Malloy & Ors and Stopford Malloy (Costs)
[2018] FamCAFC 1
•12 January 2018
FAMILY COURT OF AUSTRALIA
| MALLOY AND ORS & STOPFORD MALLOY (COSTS) | [2018] FamCAFC 1 |
| FAMILY LAW – APPEAL – COSTS – Where the appellant husband relies on the respective financial circumstances of the parties, and the respondent wife’s lack of success as justifying an order for costs – Where the Court is not satisfied that the respondent wife’s financial circumstances are superior to the appellant husband’s – Where the position taken by the respondent wife in relation to the application for leave to appeal and the appeal was not unreasonable – Where neither the appellant husband nor the respondent wife was wholly unsuccessful in relation to the applications for leave or the appeal – Where the appeal was allowed in respect of some of the orders made by the primary judge because of errors of law – Where the respondent wife should not be required to pay costs where it is the primary judge who has committed the error – Where each party should bear their own costs. FAMILY LAW – CROSS-APPEAL – COSTS – Where the cross-appellants rely on the respondent wife’s lack of success in opposing the application and the appeal – Where the cross-appellants acknowledge they are in a superior financial position – Where each of the respondent wife and the cross-appellants were partially successful in relation to the issue of leave to appeal – Where, as with the appellant husband, the respondent wife’s position in relation to the cross-appellant’s application for leave to appeal was not unreasonable – Where it cannot be said that the respondent wife was “wholly unsuccessful” in relation to the application for leave, or the appeal, mounted by the cross-appellants – Where it is not open to balance any lack of success by the respondent wife against the disproportionate financial circumstances of the cross-appellants and the respondent wife – Where the appeal by the cross-appellants was allowed in respect of some of the orders made by the primary judge because of errors of law by the primary judge – Where the respondent wife should not have to meet an order for costs in those circumstances – Where each party should bear their own costs. FAMILY LAW – COSTS CERTIFICATES – Costs certificates granted to the appellant husband and the respondent wife – Application by the cross-appellants for a costs certificate dismissed. |
| Family Law Act 1975 (Cth) s 117 |
| Federal Proceedings (Costs) Act 1981 (Cth) ss 6 and 9 Family Law Rules 2004 (Cth) Ausino International v Apex Sports [2006] NSWSC 1119 |
| APPELLANT: | Mr Malloy |
CROSS-APPELLANTS: | The Malloy Group |
| RESPONDENT: | Ms Stopford Malloy |
| FILE NUMBER: | ADC | 2595 | of | 2015 |
| APPEAL NUMBER: | SOA | 87 | of | 2016 |
| DATE DELIVERED: | 12 January 2018 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | In Chambers by way of written submissions |
| JUDGMENT OF: | Thackray, Strickland & Kent JJ |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 5 September 2016 |
| LOWER COURT MNC: | [2016] FamCA 748 |
REPRESENTATION
| SOLICITOR FOR THE APPELLANT: | Howe Jenkin Lawyers |
SOLICITOR FOR THE CROSS-APPELLANTS: | Barnes Brinsley Shaw Lawyers |
| COUNSEL FOR THE RESPONDENT: SOLICITOR FOR THE RESPONDENT: | Mr Wells QC with Mr McGinn Piper Alderman Lawyers |
Orders
The application for costs made by the appellant husband be dismissed.
The application for costs made by the cross-appellants be dismissed.
Each party bear their own costs.
The Court grants to the appellant husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (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 appellant husband in respect to the costs incurred by him in relation to the application for leave to appeal and the appeal.
The Court grants to the respondent wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (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 wife in respect to the costs incurred by her in relation to the application for leave to appeal and the appeal.
The application by the cross-appellants for a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) be dismissed.
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 Malloy and Ors & Stopford Malloy (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 ADELAIDE |
Appeal Number: SOA 87 of 2016
File Number: ADC 2595 of 2015
| Mr Malloy |
Appellant
And
| The Malloy Group & Mr Q Malloy |
Cross-Appellants
And
| Ms Stopford Malloy |
Respondent
REASONS FOR JUDGMENT
Introduction
On 5 October 2017 this Court made orders in relation to the applications for leave to appeal, and the appeal and the cross-appeal. As part of those orders we sought the submissions of the parties as to the question of costs, and we have now received those submissions.
Mr Malloy (“the appellant husband”) and the Malloy Group and Mr Q Malloy (“the cross-appellants”) seek orders for costs. Ms Stopford Malloy (“the respondent wife”) opposes those applications.
