Family Court of Australia

Grefeld & Grefeld and anor (costs)	[2015] FamCAFC 56	

FAMILY LAW – APPEAL – COSTS – where the second respondent sought costs in relation to an unsuccessful appeal against property orders – where it was found that there should be no departure from the ordinary rule that each party pay his or her own costs under s 117 of the Family Law Act 1975 (Cth) having regard to the unusual factual background of the matter and somewhat complicated legal issues arising – there be no order for costs.

FAMILY LAW – APPEAL AGAINST COSTS ORDER – further submissions required. 

Family Law Act 1975 (Cth)

Family Law (Fees) Regulation 2012 (Cth)	

Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89
Grefeld & Grefeld and Anor [2012] FamCAFC 71	

Appellant:	Ms Grefeld	

first RESPONDENT:	Mr Grefeld	

second RESPONDENT:	Ms J  Grefeld	

File Number:	BRF	2504		of	2005	

Appeal Number:	NA	90		of	2010	

DATE DELIVERED:	16 April 2015  	

Place Delivered:	Canberra	

Place Heard:	Brisbane	

Judgment of:	Finn, Strickland & Austin JJ	

Hearing date:	12 August 2011	

Lower court jurisdiction:	Family Court of Australia	

lower court judgment date:	22 June 2010	

LOWER COURT MNC:	[2010] FamCA 504	

REPRESENTATION

COUNSEL FOR THE Appellant:	Mr Galloway	

SOLICITOR FOR THE Appellant:	Peter J Sheehy Solicitors 	

first RESPONDENT:	In person	

COUNSEL FOR THE second RESPONDENT:	Mr McGregor	

SOLICITOR FOR THE second RESPONDENT:	Jones McCarthy Lawyers	

Orders
It is ordered in relation to the costs of the appeal against the orders of the Honourable Justice Barry made on 22 June 2010:
(1)	The application of the second respondent sister that the appellant wife pay her costs of the appeal be dismissed. 
(2)	There be no order for costs in relation to the appeal. 
It is ordered in relation to the appeal against the costs orders of the Honourable Justice Barry made on 22 June 2011: 
(3)	Immediately upon the delivery of the reasons for judgment of the Full Court on 16 April 2015 the Northern Region Appeal Registrar is to send to the first respondent husband at his last email and postal addresses advised by him to the Registrar, copies of:
(i)	the reasons for judgment delivered on this day and the engrossed orders which give effect to those reasons, and
(ii)	copies of the engrossed orders with respect to costs made by the Honourable Justice Barry on 22 June 2011 and of the reasons for judgment in relation to those orders.
(4)	If the first respondent husband wishes to appeal the orders with respect to costs made on 22 June 2011, he must file with the Northern Region Appeal Registrar a Notice of Appeal against those orders and pay the required filing fee under the Family Law (Fees) Regulation 2012 (Cth) by 4pm on Friday 15 May 2015 (Australian Eastern Standard Time).
(5)	If the first respondent husband wishes to make any further written submissions in support of the grounds of appeal contained in any Notice of Appeal which he may file pursuant to Order 4 of these orders, he must file such written submissions at the time of filing of such Notice of Appeal.
(6)	If the first respondent husband does file a Notice of Appeal pursuant to 
Order 4 of these orders and any written submissions in support by 4pm on 
Friday 15 May 2015 (Australian Eastern Standard Time), then on the next business day after the filing of such Notice of Appeal and written submissions (if any), the Northern Region Appeal Registrar will forward such a Notice of Appeal and written submissions (if any) to the solicitor for the appellant wife and to the solicitor for the second respondent sister. 
(7)	The appellant wife and the second respondent sister will have 21 days from the date on which the Northern Region Appeal Registrar sends to their solicitors copies of any Notice of Appeal and further written submissions (if any), to file and serve any brief written submissions that they wish to make in response to such Notice of Appeal and further written submissions from the first respondent husband. 
IT IS NOTED that publication of this judgment by this Court under the pseudonym Grefeld & Grefeld and Anor (Costs) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE Family Court of Australia at brisbane	

