Maddax and Danner (Costs) - [2016] FamCAFC 229

FAMILY COURT OF AUSTRALIA

MADDAX & DANNER (COSTS)

[2016] FamCAFC 229

FAMILY LAW – APPEAL – COSTS – Multiple appeals – Where appeals either wholly unsuccessful or discontinued – Where respondent seeks indemnity costs – Where circumstances not sufficiently exceptional to warrant indemnity costs – Appellant to pay respondent’s costs calculated on a party/party basis.

Family Law Act 1975 (Cth): s 117
Family Law Rules 2004 (Cth): r 22.53(3)

Bant & Clayton (Costs) [2016] FamCAFC 35
Kohan and Kohan (1993) FLC 92-340
Prantage & Prantage (2013) FLC 93-544

APPELLANT:

Mr Maddax

RESPONDENT:

Ms Danner

FILE NUMBER:

BRC

5778

2014

FIRST APPEAL NUMBER:

2016

SECOND APPEAL NUMBER:

2016

THIRD APPEAL NUMBER:

2016

DATE DELIVERED:

11 November 2016

PLACE DELIVERED:

Sydney

PLACE HEARD:

In Chambers

JUDGMENT OF:

Thackray, Strickland & Ryan JJ

HEARING DATE:

By way of written submissions

LOWER COURT JURISDICTION:

Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATES:

12 February 2016,
5 April 2016 &
30 June 2016 (Amended 6 July 2016)

LOWER COURT MNC:

[2016] FCCA 68
[2016] FCCA 1230
[2016] FCCA 1717

REPRESENTATION

FOR THE APPELLANT:

In person with the assistance of an interpreter

COUNSEL FOR THE RESPONDENT:

Mr J Bunning

SOLICITOR FOR THE RESPONDENT:

MTM Lawyers

Orders

The appellant pay the respondent’s costs of and incidental to Appeal NA 17 of 2016 on a party/party basis within twenty eight (28) days of agreement as to quantum or assessment.
The appellant pay the respondent’s costs of and incidental to Appeal NA 23 of 2016 on a party/party basis within twenty eight (28) days of agreement as to quantum or assessment.
The appellant pay the respondent’s costs of and incidental to Appeal NA 43 of 2016 on a party/party basis within twenty eight (28) days of agreement as to quantum or assessment.

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 Maddax & Danner (Costs) 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 FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Numbers: NA 17 of 2016; NA 23 of 2016; NA 43 of 2016
File Number: BRC 5778 of 2014

