RANKIN & RANKIN
[2019] FamCAFC 52
•26 March 2019
FAMILY COURT OF AUSTRALIA
| RANKIN & RANKIN | [2019] FamCAFC 52 |
| FAMILY LAW – APPEAL – INDEMNITY COSTS – Where the respondent seeks costs on an indemnity basis against the applicant and the applicant’s solicitor but ultimately against the applicant leaving the applicant to pursue his solicitor if so advised – Where the applicant opposes any order for costs on the basis that he was successful in having his appeal reinstated – Where the application was only necessary because the applicant had not complied with orders of this Court – Where the respondent has demonstrated the presence of exceptional circumstances such as to warrant a departure from the ordinary rule as to costs – Costs of the proceedings ordered in favour of the respondent to be assessed on an indemnity basis in default of agreement. |
| Family Law Act 1975 (Cth) s 117 |
| Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Kohan and Kohan (1993) FLC 92-340 Limousin & Limousin(Costs) (2007) 38 FamLR 478 Munday v Bowman (1997) FLC 92-784 Yunghanns & Yunghanns (2000) FLC 93-029 |
| APPLICANT: | MR RANKIN |
| RESPONDENT: | MS RANKIN |
| FILE NUMBER: | DGC | 2859 | of | 2013 |
| APPEAL NUMBER: | SOA | 33 | of | 2018 |
| DATE DELIVERED: | 26 March 2019 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 19 November 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 1 March 2018 |
| LOWER COURT MNC: | [2018] FamCA 268 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Guzzo | |
| SOLICITOR FOR THE APPLICANT: | L & Co Lawyers | |
| COUNSEL FOR THE RESPONDENT: | Mr Barbayannis | |
| SOLICITOR FOR THE RESPONDENT: | Tisher Liner FC Law | |
Orders made on 19 November 2018
The affidavit affirmed by the applicant husband’s counsel on 19 November 2018 be released to the respondent wife’s counsel for the purposes of him obtaining instructions from his instructing solicitor and client, and the respondent wife, her counsel and her solicitor be restrained from disseminating to any other persons any of the facts deposed to in that affidavit.
The applicant husband have leave to rely on his affidavit affirmed on 18 November 2018 save and except for annexure “[R]-A1”.
The Notice of Appeal filed on 25 May 2018 be reinstated.
The applicant husband have leave to file an Amended Notice of Appeal in accordance with Annexure “[RR]-A” to the affidavit of Ms RR filed on 12 September 2018.
The said Amended Notice of Appeal be referred to the Southern Appeal Registrar for a directions hearing.
The applicant husband pay the costs of the respondent wife on an indemnity basis such costs to be assessed in default of agreement.
UPON NOTING THAT the affidavit referred to in paragraph 1 herein be placed in a sealed envelope to be returned to the applicant husband following delivery of the reasons for judgment in relation to the order for costs made in paragraph 6 herein.
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 Rankin & Rankin 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 APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 33 of 2018
File Number: DGC 2859 of 2013
| Mr Rankin |
Applicant
And
| Ms Rankin |
Respondent
REASONS FOR JUDGMENT
Introduction
On 19 November 2018 I heard an Application in an Appeal filed by Mr Rankin (“the husband”) on 6 September 2018 seeking that the Notice of Appeal filed on 25 May 2018 be reinstated. That Notice of Appeal was deemed abandoned pursuant to r 22.21 of the Family Law Rules 2004 (Cth) (“the Rules”), as a result of the husband failing to comply with the order made by the Appeal Registrar on 23 July 2018 providing for the husband to file his appeal books by 3 September 2018.
On 19 November 2018 I ordered, inter alia, that the Notice of Appeal be reinstated, and that the husband pay the costs of Ms Rankin (“the wife”) on an indemnity basis, with such costs to be assessed in default of agreement. The parties indicated that they did not require my reasons for judgment for the reinstatement of the Notice of Appeal, but they did request that reasons for judgment be provided in relation to the order for costs. Due to time constraints I was unable to deliver those reasons for judgment following the hearing, and after making the orders I indicated that I would deliver those reasons as soon as possible. These are those reasons.
