Thompson & Finch & Ors
[2020] FamCAFC 230
•18 September 2020
FAMILY COURT OF AUSTRALIA
| THOMPSON & FINCH AND ORS | [2020] FamCAFC 230 |
| FAMILY LAW – APPEAL – COSTS – Where leave to appeal is not required given the orders finally determine the rights of the parties and thus are not interlocutory orders – Where ostensible bias is not demonstrated – Where the two step process in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 is not engaged – Where it is not open to raise on appeal an allegation of apprehended bias when nothing was done about it before the judge at first instance – Where the appellant’s counsel conceded that costs orders could not be resisted and although not clear at most the only issue was whether those costs should be calculated on indemnity bases – Where determination as to costs is a quintessentially discretionary exercise – Where there is no merit in any of the grounds of appeal – Appeal dismissed. |
| Family Law Act 1975 (Cth) ss 106B, 117(2A) Family Law Rules 2004 (Cth) r 22.53 Federal Circuit Court Rules 2001 (Cth) rr 13.02, 21.03 |
| Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; [1995] FCA 350 |
| APPELLANT: | Ms Thompson |
| FIRST RESPONDENT: | Mr Finch |
| SECOND RESPONDENT: | Company C |
| THIRD RESPONDENT: | Ms Lasko |
| FILE NUMBER: | MLC | 9211 | of | 2017 |
| APPEAL NUMBER: | SOA | 49 | of | 2019 |
| DATE DELIVERED: | 18 September 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | In Chambers |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 23 August 2019 |
| LOWER COURT MNC: | [2019] FCCA 2684 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Swart |
| SOLICITOR FOR THE APPELLANT: | PCL Lawyers |
| COUNSEL FOR THE FIRST AND SECOND RESPONDENTS: | Ms Galea |
| SOLICITOR FOR THE FIRST AND SECOND RESPONDENTS: | Lampe Family Lawyers |
COUNSEL FOR THE THIRD RESPONDENT: | Ms Saint |
SOLICITOR FOR THE THIRD RESPONDENT: | Berger Kordos Lawyers |
Order
The appeal 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 Thompson & Finch and Ors 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 ADELAIDE |
Appeal Number: SOA 49 of 2019
File Number: MLC 9211 of 2017
| Ms Thompson |
Appellant
And
| Mr Finch |
First Respondent
And
| Company C |
Second Respondent
And
| Ms Lasko |
Third Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed on 20 September 2019, Ms Thompson (“the appellant”) appeals against certain orders made by a judge of the Federal Circuit Court of Australia on 23 August 2019.
The appeal is opposed by Mr Finch (“the first respondent”), Company C (ACN …) (“the second respondent”), and Ms Lasko (“the third respondent”).
The orders appealed provide for the appellant to pay costs to the first, second and third respondents, and for funds held by a firm of lawyers to be released to meet those costs orders.
The appeal was listed for hearing on 7 April 2020, but prior to that date the parties agreed that the appeal could be determined on the papers.
At the directions hearing held on 11 February 2020, all three respondents were represented, and in the usual way, orders were made to prepare the appeal for hearing, including for the filing of summaries of argument. In that regard, each of the respondents were to file and serve a written summary of argument and list of authorities on or before the close of business on Tuesday 31 March 2020.
The first and second respondents complied with that order, but the third respondent failed to file a summary of argument in compliance with that order, or at all. I proceed though on the basis that all three respondents oppose the appeal, although plainly there are no submissions by the third respondent which I can take into account in determining the appeal.
Although leave to appeal was not sought in the Notice of Appeal, whether leave was required was a matter raised by the parties. For my part, leave to appeal is not required given the orders finally determine the rights of the parties, and thus, they are final orders rather than interlocutory orders (Carr v Finance Corporation of Australia Ltd (No. 1) (1981) 147 CLR 246 at 248).
Relevant Background
On 19 June 2019, the appellant filed an Application pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”), supported by an affidavit filed on the same date. She sought to have the transfer by one Mr Sutton, the applicant in the substantive proceedings, of an interest in property owned by the second respondent to the first respondent, set aside.
At the hearing of that Application on 23 August 2019, it was abruptly withdrawn following submissions made on behalf of the first and second respondents, which demonstrated first, that the evidence given by the appellant to the court as to the date of separation between her and Mr Sutton, was at odds with evidence given by the appellant to the Administrative Appeals Tribunal, and secondly, that the assertions deposed to by the appellant in her affidavit of 19 June 2019, as to the extent of her financial contributions, were substantially inflated.
