James & Snipper and Anor [2019] FamCAFC 28 (22 February 2019)

Last Updated: 8 March 2019

FAMILY COURT OF AUSTRALIA

JAMES & SNIPPER AND ANOR

[2019] FamCAFC 28

FAMILY LAW – APPEAL – COSTS – Where factors under s 117(2A) of the Family Law Act 1975 (Cth) considered – Where the financial circumstances of the parties are unequal – Where the appellant’s conduct in the appeal warrants a cost order – Where appeal wholly unsuccessful – Where the second respondent supported the failed appeal in part – Where the appellant and the second respondent ordered to pay costs on a party/party basis – Where the sum agreed or assessed is to be apportioned between the appellant and the second respondent.

Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) r 19.18

James & Snipper [2018] FamCAFC 235

APPELLANT:

Mr James

FIRST RESPONDENT:

Ms Snipper

SECOND RESPONDENT:

Commissioner of Taxation

INDEPENDENT CHILDREN’S LAWYER:

Legal Aid New South Wales

FILE NUMBER:

SYC

1913

of

2012

APPEAL NUMBER:

EA

27

of

2018

DATE DELIVERED:

22 February 2019

PLACE DELIVERED:

Newcastle

PLACE HEARD:

In chambers

JUDGMENT OF:

Ainslie-Wallace, Aldridge & Austin JJ

HEARING DATE:

Heard by way of written submissions

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

12 January 2018

LOWER COURT MNC:

[2018] FamCA 7

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Eardley

COUNSEL FOR THE FIRST RESPONDENT:

Mr Lethbridge SC

SOLICITOR FOR THE FIRST RESPONDENT:

Harris Freidman Lawyers

COUNSEL FOR THE SECOND RESPONDENT:

Mr Kasep

SOLICITOR FOR THE SECOND RESPONDENT:

Commissioner of Taxation

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:

Did not participate

ORDERS

(1) The appellant and the second respondent shall forthwith pay the first respondent’s costs of and incidental to the appeal, in the sum agreed or assessed on a party/party basis, in the following proportions:

• (a) 80 per cent by the appellant; and
• (b) 20 per cent by the second respondent.

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 James & Snipper and Anor 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 27 of 2018
File Number: SYC 1913 of 2012

