Rubbens & Woodhurst [2017] FamCAFC 225 (30 October 2017)

Last Updated: 18 December 2017

FAMILY COURT OF AUSTRALIA

RUBBENS & WOODHURST

[2017] FamCAFC 225

FAMILY LAW – APPEAL – COSTS – Costs of discontinued appeal – Applicant’s oral application to amend the relief sought dismissed where inadequate explanation for the delay in seeking to amend and where the amendment would prejudice the respondent – Consideration of the factors in s 117(2A) of the Family Law Act 1975 (Cth) – Where respondent in difficult financial situation – Where the appeals were prosecuted appropriately but the respondent was wholly unsuccessful – Offer of settlement considered – Respondent to contribute to the applicant’s costs of and incidental to the appeals in fixed sum.

Family Law Act 1975 (Cth) s 117

Collins and Collins [1985] FamCA 15; (1985) FLC 91-603 Fitzgerald v Fish and Anor [2005] FamCA 158; (2005) 33 Fam LR 123 Greedy and Greedy [1982] FamCA 41; (1982) FLC 91-250 I and I (No 2) (1995) FLC 92-625 Luadaka v Luadaka [1998] FamCA 1520; (1998) FLC 92-830

APPLICANT:

Mr Rubbens

RESPONDENT:

Ms Woodhurst

FILE NUMBER:

SYC

471

of

2016

APPEAL NUMBER:

EA EA

152 171

of of

2016 2016

DATE DELIVERED:

30 October 2017

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Thackray, Murphy & Carew JJ

HEARING DATE:

30 October 2017

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

11 August 2016; 9 September 2016

LOWER COURT MNC:

[2016] FamCA 730; [2016] FamCA 786

REPRESENTATION

THE APPLICANT:

In person

THE RESPONDENT:

In person

ORDERS

(1) The oral application by the applicant to amend the relief sought be dismissed.
(2) Within 28 days of the finalisation of the section 79 proceedings, the respondent contribute to the applicant’s costs of and incidental to the appeals in the sum of $2,000.

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 Rubbens & Woodhurst 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 SYDNEY

Appeal Number: EA 152 of 2016 & EA 171 of 2016
File Number: SYC 471 of 2016

Mr Rubbens

Applicant

And

Ms Woodhurst

Respondent

EX TEMPORE REASONS FOR JUDGMENT

THACKRAY J

1. The application before the Court is that filed by Mr Rubbens (“the husband”) on 25 August 2017, in which he seeks that Ms Woodhurst (“the wife”) pay his costs of and incidental to the appeals in the amount of $12,588 within 28 days of the conclusion of the s 79 proceedings.
2. The application was prepared when the husband was legally represented. At the commencement of the hearing today, the husband handed up a minute of order in which he seeks the following:
   1. The Husband’s costs on an indemnity basis be assessed at $12,588 payable at the conclusion of the Section 79 proceedings.
   2. In the alternative, the Husband’s costs are paid by the Wife as agreed or assessed payable at the conclusion of the Section 79 proceedings.
   3. In the alternative the Wife shall pay the Husband’s costs on a solicitor/client basis assessed at $8,811.60 payable at the conclusion of the Section 79 proceedings.
3. Regrettably, both parties appear before us today self-represented, and it is difficult to explain in succinct terms the legal issues involved in this very late application for amendment of the husband’s claim. However, what is now sought, as Justice Murphy has pointed out, in paragraphs 1 and 3 of the minute, is quite different relief to that sought in the original application.
4. The wife is caught by surprise because she was given no advance notice that costs were going to be sought on anything other than the ordinary basis. Given the lack of adequate explanation for the delay in seeking to amend the application, and given the obvious prejudice to the wife of this late turn of events, I would not permit the amendment and would therefore dismiss the oral application to amend.

