Yunghanns v Yunghanns

Case

[2000] FamCA 681

2 June 2000


[2000] FamCA 681

FAMILY LAW ACT 1975

IN THE FULL COURT OF THE
FAMILY COURT OF AUSTRALIA

AT SYDNEY  Appeal Nos.SA48 & 49L of 1998
  File No. ML6666 OF 1992

IN THE MATTER OF:  PETER NICHOLAS YUNGHANNS
  RENTIERS MACHINERY PTY LTD
  RENTIERS PTY LTD
  HAVANA PEAK PTY LTD
  INDUSTRIAL ENGINEERING PTY LTD
  CROXLEA PTY LTD
  KREMFOUR PTY LTD
  PALASSA PTY LTD
  BALLAN PASTORAL CO PTY LTD

Appellants

AND:  DAVID BRIAN YUNGHANNS
  WINGARA WINE GROUP PTY LTD
  LIGON 211 PTY LTD
  CANDOORA NO.19 PTY LTD
  SUNNYCLIFF ORCHARDS PTY LTD
  SUNNYCLIFF INVESTMENTS PTY LTD

First Respondents

AND:  MARGARET BRUCE YUNGHANNS

Second Respondent

CORAM:  LINDENMAYER HOLDEN & MULLANE JJ
DATES OF HEARING:  1 APRIL, 18 AUGUST, 1999 & WRITTEN SUBMISSIONS
DATE OF JUDGMENT:  2 JUNE, 2000

JUDGMENT OF LINDENMAYER & HOLDEN JJ AS TO COSTS

Appearances:              Mr R. Robson of Queens Counsel with Mr Young of Counsel (instructed by Nedovic & Co, Solicitors, Suite 11, 600 Lonsdale Street, Melbourne, Vic, 3000) for the Appellants

Mr Bigmore of Counsel (instructed by Jerrard & Stuk, Solicitors, DX30907, Melbourne, Vic) for the First Respondents

Mr Elliott of Counsel (instructed by Stedman Cameron, Solicitors, DX217, Melbourne, Vic) for the Second Respondent

Mr Fildes, Solicitor (of Middletons Moore & Bevins, Solicitors, Level 29, 200 Queen Street, Melbourne, Vic, 3000) for Middletons, Moore & Bevins

Mr Toohey, Solicitor (of Tress Cocks Maddox, Solicitors, Level 7, 469 LaTrobe Street, Melbourne, Vic, 3000) for Lander & Rogers

Mr Dixon of Counsel (instructed by Connery & Partners, Solicitors, DX339, Melbourne, Vic) for Mr Udorovic and (instructed by Peter Black & Associates, Solicitors, Level 13, 114 William Street, Melbourne, Vic, 3000) for Mr Brown

INTRODUCTION

  1. On 23 February, 1999, this Court delivered judgment and made orders in an appeal and an application for leave to appeal by Peter Nicholas Yunghanns (“the husband”), and a number of companies over which he exercises control, against orders made by Dessau J in proceedings instituted by David Brian Yunghanns (“the son”) and various companies effectively controlled by him.  Margaret Bruce Yunghanns (“the wife”) was also a respondent to that appeal and application for leave to appeal.  For convenience hereafter, when referring to the husband and the companies he controls, collectively, we shall call them “the appellants”;  when referring to the son and the companies he controls, collectively, we shall call them “the first respondents”;  and when referring to the wife we shall call her “the second respondent” or “the wife” as appears appropriate at the time.  Although she was not a party to the appeal, Sarah Jane Mahon, who is the daughter of the husband and wife, and the sister of the son, became a respondent to the application for costs, which is the subject matter of this judgment.  We shall refer to her hereafter as “the daughter” or “Sarah”, as appears appropriate.

  1. By our orders of 23 February, 1999, the application for leave to appeal was granted, the appeal was allowed, the relevant orders of the trial Judge set aside and the injunctions therein contained dissolved. In addition, all Form 7 and Form 8 applications of the respondents in this Court, save in so far as they sought orders under the Corporations Law, were dismissed. In the course of the hearing of certain subsequent proceedings relating to the costs application the subject of this judgment, the Court was informed that the last mentioned aspect of the proceedings has since been transferred to the Federal Court and subsequently abandoned in favour of some other and fresh proceedings in the Supreme Court of Victoria. Accordingly, apart from these current proceedings in relation to costs, the only proceedings now pending between any of these parties in this Court are proceedings by the appellants against the first respondents for damages pursuant to undertakings as to damages which were given by the first respondents to support interlocutory injunctions granted by the trial Judge but dissolved by this Court’s orders.

  1. The orders which were made on 23 February, 1999, also contained directions for the filing and service by the parties of written submission (together with any supporting affidavits sought to be relied upon) in relation to the costs of the appeal, and also of the proceedings before the trial Judge.  We explained our inclusion of a direction for submissions about the costs before the trial Judge, and our intention to deal with the question of costs, both before us and below, without further oral hearing, in paragraphs 187 to 189 of our reasons for judgment published on 23 February, 1999, as follows:-

“187.              The final matter is the matter of costs.  By their amended Notice of Appeal the Appellants seek an order that the son and the wife pay their costs, on an indemnity basis of the appeal and of the application and amended applications of the son and the wife which instituted the proceedings before the Court.

188.                Although this would appear to be a matter in which costs should probably follow the event, we did not hear any submissions on costs at the end of the argument of the appeal, and there may be some complex issues about which party or parties should be responsible for the costs of the other parties.  There is also the issue of whether any costs ordered should be indemnity costs or otherwise, and also the question of the costs of the proceedings before the trial Judge.  That is not normally a matter which this Court would deal with unless and until the trial Judge had made some orders as to those costs.  However, we notice that her Honour merely reserved the costs of the proceedings before her, and in those circumstances it may be convenient to the parties to have that issue dealt with by this Court in conjunction with the question of the costs of the appeal, without having to have a further hearing before her Honour, with the potentiality of another appeal against any costs order which she might make.

189.                Accordingly, we propose to include in our orders directions for the filing and exchange between the parties of written submissions as to costs of the appeal and the costs of the proceedings at first instance, and then to make such orders as we consider appropriate in relation to those issues after considering those written submissions and without any further oral hearing.”

