Keil & Kingscote - [2018] FamCAFC 194

FAMILY COURT OF AUSTRALIA

KEIL & KINGSCOTE AND ANOR

[2018] FamCAFC 194

FAMILY LAW – APPEAL – COSTS – DISCONTINUANCE – Where as a result of the appeal being discontinued the first and second respondents sought orders for costs, the first respondent on a party/party basis and the second respondent on an indemnity basis –Where the appellant opposes any order for costs given his poor financial circumstances – Where there are circumstances justifying orders for costs being made but there are no exceptional circumstances such as to warrant indemnity costs – Where the appellant has an entitlement to funds held in an account in the name of the first respondent – Where there are sufficient funds to which the appellant is entitled to meet the orders for costs – Costs ordered in favour of the first and second respondents assessed on a party and party basis to be paid from the account held in the name of the first respondent.

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 22.42

Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801
Limousin & Limousin (Costs) (2007) 38 FamLR 478; [2007] FamCA 1178

APPELLANT:

Mr Keil

FIRST RESPONDENT:

Ms Kingscote

SECOND RESPONDENT:

Ms Ormand

FILE NUMBER:

PTW

3739

2013

APPEAL NUMBER:

2018

DATE DELIVERED:

25 September 2018

PLACE DELIVERED:

Perth

PLACE HEARD:

Perth

JUDGMENT OF:

Strickland,
Ainslie-Wallace & O’Brien JJ

HEARING DATE:

25 September 2018

LOWER COURT JURISDICTION:

Family Court of Western Australia

LOWER COURT JUDGMENT DATE:

7 December 2017

LOWER COURT MNC:

REPRESENTATION

THE APPELLANT:

In person

COUNSEL FOR THE FIRST RESPONDENT:

Mr J B Hedges

SOLICITOR FOR THE FIRST

RESPONDENT:

Pinnington & Associates

THE SECOND RESPONDENT

In Person

Orders

The appellant husband pay the costs of the first respondent fixed in the sum of three thousand four hundred and seventy-nine dollars and forty-eight cents [$3,479.48], such amount to be paid from the Westpac Choice Account number …17 held in the name of the first respondent.
The appellant husband pay the costs of the second respondent fixed in the sum of one thousand four hundred dollars [$1,400], such amount to be paid from the Westpac Choice Account number …17 held in the name of the first respondent.

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 Keil & Kingscote and Anor 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).

IN THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WA 1L of 2018
File Number: PTW 3739 of 2013

