Milen & Milen (No 2)
[2019] FamCAFC 167
•1 October 2019
FAMILY COURT OF AUSTRALIA
| MILEN & MILEN (NO. 2) | [2019] FamCAFC 167 |
| FAMILY LAW – APPEAL – COSTS – Where the respondent seeks costs on an indemnity basis – Where the financial circumstances of the parties do not militate against an order for costs being made in favour of the respondent – Where as a result of the appeal being dismissed, the appellant was wholly unsuccessful, and that circumstance alone is a powerful circumstance justifying an order for costs – Where the appeal was commenced in circumstances where, properly advised, the appellant should have known that it had no chance of success – Where there are exceptional circumstances which allow for the costs ordered to be calculated on an indemnity basis – Costs ordered on an indemnity basis to be as assessed or taxed in the event of there being no agreement as to the same. |
| Family Law Act 1975 (Cth) s 117 |
| Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Kohan and Kohan (1993) FLC 92-340 Limousin & Limousin(Costs) (2007) 38 FamLR 478 Milen & Milen [2019] FamCAFC 80 Munday v Bowman (1997) FLC 92-784 Yunghanns & Yunghanns (2000) FLC 93-029 |
| APPELLANT: | Mr Milen |
| RESPONDENT: | Ms Milen |
| FILE NUMBER: | ADC | 1876 | of | 2016 |
| APPEAL NUMBER: | SOA | 7 | of | 2019 |
| DATE DELIVERED: | 1 October 2019 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | Written Submissions |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 21 December 2018 |
| LOWER COURT MNC: | [2018] FCCA 3848 |
REPRESENTATION
| THE APPELLANT: | In Person |
| COUNSEL FOR THE RESPONDENT: | Ms Cocks |
| SOLICITOR FOR THE RESPONDENT: | White Berman |
Order
The husband pay the costs of the wife of and incidental to the appeal calculated on an indemnity basis, with such costs to be as assessed or taxed in the event of there being no agreement as to the same.
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 Milen & Milen (No. 2) 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 APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SOA 7 of 2019
File Number: ADC 1876 of 2016
| Mr Milen |
Appellant
And
| Ms Milen |
Respondent
REASONS FOR JUDGMENT
Introduction
On 13 May 2019 I delivered ex tempore reasons for judgment, and made an order dismissing the appeal filed by Mr Milen (“the husband”) on 18 January 2019. I also provided a regime for the parties to file and serve written submissions as to costs, commencing with Ms Milen (“the wife”).
On 27 May 2019 the wife filed submissions as to costs, and although it was not ordered, at the same time her solicitor filed on her behalf an Application in an Appeal, seeking leave to rely on an affidavit of that solicitor in support of the wife’s application for costs, together with that affidavit. Unfortunately that created confusion for the husband, because instead of responding with written submissions, on 7 June 2019 he filed an affidavit responding to the wife’s application.
The wife seeks an order for costs calculated on an indemnity basis. It is unclear what the husband’s position is from his affidavit, but I proceed on the basis that he opposes any order for costs.
Discussion
The first question to be addressed here is whether there should be an order for costs at all.
Costs are governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”), and that section 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;
(c)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.
As can be seen, the primary position is that each party is to bear their own costs (s 117(1)), but where there are circumstances that justify it, an order for costs can be made (s 117(2)), and the factors set out in s 117(2A) are to be taken into account in that process.
The wife says that there are circumstances here that justify an order for costs, and relies on paragraphs (a), (c), (e), (f) and (g) of s 117(2A).
The financial circumstances of each of the parties
The primary judge found that the parties had net assets of $270,361, with total superannuation of $486,943.93.
The major asset of the wife was a house property […] with equity of $69,000, and the major asset of the husband was a house property […] with a net equity of $175,000, but which has now been sold for an amount of $135,000 more than its value at trial.
Of the total superannuation entitlements, the husband’s were $291,025, and the wife’s were $195,686.93.
Her Honour ordered, inter alia, that the parties each retain their house properties, with the husband to pay to the wife $114,536. As to the superannuation, $139,649 of the husband’s entitlement was allocated to the wife.
From that it can be seen that the financial circumstances of the parties do not militate against an order for costs being made in favour of the wife.
The conduct of the parties, or more particularly, the husband
Here the wife refers to and relies on my findings as to the husband’s outline of argument, and the case run in support of his appeal.
The relevant findings are contained in the following paragraphs of my reasons (see Milen & Milen [2019] FamCAFC 80):
…
7.However, the outline of argument, as I have explained to the husband, is inappropriate and fails to accord with the requirements of the Family Law Rules 2004 (Cth) (“the Rules”), or Practice Direction No. 1 of 2017 issued by the then Chief Justice in relation to the conduct of appeals.
8.The issues are these:
a)First, there is a failure to specifically address the grounds of appeal in any recognisable way.
b)Secondly, the summary comprises a narrative encompassing the history of the proceedings, however, not in an objective way, and my reading of the document is the husband has impermissibly put his own gloss or interpretation on the facts, and fails to accurately summarise what is recorded in various of the transcripts of the hearing that he has put before this Court for the purposes of the appeal.
c)Thirdly, much of the history is irrelevant to the appeal and specifically to the grounds of the appeal. For example, I refer to that part of the summary of argument under the headings “Respondent’s application 22 February 2017”, “28 February 2017 hearing”, “7 March 2017 hearing”, “Further Trusts”, “Ongoing failure by the respondent to make disclosure”, and, to a certain extent, those paragraphs under the heading “10 August 2019”, which I suspect should read “2017”, and many of the paragraphs under the heading “Reasons for not subpoenaing”.
d)Fourthly, the summary of argument suggests errors by the primary judge which are not the subject of any ground of appeal. For example, paragraphs 38, 39, 48, 68, 69, 99, 111 and 117.
