Marvis & Marvis
[2023] FedCFamC1A 34
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Marvis & Marvis [2023] FedCFamC1A 34
Appeal from: Marvis & Marvis [2022] FamCFamC2F 1416 Appeal number: NAA 250 of 2022 File number: MLC 5187 of 2021 Judgment of: AUSTIN J Date of judgment: 21 March 2023 Catchwords: FAMILY LAW – APPEAL – Costs – Where the primary judge ordered the appellant husband to pay the respondent wife’s costs incurred in property settlement proceedings on the basis that the appellant had been “wholly unsuccessful” – Consideration of s 117 of the Family Law Act 1975 (Cth) (“the Act”) – Error of law – Where each party enjoyed nearly the same degree of success in the substantive cause – Where it is unnecessary to consider the remaining grounds – Appeal allowed – Re-exercise – Where none of the factors prescribed by s 117(2A) of the Act justify an order for costs in the respondent’s favour – Orders of the primary judge set aside – Costs – Where the question of costs of the appeal will be determined on the papers in chambers. Legislation: Family Law Act 1975 (Cth) Pt VIII, ss 117
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) Sch 1
Cases cited: Anison & Anison (2019) FLC 93-908; [2019] FamCAFC 108
Franklyn & Franklyn(No.2) [2021] FamCAFC 160
Nguyen v Nguyen (1990) 169 CLR 245; [1990] HCA 9
Wrensted & Eades (2016) FLC 93-697; [2022] FedCFamC1F 238
Number of paragraphs: 49 Date of hearing: 21 March 2023 Place: Newcastle (via video link) Counsel for the Appellant: Ms Tulloch Solicitor for the Appellant: Kennedy Guy Counsel for the Respondent: Mr Carne Solicitor for the Respondent: Fogarty Lawyers ORDERS
NAA 250 of 2022
MLC 5187 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR MARVIS
Appellant
AND: MS MARVIS
Respondent
order made by:
AUSTIN J
DATE OF ORDER:
21 March 2023
THE COURT ORDERS THAT:
1.The appeal is allowed.
2.Orders 1 and 2 made on 20 October 2022 are set aside.
3.The respondent’s application for costs in the proceedings below is dismissed.
4.The appellant’s application for costs of and incidental to the appeal is to be determined on the papers in chambers, for which purpose:
(a)the appellant shall file and serve any evidence and written submissions upon which he relies by Friday 31 March 2023;
(b)the respondent shall file and serve any evidence and written submissions upon which she relies by Friday 14 April 2023; and
(c)the appellant shall file and serve any written submission in rely by Friday 21 April 2023.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Marvis & Marvis has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTAUSTIN J:
This is an appeal from costs orders made by a judge of the Federal Circuit and Family Court of Australia (Division 2) on 20 October 2022.
For the reasons which follow, the appeal is allowed, discretion is re-exercised, and the parties’ costs applications at first instance are both dismissed. As agreed, the costs of the appeal will be determined later.
Background
On 2 August 2022, the primary judge pronounced property settlement orders between the parties under Pt VII of the Family Law Act 1975 (Cth) (“the Act”). Simultaneously, orders were made directing the parties to file written submissions in relation to the costs of the proceedings so any such dispute could be determined on the papers in chambers.
The respondent filed written submissions seeking costs against the appellant.
The appellant resisted the costs application and sought costs against the respondent in respect of the disputed costs application.
On 20 October 2022, the primary judge made costs orders and published reasons to explain the orders made. The appeal lies from those orders.
The primary judge ordered that the appellant husband pay the respondent wife’s costs incurred on or after 4 November 2021 in the underlying property settlement proceedings, but excluding any costs associated with the caveat registered over the appellant’s property (Order 1), and ordered such costs be paid within 60 days in the sum agreed or assessed under Sch 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) (Order 2). The appellant’s costs application against the respondent was dismissed (Order 3).
The principal premise for the respondent’s costs application was her assertion that the appellant had been “wholly unsuccessful” in the underlying proceedings (at [9]). She contended that was so because he sought the dismissal of her property settlement application and failed (at [6]), whereas she enjoyed some measure of success (at [10]). The appellant resisted the submission, contending he had not been wholly unsuccessful (at [16]), but the primary judge accepted the respondent’s submission (at [27]).
The respondent also contended the appellant’s superior financial circumstances militated in favour of a costs order in her favour (at [14]), but the primary judge rejected the proposition and found no costs order was justified by the parties’ “financial position” (at [24]).
The respondent also contended the appellant’s rejection of her offer of settlement justified the costs order in her favour (at [11]–[12]), but that submission was also rejected. The primary judge found the respondent actually received less under the property settlement orders than she offered to accept from the appellant (at [13] and [26]).
