Taffner & Taffner (No. 3)
[2021] FamCAFC 156
•19 August 2021
FAMILY COURT OF AUSTRALIA
Taffner & Taffner (No. 3) [2021] FamCAFC 156
Appeal from: Taffner & Taffner [2020] FCCA 1132
Taffner & Taffner (No.2) [2020] FCCA 2328
Appeal number(s): NOA 60 of 2020 File number(s): BRC 1861 of 2019 Judgment of: STRICKLAND, ALDRIDGE & KENT JJ Date of judgment: 19 August 2021 Catchwords: FAMILY LAW – APPEAL – COSTS – Where the appeal was successful – Where both parties seek costs – Financial circumstances – Offers to settle – Partial success of appeal– Matters raised do not justify departure from the position that each party should bear their own costs – No order as to costs. Legislation: Family Law Act (1975) (Cth) s 117
Family Law Rules 2004 (Cth) Sch 3
Cases cited: Taffner & Taffner (2021) FLC 94-022; [2021] FamCAFC 68
Taffner & Taffner (No.2) [2021] FamCAFC 130
Division: Appeal Division Number of paragraphs: 22 Date of last submissions: 14 July 2021 Date of hearing: Heard by way of written submissions Place: In Chambers Counsel for the Appellant: Mr Hackett Solicitor for the Appellant: Hirst & Co The Respondent: Self-represented litigant ORDERS
NOA 60 of 2020
BRC 1861 of 2019APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MR TAFFNER
Appellant
AND: MS TAFFNER
Respondent
ORDER MADE BY:
STRICKLAND, ALDRIDGE & KENT JJ
DATE OF ORDER:
19 AUGUST 2021
THE COURT ORDERS THAT:
1.There be no order as to the costs of the appeal.
Note: The form of the order is subject to the entry in the Court’s records.
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 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Taffner & Taffner has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
STRICKLAND, ALDRIDGE & KENT JJ
On 21 May 2021 we allowed the appeal in this matter, in part, and amended one of the orders made by the primary judge so as to take account of an obligation to pay capital gains tax (Taffner & Taffner (2021) FLC 94-022). That order was varied on 29 July 2021 (Taffner & Taffner (No.2) [2021] FamCAFC 130).
Directions were made for the issue of costs to proceed by way of written submissions. Each party has filed such submissions and seeks an order for costs in his or her favour.
Mr Taffner (“the husband”) who was the appellant in the appeal, seeks costs in the sum of $23,930.38 which are said to have been quantified at the scale provided by Sch 3 to the Family Law Rules 2004 (Cth).
Ms Taffner (“the wife”) who was the respondent in the appeal, seeks her costs in the sum of $2,758.41. Although she appeared at the appeal and prepared a Summary of Argument herself, she had the assistance of lawyers at an early stage of the appeal.
Each party to proceedings under the Family Law Act (1975) (Cth) (“the Act”) is to bear their own costs unless the court considers that there are circumstances which justify the making of a costs order (s 117(1) and (2) of the Act). In considering such a costs order, the court is to have regard to the matters set out in s 117(2A) of the Act.
In their submissions both parties raised for consideration their financial circumstances, offers to settle that were made and the parties’ success or lack thereof in the appeal (s 117(2A)(a), (f) and (g) of the Act respectively).
Financial Circumstances
The husband’s evidence was that his income is $2,803 per week, with expenses of $2,966 per week. He said that he owns property worth $465,944 with liabilities of $154,353 (the husband’s Financial Statement filed on 18 May 2021).
The wife said that she is receiving $1,369 per week, with expenses of $1,355 per week. She has property valued at $1,273,400 with liabilities of $163,137 (the wife’s Financial Statement filed on 5 July 2021).
Each said that their income has been adversely impacted by the COVID-19 pandemic. The wife has received the JobKeeper allowance at times. They both share the care of two teenage boys who attend a private school.
The wife has a lower income than the husband but has a greater value of assets. Looked at in that way, it is difficult to see how this consideration points in any particular direction. The financial circumstances of the parties cannot be seen as a circumstance which would justify the making of a costs order, but are such that they would not prevent such an order being made if it was otherwise justified.
Offers to Settle
On 28 August 2020, the lawyers for the husband sent a lengthy letter to the wife’s lawyer. It asserted that there were a number of difficulties with the orders and reasons for judgment of the primary judge and foreshadowed an appeal. One of the issues identified was the order that provided for the husband to retain a property situated at H Street, Suburb J, which, however, would have to be sold to give effect to the other orders. The lawyers suggested correctly, that this would in turn cast the burden of the capital gains tax payable upon the sale entirely onto the husband which was a circumstance that had not been taken into account by the primary judge. This was the ground on which the appeal succeeded.
The letter then noted that the wife was proposing to seek an order from the primary judge that the husband pay her costs of the primary hearing in the sum of $43,344.39 (the husband’s written submissions filed on 4 June 2021, p.7).
This led to the husband making an offer not to appeal against the orders made by the primary judge (and thereby bearing the entire burden of the capital gains tax himself of the order of $139,000) provided:
·Neither party will seek costs against the other arising from the matter;
·The wife pay the arrears of school fees;
·The wife sign the school’s fee-splitting agreement; and
·The wife nominate a co-parenting application for communication.
The last three points did not arise from either the primary judge’s orders or the proposed appeal.
This letter was followed by extensive correspondence directly between the parties which did not result in any agreement.
Subsequently, the wife made an application for the costs of the hearing which was dismissed by the primary judge.
It is apparent that the wife would have been in a better financial position if she had accepted the offer because the amount of the capital gains tax she now has to pay exceeds the costs that she unsuccessfully sought in relation to the primary hearing. In addition, both parties incurred substantial costs on the appeal.
The position, however, is complicated by the proposal which extended beyond the issue of costs and capital gains tax, and extended to the liability to pay outstanding school fees. It appears that they were in excess of $21,000 (the wife’s written submissions in reply filed on 5 July 2021, p.15). The inclusion of the school fees in the offer was one of the matters that led to the difficulties which ensued between the parties and prevented an agreement being reached. This, therefore, limits the weight that can be given to the offer which otherwise would favour the husband’s contention.
Success of the Appeal
The fact that an appeal was partly successful is a relevant consideration (s 117(2A)(g) of the Act).
That was the case here. The husband raised nine grounds of appeal, only one of which was successful. The grounds that did not succeed required significant preparation and took up significant time during the hearing of the appeal. The wife, however, did not concede the ground that did succeed.
This consideration does not assist either party.
CONCLUSION
On balance, we do not consider that the matters raised by the parties justify a departure from the position that each party should bear his or her own costs. It follows that there will be no order for costs.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Strickland, Aldridge & Kent. Associate:
Dated: 19 August 2021
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