Trevi & Trevi (No. 3)

[2019] FamCAFC 58

FAMILY COURT OF AUSTRALIA

TREVI & TREVI (NO. 3) [2019] FamCAFC 58

FAMILY LAW – APPEAL – RE-EXERCISE – COSTS – Where the Full Court allowed the husband’s appeal from the orders made on 18 May 2017 and set aside Order 1 of those orders – Where the Full Court re-exercised the discretion under s 79 of the Family Law Act 1975 (Cth) to make property settlement orders – Where the husband sought costs of and incidental to the re-exercise of discretion founded primarily on offers of settlement made by the husband – Where the amount of costs sought by the husband included counsel’s fees on an indemnity basis – Where offers of settlement are an important s 117(2A) consideration in determining the question of costs – Where there is no basis for an order to be made for indemnity costs – Where, however, there are justifying circumstances for an order for costs to be made in favour of the husband on a party and party basis – Wife to pay the husband’s costs incurred on and from the date of the husband’s latest offer of settlement in an amount as agreed or, failing agreement, as assessed.

Family Law Act 1975 (Cth) ss 117(2), 117(2A)
Federal Proceedings (Costs) Act 1981 (Cth)
Family Law Rules 2004 (Cth) r 17.02

Browne v Green (2002) FLC 93-115; [2002] FamCA 791
JEL and DDF (No. 2) (2001) FLC 93-083; [2001] FamCA 907
Lenova & Lenova (Costs) [2011] FamCAFC 141
Robinson and Higginbotham (1991) FLC 92-209; [1991] FamCA 4

APPELLANT: Mr Trevi

RESPONDENT: Ms Trevi

FILE NUMBER: MLC 8475 of 2014

APPEAL NUMBER: SOA 38 of 2017

DATE DELIVERED: 3 April 2019

PLACE DELIVERED: Brisbane

PLACE HEARD: In Chambers

JUDGMENT OF: Alstergren CJ, Murphy & Kent JJ

HEARING DATE: Written costs submissions filed on 27 March 2019

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 18 May 2017

LOWER COURT MNC: [2017] FamCA 321

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Richardson SC

SOLICITOR FOR THE APPELLANT: N Lawyers

COUNSEL FOR THE RESPONDENT: Mr Bartfeld QC

SOLICITOR FOR THE RESPONDENT: Kennedy Partners

Orders

1. The wife pay the husband’s costs of and incidental to the re-exercise of discretion by the Full Court incurred on and from 2 October 2018, the amount of such costs to be agreed, or failing agreement, to be assessed on a party and party basis.

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 Trevi & Trevi (No. 3) 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 MELBOURNE

Appeal Number: SOA 38 of 2017
File Number: MLC 8475 of 2014

Mr Trevi

Appellant

And

Ms Trevi

Respondent

REASONS FOR JUDGMENT

1. On 6 September 2018 this Full Court allowed the husband’s appeal from the orders made by Thornton J on 18 May 2017 and set aside Order 1 of those orders, which provided for the payment of a cash sum from the husband to the wife.  The orders made on 6 September 2018 included provision for the parties to agree on an overall outcome in light of the reasons for judgment delivered by the Full Court.

2. In the event, the parties did not reach an agreed outcome.  It was necessary to re‑list the proceedings before the Full Court on 5 March 2019 for the purpose of, inter alia, the Full Court re-exercising the discretion under s 79 of the Family Law Act 1975 (Cth) (“the Act”) to make property settlement orders.

3. The Full Court re-exercised the discretion and made orders, accompanied by reasons for judgment, on 25 March 2019. The order for the cash sum payment was amended on 27 March 2019, pursuant to r 17.02 of the Family Law Rules 2004 (Cth) (“the Rules”) with the consent of the parties, to correct an accidental slip or omission. The amount ultimately ordered to be paid by the husband to the wife is $1,407,431.

4. Orders 2 and 3 made on 25 March 2019 were directed to the issue of costs, requiring the filing of written submissions if costs were sought (Order 2) and requiring that the amount of costs sought be specified by reference to the relevant scale of costs (Order 3).

5. On 27 March 2019 the husband filed written submissions of his Senior Counsel seeking costs as and from the date of delivery of the Full Court’s reasons for judgment delivered on 6 September 2018.  That application for costs is founded primarily on offers made by the husband to pay the wife $1,401,592 (on 27 September 2018) and $1,410,000 (on 2 October 2018).

