Rankin & Rankin (No. 3)
[2019] FamCAFC 133
•8 August 2019
FAMILY COURT OF AUSTRALIA
| RANKIN & RANKIN (NO. 3) | [2019] FamCAFC 133 |
| FAMILY LAW – COSTS – RE-INSTATEMENT – APPLICATION FOR LEAVE TO APPEAL – Where the appellant’s application for leave to appeal was wholly unsuccessful – Where the respondent sought fixed indemnity costs or, in the alternative, fixed party/party costs in relation to the failed application for leave to appeal – Where the respondent also sought the quantum of costs under an interlocutory order be fixed – Where the appellant agrees to pay a fixed amount to the respondent for costs under the interlocutory order – Consideration of ss 117(1) and 117(2A) of the Family Law Act 1975 (Cth) – Application for indemnity costs dismissed – Costs ordered in favour of the respondent on a party/party basis in a fixed amount. |
| Child Support (Assessment) Act 1989 (Cth) Pt. 7, div 4 Family Law Rules 2004 (Cth) r 19.18(1)(a) |
| Beach Petroleum NL v Johnson (No. 2) (1995) 57 FCR 119; [1995] FCA 1250 Graham & Squibb (2019) FLC 93-892; [2019] FamCAFC 33 Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 Moorcroft & Moorcroft [2017] FamCAFC 147 Rankin & Rankin [2019] FamCAFC 52 SCVG & KLD [2017] FamCAFC 95 Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681 |
| APPELLANT: | Mr Rankin |
| RESPONDENT: | Ms Rankin |
| FILE NUMBER: | DGC | 2859 | of | 2013 |
| APPEAL NUMBER: | SOA | 33 | of | 2018 |
| DATE DELIVERED: | 8 August 2019 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | In chambers |
| JUDGMENT OF: | Strickland, Kent & Austin JJ |
| HEARING DATE: | By way of written submissions |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 27 April 2018 |
| LOWER COURT MNC: | [2018] FamCA 268 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Devries |
| SOLICITOR FOR THE APPELLANT: | Manby and Scott, Child Support Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Schmidt |
| SOLICITOR FOR THE RESPONDENT: | Tisher Liner FC Law |
Orders
For the purpose of Order 6 made on 19 November 2018, with the parties’ consent, the respondent’s costs are fixed at $11,705.
The appellant shall pay the respondent’s costs of and incidental to the application for leave to appeal, fixed in the sum of $19,194.
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 (No. 3) 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 MELBOURNE |
Appeal Number: SOA 33 of 2018
File Number: DGC 2859 of 2013
| Mr Rankin |
Appellant
And
| Ms Rankin |
Respondent
REASONS FOR JUDGMENT
Introduction
On 3 May 2019, this Court dismissed the appellant’s application for leave to appeal from orders made by the primary judge on 27 April 2018, which orders effectively granted the respondent’s child support departure application made under Part 7 Division 4 of the Child Support (Assessment) Act 1989 (Cth). The question of costs in relation to the unsuccessful application for leave to appeal was reserved and procedural orders made for the parties to file their costs submissions, which have now been complied with.
The respondent seeks orders compelling the appellant to pay her fixed costs in three respects, namely:
a)Those relating to the failed application for leave to appeal, on an indemnity basis quantified at $31,555, or alternatively, on an ordinary party/party basis quantified at $22,713 (each amount rounded to the nearest dollar);
b)Those relating to the costs application, which costs are subsumed in the calculations above; and
c)Those pursuant to the interlocutory indemnity costs order made by Strickland J on 19 November 2018 (see Rankin & Rankin [2019] FamCAFC 52), when the appellant’s application for leave to appeal was re-instated following its deemed abandonment, in the fixed sum of $11,705.10.
Costs of the re-instatement
On 19 November 2018, when re-instating the appellant’s Notice of Appeal and granting him leave to file an Amended Notice of Appeal, Strickland J made an order in the following terms:
6.The applicant husband pay the costs of the respondent wife on an indemnity basis such costs to be assessed in default of agreement.
In her recent submissions, the respondent assessed her costs for the purpose of that order at $11,705.10. The appellant conceded his liability for costs of that quantum in his written submissions.
We will therefore make an order, with the parties’ consent, quantifying the respondent’s costs at $11,705 (rounded to the nearest dollar) for the purpose of the operation of Order 6 made on 19 November 2018.
The respondent proposed that the order made by this Court should prescribe that the costs are payable within 14 days, which submission the appellant did not answer. Nonetheless, we do not qualify our order in that way. The appellant’s liability for costs arises under the order previously made by Strickland J, which order inferentially requires the costs to be paid forthwith upon their quantification either by agreement or assessment. Now, some eight months later, the parties agree upon the quantum so the costs are payable forthwith under the existing order.
Costs of the application for leave to appeal
The costs order sought by the respondent in respect of the appellant’s failed application for leave to appeal is only intended to cover the period from the
reinstatement orders made by Strickland J on 19 November 2018 until the pronouncement of our orders on 3 May 2019, so there is no overlap with the costs relating to the successful reinstatement application.
Indemnity costs
The respondent’s primary application is for her costs to be paid on an indemnity basis. As the appellant correctly submits, the award of indemnity costs is “a very great departure from the normal standard” (SCVG & KLD [2017] FamCAFC 95 at [57]), but the respondent contended that “circumstances of an exceptional kind” in this case justified it (Yunghanns v Yunghanns (2000) FLC 93-029).
The respondent submitted that indemnity costs were warranted in this instance because:
a)Properly advised, the appellant ought to have known his application for leave to appeal had no chance of success;
b)The appellant misconducted the proceedings by wasting time and making groundless contentions; and
c)The appellant imprudently rejected her offer of compromise.
