Oliver & Oliver (Costs)
[2011] FamCAFC 3
•19 January 2011
FAMILY COURT OF AUSTRALIA
| OLIVER & OLIVER (COSTS) | [2011] FamCAFC 3 |
| FAMILY LAW - APPEAL – Costs – Where there were errors made by the Federal Magistrate – Costs certificates issued to both parties in respect of the appeal against the costs orders. FAMILY LAW - APPEAL – Costs – Where the wife was wholly successful in the appeal – Where the wife provided the husband with “ample” opportunity to resolve the appeal in terms no less favourable then what was ultimately ordered – Where if the husband had accepted the offer there would have been no need for written submissions regarding the costs of the wife’s appeal from either party – Where the husband is in a superior financial position – Where the husband’s rejection of the offers was imprudent – The respondent husband to pay the wife’s costs and incidental to the written submissions in relation to costs of the appeal on an indemnity basis. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 Federal Proceedings (Costs) Act 1981 (Cth) Uniform Civil Procedure Rules 1999 |
| Browne v Green (2002) FLC 93-115 Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 Collins and Collins (1985) FLC 91-603 Harris and Harris (1991) FLC 92-254 Fitzgerald (as Child Representative for A (Legal Aid Commissioner of Tasmania) v Fish & Anor (2005) 33 Fam LR JEL v DDF [2001] FamCA 907 Jones & Anor v Millward & Anor [2005] QCA 76 Penfold v Penfold (1980) 144 CLR 311 White & White [2008] FamCAFC 147. Yunghanns & Ors v Yunghanns & Ors; Yunghanns (2000) FLC 93-029 |
| APPELLANT: | Ms Oliver |
| RESPONDENT: | Mr Oliver |
| FILE NUMBER: | BRC | 7484 | of | 2007 |
| APPEAL NUMBER: | NA | 50 | of | 2010 |
| DATE DELIVERED: | 19 January 2011 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | By way of written submissions |
| JUDGMENT OF: | May J |
| HEARING DATE: | By way of written submissions |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 19 October 2009 |
| LOWER COURT MNC: | [2010] FMCAfam 220 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Cameron |
| SOLICITOR FOR THE APPELLANT: | Hillhouse Burrough McKeown Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Williams |
| SOLICITOR FOR THE RESPONDENT: | Romans & Romans Lawyers |
Orders
The Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act1981 (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 in respect of the costs incurred by the appellant in relation to the appeal against the costs orders.
The Court grants to the respondent 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 in respect of the costs incurred by the respondent in relation to the appeal against the costs orders.
The respondent husband pay the appellant wife’s costs of and incidental to the written submissions in relation to costs of the appeal on an indemnity basis.
IT IS NOTED that publication of this judgment under the pseudonym Oliver & Oliver (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISIDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 50 of 2010
File Number: BRC 7484 of 2007
| Ms Oliver |
Appellant
And
| Mr Oliver |
Respondent
REASONS FOR JUDGMENT
Introduction
The wife filed a notice of appeal on 19 May 2010 appealing an order made by a Federal Magistrate that she pay the husband’s costs. The appeal was heard on 3 September 2010, with both parties represented by counsel at the hearing. On 10 September 2010, I delivered judgment allowing the appeal and setting aside the orders of the Federal Magistrate. It was ordered that there be no orders as to costs for the trial.
The three main errors of the Federal Magistrate were set out at paragraph 42 of my 10 September 2010 reasons for judgment:
· The placement of too much weight on the wife’s initial $700,000 claim contained in her response, while ignoring her subsequent offer;
· The finding that the wife was “worse off” by refusing the husband’s offers, and to a lesser degree;
· The failure to properly consider the respective financial circumstances of the parties and the impact of the proposed order.
The parties were at liberty, in accordance with the prescribed timetable to file written submissions in regard to the costs of the appeal. Both parties have subsequently filed submissions.
Relevant law
The principles in relation to the application for costs are well settled. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) contains the legislative provisions:
(1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 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) 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.
In Fitzgerald (as Child Representative for A (Legal Aid Commissioner of Tasmania) v Fish & Anor (2005) 33 Fam LR 123 the Full Court (Kay, Warnick and Boland JJ) held that there is nothing to prevent any one factor being the sole determinate for an order of costs to be made.
Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant for an order for costs: see Penfold v Penfold (1980) 144 CLR 311.
Decisions to award costs attract wide discretion (see Penfold v Penfold; Collins and Collins (1985) FLC 91-603; Harris and Harris (1991) FLC 92-254; and Browne v Green (2002) FLC 93-115).
Submissions of the wife
The wife, in the written submissions filed 1 October 2010, seeks an order that the husband pay her costs of and incidental to the appeal save for her costs of and incidental to the application for leave to appeal for which the husband has the benefit of the 14 May 2010 costs order on an indemnity basis.
In the alternative, the wife seeks that the costs to be paid be divided between the costs of the appeal, which should be paid on the party and party or standard basis, and the costs of and incidental to the wife’s written submissions, which should be paid on an indemnity basis.
It is submitted on behalf of the wife that she has been wholly successful in her appeal. Further that the wife provided the husband with “ample” opportunity to resolve the appeal “on terms no less favourable than what was ultimately ordered”.
The affidavit of the solicitors for the wife filed on 10 September 2010 reveals that offers were made in an attempt to settle the appeal. On 17 August 2010, the wife’s solicitor wrote to the solicitors for the husband with an offer of settlement. The terms of the offer were that each party bear their own costs of the appeal and that the costs order of the Federal Magistrate be set aside so that each party bear their own costs of and incidental to the proceedings before the Federal Magistrate. This offer was rejected by the husband on 20 August 2010.
It is contended that “[t]he Wife’s position with respect to an indemnity costs order in respect of the costs of these submission is even stronger”. This is based on the fact that the wife made a further offer to settle the proceedings by way of consent orders shortly before the orders and reasons for judgment were delivered in relation to the appeal.
The terms of this offer is outlined in the affidavit of the wife’s solicitor, anticipating the orders made by the court in relation to the appeal and proposing that each party pay their own costs of the appeal.
It is explained that if the husband had accepted the offer there would have been no need for submissions regarding the costs of the wife’s appeal, from either party. It is the wife’s application that she be indemnified in respect of the additional costs incurred by her.
In the wife’s written submissions it is claimed that:
18.… Further, his rejection of the offer is, of course, in and of itself, a factor enlivening the Court’s jurisdiction to make an order for costs against him under s. 117 of the Act.
This is said to be especially so given the reasons of the Federal Magistrate in making a costs order against the wife and aggravated by the submissions made in regard to the wife’s prospects of success during the hearing of her application for leave to appeal.
The wife submits that the husband is in a superior financial position. It is said that due to the disparity of their financial circumstances and the “relevant strength of the Husband’s position” the prescribed threshold in s 117(2) of the Act is satisfied.
Submissions of the husband
It is the husband’s position that the court ought not to exercise its discretion, and that each party should bear their own costs of the appeal.
The husband concedes that the wife has been wholly successful in the appeal. It is said however, that although success in the appeal may be a significant factor, it is but one factor to consider: see White & White [2008] FamCAFC 147.
It is also submitted that the making of an offer is another “one but factor” to consider. Reference is made to Harris and Harris (1991) FLC 92-254 where it was held that an offer of greater or equivalent value to what was ultimately awarded does not necessarily lead to an order for costs. It is further submitted that the offer of the wife made on 17 August 2010 was not an offer of “compromise” but rather “a request for the Husband’s total capitulation”: see Jones & Anor v Millward & Anor [2005] QCA 76.
It is submitted that the husband had reasonable grounds to refuse the offer and that the success of the wife in the appeal falls in the category of the “rarest of cases”.
With regard to the parties’ financial circumstances, it is said that there is currently no evidence before the court as to the parties respective positions, nor is there evidence as to the legal fees incurred by the husband. It is submitted that the parties’ future earning capacities should be considered, given the disparity in their ages. Currently, the husband is 62 years of age and the wife 46 years.
The husband submits that there are no exceptional circumstances which would warrant an order for indemnity costs.
The husband contends that this is an appropriate case for the granting of a costs certificate, given that the appeal succeeded on a question of law (pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth)).
