SOGLIA & SOGLIA
[2020] FamCAFC 122
•22 May 2020
FAMILY COURT OF AUSTRALIA
| SOGLIA & SOGLIA | [2020] FamCAFC 122 |
| FAMILY LAW – APPEAL – APPEAL AGAINST COSTS ORDER – Where the appellant wife asserts that the primary judge failed to take proper notice of the financial circumstances of each party – Where the primary judge had regard to the financial circumstances of the parties, together with s 117(2A)(e) and s 117(2A)(f) of the Family Law Act 1975 (Cth) and found that there were circumstances which justified an order for costs being made – Where the wife asserts that costs should not have been awarded against her because it was the conduct of her previous solicitors in not preparing properly for the hearing and briefing counsel four days before the hearing which necessitated her seeking an adjournment – Where the wife did not raise her complaints about her previous solicitor before the primary judge and it is not now open for her to do so – Where the wife had an opportunity to seek that her previous solicitor bear the costs of the adjournment but she did not make that submission – Where the primary judge took the conduct of the wife into account and made no error – Where there is no merit in the grounds of appeal – Appeal dismissed. FAMILY LAW – APPEAL – COSTS – Where the respondent husband makes an oral application for his costs of the appeal – Where the provisions of s 117(1) of the Family Law Act 1975 (Cth) apply – Each party should bear their own costs – Application dismissed. |
| Family Law Act 1975 (Cth) ss 79, 117(1), 117(2), 117(2A) |
| Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania) v Fish and Anor (2005) 33 Fam LR 123; [2005] FamCA 158 Harris and Harris (1991) FLC 92-254; [1991] FamCA 124 Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28 |
| APPELLANT: | Ms Soglia |
| RESPONDENT: | Mr Soglia |
| FILE NUMBER: | SYC | 8323 | of | 2015 |
| APPEAL NUMBER: | EAA | 127 | of | 2019 |
| DATE DELIVERED: | 22 May 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Sydney (via video link) |
| JUDGMENT OF: | Strickland, Ainslie-Wallace & Aldridge JJ |
| HEARING DATE: | 18 May 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 31 October 2019 |
| LOWER COURT MNC: | [2019] FamCA 792 |
REPRESENTATION
| THE APPELLANT: | In person |
| COUNSEL FOR THE RESPONDENT: | Mr O’Connor |
| SOLICITORS FOR THE RESPONDENT: | Redmond Hale Simpson Solicitors & Barristers |
Orders
The appeal be dismissed.
The respondent husband’s oral application for costs be dismissed.
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 Soglia & Soglia 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 SYDNEY |
Appeal Number: EAA 127 of 2019
File Number: SYC 8323 of 2015
| Ms Soglia |
Appellant
And
| Mr Soglia |
Respondent
REASONS FOR JUDGMENT
Introduction
By her Notice of Appeal filed on 27 November 2019, Ms Soglia (“the wife”) appeals from a costs order made by a judge of the Family Court of Australia on 31 October 2019. That order required the wife to pay to Mr Soglia (“the husband”) a contribution to his costs of the first instance proceedings in the sum of $70,000 within 90 days. The order was the result of the husband’s application for costs consequent upon the order made by the primary judge on 12 July 2019, dismissing the wife’s application to set aside the parties’ Binding Financial Agreement (“BFA”) dated 20 September 2007.
In the event the appeal is allowed, the wife seeks that the costs order be discharged.
The husband opposes the appeal.
Background
The wife was born in Country M in 1960 and was 58 years of age at the time of the trial.
The husband was born in Australia in 1951 and was 67 years of age at the time of the trial.
The wife moved to Australia in 1998 with her daughter who was seven years of age at the time.
The parties met in October 2006.
The parties executed a BFA on 20 September 2007 before solemnising their marriage on … September 2007.
The parties separated around August 2013 and were divorced in 2014.
The wife instituted property settlement proceedings on 18 December 2015 seeking for the BFA to be set aside and for orders adjusting the parties’ property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
By an order made on 22 March 2017, the Court determined that “the issue as to whether there is in existence a Binding Financial Agreement and/or whether that agreement should be set aside, [was] to be determined as a separate threshold issue from the balance of the s 79 proceedings.” A trial was listed to determine the threshold issue on 29 and 30 January 2018 before Aldridge J.