Mr Maddax

Appellant

And

Ms Danner

Respondent

REASONS FOR JUDGMENT

On 5 September 2016 the Full Court dismissed two appeals brought by the appellant. A third appeal by him was discontinued at the commencement of the appeal hearings. Provision was made in the orders for the question of costs of all three appeals to be dealt with by written submissions.
In accordance with those orders, we received the following submissions:
·on behalf of the respondent on 26 September 2016, seeking indemnity costs in all three appeals, in the total sum of $28,181; and
·on behalf of the appellant on 17 October 2016, opposing orders for costs in favour of the respondent.
The Appeal Registrar has been informed that the respondent will not be filing submissions in reply.
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) is the governing provision concerning costs. By s 117(1) each party to proceedings under the Act shall bear his or her own costs unless, in accordance with s 117(2) and the related provisions, the court is satisfied that there are circumstances that justify an order for costs.
The two appeals which were dismissed challenged final parenting orders made on 12 February 2016 (“the substantive appeal”) and orders which summarily dismissed the appellant’s later filed application for interim parenting orders (“the third appeal”). The second appeal in the triumvirate was an appeal against the dismissal of the appellant’s application for a stay of the substantive orders pending appeal. In circumstances where the three appeals were listed for hearing expeditiously and simultaneously, ultimately there was no utility in the stay appeal and thus it was discontinued.
It follows that in relation to the two appeals which were dismissed the appellant has been wholly unsuccessful. In our view, his lack of success amounts to justifying circumstances (s 117(2)) in these appeals, albeit this does not mean costs follow the event. Although an appeal which has been discontinued would not be categorised as one that has been “wholly unsuccessful” (Bant & Clayton (Costs) [2016] FamCAFC 35), an appeal which is discontinued as it is called on for hearing will almost certainly require a respondent (as it has here) to incur costs unnecessarily. This circumstance amounts to justifying circumstances as well.
The question thus becomes whether by reference to s 117(2A) orders for costs are appropriate?
Turning to s 117(2A)(a), the respondent acknowledges that “neither party is of great wealth”. The appellant does not challenge the respondent’s contention that she is under extreme financial stress and does not receive financial assistance from him. It is common ground that both parties were recently able to travel abroad and that the appellant was able to meet the costs of the appeal books including transcript. Although this would suggest that he has some limited financial capacity to satisfy an order for costs, that capacity needs to be considered in light of the fact that his primary source of income is welfare benefits and there is no evidence he owns property of any value. The point being, although impecuniosity is no barrier to an order for costs, an adverse costs order would undoubtedly create financial difficulty for the appellant.
Neither party is in receipt of a grant of legal aid.
Sections 117(2A)(c) and (e) may be considered together. In relation to all three appeals counsel for the respondent argues each was prosecuted, in essence, with wilful disregard for the known facts or law and by making allegations which should never have been made. However, although the appellant was unable to establish a basis for appellate intervention, at [54] - [59] of the Full Court reasons, we accepted the appellant’s contention as to errors of fact made by the primary judge in the substantive appeal. Similarly, at [9], the Full Court expressed concern about the adequacy of the trial reasons in the substantive appeal and was satisfied that the manner in which the trial reasons were presented was “unfortunate and no doubt fuelled the father’s disquiet about the reasons for judgment”. Thus, although the appellant was unable to establish appellate error, his disquiet about the adequacy of the trial reasons could not be rejected as fanciful or categorised as “a wilful disregard for known facts or law”.
As to the stay appeal, as we mentioned earlier, it was discontinued at the commencement of the appeal hearings. However, it does not follow, as counsel for the respondent contends, that this appeal was an exercise in futility. As we explained during the hearing, when the appellant filed the stay appeal he could not know that the three appeals would be listed simultaneously and quickly. In this respect, the stay appeal only became futile when the three appeals were actually called on for hearing. Otherwise, merely because the third appeal failed does no more than suggest it was presented, as indeed is the case, on weak grounds.
We see no particular significance in the appellant’s failed argument (in the substantive appeal) that at trial he was represented by incompetent counsel. Nor is it relevant to the question of costs in these appeals that the appellant has failed to comply with an order for costs made by the primary judge.
As was mentioned in the reasons of the Full Court, the respondent proposed that we receive offers of settlement on the question of costs, which are now before us as annexures to the affidavit of the respondent’s solicitor filed on 26 September 2016. This evidence establishes that on 9 June 2016 the respondent made an offer to the appellant that if he discontinued the substantive and stay appeals prior to 24 June 2016, the respondent would not seek costs against him. However, if he failed to do so the respondent would seek an order for indemnity costs against him. The appellant gave no response to the offer. There can be no doubt his stance was imprudent.
The appellant’s submissions in reply are brief and emphasise that his appeals were “legitimate” and that he has filed an application for special leave to appeal to the High Court of Australia in relation to the two appeals which went to judgment. The appellant points out that his financial circumstances are difficult and argues that he should not be made liable “for the Respondent’s decision to seek expensive legal representation” (appellant’s written submissions filed on 17 October 2016).
We are of the view that notwithstanding the appellant’s difficult financial circumstances, orders for costs in relation to each of the appeals are appropriate. None of the appeals secured appellate intervention and they were pursued notwithstanding a sensible, some might say generous to the appellant, offer of settlement made by the respondent.
However, the question which needs to be answered is whether the respondent should be awarded indemnity costs? The respondent complied with r 22.53(3) of the Family Law Rules 2004 (Cth) and we thus have the necessary evidence as to how the amount of $28,181, the total costs sought, is calculated.
It needs to be understood that an order for indemnity costs involves a very great departure from the normal standard and that in this jurisdiction such costs are rarely ordered (Kohan and Kohan (1993) FLC 92-340; Prantage & Prantage (2013) FLC 93-544). The arguments advanced by the respondent in support of indemnity costs mirror those made in support of orders for costs.
In our view, these are no more than appeals which have been unsuccessful and, in relation to two appeals, the appellant imprudently rejected an offer for settlement. We do not consider these matters are sufficiently exceptional to justify an order for indemnity costs.
It follows therefore that the costs will be assessed on a party/party basis if the parties cannot reach an agreement on the amount.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Thackray, Strickland & Ryan JJ) delivered on 11 November 2016.

Associate:

Date: 11 November 2016