Massalski & Riley (No 2)
[2021] FamCAFC 152
•19 August 2021
FAMILY COURT OF AUSTRALIA
Massalski & Riley (No. 2) [2021] FamCAFC 152
Appeal from: Massalski & Riley [2019] FamCA 1013 Appeal number(s): EAA of 14 of 2020 File number(s): SYC 496 of 2015 Judgment of: RYAN, ALDRIDGE & WATTS JJ Date of judgment: 19 August 2021 Catchwords: FAMILY LAW – APPEAL – COSTS – Party/party costs – Where the wife was wholly unsuccessful in the appeal – Consideration of factors in s 117(2A) of the Family Law Act 1975 (Cth) – Costs ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) Pt VIIIAB, ss 79A, 90SF, 117
Family Law Rules 2004 (Cth) Sch 3
Cases cited: Buckley & Buckley [2013] FamCAFC 150
Dickson and Dickson (1999) FLC 92-857; [1999] FamCA 768
Duff and Duff (1977) FLC 90-217; [1977] FamCA 24
Massalski & Riley [2019] FamCA 1013
Massalski & Riley [2021] FamCAFC 116
Mullane v Mullane (1983) 158 CLR 436; [1983] HCA 4
Division: Appeal Division Number of paragraphs: 25 Date of hearing: By way of written submissions Place: In Chambers The Appellant: Litigant in person Solicitor for the Respondent: Russell C Byrnes Solicitor ORDERS
EAA of 14 of 2020
SYC 496 of 2015APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MS MASSALSKI
Appellant
AND: MR RILEY
Respondent
ORDER MADE BY:
RYAN, ALDRIDGE & WATTS JJ
DATE OF ORDER:
19 AUGUST 2021
THE COURT ORDERS THAT:
1.The appellant wife pay the respondent husband’s costs of the appeal fixed in the amount of $30,000 within twenty-eight (28) days.
2.The appellant wife’s application for costs of and in relation to the appeal be dismissed.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Massalski & Riley has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
RYAN, ALDRIDGE & WATTS JJ:
INTRODUCTION
On 13 July 2021, this Court dismissed an appeal by Ms Massalski (“the wife”) from property settlement and related orders made on 24 December 2019. Mr Riley (“the husband”) seeks his costs of resisting the unsuccessful appeal. The wife opposes the husband’s application for costs and, it would seem, seeks that the husband pays her costs of the appeal. At paragraph 13 of the wife’s costs submissions filed by leave on 12 August 2021, the wife explains her position thus:
13.[The wife] seeks an order that [the husband’s] application for costs be dismissed, and an order be made that [the husband] pays [the wife’s] costs of this appeal, according to the application made on 28 Oct 2020, or alternatively, that the [the wife] be allowed to re-submit her application for costs after the proceeding in the Family Court in respect of the Application pursuant to s 79A, are finalised.
However, the wife’s final submission is that:
63.It is submitted that the circumstances do not justify the making of an order for costs and therefore each party ought to bear their own costs in accordance with s117(1) of the Act.
Given that the wife asks that we take into account her submissions filed in the appeal on 28 October 2020 by which the wife claimed costs against the husband, her position is inconsistent with her submission at paragraph 63. The effect of this is that each of the parties submits that an order for costs should be made and the questions to be answered concern whether an order should be made, against whom and the amount. It is to these issues that these reasons pertain.
At the appeal hearing, so as to avoid the trouble and expense of a further hearing in relation to the questions of costs, we adopted the Full Court’s usual practice and invited submissions on the point. Brief submissions were made following which directions were made for the parties to file costs statements. However, the wife subsequently reopened the appeal and the costs consequences of that application also required consideration. Thus, directions were made to enable the question of costs to be determined without an oral hearing and by written submissions. If either party sought to have the question of costs dealt with by an oral hearing, they were required to give written notice within the stated timeframe. Notice has not been given and it is clear that the parties are content that the costs questions are dealt with by written submissions.
As to the written submissions, the husband filed his submissions in time (on 27 July 2021 and 12 August 2021). The wife did not and, at her request, she was given an extension of time to file her submissions by 12 August 2021, which was given and with which she complied.
The husband seeks his costs of the appeal, including the wife’s application to reopen the appeal, in the amount of $30,000 plus GST which is slightly less than his total party/party costs which are in the vicinity of $36,000. He pursues the lesser amount on the basis that it reflects “an appropriate ‘discount’ for the avoidance of further costs for both parties in having costs assessed” (Husband’s Costs Submissions filed 27 July 2021, paragraph 14). Be that as it may, party/party costs are to be calculated in accordance with Sch 3 of the Family Law Rules 2004 (Cth). As the item amounts in Sch 3 are inclusive of GST we will not fix an amount for costs which is exclusive of GST and that aspect of the husband’s claim for costs can be rejected at the outset.