On 24 January 2018, upon the parties submitting signed consent orders, Aldridge J made orders vacating the trial dates and for the parties to attend a private mediation.
The mediation occurred on 27 March 2018 but did not prove successful and the matter was thereafter listed for trial on 10 and 11 September 2018 before Hogan J.
On the day following the mediation, 28 March 2018, the husband made an offer of settlement to the wife in the following terms (at [5(b)]:
…
1.Our client [the husband] will pay to your client [the wife] the sum of $200,000.00 within 28 days of acceptance of this offer.
2.That each party pay their own costs.
3.That your client’s [the wife’s] claim is dismissed.
…
(Emphasis removed)
That offer was not accepted by the wife. The primary judge found that the offer appeared to have remained open and capable of acceptance until at least 6 June 2019 when the solicitors for the husband advised the new solicitors for the wife of the offer of settlement made on 28 March 2018 (at [5]).
On the first day of the trial, the wife filed an Application in a Case seeking to adjourn the trial due to issues with the wife’s payment of her legal fees, and counsel being briefed late. The wife also sought the opportunity to file an affidavit of a crucial witness in her case, namely, her previous solicitor engaged at the time of the wife entering into the BFA.
On 10 September 2018, Hogan J dismissed the wife’s Application in a Case for an adjournment, and counsel and the solicitor for the wife were given leave to withdraw from the case, upon the wife terminating her retainer of her solicitor. The trial was ultimately adjourned though upon the oral application of the wife.
The husband then sought his costs thrown away by the adjournment, on an indemnity basis.
On 27 November 2018, Hogan J made an order requiring the wife to pay to the husband his costs thrown away by the adjournment of the trial with such costs to be calculated on a party/party basis and to be paid within 30 days of the making of a final order in the proceedings.
The trial of the BFA threshold issue was finally heard in June 2019 before the primary judge, who ultimately, on 12 July 2019, dismissed the wife’s application to set aside the BFA, and all other applications before the Court, save as to costs. The primary judge also provided for written submissions to be filed by the parties as to the husband’s application for costs.
The husband sought his costs from the wife on three alternate bases, namely:
a)in a fixed amount on an indemnity basis for the entirety of the proceedings; or
b)in a fixed amount on a party/party basis up until 28 March 2018, and thereafter on an indemnity basis; or
c)in a fixed amount on a party/party basis for the whole of the proceedings.
In the written submissions before the primary judge, the husband contended that it would be more “efficient and beneficial” for the costs order of Hogan J made on 27 November 2018 to be set aside, and the costs of the entirety of the proceedings be made in a “gross sum order”. The primary judge agreed with that approach (at [9]).
The wife’s position before the primary judge was that she opposed any costs order against her at all, or alternatively, that the order should not be made on an indemnity basis. The wife further submitted that if a costs order were to be made, the order should be a “lump sum order… limited to 25% of the Husband’s costs with a discount applicable to senior Counsel’s fees repayable within 12 months” (at [14]).
On 31 October 2019, the primary judge made a costs order in the fixed amount of $70,000, which is the order the subject of the appeal. The primary judge also ordered that the previous costs order made by Hogan J on 27 November 2018 be discharged and that all other extant applications be dismissed.
The Appeal
By her Notice of Appeal, the wife effectively agitates two grounds of appeal, namely, that his Honour failed to take proper notice of first, the financial circumstances of each party, and secondly, the circumstances surrounding the wife’s conduct in relation to the adjournment of the hearing on 10 September 2018.
We will set out and discuss each ground of appeal in turn.
Ground 1
That the [primary] judge erred in the proper exercise of his discretion in awarding costs against the wife in that:
(i) [The primary judge] failed to take proper judicial notice of the competing financial positions of each of the parties [s 117(2A)(a)]
In considering the circumstances justifying an order for costs, the primary judge said this:
15.The wife, with an eye to the considerations set out in s 117(2A), submits, and the husband contends, that:
a)the wife is in an inferior position financially, both in terms of income and in respect of property to that of the husband. As much was conceded in the statement of assets contained in the Binding Financial Agreement and little had changed by the hearing 12 years later. The disparity was, at least, one of the motives for the wife’s application. The wife’s submissions (at paragraph 3(b)), suggest an equity in her home of over $350,000 – only reduced, she says, by acting as guarantor for her adult daughter to the extent of $330,000. There is no evidence about these assertions, but in any event the wife is not impecunious. The wife hopes to complete a course in 2020 and otherwise, her income arises from part-time work and Government benefits. She also owns an overseas investment property. She has, she claims, a number of unsecured debts, legal costs liabilities and credit card obligations. Her financial position makes it clear that the generous offer made by the husband ought to have been accepted in March 2018;
…
Further, in arriving at his Honour’s conclusion as to the quantum of costs, his Honour said this:
20.The wife says that “any significant lump [sum]… would result in a judgment the Husband could enforce by way of bankruptcy proceedings forcing the sale of the Wife’s home leaving her homeless…” (paragraph 4(b) of her submissions).
