Madin & Palis (Costs)
[2016] FamCAFC 25
•24 February 2016
FAMILY COURT OF AUSTRALIA
| MADIN & PALIS (COSTS) | [2016] FamCAFC 25 |
| FAMILY LAW – APPEAL – COSTS – where the Full Court ordered that each party bear their own costs of the appeal – where the Full Court found that an offer for settlement relied on by the applicant for costs could not be relied on because it impliedly purported to confer jurisdiction on the Court – where although the respondent was ultimately wholly unsuccessful the main appeal raised a novel issue to which there was no existing authority – where the Full Court reiterated that orders for indemnity costs would only be made in the most extreme cases, because the primary rule in this jurisdiction is that each party bear their own costs – no orders for costs. |
| Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) |
| APPELLANT: | Mr Madin |
| RESPONDENT: | Ms Palis |
| FILE NUMBER: | BRC | 130 | of | 2013 |
| APPEAL NUMBERS: | NA NA | 52 66 | of of | 2014 2014 |
| DATE DELIVERED: | 24 February 2016 |
| PLACE DELIVERED: | Canberra |
| JUDGMENT OF: | Finn, May & Strickland JJ |
| HEARING DATE: | By way of written submissions |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 28 January 2014 23 May 2014 |
| LOWER COURT MNC: | [2014] FCCA 118 [2014] FCCA 1029 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Bertone |
| SOLICITOR FOR THE APPELLANT: | Leishman Legal |
| COUNSEL FOR THE RESPONDENT: | Ms McLennan |
| SOLICITOR FOR THE RESPONDENT: | Allan R De Brenni & Company |
Orders
There be no order for costs in relation to the appeals against the orders of the Federal Circuit Court of Australia made on 28 January 2014 and 23 May 2014.
The Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeals.
There be liberty to the appellant to apply to the Full Court of the Family Court of Australia by letter to the Northern Region Appeals Registrar for a certificate under s 9 of the Federal Proceedings (Costs) Act 1981 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Madin & Palis (Costs) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 52 of 2014; NA 66 of 2014
File Number: BRC 130 of 2013
| Mr Madin |
Appellant
And
| Ms Palis |
Respondent
REASONS FOR JUDGMENT
On 28 January 2014 Judge Howard of the Federal Circuit Court of Australia dismissed an initiating application by Mr Madin (“the appellant”) in which he sought declarations under s 90RD of the Family Law Act 1975 (Cth)
(“the Family Law Act”) that a de facto relationship existed (in the
period from March 2002 to 9 January 2011) between himself and
Ms Palis (“the respondent”), as well as orders by way of alteration of property interests as between himself and the respondent pursuant to s 90SM of the Family Law Act.
His Honour dismissed the initiating application on the basis that it was filed outside the statutory time limit provided in s 44(5) of the Family Law Act (being “within the period of 2 years after the end of the de facto relationship”).
Subsequently, on 23 May 2014 Judge Howard ordered the appellant to pay the respondent’s costs of and incidental to the proceedings.
On 14 April 2015 this Full Court heard appeals against both the orders of
Judge Howard made on 28 January 2014 and on 23 May 2014. Both appeals were opposed by the respondent, although counsel for the respondent conceded correctly that if the appeal against the dismissal of the initiating application succeeded, then the appeal against the costs order would also have to succeed.
On 29 April 2015, we delivered reasons for judgment and made orders allowing both appeals.
In relation to the main appeal we found that the initiating application was filed within the two year period after the end of the de facto relationship on
9 January 2011. The primary judge’s calculation of the relevant time period was therefore wrong, and the initiating application should not have been dismissed. Accordingly, both the main appeal and the appeal against the primary judge’s costs order were allowed.
It may assist in understanding the issues which arose on the main appeal if we here include the following paragraphs from our reasons in relation to that appeal:
11.Whatever may have been the parties’ positions before his Honour, they were in agreement before us that in this case the two year period provided in s 44(5) commenced on 10 January 2011 by virtue of the operation of s 36(1) (Item 6) of the Acts Interpretation Act. That agreed position was undoubtedly correct.
