Browne v Green

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Barbieri & Barbieri has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. By orders made on 31 March 2025, we dismissed the appellant's appeal against certain property adjustment orders made by a judge of the Federal Circuit and Family Court of Australia (Division 1) on 1 November 2024. We made directions about the filing and service of submissions, should any party be moved to seek an order as to the costs of the appeal.
2. The respondent seeks her costs of the appeal "on an indemnity basis fixed at $95,851 or otherwise at scale in the sum of $63,777" (Respondent's written submissions filed 14 April 2025, paragraph 1). The appellant opposes the application.
3. Pursuant to s 117(1) of the Family Law Act 1975 (Cth), each party to proceedings under the Act shall bear his or her own costs. However, s 117(2) gives the Court a discretion to make a different order as to costs when there are justifying circumstances (Penfold v Penfold (1980) 144 CLR 311 at 315). In considering what order (if any) should be made under s 117(2), the Court must consider the matters listed in s 117(2A) of the Act.
4. The respondent makes three points in support of her application namely, that:

(a) she told the appellant before the appeal was filed that his proposed appeal had substantive deficiencies. She was correct in that assessment. The appeal failed and for the reasons that she advanced to him;

(b) acknowledging his Achillies heel, he sought to compromise the appeal and the competing costs applications each party had commenced arising from the primary judge's property adjustment orders; and

(c) in circumstances where:

(i) she had incurred more than $1,500,000 in legal fees of the principal application;

(ii) interest was accruing upon the unpaid judgment amount at the rate of 10.35 per cent per annum; and

(iii) she offered to accept $3,550,000 inclusive of costs, being $416,602 more than the amount awarded to her at trial, and to forego any interest,

the appellant's conduct warrants not only an order for costs, but costs on an indemnity basis.

1. The appellant makes the following points in opposing the respondent's application namely, that:

(a) he initiated "settlement discussions" and the respondent rejected his reasonable settlement offers (Appellant's written submissions filed 28 April 2025, paragraph 17);

(b) the respondent did not accept settlement offers because she would accrue more interest on the judgment amount;

(c) he must pay interest on the sum of the judgment awarded to the respondent in addition to any costs order;

(d) subjecting him to the respondent's costs would be "wholly prejudicial" (Appellant's written submissions filed 28 April 2025, paragraph 39); and

(e) the costs sought are "outside the range of reasonableness" (Appellant's written submissions filed 28 April 2025, paragraph 8).

1. This Court delivered a unanimous judgment dismissing the appeal: Barbieri & Barbieri [2025] FedCFamC1A 51. By his appeal, the appellant sought to deny the respondent the benefit of the judgment she secured. That he was wholly unsuccessful in doing so is of considerable significance (Trask & Westlake (Costs) [2015] FamCAFC 214 at [4]).
2. The appellant argues that it would be "wholly prejudicial" to him to be subject to the respondent's costs. Certainly, that a party would experience great hardship if subject to an order for costs (Browne v Green [2002] FamCA 791; (2002) FLC 93-115 at [21]), or where there is a great disparity of wealth between the parties (Kelly and Kelly (No 2) [1981] FamCA 78; (1981) FLC 91-108 at 76,811), the financial circumstances of the parties may be a significant factor. But it is not so here. Although the appellant submits that the respondent has greater financial resources than he, the primary judge's reasons for judgment make it clear that this is not so. Both have considerable financial resources (Barbieri & Barbieri (No 2) [2024] FedCFamC1F 686 at [169] and [195]-[196]). Given the appellant's age and his superannuation assets, the appellant's submission that "he is now in a position of limited cash resources", whilst not without some force, is not to the point (Appellant's written submissions filed 28 April 2025, paragraph 11).
3. Lastly, the respondent's argument that an adverse costs order would be wholly prejudicial to him seems to be a personal grievance rather than the prosecution of a legal argument. In his submission, the appellant cites the imposition of interest payments, capital gains taxes and 'other taxes' as the source of this purported prejudice (Appellant's written submissions filed 28 April 2025, paragraphs 39-40). However, the imposition of a costs order, and the costs incidental to it, were risks that the appellant accepted when choosing to initiate these proceedings. This argument is without merit.
4. The appellant suggests that the respondent persisted with her resistance to the appeal and took comfort in knowing that she would accrue more interest the longer the appeal took to resolve. Thus, he says, there was no incentive for her to accept his reasonable attempts to resolve the appeal (and the other matters dealt with in his offers) or to make her own reasonable offers to compromise it.
5. Between 9 January 2025 and 4 February 2025, a series of offers and counteroffers were exchanged between the parties. They were made to compromise not only the appeal, but also to satisfy the respondent's claim for costs in the principal proceedings and her entitlement to interest on the unpaid judgment sum. The respondent argues that the appellant has fared worse than if he had accepted her offers of compromise because (Respondent's written submissions filed 14 April 2025, paragraph 25):