Appeal Number: NA 90 of 2010
File Number: BRF 2504 of 2005

Ms Grefeld 	
Appellant

And

Mr Grefeld 	
First Respondent

And 

Ms J Grefeld	
Second Respondent

REASONS FOR JUDGMENT
Introduction 
1.	On 22 June 2010, Barry J made orders in the course of property settlement proceedings between Ms Grefeld (“the wife”) and Mr Grefeld (“the husband”), which included a declaration that the wife held a property at Suburb B in Queensland on trust for the husband’s sister, Ms J Grefeld (“the sister”). Before his Honour both the husband and the wife had opposed the making of that declaration in the sister’s favour.  
2.	One year later on 22 June 2011, Barry J made orders that the wife and the husband be jointly and severally liable for the sister’s costs in relation to the proceedings in which the declaration had been made. The precise terms of his Honour’s orders were:
 (1)	The [wife] and the [husband] jointly and severally be liable for the costs of the [sister] but only to the extent as detailed in these Orders.
(2)	The [husband] pay the costs of the [sister] on an indemnity basis to include the sums of:
a.	 $513.33 for the one third share of an updated joint valuation; and
b.	 $1,000 in relation to the translation of [European] documents.
(3)	The [wife] pay the costs of the [sister] on a party and party basis to include the sums of: 
a.	$513.33 for the one third share of an updated joint valuation; and
b.	 $1,000 in relation to the translation of [European] documents.