THE FILING OF SUBMISSIONS AND PROCEDURAL MATTERS RELATING THERETO

  1. Pursuant to the directions contained in our orders, the appellants filed written submissions as to costs on 9 March, 1999.  In paragraph 36 of those written submissions, the appellants stated the order sought by them in the following terms:-

“36.     The appellants seek orders that their costs be paid on an indemnity basis by the Son, the Son’s solicitors (Lander & Rogers), the Wife, the Wife’s solicitors (Middletons Moore & Bevins), the Wife’s Counsel (Mr John Udorovic QC and Mr David Brown of Counsel) and Sarah.  Failing which, the appellants seek orders that their costs be paid by the same persons on a solicitor – client basis.  Failing which, the appellants seek orders that their costs be paid by the same persons on a party – party basis.”

  1. Two things of significance are to be noted about that application.  The first is that, as in their amended Notice of Appeal (referred to in paragraph 187 of our earlier judgment) no order for costs is sought against any of the corporate respondents.  The second is that the claim for costs has been extended, from that contained in the amended Notice of Appeal, to include, not just the son and the wife, but also the solicitors for the former, the solicitors and both senior and junior counsel for the latter, and the daughter.  The precise form of the indemnity costs order sought against each of the persons referred to in paragraph 36 of the submissions is set out in subsequent paragraphs of those submissions.

  1. On 18 March, 1999, there was filed on behalf of the appellants an affidavit of the husband in support of the costs application contained in his submissions of 9 March, 1999.  On 26 March, 1999, an affidavit of Peter Nedovic, solicitor, was also filed on behalf of the appellants in support of their costs application. 

  1. Written submissions on behalf of the son in response to those of the appellants were filed, in accordance with our directions of 23 February, 1999, on 23 March, 1999. Those submissions oppose the appellants’ application for costs against him, whether on an indemnity, solicitor and client, or party and party basis, and contend that each party should bear their own costs, pursuant to s.117(1) of the Family Law Act 1975 (“the Act”).  Those submissions were filed by a different firm of solicitors from that which represented the first respondents before the trial Judge and on the appeal, since the latter firm had itself now become the target of a costs application, and it would not have been proper for it to continue to represent the son in the costs proceedings because of a possible conflict of interests.

  1. Written submissions on behalf of the daughter in response to those of the appellants were also filed, by the same solicitors as those now representing the son in the costs proceedings, on 23 March, 1999.  Those submissions oppose any order for costs against her.

  1. On 1 April, 1999, Lindenmayer J made orders extending the time for compliance with certain of this Court’s directions by the appellants and the wife.  He also ordered that the wife’s former solicitors and counsel and the son’s former solicitors (against all of whom the appellants were now seeking orders for costs) be at liberty to file and serve written submissions and affidavits (if sought to be relied upon) in answer to those of the appellants, by 21 May, 1999, and that the time for the filing and service by the appellants of submissions in answer to those of the respondents be extended to 11 June, 1999.  Lindenmayer J reserved the costs of all parties of and incidental to that day’s proceedings to this Full Court. 

  1. On 20 May, 1999, a document entitled “Additional Submissions of the First Respondents in Relation to Costs” was filed on behalf of the son by the firm of solicitors now representing him in the costs proceedings.  That document was not authorised by any direction of the Full Court of 23 February, 1999, or of Lindenmayer J of 1 April, 1999.  We shall say more about that, and other similar unauthorised filings, later in these reasons.  Referred to in and annexed to those “Additional Submissions” were a copy of an affidavit sworn by the husband on 2 December, 1996 and copies of some correspondence considered relevant to the costs issue as it had developed as a result of the appellants’ application.

  1. On 21 May, 1999, written submissions were filed on behalf of Mr John Udorovic, QC, (“Udorovic”), the wife’s former senior counsel, in response to the appellants’ application for an order for costs against him.  In those submissions, Udorovic asked that the appellants’ application against him be dismissed, and that they be ordered to pay his costs incurred in connexion with the application on an indemnity basis.

  1. On the same date, written submissions were filed on behalf of Mr David Brown (“Brown”), the wife’s former junior counsel, in response to the appellants’ costs application against him.  In those submissions, Brown asked that the appellants’ application against him for costs be dismissed, and that the appellants pay his costs of and incidental to defending the application “on an indemnity basis or such other basis as the Court sees fit”. 

  1. On the same date, written submissions were filed on behalf of Messrs Lander and Rogers (“Lander”), the former solicitors for the first respondents, in response to the appellants’ application for a costs order against them.  In paragraph 54 of those submissions, those solicitors submitted:-

“54.     Insofar as the Appellants’ submissions are made against the partners of Lander & Rogers it is submitted they must fail and that the Appellants ought be ordered to pay the costs of Lander & Rogers on an indemnity basis in opposing the Appellants’ application.”

  1. On the same date, written submissions were filed on behalf of Messrs Middletons Moore and Bevins (“Middletons”), the wife’s former solicitors, in response to the appellants’ application for a costs order against them.  In paragraph 3 of those submissions, those solicitors submitted that the application for costs against them “is mischievous and constitutes an abuse of process”, and in paragraph 5 thereof they sought “that the application be dismissed with costs as between solicitor and client”.

  1. On the same date, written submissions were filed on behalf of the second respondent (the wife), by a new firm of solicitors, in response to the appellants’ application for a costs order against her.  An affidavit of the wife responding to factual matters in the affidavit of the husband referred to in paragraph 6 hereof was also filed on that date.  In the written submissions on behalf of the wife it was submitted, firstly, that there should be no order for costs against her or, in the alternative, that any costs order against her should be on a party and party basis only.

  1. All of the documents referred to in paragraphs 11 to 15, above, were duly and properly filed in accordance with the directions of this Court of 23 February, 1999, as varied and supplemented by the directions of Lindenmayer J of 1 April, 1999. 

  1. On 2 June, 1999, there was filed on behalf of the first respondents a document entitled “Further Additional Submissions of the First Respondents in Relation to Costs”. In that document (which is not strictly authorised by either the original directions of this Court or the further directions of Lindenmayer J of 1 April, 1999) the first respondents apply for a costs certificate, pursuant to s.6(1) and (3) of the Federal Proceedings (Costs) Act 1981, as an unsuccessful respondent to an appeal which succeeded on a question of law.

  1. On 17 June, 1999, written submissions were filed on behalf of the appellants in reply to those of the first respondents and of the second respondent.  In accordance with Lindenmayer J’s directions of 1 April, 1999, those submissions in reply ought to have been filed and served by 11 June, 1999.