As a result of the withdrawal of the application, the first, second and third respondents sought orders for lump sum costs calculated on an indemnity basis, and the release of funds to meet those orders.
As can be seen, his Honour made the orders sought, although as I will explain shortly, not in the amounts initially sought by the respondents.
The Appeal
There were eleven grounds of appeal propounded in the Notice of Appeal, however, Ground 1 was not a ground at all, and it can be ignored. Further, at the directions hearing on 11 February 2020, Grounds 3 and 4 were struck out because they were subsumed by Grounds 11 and 8 respectively.
Ground 9 asserted “ostensible bias” on the part of the primary judge, “in allowing the [respondents] to “pick a figure” for their indemnity costs and then award that figure”.
In keeping with authority, it is necessary to deal with this ground of appeal first, because if sustained, it compromises the integrity of the process and requires remitter of the dispute for rehearing (Concrete Pty Ltd v Parramatta Design and Development Pty Ltd (2006) 229 CLR 577 at 611-612; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at [9]-[10]). However, that said, this is not a ground that can be maintained. His Honour did not allow the respondents “to “pick a figure” for their indemnity costs and then award that figure”.
Not only is that not something specifically said by his Honour, but that is not how the matter proceeded before his Honour.
Thus, the ground falls at the first hurdle.
As is readily apparent from the transcript of the hearing before his Honour, his Honour received oral applications for costs, with each counsel indicating that indemnity costs were sought. His Honour then appropriately requested, and received, submissions as to the basis of those claims. Further, as to the lump sum amounts sought by each party, his Honour quizzed counsel as to the basis for the same, with his Honour ultimately accepting the appropriateness of the amounts identified (Transcript 23 August 2019, p.7-20).
It is the case that senior counsel for the appellant suggested that opposing counsel were “just giving figures from the bar table” (Transcript 23 August 2019, p.17 lines 21-22), but that was nothing more than a comment from counsel, and certainly was not how his Honour viewed the process.
However, even if his Honour had approached the issue as alleged, it is not apparent how this could demonstrate “ostensible bias”, and that is not explained in the summary of argument filed on behalf of the appellant.
The principle of apprehended or ostensible bias is well known. The High Court of Australia said this in Johnson v Johnson (2000) 201 CLR 488:
11…the test to be applied … in determining whether a judge is disqualified by reason of the appearance of bias … is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide.
12That test … gives due recognition to the fundamental principle that justice must both be done, and be seen to be done. … The hypothetical reasonable observer of the judge’s conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues. At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is “a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial”.
(Footnotes omitted)
The application of that principle entails two distinct steps, as was explained by the High Court of Australia in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 345:
8… First, it requires the identification of what is said might lead a judge … to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. …
Here though, not even the first step, let alone the second step, is engaged.
Finally, authority tells us that it is not open to raise on appeal an allegation of apprehended bias where nothing was done about it before the judge at first instance. In other words, by doing nothing, there has been a waiver of the right to object (Vakauta v Kelly (1989) 167 CLR 568 at 572). That of course is the case here.
In these circumstances, this ground of appeal has no merit.
In relation to the remaining grounds of appeal, plainly there is a good deal of repetition, and it is unnecessary to address each ground discretely. Thus, I propose to consider many of the grounds together.
Grounds 2, 8 and 11
Ground 2 – That … (His Honour) failed to apply the relevant Law and Statue [sic] when making the Cost Order dated 23 August 2019 in favour of the First, and Third and Fourth respondents. (the “Costs Orders”)
Ground 8 – His Honour erred in law in failing to give sufficient and/or adequate and/or proper reasons for, or a pathway to, the finding of a costs order that was fixed at indemnity level as requested by the First and Third and Fourth respondents.
Ground 11 – The Trial Judge failed to give any, or adequate, or proper, consideration to, and to thus give any adequate, or proper, weight to, all relevant evidence when determining the question of Indemnity Costs for the First and the Third and Fourth respondents, and, in particular, his Honour failed to:
11.1 Refer to the [appellant’s] financial circumstances as required by law pursuant to section 117 (2A) (a) of the Family Law Act 1975 (CTH);
and, as such, the decision is plainly wrong and should not stand.
In the appellant’s written summary of argument, it is revealed that the “relevant Law and Statue [sic]” referred to is s 117(2A) of the Act, and rr 13.02 and 21.03 of the Federal Circuit Court Rules (2001) (Cth).
