Pavlic & Pavlic (No 2)
[2023] FedCFamC1A 97
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Pavlic & Pavlic (No 2) [2023] FedCFamC1A 97
Appeal from: Pavlic & Pavlic (No 2) [2022] FedCFamC2F 1453 Appeal number: NAA 255 of 2022 File number: MLC 6470 of 2020 Judgment of: AUSTIN, WILLIAMS & HOWARD JJ Date of judgment: 23 June 2023 Catchwords: FAMILY LAW – APPEAL – COSTS – Where the appeal was allowed and the question of costs was reserved – Whether the respondent should be ordered to pay the appellant’s costs of the appeal – Where the respondent opposed any costs order – Where the respondent was wholly unsuccessful in resisting the appeal, but it was not unreasonable for her, as a self-represented litigant, to rely upon the validity of the appealed judgment – Where the appellant contends he made an offer of compromise to the respondent – Where the offer had no genuine aspect of compromise – Where the parties’ conduct in the proceedings at first-instance is immaterial to the costs incurred in the appeal – Where the appellant filed his costs application late – Where the appellant did not submit why leave should be granted to pursue costs – Where there is no reason to disturb the orthodox rule imported by s 117(1) of the Family Law Act 1975 (Cth) – Where the parties shall bear their own costs of and incidental to the appeal – Application for costs dismissed. Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) (2006) 67 NSWLR 706; [2006] NSWCA 120
Fabre v Lui (No 2) [2015] NSWCA 312
Hancock v Arnold (No 2) [2009] NSWCA 19
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
Pavlic & Pavlic(No 3) [2022] FedCFamC2F 1550
Number of paragraphs: 20 Date of hearing: Heard by way of written submissions Place: In Chambers Counsel for the Appellant: Ms Renwick Solicitor for the Appellant: Coote Family Lawyers The Respondent: Litigant in person ORDERS
NAA 255 of 2022
MLC 6470 of 2020FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR PAVLIC
Appellant
AND: MS PAVLIC
Respondent
order made by:
AUSTIN, WILLIAMS & HOWARD JJ
DATE OF ORDER:
23 June 2023
THE COURT ORDERS THAT:
1.The appellant’s application for costs of and incidental to the appeal is 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 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 a pseudonym Pavlic & Pavlic has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AUSTIN, WILLIAMS & HOWARD JJ
On 4 May 2023, we allowed an appeal from property settlement orders made by the primary judge and made ancillary orders for the parties to file written submissions to enable the determination of the appellant’s application for costs on the papers in chambers.
The plurality of the Full Court said this (at [34]):
The husband proposed that the question of costs be deferred because written offers of settlement may become relevant pursuant to s 117(2A)(f) of the Act. Procedural orders will enable the question of costs to be determined on the papers.
Pursuant to the ancillary orders, the appellant filed written submissions on 16 May 2023 and the respondent filed written submissions on 24 May 2023.
The issues for consideration are whether the respondent should be ordered to pay the appellant’s costs of the appeal and, if so, the quantum thereof.
The appellant sought an order compelling the respondent to pay his costs, assessed either at $23,622.50 on an indemnity basis or $13,178.01 at scale, with the latter figure being higher than the sum of $12,971.47 sought at the time of the appeal.
The respondent opposed any costs order, regardless of the manner of assessment.
The ordinary rule is that parties to proceedings under the Family Law Act 1975 (Cth) (“the Act”) should bear their own costs of the proceedings (s 117(1)), though costs orders may be made if justified (s 117(2)), but only by advertence to prescribed considerations (s 117(2A)).
The issue of costs was not formerly determined in conjunction with the substantive appeal for one reason only: the appellant asserted written offers of settlement might become relevant to the question pursuant to s 117(2A)(f) of the Act. However, the appellant subsequently submitted his entitlement to costs arose for three reasons, whether taken individually or in aggregation: first, the appeal was successful and the respondent was wholly unsuccessful; secondly, he made an offer to the respondent which she unreasonably rejected; and thirdly, the nature of the respondent’s conduct in the proceedings before the primary judge.