6. In the result, as noted, the amount ordered to be paid is $1,407,431 so it can be seen that acceptance of either offer by the wife, also taking into account delay in payment and her own costs likely incurred, would probably have been more favourable to the wife than pursuit of the order ultimately made, and that is certainly so with respect to the offer of 2 October 2018 in an amount greater than the ordered amount.

7. Conversely, the husband can be seen to have been put to an additional burden for costs that would have been avoided if either of his offers had been accepted.

8. The wife opposes the application for costs, first, on the basis that the husband’s submissions occupy five pages rather than the ordered three pages.  However, two of those pages are directed to correction of the subject order under the slip rule.  Second, the wife objects to this Court receiving an affidavit from the husband’s solicitor.  Again, accession to that submission would allow form, rather than substance, to triumph and we overrule that objection and receive the affidavit.  Third, it is submitted that the amount of costs sought (counsel’s fees totalling $17,985) are costs on an indemnity basis and the husband has not, as was required by the subject orders, referred to the relevant scale of costs or items within it.  There is merit in this submission.

9. Beyond that, the wife’s submissions in opposition to the application for costs revolve around contentions to the effect that neither party was “wholly unsuccessful” in the appeal, within the meaning of s 117(2A)(e) of the Act and that the wife was entitled to seek “guidance” from the Full Court on the issue of interest, in the absence of relevant authority.

10. We reject the implicit contention of the wife to the effect that because each party received a costs certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) with respect to the appeal that this puts an end to an issue as to costs concerning the re-exercise of discretion. In our judgment, the question of re‑exercise of discretion, or alternatively the remitter of proceedings for that purpose, whilst forming part of the appeal proceedings, does not preclude this Court from separately considering the issue of costs with respect to that re‑exercise of discretion that this Full Court has undertaken, subsequent to the outcome of the substantive appeal.

11. We are not persuaded that the fact that the wife sought some “guidance” from the Full Court on the question of interest is a relevant consideration sufficient to refuse an application for costs otherwise warranted.

12. In our view, it is consistent with longstanding authority of this Court that offers of settlement are an important s 117(2A) consideration in determining the question of costs. Section 117(2A)(f) requires the Court to consider any offer in writing to settle the proceedings and the terms of any such offer.

13. In Robinson and Higginbotham (1991) FLC 92-209 Nygh J observed at 78,417 with respect to such a provision:

    …It is quite clear that the purpose of that provision is to ensure that offers to settle, if made seriously, are considered seriously, to ensure that the cost of litigation is avoided, the workload of this Court is lightened…

14. To similar effect, in Browne v Green (2002) FLC 93-115 the Full Court observed at [57]:[1]

    We think that whilst s 117(2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made. The insertion of s 117C into the legislation is a clear indication of the desire of Parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it a proper consideration, is something to which very significant weight indeed ought normally be given...

    [1] See also Lenova & Lenova (Costs) [2011] FamCAFC 141.

15. That noted, failure to accept an offer which in retrospect should have been accepted does not necessarily justify an order for costs on an indemnity basis.[2]

    [2] See JEL and DDF (No. 2) (2001) FLC 93-083.

16. Having regard to the considerations set out in s 117(2A) of the Act, we are comfortably satisfied that, by reference to the amount ultimately ordered, considerable weight ought be given to subsection (f) and to the offer of settlement made by the husband on 2 October 2018. We are satisfied that there are justifying circumstances, within the meaning of s 117(2) of the Act, for an order for costs to be made in favour of the husband.

17. Given the failure of the husband to adequately specify the amount of costs sought (counsel’s fees) by reference to the scale of costs, as was ordered to be done, we are unable to properly assess the just amount of costs to be ordered.  We accept the submission of the wife that there is no basis for an order to be made for indemnity costs as seems to be sought by the husband with respect to counsel’s fees.

18. Moreover, we are not satisfied that the items of costs are sufficiently particularised to enable us to determine to what extent the costs sought relate to matters about which it can be readily determined that the costs overall as claimed were reasonably necessary and thus recoverable on a party and party basis.

19. Finally, we consider that only costs incurred on and from the date of the husband’s offer of 2 October 2018 should be ordered.

20. For these reasons the costs will need to be assessed if not agreed.

21. Given that the offer made by the husband by his solicitors on 2 October 2018 is in an amount favourable to the wife, as compared to the amount of the order ultimately made, we will order that the wife pay the husband’s costs incurred on and from 2 October 2018, the amount of such costs to be agreed, or failing agreement, to be assessed on a party and party basis.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Alstergren CJ, Murphy & Kent JJ) delivered on 3 April 2019.

Associate: 

Date:  3 April 2019