Whitehouse and Whitehouse (Costs)
[2010] FamCAFC 93
•25 May 2010
FAMILY COURT OF AUSTRALIA
| WHITEHOUSE & WHITEHOUSE (COSTS) | [2010] FamCAFC 93 |
| FAMILY LAW - APPEAL – COSTS – Application for the Full Court to determine the costs at first instance concurrently with the costs of the appeal– Costs at first instance are under consideration by the trial judge – Inappropriate for the Full Court to determine the question of first instance costs – Application dismissed FAMILY LAW - APPEAL – COSTS – Application for costs against the appellant – Appellant the case guardian for the deceased wife – Appeal wholly unsuccessful – No novel propositions of law advanced in appeal – Costs ordered against the appellant. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 |
| Brown and Brown (1998) FLC 92-822 Fisher v Fisher (No. 2) (1986) 161 CLR 438 Petrotimor Companhia de Petroleos SARL v Commonwealth of Australia (2003) 128 FCR 507 W (Deceased) & W and Ors [2004] FamCA 319 |
| APPELLANT: | MS WHITEHOUSE (by her case guardian) |
| RESPONDENT: | MR WHITEHOUSE (by the executrices of his estate) |
| FILE NUMBER: | MLF | 3248 | of | 2006 |
| APPEAL NUMBER: | SA | 15 | of | 2009 |
| DATE DELIVERED: | 25 May 2010 |
| PLACE DELIVERED: | Brisbane |
| JUDGMENT OF: | May, O’Ryan and Stevenson JJ |
| DATE OF SUBMISSIONS: | 18 December 2009 and 22 January 2010 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 6 February 2009 |
| LOWER COURT MNC: | [2009] FamCA 68 |
REPRESENTATION
| SOLICITOR FOR THE APPELLANT: | CE Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Thompson and Mr Moloney |
| SOLICITOR FOR THE RESPONDENT: | Grice & Grice |
Orders
The appellant pay the costs of the respondent to be assessed.
IT IS NOTED that publication of this judgment under the pseudonym Whitehouse & Whitehouse (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SA 15 of 2009
File Number: MLF 3248 of 2006
| MS WHITEHOUSE (by her case guardian) |
Appellant
And
| MR WHITEHOUSE (by the executrices of his estate) |
Respondent
REASONS FOR JUDGMENT
Introduction
This was an unusual case given that both the husband and the wife had died prior to the finalisation of property settlement proceedings. The appeal was instituted by the wife’s daughter, Ms C, who was her case guardian. The respondent in the appeal was the executrices of the husband’s estate.
In this judgment we will on occasion follow the principal judgment and refer to the parties as husband and wife.
On 20 November 2009 the Full Court dismissed the appeal filed on behalf of the wife from the orders of Mushin J. The orders of Mushin J made on 6 February 2009 dismissed the wife’s applications. The appeal concerned the question as to whether property settlement proceedings could continue after the death of both parties, in particular whether the court had jurisdiction to make orders and whether an application pursuant to s 78 of the Family Law Act 1975 (Cth) (“the Act”) may be continued after the death of one party. The husband died in May 2007. The wife died in August 2007.
After dismissing the appeal the Full Court made directions in relation to the filing of submissions by the representatives of the husband and the wife with respect to costs. Submissions have been filed on behalf of both parties.
The successful respondent to the appeal asks for an order for costs in relation to the appeal and that we certify for counsel, including senior counsel, appearing in the appeal. He also asks that the Full Court determine the costs of the first instance proceedings “in the interests of having this entire proceeding completely and finally determined”. In that respect, he seeks that the wife’s estate pay the costs incurred from the date of death of the wife being … August 2007 or 75 per cent of the costs incurred. It is also asked that we certify for counsel at the hearing before Mushin J.
The appellant wife asks that the Full Court dismiss the husband’s costs application and that the costs of the first instance proceeding be determined by Cronin J (Mushin J then being on long leave), in accordance with orders made by Cronin J on 5 May 2009. A copy of those orders was attached to the wife’s submissions. Although his Honour ordered that the applications would be “determined on 9 June 2009” we understand that no order has yet been made.
