Kudelka, P. and Kudelka, P.I.

[1986] FamCA 5

In the marriage of KUDELKA, P. and KUDELKA, P.I.,

(1986) FLC ¶91-719

Other publishers' citations: (1986) 10 FamLR 762 (1986) 85 FLR 22

Full Court of the Family Court of Australia at Melbourne.

Judgment delivered 10 April 1986.

Before: Asche, Fogarty and Baker JJ.

Asche J.: I refer to the judgment in this matter delivered by the Full Court on 17 February 1986.

The wife, who was the successful appellant, now seeks a certificate pursuant to sec. 9 of the Federal Proceedings (Costs) Act 1981 (hereinafter called ``the Federal Act'') stating that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under the Act to the appellant in respect of the costs incurred by her in relation to her appeal.

This Full Court allowed the wife's appeal on the basis that the discretion of the learned trial Judge miscarried in so far as the amount awarded to the wife in all the circumstances was ``unreasonable or plainly unjust''. The Full Court therefore substituted a higher amount than that awarded by the learned trial Judge.

The policy of the Federal Act and similar State legislation has been stated by Moffitt J. in respect of provisions in the New South Wales Suitors' Fund Act 1951 as proceeding ``on the assumption that the law is known so that if an error of law occurs in a court of first instance or an inferior appellate court, such error may ordinarily be attributed to a fault in the administration of justice rather than of the parties so that the costs of having the error rectified ought not ordinarily to lie on the unsuccessful respondent to the appeal, but to be paid from a fund contributed to by all litigants''. Acquilina v. Dairy Farmers Co-operative Milk Co. Ltd. (No. 2) (1965) N.S.W.R. 772 at p. 773. See also Jansen v. Dewhurst (1969) V.R. 421 at p. 430 (Newton J.), Pickford v. Incorporated Nominal Defendant (1981) V.R. 583 at pp. 584-585 (Brooking J. with whose judgment Starke and Anderson JJ. concurred).

Although Moffitt J. was addressing his remarks to the case of an ``unsuccessful respondent'' I can see no difference in principle to the case of a successful appellant who succeeds because an error of law, not induced by the appellant, has been made in the Court below. The Federal Act contains both sec. 6 (which relates to unsuccessful respondents) and sec. 9 (which relates to successful appellants). In either case the object of the legislation seems clearly to provide for some amelioration of costs where a party (be he a respondent or an appellant) has suffered loss in costs through an error which ``may ordinarily be attributed to a fault in the administration of justice rather than of the parties''.

The only rider to sec. 9 of the Federal Act is that, because of the application of sec. 117 of the Family Law Act, costs of the successful appeal would not normally lie with the unsuccessful respondent; and no doubt this was the reason why sec. 9(1)(b) was included in the Federal Act. But this seems to make no difference to the principle stated above. Section 9 of the Act reads:

``(1) Subject to this Act, and in particular without limiting section 6, where —

(a) a Federal appeal referred to in paragraph (d), (j) or (k) of the definition of `Federal appeal' in sub-section 3(1) succeeds on a question of law; and
(b) in accordance with section 117 of the Family Law Act 1975, each party to the appeal bears his or her own costs,

the court that heard the appeal may, on the application of the appellant to the appeal, grant to the appellant a costs certificate in respect of the appeal.

(2) The certificate that may be granted under sub-section (1) by a court to an appellant to a Federal appeal is a certificate stating that, in the opinion of the court, it would be appropriate for the Attorney-General to authorize a payment under this Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.''

Since no order for costs was or should have been made against either party on the appeal sec. 9(1)(b) needs no further consideration.

As a matter of broad policy one might be permitted to query the restriction in sec. 9(1)(a) to a ``question of law''. If it was considered fair that a party put to the expense of an appeal because of an error of law in the Court below not attributable to the parties should receive costs (albeit limited costs — see sec. 18) from a fund provided by the Federal Government (sec. 19) it would seem equally fair in principle to extend relief to a party forced into appeal by an error of fact in the Court below, such error not having been induced by the parties. In either case a successful appellant has been put to unnecessary expense by something outside his control. See remarks of Burbury C.J. in Tasmanian Pulp and Forest Holdings Ltd. v. Woodhall Ltd. (1972) Tas. S.R. 41 at p. 43.

