ZUBCIC & ZUBCIC
[2018] FamCAFC 189
•25 September 2018
FAMILY COURT OF AUSTRALIA
| ZUBCIC & ZUBCIC | [2018] FamCAFC 189 |
| FAMILY LAW – APPLICATION IN AN APPEAL – Extension of time – Application unopposed – Extension of time in which to file a Summary of Argument granted. FAMILY LAW – COSTS – Gross sum costs – Costs thrown away as a result of an adjournment – Principles for fixing gross sum costs – Costs fixed in the sum of $16,948.33. |
| Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 |
| APPLICANT: | Mr Zubcic |
| RESPONDENT: | Ms Zubcic |
| FILE NUMBER: | SYC | 6290 | of | 2013 |
| APPEAL NUMBER: | EA | 35 | of | 2018 |
| DATE DELIVERED: | 25 September 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge J |
| HEARING DATE: | 20 September 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 6 March 2018 |
| LOWER COURT MNC: | [2018] FamCA 129 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Wong |
| SOLICITOR FOR THE APPLICANT: | Watts McCray Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr O’Ryan QC with Mr Connor |
| SOLICITOR FOR THE RESPONDENT: | Martin Street Lawyers |
Orders
It is ordered:
The time in which Mr Zubcic (“the husband”) is to file his Summary of Argument and List of Authorities is extended up to and including 31 October 2018.
The costs that the husband was ordered to pay the wife pursuant to the order made on 23 August 2018 are fixed in the sum of $16,948.33.
It is noted:
(A)The husband accepts that the appeal will be listed for hearing and will proceed regardless of whether he has filed a Summary of Argument and that if he has not done so, it will be a matter for the bench hearing the appeal to determine whether he will be permitted to make submissions on the appeal.
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 Zubcic & Zubcic has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 35 of 2018
File Number: SYC 6290 of 2013
| Mr Zubcic |
Applicant
And
| Ms Zubcic |
Respondent
REASONS FOR JUDGMENT
Introduction
In this matter, Mr Zubcic (“the husband”) seeks the following order:
That the time for the husband in which to file his Submissions in response to the Wife’s Appeal be extended from 8 August 2018 until a date 21 days following receipt by the Applicant of his share of the proceeds of sale of [B Street, Suburb C].
The husband had initially sought orders for a stay of the appeal filed by Ms Zubcic (“the wife”) on 8 March 2018 until either the property at B Street, Suburb C (“the B Street property”) was sold in accordance with Orders 8 and 9 of the orders made by Rees J on 6 March 2018 or the wife paid the sum of $120,000 into the husband’s lawyers’ trust account. He further sought that the time in which he was to file his Summary of Argument be extended to a date after either of those conditions were satisfied.
However, at the outset of the hearing of this application the husband sought leave to amend his application to seek the order set out above. At the same time, counsel for the husband indicated that no order was sought delaying the hearing of the appeal and that if the appeal came on for hearing and no Summary of Argument had been filed, he would accept the consequences of that default, whatever they may be.
This concession took much of the heat out of the proceedings because the main aim of the wife, so it was stated, was to have the appeal come on for hearing in the usual course. Consequently, a short extension of time for the filing of a Summary of Argument was not opposed.
In order to understand the application it is necessary to set out some of the relevant history.
Background
The husband and the wife were parties to property settlement proceedings which were determined by Rees J on 6 March 2018. The husband’s father, Mr B Zubcic (“the husband’s father”), was a party to those proceedings and is a party in the appeal.
The wife has appealed some of the orders made by the primary judge. One of those orders is Order 9, which concerns the division of the proceeds of sale of the B Street property. That property is jointly owned by the husband and the wife.
The order provides:
9.That upon the sale of B Street, the trustees of sale shall apply the proceeds in the following manner and priority:
9.1In payment of the costs of sale, including but not limited to the costs of the trustees for sale, agents’ commission, legal fees on the conveyance.
9.2In payment of any amount of Capital Gains Tax in relation to B Street assessed against either the husband or the wife.
9.3In payment of half of the amount remaining to the wife.
9.4In payment to the wife of the sum of $294,494 less any sum she received pursuant to Order 3 from her share of the remainder of the ATW controlled monies account.
9.5In payment of the sum of $65,000 to the wife by way of maintenance for G in accordance with Order 6.
9.6In payment of the costs of Mr and Mrs Gomes incurred in these proceedings in accordance with orders made on 1 March 2018.
9.7In payment of the sum of $100,000 to the husband’s solicitors, to be held by them until the determination of the dispute over the payment of costs of the proceedings in the Supreme Court of New South Wales Case Number … and distributed in accordance with that determination.
9.8In payment of the balance remaining to the husband.
The wife’s Notice of Appeal was filed on 8 March 2018. A Further Amended Notice of Appeal was filed on 11 July 2018.
The wife and the husband’s father have filed their Summaries of Argument.
The evidence establishes that the B Street property has now been sold and that settlement is expected to take place on 4 October 2018. The husband’s father anticipates receiving his entitlement under the orders shortly thereafter.
The wife submits that this is not likely because the tax position of the husband and wife will not be known until after June 2019. That may be so, but I do not see why a sum of money sufficient to meet the Capital Gains Tax (“CGT”), which in very broad terms is calculated by reference to property purchase and sale costs, could not be set aside and held until then.
The wife also pointed to the poor financial position of the husband. In addition to the debts referred to in his affidavit, he now owes $799,506.60 to the Commissioner of Taxation after an audit of his 2016 income tax return.