Costs of the first instance proceedings
It is submitted on behalf of the respondent husband that the Full Court should determine the question of costs at first instance “to the extent that this is permitted” pursuant to ss 28 and 94 of the Act, r 1.09 of the Family Law Rules 2004 (“the Rules”) and the “implied incidental power of the Full Court”. Attached to his submissions is a copy of the husband’s submissions in relation to first instance costs, dated 26 May 2009.
The submissions of the appellant wife strongly oppose the Full Court determining the issue of costs at first instance. A number of matters are submitted in opposition, including that:
· no notice has been given to the Court or to the wife that such an application would be made;
· no application has been made to stay the determination of the costs judgment in the Family Court, meaning that a judgment could be delivered by Cronin J and the Full Court, which would not necessarily be consistent; and
· the applications for costs made by the husband at first instance and in the Full Court are not in identical terms.
In our view, it is inappropriate for the Full Court to determine the question of first instance costs on this occasion. In addition to the matters correctly raised in the appellant’s submissions, we observe that any appeal from such a decision would have to be pursued in the High Court. Although there are some unusual features of this litigation, applications of this type should not generally be entertained. There is nothing about this case which would attract a departure from the usual course.
Costs of the appeal
Section 117 of the Act provides that subject to sub-section 117(2), each party shall bear their own costs. It is necessary, therefore, for there to be circumstances that would justify an order for costs.
In determining the matter, the Court shall have regard to a number of matters listed in s 117(2A). Of relevance in this case are the following factors:
· the financial circumstances of each of the parties to the proceedings;
· whether any party to the proceedings has been wholly unsuccessful; and
· whether either party has made an offer to settle the proceedings and the terms of any such offer.
Submissions of the respondent to the appeal – the executors of the husband’s estate
At the outset, it was submitted that the “real nature” of the appeal proceeding and an appreciation of the “effective parties to that proceeding” should be given considerable weight. In paragraphs 17 and 18 it was submitted:
17.… the appeal was instituted by [Ms C], as the executrix and a beneficiary of her mother’s estate against the executrices of the estate of the deceased husband solely for the personal benefit of [Ms C] and any other beneficiaries of her mother’s estate.
18.Given these circumstances, the proceeding on appeal (at least) is more properly perceived as a civil proceeding between the executrices of the two estates rather than one between parties to a marriage or one covered by the general philosophy of the Family Law Act including that each party should generally bear his or her own costs. Where, as here, the appeal has been wholly dismissed for want of jurisdiction, a proper consideration of the real nature of, and effective parties to, the dispute of itself supports the Full Court finding that it is just that the costs of the appeal should “follow the event”, and making a costs order in favour of the respondents. (footnotes omitted)
Reference was also made to the decision of Brennan J in Fisher v Fisher (No. 2) (1986) 161 CLR 438, to which we made reference in the primary judgment.
The submissions then addressed each of the s 117(2A) factors.
In relation to the financial circumstances of the parties, reference was made to an affidavit sworn on behalf of the wife by Ms C on 23 November 2006, in which she deposed that her mother had “substantial assets”. It was submitted that there was no evidence to suggest that “the assets in the estate of [the wife] have decreased in value from what was deposed to in 2006” although they mostly consisted of shares and fixed deposits with banks.
It was submitted that in those circumstances, Ms C had access to sufficient funds to meet a costs order and furthermore, there is no material before the Full Court to “suggest that Ms [C] personally is unable to meet any such order”.
It was submitted that the fact that the appellant had prosecuted the appeal “after the learned Judge at first instance had determined that the Court lacked any jurisdiction to deal with or continue to deal with the dispute” after the wife’s death was relevant conduct which the Full Court should have regard in determining whether it was appropriate to make a costs order.
It was submitted that the appellant had been wholly unsuccessful and that this is “conclusive in favour of the making of a costs order in favour of the respondents”. It was further submitted:
The appellant was wholly unsuccessful at both first instance and on appeal on the fundamental question of the Court’s jurisdiction to continue to hear and determine the proceeding. It has been found at first instance that upon the death of [the wife], the Court had no jurisdiction to deal further with the amended application for final orders filed by the appellant. That decision was unanimously upheld by the Full Court.
Finally, it was submitted that neither party had made any written offers to settle in relation to the first instance proceedings or the appeal.