By her application filed on 28 October 2020, the wife sought costs against the husband in the amount of $17,919.77. These costs primarily relate to counsel and solicitors fees incurred for the wife’s Notice of Appeal, the appeal books and advising her in relation to the appeal. As the wife was self-represented in the appeal and her application to reopen the appeal, her costs do not include appearance costs.
Section 117 of the Act
An application for costs falls to be determined within s 117 of the Family Law Act 1975 (Cth) (“the Act”). Section 117(1) provides that each party to a proceedings under the Act should bear his or her own costs unless the court is of the opinion that there are circumstances that justify making a costs order (s 117(2)). Section 117(2A) sets out matters to which the court should have regard to in determining whether there are circumstances which justify an order for costs, and if so, what, if any, order should be made. As well as the matters listed in s 117(2A), s 117(2A)(g) enables the court to take into account such other matters that are relevant.
THE HUSBAND’S COSTS APPLICATION
In this application, the relevant factors are:
·the parties’ financial circumstances (s 117(2A)(a));
·the conduct of the parties to the proceeding (s 117(2A)(c));
·whether a party to the proceedings has been wholly unsuccessful (s 117(2A)(e); and
·other matters which the wife says are relevant (s 117(2A)(g)).
The parties’ financial circumstances
The parties’ financial circumstances are set out in the trial reasons (Massalski & Riley [2019] FamCA 1013), including under the consideration of s 90SF(3)(b) of the Act. Stated broadly, the effect of these findings is that the parties are each in paid employment. The wife’s failure to fully disclose her financial circumstances impeded the Court’s capacity to make certain findings in relation to some of her property and financial resources. However, as is set out in our reasons for judgment (Massalski & Riley [2021] FamCAFC 116), each of the parties owns real estate and has superannuation. Otherwise, the wife’s assertion that the Supreme Court of Victoria has made an order for costs against her in favour of the husband in the amount of approximately $209,000 is not disputed. However, the wife’s equity in her property at F Street is more than sufficient to enable her to satisfy that costs order as well as the amount that the husband seeks here.
Although we do not understand either party to suggest that they cannot afford to pay the costs sought by the other party, we are satisfied that they each have the capacity to pay the costs sought by the other. Even if that was not the case, impecuniosity is no bar to an order for costs being made where it is otherwise warranted (Buckley & Buckley [2013] FamCAFC 150). The application of the subsection is moot.
The conduct of the proceedings
It needs to be understood that the reference to “the proceedings” in s 117(2A)(c) is to the appeal and not, for example, the action in the Supreme Court of Victoria, the trial, proceedings initiated by the wife in the NSW Civil and Administrative Tribunal (“NCAT”) or her recently filed application for orders purportedly pursuant to s 79A of the Act (Dickson and Dickson (1999) FLC 92-857). As to the conduct of the appeal, the husband contends that the wife’s grounds of appeal were hopeless and that her applications in the appeal were misconceived and doomed to fail. This is another way of saying that the wife was wholly unsuccessful in the appeal. It is more appropriate that the question of success is addressed under s 117(2A)(e).
Success
The wife has been wholly unsuccessful in the appeal and thus, the husband has incurred unnecessary legal expenses. These matters strongly support an order for costs in his favour.
Other matters
In opposing the husband’s application for costs, the wife repeats much of what she said at trial and in the appeal. Clearly the wife had read our reasons for judgment but for whatever reason she is unwilling to accept that the proceedings between her and the husband are a de facto financial cause, that her arguments have failed and principles of finality. It is difficult to come to any view other than the wife’s recently filed s 79A application (or its allied provision under Pt VIIIAB) has no reasonable prospects of success and that it is no more than a strategy which is designed to delay enforcement of the orders mounting up against her as long as possible. The information contained in what the wife says are the recently discovered loan application and development application made in relation to husband’s renovation of the Suburb E property is irrelevant and does not establish a basis for varying or setting aside the property settlement orders. As to this being recently discovered, the renovations were discussed in the trial reasons and, assuming for the moment that the wife did not have the documents sooner, they were obtainable with little effort. If they were somehow relevant it was incumbent on the wife to present them at trial and it is too late to raise the issue now.
The fact that the husband has discharged the Commonwealth Bank mortgage is similarly irrelevant. After all, his doing so is consistent with the orders by the primary judge designed to give the wife clear title to Unit 1 of the F Street property and for the husband to be responsible for the mortgage due to the Commonwealth Bank.
