Rand and Ors & Rand
[2009] FamCAFC 70
•4 May 2009
FAMILY COURT OF AUSTRALIA
| RAND AND ORS & RAND | [2009] FamCAFC 70 |
| FAMILY LAW – APPEAL – COSTS – where the third party appellants in both appeals sought that the respondent wife pay their costs of the appeals – where the respondent wife sought that the appellants pay her costs or in the alternative she sought a costs certificate –where the third party status of the appellants does not require any special regard in applying s 117 of the Family Law Act 1975 (Cth) – where no party “wholly unsuccessful” – no justification for an order for costs – appellant to receive costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) – costs certificates under s 9 will be granted to the appellants upon receipt of an application |
| Family Law Act 1975 (Cth) s 117 Federal Proceedings (Costs) Act 1981 (Cth) |
| FILE NUMBER: | SYF | 2153 | of | 2001 |
| APPEAL NUMBER: | EA | 16B | of | 2006 |
| 1st APPELLANT: | Mr G Rand |
| 2nd APPELLANT: | Mrs N Rand |
| 3rd APPELLANT: | GD Pty Limited |
| 4th APPELLANT: | C Pty Limited |
1st RESPONDENT: Ms S Rand
2nd RESPONDENT: Mr M Rand
3rd RESPONDENT: RE Pty Limited (In Liquidation)
4th RESPONDENT: MI Pty Limited
5th RESPONDENT: Mr RMS
6th RESPONDENT: Mr PM
7th RESPONDENT: Mr WJ
8th RESPONDENT: S Pty Limited
9th RESPONDENT: H Pty Limited & Ms S Rand
10th RESPONDENT: Mr PL (Trustee in Bankruptcy)
| APPEAL NUMBER: | EA | 16C | of | 2006 |
| 1st APPELLANT: | RE Pty Limited (In Liquidation) |
| 2nd APPELLANT: | Mr RMS |
RESPONDENT: | Ms S Rand |
| DATE DELIVERED: | 4 May 2009 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | By way of written submissions |
| JUDGMENT OF: | Finn, May and Boland JJ |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 10 January 2006 |
| LOWER COURT MNC: | [2006] FamCA 1530 |
REPRESENTATION (EA 16B of 2006)
| COUNSEL FOR THE APPELLANTS: | Mr Aldridge SC |
| SOLICITOR FOR THE APPELLANTS: | Watts McCray |
| COUNSEL FOR THE 1ST RESPONDENT: | Mr Richardson SC |
| SOLICITOR FOR THE 1ST RESPONDENT: | Adrian Twigg & Co |
REPRESENTATION (EA 16C of 2006)
| COUNSEL FOR THE APPELLANTS: | Mr Aldridge SC |
| SOLICITOR FOR THE APPELLANTS: | NOT Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Richardson SC |
| SOLICITOR FOR THE RESPONDENT: | Adrian Twigg & Co |
Orders
That there be no order for costs in relation to appeals numbered EA 16B of 2006 and EA 16C of 2006.
That the Court grants to the respondent wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 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 wife in respect of the costs incurred by the respondent wife in relation to appeals numbered EA 16B of 2006 and EA 16C of 2006.
IT IS NOTED that publication of this judgment under the pseudonym Rand and Ors & Rand is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT CANBERRA |
Appeal Number: EA 16 B of 2006
File Number: SYF 2153 of 2001
| Mr G Rand and Mrs N Rand and GD Pty Limited and C Pty Limited |
Appellants
And
| Ms S Rand and Mr M Rand and RE Pty Limited (in Liquidation) and MI Pty Limited and Mr RMS and Mr PM and Mr WJ and S Pty Limited and H Pty Limited & Ms S Rand and Mr PL (Trustee in Bankruptcy) |
Respondents
Appeal Number: EA 16 C of 2006
File Number: SYF 2153 of 2001
| RE Pty Limited (In Liquidation) and Mr RMS |
Appellants
And
| Ms S Rand |
Respondent
REASONS FOR JUDGMENT
On 28 April 2008 this Full Court delivered reasons for judgment in relation to two appeals (EA 16B of 2006 and EA 16C of 2006) against orders made on 10 January 2006 by Rowlands J in proceedings between Mr M Rand (the husband) and Mrs S Rand (the wife) for property settlement under the Family Law Act 1975 (Cth) (“the Act”). A number of third parties had been joined, on the application of the wife, as parties to those property settlement proceedings. Certain of those third parties against whom orders were made by Rowlands J in his orders of 10 January 2006, were the appellants in the two appeals mentioned.