  1. On 17 June, 1999, there were also filed on behalf of the appellants, written submissions in reply to the submissions of Lander, Middletons, Udorovic and Brown (hereinafter referred to, collectively, as “the non-parties”), and to those of the daughter.  In paragraph 3 of those submissions in reply, the appellants withdrew their application for costs against the non-parties, but not against the daughter.  On the same date, a further affidavit of the husband, with some annexed correspondence, was filed on behalf of the appellants, responding to certain matters deposed to or referred to in affidavits and correspondence relied upon by the respondents.  Those documents too, like the submissions referred to in paragraph 18 hereof, should have been filed and served by 11 June, 1999. 

  1. On 18 June, 1999, further written submissions on behalf of Lander (the first respondents’ former solicitors) were filed, in which they made clear that they wished to pursue their application for costs in opposing the appellants’ costs application against them, as submitted in paragraph 54 of their earlier submissions (see paragraph 13 hereof).  They further submitted that the appellants’ response, filed on 17 June, 1999, to the non-parties’ submissions (see paragraph 19 hereof) amounted to a “discontinuance” of the application against them, and that they accordingly sought “an order under O.12, r.8 [sic.] of the Family Law Rules”.  We take that reference to be intended as a reference to O.9, r.12(8) of the Family Law Rules, which provides:-

“If a party to proceedings discontinues an application, either wholly or in part, any other party to the proceedings may make an application to the Court, or a Registrar, for costs.”

Those written submissions were not authorised either by our directions of 23 February, 1999, or by Lindenmayer J’s directions of 1 April, 1999.

  1. On 18 June, 1999, there was filed on behalf of the wife, a document (not strictly authorised by any prior direction of the Court) entitled “Further Additional Submissions of the Second Respondent in Relation to Costs”. In that document, the wife, as the first respondents had done in their “Further Additional Submissions” referred to in paragraph 17 hereof, sought a costs certificate pursuant to ss.6(1) and (3) of the Federal Proceedings (Costs) Act 1981 (“the Costs Act”), as a respondent to an appeal which succeeded on a question of law.

  1. On 29 July, 1999, further written submissions were filed by Middletons (the wife’s former solicitors) referring to the appellants’ submissions in reply referred to in paragraph 19 hereof, in which they withdrew their application for costs against the non-parties.  In these further submissions, Middletons seek an order “formally” dismissing the appellants’ application against them and an order that the appellants pay their “costs of and incidental to defending the application on an indemnity basis or such other basis as the Court deems fit”.

  1. On 18 August, 1999, at the request of the solicitors now representing the son in the costs proceedings, the matter was relisted before Lindenmayer J, in Melbourne, for clarification of the status of some of the submissions filed prior to that date, for the making of submissions and for further directions in relation to the disposal of the proceedings.  On that occasion, Mr Robson, QC, with Mr Young of Counsel, appeared for the appellants;  Mr Bigmore, QC, appeared, nominally for the first respondents, but in reality for the son, as the only member of the first respondents against whom a costs order was being sought, and also for the daughter;  Mr Elliott appeared for the second respondent (the wife);  Mr Fildes, Solicitor, appeared for Middletons;  Mr Toohey appeared for Lander;  and Mr Dixon appeared for Udorovic and Brown. 

  1. In the course of the proceedings on that day a number of matters were either agreed to by the relevant parties, or dealt with to their ultimate mutual satisfaction by further orders and directions made by Lindenmayer J during and at the end of the proceedings.  The significant matters so dealt with, and the way they were dealt with, are as follows:-

  1. An order was ultimately made by consent of counsel for the appellants and for the non-parties,  that paragraphs 4, 10, 21 and 22 of the affidavit of the husband filed on 18 March, 1999 (see paragraph 6 hereof) be struck out, and a direction was given to the Registrar to cause those paragraphs to be stricken from the affidavit.

  2. Senior counsel for the appellants accepted that in paragraph 11 of the appellants’ reply to the respondents’ submissions (see paragraph 18 hereof) there was some misquotation of, firstly, paragraph 10 of the submissions filed for the wife on 21 May, 1999 (see paragraph 15 hereof) and, secondly, of paragraph 10 of the wife’s affidavit also filed on 21 May, 1999 (see also paragraph 15 hereof).  In relation to the former, it was agreed that the words “In what she believes is the correct purpose of the 1996 orders” should be added at the end of the quotation.  In relation to the latter, it was agreed that the words “the obligations of the husband to myself and our children” should be amended to read “the obligations of the husband and myself to our children”. 

  3. It was agreed that the affidavit of the husband filed on 17 June, 1999 (see paragraph 19 hereof) was admitted and received for the sole purpose of exhibiting and placing before the Court the correspondence exhibited to it, and not in relation to any opinions expressed therein by the husband. 

  4. Mr Robson, QC, for the appellants, clarified an assertion, in paragraph 9 of the appellants’ submissions in response to those of the respondents (see paragraph 19 hereof) to the effect that certain submissions of the respondents were “false and misleading”.  He indicated that it was only intended thereby to assert that the respondents’ submissions were “wrong” or “not correct”, and not that they were deliberately false or intended to be misleading.

  1. Orders were made granting leave to all parties to file and rely upon written submissions and affidavits which they had in fact filed but which were not authorised by previous directions, and extending the time for the filing of those which had been filed outside the time limited by those earlier directions.

  2. A direction was made for the preparation of a transcript of the proceedings of that day, and for that transcript to be made available to the Full Court for the purpose of its consideration of the costs applications in this matter.

  3. It was further ordered that the costs of all parties (including the non-parties) of that days proceedings be part of their costs in the costs proceedings.

THE COSTS OF THE NON-PARTIES OF THE APPELLANTS’ WITHDRAWN APPLICATION

  1. Each of the non-parties seeks an order for costs, on an indemnity basis, against the appellants, in respect of the costs application made against them in the appellants’ original submissions filed on 9 March, 1999 (see paragraph 4 hereof) but subsequently withdrawn in their submissions in response filed on 17 June, 19999 (see paragraph 19 hereof).

  1. Clearly, there are circumstances justifying an order for costs in favour of each of the non-parties against the appellants in respect of the costs application made by the latter but subsequently abandoned.

