Bidal and Suriz
[2018] FamCA 287
•4 May 2018
FAMILY COURT OF AUSTRALIA
| BIDAL & SURIZ | [2018] FamCA 287 |
| FAMILY LAW – COSTS – Where application for Review of Registrar’s orders as to costs – Where application successful and costs orders set aside – Where offer of settlement made and rejected – Where consideration of applicable principles – Where circumstances justify order for costs. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules 2004 (Cth) r 19.18 |
| Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 | ||
| APPLICANT: | Ms Bidal | |
| RESPONDENT: | Mr Suriz |
| FILE NUMBER: | PAC | 5647 | of | 2016 |
| DATE DELIVERED: | 4 May 2018 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | By way of written submissions last received on 9 March 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Fantin |
| SOLICITOR FOR THE APPLICANT: | Pannu Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Druitt |
| SOLICITOR FOR THE RESPONDENT: | Marsdens Law Group |
Orders
That within three months from this date the wife pay to the husband, or as he otherwise may direct in writing, by way of costs of and incidental to the husband’s Application for Review the sum of $2,500.00.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bidal & Suriz has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 5647 of 2016
| Ms Bidal |
Applicant
And
| Mr Suriz |
Respondent
REASONS FOR JUDGMENT
The application for determination is the application for costs made by the husband arising from a Review of certain orders as to costs made by a Registrar. The orders for costs made by the Registrar were not confirmed on rehearing on review: Suriz & Bidal [2017] FamCA 1064.
The context of the present issue is found in the previous reasons for judgment:
4.The proceedings were listed for the purposes of a case assessment conference on 13 March 2017. On that day the Registrar noted that the valuation of certain property of the parties needed to be undertaken. The Registrar ordered that the parties instruct a joint expert to value “the properties and to value such corporate interest as are required by the parties or either of them”. Otherwise, the parties were directed to file a balance sheet by 10 May 2017 with proceedings adjourned to 11 May 2017 as to any outstanding valuation issues.
5.On 11 May 2017 the parties appeared by phone before a Registrar. The Registrar made certain notations as to outstanding valuation issues and otherwise ordered:
a)that the husband by 1 June 2017 provide to the wife’s legal representatives certain documents by way of financial disclosure.
b)that by 19 May 2017 the wife nominate one of the husband’s joint experts to undertake the valuation of the “business entity” and in the event that the wife seeks to nominate alternate valuers then she nominate 3 alternate experts by 1 June 2017 and the husband shall “reply by the 8 June 2017”.
c)that proceedings be otherwise adjourned to 14 July 2017 before the registrar to consider whether the matter could proceed to a conciliation conference.
The costs order
6.On 14 July 2017 proceedings were yet again listed before a Registrar who noted that the husband had not complied with his disclosure obligations as ordered on 11 May 2017 and that the husband had failed to respond to a request to settle a joint letter of instruction to the expert. The Registrar ordered that proceedings be further adjourned to 5 September 2017 and that the husband pay the wife’s costs of 14 July 2017 with an itemised bill of costs to be prepared and the quantum of such costs to be determined on 5 September 2017.
Thereafter
7.On 5 September 2017 the wife provided a bill of costs totalling $2,994.00 that appears related to both 11 May and 14 July 2017.
8.The husband asserted before the Registrar that there were difficulties in relation to valuation of the family business and that valuation had still not been done. Proceedings were adjourned to 13 September 2017 for the purposes of settling a letter to be forwarded to the joint expert. As to costs, the Registrar “approved” the bill of costs rendered with certain amendments that apparently reduced the amount of cost to $1,519.85.
On Review of the Registrar’s order as to costs against the husband there were, in fact, no orders as to costs made. Thus on Review the husband was wholly successful.
The husband brings the present application that the wife pay his costs of and incidental to the review.
Costs
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to the proceedings shall bear his or her own costs.
That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.
Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: Penfold v Penfold (1980) 144 CLR 311.
The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They relevantly, in these proceedings, relate to the following:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party has legal aid and the terms of any grant of aid;
(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 answers, 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.
In Collins and Collins (1985) FLC 91-603 (at 79,877), the Full Court described the discretion conferred by s 117 as being a “broad” one and held that the factors set out in s 117(2A) are not to be read in a restrictive way.
In Greedy and Greedy (1982) FLC 91-250 and Luadaka v Luadaka (1998) FLC 92-830, the Full Court made clear that it is unnecessary to spell out detailed reasons for decisions in costs matters.
