Panshin and Farmer (Costs) - [2013] FamCAFC 29

FAMILY COURT OF AUSTRALIA

PANSHIN & FARMER (COSTS)

[2013] FamCAFC 29

FAMILY LAW ─ APPEAL ─ COSTS ─ Where the application for leave to appeal had been wholly unsuccessful ─ Where the respondent sought costs on a indemnity on the basis ─ Where the Court did not consider that the discretion to award indemnity costs should be enlivened ─ Where nothing to which the Court was referred or which emerged during the determination of the application for leave to appeal demonstrated either an ulterior motive, an absence of bona fides, or conduct which, consistent with the authorities, advanced the respondent’s claim for indemnity costs ─ Where the Court was not disinclined to form the opinion that the circumstances justified an order for costs in favour of the respondent in reliance upon the applicant’s financial circumstances ─ Applicant ordered to pay the respondent’s costs of and incidental to the application for leave to appeal on a party and party basis.

Family Law Act 1975 (Cth) s 117(2A)

Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397

APPELLANT:

Ms Panshin

RESPONDENT:

Ms Farmer

FILE NUMBER:

SYC

2252

2011

APPEAL NUMBER:

101

2012

DATE DELIVERED:

15 March 2013

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Coleman J

HEARING DATE:

By way of written submissions

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

10 July 2012

8 October 2012

LOWER COURT MNC:

[2012] FMCAfam 691
[2012] FMCAfam 1107

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Ms Winfield

SOLICITOR FOR THE APPELLANT:

Jacqui Griffin Solicitor & Attorney

COUNSEL FOR THE RESPONDENT:

Mr Levy

SOLICITOR FOR THE RESPONDENT:

Stidwell Solicitors

Orders

The applicant pay the respondent’s costs of and incidental to the application for leave to appeal as agreed or assessed on a party and party basis.
Enforcement of order 1 hereof be stayed pending the final determination of proceedings for settlement of property between the applicant and the respondent.
The respondent’s entitlement pursuant to order 1 be and remain a charge upon such interest of the applicant in the property of the applicant and respondent as the applicant is determined to have in such property.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Panshin & Farmer (Costs) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 101 of 2012

File Number: SYC 2252 of 2011

Ms Panshin

Appellant

And

Ms Farmer

Respondent

REASONS FOR JUDGMENT

COSTS

Consequent upon the Court delivering judgment in this application on 30 November 2012, and pursuant to directions then made, on 13 December 2012 Counsel for Ms Farmer, the successful respondent to the application, filed submissions in support of her application for costs. On 7 January 2013 Counsel for Ms Panshin, the unsuccessful applicant for leave to appeal, filed submissions in opposition to the making of any order for costs.
Counsel for the respondent relied on the reality that the application for leave to appeal had been wholly unsuccessful, and submitted that an order for costs should be made on that basis. It was submitted that such order for costs should be on an indemnity basis as the “whole exercise brought about by the appellant was without realistic prospect of success”.
Counsel for the respondent relied upon the decision of Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 in support of his contention that the direction to award indemnity costs should be enlivened.
Anticipating, accurately as it transpired, that the applicant would rely upon her financial circumstances in support of her resistance to the respondent’s application, Counsel for the respondent urged the Court to have “great caution in putting weight upon the appellant’s financial circumstances” they being assertedly “shrouded in mystery”. A number of submissions were made by Counsel for the respondent in relation to her financial circumstances (par 11). For reasons which will become apparent, the Court need not refer to those submissions in detail.
Counsel for the applicant placed substantial reliance upon her asserted financial circumstances. Even adopting a measure of “caution” in relation to the financial circumstances of the parties, which appear to be controversial, the applicant does not appear to be in a strong financial position at present, either in terms of assets or income.
Fairly, Counsel for the applicant conceded that the applicant had “not been successful in overturning the orders made by the Federal Magistrate”. Counsel for the applicant reminded the Court that, although ultimately unsuccessful, the applicant had raised matters of substance and, to some extent at least, persuaded the Court that there may have been errors of principle in the judgment of the learned Federal Magistrate.
As both Counsel acknowledged in their submissions, the provisions of s 117(2A) of the Family Law Act 1975 (Cth) (“the Act”) govern the exercise of discretion in relation to applications for costs. As the submissions of Counsel also clearly recognised in this case, the two most relevant factors pursuant to that section are the absence of success on the part of the applicant, and the asserted precarious financial position.
Whilst it is correct to say that Counsel for the applicant raised matters of substance on the appeal, and did so with competence and economy, the application was ultimately wholly unsuccessful. It is not without significance that s 117(2A) of the Act refers to a party having been “wholly unsuccessful”.
Whilst the Court accepts that the applicant was bona fides, the reality remains, as the Court’s reasons for judgment reveal, that the decision of the learned Federal Magistrate was not only unassailable in law, but eminently sensible, and preserved the parties’ diminishing equity in their most substantial asset.
Put simply, the applicant should have known that success with her application was problematic, and that, if, as has transpired, the application was wholly unsuccessful, the successful respondent would have a strong claim for an order for costs, the impact on the applicant of an order, if made, being substantial.
The Court is not disinclined to form the opinion that the circumstances justify an order for costs in favour of the respondent in reliance upon the applicant’s financial circumstances. The Court will however, in deference to the circumstances of the applicant, stay execution of the order until completion of the substantive proceedings for settlement of property, provided that, in fairness to the respondent, the order in her favour is to be and remain a charge upon whatever is determined in those proceedings to be the applicant’s entitlement.
The Court does not consider that the discretion to award indemnity costs should be enlivened in the circumstances of this case. In Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 at 256-7, Sheppard J said:
The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis. ...
This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it. ...
In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course. …
… it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152 evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp);the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724(Court of Appeal); Crisp v Kent (SC(NSW)(CA), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). …
The fact that the Court regarded, as Counsel for the applicant submitted, the jurisdictional challenges raised on the applicant’s behalf, albeit unsuccessfully, as matters of substance militates against awarding indemnity costs.
It is to be remembered that the costs under consideration are solely those in this Court. Nothing to which the Court has been referred, or which emerged during the determination of the applicant’s application for leave to appeal demonstrates either an ulterior motive, an absence of bona fides, or conduct which, consistent with the authorities, advances the respondent’s claim for indemnity costs.
Albeit unsuccessful, the applicant was entitled to pursue appropriate avenues of appellate challenge to the interlocutory decision of the learned Federal Magistrate. This the applicant did, and nothing associated with her absence of success persuades the Court that indemnity costs should be awarded.
The Court will make orders in the terms foreshadowed earlier in these reasons.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman delivered on 15 March 2013.

Associate:

Date: 15.03.2013