  1. The non-parties are all legal practitioners who represented parties to the substantive proceedings and against whom the appellants chose to make what could only be regarded as an unusual application for costs (and on an indemnity basis) founded upon an assertion that they caused or allowed false and misleading evidence and submissions to be placed before the Court. The making of such an application, based upon such an assertion, obliged those legal practitioners to retain their own separate solicitors and counsel to represent them and to make submissions to the Court on their behalf in defence of the application and in denial of the underlying assertion. It was entirely foreseeable that they would do so. Having done so, and having predictably asked that the appellants’ application against them be dismissed with costs on an indemnity basis, they then found that the appellants chose to withdraw their application against them, although they did not withdraw the underlying assertion. Such conduct by the appellants appears to us to be quite extraordinary and, having regard to the provisions of s.117 of the Act (especially the matters referred to in sub-s.(2A) thereof) to justify the making of an order for costs against the appellants in favour of the non-parties. The only remaining question is whether those costs should be paid on an indemnity basis, or upon the ordinary party and party basis.

  1. In Kohan and Kohan (1993) FLC 92-340 at 79,610-11, the Full Court held that this Court has power to order costs to be paid on an indemnity basis. Although that decision was based in part upon the state of the Family Law Rules at that time (particularly O.38, r.2, O.38, r.19 and O.38, r.21) and although there have been some substantial changes to the costs rules in O.38 since that date, it seems to us that those changes have not diminished the Court’s power to make an order for indemnity costs.  On the contrary, we think that the terms of O.38, rr.2, 31, 32 and 33, as they now stand, if anything enhance the Court’s power to make such an order.  In particular, we think this arises from the combination of O.38, r.31(3)(b), O.38, r.31(4), and O.38, r.33(d), which provide as follows:-

“31(3)  The Court may make any of the following orders:

...

(b)       an order that the costs payable be taxed;

(4)       In ordering a taxation of costs under paragraph (3)(b), the Court may give the taxing officer any directions that the Court sees fit.”

“33     If the Court makes a costs order under which costs are to be paid to a person, the Court may also order that, in respect of the whole or any part of the costs specified in the order the person is entitled, instead of taxed costs, to:

...

(d)      an amount to be calculated in any manner directed by the Court.”

  1. Although there are some slight differences of drafting between the current O.38, r.33(d), as set out above, and the former O.38, r.21(2), as considered by the Court in Kohan (supra), the differences are not ones of substance, and the provisions are, in all relevant respects, almost identical.  The following remarks by the Full Court (at 79,611) in that case in relation to the earlier rule are therefore apposite to the current one:-

“Rule 21 is in almost identical terms with r.6 of Pt. 52 of the Supreme Court Rules 1970 of New South Wales. That rule was debated and explained by Holland J in Degman v Wright (No.2) (supra) [(1983) 2 NSWLR 345] at 357. In our view r.21(2)(d) ‘is apt to include an order that costs are to be ascertained by taxation on some special basis specified by the order instead of the various bases for the taxation of costs that are elsewhere defined by the rules’.”

  1. It is also appropriate to note, however, that whilst holding that “in an appropriate case, the Court has a discretion to order costs on an indemnity basis” the Full Court in that case went on to say (at 79,611):-

“However, it is fundamental to the exercise of that discretion in the Family Court that the Judge should ... understand that such an order is a very great departure from the normal standard”,

and (at 79,614) that:-

“...the Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind.”

  1. The appellants’ own written submissions in support of their application for indemnity costs against the son, the wife, the daughter and the non-parties, contain a useful summary (in paragraphs 39-43 thereof) of relevant authorities upon the factors which are relevant to and inform the exercise of the discretion whether or not to award indemnity costs, and those authorities are picked up and relied upon by Lander, in paragraph 14 of their submissions filed on 21 May, 1999, in support of their contention that the appellants should pay their costs on that basis.  It is unnecessary to repeat that summary here.  It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.  All that is required is that the Court asked to exercise the discretion be satisfied that some “particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party and party basis”:  per Shepherd J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233.

  1. In this case we consider the facts that the appellants instituted proceedings against the non-parties for an order for costs, on an indemnity basis, founded upon very serious allegations of behaviour which, if established, might well be regarded as unprofessional conduct, and then withdrew the proceedings when met with defences which counter-claimed for costs on the same basis, are quite sufficient to enliven the discretion to award indemnity costs against the appellants, and indeed calls for the exercise of that discretion in the non-parties’ favour.  Although the appellants, in withdrawing their claim for costs against the non-parties, have not withdrawn the allegations upon which that claim was founded, it seems to us that the withdrawal of the application, in the circumstances in which that occurred, is tantamount to a concession that the application was ill-conceived, and should never have been made.

  1. In any event, none of the material relied upon in support of the allegation upon which the application was founded satisfied us that any of the non-parties was guilty of causing or allowing false or misleading evidence or submissions to be put before the Court.  We are of the opinion that the evidence and submissions advanced on behalf of the respondents before the trial Judge and before us, whilst in some respects erroneous, and perhaps even misguided, were not “false” and/or “misleading”, so as to justify a claim for costs being made against the legal representatives of those parties, let alone a claim for costs against them on an indemnity basis.

  1. Accordingly, we propose to order that the appellants pay the costs of the non-parties of and incidental to the costs proceedings initiated by their written submissions filed on 9 March, 1999, such costs, if not agreed, to be taxed on an indemnity basis.

THE APPELLANTS’ COSTS APPLICATION AGAINST THE WIFE, THE SON AND THE DAUGHTER

  1. So far as the claims of the appellants against the son and the wife are concerned, we are satisfied that there are, within the meaning of s.117(2) of the Act, circumstances which justify the making of an order for costs, both of the proceedings below, and of the appeal, against those parties, having regard to the matters referred to in s.117(2A) of the Act. Briefly, our reasons for that conclusion are these:-

35.1     The financial circumstances of the relevant parties, so far as they may be inferred from the material, could be said to be neutral, neither favouring nor negating such an order (s.117(2A)(a)).

35.2     The respondents were ultimately wholly unsuccessful in the proceedings (s.117(2A)(e)), and conversely, the appellants wholly successful. 

35.3     So far as the wife is concerned, she persisted in her active support of the first respondents in the litigation, notwithstanding that her position, in terms of her entitlements under the orders of 26 June, 1996, was never really under threat, and notwithstanding that on 17 April, 1998, the husband offered to pay out her entire entitlement under those orders (see Appeal Book p.290) and on 9 June, 1998 the husband paid or caused to be paid to her all outstanding moneys alleged to be due to her under the orders of 26 June, 1996 at that time (s.117(2A)(c) and (f)).

