Rittman & Rittman (Costs) - [2012] FamCAFC 151

FAMILY COURT OF AUSTRALIA

RITTMAN & RITTMAN (COSTS)

[2012] FamCAFC 151

FAMILY LAW – APPEAL – COSTS – the application of s 117AB of the Family Law Act 1975 (Cth) and its relationship with s 117 of that Act – appealable error found in the trial Judge’s assessment of the quantum of costs

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (1983) 44 ALR 607
Colgate-Palmolive Co and Anor v Cussons Pty Ltd (1993) 118 ALR 248
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Ors (1992) 110 ALR 449
Sun Alliance Insurance Ltd v Massoud [1989] VR 8

APPELLANT:

Ms Rittman

RESPONDENT:

Mr Rittman

INDEPENDENT CHILDREN’S LAWYER:

Carter Farquar

FILE NUMBER:

BRC

2571

2009

APPEAL NUMBER:

2011

DATE DELIVERED:

12 September 2012

PLACE DELIVERED:

Sydney

PLACE HEARD:

Brisbane

JUDGMENT OF:

Coleman, Strickland & Ainslie-Wallace JJ

HEARING DATE:

29 May 2012

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

1 April 2011

LOWER COURT MNC:

[2011] FamCA 228

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Galloway

SOLICITOR FOR THE APPELLANT:

Pippa Colman & Associates

COUNSEL FOR THE RESPONDENT:

Mr Waterman

SOLICITOR FOR THE RESPONDENT:

Harrington Family Lawyers

INDEPENDENT CHILDREN’S LAWYER:

No appearance

Orders

The appeal be allowed.
The orders of Barry J made on 1 April 2011 be set aside.
The wife pay 60 per cent of the husband’s costs on an indemnity basis as agreed and in default of agreement as assessed.
The husband file and serve any submissions as to costs of and incidental to the appeal within 21 days of these orders.
The wife file and serve any submissions in response within 21 days of the receipt of the husband’s submissions.
The husband file and serve any submissions in reply within 14 days of the receipt of the wife’s submissions in response.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Rittman & Rittman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NA 29 of 2011
File Number: BRC 2571 of 2009

Ms Rittman

Appellant

And

Mr Rittman

Respondent

REASONS FOR JUDGMENT

Introduction

By a notice of appeal filed on 27 April 2011, Ms Rittman (“the wife”) appeals against an order for costs made by Barry J on 1 April 2011. She seeks an order that, should the appeal be successful, the costs order be set aside, the costs application of Mr Rittman (“the husband”) be dismissed and the husband pay her costs of the appeal. The husband resists the wife’s appeal and seeks to maintain his Honour’s order.
On 1 April 2011, his Honour ordered:
In full and final settlement of costs of and incidental to the hearing of this matter, the Respondent Mother, [Ms Rittman] is to pay the costs including reserved costs of the Applicant Father, [Mr Rittman] fixed at $225,000.
The Independent Children's Lawyer did not wish to appear and be heard on the appeal.

Background

The husband’s costs application was made following a nine day trial relating to both children’s and property matters conducted before the trial Judge. His Honour delivered reasons for judgment on 17 February 2011 and made final orders on 25 February 2011.
In his costs application the husband sought, pursuant to ss 117(2) and 117AB of the Family Law Act 1975 (Cth) (“the Act”), that the wife pay two thirds of his costs fixed at $250,000.
The wife submitted that there should be no order as to indemnity costs but argued that any costs order made should be limited to “those costs causally connected to the adverse findings against the Respondent wife”.
It is unnecessary to set out his Honour’s orders of 25 February 2011 in any detail because no appeal was brought from either the children’s or property orders nor was any extension of time for filing an appeal sought.

The reasons for judgment of the trial judge

The trial Judge considered the terms of s 117AB of the Act which are as follows:
117AB Costs where false allegation or statement made
(1)This section applies if:
(a)proceedings under this Act are brought before a court; and
(b)the court is satisfied that a party to the proceedings knowingly made a false allegation or statement in the proceedings.
(2)The court must order that party to pay some or all of the costs of another party, or other parties, to the proceedings.
His Honour then turned to the case law in relation to the that section. The cases his Honour considered were in order:
·Sharma v Sharma (No. 2) [2007] FamCA 425, a decision of Ryan J.
·Charles v Charles [2007] FamCA 276, a decision of Cronin J.
·Child Support Registrar & Kanavos and Ors (2010) 44 Fam LR 422, a decision of Boland J hearing an appeal as a single judge.
His Honour found that to invoke the operation of s 117AB, a court must be satisfied that an allegation or statement made in the proceedings by a party was false and that the maker of the allegation or statement knew it to be false (at [12]). His Honour also considered that the false allegation or statement must relate to a relevant issue in the proceedings (at [13]).
No challenge was made to the correctness of his Honour’s statement of the application of s 117AB.
His Honour turned at [18] to three particular findings made in relation to the wife’s credibility. These were the authorship and/or the wife’s knowledge of a handwritten letter to a Hospital dated 19 April 2009; the wife’s evidence that the husband had written a cheque to a Mr C for $600,000; and a letter, marked as Exhibit 2, ostensibly written by the husband to the wife in which it was said that the husband had unilaterally cancelled a doctor’s appointment for one of the children.
We will consider these individual matters later in these reasons. However,