In appeal number EA 16B of 2006 the appellants were the husband’s parents Mr G and Mrs N Rand and two companies associated with the husband’s father, being GD Pty Limited and C Pty Limited.
The appellants in appeal number EA 16C of 2006 were RE Pty Limited (in Liquidation), a company in which the husband and wife had previously been the shareholders and of which they were also the directors, and the liquidator of that company, Mr RMS.
The respondent to both appeals was the wife. She opposed both appeals although her position was that depending on the outcome of the appeals, she might seek an extension of time to cross-appeal the orders of 10 January 2006 on a limited issue.
The husband took no part in the appeals (although he wanted an opportunity to be heard on any cross-appeal by the wife). He had originally appealed Rowland J’s orders of 10 January 2006, but his appeal (EA 16A of 2006) became permanently stayed when he failed to comply with an order made on 23 August 2006 requiring him to lodge security in respect of any costs which the wife might be awarded in relation to his appeal.
At the conclusion of our reasons for judgment delivered on 28 April 2008, we provided in draft form the orders which we proposed to make to give effect to our reasons, but we also gave all parties to the appeals the opportunity to make submissions on our proposed orders.
On 4 August 2008 the wife through her solicitors filed submissions on the form of orders and also in relation to the costs of the appeals; in summary she sought an order for costs in her favour, or alternatively, that there be no order for costs but that costs certificates under the Federal Proceedings (Costs) Act 1981 (Cth) (“the Costs Act”) be granted.
On 13 August 2008 the appellants in appeal number EA16B of 2006 filed submissions (prepared by senior counsel) directed to the form of orders, and the future course of the proceedings. They also sought an order dismissing the proceedings “against all respondents other than the husband, [RE Pty Ltd] and [a company known as S Pty Limited]”. In addition, they sought to be heard on costs in due course.
Also on 13 August 2008 a letter was received by the Appeals Registrar from the solicitor for the appellants in appeal number EA 16C of 2006 containing brief submissions in relation to the form of orders, and seeking to be heard in relation to costs at a later stage.
At a short hearing on 14 August 2008, the following orders were made (which save for Order 5 were largely in terms of the orders foreshadowed in our judgment of 29 April 2008):
(1)The appeal against Order 7 made by the Honourable Justice Rowlands on 10 January 2006 be dismissed.
(2)The appeals against Orders 1, 5, 6 and 9 made by the Honourable Justice Rowlands on 10 January 2006 be allowed and those orders be set aside.
(3)The application of the Wife for orders pursuant to s 90AE(1)(b) of the Family Law Act 1975 (Cth) for the substitution of the Husband for the Wife in relation to any debt on account of a directors’ loan account with [RE Pty Limited (In Liquidation)] be remitted for re-hearing, but subject to the Wife applying for such a re-hearing, and with such re-hearing only to occur after the conclusion of Proceedings … in the Supreme Court of New South Wales.
(4)The hearing of the application by the Wife for an extension of time to cross-appeal the orders made by the Honourable Justice Rowlands on 10 January 2006, and if successful the hearing of such a cross-appeal by the Wife, be adjourned to a date to be fixed after the conclusion of Proceedings […] in the Supreme Court of New South Wales, subject to any further or other order of the Full Court.
(5)The parties to the proceedings to be permitted in the proceedings presently before the Supreme Court of New South Wales […], to publish or utilise evidence or other documents discovered or utilised on subpoena or otherwise, in those Supreme Court proceedings, evidence or material obtained during, or as a consequence of, the Family Court proceedings No. 2153/2001, and further, for the purpose of implementing this order, the parties shall have liberty to photocopy any documents on the Court file or produced by subpoena or otherwise as they may be advised.
Our orders of 14 August 2008 also provided for the filing of further submissions, the relevant orders being:
(6)The Appellants in both appeals file and serve written submissions directed to:
a)The dismissal of the proceedings against all of the Respondents other than the Husband, [RE Pty Limited (In Liquidation)] and [S Pty Limited (In Liquidation)], and
b)Costs,
on or before 11 September 2008.