The legislation
The question of costs is governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”) which relevantly provides as follows:
(1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(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 application of the appellant husband
The appellant husband seeks costs in relation to the following applications:
a)Application for leave to appeal and Amended Notice of Appeal filed by the appellant husband on 24 November 2016.
b)Application in an Appeal filed by the respondent wife on 22 December 2016 seeking to rely on certain affidavits.
c)Application in an Appeal filed by the respondent wife on 13 April 2017 seeking leave to file and serve affidavits setting out details of possession proceedings in the Supreme Court of South Australia.
Further, on 23 August 2017 Chief Justice Bryant (as her Honour then was) ordered that the question of costs of and incidental to the appellant husband’s Application in a Case filed on 4 October 2016, seeking a stay of the order made by her Honour on 5 September 2016 be “costs in the appeal”. Those costs are also sought by the appellant husband.
The application for leave to appeal and Amended Notice of Appeal
The appellant husband relies on the respective financial circumstances of the parties, and the respondent wife’s lack of success as justifying an order for costs.
As to his financial position the appellant husband says that he “has no assets other than a small amount of furniture and jewellery of minimal value”. He is the registered proprietor of two properties but he says they are fully encumbered, and indeed, on 24 October 2017 the Supreme Court of South Australia made orders for possession of those properties, in favour apparently of one or other of the companies that comprise the Malloy Group of Companies.
The appellant husband seeks to rely on the financial statement filed on 5 December 2016 as to his income and his expenses, but as the respondent wife correctly points out, that financial statement is strictly not before the Court, and in any event is contentious. Thus, in terms of the husband’s income and expenditure, we are largely reliant on what appears in our reasons for judgment in relation to the application for leave to appeal and the appeal, and we will refer to that shortly.
In relation to the respondent wife, the appellant husband says that she has an apartment worth $340,000 which is subject to a mortgage of approximately $190,000; she owns a motor vehicle worth $25,000; and furniture, jewellery and personal effects worth $45,000.
The appellant husband submits that the wife’s financial circumstances are superior to his. However, we do not accept that submission.
The appellant husband claims that he has no occupation and no income, although there would appear to be no impediment to him being gainfully employed. Further, since 2010 his father, through his companies, has supported him financially to the tune of $17,153 per week as at June 2016 (see [179]). The appellant husband also still owns and occupies the properties at Suburb B and Suburb E said to be worth $4,900,000 and $2,800,000 respectively (see [126] – [127]). They are encumbered by mortgages but the father has been meeting all repayments required, again through his companies.
The appellant husband’s father also pays the wife $650 per week, again through one of his companies, and that is said to be by way of spousal maintenance, albeit there are orders of the court that require the husband to pay significantly more spousal maintenance than that amount.
Relevantly, the respondent wife is the primary caregiver to the parties’ only child, and that limits her ability to support herself financially; indeed, she receives Centrelink benefits. The appellant husband either pays no child support, or an amount of $27.00 per week. There are also substantial arrears of spousal maintenance due by the appellant husband. He has failed to fully comply with the orders of the court in that regard.
Turning to his claim of lack of success by the respondent wife, the appellant husband says that she was “wholly unsuccessful in responding to the husband’s [a]pplication for [l]eave to [a]ppeal”. That is so to a certain extent, but the issues were whether there was “sufficient doubt about the decision [of the primary judge] so as to justify its reconsideration”, and whether “substantial injustice would flow if the orders [were] not set aside” (at [24]).
Although, we found that there was “sufficient doubt”, the position taken by the respondent wife in submitting otherwise was not unreasonable. Similarly, we found that there was “substantial injustice” supposing the orders to be wrong, but again the position taken by the respondent wife against that was not unreasonable. Indeed, we rejected a number of submissions by the appellant husband as to the alleged injustice that he said he would suffer (at [27]).
We also note that leave to appeal was sought by the appellant husband against the order made by the primary judge dismissing the application for orders sought by the cross-appellants in their response filed on 14 June 2016, but we dismissed that application (at [32] and [33]).
It also cannot be said that the position adopted by the respondent wife in relation to the appeal itself lacked merit.
There were five grounds of appeal. We found that Grounds 1 and 2, which were dealt with together, were without merit, and that Ground 3 was also without merit. With Ground 4, the first issue raised was the power that the primary judge had to make the orders appointing receivers. This issue depended on the construction of the Act and we accepted the submissions of the respondent wife and found that the court had the power to make the orders. This ground also contained a challenge to the primary judge’s exercise of her discretion in making the orders, and there were eight specific areas of complaint. We rejected two of those, but found merit in the other six. As to Ground 5, which challenged a specific order, namely order (10) made by the primary judge, we found merit.