However the wording of the section makes it imperative for this Full Court first to determine whether the appeal has succeeded ``on a question of law'' before determining whether the discretion given to the Court by the use of the words ``may... grant... a costs certificate'' should be exercised.

The difficulty in determining whether an appeal from the exercise of a discretion vested in a court of first instance is a ``question of law'' or a ``question of fact'' is that the accepted analysis for determining whether a discretion has been properly or improperly exercised may place a case sometimes in one category and sometimes in another. In what has been accepted many times and by many appeal courts as the classical test for examining the exercise of a discretion Kitto J. in Australian Coal and Shale Employees' Federation and Anor v. The Commonwealth and Ors (1953) 94 C.L.R. 621 at p. 627 says:

``... the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance...''

Of these five categories it could well be said that ``acting upon a wrong principle'' could be an error of law, whereas ``making a mistake as to facts'' must be an error of fact. ``Giving weight to extraneous or irrelevant matters'', and ``failing to give weight or sufficient weight to relevant considerations'' may seem to be a question of mixed fact and law. Finally, the last test proposed by Kitto J. seems necessarily to be a question of law rather than fact since it depends on the appellate court inferring ``that there has been a failure properly to exercise the discretion which the law reposes in the Court of first instance.''

Although authorities to which I will subsequently refer have broadly placed all errors of application of discretion as errors of law, and although Kitto J. himself ranks ``mistakes as to facts'' as within that category of discretionary judgment which can be examined on appeal, it may be more appropriate to exclude mistakes of fact from that category; at least when examining whether there has been a ``question of law'' for the purposes of the Federal Act. As to questions of mixed fact and law it would seem that, providing the question of law plays an integral part in the decision appealed from, the provisions of the Federal Act may be applied.

In Jenkins v. Gleeson (1983) 67 F.L.R. 469 Blackburn J. had to consider whether to grant a certificate to an unsuccessful respondent to an appeal. Blackburn J. was of the opinion that the appeal had succeeded because the appeal court had come to two conclusions on the judgment in the Court below. One such conclusion involved a decision in law; the other a decision on fact. His Honour said (at p. 470):

``It will be seen that either the first step or the second step in the reasoning of Fox J. would have been sufficient to determine the appeal. Both steps must, however, be taken as the ratio decidendi of the case... Since the first of the two steps involved a decision of law, I think it possible to say that the appeal succeeded on a question of law, notwithstanding that the second step was only a question of fact.''

His Honour granted a certificate.

An appeal from the exercise of a discretion has been held to be a question of law in the following cases:

Richards v. Faulls Pty. Ltd. (1971) W.A.R. 129;
Barry v. Shoobridge (1971) Tas. S.R. 265;
Tasmanian Pulp and Forest Holdings Ltd. v. Woodhall Ltd. (1972) Tas. S.R. 41,
Grainger v. Harvey (1983) 1 S.R. (W.A.) 419.

Since, however, the granting of a certificate is itself discretionary it might still be argued that there should be some distinction between appeals based on wrongful exercise of discretion and appeals based on what might be considered more significant points of law. This seems to have been, at least in part, the view of Dixon C.J. in Gurnett v. The Macquarie Stevedoring Co. Pty. Ltd. (No. 2) (1956) 95 C.L.R. 106 at p. 113. The learned Chief Justice was in dissent from his brethren on the particular point before the Court which was whether the High Court had power to grant to an unsuccessful respondent an indemnity certificate under sec. 6 of the New South Wales Suitors' Fund Act 1951 in respect of the costs of the appeal. For reasons not relevant here the majority held that the High Court did not have that power. Dixon C.J. considered it had; and at p. 113 he examines whether, assuming the Court had that power, it should grant such a certificate. He considered that the discretion should be exercised against granting the certificate. He said:

``The question remains whether in substance it is a proper case for the grant of such an indemnity certificate. Sub-section (1) of s. 6 grants a power which, as s. 6(5) shows, is to be exercised as a matter of discretion. It provides that the court determining the appeal may grant to the respondent thereto an indemnity certificate. The power arises only when an appeal against the decision of a court on a question of law succeeds. Very little light is to be obtained from the long title or the provisions of the Act as to the considerations which should govern the exercise of the discretion to grant a certificate. But since it does not arise except in the case of a successful appeal against a decision upon a question of law, it would seem that the purpose of the legislature was to relieve litigants of the burden of costs that might be imposed upon them by reason of erroneous decisions upon questions of law. In the present case no question was involved as to any principle of law or any application of principle or as to the meaning or effect of any statutory provision. It is true that in the legal dichotomy between questions of fact and questions of law we place under the latter head a question whether there is sufficient evidence to submit to a jury in support of a cause of action. That is because it is a question for the court to decide and not for a tribunal of fact. In the present case no considerations of law affected the matter at all. It was simply a question whether the evidence adduced was enough to enable the jury to draw an inference of fact. Further, the defendant is a limited company apparently not without assets. All that we know concerning the finances of the defendant company is that its paid up capital is £84,000. At the trial the defendant company's counsel advisedly sought to withdraw the case from the decision of the jury. To take such a course involved an obvious risk. I cannot see why, because in the result it turned out badly, the defendant should have a claim upon the discretion of the Court to certify for the recoupment of the costs out of a public fund. Indeed I can see no sound reason why the defendant company should be indemnified for costs out of the Suitors' Fund. In my opinion the discretion given by s. 6 should in this case be exercised by refusing a certificate. I would on that ground refuse the application of the defendant respondent.''

Obviously the learned Chief Justice was prepared to categorise the question as a question of law, although with certain reservations. Otherwise, he would not have been of the opinion that the question of granting a certificate could have been considered at all. But obviously also he was influenced in his opinion that the discretion should not be exercised because ``no considerations of law affected the matter at all''. It is true that he based his view on two other grounds as well; namely that the respondent was ``apparently not without assets'' and that the conduct of the trial conduced to the error appealed from. But it is plain that he attached some weight to the absence of any or any substantial legal argument. Similarly the Full Court of Western Australia in Richards v. Faulls Pty. Ltd. (1971) W.A.R. 129 at p. 138 said:

``The decision in the present case did not turn upon the formulation of or upon the application of the facts of any general principle or substantive law, nor did it turn upon the proper construction to be placed upon any provisions of the Workers' Compensation Act or upon the proper construction to be placed upon any other statutory provision. It turned upon a question of law in the sense in which the question whether a finding of fact is open on the evidence is said to be a question of law. Hence it was in every sense a particular question and it was a question which arose out of the way in which the respondent when before the Board chose to conduct its case. The choice then was made to persuade the Board to make findings of fact upon evidence which was incapable of sustaining them... Without saying that such a question of law could never support the granting of a certificate... we are of opinion that this is not a case where a certificate should be granted.''

In contrast to this may be placed the view that once a ``question of law'' is shown to have been before the Appeal Tribunal, it should not involve itself in some gradation of difficulty or legal importance for the purpose of determining whether to grant a certificate. Certainly no such approach can be inferred from the wording of the Federal Act which merely uses the expression ``a question of law'', and makes the granting of a certificate dependent upon the Court's opinion that ``it would be appropriate'' for the Attorney-General to authorise payment under the Act.

Thus in Tasmanian Pulp and Forest Holdings Ltd. v. Woodhall Ltd. (1972) Tas. S.R. 41 at p. 44, Burbury C.J. after examining the policy of the Tasmanian Act said:

``I refer to these policy considerations only to suggest that there is no reason to read down or restrict the meaning of the expression `question of law' in order to conform with the legislative purpose of the Statute.''

