Tsay and Lou (No. 2)
[2018] FamCAFC 245
•5 December 2018
FAMILY COURT OF AUSTRALIA
| TSAY & LOU (NO. 2) | [2018] FamCAFC 245 |
| FAMILY LAW – APPEAL – COSTS – Application of costs of a discontinued appeal – Where the applicant wife earns no income except for interim spousal maintenance and does not receive social security benefits – Where the husband has numerous property and business interests – Where the husband failed to comply with directions of the Appeal Registrar – Discontinued appeal not wholly unsuccessful pursuant to s 117(2A)(e) of the Family Law Act 1975 (Cth) – Where the wife was put to unnecessary expense preparing for the appeal – Justifying circumstances for costs on a party-party basis – Costs ordered. |
| Family Law Act 1975 (Cth) s 117 (2A)(e) |
| Bant & Clayton (Costs) (2016) Fam LR 31; [2016] FamCAFC 35 Bhatt & Acharya [2017] FamCAFC 71 Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 Parke & the Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248 |
| APPLICANT: | Ms Tsay |
| RESPONDENT: | Mr Lou |
| FILE NUMBER: | SYC | 1304 | of | 2018 |
| APPEAL NUMBER: | EA | 94 | of | 2018 |
| DATE DELIVERED: | 5 December 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ryan J |
| HEARING DATE: | 5 December 2018 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 9 July 2018 |
| LOWER COURT MNC: | [2018] FCCA 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Heazlewood |
| SOLICITOR FOR THE APPLICANT: | McLachlan Thorpe Partners |
| SOLICITOR FOR THE RESPONDENT: | Lawside Lawyers |
Orders
That the respondent pay the applicant’s costs of the discontinued appeal in the amount of $2,729 within one (1) month of the date of these orders.
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 Tsay & Lou (No. 2) 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 SYDNEY |
Appeal Number: EA 94 of 2018
File Number: SYC 1304 of 2018
| Ms Tsay |
Appellant
And
| Mr Lou |
Respondent
EX-TEMPORE REASONS FOR JUDGMENT
Ms Tsay (“the wife”) makes an application for costs of a discontinued appeal. The appeal was bought by Mr Lou (“the husband”) and relates to interlocutory financial orders made on 9 July 2018. Relevantly, the orders require the husband to pay spousal maintenance arrears of $13,840 and a lump sum payment for further interim spousal maintenance in the amount of $72,800, calculated at $1,400 per week for one year. The wife’s application for interim property settlement was dismissed. A suite of orders was also made which reflected the parties’ agreement about dealings with particular assets, however some of the mechanics of those dealings seem to have been contentious. Perhaps that it is why they were subject of an appeal, even though the underlying import of the orders was agreed. For example, orders for the wife to take possession of a motor vehicle, the payment of mortgage arrears, for some of the proceeds of sale of a property at T Road to be paid into a controlled monies account and for sale the of property at Suburb D.
The notice of appeal was filed in 12 July 2018. The notice of discontinuance was filed on 15 October 2018 and the wife’s application of costs of the appeal and today was filed on 8 November 2018.
Pursuant to s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”), the Chief Justice directed that it is appropriate that this application be determined by a single judge.
Background
So as to understand today’s application it is necessary to outline some brief background facts.
The parties were married in June 2016 and separated in January 2018. They have one child C, who was born in April 2017 (“the child”). The child lives with the wife. Prior to separation the parties lived in Suburb D. The husband has interests in other property, owned either by him or by various corporate entities, and claims a number of loans related to these properties. However the nature of the ownership of these properties and legitimacy of the loans is a matter of dispute between the parties which will be determined at the final hearing.
The primary judge found that the wife earns no income and it was not in dispute that she does not receive any social security benefits. On 8 May 2018 orders were made for the husband to pay the wife interim spousal maintenance, and at the time of hearing of the wife’s application on 6 July 2018 there were arrears in the amount of $13,840. The wife sought payment of that amount plus a further lump sum interim spousal maintenance order in the amount of $75,000 and a partial property settlement in the amount of $25,000.
The husband initially sought that the wife’s application be dismissed, however it is plain from the trial reasons that agreement emerged as to the sale of property and other matters as outlined above. At all times the husband opposed the wife’s application for interim spousal maintenance and interim property settlement and it is these orders that were the focus of the husband’s appeal.
The application for costs
Section 117(1) of the Act is the governing provision concerning costs and provides the general rule that, subject to s 117(2), each party to proceedings under the Act should bear his or her own costs. Section 117(2) requires a finding of justifying circumstances for the making of an order for costs. If so found, the court may make such order for costs as the court considers just. In considering what order, if any, should be made the court is required to have regard to the factors listed in s 117(2A). I will now consider the s 117(2A) factors as relevant.
