Somers & Ettridge
[2020] FamCAFC 37
•21 February 2020
FAMILY COURT OF AUSTRALIA
| SOMERS & ETTRIDGE | [2020] FamCAFC 37 |
| FAMILY LAW – APPEAL – COSTS – Where the respondent seeks costs on an indemnity basis – Where the appellant opposes the application but did not raise any issues about how the amount was calculated and no challenge was made to the amount – Where there are circumstances that justify an order for costs being made – Where there is a clear basis for indemnity costs to be awarded – Costs ordered in favour of the respondent in the sum as sought by her. |
| Family Law Act 1975 (Cth) s 117 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 |
| APPLICANT: | Mr Somers |
| RESPONDENT: | Ms Ettridge |
| FILE NUMBER: | MLC | 11262 | of | 2015 |
| APPEAL NUMBER: | SOA | 31 | of | 2019 |
| DATE DELIVERED: | 21 February 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | Written Submissions |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 15 September 2017, 29 October 2018, 20 November 2018, 7 December 2018 |
| LOWER COURT MNC: | [2017] FamCA 1173 [2018] FamCA 863 [2018] FamCA 943 [2018] FamCA 1042 |
REPRESENTATION
| THE APPLICANT: | In Person |
| COUNSEL FOR THE RESPONDENT: | Ms Paterson |
| SOLICITOR FOR THE RESPONDENT: | Carew Counsel Pty Ltd |
Order
The applicant Mr Somers pay the costs of the respondent Ms Ettridge of and incidental to the Application in an Appeal filed on 7 June 2019 calculated on an indemnity basis and fixed in the sum of $14,682.80.
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 Somers & Ettridge 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 APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 31 of 2019
File Number: MLC 11262 of 2015
| Mr Somers |
Applicant
And
| Ms Ettridge |
Respondent
REASONS FOR JUDGMENT
Introduction
On 25 November 2019 an order was made dismissing the Application in an Appeal filed by Mr Somers (“the applicant”) on 7 June 2019, seeking extensions of time to file appeals against four sets of orders. Then, on 4 December 2019, orders were made for written submissions to be filed in relation to the oral application made by Ms Ettridge (“the respondent”) for costs, consequent upon the order of 25 November 2019.
On 17 December 2019, the respondent filed her written submissions, together with an affidavit by her solicitor, annexing the costs agreement and disclosure statement between the respondent and her solicitors.
On 3 January 2020 the applicant filed written submissions in response, and on 14 January 2020 the respondent filed written submissions in reply.
The respondent seeks indemnity costs fixed in the sum of $14,682.80 (inc. GST), or in the alternative, party/party costs fixed in the sum of $10,036.34 (inc. GST).
The application for costs is opposed by the applicant.
The relevant legislation
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) governs the question of costs, and to the extent that it is relevant provides as follows:
(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.
…
Discussion
The first question is whether a costs order should be made at all, given the applicant’s opposition to the application.
As can be seen, the primary position is that each party bears their own costs, but where circumstances justify it, there can be such order for costs as the court considers just. The factors to be considered in determining this question are the factors set out in ss 117(2A). However, there need only be one factor which provides the circumstances justifying an order for costs (Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish & Another (2005) 33 Fam LR 123), and here, that is the applicant being wholly unsuccessful in his application (paragraph 117(2A)(e)).
I also mention the conduct of the applicant in relation to the proceedings (paragraphs (c) and (g)).
The application was to extend the time to file Notices of Appeal against orders made between 15 September 2017 and 7 December 2018, and I found that none of the reasons proffered by the applicant provided an adequate explanation for the failure to file Notices of Appeal within time. Relevantly I went on and commented as follows (Somers & Ettridge (No. 3) [2019] FamCAFC 234):
16.It is also instructive to reflect on the timing of the application seeking extensions of time. The respondent submits that it was not done bona fide, and was done for no other reason than “to be vexatious and to continue to frustrate the implementation of the orders made throughout the course of these proceedings to date”.
