Wife Appeals Cost Orders
Falk & Falk [2022] FedCFamC1A 195 (24 November 2022)
The wife appeals against an order to pay the husband’s costs on an indemnity basis. The primary judge drew inferences against the appellant. The Court, in resolving this dispute, assessed whether the primary judge had adequate reasons.
Facts
On 1 February 2022, a judge of the Federal Circuit and Family Court of Australia (Division 1), made an order that “the wife pay the husband’s costs on an indemnity basis in the amount of $42,108 within 90 days.” The appellant wife filed an appeal against that order which the respondent husband resisted. However, prior to the hearing, the parties produced a signed minute where the respondent conceded the appeal on terms agreed by the parties. At the direction of the Appeal Judicial Registrar, the parties were required to file an agreed submission identifying why the appeal should be allowed and why the Full Court should re-exercise the discretion.
Those submissions were filed on 17 November 2022 and have been considered, together with the Notice of Appeal filed 28 February 2022 and the earlier submissions filed by each party relating to the grounds of appeal. In the midst of contested property proceedings where it was said that an asset pool in excess of $11 million existed, the primary judge determined at an interim hearing, that the respondent should have $1.227 million released to him from the parties’ self-managed superannuation fund and made an order to this effect. The appellant had resisted the interim application and was wholly unsuccessful in her resistance. By the time the hearing was before the primary judge, the appellant had made an offer to release $100,000 to the respondent, this offer was rejected.
Issue
Whether or not the appeal should be allowed.
Applicable law
Bhatnagar & Riju [2018] FamCAFC 144 - provides that the parties’ consent to the appeal being allowed does not obviate the need for the Full Court to be satisfied of error justifying the success of the appeal.
Analysis
The primary judge drew inferences against the appellant (at [5] and [47]) that were not raised with the appellant or her legal representatives, specifically, the finding that the appellant’s “conduct is exceptional and borders on wilful” (at [49]) and failed to provide adequate reasons for such a finding (Ground 1 of the Notice of Appeal filed 28 February 2022); and (b) made a factual error in finding the respondent made three offers of settlement (at [25]) where the third offer did not constitute an offer. The finding that the appellant “was seized of $1 million of joint monies at the hearing” (at [45]) was not open on the evidence, where the appellant’s evidence was that she had only $215,317 remaining from the funds removed from the joint account after separation (Ground 2 of the Notice of Appeal filed 28 February 2022).
The facts compel a finding that circumstances justify an order for costs, but the matters relied upon by the primary judge to demonstrate exceptional circumstances were, at this interlocutory stage, controversial. It would save the parties the further costs of taxation, if the award of costs was in a fixed sum.
Conclusion
The appeal is allowed. Order 1 made by the Federal Circuit and Family Court of Australia (Division 1) on 1 February 2022 is discharged and in substitution the appellant pay the respondent’s costs associated with the Application in a Case filed 5 May 2021 on a party-party basis in the sum of $20,000, with such amount to be paid within 28 days of the date of this order. The appellant should pay the respondent’s costs of the appeal in the sum of $23,719.86, with such amount to be paid within 28 days of the date of this order.