MURPHY J

5. I agree with the order proposed by the presiding judge and with his Honour’s reasons.

CAREW J

6. I agree with the order proposed by the presiding judge and agree with his reasons.

RECORDED: NOT TRANSCRIBED

THACKRAY J

7. The application to be determined is that filed on 25 August 2017 in which the husband seeks costs against the wife in the sum of $12,588. Given that we have earlier dismissed the oral application to amend the claim which sought costs on either an indemnity or solicitor/client basis, I infer that these costs are sought on a party/party basis.
8. The wife seeks that the application be dismissed on the basis that each party should be responsible for their own costs of the appeals.
9. The husband and wife separated in 2015 after a 20 year marriage. They have two children, one of whom is 19, the other 16 years of age.
10. The wife commenced financial proceedings in January 2016 in the course of which she sought interim orders broadly seeking spousal maintenance, child support and interim costs. The husband responded by seeking different orders about those matters and orders relating to the proceeds of the family home.
11. The competing claims came before Austin J and, on 11 August 2016, orders were made which did not give either of the parties what they sought, although the maintenance orders appeared to be closer to those sought by the husband.
12. On 7 September 2016, the wife filed a Notice of Appeal and, simultaneously, an Application in a Case seeking a stay of the orders.
13. On 9 September 2016, the wife filed an Amended Notice of Appeal. On the same day, the stay was refused and an order for costs was made against the wife.
14. On 4 October 2016, the wife sent an email to the husband in which she relevantly stated (errors in original):

... I am glad your mother got her money back - it was never about the cash for me.
...
I will continue to seek as much as I can going forward to support myself and the girls. You want to keep your business – understood but always remember I wanted to keep the house and I let it go.
...
I will go forward with the appeal - there is so little cash left that the possibility of buying a home for the girls and I to live is is not obtainable. I don’t care if i wipe out all the cash pool to get the maintenance I want. I made this very clear in the mediation. I want to live with the girls and support them thru university. You looked at me and said “present me with an offer thru your solicitor and tell me” ..... I don’t have an offer... I don’t have any income or bank account with money in it but I do have people that are prepared to fund my legal bills, through the love they have for your children and myself....
I didn’t want this - you actioned it - you finalise it.

15. In this lengthy email, the wife also described her difficult financial situation and ongoing health issues. The husband particularly relies upon the third paragraph of the email above to explain why he has “serious concerns” about the wife’s motives and bona fides in the appeals.
16. On 6 October 2016, the wife sent the husband a further lengthy email in which she relevantly stated:

73. Was [the primary judge] a maniac - yes and the transcript proves it
...
76. am I tired - very .... But I am not going anywhere until the price is right
...
I am very stressed and very unwell ...

17. The email also contained what the husband points out were “highly inappropriate and irrelevant personal attacks about [his] legal representatives”.
18. On 7 October 2016, the wife filed a Notice of Appeal against the refusal to grant a stay, an implementation order and the order for costs.
19. On 9 December 2016, the husband filed an Application in an Appeal seeking an order for security for costs, but this application was still awaiting determination at the time the wife filed her Notice of Discontinuance in relation to both of her appeals on 1 August 2017. It is apparent that this occurred as a result of legal advice, with the wife electing to return to the primary judge to seek a variation of the orders taking into account changes in her circumstances, rather than pursuing her appeals.
20. Those alleged changes in circumstances were identified in the wife’s affidavit where she described having become homeless, having to stay with friends and the unsatisfactory situation in which she was living, including that she and the girls had had to share a bedroom and even share a bed on occasions.
21. Following the discontinuance of the appeals, the husband’s solicitors wrote to the wife’s solicitors, seeking that the wife contribute $9,000 to the husband’s costs of opposing the appeals, and in the same correspondence pointing out that the husband had incurred expense of around $12,500 in opposing the appeals.
22. The law in this area is not contentious and was referred to by the husband in his submissions. The essential provision is subsection 117(1) of the Family Law Act 1975 (Cth) (“the Act”) which relevantly provides that subject to subsection 117(2), each party to proceedings shall bear his or her own costs.
23. Subsections 117(2) and 117(2A) provide that

(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), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, 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) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(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) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(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.