(7)The Respondents in both appeals file and serve any written submissions in response to any written submissions served in accordance with Order 6 above on or before 9 October 2008.
On 16 September 2008 written submissions (signed by Mr Aldridge SC, who was counsel for both groups of appellants at the hearing of appeals EA 16B of 2006 and 16C of 2006) were filed. These submissions addressed the issue of costs, seeking that the respondent wife should pay the appellants’ costs of the appeals and also of the trial “insofar as orders are made dismissing proceedings against particular appellants”.
On 27 January 2009 the solicitor for the respondent wife filed submissions in reply which sought to resist the appellants’ application for costs.
On 27 February 2009 correspondence was received by the Appeal Registrar from the solicitor for the appellants in appeal number EA 16B of 2006. Relevantly for present purposes, this correspondence referred to the submissions of the respondent wife filed on 27 January 2009 and stated that the appellants “object to any reliance being placed on those Submissions”. This objection was made on the basis that the submissions filed by the respondent wife were “well out of time and were in addition to Submissions previously made on behalf of the Respondent”.
This objection raised on behalf of the appellants in appeal number EA 16B of 2006, would appear, with respect, to overlook the provision in our order of 14 August 2008 for submissions in reply by the respondent. As to the issue of time, it appears to us that since the delivery of our reasons for judgment on 28 April 2008 (with its provision for submissions within 28 days on the form of orders), time requirements have not been adhered to in this matter. For these reasons, we are prepared to receive the submissions filed on behalf of the wife on 27 January 2009.
Costs Submissions filed on behalf of the respondent wife on 4 August 2008
In relation to the costs of the appeals, the wife’s position in the submissions filed on her behalf on 4 August 2008, was that if the Full Court was minded “at this stage” to make an order in relation to the costs of the appeals, then that order should be that the “[G Rand] interests” pay her costs. Alternatively, it was submitted that there should be no order for costs in relation to the appeals but the grant of costs certificates.
It was explained in the submissions, that for purposes of the submissions, the “[G Rand] interests” were the appellants in appeal number EA 16B of 2006, and the liquidator (who is one of the appellants in appeal number EA 16C of 2006).
The wife’s submissions commenced by referring to s 117(1) of the Act as the “starting point” on costs, with its provision that each party should be responsible for their own costs. The following submissions then dealt in some depth with the factors in s 117(2A) of the Act which the Court is required to consider before making an order for costs against a party. These submissions can be summarised as follows:
·s 117(2A)(a) – the financial circumstances of the parties: It was submitted that the wife has not received her entitlements under Rowland J’s orders, some of which are under attack in Supreme Court proceedings. Further, it was submitted that the wife has “little capacity to earn income”, that there is little evidence of the financial circumstances of the appellants, but that there is an “enormous disparity of wealth” and that this should favour the appellants paying the wife’s costs, or in the alternative, should support the wife in resisting a costs order.
·s 117(2A)(c) – conduct of the parties in relation to the proceedings: It was submitted that nothing in any party’s conduct of the appeal would be relevant to costs, but that if the parties’ conduct with respect to the trial before Rowlands J is relevant, then adverse credit findings made against the husband and his father should support the wife’s claim for costs.
·s 117(2A)(e) – whether any party has been wholly unsuccessful: It was submitted that “neither the appellants nor the respondent was wholly unsuccessful”, with the appellants being successful in relation to their appeals directed to Part VIIIAA of the Act, but unsuccessful on appeal in relation to the “[S Pty Limited] share allocation” in relation to which the wife was successful.
·s 117(2A)(g) – other relevant matters: The submissions in this regard raised a range of other matters notably that the proceedings appear “far from over”, and that it would be inappropriate for the Full Court to take further funds from the wife and give them to parties which included the husband and his father against whom adverse findings (not upset on appeal) had been made by the trial Judge, with reference being made to s 117AB (Costs where false allegation or statement made).