21.Although this cannot be ignored as a possibility, these consequences should have been understood by the wife when not only deciding to commence proceeding, but to pursue them. The husband, although in a much stronger financial position, opposed the wife’s application at all times; made a very generous offer to settle and in the end, even if he recovers the sum of $70,000 (being the wife’s assessed contribution), he will also be out of pocket for over $80,000.
22.The wife seeks 12 months to pay. Although the husband did not file any submissions in reply, I regard 12 months as too long. The wife has, on her own submissions, an equity in the home which she has depleted by agreeing to guarantee a loan for her daughter.
23.I regard 90 days from the date of this order as an appropriate time for the wife to pay the sum assessed of $70,000.
From what the primary judge recorded in those paragraphs, it is apparent that his Honour did have regard to the financial circumstances of the parties, and in particular in considering, along with paragraphs 117(2A)(e) and (f) of the Act, whether there were circumstances that justified an order for costs being made (s 117(2)). This was precisely what his Honour was required to do, and thus there is no error here as asserted in Ground 1.
However, in her Summary of Argument filed on 20 April 2020, the contents of which bear no relationship to this ground of appeal, the issue became a challenge to his Honour’s finding that there were circumstances justifying an order for costs.
The primary judge found that there were circumstances to justify an order for costs “to some extent” being made and particularly on the following bases (at [16]):
…
a)the wife’s failure to accept the husband’s reasonable offer of March 2018; and
b)the cessation of her Counsel and solicitors causing the trial on September 2018 to be adjourned causing a costs order to be made; and
c) the fact that the wife was wholly unsuccessful.
Ground 2 comprises the wife’s challenge to that second basis, and we will leave that issue to be discussed there. With the first basis, the wife submits correctly that the failure to accept an offer of settlement is only one of the factors to be considered under s 117(2A) of the Act (Harris and Harris (1991) FLC 92-254). Pausing there though, there is no error here by his Honour. As can be seen, it was one of three factors that his Honour took into account.
With the third basis, the wife says this in paragraph 12 of her Summary of Argument:
Re the wife’s lack of success: unfortunately, a trial that involves a decision about whether or not to set aside a Binding Financial Agreement is one that necessarily means a definitive win for one party & a definitive loss for the other. Had the hearing been one involving competing claims to property division, one party’s win may not be so decisive over the losing party.
(As per the original)
However, that is not a submission which finds any favour with this Court. The plain fact is that the wife was wholly unsuccessful in her application. Thus, again, there is no error in his Honour taking this into account.
The wife then submits that her impecuniosity overrides her failure to accept the husband’s offer and her lack of success.
However, although his Honour recognised that the wife’s financial position was inferior to the husband’s, his Honour found that she was not impecunious, and there was no challenge to that finding in this appeal. All the wife does is, without any argument in support, asserts that she is impecunious.
Further, there is clear authority that the Court does not need to be satisfied of each and every factor under s 117(2A) of the Act, nor does the Court need to give comparative weight to each of the factors, before making an order for costs. Any factor under s 117(2A) may be the sole foundation for an order for costs (Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania) v Fish and Anor (2005) 33 Fam LR 123 at 130).
Thus, as with the ground of appeal, there is also no merit in any of these contentions.