24. In Collins and Collins [1985] FamCA 15; (1985) FLC 91-603, the Full Court described the discretion conferred by s 117 as being a “broad” one and held that the factors set out in s 117(2A) are not to be read in a restrictive way (at 79,877).
25. In Fitzgerald v Fish and Anor [2005] FamCA 158; (2005) 33 Fam LR 123 at [41], this Court also made clear that any one of the factors referred to in s 117(2A) may be the sole foundation for an order for costs. Nevertheless, as the Full Court had earlier said in I and I (No 2) (1995) FLC 92-625, the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs” (at 82,277).
26. Further in Greedy and Greedy [1982] FamCA 41; (1982) FLC 91-250 and Luadaka v Luadaka [1998] FamCA 1520; (1998) FLC 92-830, this Court made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters.
27. Turning then to each of the factors set out in s 117(2A).

The parties’ financial circumstances

28. It is uncontested that the wife receives a disability pension. This is associated with a serious chronic condition which is described in the affidavit of an eminently qualified physician, which indicates that the wife’s particular condition is at the very extreme end of the range.
29. The husband asserted today from the bar table that the wife may still have an earning capacity, an assertion which the wife refutes. For present purposes, I am inclined to proceed on the basis that the authorities have identified the wife as a person who qualifies for a disability pension and I treat her income as being such, otherwise supplemented by child support which the husband has told us today he is paying in the figure of $2,300 per month.
30. Although the wife received an interim settlement of $100,000, she tells us that this fund has been expended. All in all, it might be said that the wife’s current circumstances where she maintains herself and her two children, are very grim.
31. The husband implicitly accepts that the wife presently does not have the capacity to meet his costs because he seeks that any amount she is ordered to pay ought to be paid after the completion of the property proceedings.
32. The husband’s financial circumstances are not quite as clear. He is operating a business, as he has done for some time. He has described to us today the financial difficulties that his business is facing. He has the obligation to pay child support and also, he tells us, he is endeavouring to meet the cost of educating his youngest daughter at an exclusive private school.
33. Overall, whilst it might seem on its face that the husband is in a stronger financial position, the wife may have better prospects in the future. In my view it cannot be said that the husband has significant or surplus funds available.
34. There is also the parties’ remaining property which appears to comprise the husband’s business, about which there is disputation as to value, and the remaining sum from the proceeds of sale of the former home, which the wife identified as an amount of approximately $500,000, still to be divided. Accepting there is a possibility the wife will receive some, if not all, of those funds, the husband may be left without liquid funds, but will have the benefit of his business.

Legal Aid

35. There is no suggestion either party is in receipt of Legal Aid.

Conduct of the parties

36. The husband properly conceded today that there was nothing in the wife’s conduct, insofar as the proceedings are concerned, which would point toward it being appropriate for her to make any contribution to his costs. The appeals were prosecuted appropriately and the wife even went to the expense of filing the appeal books.
37. The conduct that the husband would wish us to take into account is the email correspondence to which I referred earlier. In those items of correspondence, as the wife herself acknowledged today, unfortunate and unpleasant things were said, one of which has been extracted and seized upon by the husband to suggest that the wife was pursuing her appeals for an ulterior motive: namely to diminish the asset pool.
38. The wife today has properly apologised for some of the things she has said in this correspondence, but she also goes on to point out, correctly in my view, that the statements she made need to be read in the context of everything else said in the correspondence, much of which was very strong criticism directed to her own conduct in the course of the divorce. As she said in her oral submissions today, “this is what a divorce is like”.
39. While this is conduct which I understand the husband wishes us to take into account, it is not conduct that I consider relevant under s 117(2A).

Failure to comply with an order

40. This factor is not relevant.

Wholly unsuccessful

41. This is a matter of critical significance. It is clear that the wife was wholly unsuccessful in her appeals because they were discontinued prior to the Court hearing them. This is a factor of considerable importance and one which commonly leads to an order for costs being made.