3.	On 1 June 2012 this Full Court dismissed an appeal by the wife against the orders of Barry J made on 22 June 2010 which contained the declaration of trust in favour of the sister. The husband had not appealed his Honour’s orders, but he had been named as the first respondent to the appeal, and he had filed written submissions in support of the wife’s appeal. 
4.	In our orders of 1 June 2012 we granted the wife an extension of time to file a Notice of Appeal against the costs orders made by Barry J on 22 June 2011, and we permitted her to rely on a further Amended Notice of Appeal filed on 12 August 2011 as her Notice of Appeal against the costs orders. 
5.	We also gave all other parties 28 days from the making of our orders to file any Notice of Appeal or cross-appeal against the costs orders. 
6.	Further, we made orders providing for the Appeal Registrar to make directions for the filing of written submissions in relation to the wife’s appeal 
(or any other appeal or cross appeal filed) against the costs orders and also in relation to the costs of the wife’s unsuccessful appeal against orders containing the declaration of trust in favour of the sister. (That last mentioned appeal will be hereinafter referred to as “the appeal against the trust declaration”).
The material relating to costs filed following the Full Court orders of 1 June 2012
7.	Pursuant to our orders made on 1 June 2012, the Appeal Registrar made directions at a hearing on 28 August 2012 for: 
•	the wife to file and serve an appeal book in relation to her appeal against the costs orders by 21 September 2012 and a summary of argument in relation to that appeal by 12 October 2012; 
•	the husband to file and serve a summary of argument in relation to the appeal against the costs orders by 9 November 2012; 
•	the sister to file and serve a summary of argument in relation to the appeal against the costs orders by 30 November 2012, with such summary of argument to contain any application for costs in relation to the costs either of the appeal against the trust declaration, or of the (yet to be determined) appeal against the costs orders;
•	the wife to file and serve any summary of argument in relation 
“to any costs application” by the sister by 21 December 2012; 
•	the husband to file and serve any summary of argument in relation 
“to any costs application” by the sister by 1 February 2013. 
8.	On 20 September 2012 the wife filed the appeal book required for her appeal against the costs orders.
9.	On 30 November 2012 the sister filed written submissions in which she sought that the wife as the unsuccessful appellant should pay her costs of the appeal against the trust declaration. 
10.	On 22 February 2013 the wife filed an application (together with a supporting affidavit from her solicitor) in which she sought an extension of time to file her summaries of argument in relation both to the costs of her unsuccessful appeal against the trust declaration and of her appeal against the costs orders. 
11.	In her application filed on 22 February 2013 the wife also sought leave to adduce fresh evidence in relation to the sale of land which she owned at 
Suburb C. In the affidavit of the wife’s solicitor in support of the application, it was foreshadowed that the wife would file an affidavit deposing that the Suburb C land (which Barry J had recognised in [49] of his reasons for the costs orders would have to be sold by the wife) had been sold by the wife and the full net proceeds of sale paid to the wife’s mother in payment of debts owed by the wife to her mother. 
12.	On 20 March 2013 the sister filed a response to the wife’s application 
(filed on 22 February 2013) in which she sought the dismissal of that application. The response was supported by an affidavit. 
13.	On 8 April 2013 the Appeal Registrar heard and granted that part of the wife’s application which sought an extension of time to file summaries of argument until 22 April 2013. The Appeal Registrar also made consequential orders extending the time for the husband to file his summaries of argument until 
20 May 2013, and for the sister to file any summary of argument in relation to the appeal against the costs orders until 3 June 2013. 
14.	The Appeal Registrar also directed that the wife’s application to adduce further evidence be heard by the Full Court when that Court heard the appeal against the costs orders.
15.	On 22 April 2013 the wife filed a written summary of argument in relation to her appeal against the costs orders and also in relation to the costs of her unsuccessful appeal against the trust declaration. 
16.	On the same day the wife also filed an affidavit (as foreshadowed in the affidavit of her solicitor referred to in [11] above) in which she deposed as to the sale for $700,000, and the disposition to her mother of the net sale proceeds, of the property at Suburb C. 
17.	On 20 May 2013 the husband filed written submissions which commenced with a statement that he had not been served with the “Cost Order” made by Barry J on 22 June 2011 “neither by post nor by email”, and that he reserved the right to appeal “against the Cost Order after it has been served to [sic] me legally”.
18.	Notwithstanding that statement, the husband’s submissions then addressed the costs order made against him by Barry J before also addressing the costs of the wife’s unsuccessful appeal against the trust declaration. 
19.	On 3 June 2013 the sister filed further written submissions in which she responded to the submissions made by both the wife and the husband in relation to the appeal against the costs order and the costs of the appeal against the trust declaration.
The background to and decisions concerning the trust declaration   
20.	Before we consider either the appeal against the costs orders or the costs of the appeal against the trust declaration, it is necessary to provide some background to that last mentioned appeal. For a full appreciation of that background, it would be necessary to read our reasons delivered in relation to our orders of 
1 June 2012 (see Grefeld & Grefeld and Anor [2012] FamCAFC 71), but we will here provide the following summary of the history of this case as recorded in those earlier reasons:
•	In 1983 the sister granted a power of attorney to the husband in Country A.
•	In 1996, in reliance upon the power of attorney, but without the sister’s knowledge, the husband withdrew funds from the sister’s European bank account and used those funds to purchase the property at Suburb B.
•	The contract to purchase the property at Suburb B was in the wife’s sole name as purchaser, but the contract was executed by the husband on her behalf. Once the funds (from the sister’s account) were paid by the husband to the vendor to complete the contract, title was registered in the sole name of the wife. The wife was ignorant of the source of the funds.
