Reichstein & Reichstein (Costs)

[2007] FamCA 378

FAMILY COURT OF AUSTRALIA

REICHSTEIN & REICHSTEIN (COSTS) [2007] FamCA 378

FAMILY LAW - APPEAL – COSTS OF APPEAL – Satisfied both parties able to meet any order for costs – Both parties substantially unsuccessful in orders sought – Appellant’s partial success on appeal arose because of errors by trial Judge rather than respondent’s conduct of case – Appropriate to grant certificates to both parties under Federal Proceedings (Costs) Act 1981 (Cth).

Family Law Act 1975 (Cth), s 117
Federal Proceedings (Costs) Act 1981 (Cth), ss 6 and 9

Penfold v Penfold (1980) 144 CLR 311; (1980) FLC 90-800

APPELLANT: REICHSTEIN

RESPONDENT: REICHSTEIN

FILE NUMBER: ADF 908 of 2004

APPEAL NUMBER: SA 15 of 2006

DATE DELIVERED: 30 April 2007

PLACE DELIVERED: Sydney

JUDGMENT OF: Bryant CJ, Kay & Boland JJ

HEARING DATE: By way of written submissions filed 21 December 2006, 5 February 2007 and 15 March 2007

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 15 February 2006

LOWER COURT MNC: [2006] FamCA 61

REPRESENTATION

ADVOCATE FOR THE APPELLANT: Mr Reichstein in person

COUNSEL FOR THE RESPONDENT: Mr Berman

SOLICITORS FOR THE RESPONDENT: Alderman Redman

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Reichstein v Reichstein (Costs).

Orders

1. That the Court grants to the appellant a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act1981 (Cth) 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 appellant in respect of the costs incurred by him in relation to the appeal.

2. The Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) 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 in respect of the costs incurred by her in relation to the appeal.

FAMILY COURT OF AUSTRALIA AT ADELAIDE

Appeal Number: SA 15  of 2006
File Number: ADF 908  of 2004

Reichstein

Appellant

And

Reichstein

Respondent

REASONS FOR JUDGMENT

Introduction    

1. On 29 November 2006 we delivered reasons and made orders allowing the husband’s appeal in respect of orders made by the Honourable Justice Mushin on 6 March 2006 being orders pursuant to the “slip rule” amending orders of the Honourable Justice Morgan of 15 February 2006.

2. In Order 3 of our orders we provided that the parties have liberty to file written submissions with regard to the costs of the appeal in accordance with the timetable set out therein.  Written submissions were received from the husband on 21 December 2006.  The wife filed a response to those submissions on 5 February 2007.  The husband filed submissions in reply on 15 March 2007.

3. In response to a letter forwarded by the Appeals Registrar to the wife’s solicitors, those solicitors responded by letter dated 22 March 2007.  In that letter the respondent’s solicitors said:

   We confirm that we continue to act for the wife in these proceedings.

   Further to your letter of 13 March 2007 we confirm that in the event that the Full Court accedes to our submission not to make a party / party costs Order that we would wish to apply for a costs certificate pursuant to the Federal Proceedings (Costs) Act.

4. We have now considered the parties’ submissions in light of our reasons for judgment.  These are our reasons in respect of the costs of the appeal.

Relevant law

1. Before we commence our discussion of the parties’ submissions, it is convenient we set out the relevant statutory provisions and case law in respect of costs.

2. Section 117 of the Act provides:

   (1)       Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB 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) 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;

   (e) 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.

3. The power to award costs involves a wide exercise of discretion.  The breadth of the discretion is well recognised by authority, see Penfold v Penfold (1980) 144 CLR 311; (1980) FLC 90-800. 

The Parties’ Submissions

1. The husband in his submissions noted the grounds of appeal contained a number of grounds, “the major grounds predominantly related to initial contribution, contribution during the marriage, post separation contributions adjustment on account of Section 75(2) and that the overall result was not just and equitable”.  The submissions filed on behalf of the husband acknowledged “that while some grounds were not successful, overall the husband has been successful on appeal, resulting in a significant reduction in the entitlements to the wife”. 

