RAMLOW & RAMLOW
[2018] FamCAFC 158
•16 August 2018
FAMILY COURT OF AUSTRALIA
| RAMLOW & RAMLOW | [2018] FamCAFC 158 |
| FAMILY LAW – APPEAL – PROPERTY – Inconsistent treatment of credit loan account in family business – Spousal maintenance debt incorrectly calculated by the primary judge – Appeal allowed by consent – Orders varied by consent. FAMILY LAW – APPEAL – PARENTING – Appeal dismissed by consent – Parenting orders varied by consent by the court sitting it its original jurisdiction. FAMILY LAW – APPEAL – COSTS – Where the mother’s appeal was partially successful – Costs order made – Quantum of costs limited to portion of property appeal only. |
| Family Law Act 1975 (Cth) s 117 |
| APPELLANT: | Ms Ramlow |
| RESPONDENT: | Mr Ramlow |
| FILE NUMBER: | TVC | 68 | of | 2016 |
| APPEAL NUMBER: | NA | 61 | of | 2017 |
| DATE DELIVERED: | 16 August 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Ainslie-Wallace, Ryan & Baumann JJ |
| HEARING DATE: | 1 August 2018 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 October 2017 |
| LOWER COURT MNC: | [2017] FCCA 2477 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Galloway |
| SOLICITOR FOR THE APPELLANT: | Gray's Family Law |
| COUNSEL FOR THE RESPONDENT: | Mr Honchin |
| SOLICITOR FOR THE RESPONDENT: | Harrington Legal |
Orders of 1 August 2018
Appeal against Order 3 of 21 December 2017 be allowed.
By way of further order for the adjustment of property orders in accordance with 3A and 4 of the consent orders placed before the Court today set out hereunder:
3A.That the father pay to the trust account of the solicitor for the mother the further sum of $60,000 within thirty days of today.
4.That the father pay to the mother the outstanding spousal maintenance debt payable up to the date of spousal maintenance order was dismissed (being 12 October 2017) namely $5,625.00 within thirty days of 1 August 2018, thereafter any unpaid amounts to accrue interest at the applicable Family Law rate.
Appeal against parenting Orders 5 and 6 of 11 October 2017 be dismissed.
The application in an appeal filed by the appellant on 2 July 2018 be dismissed.
Judgment on the costs of the appeal be reserved.
Notations of 1 August 2018
A. The parties have agreed to vary the operative parenting orders in accordance with terms of settlement placed before the court today, 1 August 2018.
B. Those proposed orders will be considered by the Court in its original jurisdiction today 1 August 2018.
Order
The father pay the mother’s costs of the appeal in the amount of $8,000 within four months of the date of these orders.
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 Ramlow & Ramlow 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 FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 61 of 2017
File Number: TVC 68 of 2016
| Ms Ramlow |
Appellant
And
| Mr Ramlow |
Respondent
REASONS FOR JUDGMENT
Introduction
By Amended Notice of Appeal filed 9 November 2017, Ms Ramlow (“the mother”) appealed two of a suite of parenting orders made by Judge Demack on 11 October 2017. She also sought to appeal what was described as Order 1 of the property orders made by the primary judge on the same day. The so called property order was no more than a direction that the parties file orders so as to give effect to findings contained in the trial reasons. The property orders were actually made on 21 December 2017 and it is against Order 3 of those orders which the mother sought to appeal. Sensibly, the temporal point was not taken and the appeal against both parenting and property orders commenced before us for hearing on the merits. Both aspects of the appeal were finalised by consent and these reasons address the mother’s claim for costs of the property appeal.
Mr Ramlow (“the father”) is the respondent to the appeal and it was his position that the appeal should be dismissed. He also sought to resist the application to adduce further evidence filed by the mother on 2 July 2018.
The property appeal hearing
The property component of the appeal was heard first. Having taken submissions from counsel for the mother, it was during exchanges with counsel for the father that the property appeal was responsibly conceded. Stated briefly, the property appeal primarily focused on her Honour’s treatment of $120,000 advanced by the parties to establish a business. The loan was included as a liability of the business in the amount of $120,000 which had the effect of reducing its value by the full amount of the loan. However, the mother’s contention that it should also be treated as property of the father was rejected.
As counsel for the mother said, the inconsistent approach to the amount is manifest. If the company was not liable to the father for his shareholders loan, the net asset backed value of the company ought to have been increased by the same amount. If, on the other hand, the value of the company was as opined by the single expert (which value was accepted by the primary judge) this amount was payable to the father and should have been included as property available for distribution. Furthermore, the unchallenged evidence of the single expert was that the company had sufficient assets to repay to loan.
Consistent with her Honour’s assessment that parties should each receive 50 per cent of the net available property, before us and by consent, it was ordered that the mother receive an additional $60,000.
A further ground in the property appeal was against his Honour’s order in relation to the father’s spousal maintenance debt. Counsel for the father conceded that the primary judge miscalculated the amount of the debt and the consent orders provide for the error to be rectified.
The parenting appeal hearing
The parenting matter was essentially a relocation case. The parties have two children, X born in February 2007 and Y, born in April 2014 (“the children”). They were respectively 10 and three years of age at the time of the final orders.
It is uncontroversial that prior to the parties separation in November 2015 the mother was primarily responsible for the day to day care of the children. She continued in this role after separation and in January 2016, without the father’s consent, decided she and the children would move to South-East Queensland where each had family. It needs to be understood that after separation the father remained in occupation of the parties’ home and had possession and control of the family business. The family were recent arrivals in the region and did not have any relations in the area. The mother and children were living in rental accommodation. She did not have paid employment and was not in receipt of either spousal maintenance or child support.