However, what appears to have been forgotten in promoting this appeal, is that the appellant’s counsel conceded that costs orders could not be resisted, and at most, although this was not entirely clear, the only issue was whether those costs should be calculated on indemnity bases (Transcript 23 August 2019, p.16 lines 24-25; p.19 lines 1-3).
Thus, his Honour was not necessarily required to spend much, if any time, on s 117 of the Act. His Honour’s task was to determine whether the circumstances were such that indemnity costs were warranted, and specifically here, whether the conduct of the appellant was such as to invoke the court’s power to award indemnity costs. His Honour recognised that that was the task that confronted him, and his Honour then undertook that task (at [8]-[13]). That said, as submitted by the first and second respondents, in addressing the conduct of the appellant, his Honour did in fact also consider the relevant factors in s 117(2A), namely paragraphs (c), the conduct of the parties, and (g), such other matters as the court considers relevant.
As for r 13.02, that simply provides that a party may apply for costs if an application is discontinued. It is not a rule which directs how his Honour is to determine any such application.
With r 21.03, that has no application, because it relates to party/party costs, whereas the applications here were for indemnity costs.
As for the claim of a lack of adequate reasons (Ground 8), that too fails. His Honour plainly identifies in his reasons for judgment at [8]-[13], the basis on which he found that it was appropriate to order indemnity costs.
It seems that in making this complaint the appellant has obviously overlooked the important concession of her counsel referred to above. In other words, it was unnecessary for his Honour to provide any reason as to why orders for costs per se were appropriate.
It also must not be forgotten that in the field of discretionary judgments, a determination as to costs is a quintessentially discretionary exercise. In Harris and Harris (1991) FLC 92-254, the Full Court, at 78,711, described determinations as to costs as being “peculiarly a matter” within the discretion of the trial judge and that “it is only in the rarest of cases that the Full Court should interfere with a costs order”.
Further, the High Court of Australia said this in Penfold v Penfold (1980) 144 CLR 311 at 315:
Sub-section [117](2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised … . Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
(Footnotes omitted)
With the complaint that his Honour failed to give any, adequate, or proper consideration to all relevant evidence when determining the question of indemnity costs, that too must fail. The relevant evidence was canvassed at length before his Honour by both counsel for the respondents, and in response by senior counsel for the appellant. Further, his Honour at [8]-[13] plainly identified the relevant evidence of the conduct of the appellant which justified orders for indemnity costs.
As to the assertion that his Honour erred by failing to refer to the appellant’s financial circumstances as required by s 117(2A)(a) of the Act, to repeat, it was unnecessary for his Honour to do so, given the concession made by the appellant’s senior counsel. And further, in the responding submissions by her senior counsel, there was no objection to orders being made on the basis of the appellant’s financial circumstances. If there had been, his Honour would have needed to deal with that submission.
These grounds of appeal have no merit.
Ground 5 – His Honour gave inappropriate weight to a decision in the Administrative Appeals Tribunal of Australia Ad Astra Institute Pty Ltd and Australian Skills Quality Authority (2019) AATA 2514 when fixing the quantum of the Costs Orders at indemnity level for the First and Third and Fourth respondents.
In this ground the appellant seems to be suggesting that his Honour gave too much weight in fixing the quantum of the costs, to what appeared in a paragraph in the decision of the Administrative Appeals Tribunal, which on its face was inconsistent with the evidence that was before his Honour from the appellant. However, that reveals a misunderstanding of what his Honour did.
That inconsistency was one of the bases for the appellant withdrawing her application before the court, but it was not a basis for the quantum of costs ordered by his Honour. The primary bases for that were the bringing and maintaining of that application, and the effect on the parties, as well as the plainly inflated assertions by the appellant deposed to in her affidavit in support of the application, and other matters relating to the conduct of the appellant as identified by his Honour at [8]-[13] of his reasons for judgment.
There is no merit in this ground of appeal.
Grounds 6 and 7
Ground 6 – His Honour gave inappropriate weight to the amount of costs sought by the First Respondent without any evidence to support the amount of costs so sought.
Ground 7 – His Honour gave inappropriate weight to the amount of costs sought by the Third and Fourth Respondents without any evidence to support the amount of costs so sought and in particular had no regard for the effect of the Third and Fourth respondents by their own choice changing their solicitors and the increase in costs that might have occurred as a result.
There is no dispute that his Honour ultimately accepted the figures provided by counsel from the bar table, but the context of the applications for costs was that the appellant abruptly withdrew the application that was before the court, and his Honour then asked whether as a result of that, there was any application the other parties wished to make. In response, the respondents then made their applications for costs orally (Transcript 23 August 2019, p.7 lines 16-30).