Wife’s submissions in response
The wife contends that although her success in the appeal is “one but factor” identified in s 117(2A), it is a factor to which “significant weight” is to be afforded. It is said that this court should, as the Full Court (Finn, Coleman & Boland JJ) did in White and White and “proceed therefore on the basis that [she, the wife] can rely on [her] success and the [husband’s] lack of success in the appeal, as one matter which would justify an order for costs in [her] favour”.
The wife submits that her successful appeal must be considered together with the other relevant factors which enliven the awarding of costs. In the circumstances of this case, those factors are said to include, the fact that the husband failed to “beat sensible offers made by the wife”, the financial circumstances of the parties and the husband’s conduct in the appeal proceedings themselves, including the rejection of the wife’s offers.
In response to the husband’s view on the wife’s first offer, it is submitted “upon its proper construction- was not an offer of the kind that requested the husband’s total capitulation”. The submission then explains how the situation in this case can be distinguished from that in Jones & Anor v Millward & Anor. With the distinguishable features said to be, that the decision in that case concerned the interpretation of r 360 of the Uniform Civil Procedure Rules 1999 and not s 117 of the Family Law Act 1975 (Cth), the claim in that case was for relief sought plus costs and that it involved costs at trial and not an appeal.
It is reiterated that the wife made a genuine attempt to settle the matter in her offer for each party to bear their own costs of and incidental to the appeal. The result achieved was “no less favourable” than what was offered.
It is the wife’s case that it is difficult to see how the outcome “ever being amenable to [anything] other then ‘an all or nothing result’ in the sense that one or the other of the parties to it [would] be wholly successful or unsuccessful”.
The wife submits that offers when made need to be considered critically. Reference is made to the objectives of the statutory provision in relation to written offers, to reduce the cost of litigation to the parties and the community (see JEL v DDF [2001] FamCA 907).
It is the wife’s submission that the outcome of the appeal could be “confidently predicted” and thus the husband’s rejection of the offers “must be regarded as imprudent in all the circumstances”.
For the wife there is sufficient evidence before the court as to the parties’ financial circumstances. It is contended that of particular relevance is paragraph 6 of the decision of the Federal Magistrate. This paragraph should be repeated:
6.The husband is undoubtedly in stronger financial circumstances than the wife. The assets the each party retains as a result of the orders made are set out in my earlier reasons for judgment. The orders of 28 August 2009 required the husband to pay to the wife $164,398.46. In determining whether the property settlement orders were just and equitable, at paragraph [73] of my reasons I observed that that sum of money would enable the wife to rehouse, bearing in mind her current level of income. I noted, at paragraph [64] that the husband was employed as a [professional] earning some $6,185.00 per week. That included rental he received from properties owned by him. He earned some $280,000.00 per annum from his [professional] work. The wife earns approximately $900.00 per week in her work …. The financial circumstances of the parties, as a consideration, does not warrant an order for costs being made in the husband’s favour.
It is correct that the contents of this paragraph were not challenged on appeal, nor has the husband sought to adduce any evidence to the contrary.
It is submitted, in support of the wife’s claim for indemnity costs, that although “the failure to accept an offer which in retrospect, perhaps, should have been accepted is without more, insufficient to justify the making of a costs order on an indemnity basis”, an imprudent rejection of an offer will lead to such a result (see: JEL v DDF). It is asked that the husband’s rejection, particularly of the second offer, be regarded as imprudent.
Conclusion
In the circumstances of this case a number of factors as described by the wife would lead to an order for costs being made in her favour. The circumstances do not justify such order to be on an indemnity basis in relation to the hearing of the appeal.
The errors as described were that of the Federal Magistrate. It would be wrong for the husband to be required therefore to meet the costs of the appeal. In the circumstances the proper order is that each party be granted a certificate in relation to the costs of the appeal.
The application that the husband pay the costs of the submissions necessitated by a failure to agree about the costs should the appeal succeed (the wife’s 8 September 2010 offer) is in a different category. The husband should pay those costs on an indemnity basis, the justifying circumstances being the terms of the offer and the parties’ circumstances. It was extraordinary for the husband to refuse to agree to such a proposal.
I certify that the preceding thirty five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice May delivered on 19 January 2011.
Associate:
Date: 19 January 2011
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