2. The husband noted the two monetary adjustments in his favour as a result of the appeal being allowed reduced the wife’s entitlements resulting in the splitting order made in favour of the wife being reduced by $28,440.00, and the cash adjustment payable to the wife was reduced by $126,827.00.  Thereafter the husband set out matters relevant to considerations under s 117(2A). 

3. The husband referred to the financial circumstances of the wife, submitted that she had been substantially unsuccessful, and that neither party had made any relevant offer.  The husband sought that the wife pay his costs in the sum of $36,628.88. 

4. The husband did not provide any itemisation of his claim for solicitor’s fees of $20,318.38.  We are unable to discern whether the claim is made on the basis of costs incurred pursuant to a costs agreement or at scale.

5. The husband seeks, in the alternate, he receive costs as agreed or in default “as may be taxed” (that is, assessed pursuant to ch 19 of the Family Law Rules 2004). Finally, in his principal submissions, the husband seeks, in the event he is unsuccessful in respect of his application that the wife pay his costs associated with the appeal, a certificate pursuant to s 9(1) of the Federal Proceedings (Costs) Act 1981 (Cth).

6. The wife provided detailed written submissions in which she opposed the husband’s application for costs.

7. The wife noted she had made a concession in relation to Ground 1 being recognition of a mistake made by the trial Judge. The wife’s submissions noted that the husband was unsuccessful in respect of issues raised in Grounds 2, 3, 4, 5, 10 and 19 of his grounds of appeal. 

8. In her submissions the wife noted:

   11.Before the Full Court the husband adopted a different position to that put before the Trial Judge, namely, that he should be given substantial credit for his initial contribution of the [CS] Account and also his contribution to the funds at the date of separation in the [CS] Account being an entity the existence of which the husband denied.

9. The wife noted that as a result of the husband’s successful appeal the parties’ property was adjusted as to 70 per cent to the husband and 30 per cent to the wife.  The wife’s submissions noted however that on appeal the husband sought there be an apportionment of 80 per cent of the asset pool to him and 20 per cent to the wife.

10. The husband’s counsel referred to an offer to settle filed in the Court on behalf of the wife on 16 December 2005 when the wife sought a 65 per cent adjustment in favour of the husband and a 35 per cent adjustment in her favour.  Her counsel noted:

    16.… This offer was rejected by the husband and in circumstances where there was no counteroffer [sic] filed by the husband.  Accordingly, the disparity between the percentage adjustment that was proposed by the wife in December 2005 and that as ultimately determined by this Honourable Court was 5%.  The wife was significantly closer to the ultimate outcome than was the husband in respect of this application before the Trial Judge and ultimately the orders sought from this Honourable Court.

11. The wife concluded her submissions by noting that both parties had been “substantially unsuccessful”. 

12. The husband’s submissions in reply, which were prepared by the husband himself, canvassed a number of factual matters not before the trial Judge or the Full Court.

13. The husband referred to the wife’s offer made on 16 December 2005 and compared the offer to the amount adjusted by reason of the appeal being allowed and noted: “[f]or this reason the existence of that offer can have no bearing on the determination of costs.” 

Discussion

1. On the re-exercise of discretion by us we found the parties had total assets and liabilities (excluding superannuation) of $1,447,207.00 and superannuation entitlements of $355,498.00.  Both parties were in employment.  We are satisfied that the parties’ financial circumstances are such that either could meet any order for costs which may be made.

2. We accept the general thrust of the submissions made by the wife’s counsel that both parties were substantially unsuccessful in the orders they sought, and that the husband was unsuccessful in a number of issues agitated on the appeal.

3. We see merit in the submissions of counsel for the wife in relation to the issues agitated on appeal.  Whilst the husband was partially successful, the issues on which he succeeded did not arise as a result of the wife’s conduct of the case.  Those issues arose because of errors by the trial Judge. 

4. In these circumstances we are of the view it is appropriate that each party should have certificates pursuant to the relevant provisions of the Federal Proceedings (Costs) Act 1981 (Cth).

5. For completeness, we note we agree with the submissions made on behalf of the husband that the offer of settlement made by the wife in the circumstances of this case is not relevant to our determination of costs. 

I certify that the preceding twenty five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court

Associate: 

Date: 30 April 2007