N Pty Ltd & A Pty Ltd

[2021] FedCFamC1A 27

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APELLATE JURISDICTION

N Pty Ltd & A Pty Ltd [2021] FedCFamC1A 27

Appeal from:

A Pty Ltd as Trustee for the Storrer Family Trust and Anor & N Pty Ltd and Ors [2019] FamCA 1046

A Pty Ltd as Trustee for the Storrer Family Trust and Anor & N Pty Ltd and Ors [2020] FamCA 87

Appeal number(s):

NOA 20 of 2020

File number(s):

BRC 7225 of 2009

Judgment of:

STRICKLAND & ALDRIDGE JJ

Date of judgment:

5 October 2021

Catchwords:

FAMILY LAW – CORPORATIONS LAW – APPEAL – COSTS – Where the appeal was allowed in part – Weight given to limited basis of success – Substance of separate issues – Costs awarded to parties set off – Appellants to pay the respondents’ costs in a fixed sum.

Legislation:

Corporations Act 2001 (Cth) ss 233, 1335

Family Law Act 1975 (Cth) ss 28(4)(a), 117

Federal Circuit and Family Court of Australia Act2021 (Cth) s 17(2)(b)

Family Law Rules 2004 (Cth) Sch 3

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Sch 3

Cases cited:

Firebird Global Master Fund II Ltd v Republic of Nauru and Another (No 2) (2015) 327 ALR 192; [2015] HCA 53

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Number of paragraphs:

13

Date of last submissions:

2 September 2021

Date of hearing:

Heard by way of written submissions

Place:

In Chambers, delivered in Sydney

Counsel for the Appellants:

Mr Looney QC with Ms Nichols

Solicitor for the Appellants:

McCullough Robertson Lawyers

Counsel for the Respondents:

Mr J Green

Solicitor for the Respondents:

Bridge Brideaux Solicitors

ORDERS

NOA 20 of 2020
BRC 7225 of 2009

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

N PTY LTD

First Appellant

N INVESTMENTS PTY LTD

Second Appellant

R PTY LTD ATF THE MR O FAMILY TRUST (and others named in the Schedule)

Third Appellant

AND:

A PTY LTD ATF THE STORRER FAMILY TRUST

First Respondent

MR STORRER

Second Respondent

ORDER MADE BY:	STRICKLAND & ALDRIDGE JJ
DATE OF ORDER:	5 OCTOBER 2021

THE COURT ORDERS THAT:

1.The appellants’ pay the respondents’ costs fixed in the sum of $80,000.

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 N Pty Ltd & A Pty Ltd has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

STRICKLAND & ALDRIDGE JJ:

1. On 29 July 2021, the Full Court of the Family Court of Australia (Strickland, Aldridge & Kent JJ) allowed the appeal in part in this matter, set aside the orders made by the primary judge, remitted the proceedings for further hearing and directed that the issue of costs proceed by way of written submissions. These have now been filed.

2. Justice Kent resigned from the Court with effect from 29 August 2021. The parties have consented to the remaining judges dealing with the question of costs, which is a course permitted by s 28(4)(a) of the Family Law Act 1975 (Cth) (“the Family Law Act”) and s 17(2)(b) of the Federal Circuit and Family Court of Australia Act2021 (Cth).

3. The appellants, whose costs were calculated at the time pursuant to Sch 3 of the Family Law Rules 2004 (Cth) which is now Sch 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), to be $240,813, seek an order that the respondents pay one third of these costs being $80,271. In doing so, the appellants accept they did not succeed in challenging the primary judge’s findings that their conduct had been oppressive of the respondents’ rights and that the appeal was allowed because of procedural unfairness in the determination of what orders were appropriate to provide a remedy for that conduct.

4. The respondents, whose costs were calculated in a similar way to be $243,024.64, seek an order that the appellants pay 95 per cent or, alternatively 90 per cent of those costs (namely, $218,832.76 or $194,640.88 respectively) on the basis that the appellants failed in most of the grounds of the appeal and that the time and effort that was expended on the grounds that were successful was minimal.

5. The proceedings were pursuant to s 233 of the Corporations Act 2001 (Cth) (“the Corporations Act”) and, therefore, not “under” the Family Law Act, so s 117 of the Family Law Act does not apply and the position is covered by s 1335(2) of the Corporations Act, which grants a general discretion as to costs.

6. The general principle is that a successful party in litigation is generally entitled to an award of costs in its favour (Oshlack v Richmond River Council (1998) 193 CLR 72 at [67]). However, “where it may be said that the event of success is contestable, by reference to how separate issues have been determined” a different approach may be taken (Firebird Global Master Fund II Ltd v Republic of Nauru and Another (No 2) (2015) 327 ALR 192 at [6]). There must however, be circumstances, which justify a departure from the general rule.

7. It is implicit in the submissions of both parties that a departure from the usual position is warranted. We were referred to a number of cases in which different costs orders were made but we found them to be of little assistance because they involved the application of general principles to the particular circumstances of each case.

8. The assessment of a just result is somewhat intuitive and is not to be derived by a simplistic analysis of the number of grounds that succeeded or failed, noting that in this matter several were not determined. Rather, the court should look at the substance of the separate issues that were determined.

9. The appellants were successful in having the orders of the primary judge set aside. It was necessary therefore for them to bring and prosecute the appeal.

10. Having said that, the Court’s reasons dealt with two matters of substance which were whether the findings of oppression made by the primary judge were correct and whether there was a procedural error in the making of the final orders. This leads to the conclusion that the respondents should receive their costs that relate to the challenges to the findings of oppression.

11. As we have said, there were a number of grounds of appeal which were not resolved and the appellants should receive their costs that relate to the procedural unfairness in the making of the final orders.

12. Doing the best we can, we assess that the appellants should receive one third of their costs to reflect the success of the appeal generally, but giving weight to the limited basis of that success. The respondents should receive their costs in respect of the issue of oppression which we assess as two thirds of their costs.

13. These costs, broadly $80,000 and $160,000 respectively, will be set off. There will be an order that the appellants pay the respondents’ costs fixed in the sum of $80,000.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Strickland & Aldridge.

Associate:

Dated:       5 October 2021

SCHEDULE OF PARTIES

NOA 20 of 2020 BRC 7225 of 2009
Appellants
Fourth Appellant:	T PTY LTD ATF THE Z FAMILY TRUST
Fifth Appellant:	M PTY LTD ATF THE S FAMILY TRUST
Sixth Appellant:	B PTY LTD ATF THE C FAMILY TRUST
Seventh Appellant:	MR O
Eighth Appellant:	MS Z
Ninth Appellant:	MR J
Tenth Appellant:	MR C
Eleventh Appellant:	MR O AND MS O ATF THE O PROPERTY TRUST
Twelfth Appellant:	MS Z AND MR D ATF THE E PROPERTY TRUST
Thirteenth Appellant:	N PROPERTY PTY LTD ATF THE N INVESTMENTS TRUST