17.There is force in that submission, given the history of the proceedings since the initial order for the sale of the property was made by Cronin J on 29 October 2018. The applicant refused to comply with that order, and despite there being three enforcement applications filed, and various orders made, the applicant was able to stall the sale of the property. It had reached the stage by June 2019 where the applicant was required to sign a contract of sale, and he was refusing to do so. It was only then that he filed the application seeking extensions of time, just prior to the respondent filing a further Application in a Case on 12 June 2019, seeking further enforcement orders in relation to the sale of the property. Plainly, he thought that filing the application for extensions of time would prevent or further delay the sale of the property, because he followed that up with an application to stay the orders providing for that sale, pending determination of his “appeals”. However, it did not achieve that purpose, with Johns J dismissing the latter application on 2 August 2019, and at the hearing of the application, I was informed that settlement of the sale of the property was due to take place on the following Friday. Indeed, it is common ground that the sale has now been completed.
I also found that none of the proposed appeals had any prospects of success, and that was even after adjourning the matter to provide the applicant with the opportunity to present a document setting out in detail the appealable errors that he asserted. He filed that document, but it did not assist, and it did not alter the inevitable outcome.
Thus, the conduct of the applicant also justifies an order for costs being made.
Regard must be had though to the financial circumstances of the parties (paragraph (a)), but here, there is nothing about those financial circumstances that would militate against an order for costs in the respondent’s favour.
On 7 September 2019, the sale of a property at Suburb C settled, and the nett proceeds were then divided between the parties pursuant to orders made by Cronin J on 29 October 2018. The applicant received $83,329 and the respondent received $448,256, with $15,033 being held back from the applicant’s share, as security for various costs applications made by the respondent against the applicant, that are yet to be determined.
Thus, given there are circumstances justifying an order for costs, that provides the answer to the first question.
The next question is whether the costs should be calculated on an indemnity basis, or a party/party basis.
In relation to this question it is useful to record what the Full Court said in D & D (Costs) (No 2) (2010) FLC 93-435:
26.In Limousin & Limousin (Costs) [2007] 38 FamLR 478, the Court reviewed the authorities in relation to indemnity costs. Reference was there made to the judgment of the Full Court in Kohan and Kohan (1993) FLC 92-340. It was recorded at 79,614 (citations omitted) in which it was said that:
The intent of s 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the court may make such order as the court considers just. As we have pointed out, the court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges. By O 38 r 2, the provisions of O 38 apply to costs ordered to be paid or taxed, and costs payable or to be taxed between solicitor and client. O 38 r 7 makes provision for the allowance of additional amounts for complexity, difficulty or novelty and special skill, knowledge or responsibility. Consequently, the Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind. See Degmam v Wright (No 2) [1983] 2 NSWLR 354]; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534; Hobartville Stud v Union Insurance Co (1991) 25 NSWLR 358 at 368–70.
Indemnity costs orders are still an exception in this and other jurisdictions.
27.The Court in Limousin (supra) also referred to the judgment of Shephard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 upon which learned Counsel for the Wife relies in support of the present application. Shephard J said in Colgate-Palmolive (supra) (at 256):
“2.The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis …
3.This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it …
4.In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course …”
28.Reference was made to the later decision of the Full Court of Yunghanns v Yunghanns (2000) FLC 93-029 in which is [sic] was said (at 87,471, par 31):
“It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.”
In Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248, Sheppard J provided some examples of circumstances that might warrant the exercise of discretion to award indemnity costs, and usefully, Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660, drew from his Honour’s decision the following:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] 81 ALR 397.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra).
(c)Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v Westpac Banking Corporation (unreported Federal Court, 5 March 1993)).
(e)An imprudent refusal of an offer to compromise.
Plainly, the examples in (a) and (d) apply here and provide a clear basis for indemnity costs to be awarded.
As referred to above, the amount sought is $14,682.80, and importantly, the applicant, although he opposed an order for costs being made, did not raise any issue about how that amount was calculated, and no challenge was made to the amount. Thus, I will make the order sought by the respondent in that regard.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 21 February 2020.
Associate:
Date: 21 February 2020
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