The third reason is utterly immaterial to the costs incurred by the appellant in the appeal. The respondent’s conduct in the proceedings at first instance could only be relevant to any costs awarded in those separate proceedings (s 117(2A)(c)).
The first reason is not influential. The appeal succeeded, so the appellant was correct to pursue it. Though the respondent was wholly unsuccessful in the appeal (s 117(2A)(e)), it was not unreasonable for her, as a self-represented litigant, to rely upon the validity of the judgment delivered by the primary judge.
Some further detail is necessary to deal with the second reason.
On 3 November 2022, the appellant’s lawyers wrote to the respondent pointing out the error identified by the Full Court in the primary judge’s calculations, inviting her to join in a letter to the primary judge requesting correction of the orders under the slip rule. The respondent replied on 7 November 2022, refusing to do so. However, by the time of her refusal, the appellant had already unilaterally written to the primary judge seeking variation of the orders under the slip rule, which application the primary judge later refused on 10 November 2022 (Pavlic & Pavlic (No 3) [2022] FedCFamC2F 1550). It follows that the respondent’s contrary attitude, at least at that stage, had no bearing on the costs incurred by the appellant in the appeal.
On 14 December 2022, the appellant’s lawyers wrote to the respondent informing her that they would seek indemnity costs from her if she did not concede the appeal and the appeal ultimately succeeded. The respondent did not reply. The appeal was allowed in May 2023.
However, the letter sent to the respondent on 14 December 2022 could hardly be characterised as an “offer of compromise” because she was not offered anything in return for her complete capitulation in the appeal. It was merely a demand for her to surrender. She was threatened with indemnity costs if the appeal succeeded, but was not offered any relief from costs liability in return for an early concession of the appeal. There was no genuine aspect of “compromise” (Fabre v Lui (No 2) [2015] NSWCA 312 at [6]; Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [12]–[20]; Hancock v Arnold (No 2) [2009] NSWCA 19 at [23]; Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) (2006) 67 NSWLR 706 at [8]).
The terms of the letter written to the respondent do not reasonably engage s 117(2A)(f) of the Act, so the question of costs was deferred and not resolved at the time of the appeal hearing on an incorrect premise. The appellant said that written offers of settlement may become relevant to the question of costs but, as it transpired, they did not. Moreover, the appellant’s claim for costs to be paid on an indemnity basis was unreasonable.
None of the reasons advanced by the appellant militate in favour of a costs order.
Conversely, the respondent’s opposition to any costs order was premised on two considerations: first, the appellant was late in filing his schedule of costs; and secondly, her poor financial circumstances gainsaid any order.
On 9 January 2023, the appeal registrar ordered the appellant to file and serve his costs schedule seven days prior to the first day of the Full Court sitting in which the appeal was listed for hearing (Order 11) and noted that any default in compliance with Order 11 would mean leave would be required to even make the foreshadowed costs application (Notation H). The appeal was heard on 1 March 2023 and the appellant filed his first costs schedule on 21 February 2023, which was undoubtedly slightly late. No reason was advanced by the appellant for why leave should be granted to entertain his costs application, but the respondent has since had plenty of time within which to contemplate her opposition to the proposed costs order.
The respondent asserted she is no longer employed, but did not provide evidence to verify the fact. The appellant asserts the respondent is employed full-time on an annual salary of $45,000. The parties are yet to have their property settlement dispute re-heard, which will entail division of net assets and superannuation of around $3 million. The respondent’s income may be modest, but she will eventually have assets against which any costs order could be levied.
On balance, there is no reason to disturb the orthodox rule imported by s 117(1) of the Act. The parties shall bear their own costs of and incidental to the appeal. The appellant’s application for costs is dismissed.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Austin, Williams & Howard. Associate:
Dated: 23 June 2023
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