HIS HONOUR: Well, this is a problem. I can tell you I’m not reading it. I’m not someone’s law clerk. Sir, a section 50 summary doesn’t just mean you look at it and say what you says it says. It means you extract the relevant material into an excel spreadsheet or into a word document so that people can look at the figures and agree or not. But anyhow, I have no intention of reading that material…
(Transcript 20 August 2020, p.21 lines 16–43)
Nonetheless, his Honour received it as an aide memoir for reasons that are unclear, especially if he had no intention of relying on it. If the document had the difficulties noted by his Honour one wonders what assistance it could render.
Section 50(1) of the Evidence Act 1995 (Cth) permits the content of two or more documents to be adduced in the form of a summary if the Court is satisfied that “it would not otherwise be possible conveniently to examine the evidence because of the volume or complexity of the documents in question”.
The appellant’s summary consisted of 10 items and two schedules. Items 2, 8 and 10 self- evidently are not summaries of documents but conclusions drawn from a number of sources. None of the other items (save for item 9, which was just a list of liabilities) set out the individual entries from the various bank accounts that were relied upon but merely presented totals. For example, item 1, which purported to summarise relevant entries in a bank account from 25 August 2005 to 1 June 2020 as “Home Loan Payments of [B Street, Suburb C]” as “[t]otal payments $460,908”.
As the individual entries relied upon are not identified it was difficult, if not impossible, for the respondent to check its accuracy, effectively rendering the summary useless. In any event, it was not in dispute that the appellant had made nearly all of the mortgage repayments.
That difficulty is even more apparent in item 3 which purported to give a total of “matrimonial moneys” received by the respondent until separation. The vagueness of the phrase means that it would be impossible for anyone but the appellant to know what he had selected unless the individual items were identified.
Two supplementary schedules were attached to the summary and the appellant addressed submissions to the first. It was headed “Supplementary Schedule to Wife’s Matrimonial Money Transactions LL Bank Account [two bank accounts were identified] from Sep 2006 – Apr 2011 - money received and withdrawn”. The appellant submitted that this summary established that at the time of separation the respondent had some $65,000 in cash. It does not. Assuming for the moment that the difference between the amounts deposited and withdrawn was that sum, this alone does not prove that the respondent retained the withdrawals. Further, her evidence that the withdrawals were used for living expenses seems inherently plausible.
We do not think that the primary judge erred by not giving the summary any weight.
A further difficulty for the appellant arises from the fact that all of the primary documents he relied on to produce the summary were themselves in evidence. The appellant could simply have relied on them to seek to establish his point but he did not do so.
This ground is not established.
Did the respondent fail “to disclose the legal or equitable basis of half ownership attributed to her daughter” in the Suburb J property? (Ground 4)
This ground of appeal and the submissions in support assume that the respondent held a greater interest in the Suburb J property than the one half she asserted.
The respondent’s case was that she was a registered owner as a tenant in common with her daughter in equal shares in the property which they purchased together in 2012. Accordingly she disclosed that she owned one half of the property. The respondent only had an obligation to disclose that she beneficially owned the entirety of the property if that was in fact the case.
In these circumstances the appellant bore the onus of proving that the respondent was indeed the beneficial owner of the whole of the property.
The respondent described the purchase in the following terms:
I purchased a property at [H Street, Suburb J] with my daughter [Ms F] for $408,000.00 in 2012. We purchased the property as tenants-in-common in equal shares and we borrowed $400,000.00 from Westpac Banking Corporation. [Ms F] put in $3,000.00 which she had saved. I borrowed $7,000.00 from my good friend [Ms JJ], who worked with me in [Employer KK] and $3,000.00 from my parents. I also used the $7,000.00 child support from [the appellant] and money I had saved while in the rented [Suburb C] house to pay the rest of the purchase price and other associated expenses.
(Respondent’s affidavit filed on 26 June 2020, paragraph 41)
The primary judge said, in a finding not disputed by appellant, that this evidence was not substantially challenged.
The daughter married in 2017 and moved out of the property. The respondent has been responsible for the mortgage since then.
Nothing arises from these facts that suggests the respondent had a greater interest in the property than what she asserted.