(a) she was entitled to $3,131,398 as ordered by the primary judge;

(b) she is entitled to interest calculated daily from 5 December 2024, exceeding $111,000, taking the total amount owed by the appellant to $3,242,398, excluding costs;

(c) she is likely to secure an order for costs of the principal proceedings;

(d) her indemnity costs of the s 79A component of those proceedings are around $980,000; and

(e) by her last offer she was willing to accept $3,550,000 inclusive of the costs of the substantive proceedings, a substantial discount on what she otherwise expected.

1. The appellant submits that the respondent provided no explanation as to why she declined his settlement offers. He does not suggest why she was required to give him reasons and we do not consider her failure to do so is relevant to the present application. Whilst "it is very important for the Court to give proper consideration to written offers of settlement that have been made" (Browne & Green [2002] FamCA 791; (2002) FLC 93-115 at [57]) we consider the offers in the present case to add little to the weight of either parties' arguments.
2. In Warne v ACN 603 541 411 Pty Ltd trading as Chandlers International Lawyers (No 2) [2025] NSWCA 92, the New South Wales Court of Appeal recently summarised the relevant principles to apply in considering whether to award indemnity costs in circumstances where a party is found to have imprudently rejected a reasonable offer of settlement, stating at [29]-[31]:

...the rationale for special costs orders, where a party has not accepted an offer of compromise or Calderbank offer that is more favourable than the ultimate judgment, is that articulated in Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721; [1992] NSWCA 721. In summary, those are: to encourage the saving of private costs and the avoidance of the inherent risks, delays and uncertainties of litigation by promoting early offers of compromise; to save the public costs necessarily incurred in litigation ultimately found to have been unnecessary; and to indemnify the party making a reasonable offer of compromise because, from the time made, notionally the real cause and occasion of the litigation is the attitude adopted by the party rejecting the offer.

Where the offer is a Calderbank offer (and not an offer of compromise under the rules), it must be established by the offeror that the rejection of it (assuming it embodied a genuine element of compromise) was unreasonable in order to warrant an indemnity costs order.

In considering the reasonableness of the rejection of the offer, one takes into account factors such as the stage of the proceeding at which the offer was received; the time allowed to the offeree to consider the offer; the extent of the compromise offered; the offeree's prospects of success, assessed as at the date of the offer; the clarity with which the terms of the offer were expressed; and whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it (see Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 where it was noted that relevant factors include those identified by the Court of Appeal in Victoria in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298).

1. In the present case, the offer required complete capitulation by the appellant in respect of his appeal. It effectively required the appellant to accept that "the prospects of a successful appeal were nil or so negligible as to discontinue his appeal" (Warne at [33]).
2. The appellant initiated and prosecuted the appeal. He was wholly unsuccessful. The respondent's continued opposition to his appeal was both unsurprising and vindicated. She cannot be criticised for opposing the appeal and rejecting the appellant's overtures of resolution.
3. However, for reasons similar to those articulated in Warne, we are not persuaded that the respondent should have her cost on an indemnity basis. Whilst the appeal failed and its merit poor, we would not describe the appeal as hopeless, without reasonable cause, frivolous or vexatious.
4. We consider that the respondent should have her costs of the appeal fixed according to scale at $63,777 and so order.

I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland and Justices Wilson and Jarrett.