35.4     The entire proceedings in this case, although presented by the respondents (erroneously, as we found in our substantive judgment) as proceedings to enforce the orders of the Court of 26 June, 1996, bore much more the character of commercial proceedings between the husband (on the one hand) and the son and daughter (on the other) for control of the Wingara Wine Group, and in such proceedings in other jurisdictions, costs ordinarily follow the event (s.117(2A)(g)).

  1. The only remaining issue, as between the appellants on the one hand and the wife and son on the other, is whether the costs to be paid by the latter to the former should be on an indemnity basis, as sought by the appellants, or on the normal party and party basis.  Before turning to that issue, however, it is convenient to determine whether the appellants should also obtain a costs order against the daughter, who was not a party to the proceedings.

  1. There is no question that this Court has power to make a costs order against a non-party:  Knight v F.P. Special Assets Ltd (1992) 174 CLR 178; McAlpin & McAlpin (1993) FLC 92-411; McDonald & McDonald (1994) FLC 92-508; and S v S (1997) FLC 92-762 or 22 FamLR 112.

  1. In Knight v F.P. Special Assets Ltd (supra) at 192, Mason CJ and Deane J said:-

“For our part, we consider it appropriate to recognize a general category of case in which an order for costs should be made against a non-party and which would encompass the case of a receiver of a company who is not a party to the litigation.  That category of case consists of circumstances where the party to the litigation is an insolvent person or a man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation.”

  1. In S v S (supra) at FLC 84-381-2 (FamLR 123-4) Nicholson CJ referred to an unreported decision of the Full Court of this Court in Re Z (No.4) (unreported – judgment delivered 6 March, 1997) in which the majority (Nicholson CJ and Frederico J) approved the following passage from the judgment of Hannon J in Pagliarella & Pagliarella (No.3) (1994) FLC 92-460 at 80,756:-

“Although Mason CJ and Deane J referred to the recognition of a general category of case, it seems to me that they were not stating that category as being exhaustive so as to exclude other cases where specific circumstances may justify an order for costs being made against a non-party in the interests of justice.  This was adverted to by Nicholson CJ and Maxwell J in McAlpin and McAlpin [in the passage at 80,215] and by Gobbo J in Bischof & Anor v Adams & Ors [1992] 2 VR 198 at page 204 when he said that a relevant consideration was whether there was a causal connection between the non-party and the incurring of the costs, that being a matter that bears directly on the justice of whether he should pay costs that he has caused to be incurred. (See also the comments of Nicholson CJ and Fogarty J in Re P (a child);  Separate Representative (1993) FLC 92-376). It can now be taken as clear law that this Court has jurisdiction to make an order for costs against a non-party at least if that person plays an active part in the litigation and has an interest in the subject of the litigation.”

  1. In the same case (S v S) Nicholson CJ also referred to the fact that in Re Z (No.4) (supra) he and Frederico J had “specifically agreed with the view expressed by Gobbo J in Bischof v Adams [1992] 2 VR 198 at 204 where his Honour said that the connexion between the proceedings and (in Gobbo J’s example) a witness [to justify an order for costs against the witness] may be slender”.

  1. At the same time, however, it must be remembered, as Santow J cautioned in Wentworth v Wentworth (1999) NSWSC 317: “... an order against a non-party should be approached with caution: C.E. Heath Underwriting and Insurance (Australia) Pty Ltd v Daraway Constructions Pty Ltd [unreported, Supreme Court of Victoria, Batt J, 1 September 1995] and an order against a non-party will always be exceptional:  Symphony Group Plc v Hodgson [[1994] QB 179] at 192H; Aiden Shipping Co Ltd v Interbulk Ltd [1986] AC 965 at 980F per Lord Goff; Najjar v Haines [(1991) 25 NSWLR 224] at 249 per Clarke JA in relation to appeal proceedings; Vestris v Cashman [[1998] SCSA S6852].”

  1. In the same case, Santow J, citing Bischof v Adams, C.E. Heath Underwriting v Daraway Constructions and Vestris v Cashman (all supra) said:-

“There must be a causal connexion between the non-party and the occasion for ordering costs”.

  1. The facts relied upon by the appellants to establish the necessary connexion between the daughter and the proceedings and to justify the making of a costs order against her are set out in paragraphs 56-60 of the written submissions for the appellants filed on 9 March, 1999 (see paragraph 4 hereof), and the precise terms of the indemnity costs order sought against her are set out in paragraph 61 of those submissions as follows:-

“Sarah Jane Mahon pay the Appellant’s costs of the appeal and the proceedings before the trial Judge in a sum to be ascertained on the basis that such sum is to comprise all of the Appellants’ costs except so far as they are of an unreasonable amount or were unreasonably incurred so that, subject to such exceptions, each Appellant will be completely indemnified by Sarah Jane Mahon for his or its costs.”

  1. Essentially those facts (as to which there is no issue taken by the daughter in the written submissions filed on her behalf on 23 March, 1999) are that it is clear from all the material in the proceedings that the son was acting throughout with the authority and on behalf of his sister [see e.g. his affidavit of 4 June, 1998, paragraphs 3, 7, 10, 11, 12 and 19, at Appeal Book pp.256-265], who was at all relevant times his co-shareholder and co-director of Candoora and Ligon, and whose interests were in all respects identical with his.  In addition, it is clear from all the material that the daughter was represented by the same solicitors (Lander) as the son and the corporate first respondents, and that unity of representation between the son and the daughter even extended to the new solicitors and counsel retained in the costs proceedings following the joinder of Lander as a respondent to the appellants’ costs application (see the written submissions filed on behalf of the son and on behalf of the daughter, both filed on 23 March, 1999 – referred to in paragraphs 7 and 8 hereof).

  1. Notwithstanding the absence of any suggestion that either the son or the wife is impecunious (and for that reason unlikely to be able to honour any costs order in favour of the appellants) we are of the opinion that there is clearly a sufficient connexion between the daughter and the proceedings, including a causal connexion between her and the occasion for ordering costs, to justify, and that the overall circumstances of the case do justify, an order for costs against her, jointly and severally with her mother and brother, whether that order be on an indemnity basis or on a party and party basis.

The Claim for Indemnity Costs

  1. The claim for indemnity costs against the wife, the son and the daughter is made on the basis that they placed or caused to be placed before the Court, both at first instance and on appeal, evidence and submissions which were “false and misleading”. 