The appellant submitted that because of the non-disclosure “the basis of [the daughter’s] half ownership remained unclear, giving rise to a Briese and Briese type of error” (Appellant’s Summary of Argument filed on 22 April 2021, p.9). That is a reference to Briese and Briese (1986) FLC 91-713, which uncontroversially states that proper financial disclosure must be made, which is a position now made clear by the Family Law Rules 2004 (Cth) (“the Rules”).
The appellant’s submission assumes that the beneficial ownership of the Suburb J property was held in a different manner to the legal title, however, if he wished to contend that this was so and that the true position was the daughter held her interest on trust for the respondent, he had to prove that this was so.
As we understand his Honour’s reasons, the appellant’s case was not “fully developed” to prove the suggestion that the respondent had some equity in the daughter’s interest (at [65]). However, the primary judge found that there was insufficient “material or submissions before me to make such a finding” (at [65]).
The appellant did not seek to demonstrate that this finding was wrong or take us to any evidence that expanded on what we have just described. It follows that he could not establish that the respondent had a greater interest than she asserted or that there had been a lack of disclosure.
This ground fails.
Was the judgment “infected with disclosure issues on part of [the respondent] affecting the outcome”? (Ground 5)
The appellant’s submissions were simply a catalogue of what he asserted was inadequate disclosure which did not seek to identify error on the primary judge’s part.
In his written submissions made to the primary judge, the appellant complained that the respondent had not disclosed the amount of money retained by her at separation and her superannuation and life insurance amounts.
That is not accurate. The respondent’s evidence was that she had some $15,000 at the time of separation. As we have already identified, the appellant contended that this evidence was wrong but he did not attempt to establish by reference to the evidence that the amount the respondent had was in fact $65,000. He simply asserted that to be so.
No oral submissions were made by the appellant as to disclosure.
The appellant thus fails at this additional hurdle.
As to the respondent’s superannuation and life insurance interests, it is apparent from the appellant’s Summary of Argument that he was aware of them at the time but he did not accept that he had been given all the relevant documents or statements “in a verifiable form” (Appellant’s Summary of Argument filed 22 April 2021, p.11).
Importantly, the primary judge noted the respondent’s superannuation was agreed to be $73,342 (at [17]).
In short, the appellant has not pointed to any error on the part of the primary judge. This ground does not succeed.
Was it open to find that it was just and equitable to make the 42:58 division where the appellant made the overwhelming direct financial contribution? (Ground 6)
The nature of appeals from the exercise of discretion under s 79 of the Act is constrained by the principles set out in House v The King (1936) 55 CLR 499 and error is not shown simply by the possibility of a different result being derived by other judges.
The primary judge, as we shall shortly show, took into account the appellant’s financial contribution. Therefore, in order to succeed on this ground, the appellant must show that the outcome was unreasonable or plainly unjust. In doing so he faces the difficulty that the ambit of the trial judge’s discretion is wide indeed (Gronow v Gronow (1979) 144 CLR 513; Mallet v Mallet (1984) 156 CLR 605).
The primary judge found that the appellant accumulated between $90,000 to $92,000 during the marriage, described by his Honour as “joint matrimonial property” which he used as “seed money to then start purchasing properties” (at [68]–[69]). His Honour continued:
70.[The appellant’s] purchase of the first properties, which were then used to buy further properties, was only able to be carried out in the way it has been by the use of that $90-92,000. Further, he was living in the former matrimonial home, and he appears to have used that house as security in a way, not necessarily strictly as security by way of mortgage, but by saying that it was rented out.
This led to the following conclusion:
101.Now noting those matters, starting from [the respondent’s] point of view, she says that weighing all of those factors, in terms of contributions, that her contributions were, I think, on a very moderate basis, a submission she said 40 per cent to [the appellant’s] 60 per cent. As I said, she made that, and again I say, in my view, quite moderate submission based on [the appellant’s] slightly larger initial financial contribution, the fact that [the appellant] did make a real contribution caring for [the respondent’s] three children across that period of time, and noting that although he used the seed money and the former matrimonial home to obtain loans to do all the property portfolio he subsequently built, nevertheless, he still had to work hard and expend effort, skill and income in doing so. As I have indicated, I think that that is a very moderate submission by [the respondent] in those regards.
The primary judge clearly found and took into account that the appellant had made a significantly greater financial contribution than the respondent but the use of money acquired during the marriage as “seed money” was a significant contribution by the respondent to the property of the appellant.