The costs awarded in the respondent’s favour were confined to those accrued by her as and from 4 November 2021, which was the date from which the primary judge found she had properly particularised her case for property settlement relief at a mediation (at [29]–[31]).
The Appeal
As can be seen, the costs order made in favour of the respondent sprang from a finding that the appellant had been “wholly unsuccessful”. In that regard, the primary judge said:
27.I consider there is merit in the [respondent’s] argument that the [appellant] was wholly unsuccessful.
28.The [appellant] has throughout these proceedings argued for a nil adjustment on the basis of nil contributions and nil section 75(2) factors. The [appellant’s] case that the [respondent] did not receive as much as she sought or that she supported the removal of the caveat prior to the trial do not go to his success. He was wholly unsuccessful in this s 79 matter.
Grounds 1, 2 and 3
These grounds collectively assert the primary judge fell into appealable error by making the findings at paragraphs [27] and [28] of the reasons for judgment, which broad contention should be accepted without needing to analyse the intricacies of the grounds.
The respondent commenced the proceedings in May 2021, filing an application for property settlement relief, the nature of which evolved as the proceedings progressed.
The respondent initially sought an unquantified lump sum payment from the appellant. In June 2021, the appellant responded by seeking that the respondent’s application be dismissed. His position did not change throughout the litigation.
At mediation in November 2021, the respondent quantified her claim at between 12.5 and 15.5 per cent of the parties’ aggregated net assets, but the appellant still maintained the parties should retain their individual assets and liabilities without any adjustment order. The parties did not compromise, so the dispute progressed to trial.
The trial was heard in June 2022. At that time, while the respondent had not amended her Initiating Application filed in May 2021, she did file an Outline of Case document and a Minute of Orders for which she applied. She contended the parties’ net assets were worth about $1.7 million and she wanted 15 per cent of them. Given the assets retained by her, she applied for an order compelling the appellant to pay her an extra $129,000. Ultimately, the primary judge ordered the appellant to pay the respondent $77,650.
Essentially then, the respondent wanted $129,000 from the appellant, he resisted having to pay her any amount, but he was ordered to pay her $77,650. Obviously enough, both parties enjoyed a measure of success, though the result was slightly closer to the outcome for which the respondent had advocated.
How then could the primary judge have found that the appellant was “wholly unsuccessful”? It was simply because he proposed paying the respondent nothing, yet was ordered to pay her something. But such an analysis of s 117(2A)(e) of the Act is flawed.
That sub-section provides:
117 Costs
…
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
…
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(Emphasis added)
Clearly enough, the provision invites consideration of whether a party has been wholly unsuccessful in the proceedings; not whether a party has been wholly unsuccessful in prosecuting his or her particular application (Anison & Anison (2019) FLC 93-908 at [37], [42] and [43]; Franklyn & Franklyn(No.2) [2021] FamCAFC 160 at [27]–[28]).
The respondent’s submissions to the contrary are rejected. She incorrectly focussed upon the failure of the appellant’s application, rather than upon the overall result he achieved in the proceedings, submitting:
18.In the present case, [the appellant’s] position at trial that there be no property adjustment at all failed. That application was wholly unsuccessful. Property adjustment orders were made.
(Respondent’s Summary of Argument filed 23 February 2023)
The respondent boldly submitted this in relation to Anison:
35.To the extent that the decision of Anison & Anison (2019) FLC 93-908 seeks to read down the application of s 117(2A)(e), it should be considered plainly wrong. …
(Respondent Summary of Argument filed 23 February 2023)
The glib submission is rejected. Much more than a bare proposition is required to impel an appellate court to conclude that an earlier authority is clearly wrong and to depart from it (Nguyen v Nguyen (1990) 169 CLR 245 at 269). The innovative attempt to present the argument more palatably during oral argument failed.
Here, the “proceedings” comprised a cause of action for property settlement relief under Pt VIII of the Act. The respondent sought an order that the appellant pay her $129,000, but he successfully confined the relief granted to her to little more than one-half of the sum she claimed. He was therefore certainly not “wholly unsuccessful” in the proceedings. While his specific application was unsuccessful, so was the respondent’s. In fact, he enjoyed nearly the same degree of success as her in the substantive cause.
The respondent relied upon two authorities, supposedly to buttress the validity of the finding made about the appellant’s complete lack of success, but neither did.
In Wrensted & Eades (2016) FLC 93-697 at [85]–[87], the Full Court rejected a ground of appeal challenging a finding that the appellant had been wholly unsuccessful in parenting proceedings because he failed to restrain the respondent from moving with the children to live overseas for a confined period of time. Self-evidently, they were quite different circumstances to those in issue here.