Ground 2
That the [primary] judge erred in the proper exercise of his discretion in awarding costs against the wife in that:
(ii) [The primary judge] failed to take proper judicial notice of the circumstances surrounding the wife’s conduct in relation to the adjournment of the hearing on 10 September 2018 [s 117(2A)(g)]
The primary judge refers to the circumstances of the adjournment of the trial on 10 September 2018 specifically at [6], [8], [15(b)(ii)] and [16(b)] as follows:
6.On 28 August 2018, the Court advised the parties the matter was listed for hearing for two days commencing 10 September 2018. The evidence of the husband’s solicitor (paragraph 13) is that on the first day of hearing, the wife sought an adjournment and terminated her retainer of her solicitors then on the record. The aborted hearing before Hogan J was adjourned, however her Honour on 27 November 2018 made the following orders…
…
8. Hogan J delivered written reasons for:
a)refusing an application to adjourn the hearing on 10 September 2018;
b)after refusing the adjournment initially, after which the Counsel (directly briefed) was given leave to withdraw, the oral application by the wife for an adjournment was granted; and
c)her order made 27 November 2018 for costs “thrown away”.
…
15.The wife, with an eye to the considerations set out in s 117(2A), submits, and the husband contends, that:
…
b)the criticisms of the delays and extra costs incurred by the husband as raised by him, the wife says, are due to her former solicitors conduct and advice. However, as the history reveals, her decision to:
i)not accept the reasonable offer;
ii)seek to adjourn the trial on 10 September 2018; and
iii)to press to a final hearing,
all are her actions, for which there are consequences.
(Emphasis added)
…
16.In my view, circumstances exist which justify an order to some extent being made, particularly:
…
b)the cessation of her Counsel and solicitors causing the trial on September 2018 to be adjourned causing a costs order to be made; and
…
The wife’s submissions as to this ground of appeal contained in her Summary of Argument do not assist the Court. The submissions do not directly address this ground of appeal.
In her submissions, the wife does assert that she had “no choice but to seek an adjournment because her solicitor had negligently not prepared for the hearing, nor did he brief counsel until 4 days before the hearing”. The wife further asserts that “counsel withdrew [and] the wife was advised to terminate the services of her solicitor. Having no legal representation, [and] being fully unprepared, the wife again sought an adjournment” (Wife’s Summary of Argument filed on 20 April 2020, paragraph 6).
Thus, it seems that the wife’s essential argument is that the Court should not have awarded costs against her because the adjournment on 10 September 2018 was not her fault but was the fault of her previous solicitor.
The wife then submits that the costs order made by Hogan J on 27 November 2018 has become the subject of a negligence claim against her previous solicitor. The wife asserts that by the primary judge discharging that costs order (Order 1 of the orders dated 31 October 2019), his Honour “created difficulties for the wife in continuing with her negligence claim, as quantum is [and] will be an extremely hard task to determine” (Wife’s Summary of Argument filed on 20 April 2020, paragraph 7). However, there is no appeal against the order setting aside Hogan J’s costs order, and this submission is not open to the wife.
Further, the husband correctly submits that the wife should be precluded from raising her complaints about her previous solicitor because those issues were not part of her case before the primary judge (Metwally v University of Wollongong (1985) 60 ALR 68). The only reference to be found in the wife’s submissions before his Honour as to the wife’s previous solicitor’s conduct was the complaint that “her second former solicitor did little or nothing during his 12 months of engagement” (Wife’s costs submissions filed on 25 September 2019, paragraph 5(b)).
As also submitted by the husband, the wife had the opportunity before Hogan J to seek that her previous solicitor bear the costs of the adjournment, but did not do so. Thus, there has been no hearing on the merits as to whether or not the wife’s previous solicitor bears any responsibility for the adjournment, and this Court is in no position to make any finding about that.
To return to the ground of appeal, his Honour did take into account what was before him as to the conduct of the wife in relation to the adjournment, and there is no error here.
Conclusion
There is no merit in the grounds of appeal, and thus the appeal will be dismissed.
Costs
In the event the appeal was dismissed, the husband sought his costs on a party/party basis in accordance with his schedule of costs (in the form of an affidavit of his solicitor) filed on 11 May 2020. Those costs total $20,187.92 including solicitor and counsel fees. The wife submits that in the event the appeal is dismissed, each party should bear their own costs, on the basis that the wife says she is impecunious and the husband is financially secure.
We consider that the primary position as provided for in s 117(1) of the Act, namely that each party bear their own costs, should be applied here. Thus, the husband’s oral application for costs will be dismissed.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ainslie-Wallace and Aldridge JJ) delivered on 22 May 2020.
Associate:
Date: 22 May 2020
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