At the hearing the wife sought an order for costs on an indemnity basis against both the husband and the husband’s solicitor but ultimately against the husband on the basis that the husband has other remedies to pursue against his solicitor. The amount sought was $8,250 comprising $5,500 for solicitor’s fees and $2,750 for counsel fees. That compared with party/party costs of $4,799.04 comprising $3,613.35 for solicitor’s fees and $1,185.69 for counsel fees. I note though that there was no agreement as to either of those amounts, and it was understood that in those circumstances any order for costs would be on the basis that the costs would have to be assessed in default of agreement.
The reason for the order being sought against the solicitor is that it is apparent from the documents filed by the husband, and as was submitted by his counsel during the hearing, that the failure to file the appeal books within time was the fault of the solicitor, and it was said that no blame could be attributed to the husband.
The husband’s solicitor filed an affidavit in support of the Application in an Appeal on 6 September 2018, and deposed as follows:
11.Amongst other things, mainly due to my recent ill health I inadvertently failed to file and serve the Appeals [sic] Books on or before 3 September 2018.
The husband also filed an affidavit in support of the said application on 12 September 2018 wherein he deposed as follows:
4.The failure to lodge the appeal books on 3 September 2018 is not related to any fault that can be attributed to me in anyway. At all times I have given instructions to [my solicitor] to prosecute the appeal.
Further, the husband deposed as follows:
d.Accordingly, I respectfully submit:
…
c)No hardship or prejudice flows to the respondent wife from the delay, which cannot be compensated for by orders as to costs or otherwise.
…
On 17 September 2018 the husband’s solicitor filed a further affidavit and deposed as follows:
3.I practise as a sole practitioner and I am the person responsible for the preparation of the appeal books. I was unable to attend work on 3 September 2018 on account of a recent medical condition which contributed to the failure to file the appeal books on 3 September 2018. To this end, if necessary, I will provide evidence to the court of my condition on a confidential basis with the leave of the court.
4.Accordingly, the failure to lodge the appeal books on 3 September 2018 is not related to the fault of the applicant in anyway.
…
17.Accordingly, if the appeal is reinstated it is submitted on behalf of the applicant that:
…
c)No hardship or prejudice flows to the respondent wife from the delay, which cannot be compensated for by orders as to costs or otherwise;
…
At the hearing on 19 November 2018 the husband’s counsel sought to provide to the court on a confidential basis a further affidavit of the husband’s solicitor. The husband was permitted to rely on that affidavit but not on the medical report annexed thereto. I also granted an injunction restraining the wife, her counsel and her solicitor from disseminating to any other person the contents of that affidavit.
In summary, in the affidavit the husband’s solicitor deposed to her medical condition which caused her to be “lethargic, and exhausted, with a lack of focus and motivation”, but with appropriate treatment her condition had improved. Nevertheless, on the weekend prior to 3 September 2018 (the last date for the filing of the appeal books), she became unwell and was “bedridden”, and that was also the case on 3 September 2018.
In oral submissions at the hearing I was informed by the husband’s counsel that the appeal books were not quite complete by 3 September 2018 but they were able to be filed by 5 September 2018, namely two days after the last date for that to occur.
The wife filed a Response on 14 November 2018 seeking dismissal of the application together with a supporting affidavit.
Despite what was said in paragraph 8(c) of the husband’s affidavit and paragraph 17(c) of his solicitor’s affidavit, the husband’s counsel opposed any order for costs and sought that the question of costs be reserved. However, he submitted that if an order for costs was made, then it should be against the husband leaving him to “work it out” with his solicitor.
As can be seen, I agreed with the submissions of both the husband and the wife, and the order is against the husband leaving him to pursue his solicitor if so advised.
Discussion
In relation to the application for costs, the first question to be considered is whether a costs order should be made at all, given the terms of s 117 of the Family Law Act 1975 (Cth) (“the Act”). That section relevantly provides as follows:
(1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 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), (4A), 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;
(c)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.
As can be seen, the primary position is that each party is to bear their own costs, but that is subject to whether there are circumstances that justify an order for costs being made.