Submissions of the appellant – the wife’s case guardian
It was conceded that the appeal was unsuccessful. Correctly it was observed that this is only “one basis upon which the Court could proceed to make some order for costs”.
It was submitted that the disproportionate wealth of the two estates is a factor which militates against the making of any costs order. Reference was made to the Full Court decision in Brown and Brown (1998) FLC 92-822.
Attached to the submissions on behalf of the respondent to the appeal is a list of the assets of the estate of the wife proven in probate consisting of stocks, shares and investments totalling approximately $300,000. In contrast, it was submitted, the husband’s estate included the former matrimonial home (in which the parties resided in excess of thirty years), stocks, shares and investments, and exceeded $2.6 million.
As to the request on behalf of the husband in relation to the certification for counsel, it was submitted that there was no justification for the appearance of three counsel, including senior counsel for the husband. It was submitted:
The consistent engagement of three counsel (including two junior counsel) throughout the proceedings at first instance and on the appeal was unnecessarily [sic]. The costs of the preparation of three counsel is not an expense that the Applicants should have to meet at any level.
Although the Family Law Rules 2004 provide:
19.50 Certificate as to counsel
The judicial officer hearing a case may certify that it was reasonable to engage a lawyer (including Queen’s Counsel and Senior Counsel) as counsel to attend for a party.
in our view, we should not determine this question, rather it is best left to the assessment process as provided in r 19.52.
Discussion
To assess the merits of the parties’ submissions it is necessary to refer to the reasons for dismissing the wife’s appeal. The matters considered in the appeal are set out in the following paragraphs of the principle judgment:
4.As the husband’s legal personal representative challenged the Court’s jurisdiction to hear the wife’s amended application, the issue before Mushin J was whether the Court had jurisdiction to make orders, and if so, whether that jurisdiction should be exercised.
5.The judge determined that the wife’s amended application was void ab initio as relief should have been sought pursuant to section 78 of the Family Law Act 1975 (Cth) (‘the Act’). The orders made by Mushin J dismissed the wife’s amended application, dismissed all other applications and removed the proceedings from the list of cases awaiting hearing. The parties’ were given liberty to apply for consequent orders (including any order for costs).
6.It is argued by the respondent to the appeal that after the death of both parties, the original jurisdiction of the Court pursuant to the Act dissipated and no orders could be made by this Court. It is without doubt that absent the accrued jurisdiction of the Court, the death of the parties brought to an end the capacity of their representatives to seek orders for property settlement.
7.Arising from the decision of Mushin J a separate question is whether an application pursuant to section 78 may be continued after the death of one party.
In paragraph 16 we referred to an important agreement between the parties to the litigation before the trial judge which Mushin J correctly described as follows:
39.It is common ground that at the time of filing of the wife’s initiating application for alteration of property interests and the husband’s response thereto, both applications constituted a ‘matrimonial cause’ in accordance with paragraph (ca) of the definition of that term in s 4(1). Upon the death of the husband and the substitution of his legal personal representative pursuant to s 79(8) of the Act, the proceedings remained a ‘matrimonial cause’ within the original jurisdiction of this Court as held by the High Court of Australia in Fisher (supra). Further, it is agreed that the competing applications for alteration of property interests pursuant to s 79 of the Act came to an end upon the death of the wife and the Court no longer had jurisdiction to determine them from that time (MacKenzie (supra)).
40.It is agreed that the Accrued Application could not have been brought in its precise form within the original jurisdiction of the Court. This is based on the Court’s jurisdiction, or lack thereof, to deal with the matter ‘at equity’. I note the decision of Vergis and Vergis (1977) FLC 90-275, in which Emery J held at 76,470:
[T]he Family Court is not a court of Common Law or a Court of Equity as are the Supreme Courts of the States with inherent jurisdiction. The Family Court is a creature of statute and has no powers other than those given to it by statute.