Offer in writing

42. As I mentioned earlier, at an appropriate time, the husband’s solicitors made an offer to the wife to compromise his claim for costs at $9,000, instead of the $12,500 the husband has expended. However what we now know from the attempt made this morning to amend the application, is that the claim for $9,000 slightly exceeds what the husband would have claimed on a solicitor/client basis. This indicates that, on a party/party basis, the amount of $9,000 was in excess of what the husband would have been reasonably entitled to seek from the wife.
43. We have not had the benefit of being provided with a copy of the costs agreement between the husband and his solicitors and, given that costs are now not sought on an indemnity basis, it is unnecessary for us to see it. Regardless, one can tell from the accounts before us that the husband’s solicitors were charging him at a rate of $420 and $550 per hour for various items of work.
44. It has not escaped the attention of this Court that the husband’s solicitors, while charging at this rate per hour, nevertheless expected the husband to pay for them making themselves familiar with the law, at least in this appeal court. For example, on 12 December 2016, the husband was charged $64 for researching the case law, and on 4 August 2017, was charged $130 for researching the procedural rules. (I presume “researching” means “reading”). And then, three days later, apparently not enough “research” had been done and there was another $195 charged for research into appeal procedure and case law.
45. While recognising that the solicitors are not present to defend themselves and that there may be an explanation for the charges, on their face the charges appear inappropriate. The solicitors are charging to research the law, charging $27.50 every time they produce an item of correspondence (for the printing and saving of the correspondence) and charging $27.50 for the updating of the index to the case management system which apparently is associated with some of these items of work. The charge-out rate would indicate that the person doing the printing and saving of correspondence and the updating of the index is charging at the rate of $275 per hour.
46. I make those comments in the context of looking at the reasonableness of the offer that was made by the husband. In my view, the offer was not a reasonable one and therefore does not support his case.
47. I note also that the claim includes a claim for the costs associated with the application for security for costs. It is apparent that that application was prompted by the email from the wife, to which I referred earlier, but even taking that email into account, my brief consideration of the application for security for costs would indicate that it had very modest prospects of success.

Other relevant matters

48. There are a number of matters to be referred to here. First, the wife asserts, and I accept, that these appeals were instituted on the advice of an experienced senior counsel and the solicitor with conduct of the matter. That proposition finds support in the care that was clearly taken in the drafting of the grounds of appeal. It is apparent also that careful consideration was given to what had occurred at first instance, lending support to the proposition that these were appeals instituted with the benefit of advice.
49. The next matter to take into account is the husband’s assertion that the appeals were vexatious. It follows from what I have said earlier that prima facie the appeals were not vexatious, given that the only proposition to support such a claim is something said in anger by the wife in the course of correspondence.
50. The final thing to consider is that although we have not heard full argument in relation to the underlying dispute that the Full Court would have heard had the appeals not been discontinued, it cannot be said that the grounds of appeal upon which the wife intended to rely were without merit.

Conclusion

51. There are arguments that favour the position of each party.
52. Stepping back and weighing up these factors, I am of the opinion that the matter that should be given the greatest weight is that the wife has been wholly unsuccessful in these appeals. It is the case that the husband has been put to considerable expense in opposing them, and I consider an order for costs should be made.
53. Although as the husband submits, it may be seen that the appeals were “commercially unreasonable”, there is merit in the wife’s statement about the invidious situation in which she found herself as a result of the orders, where she was living on insufficient funds to maintain herself, having received a lump sum which was likely to be, and we are told, has been, expended in the interim.
54. In determining the amount that I consider the wife ought to contribute to the husband’s costs, I take account of the fact that on the husband’s own estimate, solicitor/client costs would be, at most, $8,811.60.
55. In all of the circumstances, I consider that an appropriate sum for the wife to be required to pay is $2,000, payable upon the conclusion of the s 79 proceedings.

MURPHY J

56. I agree with the order proposed by the presiding judge. I seek to specifically associate myself with his Honour’s comments in respect of the costs itemised and apparently charged by the husband’s solicitors, including the proper, with respect, caveats expressed by his Honour. I also, with respect, agree specifically with his Honour’s comments made in respect of the husband’s application for security for costs. I too do not consider that it was open to the husband to assert, as he did, that the wife’s appeals were vexatious. It seems to me that the challenges contained in the grounds were well open, despite what the outcome of a proper consideration of those grounds might reveal. I otherwise agree with his Honour’s reasons.

CAREW J

57. I agree with the proposed order of the presiding judge and I have nothing to add.

I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Thackray, Murphy & Carew JJ) delivered on 30 October 2017.

Associate:

Date: 8/12/17