Later the Full Court in Hawkins & Roe [2012] FamCAFC 77 said:
17.With respect to the application of the section, in Penfold and Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".
Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v Kent). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
(footnotes omitted)
18. The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:
… A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
The provision relating to the calculation of costs is set out in r 19.18(1) of the Family Law Rules 2004 (Cth) which state:
19.18 Method of calculation of costs
(1)The court may order that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
It was said in Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 at 162, the purpose of the rule enabling an order for costs in a specific amount, without formal assessment or taxation is, commonly with other courts, to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”.
In Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 the court said at [10] that the court must act judicially, but that does not mean that it must exercise the power to award a lump sum in any “scientific or formulaic manner”.
Murphy J observed in Parke & the Estate of the Late A Parke (2016) FLC 93-748:
130. If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court”… The process does not “by its very nature … envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”…
As to the considerations in s117(2A):
a)Both parties are in employment and have unresolved property proceedings before this Court. There are clearly assets from which any order as to costs can be met.
b)Neither party is in receipt of a grant of legal aid.
c)The husband offered to compromise the costs issue by an offer to pay $1,050.00 in lieu of the sum assessed by the Registrar. The wife continues to contend that the husband has failed to make proper and adequate disclosure. However, the Court is required to consider the circumstances that existed as at the date of the orders impugned by the Review Application.
d)The wife continues to complain as to the husband’s noncompliance. Such issues are not relevant to the present application for costs.
e)The wife opposed the Review Application and sought that the costs orders be sustained. She was unsuccessful.
f)In Lenova & Lenova (Costs) [2011] FamCAFC 141 the Full Court, Bryant CJ, Coleman and Murphy JJ said:
In this jurisdiction, costs do not “follow the event”; the Act prescribes, relevantly, that “subject to subsection (2) ... each party to proceedings under this Act shall bear his or her own costs”
(s 117(1)). As a result, a litigant, or prospective litigant, cannot rely upon a costs order following upon success in the action as a means of dissuading the other party from pursuing unmeritorious litigation or as a means of seeking to persuade the other party from pursuing litigation.
A timely offer in writing genuinely made might, then, be seen as an important part of a limited armoury available to prospective litigants seeking to avoid the costs of litigation. Conversely, where, consequent upon success in an action, a litigant can point to the making of a genuine and timely offer having been made, that offer might be seen as an important (albeit not the only) matter in the exercise of the discretion as to the ordering of costs.
That consideration must, of course, be balanced against a litigant having a limited capacity to meet a costs order, as well as any other relevant considerations. But, a limited financial capacity to meet an order cannot be determinative; if it were, a party would always be able to plead impecuniosity as a means of avoiding a costs order in circumstances where pursuit of the litigation has continued in the face of a reasonable offer to cease that litigation and the incurring of its attendant costs.
Whilst regard is had to the financial circumstances of the respondent wife, she was advised by legal practitioners at each stage of the proceedings. She can, in our view, be seen to have known the risks of refusing to compromise in the face of a written offer made before the appeal was filed. That factor, together with the husband’s success in the appeal, warrants an order for costs being made in favour of the husband.
The husband offered to compromise his liability, an offer not accepted by the wife. The husband agreed to pay $1,050.00 to wholly satisfy the Registrar’s order by accepting the wife’s offer in such terms. He, otherwise, sought that the Application for Review be ended with no order as to costs and that the orders as to costs be otherwise discharged by consent (presumably after payment of the $1,050.00). Peculiarly, the wife did not agree to the costs order being discharged but invited the husband to file a Notice of Discontinuance of the Application for Review. The husband did not agree and put the wife on notice that he would seek costs of his Review Application if successful. The Review proceeded to determination.
g)There is no other fact or circumstance relevant.
In the circumstances of this matter it is appropriate that there be an order for costs by way of the wife making a contribution to the husband’s costs of the Review Application.
The husband seeks costs asserting that at scale as provided by the Rules his reasonable costs are in the sum of $16,940.09. The Review was determined on the basis of written submissions ordered on 14 November 2017 with judgment reserved to chambers.
The quantum sought appears, without further information, excessive in the circumstances. However doing the best on the information at hand it is justified that there be an order that the wife pay by way of contribution to the husband costs the sum of $2,500.00.
An order will be made accordingly.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 4 May 2018.
Associate:
Date: 4 May 2018
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Appeal
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