Costs Submissions filed on behalf of the appellants on 16 September 2008
In support of the contention in his submissions filed on 16 September 2008, that the respondent wife should pay the costs of the appeals incurred by the appellants, senior counsel for the appellants relied on:
·the fact that “overwhelmingly the Appellants were successful”;
·the concession by counsel for the respondent wife that the appeal against Order 1 of the orders of 10 January 2006 had to be allowed;
·the submission by counsel for the respondent wife that the wife did not “seek to uphold Order 5(a) [sic] as against [MI] Pty Ltd” (reasons for judgment of 28 April 2008, paragraph 127);
·the Full Court’s finding that there was no power pursuant to s 90AE(1)(b) to deal with the liquidator’s claim for insolvent trading, with it accordingly being submitted, that the proceedings against the liquidator should be dismissed and he should be given his costs for both the appeal and the proceedings before Rowlands J.
More generally, the appellants’ counsel submitted that the wife should have recognised that the “trial judge failed to give proper reasons in relation to many aspects of the orders that he made” and “not forced the Appellants to conduct an appeal where the outcome was, with respect, obvious”.
In response to the submissions of the respondent wife directed to the disparity between the financial resources available to the parties, it was submitted for the appellants that the wife’s circumstances “have not prevented [the wife] from prosecuting lengthy, expensive if not profligate … proceedings” at trial and in defending the appeal.
As to the wife’s reliance on adverse credit findings in the trial judgment, it was submitted that these findings come from Rowland J’s judgment which has “been established to be insufficiently reasoned” and has to be re-determined.
Further submissions filed on behalf of the wife on 27 January 2009
We do not consider it necessary to provide any summary of the wife’s relatively brief submissions filed on 27 January 2009 which, as earlier explained, we have been prepared to receive over objection. To the extent that any of those submissions accord with our own views, that will emerge from what follows.
Conclusion in relation to costs of the appeals
It will thus be seen that on the basis of the arguments summarised above, that the third party appellants in both appeals seek that the respondent wife pay their costs of the appeals, and that the wife, in turn, seeks (at least as her primary position) that the appellants pay her costs.
The starting point in relation to costs of proceedings under the Act is, as pointed out in the submissions on behalf of the wife, that under s 117(1) “each party to proceedings under the Act shall bear his or her own costs”. However, the court may make an order for costs if it is of the opinion that the circumstances justify it in so doing, having regard to the matters in s 117(2A).
It is important to note that nowhere in s 117 is any distinction drawn expressly between, on the one hand, the parties to proceedings who might be termed the primary or principal parties, that is, in a case such as the present, the husband and the wife, and on the other hand, parties who can be described as third parties. Nevertheless, there are cases in which the fact that a party is a third party may be a matter to which regard could be had as another relevant matter under s 117(2A)(g).
However, in the present case, given the close business (and in some instances, personal) relationships between the husband and the wife and the appellant third parties (including the Liquidator given that he is the liquidator of the family company of the husband and the wife), we do not regard the third party status of the appellants as being a matter to which any special regard should be had in applying s 117. Thus, to the extent that this was a submission made in the final submissions of the wife, we agree with it.
The still incomplete state of proceedings in the Supreme Court of New South Wales and in the Family Court makes it impossible to determine the real financial position of the wife, and probably also to some extent that of the third parties. Thus, the financial circumstances of any party could not at this stage provide any justification for any costs order in favour of, or against, any party.
The success, or lack of success, of the third party appellants and of the respondent wife has been canvassed in depth in their respective submissions. But ultimately having regard to our reasons for judgment of 28 April 2008, while the appellants can be said to have enjoyed greater success than the wife, no party can, in the words of s 117(2A)(e), be said to have been “wholly unsuccessful”, with the result that no order for costs would be justified against any party at least on the basis of that matter alone.
Some endeavour can be seen as having been made in the appellants’ submissions to place responsibility on the wife for the inadequacy of the trial Judge’s application of, and reasoning in relation to, the provisions of Part VIIIAA of the Act. In a similar vein, the appellants criticise the wife’s defence of the appeal. However, in this regard, we consider that there is some force in the submission made on behalf of the wife, that at the time of the trial that Part was newly enacted and little guidance in relation to its application was available. The position was not greatly dissimilar at the time when the appeals were heard and determined. But in any event, we would be reluctant to accept that, other than in the most extraordinary of cases, inadequate reasoning or other error of law on the part of a trial Judge should provide justification for a costs order against a party.