his Honour said:
19. I am prepared to find that in each of the three instances quoted above at (i), (ii) and (iii) [the mother] being a party to the proceedings knowingly made a false statement in the proceedings and that such statement was of a relevant nature. I do not propose to make any further findings for the purpose of s 117AB. As I observed earlier it is unnecessary for me to do so as the mandatory impact of s 117AB is invoked once findings under the section have been made.
As part of his consideration of s 117AB matters, his Honour reviewed the credit findings he made about the wife in the primary judgment. He said at [10]: “(i)n doing so it will be obvious that in certain instances I was satisfied to the Briginshaw standard” (emphasis in the original). He continued:
16. It is not necessary to consider whether the Briginshaw standard of proof has been met until the Court is asked to consider the terms of s 117AB. That is to say a Judge may revisit findings made in the reasons delivered on the substantive issues (refer paragraphs 27 to 32 post).
In discussing whether a judge may revisit findings previously made when considering an application pursuant to s 117AB, his Honour respectfully disagreed with the approach taken by Cronin J in Charles & Charles. The trial Judge was of the view that a judge “only has to make finding in any given matter to the standard of proof applicable to that determination”, and that where a judge has not “specified findings as meeting a certain standard of proof” then he or she is “not precluded from revisiting the findings to consider whether a higher standard of proof is established”.
His Honour went on to consider counsel for the wife’s submission that the trial Judge’s adverse findings as to the wife’s credit were only one relevant factor that must be weighed in the exercise of the court’s discretion. His Honour was of the opinion that a judge is “required to have regard to all relevant factors set out in s 117(2A) but may decide to award costs based on one or more of those factors”.
His Honour found that relevant to his determination were the financial circumstances of the parties; the conduct of the parties; and whether any party to the proceedings had been wholly unsuccessful in the proceedings (at [30]).
As to the financial circumstances of the parties, his Honour extrapolated from the evidence before him that the wife’s liability for legal costs was in the order of $470,805 as against those of the husband of $375,691 (at [43] and [44]).
His Honour observed that, as a result of the property orders he made, the wife would receive $432,884 and, if she was ordered to pay costs in the amount as sought by the husband of $250,000, she would be left with $182,884 (at [38] and [39]).
Although his Honour recognised that a costs order made in favour of the husband would leave the wife “destitute”, his Honour considered that her approach and attitude to the litigation had brought this about (at [45]).
Turning to the conduct of the parties, his Honour said:
55. The inappropriate conduct of [the mother] throughout the litigation permeated this case from start to finish. It commenced with deliberately false allegations that she had been the victim of assault on the day of separation (1 January 2009). A short time later, although it was asserted it had occurred in late December 2008, the allegation was made [the father] had signed a cheque for $600,000 payable to [Mr C]. The misleading and deceptive conduct continued up to the annexing of the fabricated documents to her trial affidavit, a matter of only weeks prior to the hearing. [The mother’s] behaviour involved false complaints to the police and misleading, spurious complaints to the Department of Communities (Child Safety Services).
His Honour then considered whether the wife had been “wholly unsuccessful in the proceedings” and at [58] set out his reasons as to why she had been wholly unsuccessful in relation to all significant issues in dispute.
At [63] and following, his Honour considered the issue of indemnity costs and correctly appreciated that an order of that character should only be made in exceptional circumstances and the court should not too readily depart from the principle that in family law matters each party should bear his or her own costs. He concluded that this was an exceptional case and at [66] set out his reasons for so concluding.
His Honour then considered the quantum of the costs order to be made and referred to r 19.18 of the Family Law Rules 2004 (Cth) which provides a method for calculating costs (at [69]). His Honour indicated that a judge could, in assessing costs, take into account his or her own experience of awarding and assessing costs; that costs in excess of $300,000 might be reasonably expected in a matter lasting nine days with a large number of witnesses and lengthy complex exhibits; and that a judge can assess whether costs are reasonable by comparing them with the costs incurred by the other party (at [70]).
As to this last matter, his Honour observed that although the husband went to considerable lengths to rebut the allegations made against him by the wife, by calling witnesses and presenting evidence, his costs were less than those of the wife.
His Honour clearly acknowledged that the purpose of a costs order is not punitive but said that the wife’s conduct as he had found it to be was deserving of censure and such as to bring the matter within the exceptional circumstances in which an award of costs on an indemnity basis was appropriate (at [72]).
Observing that the husband’s costs claim was 30 per cent less than his costs and wishing to avoid further expense and delay which his Honour found would attend any assessment of costs, his Honour proceeded to fix costs at a set amount which was 60 per cent of the husband’s costs.
Finally, his Honour considered costs that had been reserved from earlier in the proceedings and ordered that the wife pay those costs on a party and party basis. His Honour indicated that these costs would be “subsumed” in the order of $225,000 that he proposed to make.
His Honour said:
90. Having determined that s 117AB operates there is sufficient compliance with the legislative mandate if an order is made in general terms pursuant to s 117(2A). I do not find it necessary for separate costs orders to be made under s 117(2A) as distinct from

s 117AB. The only requirement is once s117AB becomes operative, a Judge is required to order at the very least that some of the costs of the other party be paid.

The appeal

This appeal raises a number of issues about the application of s 117AB of the Act and its relationship with other provisions of s 117.

Ground 1

Ground 1 asserts:
1. His Honour erred in law in applying criteria from s.117(2A) in consideration of what costs order to make under s.117AB when he did not make an order under s.117(2).
Section 117AB was repealed on 7 June 2012. Its application is now entirely academic. At the time of the hearing and appeal, it was still in force and we will determine the appeal on that basis. If the wife’s appeal succeeds, we would not be able to re-exercise the discretion on the basis that s 117AB is to be addressed nor could a new trial Judge if we remitted the matter for re-hearing. If the appeal is allowed and the order for costs set aside, any consideration of costs would have to be determined on the basis of the present provisions of the Act.
It is to be first observed that, by its terms, s 117AB is mandatory. It does not however provide any guidance as to the nature and extent of any costs ordered once the section is enlivened or how the ambit and terms of such an order are determined.
It was submitted that if a court is satisfied that the criteria of s 117AB had been met, costs are then “at large” and no recourse could be had to s 117(2A). Indeed, it is suggested that, having found s 117AB enlivened, a judge is prohibited from considering the criteria within s 117(2A).
We reject that argument. No authority was cited as supporting this proposition and a reading of s 117 as a whole does not support it. We do not suggest however that the trial Judge was required to have regard to s 117(2A) once

s 117AB was enlivened.
Section 117 provides to the extent that it is relevant:
117 Costs
(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;
(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.
…
The clear legislative intention in relation to costs in this court is that each party should bear his or her own costs. Section 117(2) provides a discretion to depart from that principle and make such costs order the court thinks just if the circumstances justify doing so.
A determination whether to make a costs order pursuant to s 117(2) requires factors listed in s 117(2A) to be considered.
Although making an order is mandatory once s 117AB is enlivened, the terms of such order involve the exercise of discretion. As is clear from their terms, the provisions of s 117(2A) do little more than codify the matters to which a judge could have regard when determining the ambit and terms of an order pursuant to s 117AB. Thus it is open to a trial Judge applying s 117AB to determine the costs order that is to be made by reference to the criteria in

s 117(2A). Accordingly there is no merit in this ground of appeal.
It was argued that his Honour “did not make an order under s.117(2)”. As we have noted, at [90] of his Honour’s reasons, it seems tolerably clear that that is exactly what his Honour did. It is to be recalled that his Honour said:
90. Having determined that s 117AB operates there is sufficient compliance with the legislative mandate if an order is made in general terms pursuant to s 117(2A). I do not find it necessary for separate costs orders to be made under s 117(2A) as distinct from s 117AB. The only requirement is once s117AB becomes operative, a Judge is required to order at the very least that some of the costs of the other party be paid.
We are far from persuaded that his Honour did not make an order pursuant to s 117(2A). However, in the result, nothing turns on this.

