Property – Costs order set aside where each party enjoyed nearly the same degree of success in substantive proceedings – Whether a party is “wholly unsuccessful” pursuant to s 117(2A)(e) of the Family Law Act focuses on the overall result, rather than the failure of a property application
In Marvis [2023] FedCFamC1A 34 (21 March 2023) Austin J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, heard a husband’s appeal from a costs order made following a decision in contested property proceedings.
At first instance the wife made a costs application on the basis that the husband had been “wholly unsuccessful” in the proceedings because he sought the dismissal of her property settlement application and failed, whereas she enjoyed some measure of success ([9]).
The trial judge ordered that the husband pay the wife’s costs from 4 November 2021 which was the date she properly particularised the relief sought. The husband appealed.
Austin J said (from [14]):
“The respondent commenced the proceedings in May 2021, filing an application for property settlement relief, the nature of which evolved as the proceedings progressed.
[15] The respondent initially sought an unquantified lump sum payment from the appellant. In June 2021, the appellant responded by seeking that the respondent’s application be dismissed. His position did not change throughout the litigation.
[16] At mediation in November 2021, the respondent quantified her claim at between 12.5 and 15.5 per cent of the parties’ aggregated net assets, but the appellant still maintained the parties should retain their individual assets and liabilities without any adjustment order. The parties did not compromise, so the dispute progressed to trial.
[17] The trial was heard in June 2022. At that time, while the respondent had not amended her Initiating Application filed in May 2021, she did file an Outline of Case document and a Minute of Orders for which she applied. She contended the parties’ net assets were worth about $1.7 million and she wanted 15 per cent of them. Given the assets retained by her, she applied for an order compelling the appellant to pay her an extra $129,000. Ultimately, the primary judge ordered the appellant to pay the respondent $77,650.
[18] Essentially then, the respondent wanted $129,000 from the appellant, he resisted having to pay her any amount, but he was ordered to pay her $77,650. Obviously enough, both parties enjoyed a measure of success, though the result was slightly closer to the outcome for which the respondent had advocated.”
Referring to section 117(2A)(e) of the Family Law Act 1975, the Court continued (from [21]):
“Clearly enough, the provision invites consideration of whether a party has been wholly unsuccessful in the proceedings; not whether a party has been wholly unsuccessful in prosecuting his or her particular application (Anison & Anison [2019] FamCAFC 108 … ; Franklyn & Franklyn (No.2) [2021] FamCAFC 160 … )
[22] The respondent’s submissions to the contrary are rejected. She incorrectly focussed upon the failure of the appellant’s application, rather than upon the overall result he achieved in the proceedings …
( … )
[25] Here, the ‘proceedings’ comprised a cause of action for property settlement relief under Pt VIII of the Act. The respondent sought an order that the appellant pay her $129,000, but he successfully confined the relief granted to her to little more than one-half of the sum she claimed. He was therefore certainly not ‘wholly unsuccessful’ in the proceedings. While his specific application was unsuccessful, so was the respondent’s. In fact, he enjoyed nearly the same degree of success as her in the substantive cause.”
Both parties’ applications for costs of the trial were dismissed and procedural orders were made for the filing of submissions in relation to the costs of the appeal.