Mr Keil

Appellant

And

Ms Kingscote

First Respondent

And

Ms Ormand

Second Respondent

EX TEMPORE REASONS FOR JUDGMENT

Strickland J

On 4 January 2018 Mr Keil (“the appellant”) filed a Notice of Appeal against orders made by Duncanson J on 7 December 2017.
On 28 May 2018 the appellant discontinued that Notice of Appeal. As a result Ms Kingscote (“the first respondent”) and Ms Ormand (“the second respondent”) each made an application for costs, the first respondent filing her application on 22 June 2018, and the second respondent filing her application on 25 June 2018.
In both of those applications costs are sought on an indemnity basis. However, in relation to the application filed by the first respondent, it transpires that the costs sought would be the same, whether assessed on a party/party basis, which is the usual basis, or an indemnity basis. Thus, given that, understandably, the first respondent no longer pursues an application for indemnity costs, but still seeks the same amount of costs calculated on a party/party basis.
In relation to the second respondent, to repeat, she too sought an order for costs on an indemnity basis. It seems from the schedule of costs provided by her solicitors, and which schedule is annexed to her affidavit, that the costs she seeks are in fact on a solicitor/client basis. Thus, for her to obtain an order that all of those costs be paid, it is necessary for her to justify a costs order on an indemnity basis. I will return to that shortly.
Those two applications are opposed by the appellant. It seems that the basis of his opposition is that he was advised by his barrister at the time to discontinue the appeal, and he considers that he discontinued his appeal at a stage which would have meant that the costs incurred by the first and second respondent would not be of the order as claimed by them.
Rule 22.42 of the Family Law Rules 2004 (Cth) (“the Rules”), provides that a party discontinuing an appeal may be ordered to pay the costs of all other parties. That said, the question of whether costs will be ordered, and on what basis, is still governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). Relevantly s 117(2) of the Act provides that costs can be ordered where there are circumstances that justify such an order, and s 117(2A) of the Act sets out the factors to which regard must be had in determining whether an order for costs is made.
The justifying circumstance here is the fact of the discontinuance of the appeal. In other words, the first and second respondents necessarily incurred costs following the filing of the Notice of Appeal, but with the appeal being discontinued, those costs have been thrown away.
I pause there to record that we have before us detailed schedules of costs incurred by both the first and second respondent, and in relation to the concern by the appellant as to those costs, for my part, I accept that those costs as detailed in those schedules were incurred, and were incurred relevantly in relation to the appeal, between the filing of the appeal and its discontinuance.
I find that there is a circumstances that plainly justifies an order for costs being made. And to repeat, I accept that that circumstance is the fact of the appeal being discontinued and the respondents’ costs incurred to that date being thrown away.
In terms of the factors in s 117(2A) to which regard must be had, the conduct of the appellant husband (s 117(2A)(c)), and what I will refer to as the catchall provision (s 117(2A)(g)), which allows the court to take into account any other circumstance beyond those identified in the earlier paragraphs in determining whether an order for cost should be made, are relevant. I note that none of the other factors set out in s 117(2A) have been the subject of any submission by any of the parties today, either as providing a further justifying circumstance for an order for costs, or as preventing an order for costs being made.
Quite properly though, Mr Hedges for the first respondent has referred us to the Statement of Financial Circumstances filed by the appellant in the substantive proceedings, and which is annexed to the affidavit of the first respondent filed on 22 June 2018. It is plain from that Statement of Financial Circumstances that the appellant is in poor financial circumstances. Importantly though, what is sought in this case is that, if orders for costs are made, those orders be met by payments out of a fund held in an account in the name of the first respondent, part of which fund the appellant is entitled to. Thus, although his circumstances on the face of it might be poor, it is conceded by the appellant that there are sufficient funds to which he is entitled in that account, to meet any order for cost that we might make.
Thus, having found that there should be an order for costs, the next question is, on what basis the order for costs should be made; in other words, on the usual party/party basis, or by way of indemnity costs.
To repeat, we need not trouble ourselves in relation to that issue insofar as the first respondent is concerned, but we do need to in relation to the costs sought by the second respondent.
The principles applicable to indemnity costs have been settled for some time, and the authorities are well known. In Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, Sheppard J said this at page 232 – 233:
…
2.The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis …
3.This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of Court) or a decision of an intermediate court of appeal or of the High Court would be required to alter it …
4.In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course.
In Limousin & Limousin (Costs) (2007) 38 FamLR 478, the Full Court reviewed the authorities in relation to indemnity costs, and in effect, confirmed the principle that the court should not depart lightly from the ordinary rules relating to costs between party and party, and the circumstances justifying the departure should be of an exceptional kind.
Thus, it emerges from the authorities that to justify an order for indemnity costs there needs to be exceptional circumstances.
For my part, I am not persuaded that there are exceptional circumstances here such as to warrant an indemnity costs order, and the orders for costs should be assessed on a party/party basis.
To repeat, that is indeed the case as presented by the first respondent, and the amount of costs sought on a party/party basis by her is $3,479.48. I would propose to make an order that costs in favour of the first respondent be paid in that sum.
In relation to the second respondent, as I indicated earlier, the schedule of costs that we have would seem to be calculated on a solicitor/client basis, and thus for all those costs to be awarded to the second respondent she would have needed to satisfy us that there are exceptional circumstances justifying an order for indemnity costs. To repeat, I am not persuaded that that is the case.
As I indicated during submissions, I am not a taxing officer, but in the circumstances, and in order to conclude this matter expeditiously, I would propose applying a broad-brush approach to the amount of costs sought, in order to arrive at what those costs would be on a party/party basis. The amount of costs sought is $2,043.85, and applying a broad-brush approach to those costs, in my view, the party/party costs would be assessed at $1,400.
The next issue is the terms of the payment of those orders for costs.
As I have identified, on the face of the appellant’s Statement of Financial Circumstances, there is no obvious fund for him to meet those costs, but there is the fund to which he has an entitlement, and to which I have referred.
We understand that neither party can access that fund of their own motion. There is an order of the court preventing that, but as we also understand it, those funds can be accessed with the agreement of all parties, or by order of the court.
Thus, I would propose to make an order that the amount of costs to be paid by the appellant be paid from that account.

AINSLIE-WALLACE J

I agree with the orders proposed by Justice Strickland and the reasons for making them.

O’BRIEN J

I also agree with the orders proposed by Justice Strickland and for his reasons.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the ex tempore reasons for judgment of the Honourable Full Court (Strickland, Ainslie-Wallace & O’Brien JJ) delivered on 25 September 2018.

Associate:

Date: 10 October 2018