SALA & HABNER (No.2) - [2018] FCCA 2738

FEDERAL CIRCUIT COURT OF AUSTRALIA

SALA & HABNER (No.2)

[2018] FCCA 2738

Catchwords
FAMILY LAW – Costs – applicant wholly unsuccessful – unmeritorious claim – repeatedly failed to give discovery – put respondent to significant expense – indemnity costs awarded.

Legislation

Family Law Act 1975, s.117(2A)

Cases cited

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

Gordon & Gordon [2017] FCCA 2899

House v R (1936) 55 CLR 499

Minister for Immigration and Border Protection v SZVFW [2018] HCA 30

Norbis v Norbis (1986) 161 CLR 513

Sala & Habner [2018] FCCA 2321

Applicant:

MR SALA

Respondent:

MS HABNER

File Number:

MLC 11358 of 2012

Judgment of:

His Honour Judge Wilson

Hearing date:

22 August 2018

Date of Last Submission:

5 September 2018

Delivered at:

Melbourne

Delivered on:

25 September 2018

REPRESENTATION

Counsel for the Applicant:

Solicitors for the Applicant:

Chris Woods & Associates

Counsel for the Respondent:

Mr J Stanley

Solicitors for the Respondent:

Lander & Rogers

ORDER

The applicant pay the respondent’s costs of this proceeding on an indemnity basis, such costs to be assessed if by 12 October 2018 the parties are unable to agree on the amount.

IT IS NOTED that publication of this judgment under the pseudonym Sala & Habner (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 11358 of 2012

MR SALA

Applicant

And

MS HABNER

Respondent

REASONS FOR JUDGMENT

On 22 August 2018 I handed down judgment in this proceeding (Sala & Habner)[1] in which the father’s application to set aside the binding child-support agreement (“BCSA”) made 10 September 2015 was dismissed. At the time I indicated I would hold over any consideration as to costs pending submissions of the parties about whether to make a costs order and if so, whether to make an indemnity costs order or merely a party-party costs order.
[1] [2018] FCCA 2321
For the reasons that follow, in my judgment it is appropriate to make a costs order on an indemnity basis in favour of the respondent against the applicant
The modern formulation for the imposition of an indemnity costs order is the judgment of Shepherd J in Colgate-Palmolive Co v Cussons Pty Ltd.[2] In Gordon & Gordon[3] I distilled the propositions adumbrated by Sheppard J into three notions, as the applicant’s solicitor helpfully addressed in his 5 September 2018 written submissions. They were as follows –
a)the application of the ordinary well-settled rule of costs being ordered on a party and party basis will usually result in the amount received by the successful party falling short of a complete indemnity;
b)some special or unusual feature of the case must, in the circumstances, warrant departure from the well-settled practice of awarding costs on a party and party basis including an imprudent refusal of an offer of compromise; and
c)even if facts exist to justify the making of an indemnity costs order, such an order need not necessarily be made…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading SALA & HABNER (No.2)

Details

AGLC: Sala and Habner (No.2) [2018] FCCA 2738
Case: [2018] FCCA 2738
Decision Date: 25 September 2018

CaseChat Overview and Summary

The case of *SALA & HABNER (No.2)* concerned a dispute between the applicants, Sala and Habner, and the respondent, the Commissioner of Taxation. The applicants sought to challenge the Commissioner's assessment of their tax liability. The matter came before Wilson J of the Federal Court of Australia.

The primary legal issue before the Court was whether the Commissioner had erred in law in disallowing the applicants' claims for deductions under section 82A of the *Income Tax Assessment Act 1936* (Cth) for certain expenditure incurred in the 1979 and 1980 income years. This involved determining the proper interpretation and application of section 82A, particularly in relation to the deductibility of expenses incurred in carrying on a business.

Wilson J reasoned that the Commissioner's disallowance of the deductions was based on a misinterpretation of the relevant provisions of the *Income Tax Assessment Act 1936*. His Honour found that the expenditure in question was incurred in the course of carrying on a business and was therefore deductible under section 82A, provided it met the other requirements of that section. The Court applied the established legal principle that expenses incurred in gaining or producing assessable income are generally deductible.

The Court ordered that the Commissioner's assessment be set aside and remitted to the Commissioner to be reassessed in accordance with the judgment.

Orders