Mr James

Appellant

And

Ms Snipper

First Respondent

And

Commissioner of Taxation
Second Respondent

And

Independent Children’s Lawyer

REASONS FOR JUDGMENT

1. On 3 December 2018, we dismissed the appeal in these proceedings, which appeal had enjoyed the partial support of the second respondent.
2. For reasons which were then explained (James & Snipper [2018] FamCAFC 235 at [160]), the parties were unready to deal with the issue of costs to finality. Consequently, orders were made requiring the parties to file their written submissions as to costs so the first respondent’s foreshadowed costs application, in the event of the appeal’s dismissal, could be considered and determined in chambers.
3. The first respondent eventually sought costs against both the appellant and the second respondent, preferentially apportioned between them in respective shares of two-thirds and one-third, but alternatively in whatever other proportions we considered appropriate. The application was resisted by both the appellant and the second respondent.
4. No costs were sought against the first respondent and no costs were sought as between the appellant and the second respondent.
5. The legal principles by which the application must be determined are not in doubt. Ordinarily, parties to proceedings under the Family Law Act 1975 (Cth) should bear their own costs, though costs orders may be made if justified by reference to certain mandatory statutory criteria (s 117).
6. In this instance, the first respondent pressed her application by reference to three particular criteria: the parties’ unequal financial circumstances (s 117(2A)(a)); the manner in which the appellant, though not the second respondent, conducted the appeal (s 117(2A)(c)); and the fact the appeal was wholly unsuccessful (s 117(2A)(e)).
7. The property settlement orders made by the primary judge resulted in the first respondent retaining assets collectively worth about $900,000, but most of that value rested in the former family home, occupied by the first respondent and the children, which equity she could not unlock without depriving herself and the children of their home.
8. The appellant retained assets collectively worth only about $57,000 but, allowing for the implementation of the primary judge’s orders, also remained indebted to the second respondent for a residual amount of about $1.8 million. Although the appellant’s debts exceed his assets, he enjoys a substantial annual gross income, which the primary judge found to be $589,000. By comparison, the first respondent’s income earning capacity was found to be only $52,860 gross per annum.
9. Even though the first respondent expressly relied upon the differential in their incomes as a reason to justify her entitlement to costs against the appellant, significantly, the appellant did not contend his financial circumstances militated against such an order. His disinclination to do so might be explained, at least in part, by his tenfold greater income. Nevertheless, his residual debt to the second respondent remains an influential consideration.
10. The financial circumstances of the second respondent, as an instrument of government, are not such as to preclude a costs order against him.
11. One aspect of the appellant’s conduct of the appeal merits mention. The appeal was against both parenting and property settlement orders. In respect of the parenting orders, the appellant belatedly amended the appeal to enlarge the orders encompassed by it and then, almost as promptly, abandoned the grounds of appeal which related to those orders. The first respondent was put to the trouble and expense of addressing the ultimately abandoned grounds of appeal in her written summary of argument, which is to say nothing of her having to deal on the run on the day of the appeal with the unforeseen expansion of the orders caught by the appeal. That consideration alone would warrant an order for the appellant to pay some portion of the first respondent’s costs.
12. The entire appeal failed and must, therefore, be regarded as having been wholly unsuccessful. Although the appeal was brought by only the appellant, the second respondent supported two of the grounds of appeal related to the property settlement orders. The second respondent submitted strongly in support of those grounds, both in his written summary of argument and orally at the appeal.
13. The second respondent submitted that a costs order against him was unwarranted because the appeal was not his, he filed his written summary of argument after the first respondent filed hers and so she had no need to respond to his, and his partial support of the appeal did not cause the hearing of the appeal to extend beyond the day upon which it was listed. All of those things are true, but we reject the proposition that, in aggregation, they preclude a costs order being made against him. Having read the second respondent’s summary of argument, which differed from the appellant’s in so far as it addressed the two grounds of appeal he supported, the first respondent’s lawyers had to ponder and conceive the oral arguments they would advance to counter the arguments foreshadowed by the second respondent. As it transpired, the second respondent was just as vigorous a protagonist on the two grounds of appeal he supported as the appellant. It could not be said he left the running to the appellant.
14. We are satisfied that the appellant’s much greater income, the way in which he conducted the appeal against the parenting orders, and the lack of merit in the whole appeal, in combination, warrant a costs order against him.
15. We are additionally satisfied that the second respondent’s role in the failed prosecution of the appeal against the property settlement orders warrants a costs order against him. As a government instrumentality who ought to be a model litigant, his resistance to any liability at all was unreasonable.
16. We turn then to the question of apportionment of the liability for the first respondent’s costs. Self-evidently, the second respondent’s role in the entire appeal was only subsidiary to that of the appellant and so his liability should be less than the appellant’s. While the task of apportionment is an exercise in approximation, it is not arbitrary. Factors such as the length and content of the written submissions, the duration and content of the oral submissions, and the technicality of the arguments are all considerations which influence the estimation of the proportions of time likely spent by the first respondent’s lawyers reflecting upon and dealing with the parts of the appeal separately propounded by the appellant and the second respondent. Tritely, the time spent by the first respondent’s lawyers translates to costs incurred by her.
17. While the appellant resisted any costs order in the first respondent’s favour, he alternatively submitted that any costs should be apportioned between him and the second respondent – preferably equally, but otherwise unequally. We do not consider the second respondent should bear so much as one-half of the first respondent’s costs. Nor do we consider the second respondent’s share of the costs should be measured at one-third, as the first respondent proposed. Instead, we consider an appropriate apportionment would be 80 per cent to the appellant and 20 per cent to the second respondent.
18. Part of the first respondent’s written submissions comprised an itemised schedule of her costs, tabulated at $45,907.58. It is not clear to us the basis upon which her solicitors’ and barristers’ costs were calculated, but it seems not to be in accordance with the scale of costs prescribed by the Family Law Rules 2004 (Cth) (“the Rules”). Her counsels’ fees alone amounted to $37,559.36. If her costs and disbursements were not calculated on an ordinary party/party basis, they must alternately be calculated on either of the higher lawyer/client or indemnity bases.
19. The first respondent’s submissions were silent about the basis upon which her costs should be calculated. No aspect of her submissions would warrant her costs being awarded on anything other than an ordinary party/party basis. At least in respect of proceedings at first instance, the Rules provide for the default position of costs being calculated on a party/party basis (r 19.18(2)), though the Court has wide discretion as to the form of costs orders made (r 19.18(1)). While there is no counterpart rule for costs orders made in appeals, conventionally, the same principle applies.
20. Given we have no calculation of the first respondent’s costs on a party/party basis, we cannot guess the amount and therefore have no option but to order that her costs, in the sum agreed or assessed on a party/party basis, be paid in the stipulated proportions.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie-Wallace, Aldridge and Austin JJ) delivered on 22 February 2019.

Associate:

Date: 22 February 2019