While the application for leave to appeal was wholly unsuccessful, we are not persuaded it was reasonably foreseeable that the application had “no chance of success” at all. Indeed, the respondent did not move for the summary dismissal of the application under s 96AA of the Family Law Act 1975 (Cth) (“the Act”) on the basis it had no reasonable prospect of success.
The appellant’s conduct of the application for leave to appeal after it was
reinstated was less diligent than it could have been, as is evidenced by him contending for misconceived grounds of appeal (at [20], [25], [34], [46]); twice amending his grounds of appeal (at [15]); filing and serving an Amended Summary of Argument (at [14]); and belatedly abandoning grounds of appeal at the commencement of the hearing before this Court (at [16]). However, his conduct of the application was not so egregious as to warrant his payment of indemnity costs. Rather, it is a factor which militates in favour of a costs order being made when it ordinarily would not be (s 117(2A)(c) of the Act).
As for the rejection of the respondent’s offer of compromise, the appellant rejected the respondent’s offer (made on 14 January 2019) which comprised three components: his acceptance of child support departure orders in the total sum of $1,050 in lieu of $1,200 per week; his payment of her costs of $10,000; and his payment of $30,000 in full satisfaction of child support arrears. The appellant ultimately failed in his bid to challenge the primary judge’s orders and therefore remains bound by the child support departure orders made in the sum of $1,200 per week, but that particular aspect of the respondent’s offer was not divisible from the remainder. The offer was pitched as a package of all three components. It was not unreasonable for the appellant to reject the part of the respondent’s offer requiring him to pay her costs, given the terms of s 117(1) of the Act. Nor was it even open for the appellant to accept the respondent’s offer to pay a compromised lump sum in full satisfaction of the child support arrears. She had no power to compromise the quantum of his child support liability, which is a debt due by him to the Commonwealth; not to her. Consequently, this factor does not support the respondent’s application.
The respondent’s application for indemnity costs is dismissed.
Ordinary costs
The respondent calculated her ordinary party/party costs at $22,713 (rounded to the nearest dollar), which computation the appellant challenges as excessive. Without purporting to be exhaustive of the instances of excessive charges, the appellant pointed to two component claims for items of work which he said were excessive, but we are unable to discern from the respective submissions whether or not those two individual claims are fair and reasonable for the amount of work done.
However, it is noteworthy that when the respondent filed a schedule of her costs in the appeal on 21 March 2019, pursuant to the procedural orders made by the Regional Appeal Registrar, her ordinary party/party costs up to and including the hearing before us on 28 March 2019 were calculated at $19,194 (rounded to the nearest dollar). Although no explanation was advanced for the differential, we impute the extra costs of about $3,519 relate specifically to those incurred in the preparation of written submissions for these costs applications.
The respondent could not mount a reasonable case for her recovery of costs in relation to the determination of this costs dispute or, for that matter, her calculation of those costs at anything like $3,519. In so far as her application extends to her recovery of costs for prosecuting these costs applications, her application is dismissed. The ordinary rule under s 117(1) of the Act prevails, requiring the parties to bear their own costs.
Turning then to the costs pertinent to only the appellant’s failed application for leave to appeal, we are persuaded a costs order in the respondent’s favour is warranted. Indeed, the appellant did not oppose such an order. He only submitted that the order should be capped at $14,000.
In summary, the circumstances which justify a costs order are: the appellant did not rely upon his financial circumstances as a ground to resist the order being made (s 117(2A)(a)); neither party was the recipient of a grant of legal aid (s 117(2A)(b)); the appellant’s conduct of the application for leave to appeal caused the respondent to incur extra costs (s 117(2A)(c)); and the appellant was wholly unsuccessful (s 117(2A)(e)).
Rule 19.18(1)(a) of the Family Law Rules 2004 (Cth) permits the Court to order costs in a specific amount, which the respondent seeks. The purpose of the rule is to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation” (Graham & Squibb (2019) FLC 93-892 at [92] quoting Beach Petroleum NL v Johnson (No. 2) (1995) 57 FCR 119 at 120).
The respondent claimed party/party costs up to and including the hearing before us of $19,194, but the appellant asserted the calculation was excessive and conceded $14,000 was appropriate.
We are satisfied that the respondent’s schedule of costs filed on 21 March 2019, read with the parties’ respective written submissions, provides sufficient material to enable this Court to justly fix a sum for costs in accordance with the rule and the principles as to its application (see Moorcroft & Moorcroft [2017] FamCAFC 147 at [38] applying Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23).
Faced with the respondent’s detailed schedule of costs, the appellant submitted that “various costs items…might be considered excessive” (emphasis added). Beyond nominating only two “examples”, together amounting to $500 of the respondent’s claimed costs, the appellant does not advance any specific challenge to the numerous items particularised by the respondent. Rather, the appellant resorted to a comparison of the respondent’s claim with his own costs schedule and the costs of the discrete reinstatement application. This approach ought be rejected.
The purpose of this Court requiring parties to file itemised schedules of costs in advance of their appeal is so that costs, where ordered, may be fixed in an amount so as to obviate for the parties the delay and added expense of an assessment. That is what the relevant rule is designed to achieve. Whilst, in accordance with principle, this Court is not obliged to, nor should it attempt, something akin to a taxation of costs undertaken by an assessor which does not relieve the parties from providing sufficient particulars of either the costs claimed or the basis of any challenge, if a properly particularised claim is to be challenged.
We are satisfied that the respondent’s claim is supported by sufficient particulars. In contrast, the broad and un-particularised challenge of the appellant is insufficient to displace the conclusion that the respondent’s claimed amount of $19,194 is a just amount to fix for costs and we will so order.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Kent & Austin JJ) delivered on 8 August 2019.
Associate:
Date: 8 August 2019
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