KLD and SCVG - [2019] FamCAFC 5

FAMILY COURT OF AUSTRALIA

KLD & SCVG

[2019] FamCAFC 5

FAMILY LAW – APPLICATION IN AN APPEAL – Application for costs of a discontinued application in an appeal – Where the discontinued application sought to challenge costs orders – Conduct of the parties – Consideration of relevant matters under s 117 of the Family Law Act 1975 (Cth) – Husband ordered to pay the wife’s costs of the discontinued application – Costs as assessed on a party/party basis.

Child Support (Assessment) Act 1989 (Cth) s 104
Family Law Act 1975 (Cth) ss 94AAA(3), 117
Family Law Rules 2004 (Cth) r 17.02(1)(b)

APPLICANT:

Ms KLD

RESPONDENT:

Mr SCVG

FILE NUMBER:	SYC	4380	of	2008
SYC	2044	of	2013

APPEAL NUMBER:	EA	75	of	2015
EA	156	of	2015

DATE DELIVERED:

17 January 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Ryan J

HEARING DATE:

19 November 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Stenhouse

SOLICITOR FOR THE FIRST APPLICANT:	Macphillamy’s Lawyers
THE RESPONDENT:	In person

Orders

The husband pay the wife’s costs of and incidental to the Application in an Appeal filed on 7 May 2018 in the amount of $3,149.28, within twenty-eight (28) days.

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 KLD & SCVG 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 APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 75 of 2015; EA 156 of 2015
File Number: SYC 4380 of 2008; SYC 2044 of 2013

Ms KLD

Applicant

and

Mr SCVG

Respondent

REASONS FOR JUDGMENT

By an Application in an Appeal filed 14 September 2018, Ms KLD (“the wife”) makes an application for costs of a discontinued application filed on 7 May 2018 by Mr SCVG (“the husband”) to stay the operation of orders for costs made against him on 24 May 2017. The husband resists the application. It is his position that the question of costs should be reserved to the substantive application.
Pursuant to s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”) the Chief Justice directed that it is appropriate that this application is determined by a single judge.
The substantive application is an application in an appeal filed on 5 December 2017 pursuant to orders made by Ainslie-Wallace J ([2018] FamCAFC 26). By that application the husband seeks to set aside the orders in relation to costs made by the Full Court on 24 May 2017. The application is made pursuant to r 17.02(1)(b) of the Family Law Rules 2004 (Cth) (“the Rules”). In the alternative, he seeks a certificate pursuant to s 104 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”). In her decision giving leave to file the application, Ainslie-Wallace J summarised this aspect of this extraordinary litigation as follows:-
5.An understanding of the appeals that were before the Full Court is helpful so as to give this application context.
6.In 2012 [the husband] applied to the Child Support Registrar (“the CSR”) for a determination to depart from various child support assessments as between himself and [the wife]. A decision was made, which was objected to by [the husband]. A new decision was made, and again objected to by [the husband]. The matter came before the Social Security Appeals Tribunal (the SSAT) on 6 February 2013. In March 2013 the SSAT recorded its decision setting [the husband]’s adjusted taxable income at $360,000 per annum and [the wife]’s at $130,000 per annum. [The husband] appealed to the Federal Circuit Court of Australia and in 2015 Judge Scarlett affirmed the decision of the SSAT. It was this decision that was the subject of appeal EA 75 of 2015.
7.The Full Court found that leave to appeal the decision of Judge Scarlett should be refused and the application for leave was dismissed.
…
9.Heard at the same time as the child support appeal was [the husband’s] appeal against a costs order made by Cronin J on 27 February 2015. The costs order provided that [the husband] pay 50 per cent of [the wife]’s costs of the parenting proceedings before Cronin J on an indemnity basis. This appeal (EA 156 of 2015) was dismissed by the Full Court.
10.The Full Court further ordered [the husband] to pay the costs of both [the wife and the CSR] of and incidental to the appeals.
11.The [husband] applied to the High Court for special leave to appeal the Full Court decision, but that application was dismissed.
Returning to the discontinued application, on 7 May 2018 the husband filed the stay application which was listed before me for hearing on 23 August 2018. Directions had been made for the hearing, in relation to which relevantly, the wife was ordered to file and serve her material (including summary of argument) by 21 August 2018, which she did. Without advance warning, on 21 August 2018, the husband filed a notice of discontinuance.
Although the wife’s application for costs was initially presented on the basis that an order for indemnity costs would be appropriate, this was abandoned in favour of party/party costs.
Section 117(1) of the Act is the governing provision concerning costs and provides the general rule that subject to s 117(2) each party to proceedings under the Act should bear his or her own costs. Section 117(2) requires a finding of justifying circumstances of an order for costs. If so found, the court may make such order for costs it considers just. In considering what order, if any, should be made, the court is required to have regard to the factors listed in s 117(2A).
The first relevant factor is the financial circumstances of each of the parties (s 117(2A)(a)). Neither party provided evidence as to their current financial circumstances and the most recent information is that contained in a decision of the Administrative Appeals Tribunal dated 1 May 2018. That decision contains an analysis of financial information provided by each of the parties for the years ended 2015 and 2016. The husband was found to be “a wealthy person with significant income” who “could meet all of the children’s proper needs”. The wife was found to be “much wealthier than he is” and also able to meet all the children’s proper needs. Importantly, the Tribunal found that “both parties failed to frankly and fully disclose their financial circumstances and the Tribunal cannot make accurate findings about their relative wealth”. Neither can I and the application of the subsection is moot, albeit I am satisfied the husband has the capacity to pay costs in the amount sought without occasioning him hardship.
The next factor is s 117(2A)(c), the conduct of the parties. This is relevant to the husband’s conduct subsequent to the filing of his application in an appeal and, relevantly, the notice of discontinuance. Pursuant to s 117(2A)(c) and also s 117(2A)(g) it is unarguable that the wife incurred costs preparing for an application unnecessarily. Although the husband said that anyone looking at his application would appreciate that it was doomed to fail and thus would not have incurred legal expenses, by that measure it should not have been filed at all. There is no doubt that the wife has been put to unnecessary expense and it is this factor which carries the most significant weight.
The disposition of the substantive application is irrelevant to the question of the costs of the now discontinued application.
Thus, the fact that the wife has incurred costs unnecessarily amounts to justifying circumstances, and on balance, an order for costs in the wife’s favour should be made.
The wife is seeking costs in the amount of $3,149.28. This includes the costs of this application in which she has been successful.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 17 January 2019.

Associate:

Date: 17 January 2019