Vadisanis and Vadisanis (Costs)
[2012] FamCAFC 196
•27 November 2012
FAMILY COURT OF AUSTRALIA
| VADISANIS & VADISANIS (COSTS) | [2012] FamCAFC 196 |
| FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – EXTENSION OF TIME – where the wife sought an extension of time to file an application for costs – where the husband has not responded to the application – where there was an adequate explanation for the failure to comply with the timeframe provided in the Rules – where the husband’s conduct provides significant support for the wife’s application – where the interests of justice demand that the application be granted – application granted. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – COSTS – where the wife seeks that the husband pay her costs of and incidental to the appeal filed by him on 19 January 2010 – where the wife seeks that costs be paid on an indemnity basis – where the husband failed to respond to the wife’s application – where the conduct of the husband and his failure to comply with court orders provide circumstances that justify an order for costs – where there are no exceptional circumstances that justify an order for indemnity costs – husband to pay the wife’s costs assessed on a party/party basis in default of agreement. |
| Family Law Act1975 (Cth) s 117 Family Law Rules 2004 (Cth) r 1.14 and r 22.45 |
| Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 D & D (Costs) (No. 2) (2010) FLC 93-435 Gallo v Dawson (1990) 93 ALR 479 Kohan and Kohan (1993) FLC 92-340 Limousin v Limousin (Costs) (2008) 38 Fam LR 478 |
| APPELLANT/RESPONDENT: | Mr Vadisanis |
| RESPONDENT/APPLICANT: | Ms Vadisanis |
| FILE NUMBER: | SYC | 6377 | of | 2008 |
| APPEAL NUMBER: | EA | 10 | of | 2010 |
| DATE DELIVERED: | 27 November 2012 |
| PLACE DELIVERED: | Adelaide |
| JUDGMENT OF: | Finn, Thackray & Strickland JJ |
| HEARING DATE: | By way of written submissions |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 23 December 2009 |
| LOWER COURT MNC: | [2009] FamCA 1385 |
REPRESENTATION
| SOLICITORS FOR THE APPELLANT /RESPONDENT: | Vizzone Ruggero & Associates |
| SOLICITORS FOR THE RESPONDENT/ APPLICANT: | Campbell Paton & Taylor |
Orders
The time for the wife to file an application for costs be extended nunc pro tunc to 11 January 2012.
The husband pay the wife’s costs of and incidental to the appeal excluding costs in relation to the application in an appeal filed by the wife on 6 July 2011, with such costs to be assessed on a party/party basis in default of agreement.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Vadisanis & Vadisanis has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 10 of 2010
File Number: SYC 6377 of 2008
| Mr Vadisanis |
Appellant/Respondent
And
| Ms Vadisanis |
Respondent/Applicant
REASONS FOR JUDGMENT
Introduction
This is an application by the respondent wife (“the wife”) filed on 11 January 2012 seeking an order for an extension of time to file an application for costs, and in the event that time is extended, seeking an order that the appellant husband (“the husband”) pay the wife’s costs of and incidental to the appeal filed by the husband on 19 January 2010.
The husband has failed to respond to that application.
Background
On 19 January 2010 the husband filed an appeal against parenting orders made by Justice Le Poer Trench on 23 December 2009.
As a result of the husband’s failure to file appeal books by 29 June 2010 as ordered by the Appeal Registrar on 28 April 2010, the appeal was deemed abandoned.
On 17 December 2010, on the application of the husband, the appeal was reinstated, and orders made, inter alia, for the filing and service of an Amended Notice of Appeal by 24 December 2010, and extending the time to file and serve the appeal books to 25 February 2011.
The husband failed to fully comply with these orders and on 6 July 2011 the wife filed an application in an appeal seeking that the appeal be dismissed.
On 23 August 2011 this Court made orders dismissing the application in an appeal filed by the wife and providing, inter alia, for the husband to file and serve his summary of argument by 23 September 2011, and that if he failed to do so the appeal do stand dismissed. Importantly an order was also made that the costs of and incidental to the application in an appeal filed on 6 July 2011 be paid by the husband’s solicitor.
The husband failed to comply with these orders, and thus the appeal stood dismissed.
