LUBITON & DRUMMOND

[2020] FamCA 466

FAMILY COURT OF AUSTRALIA

LUBITON & DRUMMOND [2020] FamCA 466

FAMILY LAW – COSTS – payment of costs for application for leave to appeal out of time – significance of lack of success in resisting an application for extension of time pursuant to rule 1.14 – manner of conduct of litigation – late abandonment of factual issues

Family Law Act 1975 (Cth) ss 79A, 96, 96(1A), 117, 117(1), 117(2), 117(2A), 117C
Family Law Rules 2004 (Cth) rule 1.08, 1.14, 1.14(1), 1.14(3), 22.03

I & I (1995) FLC 92-625
Kohan & Kohan (1993) FLC 92-340
Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664
Penfold v Penfold (1980) 144 CLR 311

APPLICANT: Ms Lubiton

RESPONDENT: Mr Drummond

FILE NUMBER: CAC 2132 of 2019

DATE DELIVERED: 5 June 2020

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Gill J

HEARING DATE: 7 May 2020

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Andrew Warren & Associates

COUNSEL FOR THE RESPONDENT: Mr G Howard

SOLICITOR FOR THE RESPONDENT: Robinson & McGuinness

Orders

1. It is ordered that, in relation to his application for leave to appeal the orders of the Town A Local Court of 8 August 2019 out of time, the Husband pay the Wife’s costs as agreed or as assessed;

2. The costs of the Wife are to include the costs of the handwriting expert.

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 Lubiton & Drummond 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).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 2132 of 2019

Ms Lubiton

Applicant

And

Mr Drummond

Respondent

REASONS FOR JUDGMENT

Introduction    

1. This matter concerns competing applications for costs flowing from proceedings in which the Husband was granted leave to lodge an appeal out of time.

2. The Husband successfully obtained leave to appeal out of time from consent orders entered into in a court of summary jurisdiction, the Local Court of NSW. By s 96 of the Family Law Act 1975 (Cth) a de novo appeal from a decision of that court is available as of right to the Family Court of Australia. However, the timing of such an appeal is governed by s 96(1A) as follows:

   An appeal under subsection (1) shall be instituted within the time prescribed by the standard Rules of Court or within such further time as is allowed in accordance with the standard Rules of Court.

3. Rule 22.03 provides that such an appeal is to be lodged within 28 days. The leave to appeal out of time was an exercise of the discretion contained at Rule 1.14(1), which allows the Court to extend a “time that is fixed under these Rules.”  In the exercise of this discretion orders were made extending the time allowed to lodge an appeal from the decision of the Local Court on 8 August 2019 to 24 April 2020.

4. Rule 1.14 also provides:

   (3) A party who makes an application under subrule (1) for an extension of time may be ordered to pay any other party’s costs in relation to the application.

Principles in relation to costs

1. Costs are governed by the operation of s 117 of the Family Law Act 1975 (Cth) which provides a starting point that each party should bear his or her own costs, unless circumstances are established, pursuant to ss 117(2) and (2A) that justify the making of a costs order. If such circumstances arise then the Court may make such order as to costs as it considers to be just.

2. In Kohan & Kohan[1]the Full Court observed that:

   The intent of s 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the court may make such order as the court considers just.

   [1]Kohan & Kohan (1993) FLC 92-340

3. These provisions were dealt with by the High Court in Penfold v Penfold[2] where the plurality said:

   It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.

   Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in “a clear case”.

   Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.

   [2]Penfold v Penfold (1980) 144 CLR 311

4. In I & I (No 2), the Full Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”.[3] 

   [3]I & I (1995) FLC 92-625 p. 82,277

5. As indicated in Medlon & Medlon (No 6) (Indemnity Costs), no single factor takes precedence over any other factor. The trial judge is to exercise her or his discretion with regard to the weight that is afforded each factor under s 117(2A).[4]

   [4]Medlon & Medlon (No 6) (Indemnity Costs) (2015) FLC 93-664 (Strickland J)

6. Section 117(2A) is in the following terms:

   (2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   (a) the financial circumstances of each of the parties to the proceedings;

   (b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

   (e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g) such other matters as the court considers relevant.

The considerations in this case

(a) The financial circumstances of each of the parties to the proceedings

1. Section 117(2A)(a) governs consideration of the respective financial circumstances of parties to the proceedings.

2. The parties’ financial positions are similar, although the Husband is in a superior position to the Wife in respect of current income and expenses, as revealed by his financial statement filed 24 October 2019.