We are unable to see any error in his Honour’s reasons or that the result arrived at was unreasonable or plainly wrong.
This ground is not established.
Did the respondent take an “unreasonable and convoluted approach to the property split”? (Ground 7)
We do not understand this ground or see how it involves any error by the primary judge.
The complaint appears to be that the appellant had to pay funds to the respondent but nonetheless retain his loans. This merely states the effect of the orders and does not identify error. The alternative, which was not suggested by him, was to sell the Suburb C property and divide the net proceeds. In any case, the alternative was part of the property settlement orders made by the primary judge, providing for a default sale of the Suburb C property in circumstances where the appellant failed to make the payment.
Was the judgment based on erroneous findings? (Ground 8)
The appellant relied on three matters.
First, it is submitted that the primary judge misstated the appellant’s income.
The primary judge recorded that the appellant’s Financial Statement filed on 14 July 2020 showed his total salary or wages as $752 per week (at [103]). That was entirely correct. His Honour also recorded that the appellant “makes most of his money as a translator and from his real property portfolio” but did not specify the amount (at [92]). As the Financial Statement indicates, in the next entry that appears after salary, the appellant received $2,010 per week in rent. There is no reason to think that the primary judge was not aware of that sum and hence the actual income of the appellant. However, any error that understated his income worked in favour of the appellant.
Secondly, the primary judge found that the appellant completed his law degree before marriage, whereas the appellant submitted it was during the marriage. Nothing turns on this minor error. Again, even if any error was established, it would have worked in favour of the appellant.
Finally, the respondent said that she withdrew cash to pay grocery bills. Whether that was logical or justified is irrelevant as no finding made by the primary judge is challenged.
This ground fails.
Was the judgment impacted by mathematical issues? (Ground 9)
As the appellant’s submissions make clear, this ground relies on the success of at least one of the earlier grounds. As none has succeeded, it too must fail.
The appeal will be dismissed.
THE COSTS APPEAL
Background
The primary judge ordered the appellant to pay the respondent’s costs of the hearing fixed in the sum of $75,000. This was akin to an indemnity costs order because the respondent’s actual costs were $83,445.
In doing so, the primary judge took into account offers made by the parties in accordance with s 117(2A)(f) of the Act. His Honour found that the respondent had made reasonable offers on 1 November 2017 and 3 September 2018 and on the first day of hearing. The last, an open offer, was the least favourable to the appellant and proposed that the respondent receive a payment of $500,000 and the appellant retain the Suburb C property. The earlier offers proposed that the respondent receive significantly less than that, which were approximately $300,000 and $400,000 respectively (at [20]).
It follows that the appellant would have been better off under each of these offers than under the orders that were made.
The appellant made just one offer which was to pay the respondent $20,000 and for him to retain the Suburb C property (at [21]).
After noting that the appellant had significantly more assets then the respondent (s 117(2A)(a) of the Act) his Honour concluded:
36.As I have said, I have given the benefit of the doubt and assumed that it is some kind of obsessional issue, but he has not suggested that he is not competent, and having an obsessional belief that you should get what you want and the other party should get nothing does not relieve a party from the principles of Colgate-Palmolive Co v Cussons Pty Ltd.
37.I note, of course, that costs are not punitive. The purpose of costs is provide compensation to the party who has had to pay costs for having incurred them. It is not to punish the other party, but when one considers the extent to which there should be unrecovered costs, the conduct of the other party is highly relevant, and in this case, I consider that [the appellant’s] conduct falls fairly and squarely into the kind of conduct considered in cases such as Colgate-Palmolive Co v Cussons Pty Ltd and once taking into account the offers and his conduct to these proceedings, in my view, there is absolutely no doubt this is one of those rare cases where not only should there be a costs order, but the costs should be for indemnity costs.
The primary judge clearly had in mind the well-known decision in Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, which brought together many authorities that dealt with indemnity costs. There, at 233, Sheppard J included in the list of circumstances in which indemnity costs may be considered “the making of irrelevant allegations of fraud”, “the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions” and “an imprudent refusal of an offer to compromise”.
