Bachman & Donohoe (No 3)
[2022] FedCFamC1F 185
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Bachman & Donohoe (No 3) [2022] FedCFamC1F 185
File number(s): SYC 8527 of 2020 Judgment of: REES J Date of judgment: 25 March 2022 Catchwords: FAMILY LAW – COSTS – Where the respondent was wholly unsuccessful in arguing the financial agreement was binding – Respondent to pay the applicant’s costs of the application to set aside the agreement as assessed or agreed. Legislation: Family Law Act 1975 (Cth) s 117(2A) Division: Division 1 First Instance Number of paragraphs: 20 Date of last submission/s: 23 March 2022 In Chambers: 25 March 2022 Place: Sydney Counsel for the Applicant: Mr Stewart Solicitor for the Applicant: Dorter Family Lawyers And Mediators Counsel for the Respondent: Mr Wong Solicitor for the Respondent: Broun Abrahams Burreket ORDERS
SYC 8527 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BACHMAN
Applicant
AND: MR DONOHOE
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
25 MARCH 2022
THE COURT ORDERS:
1.That the respondent pay the applicant’s costs of her application to set aside the agreement executed by the parties on 22 June 2016 from 27 January 2021 to 30 November 2021 as assessed or agreed, such sum to be paid within 30 days of the date of the assessment or agreement.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 a pseudonym Bachmann & Donohoe has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
On 30 November 2021, orders were made setting aside an agreement executed by Ms Bachman (“the applicant”) and Mr Donohoe (“the respondent”) on 22 June 2016 on the basis that the applicant had not received independent legal advice.
The applicant now seeks an order that the respondent pay her costs of those proceedings on an indemnity basis in the amount of $215,935.21, or, in the alternate, on a party and party basis.
That application was filed on 11 February 2022 and the applicant seeks leave to proceed out of time. In her Amended Application for Final Orders filed 15 April 2021, the applicant sought, as Order 13, an order that the respondent pay her costs. Accordingly, the present application is not out of time and no leave is necessary.
The application is opposed by the respondent who, relevantly, seeks an order that costs be reserved, or, in the alternate, that the application be dismissed. He relies on an affidavit sworn by him on 10 March 2022 and written submissions.
The wife relies on an affidavit sworn by her on 11 February 2022 and written submissions filed on 23 March 2022.
The respondent submits that the applicant has not demonstrated any urgency or primacy to the making of a costs order in circumstances where the proceedings are not yet complete.
The issue of the validity of the agreement was listed as a discrete, threshold issue. The matters to be considered in relation to the costs application are discrete to that application and both parties have filed the evidence upon which each relies. The fact that the substantive proceedings have not been completed is irrelevant to the determination of the issue of costs in relation to the discrete issue.
The fact that the respondent is considering commencing proceedings in negligence against his former solicitor is not relevant to this application although determination of this application may assist the respondent to quantify his claim.
I am not persuaded that there is any reason to reserve the applicant’s costs.
Both parties have filed Financial Statements. The applicant deposed to net assets including superannuation entitlements of about $5,700,000. The respondent deposed to net assets of about $10,000,000.
The application is to be determined in accordance with the provisions of the Family Law Act 1975 (Cth) s 117(2A) which are set out below:
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
The respondent’s financial position is superior to that of the applicant.
On behalf of the respondent, it is submitted that neither party turned his or her mind to the fact that the agreement signed on 22 June 2016 was the operative agreement and that the applicant did not amend her application to seek to set aside that agreement rather than the later, inoperative, agreement. That amendment was made in the applicant’s Case Outline on 18 November 2021. It is not, however, submitted that the respondent would have run his case differently had the amendment been made earlier or that he would not have continued to seek to uphold the validity of the 22 June 2016 agreement or that the amendment exacerbated the costs of the proceedings.
The applicant relies on the fact that the respondent was wholly unsuccessful and on offers of settlement made by her.
Before me, the respondent asserted that the agreement was a binding financial agreement (“BFA”) and that the conditions precedent to it’s being so characterised had been met. Relevantly, the respondent asserted that the applicant had received independent legal advice.
The respondent was wholly unsuccessful in those assertions.
The applicant relies on the following offers of settlement:
·On 26 May 2020, the applicant’s solicitor wrote to the respondent’s solicitor asserting that the agreement entered into by the parties did not oust the jurisdiction of the Court and inviting the respondent to advise the basis on which he asserted that it did. The applicant suggested mediation.
·The respondent’s solicitor replied on 2 June 2020 stating “Our client’s position is that the Agreement stands, and we can see no reason why it would not…”. They invited the applicant to set out the matters upon which she relied in asserting that the agreement was not a BFA.
·There is no evidence that the applicant’s solicitor ever provided a response setting out her contentions.
·On 17 December 2021, the applicant’s solicitor wrote to the respondent’s solicitor advising that her costs were $165,830 and offering to settle for payment of $110,500.
I am not satisfied that any of the purported offers justifies the making of an order for costs.
However, I propose to order that the respondent pay the applicant’s costs from 27 January 2021 when he filed his response until the delivery of judgment on 30 November 2021.
I am not satisfied that the circumstances of these proceedings come within that small group of exceptional cases which merit the making of an indemnity costs order and the applicant’s costs will be paid at scale.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 25 March 2022
0
0
0