9.Thus, as can be seen, there are significant issues with that summary of argument and, as I indicated to the husband, it is not open for me to take much, if any, of its contents into account. However, recognising that the husband is appearing today without legal representation, and assuming that he has prepared this summary of argument without the assistance of legal representation, I have taken the time in preparing for today to carefully read the summary of argument, and attempt to identify those parts of it, albeit there are few, which relate to his specific grounds of appeal.
Then, there are my findings as to the grounds of appeal. I described Ground 1 as “pure speculation”, Ground 2 as “misconceived”, and Ground 3 as “misconceived” and being a repeat of Grounds 1 and 2.
Plainly the conduct of the husband in these respects is a circumstance that justifies an order for costs.
The lack of success of the appeal
The husband’s appeal was dismissed, and thus he has been wholly unsuccessful. That alone is a powerful circumstance justifying an order for costs.
Settlement offers
The wife relies on an offer made on 2 April 2019 that the husband withdraw the appeal, and each party bear their own costs.
The husband rejected that offer and put a counter-offer to which the wife did not respond, but plainly did not accept.
It is unclear how the wife says that her offer, its refusal, and the outcome of the appeal should be taken into account by this Court in relation to the question of costs.
For example, the outcome of the appeal will be a worse result for the husband than if he had accepted the offer on the basis that costs will be awarded against him, but it is not sought that costs be paid only as on and from the date of the offer; costs are sought from the commencement of the appeal.
Further, the fact that in the letter of offer the husband was put on notice that if he proceeded with the appeal, indemnity costs would be sought, does not create a circumstance justifying an order for costs.
Thus, I do not propose to take the offer into account here.
Other matters
The wife suggests that it be taken into account that the husband’s draft appeal index identified extensive irrelevant material on which he proposed to rely. However, it is unnecessary for this Court to address that issue when the lack of success of the appeal provides the circumstance that justifies an order for costs.
Thus, I am satisfied that an order for costs is justified here.
However, before I leave this issue, I note that for some unexplained reason, in response to the wife’s application, the husband outlined in his affidavit his attempts to obtain legal assistance in relation to his appeal, but then says that he did not have the funds required, and ultimately claims that that is a “failure of the family court system”.
The next question is on what basis should the costs be calculated? The usual basis is party/party, but the wife seeks that it be on an indemnity basis.
Unfortunately, I am not told what the costs are on the usual party/party basis, and accordingly I cannot compare them, but the amount sought on an indemnity basis is $17,668.23.
The principles relevant to whether indemnity costs will be awarded are well settled, and it is well established that for indemnity costs to be awarded there must be exceptional circumstances as to why the usual rule of costs being calculated on a party/party basis should be departed from (Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Kohan and Kohan (1993) FLC 92-340; Munday v Bowman (1997) FLC 92-784; Yunghanns & Yunghanns (2000) FLC 93-029; and Limousin & Limousin (Costs) (2007) 38 FamLR 478).
As to what might constitute an exceptional circumstance, specific reference can be made to the decision of Sheppard J in Colgate-Palmolive Co, where his Honour detailed circumstances that might qualify. Usefully, Holden J in Munday v Bowman at 84,660 drew from the decision of Sheppard J the following examples:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts. …
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud. …
(c)Evidence of particular misconduct causing loss of time to the court and to other parties. …
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions. …
(e)An imprudent refusal of an offer to compromise.
(Citations omitted)
It is also important to note that the category of circumstances which enliven the discretion to award indemnity costs are not closed, and thus the circumstances do not need to come precisely within the examples provided by Sheppard J.
Here, the wife relies on the following as demonstrating the exceptional circumstances required for indemnity costs to be awarded:
22.1The Appellant’s commencement, and then continuation, of the Appeal, in circumstances where it was doomed to failure:
22.1.1On its face, the Appeal arises from orders made on 21 December 2018. In reality, the Appellant’s complaints concern determinations made on 10 August 2017, which were not the subject of appeal;
22.1.2At the hearing on 18 March 2019, the Honourable Justice Strickland invited the Appellant particularly to seek legal advice upon Ground 2. Notwithstanding this, the Appellant persevered with that ground;
22.2The Appeal contains contentions which ought never to have been made. The Respondent refers to paragraphs 11, 12 and 14 of this submission;
22.3The Appellant imprudently refused the Respondent’s settlement offer. The Respondent refers to paragraphs 15-18 of this submission.
I do not consider that the submissions in 22.1.2 or 22.3 are sufficient, but what is said in 22.1.1 and 22.2, with one further comment, is enough to justify departing from the usual approach of party/party costs, and awarding indemnity costs.
First, to explain 22.2. The earlier paragraphs referred to emphasise my description of the grounds of appeal as set out in [15] above.
As to the further comment, it seems to me that the appeal was commenced in circumstances where, properly advised, the husband should have known that he had no chance of success, and that confirms my view that there are exceptional circumstances sufficient to justify awarding indemnity costs.
However, that said, I am not persuaded that all of the costs sought can be justified as being reasonable without more information, and thus I will be referring the matter to taxation.
One example is counsel fees. I do not understand why there are two items, or to what those items relate. The tax invoice and the estimate are said to be attached, but they are not.
I also note that the husband is challenging the time spent in court by both counsel and the solicitor, and that would need to be clarified.
Finally, I note that GST is included in the amount claimed for the solicitor’s costs, and that may be problematic,
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Strickland J delivered on 1 October 2019.
Associate:
Date: 1 October 2019
0
2
1