In Balodis & Balodis [2022] FedCFamC1F 437 at [15]–[16], Gill J unsurprisingly endorsed existing authority, including Anison, and said nothing to contradict what is said in these reasons.
Ground 4
This ground alleges a mistake of fact at paragraph [30] of the reasons for judgment, where the primary judge found the respondent sufficiently particularised her claim for property settlement relief at the mediation on 4 November 2021 to enable the appellant’s contemplation of it.
The success of the preceding grounds makes it unnecessary to separately consider this ground.
Ground 5
This ground asserts an implied discretionary error, but it is unnecessary to separately consider this ground when specific appealable error has already been identified.
Disposition
The appellant sought the re-exercise of discretion in the event the appeal succeeded.
The respondent instead primarily sought remitter of the proceedings to the primary judge for “reformulation of her Honour’s reasons”, but that is not possible. First, her Honour has retired from judicial office, but secondly, the appealable error which sustains the appeal is incapable of correction by supplementary reasons. The respondent, like the appellant, alternatively sought the re-exercise of discretion.
The re-exercise of discretion entails reconsideration of the respondent’s costs application (granted by Orders 1 and 2) and also the appellant’s costs application (refused by Order 3), because the latter’s dismissal followed upon the former’s success.
Neither party sought to adduce further evidence, but each supplemented the submissions they made at first instance to the primary judge.
The orthodoxy is for parties to proceedings under the Act to bear their own costs (s 117(1)), though discretion exists to make costs orders if the circumstances warrant it (s 117(2)). In considering whether a costs order should be made and, if so, the nature of it, the Court must take into account certain prescribed considerations (s 117(2A)).
While the appellant enjoys a stronger financial position, both parties have substantial assets and handsome incomes. The appellant’s financial circumstances do not thwart a costs order being made against him, but the respondent’s financial circumstances are not so much less fortunate as to demand a costs order in her favour (s 117(2A)(a)).
Neither party was in receipt of a grant of legal aid to contest the substantive proceedings (s 117(2A)(b)).
The respondent commenced the proceedings in May 2021, but did not usefully particularise the ambit of her property settlement claim until the mediation in November 2021. Her conduct of the proceedings before the mediation occurred tended to impede any real prospect of the litigation being compromised (s 117(2A)(c)). The appellant alleged in the appeal that the respondent did not satisfactorily particularise her case until the trial commenced in June 2022, but he could arguably have reasonably understood at the mediation in November 2021 that she claimed (at most) some 15.5 per cent of the parties’ net assets and superannuation.
I am not satisfied that any other aspect of the parties’ conduct of the substantive proceedings militates either in favour of or against a costs order.
The proceedings were not necessitated by any default (s 117(2A)(d)).
Neither party was wholly unsuccessful in the proceedings. The ultimate result was about mid-way between the polarised positions for which they each advocated (s 117(2A)(e)).
The primary judge made findings about offers of settlement made by the parties (at [7]). Since those findings were not challenged in the appeal, I accept them as being correct, subject to this caveat: the proceedings were not commenced until May 2021 so the offers must have been made in 2021; not 2020 as stated. In September and October 2021, the appellant offered to pay the respondent $10,000, which offer was less attractive than her eventual entitlement. In September 2021, the respondent offered to accept $112,000, which offer exceeded her eventual entitlement. None of the offers are relevant to the question of costs (s 117(2A)(f)).
Neither party submitted that any other consideration should be regarded as influential in the outcome (s 117(2A)(g)).
In aggregation, none of the factors prescribed by s 117(2A) of the Act justify an order for costs in the respondent’s favour. Her application for costs is dismissed. It will be necessary to set aside the contrary orders made by the primary judge (Orders 1 and 2).
The appellant sought an order compelling the respondent to pay his costs of defending her costs application, which he quantified at $4,478.61, but he faces the same constraints imposed by the Act (ss 117(1), 117(2) and 117(2A)).
His application was posited only on the basis that her costs application was “completely without merit”, ostensibly calling to aid s 117(2A)(e) of the Act. The respondent’s application has indeed now proven to be unsuccessful, but the preceding paragraphs of these reasons should demonstrate how easily and quickly the respondent’s application could have been determined. His expenditure of $4,478.61 to resist her primary costs application was unreasonably excessive and should not be visited upon the respondent. The appellant’s application for costs should also be dismissed. The primary judge made an order to achieve that result (Order 3), so it need not be disturbed.
Costs of the appeal
The appellant sought costs of the appeal against the respondent in the sum of $18,857.20.
The appellant contended that offers of compromise exchanged between the parties in advance of the appeal hearing would bear upon the question of costs, so they agreed to file evidence and written submissions to enable the question to be determined on the papers in chambers. Procedural orders are made to that effect.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Austin. Associate:
Dated: 24 March 2023
3
4
0