Grounds 5 and 8

Grounds 5 and 8 respectively assert:
5. His Honour erred in ordering costs not on a compensatory basis, but punitively, thereby misunderstanding and misapplying s.117AB, and certain of the criteria in s.117(2A) (though these grounds elsewhere assert that these criteria have no application).
8. His Honour erred in law in censuring the perceived (mis)behaviour of the Appellant by an award of costs thereby making a punitive costs order and not a compensatory one.
Both of these grounds may be considered together as their common theme is that the trial Judge erred by making a “punitive” costs order.
His Honour said:
72. I find that [the mother’s] behaviour, such as:
·falsely creating documents to portray [the father] in a bad light;
·knowingly making false allegations, such as the sending of documents to [L] and Dr [M], making it appear as if the documents were from Mr Rittman;
·making false complaints to the police, such as the false complaint of assault outside the [N] Police Station; and
·falsely denying allegations such as the occasion [the mother] exposed her breasts while at the same time abusing [the father’s] partner;
pervades every aspect of the case. Such behaviour is deserving of censure. I accept the award of costs is a compensatory exercise and not a punitive one but I find [the mother’s] behaviour was so extreme and so gross, it brings this case within the exceptional category to justify an award of costs on an indemnity basis.
It was argued in the wife’s summary of argument at paragraphs 35 and 36 that notwithstanding his Honour’s acceptance of the principle that costs were to compensate not punish:
35. …the tenor of the judgment makes it plain, it is respectfully submitted, that his Honour’s intention was not to compensate but in fact to punish:
(a)There was no calculation of what the respondent was being compensated for;
(b) There was no dissection by his Honour of the extent to which the trial was enlarged by any of the three matters that he indicated enlivened s.117AB;
(c) The judgment is organised in a manner that suggests conflation of the last mentioned section with s.117(2A).
36. It is submitted, even if a consideration of the criteria in s.117(2A) is apt or may assist in an assessment of costs, its application is limited, though its employment suggests that his Honour has enlarged his consideration of the defaults of the wife beyond those set out as his findings in paragraph 18 of the reasons.

We do not accept that by reference to any of the matters referred to in the submissions or in generally considering his Honour’s reasons, the trial Judge misdirected himself as to the basis for ordering costs.
It is instructive to consider the explanatory memorandum to the enactment of s 117AB and the second reading speech.
In a second reading speech on 2 March 2006, the Commonwealth Attorney General said:
The bill seeks to address concerns about false allegations and false denials by the inclusion of the new cost provision that applies where a person has knowingly made false allegations or a false statement—and this clearly also covers false denials. This provision implements a committee recommendation. It is appropriate, given the high test that must be satisfied: a person must knowingly make the false statement. In such circumstances criminal penalties could also be applied.
It is abundantly clear that the purpose of the section is to compensate a party for the expense of meeting what are found to be knowingly false allegations or statements. It is also clear to us that the conduct to which this section is directed is, rightly, conduct that ought to be the subject of censure. Given the findings made by his Honour as to the wife’s conduct and its effect on the trial, it is little wonder that his Honour observed that it was worthy of censure. However that in our opinion falls short of indicating an intention to punish by costs rather than compensate. The terms of s 117AB make clear that conduct worthy of censure needs to be established to enliven the section. To equate censure with punishment, as counsel for the wife does, is in our view erroneous. The fact that an order may have a “punitive” impact upon a party’s financial position does not of itself render the order “punitive” as that term is understood in law.
As to the asserted failure by his Honour to calculate “what the respondent was being compensated for”, we do not accept that the section requires such a “calculation”. His Honour set out in detail the matters which, in his view, called s 117AB into play and, in the context of s 117(2A), considered the matters relevant to determining the extent to which the father should in fact be “compensated” by the court’s order.
It was further contended that in determining costs, there was no “dissection by his Honour of the extent to which the trial was enlarged by any of the three matters that he indicated enlivened s.117AB”.
As we understand this argument, it is that having found certain matters to be of an order of seriousness so as to call s 117AB into play, his Honour was restricted in his consideration as to costs to the effect that those matters, and those matters alone, had on the length of the trial.
We do not accept this contention for two reasons.
First, the wording of s 117AB does not lend itself to that interpretation.
Secondly, while in some instances a judge may well be able to identify the extent to which an allegation or statement of a kind to which s 117AB refers has attenuated a trial, it seems to us that in many more cases it would be difficult, perhaps impossible for a judge to “dissect” a trial in the way suggested in the submission.
It seems then to us that while it may be appropriate in some cases for a trial Judge to “dissect” out the conduct which enlivened s 117AB and determine the extent to which it extended the trial or directly caused costs to be incurred meeting the knowingly false assertion, it will not always be possible. In any event, it is clear from his apportionment of the costs that the trial Judge did “dissect” the trial in the manner counsel for the wife submits that he should have.
The approach taken by the trial Judge in this matter which was to consider the impact of the “three particular matters” which he found enlivened the section together with the relevant matters under s 117(2A) was open to him. There is no merit in grounds 5 or 8.