However, whilst his financial resources are under his control, the husband can spend whatever he receives pursuant to the primary judge’s orders as he sees fit.
In any event, these submissions ultimately are not relevant given the concession noted earlier.
The appeal is likely to be listed for hearing in the sittings at the end of November 2018 or early next year. That listing will take place whether or not the husband has filed his Summary of Argument. I will therefore extend the time for the husband to file his Summary of Argument up to and including 31 October 2018. A notation will be made that the husband accepts that the appeal will be listed for hearing and will proceed whether or not he has filed a Summary of Argument and that if he has not done so, it will be a matter for the bench hearing the appeal to determine whether he will be permitted to make submissions on the appeal.
Costs
On 23 August 2018, I ordered the husband to pay the costs thrown away by reason of the adjournment on an indemnity basis and that those costs be paid at the time of the final distribution of property in these proceedings.
The wife now seeks to have these costs quantified in the sum of $23,602.30. The husband opposes that order and submits that the costs should be assessed or, alternatively, fixed in a lower amount.
It has been the practice of the Full Court for some time now to fix the costs of matters before it, where it can properly do so. Such a course avoids the delay and expense suffered by both parties where a formal assessment is undertaken.
Thus, if the costs can properly be fixed, I consider that I should do so. That process is, however, far from an assessment.
The principles to be applied were set out by Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 as follows:
9For present purposes it seems convenient to commence with a recitation of the principles which inform the exercise of the discretion:
i. the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: Beach Petroleum NL v Johnson (1995) 57 FCR 119, Von Doussa J page 265: [following Purchase J in Leary v Leary [1987] 1 All ER 261 who described the purpose of the rule allowing the fixing of a gross sum as “the avoidance of expense, delay and aggravation involved in protracted litigation arising out of taxation” (All ER page 265)];
ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum at [16];
iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available: Harrison v Schipp (2002) 54 NSWLR 738, per Giles JA at para [22]; [following (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA) and adopted in Sony Entertainment v Smith (2005) 215 ALR 788; [2005] FCA 228; BC200500963 at para [199];
iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place: Harrison v Schipp at para [22];
v. the gross sum "can only be fixed broadly having regard to the information before the Court": Beach Petroleum at 124;
[In Hadid v Lenfest Communications Inc [2000] FCA 628 at [35] it was said that the evidence enabled fixing a gross sum "only if I apply a much broader brush than would be applied on taxation, but that ... is what the rule contemplates".]
vi. nevertheless the power to award a gross sum must be exercised judicially, and after giving the parties an adequate opportunity to make submissions on the matter: Leary v Leary [1987] 1 WLR 72 at 76, and Beach Petroleum NL v Johnson (No.2) (1995) 57 FCR 119 at 120”;
vii. In terms of the necessity for the approach taken to be logical, fair and reasonable, Von Doussa J in Beach Petroleum NL & Anor v Johnson & Ors (No 2) (1995) 57 FCR 119, put the matter as follows, at paras [16]:
"On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary “fail safe” discount on the cost estimates submitted to the Court: Leary v Leary at 265. …"
…
11 In the result it is not an arbitrary exercise of power for the Court to weigh up competing factors and make a determination, even if, as is often the case, the task cannot be undertaken in a mathematical or precise manner. As the Court of Appeal found in Norris v Blake (by his Tutor Porter) [No 2] (1997) 41 NSWLR 49 mathematical weightings of potential outcomes in loss of chance cases might be unsustainable and reliance rather should be placed on more intuitive methods to determine loss: (1997) 41 NSWLR 49 at 71-73. Similarly, the courts are frequently required to estimate damages that are not capable of precise quantification and require a degree of approximation and even guesswork. [Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83, 138 and 153; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257 at [37]-[38]]
The main objection made by the husband was that it was difficult to tell from the fees memoranda and bills of costs that were tendered whether any particular costs related to the application of 23 August 2018 and were therefore thrown away. For this reason, it was submitted that the proper course was an assessment.
Some of the entries in those documents specifically refer to preparation for or appearance at the 23 August 2018 hearing. For other entries, such as conferences, it can safely be inferred that conferences and preparation undertaken shortly before the hearing had some relation to the proceedings. That is sufficient to identify the items that should be taken into account. It is to be recalled that the order was for indemnity costs and is not a party and party assessment.
I also bear in mind that since 23 August 2018, the husband has fundamentally changed the nature of his application so that much of the earlier preparation could not be said to be relevant to it.
I note that junior counsel for the wife did not appear on 23 August 2018, but accept that it would be reasonable for him to be involved in preparation. It would also be reasonable for the senior counsel who is to appear on the appeal to be involved to some extent.
I propose to allow all of the fees of senior counsel who appeared on 23 August 2018 as the fees, by inference, all relate to that date ($7,000 excluding GST). Similarly, I will allow the fees of senior counsel who is to appear on the appeal ($1,600 exclusive of GST). I will allow junior counsel’s fees from 20 August 2018 when he drew his client’s affidavit and onwards ($4,608.33).
Similarly, I will allow the solicitors’ costs from 20 August 2018, excluding an entry for 22 August 2018 for “Review of the Affidavit of client, draft affidavit and application in relation to staying Order 9.8”. I do not know why a review was required or whether it was in relation to this application or the unrelated stay application. I will exclude all costs after 23 August 2018. Solicitors’ costs will therefore total $3,740.
It follows that the costs will be fixed in the sum of $16,948.33.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 25 September 2018.
Legal associate:
Date: 25 September 2018
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