The Appeal
Did the primary judge take “the wrong approach towards [the appellant’s] case in the costs application by voiding the material by [the appellant] based on misunderstanding that if a litigant’s credibility is impugned then that litigant will not be able to make submissions and arguments”? (Ground 1)
The appellant identified the following comments of the primary judge as being relevant to the ground:
21.The evidence before me is the only offer [the appellant] made throughout the proceedings was $20,000, with him to get the house. At the end of the hearing, his final position was that [the respondent] should get $150,000 and he got the former matrimonial home, and that was in the context where he must have been aware he was in significant difficulty, given the comments I had made, the 128 certificate, and the fact that it is clear that he was not being honest in my view, and he knew it, and that it was clear that I was not going to accept his arguments.
The appellant submits that evidence and submissions are quite different things, and that even if evidence has been given dishonestly by a party that should not affect the ability of that party to make submissions or to bear upon their acceptability.
The quoted passage refers to findings made by the primary judge in the earlier property reasons that the appellant had provided at least two false documents to a bank in order to obtain finance and that he thereby obtained a financial benefit by deception (at [84]). Not surprisingly, as his Honour expressly said, this significantly impacted on the assessment of the credibility of the appellant’s evidence.
In expanding on his submissions that the primary judge failed to distinguish between evidence and submissions, the appellant relied on two matters (Appellant’s Summary of Argument filed on 21 May 2021, p.2).
The first was that he had made the overwhelming financial contributions, which was supported by the bank records. We have already discussed the difficulty of the appellant’s approach to the bank records. It is plain, however, that the primary judge received the appellant’s submissions and accepted them to the extent that it was found that the appellant made the greater financial contribution. It was not found to be an “overwhelming financial contribution” because of the contributions made by the respondent, the acceptance of which was not based on any finding of dishonesty on the part of the appellant (Appellant’s Summary of Argument filed on 21 May 2021, p.2).
The second was the beneficial ownership of the Suburb J property, which we have also discussed. The appellant submitted that it should have been found that the daughter had no interest in the property because she had not contributed financially to it or that the respondent should have proved that the daughter had done so. As we have explained, the primary judge was not persuaded that there was any evidence suggesting that the property was held by the respondent and her daughter as anything other than tenants in common in equal shares. Again, the primary judge heard and dealt with the appellant’s submissions on their merits and not on the basis that he had acted dishonestly.
This ground is not made out.
Did his Honour discern that the respondent attempted to obtain a judgment by fraud? (Ground 2)
Under this ground the appellant set out a number of instances which he asserts that the respondent was making untruthful statements, failing to provide relevant documents and misleading the Court.
His submissions to that effect were rejected by the primary judge in the reasons for judgment concerning the property appeal. The appeal against those orders has been unsuccessful.
This appeal is therefore not the appropriate vehicle to ventilate these challenges.
Did his Honour “fail to discern that [the respondent’s] lawyers failed to understand the notion of estoppel”? (Ground 3)
Whether or not the respondent’s lawyers understood the principles of estoppel is entirely irrelevant to the costs order.
Did the primary judge “fail to discern [the respondent’s] and her solicitor’s conduct during the time leading to the hearing in making the costs order”? (Ground 4)
In his Summary of Argument filed on 21 May 2021, the appellant identified the following conduct as being covered by this ground:
(1)The respondent’s promise to pay one week of the mortgage each month and failing to do so;
(2)The solicitor’s costs amount is not itemised; and
(3)The respondent is requested to bring her superannuation statements to court.
The first is not an example of conduct related to the hearing but, in any event, that issue was decided adversely to the appellant.
The second, again is not self-evidently poor conduct. The primary judge found that the costs claimed were reasonable (at [38]). No challenge is made to that finding and we cannot take this aspect of the matter further.
The last point is not conduct by the respondent or by her solicitors.
This ground fails.
It follows that the appeal will be dismissed.
COSTS
The respondent sought costs of $14,486.53 for both appeals ($12,369.80 for the property appeal and $2,116.73 for the costs appeal) on the ground that they were wholly unsuccessful.
The respondent’s costs schedule shows that an amount for goods and services tax (“GST”) has been added to the final amount sought, after individual cost amounts were set out. Schedule 3 of the Rules, on its face, makes clear that the individual cost amounts set by the Schedule are inclusive of GST. Accordingly, the GST should be excluded from the costs sought by the respondent, and reduced to $13,169.56.
The appeal was wholly unsuccessful and no cogent reasons were advanced by the appellant as to why such an order should not be made.
There will be an order made accordingly.
I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, Watts & Austin. Associate:
Dated: 16 July 2021
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