Ground 6

Ground 6 challenges his Honour’s analysis of the s 117(2A) criteria and is in the following terms:
6. In any case, his Honour erred in his analysis of those criteria:
(a) by giving no, or no sufficient, consideration to the impact that the costs order would have on the Appellant, and indirectly upon her ability to provide support for the children of the marriage and for herself;
(b)by allowing the expression “conduct” where it appears in s.117(2A)(c) to comprehend only those matters about which his Honour had made credit findings against the Appellant, and not the much more extensive meaning demanded by the sub-section;
(c) by failing properly to consider the practical meaning of the words “wholly unsuccessful in the proceedings” in the circumstances of a case where the placement of a child determined the property settlement percentage division, and where the report of the family consultant, and her oral evidence, recommended placement of the child primarily with the Appellant.
Financial circumstances of the parties
Counsel for the wife argued that a proper consideration of the financial circumstances of each party should have led his Honour to the conclusion that a costs order of the magnitude made would have “such an impact upon the wife as to compromise her parenting generally”. It was further argued that in circumstances in which there was no calculation as to “a degree to which the wife’s stated defaults occasioned costs to the husband, a determination… that the order would be punitive, rather than compensatory has led his Honour into error”. It was argued that his Honour’s finding that the costs order would leave the wife “destitute” was not a proper consideration of the financial circumstances of the parties.
First, we observe that we have not been referred to any evidence that the trial Judge’s order for costs would “compromise” the wife’s parenting ability.
Secondly, his Honour was acutely aware of the impact of a costs order of the magnitude of that sought by the husband would have on the wife. His Honour said:
45. The fact that a costs order will leave [the mother] destitute is a most unfortunate outcome but it is a matter for which she must accept full responsibility. She is the one who has litigated in a win at all costs fashion. It is most unfortunate that [L] will be unable to attend the school she has previously attended, but I would be of the view it is likely she would be unable to attend this school regardless of whether the Court elected to make an order for costs (indemnity costs or otherwise).
46. The full extent of [the mother’s] overall liability has not been disclosed, but that is a matter for which her legal representatives and [the mother] must take responsibility. Whilst I consider the financial circumstances of the parties to be a relevant consideration in considering the costs issue, it is not an overwhelming consideration notwithstanding the effect of any order would be to leave [the mother] with little or no assets. A litigant must always be conscious of the possible consequences of an adverse costs order. It has oft been observed an impecunious litigant cannot litigate with impunity. A similar observation may be made about a person who will become impecunious if the Court were to make an adverse costs order.
We observe that these comments came immediately after his Honour’s examination of the costs incurred and projected to be incurred by the wife as a result of the litigation against the amount she would expect to receive by way of property settlement with the husband. They also follow his Honour’s observations:
35. In the course of submissions [the father’s] Counsel made the telling point that after the parties exchanged their cost details pursuant to the Family Law Rules, it was evident that a significant sum of money had been paid by [the mother] with no obvious source being disclosed.
36. At paragraph 5.8 of the written submissions on [the father’s] behalf it is noted that between the 19 February 2009 and the 6 September 2010 Exhibit 31 reveals a sum of $80,764 was paid by [the mother] towards her legal fees at a time when she was subsisting on Centrelink benefits. There is no corresponding liability revealed in financial statements or affidavit form to show that she borrowed such funds from one or more sources.
37. I note that in Exhibit 31 there does not appear to have been any compliance with Rule 19.04(5), namely disclosure of the source of the funds. It may be that the various payments specified as summarised in paragraph 5.8 of [the father’s] Counsel’s written submissions quoted above, all came via [the mother’s] account, in which case she has access to income which she has not otherwise disclosed. If however the funds were being deposited on her behalf by others, then sub rule (5) should have applied and disclosure made.
Although so doing was putting the matter at its highest for the wife, it was argued that to comment that the order would leave the wife “destitute” did not amount to a proper consideration of the financial circumstances of the parties. This submission ignores his Honour’s findings quoted above and that his Honour had heard property settlement proceedings between the husband and the wife and from [498] of the reasons of 25 February 2011 made an extensive examination of the parties’ financial circumstances as part of his determination of the financial matters between them. His Honour’s reference in paragraphs [45] and [46] must be read against that background. The wife’s financial circumstances did not preclude the making of a costs order and it was reasonably open to the trial Judge to conclude that they should not disentitle the husband to the order to which he was otherwise entitled. We find no force in this argument.
Conduct
Section 117(2A)(c) is in the following terms:
(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…
It was argued for the wife that, in error, his Honour “enlarged the scope of the expression ‘conduct’ where it appears in s.117(2A)(c) to matters well beyond that which the sub-section can bear”. It was further submitted:
…[t]he relevant part confines conduct to the parties’ behaviour as litigants, namely with respect to documentation, disclosure and interlocutory matters generally. There is no evidence in the reasons, nor may any reliably be inferred that the wife conducted herself as a litigant in ways productive of costs. Instead, it is apparent when the reasons are taken as a whole, that his Honour has enlarged the meaning of the word “conduct” to take into account what he found to be the behaviour of the wife as a wife and thus not only imported questions of fault into the proceedings but then invested a consideration of costs liability with a dimension not authorised by law. (emphasis in the original)
To the extent that conduct of a party must be conduct in relation to the proceedings (our emphasis), there was nothing that would preclude his Honour from taking into account the wife’s conduct as he found it in creating and propounding false documents and making baseless allegations. It would unnecessarily confine the section to restrict it to non-compliance or intransigence in relation to procedural matters. We reject the argument that the wife’s conduct as found by his Honour was other than conduct “as a litigant”.
Wholly unsuccessful
His Honour compared the competing applications of the husband and wife against his findings and he came to the view that the wife had been wholly unsuccessful. He said:
58. At paragraph 22 of [the mother’s] written submission it is noted:
“22.The applicant husband contends that section 117(2A)(e) is relevant because the wife was wholly unsuccessful in the proceedings. This submission cannot be sustained. A perusal of the case summaries reveals that both parties have had mixed success.”
·[The mother] sought an order for joint parental responsibility and that she be given sole responsibility for medical issues. [The father] sought an order for sole parental responsibility. The Court made an order for sole parental responsibility.
·[The mother] sought the child reside primarily with her for 9 nights out of 14. [The father] sought that the child reside with him for 11 nights out of 14 and for half the holidays. The Court made an order in the terms sought by [the father].
·In relation to property settlement [the father] sought an order that the property be divided equally. [The mother] sought a division of 80/20 per cent in her favour. The Court made an order for an equal division of property.
His Honour further said:
60. The reality is that in a lengthy judgment no adverse findings were made against [the father]. Adverse findings were made against [the mother]. The findings were probably the strongest I have made against any litigant in a lengthy judicial career. I do not accept that perusal of the reasons reveals that both parties have had mixed success.
It was argued that the wife’s position adopted before his Honour on the children’s issues and in relation to property was a reasonable one and could not be aptly considered “wholly unsuccessful” in those circumstances. Significantly, counsel for the wife did not refer us to any issue in respect of which it was asserted that the wife had been “successful”.
The term “wholly unsuccessful” is not one of science, capable of being determined by some forensic analysis. In determining this issue, his Honour considered every issue in which the wife’s position competed with that of the husband and in respect of each contested issue, his Honour found in favour of the husband. We find no fault with his Honour’s approach to this issue.