The first factor is the financial circumstances of each of the parties (s 1172A(a)). The wife contends that she has no income apart from spousal maintenance and it is uncontroversial that she has care of the parties’ infant child. The trial reasons reveal that she does not receive any social security benefits, and that the wife received support from family members in the amount of $50,000, however those monies were to be applied to legal expenses and her living expenses. As to the husband, the primary judge found that it was difficult to understand precisely his financial situation, however she was satisfied that he was able to make spousal maintenance payments to the wife and that he has considerable property interests. Nothing was said by his solicitor this morning which suggests that the husband does not have the capacity to pay in the amount sought and I proceed on the basis that he can.
The next factor is s 117(2A)(c), the conduct of the parties. This is relevant in relation to the husband’s conduct subsequent to the filing of his notice of appeal on 12 July 2018.
On 27 August 2018 the Appeals Registrar made a direction that the husband file and serve written submissions by 3 September 2018 as to why leave to appeal should be granted as per the principles set out in Medlow & Medlow (2016) FLC 93-692.
On 3 September 2018, the day the submissions were due, the husband’s solicitors sent an email to the Appeals Registrar seeking an extension of time, stating that counsel was unable to meet the timeframe. No formal application for an extension of time was made by the husband, and no further explanation provided, either in the email or by affidavit evidence, as to why the deadline could not be met. The wife filed her submissions on 10 September 2018 in compliance with the Registrar’s direction.
The husband’s conduct in failing to comply with the directions of the Appeal Registrar is a factor to be given some weight, though I do not consider it to be determinative, particularly as it appears on its face that the failure to comply with this direction may in part be the responsibility of the husband’s former solicitors, who I note filed a notice of ceasing to act on 12 September 2018. Be that as it may, it is for the husband to diligently attend to the conduct of his litigation.
The next matter to consider is whether the husband has been wholly unsuccessful in his appeal (s 117(2A(e)). I agree with the submission made by counsel for the wife that as the husband’s appeal has not been heard on its merits; consistent with authority I would not find that he has been wholly unsuccessful (Bant & Clayton (Costs) (2016) Fam LR 31 (“Bant”)). While I accept that the Full Court came to a different view in Bhatt & Acharya [2017] FamCAFC 71, no authority was cited for the proposition that a discontinued appeal is one that has been wholly unsuccessful and I remain of the view as outlined above in Bant (see also Parke & the Estate of the Late A Parke (2016) FLC 93-748). The effect of this is that the question of whether the husband has been wholly unsuccessful does not arise in this case.
Section 117(2A)(g) allows the court to consider such other matter as it considers relevant. In this case, it is unarguable that the wife incurred costs in preparing for an appeal unnecessarily, all the more so in circumstances where her financial situation is precarious, and it is this factor on which I place the most weight. In my view the fact that the wife has incurred costs unnecessarily amounts to justifying circumstances and on balance means that an order for costs in the wife’s favour should be made.
Quantum
The wife is seeking costs in the amount of $8,328.70. For reasons which fail me, the application for costs was presented on an indemnity basis. This is not the type of matter which would attract indemnity costs, so much so was conceded by counsel for the wife. Why the solicitor went to the trouble of preparing a bill calculated on an indemnity basis defies logic.
Not without considerable difficulty, I was able to establish that the costs sought calculated on a party-party basis amount to $6,193. But that amount provides for eleven hours of preparation and attendances by the wife’s solicitor. Once it is understood that the solicitor did not prepare the submissions filed in the case, did not prepare the application for costs nor the three paragraph affidavit which was filed in support of it and the appeal had not yet been listed for hearing, the figure of eleven hours in unsustainable. It is appropriate in my view to allow the solicitor’s costs at the rate of three hours. Counsel for the wife said this should be calculated at the rate of $158 per hour. That comes to an amount of $474.
I do not agree that an application for costs as simple as this necessitated the retention of counsel to appear. Of course I make no criticism of wife for choosing to brief counsel, but the question here is that, on an application for adverse costs, whether that decision should be visited on the husband. In my view it should not. Doing the best that I can with the material that has been provided, I propose to allow $500 for today’s appearance.
Counsel was obviously briefed to prepare the documents filed in the proceedings and the amount sought is appropriate. That being the case, the appropriate order for costs is in the amount of $2,729 and I will make an order to that affect. The order will allow for payment within a month.
I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan on 5 December 2018.
Associate:
Date: 6 December 2018
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