In paragraphs 43 and 44 the trial judge found:
43.Section 78 refers to ‘the parties to a marriage’. At the time that the Accrued Application was made, one of the parties to the marriage, the husband, had died. There is nothing to suggest that the ratio of Fisher's case does not extend to an application under section 78 in the circumstances. No submission has been made to the contrary. Accordingly, I find that at the time of making the Accrued Application, the legal personal representatives of the wife could have amended the substantive application to seek an appropriate declaration which this Court had the jurisdiction to determine pursuant to that section. The evidence and submissions in support of the application would have been identical to those which could be advanced in a State Court in support of the relief sought in the Accrued Application. Likewise, the relief which the Court had jurisdiction to grant in an application pursuant to section 78 of the Act would have been identical to that which was available in the State Court as between the parties to the proceedings as they then were. It follows that had the legal personal representatives of the wife relied on section 78 rather than the Accrued Application, no prejudice would have been suffered by them with regard to the available relief.
44. In summary:
· Part VIII of the Act covers the field with regard to relevant matrimonial causes;
· At the time that the Accrued Application was made, the proceedings before the Court constituted a matrimonial cause, notwithstanding that one of the parties to the marriage had died;
· Accordingly, at that time, any relief which was a matrimonial cause could only be sought under the Act;
· The relief sought in the Accrued Application was a matrimonial cause which could have been brought under section 78 and therefore could only be sought pursuant to that section; and
· Because the relief sought in the Accrued Application was not sought under the Act, it was void ab initio for want of jurisdiction.
The wife’s application was dismissed.
Under the heading “Accrued jurisdiction”, we said:
28.Turning to the substantive issue raised in the appeal, counsel for the appellant noted that the husband was deceased when the wife’s application was amended to rely on the ‘accrued application’.
29.The essence of the submissions were that although the wife’s claims pursuant to section 79 abated at the death of both parties, the accrued claim survived the death of the wife. Contrary to the judgment of Mushin J, it was submitted that the wife was not entitled to seek declaratory relief under section 78 of the Act as there were ‘no parties to the relevant marriage’. Rather, the proceedings were ‘between a party to the marriage and the personal representatives for the other party to that marriage’.
30.The provisions of section 78(1) are as follows:
In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.
In the judgment we set out at length parts of the judgment of the Federal Court in Petrotimor Companhia de Petroleos SARL v Commonwealth of Australia (2003) 128 FCR 507. We would refer again to the following paragraphs:
18.What is, we think clear, however, is that where the federal part of the controversy is such that the Court lacks jurisdiction to hear it, then there can be no accrued jurisdiction. Accrued jurisdiction can only arise where the single controversy which is the ‘matter’ is one which is within the jurisdiction conferred upon the Court. If no federal jurisdiction is properly invoked then there can be no accrued jurisdiction: Carlton & United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543 and Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at 598 per French J.
…
20.It can be said in criticism of our view that the distinction we have sought to draw is a fine one. But it is a distinction which might need to be drawn where the question thereafter is whether the decision of this Court could be prohibited or quashed by the High Court under s 75 (v) of the Constitution because the Court has acted in excess of or failed to exercise its jurisdiction.
It can be seen from the conclusion of the Full Court judgment that we agreed with the first three conclusions as set out by the trial judge in paragraph 44, to which we have referred. However, we did not agree with his Honour in relation to the “accrued jurisdiction” argument. In essence, we accepted the argument of the appellant in relation to s 78.
The court exercises a wide discretion in relation to costs. In this case the fact that the appeal was wholly unsuccessful is of critical importance.
As to the impact of the decision of the Full Court in relation to the appellant’s case and the application by the respondent for costs, it can be seen that the appellant failed in the appeal.
In the judgment we relied on Fisher v Fisher (No. 2), decided by the High Court of Australia in 1986. There were no novel propositions of law advanced in the appeal, nor matters that had not previously been considered by this Court and the High Court of Australia.
The argument raised by the respondents to the appeal, the applicants for costs, that we should consider who the parties to the appeal are is a correct consideration in this matter although no support was provided for that proposition by authority. Although reference was not made to it, we have some regard to the decision W (Deceased) & W and Ors [2004] FamCA 319 especially paragraph 28 as follows:
28.In relation to the financial circumstances of the parties, we know nothing of those of the appellants personally, but that is irrelevant, because they are not parties in their own right but only as the legal personal representatives of their deceased mother. The financial circumstances of the estate are relevant, and well-known, being described in details in the judgment of the trial Judge. …
In our view, the nature of the appeal together with the result that the appeal was wholly unsuccessful justifies an order that the appellant should pay the respondent’s costs.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 25 May 2010
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