12.The question on this appeal therefore became whether 9 January 2013, being the date of filing of the initiating application, was “within” the two year period which, it is agreed, commenced on
10 January 2011. The appellant contended that it was, while the respondent sought to uphold the primary judge’s conclusion that that period had expired on 8 January 2013.…
14. The only authority to which we were taken and which we consider to be of assistance to us in determining the end date for the two year period provided for in s 44(5) of the Family Law Act, which in this case commenced on 10 January 2011, is the decision of Beaumont J of the Federal Court of Australia in Susiatin v Minister for Immigration and Multicultural Affairs (1998) 83 FCR 574.
…
19. We are therefore prepared to conclude at least by analogy with Beaumont J’s decision in Susiatin that in the present case the two year limitation period provided in s 44(5) of the Family Law Act commenced on 10 January 2011 and ended at midnight on 9 January 2013. The appellant’s initiating application, having been filed on 9 January 2013, was therefore filed within time, and the primary judge was in error in holding that it was not.
20. That result accords with the plain meaning of the sub-section, and there is no warrant in that sub-section, in s 36(1) of the
Acts Interpretation Act, or in any relevant authority for, in this instance, excluding from the calculation of when the two year period ends, the last day of that two year period,
i.e., 9 January 2013.We indicated at [30] of our reasons for judgment in relation to the appeals that unless there was some significant matter of which we were not aware that would justify a departure from the general rule under s 117(1) of the
Family Law Act, that each party to proceedings under the Family Law Act should pay his or her own costs, we would be prepared to grant costs certificates to both parties under the Federal Proceedings (Costs) Act 1981 (Cth) given the outcome of the appeals.
However, because it had emerged at the conclusion of the hearing of the appeal that there may be matters relevant to the issue of costs which should appropriately be the subject of written submissions, we included in our orders liberty for both parties to file and serve written submissions in relation to the costs of both appeals.
Subsequently the respondent, followed by the appellant, filed written submissions. The respondent sought a costs certificate under s 6 of the
Federal Proceedings (Costs) Act 1981 (Cth). However, the appellant sought that the respondent pay his costs on an indemnity basis. The respondent then filed submissions in reply addressing the issues raised in the appellant’s written submissions, and opposing a costs order being made against her on
“either a standard or indemnity basis”.
The provisions of s 117(1), (2), and (2A) of the Family Law Act
As already indicated, the general rule contained in s 117(1) of the Family Law Act is that each party to proceedings under the Act should pay his or her own costs of the proceedings. However, under s 117(2) an order for costs may be made if the court is of the opinion that there are circumstances that justify such an order, and in considering whether to make such an order, the court is to have regard to matters contained in s 117(2A). Those matters are:
(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 appellant’s application that the respondent pay his costs
It will be convenient first to consider the appellant’s application that the respondent should pay his costs of the appeal, and to do so having regard to the following s 117(2A) matters relied on by the appellant, being:
·that the respondent is, according to the appellant, in a superior financial position to the appellant (which appears not to be accepted by the respondent);
·that the conduct of the respondent in continuing to oppose the appeal was relevant, in circumstances where May J in her judgment of
11 November 2014 granting the appellant an extension of time in which to institute the main appeal, had indicated that the proposed appeal had merit;·that the respondent had been wholly unsuccessful in both appeals;
·that following May J’s judgment the appellant had made a written offer to settle the appeal which had not been accepted by the respondent.
The offer for settlement just mentioned was contained in a letter sent by the appellant’s solicitors to the respondent’s solicitors on 24 November 2014. That letter was in the following terms (omitting formal parts):
We have now filed Notices of Appeal on behalf of our client in respect of the orders of Judge Howard dated 28 January 2014 and 23 May 2014. These will be served upon you shortly however we attach copies now for your ease of reference.
We note our client was granted leave to appeal out of time and was ordered to pay your client’s costs.
We further note that May J assessed the merits of our client’s appeal against the dismissal of his application and the consequential costs order. Having regard to that judgment it is likely our client will be successful in the Appeal.
