Ceoi & Ek (Costs) [2008]

FAMILY LAW - COSTS

FAMILY COURT OF AUSTRALIA

SUBMISSIONS RECEIVED FROM:

ORDERS

(1) The appeal against the orders made by the Honourable Justice Barry on 29 September 2006 be allowed.
(2) Order 2 of the orders be set aside and in lieu thereof it is ordered that the husband pay one third of the wife’s costs of and incidental to the proceedings (other than the appellate proceedings) as agreed and in default of agreement as assessed by a registrar of the Family Court of Australia.
(3) The husband’s application that the wife pay his costs of and incidental to the appeal be dismissed.
(4) The Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.
(5) The Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Ceoi & Ek (Costs).

Appeal Number: NA 45 of 2007
File Number: BRF 1868 of 2003

Appellant

And

Respondent

REASONS FOR COSTS JUDGMENT

1. On 9 November 2007 we made orders allowing the husband’s appeal against property orders that had been made by Barry J on 19 May 2006. The trial judge had made orders which had the effect of the wife receiving or retaining assets to the value of $1,297,400. On appeal we reduced the wife’s entitlement to retain or receive assets to the value of $750,000 and made the necessary consequential orders. We further ordered:
   1. The parties be at liberty to file written submissions concerning the appeal against the order made by the Honourable Justice Barry on 29 September 2006 that the husband pay the wife’s costs of the proceedings and in relation to the costs of this appeal as follows:
      • (a) The husband to file and serve his submissions within 21 days;
      • (b) The wife to file and serve her submissions in response within 14 days thereafter; and
      • (c) The husband to file and serve any submissions in reply within 7 days thereafter.
2. We have now received submissions from each of the parties relating to both the appeal and the costs order made by Barry J on 29 September 2006 that the husband pay the wife’s costs of and incidental to the proceedings as assessed by a registrar of the Court.
3. The reasons given by Barry J when pronouncing the costs order that is the subject of the appeal are brief and it is convenient to include them in their totality. They read as follows (leaving aside procedural detail):
   1. I accept the husband has been wholly unsuccessful in a series of interim hearings prior to final trial proceeding as well as wholly unsuccessful in the issues to be determined at trial. I made findings adverse to the husband’s credibility as well as findings that he had not given full disclosure of his true financial position.
   2. I accept the force of the submissions made on behalf of the wife that the behaviour of the husband and/or his legal representatives on his behalf added significantly to the length of the trial and the costs of the trial.
   3. I am satisfied the husband has the earning capacity to meet any order for costs. Neither party is legally aided.
   4. The wife served upon the husband an Offer of Settlement which was dated 27 may 2004, but did not file same. In that Offer she proposed that the assets be divided 65%/35%. She sought a specific order that the husband indemnify the wife in relation to various liabilities. She made a notation to the offer:

“The wife is unable to file an Offer with any more particularly as the wife is unsure of the value of the matrimonial property at this stage due to the unavailability of all valuations as at the date of making this offer and the dispute regarding the veracity of the matrimonial liabilities as alleged by the husband in his material.”

1. The husband filed an Offer of Settlement. I accept that that was a very low offer offering the wife one third of the property pool. That Court ultimately awarded the wife 72% of the known assets.
2. I have considered the written submissions lodged on behalf of the husband, the effect of the submissions is to challenge findings of fact made by me as the Trial Judge. That is a matter for the Appeal Court and is not a matter which touches on the determination of the issues I am required to take into account pursuant to Section 117(2A).
3. In the whole of the circumstances I propose to order that the husband pay the wife’s costs of and incidental to the proceedings in this matter as assessed by a Registrar of this Court.
4. Given that the orders made by Barry J presumed an outcome to the proceedings which is substantially different from that reached by the Full Court, it becomes necessary for us to exercise the discretion of the trial judge afresh.
5. Our task is not made any the easier by the nature of the husband’s submissions which were essentially the submissions that he placed before the trial judge. As indicated in our principal judgment in these proceedings much of the husband’s documentation does not follow any logical sequence and at times it is difficult to determine precisely what the nature of his argument is.
6. Deciphering as best we can the appellant’s submission it would appear that the appellant seeks an order that the respondent meet her own costs both of the trial and of the appeal and that she contribute towards the appellant’s expenses defined as “legal bill, secretaries, searches and other related expenses”.
7. Counsel for the respondent seeks to maintain the order made by the trial judge that the appellant pay the respondent’s costs of the trial and seeks a further order that the respondent be granted a certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1989 (Cth) in relation to the appeal. We think it convenient to indicate at this stage that we accede to the application for the costs certificate and we propose to make such an order.
8. The issue of the appropriateness of a costs order is governed by the provisions of s 117 of the Family Law Act 1975 (Cth). That section relevantly provides as follows:

(1) Subject to subsection (2) ... each party to proceedings under this Act shall bear his or her own costs.

(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs...as the court considers just.

(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:

(a) the financial circumstances of each of the parties to the proceedings;
(b) ...
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) ...
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.

1. The outcome of the appeal sees the wife retaining assets worth $750,000 whilst the husband retains assets worth $572,000 plus further assets to a value of $470,000 less any entitlements of the various co-owners and any debt he may owe for monies allegedly borrowed to pay a tax debt. His capital position is at least equal to or if not significantly greater than that of the wife.
2. In our principal judgment we saw no reason to reject the finding by the trial judge that the husband could earn a high income through his prayer meetings and other fund raising efforts. It is not suggested that the wife has any capacity to earn a significant income.
3. The task of determining to what extent the conduct of the parties in the proceedings in relation to the proceedings should be given weight is the most difficult task for an appellate court when dealing with a long and complex trial. The trial occupied seven days of hearing.
4. The trial judge summarised the respective claims of the parties as the wife seeking orders entitling her to assets of $1.298 million whilst the husband sought that the wife retain assets to the value of $290,677. The outcome that we determined was appropriate is close to the mid-point of those competing claims.
5. The task of determining the size of the asset pool was made more difficult by the complex nature of the holdings of the parties, including many off-shore holdings and the lack of accurate accounting records.
6. The trial judge formed a very poor view of the husband’s credibility, and as we said at paragraph 105 of the principal reasons for judgment, in final addresses at trial the husband’s counsel had conceded his client’s answers and cross-examination were less than satisfactory. We noted at paragraph 107 that at least one passage in the transcript reinforced the conclusion of the trial judge that the husband’s credit had serious difficulties.
7. In support of the wife’s claim to uphold the costs orders made at trial, counsel submits that the husband’s prevarication and confused evidence contributed to the length of the trial. In particular her counsel submits that the husband’s conduct in preparation for the trial merits a costs order being made against him.
8. Nothing has been raised by the husband in his submissions that would lead us to reject the trial judge’s finding at paragraph 23 of his costs judgment that “the husband had been wholly unsuccessful in a series of interim hearings prior to final trial proceeding ...”.
9. Doing the best we can and bearing in mind the limitations that we have identified as a consequence of which we can only apply a broad approach, we conclude that an appropriate order in the circumstances is to require the husband to pay one third of the wife’s costs of and incidental to the proceedings from the time of their institution until the completion of the trial.
10. As to the husband’s costs of the appeal, we do not know what recoverable costs he might have, if any. In any event, notwithstanding the appeal’s success, having regard to the parameters of the parties’ positions on the appeal, and in particular what we have earlier said about the disparity in earning capacities of the parties, we decline to make any award of costs of the appeal in the husband’s favour.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court

Associate:

Date: 24 January 2008