  1. We do not accept that submission.  As we indicated in paragraph 33 above, when dealing with the question of the claim of the appellants against the non-parties, we were, at the time of our appeal judgment, and remain, of the opinion that some of the evidence and submissions put before the Court by or on behalf of the wife, the son and the daughter, were wrong, and perhaps even misguided, but we are far from satisfied, and in our appeal judgment did not conclude, that they were deliberately false or intended to mislead the Court, as distinct from aimed at persuading the Court to a particular conclusion about the effect and intention of the orders of 26 June, 1996, from which this litigation stems.  Whilst we ultimately held that the view being advanced by or on behalf of the respondents as to the meaning and effect of those orders was erroneous, it was not our conclusion that that view was completely untenable, or based upon assertions of fact which the human respondents knew to be false.  It would not be possible to reach such a conclusion without those respondents being subjected to detailed cross-examination about their state of knowledge and belief at various relevant times and, as these were interlocutory proceedings, there was no oral evidence given to the Court at any time. 

  1. Accordingly, applying the principles discussed in paragraphs 28 to 31 hereof to the appellants’ claim against the wife, the son and the daughter, we are not satisfied that any particular facts or circumstances exist which warrant the making of an order for the payment of costs other than on a party and party basis.  The application for indemnity costs is therefore rejected, but for the reasons previously given, the wife, the son and the daughter will be required to pay the appellants’ party and party costs of the appeal, and of the proceedings before the trial Judge.  Those costs, however, will not include the costs of the costs application against them.  The real or most substantial issue on that costs application was whether the wife, the son and the daughter should pay the appellants’ costs on an indemnity basis.  On that issue, the appellants have failed.  Whilst they have succeeded in obtaining a costs order on a party and party basis, which was formally opposed, we consider that by far the major portion of the costs incurred in the costs proceedings was incurred on the indemnity costs issue, without which (save for the issue about payment of costs by the non-party daughter) the costs issue would have been quite straightforward and not seriously contested.  We therefore consider that each of the appellants, the wife, the son and the daughter should bear their own costs of the costs proceedings between them

THE RESPONDENTS’ APPLICATIONS FOR COSTS CERTIFICATES

  1. Section 6 of the Costs Act, so far as relevant, provides:-

“6.(1)Subject to this Act, where a Federal appeal succeeds on a question of law, the court that heard the appeal may, on the application of a respondent to the appeal, grant to the respondent a costs certificate in respect of the appeal.

...

(3)The certificate that may be granted under subsection (1) or (2)by a court to a respondent to a Federal appeal is a certificate stating that, in the opinion of the court, it would be appropriate for the Attorney-General to authorize a payment under this Act to the respondent in respect of:

(a)       the costs incurred by the respondent in relation to the appeal; and

(b)any costs incurred by an appellant in relation to the appeal that have been, or are required to be, paid by the respondent to the appellant in pursuance of an order of the court, not being costs to which a costs certificate granted under section 7 relates.”

  1. In this matter, there is no doubt that the appeal succeeded on a question of law, because we held, in paragraphs 129, 130, 138 and 139 of our substantive judgment, that the trial Judge erred in principle in making the orders which were the subject of the appeal. We have also held, in this judgment, that the son and the wife (along with the daughter, who is not a respondent to the appeal) should pay the appellants’ costs of the appeal. Accordingly, the conditions precedent to the grant to each of the first respondents (the son and his companies) and the second respondent (the wife) of a certificate under paragraph (a) of s.6(3) of the Costs Act, and to the son and wife of a certificate under paragraph (b) of that sub-section, have been satisfied.

  1. The Costs Act itself gives no guidance to the Court as to the circumstances in which costs certificates should or should not be granted. The grant or refusal is therefore discretionary (Tyson & Tyson (No.2) (1993) FLC 92-401), and the Federal Court has described the discretion as “unfettered”: see TPC v Orlane Australia Pty Ltd (1984) 1 FCR 157 and Bullock v Federated Furnishings Trades Society of Australia (1985) 58 ALR 383.

  1. The underlying purpose of the Act, and of s.6 in particular, is to give some protection to respondents to appeals, which succeed because of error of law by the trial Judge, from the consequences as to costs which might be expected ordinarily to flow from such an occurrence. That protection is, however, limited by s.18(2) of the Costs Act, to a maximum amount prescribed, pursuant to s.18(1) in respect of each certificate granted under the Act. In the case of the Family Court, that prescribed amount is $4,000 per certificate.

  1. In Tyson & Tyson (No.2) (supra) at 80,111, the Full Court said that matters  relevant to the exercise of the discretion to grant or refuse a costs certificate include:

“... the overall reasonableness or otherwise of the attitude adopted throughout the proceedings by the party applying for the certificate to the relief sought by the other, the financial resources of the applicant, and the likely quantum of the party’s total costs of the appeal, as compared with the ‘prescribed maximum amount’ payable upon a costs certificate (in this case $4,000), ... [and] the fact that the funds to honour such a certificate must come from the public purse.”

  1. In this case there can be not the slightest doubt that the appeal costs incurred by the first respondents and by the wife will far exceed the $4,000 prescribed limit, as too will the costs of the appellants which we shall order that the son, the wife and the daughter pay.  There is no reason to suppose that it is beyond the capacity of either the son or the wife to meet those total costs from their own resources, but it does not follow that to do so would not cause them some hardship.  It undoubtedly will.  We know nothing of the daughter’s capacity, but as she is not a respondent to the appeal she cannot be granted a costs certificate.  However, the fact that the costs order against those three persons will create a joint and several liability, with mutual rights of indemnity by each against the others in respect of any payment above his or her one-third share of the total, limits the potential for hardship to be suffered by each of them individually. 

  1. The attitude which the wife and the son adopted to the proceedings, although adjudged erroneous by us, was not entirely devoid of any merit, nor are we satisfied that the proceedings were motivated by any malice or ill-will on the part of either.  Their arguments found favour with the trial Judge.  Although we have concluded that her Honour erred, we are not satisfied that she was in any way “misled” (in the perjorative sense of that word) by the evidence or submissions advanced on behalf of these respondents, although she was no doubt led into error of law, at least in part by those submissions.

  1. In all of the circumstances, we consider it a proper exercise of the discretion vested in us by s.6 of the Costs Act to grant to the first respondents and to the second respondent wife, certificates under paragraph (a) of s.6(3) of that Act, and to the wife and son jointly, a single certificate under paragraph (b) of that sub-section in respect of the costs which we will order that they and the daughter pay to the appellants in respect of the appeal.