Ground 9

Ground 9 asserts that his Honour erred in finding:
…that the Appellant’s behaviour justified an award of costs on the indemnity basis when that behaviour (as found) was not shown to have been productive of costs, and when such a finding indicated a misunderstanding by his Honour of the function of costs orders, particularly those awarding costs on the indemnity basis.
Counsel argued:
…it is apt here, to remember that if costs are compensatory then only that which is lost to the husband by those matters found by his Honour to justify an order for costs can found such an order. The husband made no attempt to isolate his costs and the whole of his application is consummate only with the submission that the whole of the wife’s defence on his application was unmerited.
The law concerning the award of indemnity costs is well settled. In Colgate-Palmolive Co and Anor v Cussons Pty Ltd (1993) 118 ALR 248, Sheppard J after referring to the “settled practice” of courts when making an order for costs, to express that order as a payment on a party and party basis, said at page 257:
…there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule…
Further, his Honour said at page 257:
…Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud… evidence of particular misconduct that causes loss of time to the court and to other parties…
The trial Judge said as to the principles to be considered in determining whether to order indemnity costs:
64. I do not need to consider these cases other than to reiterate that in making the orders I am about to make, I am fully appreciative that indemnity costs are only made in exceptional circumstances and the Court should not depart lightly from the ordinary rules relating to costs between party and party.
65. I propose to find that this is an exceptional case and one which falls within the range where it is appropriate to make an award of indemnity costs.
As a statement of principle, we find nothing thus said by the trial Judge to have been erroneous.
His Honour then listed the factors which led him to that conclusion. Those factors provided an ample foundation for his Honour’s conclusion that “exceptional circumstances” had been demonstrated.
We do not accept that his Honour misunderstood the circumstances in which an order for indemnity costs might be made. If that were not already abundantly clear from the parts of his reasons already quoted here, it is put beyond doubt when after accepting that the proceedings were “emotionally charged” he said:
51. This can never be any justification for a litigant to manufacture evidence to cast the other party in a poor light, nor to engage in a “concerted campaign of lies and deceit.” To suggest that such criticisms are, “insufficient to justify a costs order when weighed against other relevant considerations”, is an inappropriate submission which minimises the seriousness of such conduct.
As we have said, because his Honour did not expressly quantify the costs directly flowing from the wife’s conduct of the litigation does not militate against a costs order being made.
His Honour correctly in our view found that:
17. It is not necessary to make findings of a specific amount under

s 117AB although a Judge would have the discretion to do so…
His Honour referred to the expense incurred by the husband in gathering and presenting evidence to refute the “numerous false allegations” made by the wife against him and said:
49. …I have already made observations in the earlier reasons he was entitled to defend himself against false allegations of violence, inappropriate behaviour of a sexual nature toward his daughters and the host of other misleading allegations that have been made.
It seems to us that this is the precise type of case in which an exact “dissection” of how the false allegations have produced costs through the calling of evidence to refute them would be difficult, and, in our view nothing that has been put to us persuades us that it is necessary, although, as we have said, in some cases it might be readily and helpfully done. No statutory provisions or authority to which we have been referred imposed an obligation of further or greater “dissection” upon the trial Judge.

Grounds 10 and 11

Grounds 10 and 11 challenge the adequacy of his Honour’s reasons for decision and assert as follows.
10. His Honour erred in awarding reserved costs to the Respondent when he gave no or no adequate reasons therefor.
11. His Honour gave no sufficient reasons for his findings and orders and was otherwise wrong in law and in fact, such that the exercise of his discretion has miscarried.
The question of reserved costs was considered by his Honour from [79] and relate to a hearing on 11 and 12 June 2009 when the wife proposed that the husband spend four hours each week with the child, O and that the time be supervised. It seems that his Honour ordered that the husband spend 12 hours each Saturday and Sunday with the child. He made no order that the time be supervised. The matter was adjourned to 20 July 2009 for further hearing.
His Honour noted that when the hearing resumed, the wife sought a condition that time spent between the husband and the child be “that he attend with her on 16 specified medical specialists” (at [81]). His Honour declined to make that order.

His Honour said:
83. Costs were sought by [the father’s] legal representatives when the decision was handed down on 30 July. I reserved costs to the trial. I am firmly of the view that [the father] would be entitled to his costs on a party and party basis for the hearings on the 11 June and 12 June 2009 and on the 20 July and 30 July 2009.
He further referred to an application by the wife made in August 2010 in which she sought that funds being held by a solicitor in trust be released to pay the older child’s school fees in advance. This was dismissed.
In relation to this application, costs were reserved to the trial Judge.
His Honour said:
88. Having regard to the issues for determination on that occasion and the orders sought by [the mother], I would be minded to order [the mother] to pay [the father’s] costs on a party and party basis of and incidental to that application.
A successful challenge to the adequacy of a trial Judge’s reasons must establish that his or her reasoning process is not discernible from the reasons given. We also note what was said in Sun Alliance Insurance Ltd v Massoud [1989] VR 8, where the Full Court of the Supreme Court of Victoria, said, per Gray J, at page 18:
…The adequacy of the reasons will depend upon the circumstances of the case…
In this instance, his Honour was both the trial Judge and the judge who considered the wife’s pre-trial applications. His reasons in relation to the reserved costs must be read in that context and in the context of his reasons in the principal suit. His reasoning process is discernible and we find no error. Equally we find no basis for the challenge in Ground 11 either in relation to the principal costs order or in relation to the reserved costs.

Grounds 2, 3 and 7

Grounds 2 and 3 challenge his Honour’s findings in relation to the matters relied on to enliven s 117AB and as to the other matters referred to by him in considering the costs application. It is convenient to consider them together.
Ground 2 asserts:
2.His Honour erred in law in determining retrospectively that he had made findings in accordance with s.140 of the Uniform Evidence Act (sic) when there was no expression of such findings in the primary judgment.
In dealing with the three particular matters which, in his Honour’s opinion enlivened the application of s 117AB he said in respect of each matter the following words:
18. …I was satisfied then and am satisfied now to the Briginshaw standard that…
Counsel’s written submissions referred to arguments put to his Honour in the course of the costs hearing and in particular:
Lastly, it was submitted for the learned trial Judge, and it is here, the findings of the trial Judge should not be taken to rise above the balance of probabilities in the absence of an express finding that the Briginshaw standard had been met.
As we understood the arguments advanced by the appellant two points emerged in relation to his Honour’s findings; whether his Honour was entitled to revisit his findings and determine whether he was satisfied as to them taking into account the gravity of the allegation and the consequences to flow from the finding and whether his Honour was required in making those findings in the primary judgment to expressly refer to Briginshaw.
It seems to us that his Honour was well aware of the terms of s 140 of the Evidence Act 1995 (Cth). We also observe that the standard of proof required of the matters to which his Honour referred was the civil standard, the balance of probabilities not, as the appellant’s written submission would seem to indicate some other, higher standard.
As was said in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltdand Ors (1992) 110 ALR 449 at 449, the majority of the High Court said:
…The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove… (footnotes omitted)
We see no impediment to a judge returning to primary findings to consider whether they are applicable to another section of the act provided doing so does not result in inconsistent findings of fact or findings of fact which are unsupported by earlier findings. However, it is unnecessary (if this be the thrust of the submission) that some incantation or reference to Briginshaw be imported into the reasons before it can be said that the findings were reached with a particular level of satisfaction.
In any event, having regard to his Honour’s findings in the principal judgment on the matters to which he particularly referred in determining that s 117AB was enlivened, the language he used in making those findings and their context in the judgment as a whole are utterly persuasive that his Honour was acutely aware of the gravity of the findings he made. For example in dealing with the letter of 26 July purporting to be from the husband cancelling a doctor’s appointment for one of the children, his Honour said:
157. It was in [the mother’s] interest and [the mother’s] interest only to cancel Dr [C’s] appointment. [The father] at that stage did not have any knowledge that there would be attempts to cancel Dr [C’s] appointment notwithstanding the assertion in the letter from [the mother’s] solicitors.
158. The document, exhibit 2, is a digitally fabricated document. The evidence indicates to me in an overwhelming fashion that the only person who could be responsible for the fabrication is [the mother] or someone acting on her behalf.
His Honour made no express reference to Briginshaw however that is not in our view decisive. It is important to consider not only what his Honour said when making the particular findings but the language he used and the context of the reasons as a whole. To repeat, it is abundantly clear that his Honour was well aware of the seriousness of the findings he was making. As is apparent from his reasons, this was not a matter in which his Honour was attempting to resolve competing versions of the one event but, as he said in his reasons of