On 9 May 2012 this Court ordered that the wife’s application filed on
11 January 2012 be dealt with by way of written submissions according to the following timetable:
a)By 1 July 2012 the wife serve on the husband that application, the supporting affidavit, a copy of these orders, and brief written submissions in support of the application;
b)By 1 August 2012 the husband serve on the wife any response to the application with brief written submissions in support of such response; and
c)By 15 August 2012 the wife serve on the husband any further submissions in reply, and file all written submissions served in accordance with the previous orders.
On 29 June 2012 the wife filed an affidavit and submissions in support of the application.
On 6 July 2012 the wife’s solicitors filed an affidavit of service in relation to service upon the husband’s solicitors of the application in an appeal filed on
11 January 2012, the wife’s affidavit in support, and unsealed and sealed copies of the wife’s affidavit and submissions in support of the application filed on 29 June 2012.
On 22 August 2012 the Appeal Registrar received a letter from the wife’s solicitors advising that the husband had not served on them any response or written submissions in accordance with the orders made on 9 May 2012.
In these circumstances we proceed to determine the wife’s application in an appeal filed on 11 January 2012.
Application for an extension of time
Pursuant to r 22.45(4) of the Family Law Rules 2004 (Cth) (“the Rules”) an application for costs must be made within 28 days after an appeal is dismissed under r 22.45. However, pursuant to r 1.14 a party may apply for an extension of time to make such an application.
The principles applying to an application to extend time are well settled. They are conveniently set out in the oft-cited judgment of McHugh J in the High Court decision of Gallo v Dawson (1990) 93 ALR 479, at 480. His Honour said this:
The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes, at 263-4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice.
Thus, the fundamental issue is whether an extension of time is necessary to enable the court to do justice between the parties, and in assessing where the justice of the case lies there are a number of factors that may be relevant to take into account. For example, whether there are adequate reasons explaining the delay (or the failure to comply with the relevant timeframe), the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences of a grant or refusal of the application.
Adequate explanation
Here the application was eventually filed on 11 January 2012, namely 82 days beyond the 28 day period allowed by the Rules.
In summary the reasons provided by the wife for failing to comply with the timeframe in the Rules are as follows:
17.1The Wife was not aware that she [had] to file the costs application within 28 days after the Appeal being dismissed
17.2The Wife was burdened with full-time care of the two (2) children to the marriage, had had to engage in full-time work to support the children and had received no financial support from the Husband since 5 August 2009 when the children were returned to full-time her (sic) care.
17.3The wife was also burdened with having to prepare for the substantive property proceedings, with her evidence in chief due to be filed by 23 December 2011.
17.4The propensity of the Husband to file Applications to reinstate the Appeal and the letter from Appeal Registrar Halbert dated
29 September 2011 led the Wife to assume a further application would be filed by the husband.It cannot be a relevant excuse that the wife was unaware that she had to file the application within 28 days, and particularly given that she was legally represented at all times. Nor can it be relevant that she thought the husband would file an application to reinstate. However, it is understandable that she was distracted by the full-time care of her children and having to prepare for the substantive property settlement proceedings.
Accordingly, we find that there has been an adequate explanation of the failure to comply with the timeframe provided for in the Rules.
The conduct of the parties
There is of course no issue with the conduct of the wife; she has behaved appropriately at all times. However, the conduct of the husband is a matter of serious concern and is highly relevant to where the justice of the case lies.
As referred to above, after filing his Notice of Appeal, the husband failed to comply with the order for the filing and serving of the appeal books. Then, after having the appeal reinstated the husband again failed to comply with the orders made at the time, and that led to the application by the wife to dismiss the appeal. That application was not successful though, and the husband was given yet another chance to pursue his appeal. However, he again failed to comply with the order giving him that opportunity, and as a result the appeal has been dismissed.
Finally, a regime was put in place for the making of submissions as to costs, and the husband has failed to comply with that regime.
Accordingly, it can be seen that the husband’s conduct provides significant support to the justice of the case favouring the wife in her application.
The history of the proceedings and the nature of the litigation
The wife did not address any submissions to the Court on these topics, and it is unnecessary to consider them.
The consequences of the granting or refusal of the application
If the application is granted then the costs application will proceed and the husband will need to deal with it. However, he has chosen not to file any submissions and presumably take his chances, and thus we have little sympathy for him in considering whether the application for costs should be allowed to proceed.
If the application is refused then the wife will not be able to pursue the application for costs. Given that this all started with the husband’s appeal, and that appeal has now been dismissed after the wife has incurred significant costs, such a result will be a severe financial prejudice to the wife.