So as to avoid the significant costs of the Appeal which will be incurred by both parties, in respect of which our client will likely succeed, we are instructed to invite your client to settle our client’s Appeal on the following basis:
1.That the appeal be allowed in respect of each Notice of Appeal;
2.That the orders made on 28 January 2014 and 23 May 2014 be set aside;
3.That the substantive matter be remitted to the Federal Circuit Court for hearing before a Judge other than Judge Howard;
4.That our client pay your client’s reasonable costs as ordered by May J on 11 November 2014, to be assessed by a jointly agreed assessor if not agreed;
5.That your client reimburse our client for the filing fees in respect of each of the Notices of Appeal, each in the sum of $1,270, totalling $2,540; and
6. That there be no order as to costs.
This will then allow the parties to proceed with the hearing and determination of our client’s application pursuant to Part VIIAB of the Family Law Act 1975.
This offer is open for acceptance by your client for 7 days. Thereafter, any offer to settle our client’s Appeal will be on the basis of your client paying our client’s costs of the Appeal.
(Original emphasis)
The respondent rejected this purported offer for settlement from the appellant without providing any reasons in a letter her solicitors sent to the appellant’s solicitors on 28 November 2014.
In our view, no weight can be placed in support of the appellant’s application for costs on this purported offer to settle the appeals. This is because the effect of
s 44(5) of the Family Law Act is that there is no jurisdiction in a court to entertain proceedings with respect to property between former de facto spouses unless such proceedings are instituted within two years after the end of the de facto relationship (unless leave has been granted under s 44(6)).In the present case a judge had ruled that the proceedings had been instituted outside the two-year limitation period and he had therefore dismissed them. It would not have been open to the parties to agree to set aside the order dismissing the proceedings, and then seek to have another judge proceed to determine the property proceedings without regard to the question of jurisdiction to entertain the proceedings. As parties cannot agree to confer jurisdiction on a court, the original judge’s finding that there was no jurisdiction would have stood until there was a decision to the contrary by an appeal court and the order dismissing the initiating application set aside.
There can therefore be no criticism of the respondent for refusing to accept the purported offer for settlement, and no weight placed on that offer in the determination of the application by the appellant for costs.
Similarly, we consider that no real weight can be placed on the conduct of the respondent in continuing to oppose the appeals notwithstanding May J’s conclusion reached in the context of an application to extend time to appeal, that the appeal had “merit”. Her Honour was concerned only with the prospects of success of the appeal for that limited purpose. She was not determining the appeal.
Moreover, the respondent at that time had the benefit of a decision in her favour in relation to an issue on which, as will have emerged from the extract of our reasons for allowing the appeals which is earlier set out, there was no clear existing authority.
It is true that the respondent was ultimately “wholly unsuccessful” in relation to both appeals. But again we emphasise that the main appeal raised a novel issue on which there was no clear existing authority. The success of the costs appeal was merely the necessary consequence of the success of the main appeal.
The existence of a disparity in the financial circumstances of the party appears to be a matter of some dispute. However, even if the appellant’s claims on this matter are accepted in their entirety, they would not, in our view, provide justification for the making of a costs order in the appellant’s favour having regard to the circumstances of these appeals as we have explained them.
The appropriate outcome in relation to the costs of these appeals is that there be no order for costs.
Finally, we take the opportunity to observe that in so far as the appellant sought an order for indemnity costs, applications for such costs should only be made, and such costs will only be ordered, in the most extreme cases. This is particularly so having regard to the fact that the primary rule in this jurisdiction is that each party should pay their own costs. Unfortunately, however, applications for indemnity costs are increasingly being made in this jurisdiction, thereby imposing further burdens on the court’s limited resources and causing further unnecessary expense for litigants.
The respondent’s application for a costs certificate
As earlier mentioned, the respondent sought only the grant of a costs certificate under s 6 of the Federal Proceedings (Costs) Act 1981 (Cth). We are prepared to grant such a certificate.
A costs certificate for the appellant
Although the appellant has not sought a costs certificate, we would also be prepared to grant him one under s 9 of the Federal Proceedings (Costs) Act 1981 (Cth).
In order for the appellant to obtain such a certificate, it would be necessary for him or his solicitors to write to the Appeal Registrar requesting that the Full Court grant him such certificate. This Court would then make the necessary order.
I certify that the preceding twenty six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Finn, May and Strickland JJ) delivered on 24 February 2016.
Associate:
Date:
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