Here, there are such circumstances in the conduct of the husband and/or his solicitor (s 117(2A)(c) and (g)), and they are as follows:
a)The fact that the husband’s solicitor has taken the blame for the default does not prevent an order for costs being made against the husband. The onus was on the husband to comply with the order of the court and he cannot escape that responsibility because his solicitor has allegedly not carried out his instructions. The husband’s solicitor is in effect the husband’s agent.
b)Although the husband’s solicitor has chosen to accept the blame for the failure to file the appeal books in time, there are significant gaps in the evidence provided by the husband and his solicitor in that regard. For example:
i)There is no mention as to when preparation of the appeal books was undertaken, what part the husband played in that, and why they were not able to be filed well before 3 September 2018, instead of being left to the last minute.
ii)The husband’s solicitor says that she had a medical condition, but that did not prevent the appeal books being almost complete by 3 September 2018, and then being in fact completed by 5 September 2018. It was also agreed at the hearing that the solicitor was not hospitalised, that she was at home on or about 3 September 2018, and she had access to the necessary technology.
iii)Importantly, on 30 August 2018 the husband’s solicitor corresponded with the wife’s solicitor but did not alert the latter to any anticipated delay in filing the appeal books by reference to her health or any other reason. Further, no application was made seeking an extension of time to file those appeal books.
iv)No evidence has been provided as to what the “other things” were that prevented the solicitor from filing the appeal books in time.
c)It was submitted by the husband’s counsel that there should be no order for costs, and particularly indemnity costs, because the husband has been successful in having his appeal reinstated. However, the only reason why these proceedings have been necessary, is the failure by the husband to comply with the order of the court. And, in the circumstances, it was reasonable for the wife to oppose the application for reinstatement and for her to incur legal costs and expenses as a consequence.
I note again that it is not readily apparent how the position taken by the husband’s counsel as to an order for costs at the hearing in this regard sits with paragraph 8(c) of the husband’s affidavit and paragraph 17(c) of the husband’s solicitor’s affidavit set out above.
d)It is also important to note that this was not the first time that the husband had failed to meet a deadline in relation to an appeal. On 29 February 2016 final orders for property settlement and other financial matters were made by Johns J, and the husband failed to file a Notice of Appeal against those orders within the 28 day period allowed under the Rules. As a result the husband had to make an application for an extension of time to pursue an appeal. In that instance the wife consented to the extension of time.
These circumstances plainly justify an order for costs being made.
The second question then is on what basis those costs should be calculated. The wife says that it should be on an indemnity basis, but the husband opposes that.
It is well established that for indemnity costs to be awarded there must be exceptional circumstances as to why the usual rule of costs being calculated on a party/party basis should be departed from (Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Kohan and Kohan (1993) FLC 92-340; Munday v Bowman (1997) FLC 92-784; Yunghanns & Yunghanns (2000) FLC 93-029; and Limousin & Limousin(Costs) (2007) 38 FamLR 478).
The wife submits that the circumstances which justify an order for costs are exceptional such that there should be an indemnity costs order.
The husband submits that no such order should be made, again pointing to the fact that he has been successful in his application to reinstate the appeal, that the default was “technical”, that the failure to file within time was as a result of the misfortune that befell the solicitor, and it was not deliberate.
I need not repeat what I have said about the argument that the application has been successful; that is not a sustainable argument. It is also not the case that the default can be described as “technical”. Time limits are imposed to ensure that the matter proceeds along the case management pathway smoothly and effectively, and the matter is determined in a timely fashion. As to the position of the solicitor, as identified above, it has not been established that the medical condition of the solicitor can necessarily be promoted as the reason for the failure to comply with the order. And in relation to the final point, it cannot be said that the default was deliberate, but that does not provide an answer to the fact that it occurred, and as a result the wife has been put to expense in meeting the application for reinstatement.
In conclusion then, I find that the circumstances identified above are exceptional such as to justify costs being awarded on an indemnity basis. The wife should not be out of pocket in having to meet an application which was only necessary because of the husband’s failure to comply with the order of this Court as to the filing of his appeal books.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 26 March 2019.
Associate:
Date: 26 March 2019
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