In the same case Crawford J. after examining the case law said at p. 50:

``None of these cases decides that a test narrower than that applied in determining what a question of law is for founding jurisdiction for an appeal is to be applied to cases under legislation similar to the Appeal Costs Fund Act 1968 [Tasmania].''

If therefore the meaning of the expression ``question of law'' is not to be ``read down'' or restricted or too narrowly interpreted, why should the mischief which the Act is meant to prevent, namely compensating a litigant for unnecessary expense occasioned by an erroneous determination of a question of law, be read down or confined? Once it is determined that a ``question of law'' has been involved there is nothing in the various State and Federal Acts to suggest that a test for granting or refusing a certificate should be whether or not the question of law was a matter of substantial argument or of novelty or of unusual difficulty. Such matters are obviously irrelevant from the point of view of the party seeking a certificate. His position surely is that in any event he has suffered financial loss caused by an error in the Court below not attributable to him and that his claim for relief should hardly be judged by the extent of the egregiousness of the error. It is naught to him whether a trial Judge made an easily discernible mistake in the exercise of his discretion or an almost imperceptible slip during an otherwise impeccable dance through a maze of contradictory authorities. In either case loss has been unfairly occasioned to one or both parties and it would appear that the policy of the Federal Act and other similar legislation is to cure the grievance that the appellant or respondent might complain of; albeit within definitive limits of the amount of compensation.

If that is so it seems to me that a court should not be astute to place obstacles of this nature in the way of the granting of a certificate. Nor should it take the view that there should be some special and more difficult test in considering the issue of a certificate where the successful appeal is from a discretionary judgment. This cautions approach may be dictated by a fear of opening the floodgates; but it would seem to run contrary to the very purpose of the Federal Act.

However it is a proper matter for consideration in exercising the discretion to grant or refuse a certificate to determine whether and to what extent the applicant has been the author of his own misfortune.

The remarks of Dixon C.J. in Gurnett v. The Macquarie Stevedoring Co. Pty. Ltd. (No. 2) (supra) and the judgment of the Full Court of Western Australia in Richards v. Faulls (supra) already referred to can be seen as justifying the refusal to grant a certificate on grounds other than that no considerations of law were involved. In both cases the view was taken that the conduct of the case in the Court below contributed to the error that had to be corrected.

Obviously there could be other grounds for exercising adversely to the applicant the discretion to grant a certificate. Failure in the Court below to cite appropriate case law, failure to make obvious submissions, failure to deal adequately with opposing arguments, unmeritorious conduct of the parties (e.g. tax evasion), are instances which come to mind. But because it is an exercise of discretion and each case must depend upon its particular facts, it would be futile to endeavour to set out an exhaustive list.

In the present case, however, I can find nothing to suggest that the error which this Full Court found in the approach of the learned trial Judge was in any way induced by the presentation of the appellant's case or any conduct of the appellant. The Full Court was of the opinion that the learned trial Judge had erred and as a result the appellant in prosecuting her appeal has been put to expense which she should not have incurred. It may be argued that she has received the not insubstantial addition of $40,000 to the original order in her favour and that she should therefore herself bear the costs occasioned by her appeal. I am unable in the circumstances of this case to consider that that would be just to her. Although I would not suggest that there could not be occasions when an applicant may be sufficiently wealthy to make a payment from the public purse inappropriate I would not consider that this is such a case. The amount awarded to her represents her contribution to a marriage of some 24½ years including her contribution in bearing and rearing three children. In the opinion of the Full Court it was a just and equitable recognition of that contribution having regard to all relevant circumstances. No doubt she will still be out of pocket after receiving such sum as the authorities may consider her entitled to on a certificate under the Federal Act. The granting of the certificate will enable her to recoup to some extent losses not occasioned by any action of hers. In my view and in these particular circumstances a certificate should be granted.

Pursuant to sec. 9 of the Federal Act I would grant the appellant wife a costs certificate stating that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under the Act in respect of costs incurred by the appellant in relation to this appeal.

Fogarty J.: I agree.

Baker J.: I agree.