Worth & Worth (No.2) - [2019] FamCAFC 126

FAMILY COURT OF AUSTRALIA

WORTH & WORTH (NO. 2)

[2019] FamCAFC 126

FAMILY LAW – APPEAL – COSTS – Where the respondent seeks her costs on an indemnity basis – Where regardless of the concession by the appellant that he should make a payment, albeit a much lesser sum than the amount sought by the respondent, the appeal was dismissed, the appellant was wholly unsuccessful, and that alone provides a circumstance justifying an order for costs – Where the circumstances cannot be categorised as being exceptional such as would warrant indemnity costs – Where in the alternative the respondent seeks costs on a solicitor/own client basis – Where this would still be a significant departure from the usual costs assessment on a party/party basis – Where the respondent needs to make out a case for achieving greater indemnity than would be received by her on a party/party basis – Where there is no basis here for departing from the usual approach of assessing costs on a party/party basis – Appellant to pay the respondent’s costs of and incidental to the appeal, such costs to be assessed on a party/party basis in default of agreement.

Family Law Act 1975 (Cth) ss 117(2), 117(2A), 117(2A)(a)

Bouras v Grandelis (2005) 65 NSWLR 214; [2005] NSWCA 463
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801
Limousin & Limousin(Costs) (2007) 38 FamLR 478; [2007] FamCA 1178
Munday v Bowman (1997) FLC 92-784
Yunghanns v Yunghanns (2000) FLC 93-029; [2000] FamCA 681

APPELLANT:

Mr Worth

RESPONDENT:

Ms Worth

INDEPENDENT CHILDREN’S LAWYER:

Legal Aid Queensland

FILE NUMBER:

NOA

2017

APPEAL NUMBER:

BRC

1771

2014

DATE DELIVERED:

29 July 2019

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Brisbane

JUDGMENT OF:

Strickland, Kent & Hogan JJ

HEARING DATE:

18 May 2018

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

13 April 2017

LOWER COURT MNC:

[2017] FamCA 227

REPRESENTATION

THE APPELLANT:

In person

COUNSEL FOR THE RESPONDENT:

Mr George

SOLICITOR FOR THE RESPONDENT:

Rosen Lawyers

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER

Ms McArdle

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER

Legal Aid Queensland

Orders

The appellant husband pay the costs of the respondent wife of and incidental to the appeal, up to and including 18 May 2018, such costs to be assessed on a party/party basis in default of agreement.

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 Worth & Worth (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 FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NOA 16 of 2017
File Number: BRC 1771 of 2014