•	Subsequently, the wife joined the sister to property settlement proceedings between herself and the husband, and sought an order that the sister transfer another property to her. This claim by the wife was later abandoned.
•	Once joined in the property settlement proceedings, the sister filed a Response seeking the transfer of the Suburb B property to her, alleging that the wife held that property on either a resulting or a constructive trust for her because of the circumstances of its acquisition. The wife denied this claim.
•	The essential finding of the trial judge, Barry J, was that the wife held the property on a constructive trust for the sister because it had been acquired with the sister’s money in circumstances involving a breach of the fiduciary duty owed to her by the husband.
21.	In our reasons for judgment in which we dismissed the appeal by the wife 
(in which she was supported by the husband, although he was not an appellant) against Barry J’s declaration of a trust of the property in favour of the sister, we rejected the wife’s arguments that his Honour had erred:
•	in finding that the husband owed a fiduciary duty to the sister by virtue of the power of attorney and that he had breached that duty; and 
•	in not finding that the wife’s title was indefeasible under Queensland real property law, or impregnable under the principles which emerge from the decision of the High Court in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89). 
22.	Our essential conclusion was that the facts as found by Barry J permitted the imposition of a constructive trust in the sister’s favour. 
The appeal against the Trial Judge’s orders for costs
23.	The first issue which we have to determine in relation to the appeal against the costs orders made by Barry J on 22 June 2011 is whether the husband as well as the wife is an appellant. 
24.	As we explained earlier at [4], in our orders of 1 June 2012 in which we dismissed the wife’s appeal against the trust declaration, we granted the wife an extension of time to appeal the costs orders and permitted her to rely on a further amended Notice of Appeal filed on 12 August 2011 as her notice of appeal against the costs orders.  
25.	During the hearing of the appeal against the trust declaration, when submissions were made to us on behalf of the wife seeking the extension of time to appeal the costs orders, the husband (who was self-represented and appeared by video link from Europe) raised with us whether he could also appeal the costs orders. 
26.	Counsel for the sister immediately informed us that he did not “think that [he] could object to that” (Transcript, 12 August 2011, p37 ln 47). We assume that counsel meant that he could not object to the husband also being granted an extension of time to appeal the costs orders (and this position was confirmed in the submissions filed by the sister on 3 June 2013). It was for that reason that in our orders made on 1 June 2012 in relation to the appeal against the trust declaration, we included the order mentioned at [5] above whereby all other parties (that is, other than the wife) were given 28 days from the making of our orders to file any Notice of Appeal or cross-appeal against the costs orders.    
27.	We understand that the husband has never filed a Notice of Appeal against the costs orders, and this would seem to be confirmed by the fact that in his written submissions in relation to the various costs matters filed on 20 May 2013, he stated that he reserved the right to appeal “against the Cost Order [sic] after it has been served to [sic] me legally” (see [17] above). 
28.	We mention at this point that there is in this Court no formal method of service of orders (save in circumstances where an order is sought to be enforced). Rather, the practice is for orders and reasons for judgment to be sent by the Courts’ registries to litigants at their last known address for service. We have difficulty in understanding why when the husband participated (by telephone from Europe) in the hearings which the Appeal Registrar conducted on 
28 August 2012 (see [7] above) and on 8 April 2013 (see [13] above), that the husband apparently did not ask for a copy of the costs orders (and judgment if necessary). 
29.	Notwithstanding all these matters, the husband has in his written submissions filed on 20 May 2013 made submissions in opposition to the costs orders, and the sister in her submissions filed on 3 June 2013 made submissions 
“in answer to the appeal against the costs order (sic) made by the Honourable Justice Barry on 22 June 2011 against both the [wife] and the [husband]”. 
30.	However, there are difficulties with us now simply proceeding to treat the husband as having appealed the costs orders and to assume that he has done so on the basis of the complaints contained in his written submissions filed on 
20 May 2013.
31.	The first difficulty is that it would, or could, be procedurally unfair to the husband for us to attempt to determine an appeal by him against the costs orders without being sure that he has seen the orders, which are the subject of the appeal, and the reasons for judgment, which support those orders, and also without our knowing what precisely his grounds of appeal are. Secondly, there is the matter of the filing fee which the Family Law (Fees) Regulation 2012 requires to be paid on the filing of a Notice of Appeal.
32.	Given these difficulties, we consider that we have no alternative other than to direct that immediately upon the delivery of these reasons for judgment the Northern Region Appeal Registrar should send to the husband at his last known postal and email addresses copies of these reasons for judgment and of the engrossed orders giving effect to these reasons and of the engrossed costs orders made by Barry J made on 22 June 2011 together with a copy of his Honour’s reasons for judgment published that day; and if the husband wishes to appeal the costs orders, he should forward to the Northern Region Appeal Registrar no later than 4pm on Friday 15 May 2015 a completed Notice of Appeal and pay the filing fee required under the Family Law (Fees) Regulation 2012. If the husband wishes to make any further written submissions in support of the grounds of appeal contained in any Notice of Appeal which he may file, then such written submissions should be filed with his Notice of Appeal.
33.	If the husband does not file a completed Notice of Appeal (with or without further written submissions) and pay the required filing fee by 4pm on Friday 15 May 2015, we will proceed on the basis that he does not appeal the costs orders made on 22 June 2011, and then deliver judgment in relation to only the wife’s appeal against those orders.