Conclusion as to the application to extend time
As the authorities recognise, the consideration of the relevant factors informs the court in determining the fundamental issue, namely, where the justice of the case lies. Here, it is beyond doubt that the interests of justice demand that the application be granted. There is an adequate explanation for the failure to comply with the Rules, the conduct of the husband in failing to pursue his own appeal speaks for itself, and the wife will suffer serious financial prejudice if the application is refused. Thus we propose to grant the application.
The application for costs
Introduction
Unhelpfully, the applicant wife has failed to identify the amount of costs sought, but she does seek that any costs order be calculated on an indemnity basis. We also observe that her application excludes the costs of and incidental to her application filed on 6 July 2011, those costs being the subject of an order of this Court made on 23 August 2011 for the husband’s solicitors to pay those costs.
To repeat, the respondent husband has failed to file any submissions in relation to this matter, but we proceed on the basis that he opposes the application.
The relevant statute law
The principles which govern an application for costs in proceedings under the Family Law Act1975 (Cth) (“the Act”) are set out in s 117 of the Act. The relevant sub-sections provide 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.
Thus, the general rule is that each party should bear his or her own costs of proceedings under the Act. However, the court is empowered to make an order for costs if it is of the opinion that there are circumstances which would justify such an order, and s 117(2A) sets out a range of matters to which the court should have regard in considering whether to make an order for costs, and if so, how much that order should be.
Turning then to the relevant factors set out in s 117(2A).
(a) The financial circumstances of the parties
We of course have no evidence from the husband as to his financial circumstances, but as to the wife:
a)The wife is employed full-time, and her gross income is $1,379 per week. In addition, she receives a family tax benefit of $140 per week.
b)The wife has the primary responsibility of caring for and supporting the two children of the marriage. The husband has not provided the wife with any financial support for the children and he has only seen them on three occasions since August 2009.
c)The wife’s expenses total $2,573 per week.
d)There are pending property settlement proceedings between the parties. The wife’s estimated value of her property assets is $329,854, and she has superannuation entitlements of $30,365. The wife’s liabilities are $245,351 including legal costs of $149,563 as at 14 February 2012. The wife says that she has incurred a further $40,000 in legal costs since then.
(b) Legal aid
Neither party received legal aid.
(c) The conduct of the parties to the proceedings
(d) Compliance with previous orders of the court
We have set out above the relevant conduct of the husband in failing to comply with orders of this Court, and we need not repeat that. In summary, his conduct has caused delay and the incurring of unnecessary legal costs by the wife. He has been afforded a number of opportunities to prosecute his appeal, but he has failed on each occasion to comply with the orders put in place.
Although it is apparent that part of the husband’s failure to comply has been the fault of his lawyers, and one costs order has been made against his solicitors, that still does not absolve the husband from responsibility for the other failures.
(e) Wholly unsuccessful in the proceedings
The husband’s appeal has been dismissed and to that extent the husband has been wholly unsuccessful in the proceedings. However, the cause of that has been his failure to comply with orders of this Court, and thus that should be the basis for any order for costs being made.
(f) Offers of settlement
This factor is not relevant here.
(g) Other matters
We do not consider that there are any other relevant matters here.
Conclusion as to the application for costs
It is beyond doubt that the conduct of the husband and his failure to comply with orders of this Court provide circumstances that justify an order for costs being made. Further, that conclusion is enhanced by a consideration of the wife’s financial circumstances.
We now turn to that aspect of the wife’s application which sought that any order for costs should be on an indemnity basis.
A useful recent discussion of the question of indemnity costs is to be found in the decision of the Full Court in D & D (Costs) (No. 2) (2010) FLC 93-435. There the Full Court reviewed extensively earlier authorities including Limousin v Limousin (Costs) (2008) 38 Fam LR 478 and Kohan and Kohan (1993) FLC 92-340, and also Sheppard J’s decision in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248.
It emerges from the discussion by the Full Court in D & D (Costs) (No. 2) that there still needs to be exceptional circumstances to justify an order for indemnity costs in this jurisdiction. In our view, there are no such exceptional circumstances in this case.
Accordingly, the order that we would make is that the husband pay the wife’s costs of and incidental to the appeal excluding costs in relation to the application in an appeal filed by the wife on 6 July 2011, with such costs to be assessed on a party/party basis in default of agreement.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Finn, Thackray and Strickland JJ) delivered on 27 November 2012
Associate:
Date: 27 November 2012
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