25 February 2011:
228. This is not a case of a litigant engaging in a degree of hyperbole. It is not a case of a litigant mistakenly putting her own interpretation on a remembered event…
The fact that the trial Judge did not, in the primary judgment, make findings in terms of s 117AB is unsurprising and was not erroneous. To have done so would in reality have “put the cart before the horse”. The trial Judge had no reason to categorise his findings in the primary judgment in the way in which he did and, in our view was able to, in the costs judgment. We see no reason in law or logic for accepting the proposition that when giving judgment in substantive proceedings, a trial Judge must make findings beyond those necessary to determine the substantive proceedings, and which potentially only have relevance to subsequent proceedings arising out of or in relation to the determination of the primary issue. In considering the issue of s 117AB his Honour was required to determine whether the wife had knowingly made a false statement in the proceedings; he had already made those findings and to revisit them for the purposes of considering whether a costs order was mandated was, in our view entirely unremarkable.
Turning to the three issues that his Honour identified as enlivening s 117AB. The first of those related to a letter written to a Hospital on 19 April 2009. At [201] to [202] in the principal judgment, his Honour considered this matter.
On 16 April 2009, an administrative officer of the hospital wrote to the wife:
In order to record yourself as the next of kin for your daughters, [L] and [O], would you kindly confirm in writing that you are the legal guardian for your children.
On 19 April 2009, a letter was sent to the administrative officer:
Please be advised that [L] and [O] current address (my driver’s licence attached) please be advised that their postal address is as above… Please be advised that I [Ms Rittman] am the legal guardian for the above girls.
The wife denied that she had written the letter but suggested that the handwriting looked like that of one of her friends, Mr DD. She denied asking him to write to the hospital on her behalf.
His Honour found:
202. Having heard the cross examination of [the mother] I am satisfied that it is more likely than not the letter was written by Mr [DD] a friend of [the mother], but was dictated by her to Mr [DD] and she well knew the contents of the letter…
His Honour referred to the wife’s evidence as to how Mr DD came to write the letter and found it to be “inherently implausible”. His Honour then set out the reasons why he came to the view that he did, including the annexure to the letter of the wife’s drivers licence and a notice from Australia Post for the renewal of the post office box to which the letter referred. Across the notice the word “paid” had been written. His Honour concluded: “(i)n all the circumstances it is untenable for [the mother] to deny any knowledge of this letter being written to the … Hospital”.
His Honour found that the wife was not a reliable witness. He made many findings adverse to her credit, some of which we have referred to earlier in these reasons.
The cheque to Mr C
The wife alleged that the husband had written a cheque to Mr C for $600,000. The husband denied that he had. His Honour found that it was “far more likely” that the wife had completed a cheque that the husband had signed earlier. At [203] his Honour sets out the basis for this finding. At [523] and following, in dealing with the property issues, his Honour refers to the wife’s evidence on this point and finds her account to be “improbable”. His Honour observed that although Mr C was, at one point a party to the proceedings, he had not filed any evidence and had discontinued his participation. He was not called by the wife to support her claim.
The wife agreed that she gave a cheque to Mr C for $600,000 signed by her and the husband.
His Honour referred to this as follows:
438. The cross examination of [the mother] became more and more absurd as it progressed. [The mother’s] evidence was that the cheque for $600,000 said to have been signed by [the father] with full knowledge that it was a cheque for $600,000 being paid to [Mr C] was signed on the 27 December 2008, four days before separation. There is no evidence of any demand of any kind being made by [Mr C] for such an amount. There is not the slightest evidence as to how the said $600,000 was said to be calculated. What is abundantly clear is [the mother] now accepts that no money is owing to [Mr C] and he has withdrawn any claim.
Letter of 26 July 2010
This letter, ostensibly from the husband to the wife, said that the husband had cancelled an appointment for the child, O with one of her doctors. The husband accepted that the handwriting on the letter was his but denied that he had written the words in the final sentence about cancelling the appointment. Evidence of document experts persuaded his Honour that the letter was fabricated with the words about cancelling the doctor’s appointment having been added by digital manipulation and that other words had been transposed from one part of the letter to another.
His Honour found at [144] and following that the question of the doctor’s appointment was contentious between the parties. His Honour found at [157] that it was in the wife’s interests to cancel the appointment. He concluded that the only person who could be responsible for the fabrication was the wife or someone acting at her behest (at [158]).
Ground 3 challenges the findings on which his Honour relied to invoke the provisions of s 117AB and is as follows:
3. In any event, the “three particular findings” said to be the basis of the application of s.117AB are/were:-
(a) unsupported by the evidence;
(b) not findings of allegations or statements made “in the proceedings”; and
(c) in the first two instances, irrelevant.
This ground is allied to the matters raised in Ground 7 and it is convenient to consider them together.
Ground 7 asserts:
7. His Honour erred in law, and in fact, by making findings in the primary judgment (reflected in the costs judgment) that were not open to him, given the lack of adequate challenge to the Appellant in cross-examination on the matters the subject of the findings, and/or which were not reasonably open otherwise, concerning the matters of:-
(a) a cheque payable to one [Mr C];
(b) supposedly false complaints to the police and the Department of Communities (Child Safety Service);
(c) fabricated documents;
(d) documents sent to the child [L] (or her school) and to