ORDERS

  1. For the foregoing reasons, the orders which we propose are:-

  2. That the application of the appellants for an order for costs against Mr John Udorovic of Queens Counsel, Mr Brown of Counsel, Messrs Lander & Rogers, Solicitors, and Messrs Middletons Moore & Bevins, Solicitors, (“the non-parties”) be dismissed.

  3. That the appellants pay the non-parties’ costs of and incidental to the appellants’ application for costs (“the costs proceedings”), including any reserved costs thereof, in a sum to be ascertained, in the absence of agreement, by taxation on the basis that such sum is to comprise all of the non-parties’ costs of the costs proceedings, except so far as they are of an unreasonable amount or were unreasonably incurred, so that, subject to such exceptions, each of the non-parties will be completely indemnified by the appellants for their costs of those proceedings.

  4. That the respondents David Brian Yunghanns and Margaret Bruce Yunghanns, and Sarah Jane Mahon, pay the appellants’ taxed costs of and incidental to the appeal and the proceedings before the trial Judge, including any reserved costs.

  5. That the costs payable by the respondents and Sarah Jane Mahon pursuant to Order 3 hereof exclude any costs of and incidental to the appellants’ costs application against them.

  6. That the court grants to the first respondents and to the second respondent, costs certificates pursuant to s.6(3)(a) of the Federal Proceedings (Costs) Act 1981 (“the Costs Act”), being, in each case, a certificate stating that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the relevant respondent in respect of the costs incurred by that respondent in relation to the appeal.

  7. That the court grants to the respondents David Brian Yunghanns and Margaret Bruce Yunghanns a single costs certificate, pursuant to s.6(3)(b) of the Costs Act, being a certificate stating that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to those respondents, in such proportions as the Attorney-General may consider appropriate, in respect of the costs incurred by the appellants in relation to the appeal that are required to be paid by those respondents to the appellants in pursuance of order 3 of these orders.

FAMILY LAW ACT 1975

IN THE FULL COURT OF THE
FAMILY COURT OF AUSTRALIA

AT SYDNEY  Appeal Nos.SA48 & 49L of 1998
  File No. ML6666 OF 1992

IN THE MATTER OF:  PETER NICHOLAS YUNGHANNS
  RENTIERS MACHINERY PTY LTD
  RENTIERS PTY LTD
  HAVANA PEAK PTY LTD
  INDUSTRIAL ENGINEERING PTY LTD
  CROXLEA PTY LTD
  KREMFOUR PTY LTD
  PALASSA PTY LTD
  BALLAN PASTORAL CO PTY LTD

Appellants

AND:  DAVID BRIAN YUNGHANNS
  WINGARA WINE GROUP PTY LTD
  LIGON 211 PTY LTD
  CANDOORA NO.19 PTY LTD
  SUNNYCLIFF ORCHARDS PTY LTD
  SUNNYCLIFF INVESTMENTS PTY LTD

First Respondents

AND:  MARGARET BRUCE YUNGHANNS

Second Respondent

CORAM:  LINDENMAYER HOLDEN & MULLANE JJ
DATES OF HEARING:  1 APRIL, 18 AUGUST, 1999 & WRITTEN SUBMISSIONS
DATE OF JUDGMENT:  2 JUNE, 2000

JUDGMENT OF MULLANE J AS TO COSTS

Appearances:              Mr R. Robson of Queens Counsel with Mr Young of Counsel (instructed by Nedovic & Co, Solicitors, Suite 11, 600 Lonsdale Street, Melbourne, Vic, 3000) for the Appellants

Mr Bigmore of Counsel (instructed by Jerrard & Stuk, Solicitors, DX30907, Melbourne, Vic) for the First Respondents

Mr Elliott of Counsel (instructed by Stedman Cameron, Solicitors, DX217, Melbourne, Vic) for the Second Respondent

Mr Fildes, Solicitor (of Middletons Moore & Bevins, Solicitors, Level 29, 200 Queen Street, Melbourne, Vic, 3000) for Middletons, Moore & Bevins

Mr Toohey, Solicitor (of Tress Cocks Maddox, Solicitors, Level 7, 469 LaTrobe Street, Melbourne, Vic, 3000) for Lander & Rogers

Mr Dixon of Counsel (instructed by Connery & Partners, Solicitors, DX339, Melbourne, Vic) for Mr Udorovic and (instructed by Peter Black & Associates, Solicitors, Level 13, 114 William Street, Melbourne, Vic, 3000) for Mr Brown

  1. I have read the reasons of Lindenmayer and Holden JJ and the orders proposed.

  1. I agree with those reasons and orders except in regard to:

a)the order for costs against the appellant’s in favour of the non-parties (“the lawyers”) in respect of the appellant’s application for the lawyers to pay the costs of the appeal:  and,

b)paragraphs 32, 33 and 34 of those reasons.

  1. I also disagree with the contents of paragraph 47.

  1. The appellants withdrew the application for costs after submissions, but the relevant provisions of  the Act do not contain any rule that an applicant who withdraws an application should pay the costs of the other party on an indemnity basis, nor on even a party/party basis.

  1. The power in Sec.117 of the Act to award costs is discretionary.  The discretion is to be exercised having regard to the matters under Subsec.117(2A).  Those matters include the fact that the application was withdrawn and the applicants were thus wholly unsuccessful.

  1. That causes some suggestion that the application of the appellants for a costs order against the lawyers had no merit.  But it is not a necessary inference.

  1. The only other relevant matter under the subsection suggests quite the contrary.  That matter arises under para.117(2A)(g).    It comprises grounds relied upon by the applicants in support of their application and is based on the findings in the appeal judgment and the material before the Full Court on the hearing of the appeal.

  1. That material suggests the appellant’s application for an order that the lawyers pay the costs of the appeal had merit and that also there was merit in the argument that the Court’s order should be an indemnity order as the appellants sought.

  1. The matter which arises under paragraph 117(2A)(g) is conduct of the lawyers in the proceedings before the Trial Judge.

10. In the hearing before the Trial Judge injunctions were sought by the lawyers on behalf of their clients to restrain companies from certain conduct said to be in breach of previous orders.  But in our judgment we found that some of those companies were not parties to the orders and not bound by them.  We found that the orders applied to loans, but some of the injunctions were sought in respect of debts which were not loans.  We found that injunctions were sought in respect of loans which did not occur till after the orders were made and to which the orders therefore did not apply.  We found that the court should not have granted any of the injunctions.