We cannot allow what then occurred to go unnoticed and it is sufficient to record her Honour’s findings at [28]:
28. The interim parenting matter was heard by Judge Coker on 1 February 2016 who ordered, in part, for the children to return to live at [Town B] and to live with the father and spend time with the mother as agreed. Between them the parties agreed that the shared care arrangement would be in place. It is the mother’s position that she felt compelled to agree to an arrangement that the children would have equal time with her in circumstances where the order provided for the children to live with the father and she was seeking to maximise the amount of time they would have in her care. In any event those arrangements were regularised via a parenting order made on an interim basis on 28 April 2016. That order included that the parents would have equal shared parental responsibility.
If what was established at trial about the families situation at that earlier time was known then, it is difficult to understand how, on a proper application of Part VII of the Family Law Act 1975 (Cth) (“the Act”) the orders of 1 February 2016 were made. In any event, they were, and at trial the father sought a continuation of the week about arrangement. The mother maintained her desire to relocate with the children. Orders were made along the lines proposed by the father. They were contrary to the views of the elder child, and it was argued on appeal, failed to adequately address deficiencies in the father’s parenting capacity.
Some 11 months passed between trial and delivery of judgment and a further eight months between the lodgement of the appeal and this hearing. It would seem that the family’s circumstances changed in the interregnum, and it is against those changes that it was agreed that the parenting appeal would be dismissed. It was, and the court was reconstituted so that in the exercise of its original jurisdiction the parenting orders could be varied by consent.
The mother’s application for costs
These matters provide the backdrop to the mother’s application for costs of the property appeal.
Section 117(1) of the Act is the governing provision concerning costs and provides the general rule that subject to s 117(2) each party to proceedings under the Act should bear his or her own costs. Section 117(2) requires a finding of justifying circumstances as an essential preliminary to the making of an order for costs. If there are circumstances that justify it in so doing, the court may make such order for costs as the court considers just. In considering what order, if any, should be made the court is required to have regard to the provisions of s 117(2A). It is not necessary for the court to be satisfied that all of the factors referred to s 117(2A) for an order for costs to be made.
The effect of her Honour’s property orders is that the parties received an equal share of their net assets. The net property pool was valued at $500,000. However, $140,000 of that pool of property comprised pre-trial distributions of monies which had been utilised. As to the parties’ financial circumstances, the primary judge said:
186. I assess that the [mother]’s future needs need to be understood on the basis that she has an income earning capacity but it requires her to start from scratch. I assess that her income earning capacity is more probable than not to be less than the [father]’s income earning capacity. I assess that a weighting in the [mother]’s favour in the order of 10% would appropriately attend to her future needs.
Otherwise, the father receives a pension at the rate of $730 per fortnight, in relation to which a splitting order was made in the amount of 12.5 per cent in the mother’s favour. The orders made in the appeal recognise that the additional $120,000 is to be shared equally. Neither party is in a healthy financial situation albeit the father’s position is somewhat superior to that of the mother. Although it may occasion him some financial discomfort, he has sufficient assets under his control (the home in which he resides and the business) that he ought to be able to satisfy an order for costs in favour of the mother without needing to dispose of assets.
Otherwise, the mother’s application for costs is predicated on her success in the property appeal. Furthermore, it is argued that the property component of the appeal comprised the major component of the total appeal, which factor it was submitted is relevant to both the quantum of costs and the weighting appropriate to the mother’s success in the property appeal.
Counsel for the father is correct in his contention that s 117(2A)(e) is concerned with whole, not partial success. However, the court is able to take into account other matters (s 117(2A)(g)) and partial success in the appeal is a relevant consideration. In our view, the approach by the primary judge to the treatment of the $120,000 advance to the business was so unequivocally flawed that this component of the appeal should have been resolved without the mother being put to the trouble and expense of preparing appeal books and retaining counsel for the property aspect of the appeal. Indeed this error was identified prior to lodgement of the appeal and the father was invited to rectify the error by consent. He refused and the appeal followed.
However, it is not accepted that early resolution of the property appeal would have negated the necessity for appeal books to be prepared in relation to the parenting aspect of it or the retention of counsel. Nor is it accepted that the property aspect of the appeal comprised the larger aspect of the overall appeal. On a fair reading of the documents provided in the appeal books, the transcript and the summary of arguments, the parenting and property aspects were roughly equivalent. The telling difference between the two aspects of the appeal is that the outcome of the parenting appeal was more difficult to assess than it was in the property appeal. Although the parenting appeal was ultimately dismissed by consent, it raised matters of substance relevant to the welfare of children. The failure to resolve that aspect of the appeal prior to the hearing before us does not weigh heavily against an order for costs. Whereas the failure to resolve the property aspect of the appeal as soon as the issue was raised weighs heavily in favour of an order for costs in favour of the mother.
Conclusion
We are satisfied that the failure to compromise the property appeal early amounts to justifying circumstances that an order for costs should be made in favour of the mother. The quantum must reflect the fact that she should not be recompensed for her costs in the parenting appeal. Given that it was compromised at the hearing it is appropriate that she does not receive the full amount of her party/party costs in the property appeal.
Calculated on an indemnity basis her total costs were roughly $28,000. Of this amount $14,000 should be attributed to the property appeal. Of this amount we are satisfied that she should be compensated $8,000. The father will be given four months within which to make the payment.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 16 August 2018.
Associate:
Date: 16 August 2018
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