Dr [M]; and
(e) supposedly false denials of the Respondent’s allegations.
Counsel for the appellant argued that there was insufficient evidence to enable his Honour to make the findings he did. First we note that in order to challenge his Honour’s fact finding on appeal, counsel must persuade us that there was no evidence on which the finding could have been made. That another judge may have come to a different conclusion is not to the point. In relation to all of the findings made by his Honour we are satisfied that there was abundant evidence on which he could come to the conclusions he did.
Secondly, the appellant’s argument on the failure to challenge the wife in cross-examination was, in our view misguided. It was argued that the findings should not have been made without there being “the making of a clear allegation against her (the wife)” and “direct, precise cross-examination concerning that allegation”.
In this regard we note that it was not suggested that the wife had not been cross-examined on the matters to which this ground refers but that it was insufficient. In written argument counsel, by way of illustration, pointed to the cross-examination of the wife on the question of the affidavits and other court documents sent to the child, L purportedly under the hand of the husband and in relation to which his Honour found that it was the wife who had sent the documents. It was asserted: “(t)he independent children’s lawyer did (faintly) ask (but not put) a question about the creation of the letters and was met with the wife’s denial”. In our view nothing more was required. We reject this argument.
This argument, when exposed in oral submissions, did not take into account the effect of his Honour’s other findings about the wife’s credit and about evidence which his Honour took into account to support his findings. Accordingly we reject the contention that the findings were unsupported by evidence.
Nor do we accept the assertion made in the written submissions that his Honour’s view about the interface between affidavit evidence and the rule in Browne v Dunn was incorrect.
In his primary judgment, his Honour directly considered the submission by the wife’s counsel on the rule in Browne v Dunn at [432]. His Honour set out the cross-examination of the wife on the letter purportedly written by the husband (exhibit 2) and said:
433. I have perused the cross examination of [the mother]. It is abundantly clear that Counsel was properly putting to the witness that the letter of April 2009 (exhibit 1) was a fabrication. [The father] had already given oral evidence to that effect.
…
436. The rule of Browne v Dunne (sic) hardly applies in an age where we have trial by affidavit. Just prior to trial [the father] received [the mother’s] affidavit which for the first time annexed exhibits 1 and 2. He immediately challenged the authenticity of such documents. He may not be able to say, proof positive, who was the author, but he was certainly able to say that he was not. Where such an assertion is made as it was in his evidence in chief, the only reasonable inference that could be drawn is that [the mother] is responsible for the fabricated documents as they have emanated from her possession. I reject the submissions made by [the mother’s] Counsel relying on the authority of Browne v Dunne (sic).
In Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (1983) 44 ALR 607, Hunt J said at page 623 to 624 in respect of an argument raising the obligation of a party to comply with the rule in Browne v Dunn:
…It has in my experience always been a rule of professional practice that, unless notice has already clearly been given of the cross-examiner's intention to rely upon such matters, it is necessary to put to an opponent's witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings. Such a rule of practice is necessary both to give the witness the opportunity to deal with that other evidence, or the inferences to be drawn from it, and to allow the other party the opportunity to call evidence either to corroborate that explanation or to contradict the inference sought to be drawn. That rule of practice follows from what I have always believed to be rules of conduct which are essential to fair play at the trial and which are generally regarded as being established by the decision of the House of Lords in Browne v Dunn (1894) 6 R 67.
No doubt because that decision is to be found only in an abscure series of law reports (called simply “The Reports” and published briefly between 1893 and 1895), reliance upon the rules said to be enshrined in than decision seems often to be attended more with ignorance than with understanding. The appeal was from a defamation action brought against a solicitor and based upon a document which the defendant had drawn whereby he was to be retained by a number of local residents to have the plaintiff bound over to keep the peace because of a serious annoyance which it was alleged he had caused to those residents. Six of the nine signatories to the document gave evidence on behalf of the defendant that they had genuinely retained him as their solicitor and that the document was really intended to be what it appeared on its face to be. No suggestion was made to any of these witnesses in cross-examination that this was not the case and, so far as the conduct of the defendant's case was concerned, the genuineness of the document appeared to have been accepted. However, the defence of qualified privilege relied upon by the defendant depended in part upon whether the retainer was in truth genuine or whether it was a sham, drawn up without any honest or legitimate object but rather for the purpose of annoyance and injury to the plaintiff. This issue was left to the jury. The plaintiff submitted to the jury that the retailer was not genuine and was successful in obtaining a verdict in his favour. In support of that submission, the plaintiff asked the jury to disbelieve the evidence of the six signatories who had said that the retainer was a genuine one.
Lord Herschell LC said (at 70-71):
“Now, my Lords, I cannot help saying that it seems to me to be absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness is not speaking the truth on a particular point, to direct his attention to the fact by some questions put in cross-examination showing that that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged, and then, when it is impossible for him to explain, as perhaps he might have been able to do if such questions had been put to him, the circumstances which it is suggested indicate that the story he tells ought not to be believed, to argue that he is a witness unworthy of credit. My Lords, I have always understood that if you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and, as it seems to me, that is not only a rule of professional practice in the conduct of a case, but is essential to fair play and fair dealing with witnesses.”
His Lordship conceded that there was no obligation to raise such a matter in cross-examination in circumstances where it is “perfectly clear that (the witness) has had full notice beforehand that there is an intention to impeach the credibility of the story which he is telling”…