11. Affidavits drawn and relied upon by the lawyers included repeated use of expressions such as “ownership”, “the Wingara Group”, “treated the Wingara Group as part of the Yunghanns Group”, “consistent with ownership and control of the Wingara Group passing from him”, “ownership of the Wingara Group had passed from him”, “the transfer of ownership of Wingara and the companies to Sarah and I”, and, “the passing of ownership and control of the Wingara Group to my sister and me”.

12. Given the findings on appeal all of these expressions were used in ways that were misleading.

13. The material in the affidavits made various allegations or inferences including:

  • that prior to the orders the husband beneficially owned the Wingara Group;

  • that after the implementation of the 1996 orders the son and the daughter beneficially owned it;

  • that the effect of the 1996 orders involved a transfer of that “property”;

  • that the injunctions sought were to protect property so transferred;  and

  • that the application sought to restrain claims prohibited by the 1996 orders.

14. From our findings on the appeal, it is clear that these allegations were untrue.

15. The submissions by the lawyers at the hearing before the Trial Judge did not draw the attention of the Trial Judge to these problems in their client’s cases.  On the contrary, they too included the same and similar expressions, allegations and inferences.

16. It is arguable that the lawyers, as such, knew or ought to have perceived that the offending material was imprecise, untrue or legally incorrect.  It is arguable that the lawyers knew or ought to have known that such material might mislead the Court.  It is arguable that such material did in fact mislead the Trial Judge.

17. On the material available to this bench, in my view the application for a costs order against the lawyers was not without merit and nor was the argument that it should be an indemnity order.

18. Whilst the withdrawal of the application and the fact that the applicants have been wholly unsuccessful justifies an order that the applicants pay the lawyers costs on a party/party basis, I do not agree that the circumstances justify an order for costs on an indemnity basis.

COSTS – Application for costs against legal representatives of parties – Discretion of Court to order costs on indemnity basis – Power of Court to make costs orders against a non-party

Family Law Act – s.117

Knight v F.P. Special Assets Ltd (1992) 174 CLR 178; S v S (1997) FLC 92-762; CE Heath Underwriting and Insurance (Australia) Pty Ltd v Daraway Constructions Pty Ltd [Unreported Supreme Court of Victoria decision, 1 September, 1995] cited and followed; McAlpin & McAlpin (1993) FLC 92-411; McDonald & McDonald (1994) LC 92-508 followed.

On 23 February, 1999 the Full Court delivered judgment (see (1999) FLC 92-836) and made orders in an appeal and an application for leave to appeal by the husband and a number of companies under his control, against orders made by Dessau J. Those orders also contained directions for the filing and service of written submissions in relation to the costs of both the appeal and the proceedings before the trial Judge.

The appellants sought that their costs be paid on an indemnity basis by the son, the son’s solicitors, the wife, the wife’s solicitors, both the wife’s counsel and the daughter.  In the alternative the appellants sought orders that the same persons pay their costs on a solicitor-client basis or, failing that, on a party-party basis.  No order for costs was sought against any of the corporate respondents.

The respondent son opposed the application for costs, on any basis, and contended the parties should bear their own costs pursuant to s.117(1). The respondent daughter also opposed any order for costs against her. Both senior and junior counsel for the wife sought that the appellants’ application against them be dismissed and that the appellants be ordered to pay costs in connection with that application on an indemnity basis. The son’s former solicitors submitted that the appellants’ application must fail and that their costs ought to be paid by the appellants on an indemnity basis. The wife’s former solicitors sought that the application be dismissed with costs as between solicitor and client whilst the wife submitted that there should either be no order as to costs or that any order against her should be on a party-party basis only.

The appellants subsequently withdrew their application for costs against the non-parties (the legal practitioners who represented the respective respondents in the substantive proceedings) who, in turn, sought costs of the costs proceedings against them on an indemnity basis against the appellants.

Held, Lindenmayer and Holden JJ, (Mullane J dissenting):

  1. The extraordinary conduct of the appellants in bringing and withdrawing the application for costs against the non-parties, was, having regard to s.117, sufficient to justify the making of an order for costs in favour of the non parties, on an indemnity basis.

  2. (per Mullane J dissenting)  It was arguable that the non-parties did make submissions and place evidence before the trial Judge which were misleading, and the mere withdrawal by the appellants of their costs application against them was not sufficient to justify an indemnity costs order in their favour.  The non parties should have their costs of the costs proceedings on a party and party basis only.

(Per curiam)

  1. While the Court has the discretion to order costs on an indemnity basis, and order 38 enhances the Court’s power to do so, the making of such an order is “a very great departure from the normal standard”: Kohan and Kohan (1993) FLC 92-340 followed and cited.

  2. The categories of circumstances which enliven the discretion to award indemnity costs are not closed and it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom the order is sought: Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 cited.

  3. Circumstances, within the meaning of s.117(2), existed sufficient to justify the making of an order, against both the son and the wife, for the payment, on a party-party basis only, of the appellants’ costs of both the trial and the appeal. Further there was sufficient connection between the daughter (a non-party) and the proceedings to also justify an order for costs against her: Knight v F.P. Special Assets Ltd (1992) 174 CLR 178; S v S (1997) FLC 92-762; CE Heath Underwriting and Insurance (Australia) Pty Ltd v Daraway Constructions Pty Ltd [Unreported Supreme Court of Victoria decision, 1 September, 1995] cited and followed; McAlpin & McAlpin (1993) FLC 92-411; McDonald & McDonald (1994) LC 92-508 followed.

  4. However, given that the appellants had unsuccessfully sought costs against the wife, the son, and the daughter on an indemnity basis, which was the main issue between them in the costs proceedings, the costs awarded to the appellants against them should not include the costs of the costs proceedings.

  5. That in all of the circumstances of the case, the unsuccessful respondents to the appeal should have a costs certificate in respect of their costs of the appeal, pursuant to s6(3)(a) of the Federal Proceedings (Costs) Act 1981, and the wife and the son (as unsuccessful) respondents ordered to pay costs to the appellants) should have a single costs certificate, pursuant to s6(3)(b) of the Federal Proceedings (Costs) Act, in respect of the costs payable by them to the appellants in relation to the appeal.

REPORTABLE

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