In summary then, neither the appellant husband nor the respondent wife was wholly unsuccessful.
One further factor arising under s 117(2A) that needs to be considered is s 117(2A)(g), namely “such other matters as the court considers relevant”.
As submitted by the respondent wife, it is relevant that the first instance proceedings instituted by the respondent wife arose from “the default [by the appellant husband] of an order for spousal maintenance with which there has been substantial and persistent non-compliance”, generating significant arrears. Secondly, this Court has determined that in relation to those proceedings the appellant husband and the respondent wife should bear their own costs.
We also accept the submission of the respondent wife that the appellant husband’s appeal was allowed in respect of some of the orders made by the primary judge because of errors of law, namely a failure to bring to account the requirement of the Family Law Rules 2004 (Cth) (at [139] and [142]), and a failure to provide reasons (at [150]). Thus, it is said that the respondent wife should not be required to pay costs where it is the primary judge who has committed the error.
The applications in an appeal filed by the respondent wife respectively on 22 December 2016 and 13 April 2017
These applications were dismissed, and thus the appellant husband submits that the respondent wife was wholly unsuccessful in relation to those applications. However, as submitted by the respondent wife, the earlier application was, in part, rendered unnecessary (at [160]), and the filing of the later application was not opposed by either the appellant husband or the cross-appellants.
In any event, they need to be seen not as discrete applications, but as applications filed in the context of the application for leave to appeal and the appeal, and the fate of any question of costs in relation to them should follow what is ultimately found in relation to the appellant husband’s costs of the application for leave to appeal and the appeal (Ausino International v Apex Sports [2006] NSWSC 1119 (“Ausino International”), per Campbell J at [55] and [56]).
The husband’s application in a case filed on 4 October 2016
As referred to above, her Honour ordered that the appellant husband’s costs in relation to this application be “costs in the appeal”.
Plainly, that is not an application that was before us, but equally clearly, given her Honour’s order, the costs will be treated as part of the appellant husband’s costs in the appeal, and dealt with in the same way (Ausino International).
Conclusion
On balance, we are not persuaded that there are circumstances here that justify making an order for costs in favour of the appellant husband, and the primary rule in s 117(1) of the Act should apply, and each party should bear their own costs.
The application of the cross-appellants
The cross-appellants seek costs in relation to their application for leave to appeal and the appeal.
As with the appellant husband, the cross-appellants rely on the respondent wife’s lack of success in opposing the application and the appeal.
In relation to the financial circumstances of the cross-appellants vis a vis the respondent wife, the cross-appellants acknowledge “they are in a superior financial position” but submit that “balancing this factor against the other relevant [s]ection 117(2A) factors renders it appropriate that there be a costs [o]rder in their favour”. Pausing there, it is not the case that there are multiple other relevant factors: the only other factor that is identified by the cross-appellants is the lack of success of the respondent wife.
As to the lack of success, the first point to note is that this Court found that the cross-appellants did not have standing to appeal orders (13) and (14) of the orders made by the primary judge, and further, leave was not granted to appeal order (15).
Thus, each of the respondent wife and the cross-appellants were partially successful in relation to the issue of leave to appeal. Further, and in any event, as with the appellant husband, the respondent wife’s position in relation to the cross-appellant’s application for leave to appeal was not unreasonable.
As to the appeal, we found it unnecessary to address the separate challenges by the cross-appellants to the other orders, given that those challenges were almost on all fours with those raised by the appellant husband (at [153]).
Thus, as with the appellant husband, it cannot be said that the respondent wife was “wholly unsuccessful” in relation to the application for leave, or the appeal, mounted by the cross-appellants.
In these circumstances, it is not open to balance any lack of success by the respondent wife against the disproportionate financial circumstances of the cross-appellants and the respondent wife, and that alone would prevent any order for costs being made in favour of the cross-appellants.
We also note again that, as with the appellant husband’s appeal, the appeal by the cross-appellants was allowed in respect of some of the orders made by the primary judge because of errors of law by the primary judge, and the respondent wife should not have to meet an order for costs in those circumstances.
Conclusion
Again, we are not persuaded that there is any circumstance here that justifies making an order for costs against the respondent wife, and the primary rule in s 117(1) of the Act should apply, and each party should bear their own costs.
Costs certificates
In the event that no order for costs was made, each party seeks a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth).
In all the circumstances, we will grant costs certificates to each of the appellant husband and the respondent wife, but we are not persuaded to do so with respect to the cross-appellants.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Thackray, Strickland & Kent JJ) delivered on 12 January 2018.
Associate:
Date: 12 January 2018
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