As to the NCAT proceedings, the gravamen of the wife’s submissions are captured by the following assertions:
53.[The husband] obtained orders to subdivide the Suburb G property by registering a strata plan which require certain actions to be taken in compliance with the Strata Scheme Management Act (“the Act”), while he had no intention to comply with the Act.
54. The new proceedings commencing in NCAT, were provoked by [the husband] declaring that he is not going to allow [the wife] to perform any function in the Owners’ Committee or vote on any matters which needs to be resolved by the Owners’ Corporation, which is in blatant denial of [the wife’s] right under the Strata Schemes Management Act.
55. Now, [the wife] only has some arguable right to seek a transfer one of the units in a non-compliant strata scheme, which is affected by building defects, to her. It is arguable that such a property does not fit a definition of an ‘asset’, as it is rather an unfinished development project. To settle the property by accepting unit in a non-compliant strata scheme, would further extend [the wife’s] financial vulnerability, while she is exposed to costs obtained in effect of the presumed success, which was an effect of arguable abuse of court process.
(Wife’s Costs Submissions filed 12 August 2021)
The wife’s assertion that her interest in her F Street unit is not property is wrong. Reference need only be made to cases such as Duff and Duff (1977) FLC 90- 217 and Mullane v Mullane (1983) 158 CLR 436 to establish the point.
The effect of these matters is that none of the other matters which the wife submits are relevant to whether an order for costs should be made in favour of the husband withstand even gentle scrutiny and they are plainly irrelevant.
Conclusion on the husband’s application
The wife’s lack of success in the appeal justifies an award of costs in favour of the husband. He has incurred legal costs unnecessarily and the circumstances amply justify departure from the provision that a party to proceedings under the Act should bear his or her costs.
As to the quantum of the husband’s costs, we agree that it is appropriate that his costs are fixed and this issue is brought to a close so that it does not become another piece of satellite litigation. When regard is had to the large volume of material filed in the appeal, the challenges made by the wife to the trial reasons which, as we said in our principal judgment, too often misstated what had occurred, it was necessary for those appearing for the husband to undertake an intricate review of the trial record and provide highly detailed submissions. It was plainly necessary and easily comes within the realm of party/party costs.
Furthermore, the wife’s claim for costs provides some guidance as to the reasonableness of the amount sought by the husband. Taking into account the fact that the husband’s costs include the costs of appearances on the appeal, it can be seen that there is a broad comparability of their legal expenses incurred prior to the appeal hearing. As to the wife’s complaint that the husband has failed to give a copy of his cost agreement this does not advance her position. It was only necessary for him to do so if he sought indemnity costs, which he does not. Finally, the wife’s submission that the husband “has engaged silk in an ‘essentially straightforward’ matter” (Wife’s Costs Submissions filed 12 August 2021, paragraph 21) is risible. Although this should have been a relatively straightforward de facto property case, the nature and breadth of the arguments discussed in the trial reasons and in the appeal which emanated from the wife made it anything but and more than justify the husband’s decision to retain senior counsel.
It is our assessment that the husband’s party/party costs should be fixed in the amount of $30,000. The wife will be ordered to pay this amount within 28 days.
THE WIFE’S APPLICATION FOR COSTS
The wife’s application for costs filed on 28 October 2020 proceeded on the assumption that she would succeed in the appeal in every respect which has not happened. The only other justification for an award of her costs in her favour is said to be:
21.The case was prolonged and complicated by [the husband], acting in disregard of the interim Family Court orders. The final judgment contained errors that were the effect of denial of the contributions of [the wife], made without proper legal basis.
22. [The wife] contends that by making false statements and misleading submissions, [the husband] disentitled himself from seeking costs orders in this appeal.
23. [The wife] asks for the costs to be granted on the basis that 50% of the costs incurred on preparing the appeal, was related to the decision related to the matter transferred from Victoria, which was affected by the false evidence and misleading submissions and this conduct was in breach of the overarching obligations. The remaining 50% to be considered as costs related to the errors made by the trial judge.
(Wife’s Application for Costs filed 28 October 2020)
The findings made in relation to the husband’s application for costs weigh heavily against an order for costs in favour of the wife. Furthermore, not only did the wife fail to establish error in the approach taken by the primary judge, it was statements and submissions made by her that misstated the facts. There is no justification for an order for costs in favour of the wife and her application will be dismissed.
OTHER MATTERS
Finally, we feel it is incumbent on us to encourage the wife to take legal advice in relation to her s 79A application and to carefully consider whether the application should be withdrawn. She is already at risk of an adverse costs order in relation to it and the longer it continues (even if she withdraws and files afresh under Pt VIIIAB) and the husband’s costs mount, so too does the potential costs consequences for her.
I certify that the preceding twenty five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Ryan, Aldridge & Watts. Associate:
Dated: 19 August 2021
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