Thus none of the matters which we have so far canvassed, nor indeed any other matter raised in the submissions of any party, would in our opinion provide justification for a costs order in relation to the appeals number EA 16B of 2006 and EA 16C of 2006. Accordingly, we propose to make no order for costs in relation to those appeals. We will shortly consider the issue of costs certificates under the Costs Act.
The application for the dismissal (with costs) of the proceedings against certain of the appellants
It will be recalled that in the submissions (filed on 13 August 2008) of the appellants in appeal number EA 16B of 2006, an order was sought “dismissing the proceedings against all Respondents other than the Husband, [RE Pty Limited and S Pty Limited]”.
As the basis for such an order was not apparent from the appellants’ submissions of 13 August 2008 and as the respondent wife had to be given the opportunity to respond in relation to this proposed order, our orders of 14 August provided for further submissions in relation to this matter.
The only references to the application for the dismissal of proceedings against certain, indeed most, of the third parties (being the respondents at first instance) in the submissions filed on behalf of both groups of appellants on 16 September 2008 are as follows:
2.Insofar as orders are made dismissing proceedings against particular appellants the Respondent ought to pay the costs of those parties in the Court below as well.
…
6. Fourthly, the Court found that there was no power pursuant to section 90AE(1)(b) to deal with the liquidator’s claim for insolvent trading. The proceedings against the liquidator therefore should be dismissed and he should be given his costs for both the appeal and the proceedings before Rowlands J.
The reference in paragraph 6 of the appellants’ submissions only to the liquidator and the provision of a reason why the proceedings against him should be dismissed, suggests that it is only the proceedings against the liquidator which are now sought to be dismissed. We note in this regard that no reason appears to be provided in the appellants’ submissions as to why the proceedings against any other appellant should now be dismissed. Thus we are uncertain as to precisely which of the appellants seek the dismissal of the proceedings against them.
In relation to the liquidator, it could well be said that the statement in paragraph 6 of the appellants’ submissions that this Court found that there was no power pursuant to s 90AE(1)(b) is an oversimplification of paragraphs 151 to 156 of our reasons of 28 April 2008.
The position of the wife in relation to the possible dismissal of the proceedings against certain of the appellants is not entirely clear to us, although her submissions filed on 27 January 2009 might be read as opposing such a course.
Given the uncertain position arising from the submissions of all parties and the fact that there are proceedings pending in the Supreme Court between the wife and certain of the appellants, and the possibility of future proceedings at least between the husband and the wife and at least some of the third parties in the Family Court, we are not persuaded that we should dismiss any part of the proceedings at least at this stage.
Should a more precise application or applications and more cogent arguments be made to us on this issue at some time in the future, we would be prepared to re-consider the matter if appropriate in the then prevailing circumstances.
Given what we have said about this matter, no question of costs at first instance can arise at this stage.
Costs certificates
As earlier mentioned, the respondent wife sought that in the event that there was no order for costs made in relation to the appeals, that she receive a costs certificate under s 6 of the Costs Act in respect of her costs incurred in relation to the appeals. We are prepared to grant her such a certificate.
We would also be prepared to grant certificates under s 9 of that Act to all appellants. To enable us to do so, they should apply by letter to the Appeals Registrar.
The wife through her solicitor also sought a certificate under s 10(2) and (3) of the Costs Act. Section 10 of that Act is directed to the grant of a certificate in a case where a Judge becomes unavailable to complete the hearing of the case. The wife seeks a certificate under s 10 because of the retirement of the trial Judge in this case, Rowlands J.
Although our orders provided for the possibility of a re-hearing of the wife’s applications pursuant to s 90AE(1)(b) of the Act following the conclusion of the Supreme Court proceedings, our orders did not provide that such a re-hearing should be before the original trial Judge. Furthermore, it is very unusual when this Court upholds an appeal for it to remit the proceedings to the trial Judge. As a general rule, we remit to another Judge and provide for all parties to receive costs certificates in respect of the new trial under s 8 of the Costs Act.
We appreciate, however, that there are particular complexities in this case concerning its future conduct. Some of these complexities were canvassed in the concluding paragraphs of our reasons for judgment of 28 April 2008.
As we do not understand there to be any time limit on applications for certificates under the Costs Act, we think that the safer course is to leave it open to all parties to make application to the Full Court at some time in the future for certificates under either s 8 or possibly under s 10 depending upon the circumstances then existing.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court
Associate:
Date: 4 May 2009
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