However, prior to advising his Honour of the amounts sought, counsel for the first and second respondents said this:
MS FISKEN: No. Although, your Honour, it would be customary for me to fully particularise and itemise the precise orders that I’m seeking and to produce a copy of the costs agreement. Although, that is not strictly necessary. And I do have a copy of the costs incurred by my client with respect to Nicholsons Lawyers, the previous lawyers. But at this point in time, given that we weren’t aware that this application was going to be discontinued – if your Honour thinks it more appropriate - - -
HIS HONOUR: Well - - -
MS FISKEN: - - - this could be done by way of written submissions.
(Transcript 23 August 2019, p.12 lines 24-33)
His Honour then responded as follows:
HIS HONOUR: No. I would like to determine the matter today, if possible, and without offending any particular rule of practice or – I’m just referring to the commentary in the marriage of Hogan. The Full Court held that the court cannot make what is called an open-ended order for costs and that an order for costs, whether interim or final, must be either certain and/or ascertainable.
(Transcript 23 August 2019, p.12 lines 35-39)
It was then that counsel informed his Honour of the amount sought, identifying it as costs incurred by her instructing solicitors to date, counsel’s fees for the appearance and preparation for that day, and the further costs of the solicitors who had taken over the conduct of the matter.
Counsel for the third respondent then informed his Honour of the amount of costs sought on her behalf. However, his Honour challenged that amount and quizzed counsel as to how it was made up. As a result, the amount sought was reduced by approximately $17,000.
His Honour then called on counsel for the appellant to respond. However, that response was not to, for example, seek an adjournment to allow consideration of the costs sought, and nor was the proposition of written submissions being filed, taken up. Instead, senior counsel, as referred to above, indicated that he could not resist “ordinary orders for costs”, but in effect queried whether indemnity costs were justified (Transcript 23 August 2019, p.16 lines 24-25).
In terms of the orders sought, there was no challenge to the same except to query whether there was a doubling up with amounts paid pursuant to earlier orders. Ultimately, counsel for the third respondent, and counsel for the first and second respondents accepted that these amounts should come off the respective amounts sought.
Senior counsel did, as referred to above, raise a concern as a result of “people just giving figures from the bar table”. However, the concern was not as to the amounts sought, but to ensure “that the matters that should be taken into account are taken into account” (Transcript 23 August 2019, p.17 line 22).
Although there was no amplification of what was being referred to, the implication from what followed is as to what his Honour would take into account in determining whether costs should be awarded on an indemnity basis.
Then, still without any challenge to the amount sought, senior counsel said this, just prior to his Honour delivering his reasons for judgment:
MR WILSON: Or generally, yes. So I don’t think there’s much I can really say in respect of the issue about costs other than to say that the application, having been withdrawn, I think costs orders are appropriate. …
(Transcript 23 August 2019. p.19 lines 1-3)
I also note that there was no challenge raised by senior counsel for the appellant to that portion of the costs sought which related to other solicitors taking over the matter.
Thus, it is not open to the appellant to assert error by the primary judge as propounded in these two grounds of appeal.
Finally, I note the submission of the first and second respondents, that it was always within his Honour’s discretion to award a lump sum amount for costs without formal assessment or taxation, and that is often done to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation” (Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120).
Further, although the court must act judicially in awarding a lump sum amount, it is not required to do so in any “scientific or formulaic manner” (Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [10]).
Thus, in short, his Honour was able to do what he did.
There is no merit in these two grounds of appeal.
Ground 10 – The decision is outside the metes and bounds of His Honours [sic] discretion and as such is plainly wrong, or is unsafe and should not stand.
This ground can only succeed if it is established that the primary judge has made an error in the exercise of his discretion. However, given the lack of success of any of the preceding grounds of appeal, that hurdle has not been overcome by the appellant. Indeed, I note that nothing that is submitted in the appellant’s summary of argument, alters this outcome. Those submissions merely repeat the complaints in the other grounds of appeal.
Conclusion
Having found no merit in any of the grounds of appeal, the appeal must be dismissed.
As to the issue of the costs of the appeal, given that the appeal was heard on the papers, no submissions were made in this regard. However, as the parties would be aware, r 22.53 of the Family Law Rules 2004 (Cth) permits a party to make an application for costs, if so advised, by filing an Application in an Appeal 28 days after the court makes an order disposing of the appeal.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 18 September 2020.
Associate:
Date: 18 September 2020
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