(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party

1. Neither party is in receipt of legal aid.

(c) The conduct of the parties to the proceedings in relation to the proceedings

1. Section 117(2A)(c) requires consideration of the conduct of the parties in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters.

2. This aspect was key to the Wife’s application for costs.

3. The Husband sought leave to appeal out of time, or in the alternative pursued relief pursuant to s 79A of the Family Law Act 1975. The application for leave was heard on 15 April 2020, in advance of the s 79A application and, leave being granted, the s 79A application was rendered otiose.

4. In pursuing relief, the Husband led evidence asserting that he had not signed the consent orders, that he had been unaware until 27 September 2019 of the consent orders, that the consent orders did not reflect his understanding of an agreement between he and the Wife, and raised other issues regarding the consent orders.

5. In preparation for the case the Wife engaged a handwriting expert on the issue of the execution of the consent terms.

6. As late as 3 April 2020 the Wife sought the Husband’s consent to rely upon the evidence of that expert in the leave hearing.  Consent was given by the Husband in Court on that day.

7. Although the Husband asserts that the Wife should have been aware on receipt of his written submissions for the leave application, filed 8 April 2020, that the handwriting expert was irrelevant, such a conclusion is not made clear in those written submissions.  The submissions were voiced in equivocal terms.  A number of references are made to “whether or not he signed the consent orders” and, at [34] the Husband maintains that he did not sign the orders.  While the Husband asserts there that it is not necessary to find that he did not sign the orders, he maintained as an alternate argument that he did not sign the orders and, at [35] asserts that the non-signing of the orders is a reason for leave to be granted to appeal out of time.

8. As far as the Wife could know, on reading the submissions, the signing of the orders was still a live issue in the Husband’s application for leave.

9. At the hearing on 15 April 2020, the Husband conceded that, for the purpose of the hearing of the leave question, the Court should proceed on the basis that the Husband signed the impugned documents, and that his failure to sign them would not form a part of the leave application.  Until this time the Wife reasonably took the signing of the documents as a relevant contested fact on the Husband’s application.

10. As pointed out by the Wife, this approach sits poorly with the Husband’s obligations under Rule 1.08, including “identifying the issues genuinely in dispute in a case” in order to achieve the objectives set out at Rule 1.04, being achieving the resolution of a case “in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.”

11. It was also identified by the Wife that, given the Husband’s concession, the proceedings arose out of the Husband’s execution of the consent terms.

(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. Although this was raised by the Wife as a relevant matter, being that the Husband did not comply with the consent orders that he sought leave to appeal out of time, the grant of the leave points away from this being a matter of significance.  It is also unclear that the proceedings (being the application to appeal out of time) could be described as necessitated by his non-compliance.

(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. The Wife was wholly unsuccessful in resisting the application to appeal out of time.

(f) Whether either party to the proceedings has, in accordance with s 117C or otherwise, made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer

1. No offer was identified.

(g) Section 117(2A)(g) — Any other relevant matters.

1. The parties did not identify other matters.

Discussion

1. The financial circumstances of the parties do not point to any particular resolution of the costs matter.

2. It may be observed that the pursuit of an extension of time under the Rules carries with it the specific warning that the applicant may be required to bear the respondent’s costs. That consideration takes place within the framework of s 117, but in the context of the tacit recognition under the Rules that an extension of time is the seeking of an indulgence from the Court to the detriment of another party, by reason of a failure to comply with the obligation imposed by the Rules or by a procedural order. This characteristic forms a part of a party’s conduct of the case.

3. Under those circumstances the fact that the Wife has been “wholly unsuccessful” in resisting the application for leave to appeal out of time is of lesser weight.

4. In this particular case it is the conduct of the parties to the proceedings that should be taken to be determinative of the costs application.  In addition to the characteristic of the application as identified above, the manner of litigating the proceedings in relation to the issue of whether the Husband signed the consent terms strongly points to an order for costs in favour of the Wife.  The Wife was drawn by that conduct to pursue evidence and issues that were effectively abandoned by the Husband when it came to arguing the matter before the Court.

5. These matters call for a costs order to be made in favour of the Wife in relation to the application for leave to appeal out of time.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 5 June 2020.

Associate: 

Date:  5 June 2020