34.	If the husband does file a Notice of Appeal within the required time, then the Appeal Registrar will be directed to forward a copy of that Notice of Appeal, together with any further written submissions filed by the husband, to the solicitors for the wife and for the sister, and those parties will have a further 
21 days to respond. 
35.	We have considered whether it would be appropriate for us now to proceed to determine the wife’s appeal against the costs orders without waiting to establish whether or not the husband also appeals those orders. However, on balance we consider that the preferable course is to defer any decision on any appeal against the costs orders until the issue of whether or not the husband is an appellant is clarified.
The costs of the appeal against the trust declaration 
36.	Notwithstanding our inability at this time to determine the appeal against the costs orders made on 22 June 2011, we consider there is no impediment to our now deciding the application by the sister (contained in her written submissions filed on 30 November 2012) that the wife as the unsuccessful appellant against the orders made 22 June 2010, which contained the trust declaration, should pay the sister’s costs of the appeal against those orders. 
37.	In the written submissions (filed 30 November 2012) on behalf of the sister in support of her application that the wife pay her costs of the unsuccessful appeal against the trust declaration, and after a brief consideration of the matters contained in s 117(2A) of the Family Law Act 1975 (Cth) (being the matters to be considered whether in effect there should be any departure from the ordinary rule that in proceedings under that Act, each party should bear their own costs), the following submissions were made (at [10] to [12]):
•	“[T]hat whilst the proceedings have been conducted under the accrued jurisdiction of the Family Court, and that under the provisions of the Family Law Act 1975 the ‘ordinary rule’ is that each party bear their own costs, the subject claim is, in fact, a civil claim in which the [sister] was wholly successful both at trial and on appeal. In ordinary circumstances in a civil claim the successful party would also receive the benefit of a costs order.”
•	That “the circumstances of the case justify a departure from the ‘ordinary rule’ that each party bear their own costs and the [wife] should be ordered to pay the [sister’s] costs of and incidental to the appeal.”
•	That no factor exists “which would justify an order other than the payment of party/party costs to be agreed, or in default of agreement to be assessed.” 
38.	In that part ([35] to [52]) of the wife’s written summary of argument 
(filed 22 April 2013) which addressed the issue of the costs of the appeal against the trust declaration, it was submitted in resisting any order for costs that both at trial and on appeal the wife had raised “legitimate and arguable points of law”. Particular reliance was also placed by the wife on her ignorance of the true source of the funds used to purchase the property, which was found by the trial Judge and by the Full Court, to be held on trust for the sister because it had been purchased with her funds. It was further submitted for the wife that “the only appropriate [o]rder” with respect to the sister’s costs of the appeal against the trust declaration is that they be paid by the husband, but that is not an order sought by the sister before us. 
39.	In seeking to resist an order for costs in relation to her unsuccessful appeal against the trust declaration, the wife also relied on her application to adduce fresh evidence concerning her sale of a property at Suburb C and her asserted payment of all the sale proceeds to her mother in satisfaction of amounts owed to her mother. The admission of the fresh evidence was opposed by the sister both on the ground of relevance and on the basis that it could not affect the outcome of the application for costs.
40.	We consider that because there was evidence before the trial Judge (recorded at [49] of his reasons for judgment of 22 June 2011 in relation to his costs orders) that the wife owed her mother $617,000, which is a sum not far short of the amount of $700,000 apparently received by the wife for the Suburb C property less the costs of sale, the fact of the sale of the property could make little relevant difference to the wife’s financial position. In other words, she no longer has that particular asset, but nor does she have the substantial liability which she apparently had to her mother. Thus, there would be no useful purpose in the further evidence, at least in so far as it is relied on by the wife as a shield against the sister’s application for costs of the unsuccessful appeal against the trust declaration. We will therefore not receive that evidence in the context of that application for costs. 
41.	The husband’s written submissions (filed on 20 May 2013) also purport 
(at [79] to [92]) to address the issue of the costs of the unsuccessful appeal against the trust declaration, for the purpose, it would appear, of opposing any order being made against him in favour of the sister. However, as we have already said, there is no such order sought by the sister, and thus there is no necessity to address further the husband’s position in relation to the costs of the appeal against the trust declaration. 
Conclusion in relation to the costs of the unsuccessful appeal against the trust declaration
42.	While we accept that there is some force in the submission made on behalf of the sister that her claim for the declaration of trust was in the nature of a civil claim, in relation to which, if successful, she would ordinarily receive the benefit of a costs order, it has to be remembered that these proceedings were conducted under the Family Law Act 1975 (Cth). The ordinary rule under that Act (s 117(1)) is that each party should pay his or her own costs unless there are circumstances which would justify an order for costs. Having regard to the unusual factual background to this matter and the somewhat complicated legal issues which accordingly arose, we are not persuaded that there should be any departure from the ordinary rule under the Act that each party pay his or her own costs. We will therefore dismiss the sister’s application against the wife for costs and order that there be no order for costs in relation to the appeal against the trust declaration. 
I certify that the preceding forty two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 16 April 2015.

Associate:  

Date:  16 April 2015