Justice Hunt analysed cases in which the “rule” had been formulated or re-formulated and said at page 630:
…In many cases, of course, counsel for the party calling the witness in question will be alert to the relevance of the other material in the case to be relied upon for the challenge to the truth of the evidence given by his witness or to the credit of that witness, and in those circumstances counsel will be able to give his witness the opportunity to deal with that other material in his own evidence in chief… But at some stage during the course of the evidence, the witness must be given a proper opportunity to deal with the material to be relied upon for the challenge…
In LC v TC (1998) FLC 92-803, Baker J said at [38] and [39]:
38. …it must be said that the rule in Browne v Dunn does not apply where the witness is on notice that the witness’s version of events is in contest. That notice may come from the pleadings or the other side’s evidence or the other side’s opening; it may even come from the general manner in which the case is conducted. In general, however, this exception to the rule should only operate where the issue is a fairly clear and obvious one (see Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 at 224-5 per Glass JA, Trade Practices Commission v Mobil Oil Australia Ltd (1984) ATPR ¶40-482 at 45,528; (1984) 3 FCR 168 at 181, Jagelman v FCT (1995) 31 ATR 467 at 472-3, and Raben Footwear Pty Ltd v Polygram Records Inc(1997) AIPC ¶ 91-324 at 39,350-39,351; (1997) 145 ALR 1 at 15).
39. Both parties filed extensive affidavits in the course of the proceedings and each knew what the other’s case was and what allegations of fact were being made in support of them. Neither party was caught by surprise and it did not seem necessary for a party to give extensive evidence-in-chief denying or rebutting the evidence given by the other party on affidavit. In any event, the trial Judge did not at any stage of the proceedings seek to prevent evidence from being given whether in-chief or in cross- examination…
The trial Judge’s analysis of the rule as it applies in a trial where evidence is given by affidavit is, in our view, entirely apt. We find no force in this argument.
In any event, the assertion that the wife had fabricated the letter of April 2009 was squarely put to her in cross-examination by counsel for the husband:
[Counsel for the husband]: You manufactured that correspondence to purport to show that [Mr Rittman] had cancelled the appointment, to give you the all clear to book that ticket whenever you wished?‑‑‑I disagree.
We also reject the argument that the findings did not relate to assertions made “in the proceedings”. In relation to all three matters to which his Honour referred in coming to his decision on costs, the documents or statements had been asserted in the proceedings.
That the falsification of the documents may have preceded the hearing is not to the point; the documents and assertions were made in the proceedings and the wife swore them to be true or denied being the author.
It was argued that very little court time was involved in dealing with the issues concerning the letter to the hospital and the cheque to Mr C and they were “strictly irrelevant”. We disagree. The letter to the hospital, the letter asserted to be from the husband and which referred to cancelling the doctor’s appointment and the wife’s assertion that the parties owed Mr C $600,000 formed part of what his Honour found was a course of conduct in which the wife created documents and made false allegations intending to cast the husband in a poor light. That individually each matter may have occupied only a small amount of time is beside the point. His Honour was required amongst other things, to determine the credit of the parties because that was squarely an issue of relevance. The issue of the husband’s attitude to his duties as a parent and his performance of them was a most important issue raised in the proceedings. The issue of the asserted debt to Mr C clearly went to the determination of the assets of the parties to be distributed between them.
Although the respondent contended that it was not open to the appellant to challenge the findings by his Honour when there was no appeal from the primary judgment, we are not persuaded that it is not open to a litigant to challenge a finding when relied on in an ancillary judgment for different purposes when the primary judgment had not been challenged. In any event, given our determination on the appeal, it is not necessary to consider this issue further.

Ground 4

Ground 4 challenges his Honour’s assessment of the amount of costs to be paid by the wife and is as follows
4. His Honour erred in assessing the quantum of the Respondent’s costs:-
(a)when the Respondent had led no evidence of proper assessment of his costs; and
(b)by comparing them to the Appellant’s costs.
His Honour had before him (Exhibit 31) evidence of the wife’s costs as at 28 September 2010 which demonstrated her costs at that time were $265,188 of which $260,000 had been paid, and an indication of prospective costs of $80,000. Although no itemised bill was before his Honour, in submissions it was said that the husband’s legal costs were $375,691. We were told (and there seemed to be no dispute) that, as required by the Family Law Rules, his Honour was shown the husband’s costs notice at the commencement of the trial and the costs were between $308,000 and $321,000.
It was undisputed that no itemised bill of the husband’s costs was before his Honour and counsel for the wife strenuously argued to his Honour that there was inadequate evidence before him on which to make the determination of the amount of costs to be ordered.
Counsel for the husband argued before us that his Honour’s reasons indicate that he knew how much each party had expended on costs and had compared those of the wife with those of the husband. It was also argued that his Honour had before him (attached to the husband’s submissions on costs) an extract from the husband’s costs agreement that set out the hourly rate and the lawyer’s schedule of fees. His Honour found at [76] that the fees charged by the husband’s solicitors were “on the low side when I compare it to the terms of costs agreements of many other firms practicing (sic) in this jurisdiction”.
Counsel for the husband argued that his Honour’s finding that the husband’s costs were less than those of the wife in circumstances where he had put on extensive evidence both by document and by calling witnesses to rebut her allegations were, a fortiori, a finding that the husband’s costs were reasonable.
We do not accept that submission. Although his Honour had the “bottom line” of the husband’s costs, there was no evidence before him as to how that figure was derived. More importantly by deciding the issue without that information and in the face of the wife’s submissions that it was necessary to enable a proper consideration of the costs incurred, his Honour deprived the wife of the ability to challenge the constitution of the costs and to argue the appropriateness of the charges. She did not have the opportunity to have this aspect of the decision fully argued and we consider that his Honour fell into appealable error.
We accept the argument of the wife that, in the absence of an itemised bill for each party, his Honour’s comparison of the costs both had incurred did not provide a safe foundation for concluding as he did that the husband’s costs were reasonable.

Conclusion

Having found substance in Ground 4 going to the quantum of the costs ordered by his Honour, the appeal will be allowed and his Honour’s orders set aside.
While we accept that to set the order aside potentially leaves the entire issue of costs at large, it must be observed that we find no fault with his Honour’s findings that s 117AB of the Act was enlivened and that the circumstances of the matter justified a departure from the usual costs order to order the wife to pay 60 per cent of the husband’s costs on an indemnity basis. Although

s 117AB now cannot provide the basis for a costs order against the wife in the review of his Honour’s decision, the abundance of undisputed findings of fact made by his Honour provide ample foundation for making an order pursuant to s 117(2) of the Act.
The question then becomes whether we can re-exercise the discretion or whether the proceedings should be remitted. In this regard both counsel sought to file written submissions. However, we consider that to be unnecessary. Although we have not disturbed the trial judge’s findings that there are circumstances here that justify an order for costs, that those circumstances are “exceptional” such as to justify an award of indemnity costs, and that the wife should pay 60 per cent of the husband’s costs, we have found that his Honour erred in fixing that at $225,000. However, that is not a matter on which we would re-exercise the discretion to the extent of assessing those costs. We are ill-equipped to do so given that it is likely to be a controversial issue. We need do no more than order that the wife pay 60 per cent of the husband’s costs as agreed and in default of agreement as assessed.

Costs of the appeal

At the conclusion of the appeal we indicated that we would invite written submissions as to costs. Accordingly we will provide for a regime for the provision of the costs submissions.

I certify that the preceding one hundred and forty-three (143) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Coleman, Strickland & Ainslie-Wallace JJ) delivered on 12 September 2012.

Associate:

Date: 12 September 2012