Mr Worth

Appellant

And

Ms Worth

Respondent

And

Independent Children’s Lawyer

REASONS FOR JUDGMENT

Introduction

On 8 March 2019 this Court dismissed the appeal filed by Mr Worth (“the husband”) against certain of the final parenting and property settlement orders made by Forrest J on 13 April 2017.
At that time orders were also made for the parties to file and serve written submissions as to the question of the costs of and incidental to the appeal.
On 12 March 2019 Ms Worth (“the wife”) filed her written submissions in which she sought an order that the husband pay her costs calculated on an indemnity basis in the sum of $49,959.20.
On 28 March 2019 the husband filed his written submissions in response in which he opposed that order, but proposed that he pay $4,000 towards the legal costs of the wife.
On 15 April 2019 the wife’s solicitor filed a brief responding written submission to the husband’s submission, but it is unnecessary to refer to the same.
Given the concession made by the husband that he should pay $4,000 by way of costs, there can be no issue that an order for costs in favour of the wife is warranted in this case. Indeed, regardless of that concession, there are circumstances here that justify an order for costs being made (s 117(2) and (2A) of the Family Law Act 1975 (Cth) (“the Act”)), and we need to go no further than to refer to the fact that the appeal was dismissed, and thus the husband was wholly unsuccessful, as providing that circumstance.
Section 117(2A)(a) also requires this Court to have regard to the financial circumstances of each of the parties to the proceedings. In her written submissions the wife referred to her financial circumstances as providing a basis for an order for costs, and there is some force in that submission. As for the husband, he referred obliquely to his financial circumstances, but he did not promote them as providing a basis for there being no order for costs.
Given that this Court is satisfied that there is at least one circumstance justifying an order for costs in the wife’s favour, the issue that needs to be addressed is how those costs should be calculated, namely on the usual party/party basis, or the exceptional indemnity basis.
The authorities are clear, that for the usual basis to be departed from, exceptional circumstances need to be demonstrated (see, eg, Limousin & Limousin (Costs) (2007) 38 FamLR 478). The categories of such circumstances are not closed (Yunghanns & Yunghanns (2000) FLC 93-029), but some examples are provided in the oft-quoted decision of Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (“Colgate-Palmolive Co”), and usefully, Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660, drew from his Honour’s decision the following:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties.
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
(e)An imprudent refusal of an offer to compromise.
(Citations omitted)
The wife submitted that indemnity costs were warranted in this instance because:
a)The wife ought not be “out of pocket”.
b)“…an award of costs against the Husband in a sum any less than the actual monetary cost to the Wife would work an extraordinary injustice”.
c)The property settlement order “is a once off opportunity for [the wife] to provide for her future and the future of two young and needy children”, and her entitlement should “not be depleted by having to pay any legal fees incurred in responding to this Appeal” (emphasis as per the original).
d)The “circumstances in this case, in addition to the extraordinary conduct of the Husband as a litigant” (emphasis as per the original), justify not only that he pay costs, but that they be assessed on an indemnity basis.
We do not consider that any of those circumstances can be categorised as “exceptional circumstances” such as would warrant indemnity costs. For example, to say that the wife should not be “out of pocket” begs the question, as does the suggestion that an amount less than all of the actual costs incurred would work an injustice, and likewise the plea that the wife’s property settlement entitlement should not be depleted by having to pay any legal fees.
The husband’s conduct as a litigant can be relevant, but only in relation to the appeal, and not in relation to the trial.
The husband’s conduct identified in the written submissions of the wife at paragraphs 2, 5, and 8–18 in the context of the appeal, certainly justifies an order for costs, but it does not warrant a departure from the assessment of costs on the usual basis of party/party.
Thus, we are not persuaded that the costs should be calculated on an indemnity basis.
In the alternative the wife seeks that her costs be assessed on a “solicitor/own client” basis.
There is no doubt that there is a difference between indemnity costs and solicitor/own client costs, and that difference relates to the level of indemnity. In other words, with the latter not all of the costs incurred are claimable, but the difference is relatively minor, and has been “eroded by practice and by inconsistent amendments to the various legislative instruments that make up the costs assessment regime” (Bouras v Grandelis (2005) 65 NSWLR 214, per Santow JA at [125]).
Further, given that they would still represent a significant departure from the usual assessment on a party/party basis, there needs to be sufficient justification demonstrated for that departure. It is not, as the wife submits, that the costs sought only have to be seen as “reasonable”. In our view, a case needs to be made out by the wife for giving her greater indemnity than she would receive on a party/party basis, and indeed, something approaching an exceptional circumstance is required. As Sheppard J said in Colgate-Palmolive Co at page 233:
4.In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course …
However, that is not the case here and we do not consider that there is any basis for departing from the usual approach of assessing the costs on a party/party basis.
Unfortunately, the only schedule of costs that the wife provided with her written submissions, was a schedule calculated on an indemnity basis. Thus, we are not in a position to fix the costs, and that will need to go to assessment in default of agreement. Likewise the husband advanced no cogent reason to support a conclusion that it would be just to limit the amount of costs ordered to only $4,000, rather than the assessed amount.
Finally, and out of abundant caution, we note two matters:
a)In ordering that the husband pay the costs of the wife of and incidental to the appeal calculated on a party/party basis, the wife is not thereby entitled to claim any of the costs of the Application in an Appeal filed by her on 15 November 2018, and which application was discontinued on 19 February 2019. No costs were sought by either party in relation to that application or its discontinuance.
b)Our order for costs only provides for the costs up to and including 18 May 2018, the date of the hearing of the appeal. That is because the wife has failed in her claim to recover indemnity costs, and the husband has failed to limit the costs to $4,000. Thus, the wife should not be able to claim any costs incurred subsequent to the hearing of the appeal, including with respect to the written submissions on costs.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Kent & Hogan JJ) delivered on 29 July 2019.

Legal Associate:

Date: 29 July 2019