Cantwell and Cantwell (No. 2)

[2018] FamCA 510

FAMILY COURT OF AUSTRALIA

CANTWELL & CANTWELL (NO. 2) [2018] FamCA 510

FAMILY LAW – COSTS – Between parties – Offer of settlement – Party/party costs – Quantum of costs – Scale of costs

Family Law Act 1975 (Cth) ss 117(2A)
Family Law Rules 2004 (Cth) r 10.01(1)

Kohan & Kohan (1993) FLC 92-340

APPLICANT: Mr Cantwell

RESPONDENT: Ms Cantwell

FILE NUMBER: ADC 1215 of 2014

DATE DELIVERED: 13 July 2018

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 4 July 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Richards

SOLICITOR FOR THE APPLICANT: David Burrell & Co

COUNSEL FOR THE RESPONDENT: Mr Jordan

SOLICITOR FOR THE RESPONDENT: Orb Lawyers

Orders

1. That the wife pay the husband’s costs in the sum of FIVE THOUSAND TWO HUNDRED AND NINETY DOLLAR ($5,290) within sixty (60) days of this order.

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 Cantwell & Cantwell (No. 2) 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 ADELAIDE

FILE NUMBER: ADC 1215 of 2014

Mr Cantwell

Applicant

And

Ms Cantwell

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. Mr Cantwell (“the husband”) by his Application in a Case filed 14 May 2018 seeks that Ms Cantwell (“the wife”) pay his costs incurred in challenging her Application for Costs filed 6 February 2018 calculated on an indemnity basis in the sum of $13,508.19 or as may be otherwise ordered.

2. Following a judgment delivered on 17 April 2018, I ordered that the wife’s Amended Application in a Case filed 6 February 2018 seeking that the husband pay the sum of $75,000 for her costs incurred in the substantive proceedings for the period 30 November 2015 to 3 March 2017 be dismissed.

3. At the hearing the husband’s counsel amended the orders sought by deleting the reference to indemnity costs and whilst not able to nominate a fixed amount suggested that on a party/party basis a reduction of 50 per cent on the figure of $13,508.19 would represent an appropriate compromise.

THE HUSBAND’S APPLICATION

1. The husband now seeks an order that the wife pay his costs on a party/party basis incurred in opposing her application for costs.

2. In considering what order should be made, if any, in respect of the husband’s costs, s 117(2A) of the Family Law Act 1975 (Cth) (“the Act”) requires the Court to have regard to the following:-

   (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 fact, 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 any 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.

3. The Court therefore has a wide discretion when considering an application for costs.

4. The husband contends that the wife has been wholly unsuccessful in her application for costs and that he made an offer in writing to the wife to settle the proceedings which should have been accepted.

5. The husband argues that the wife’s application was unsuccessful because she did not take into account the extent to which the proceedings required detailed consideration of a range of other issues, but instead chose to focus on the “ownership/control of the Cantwell interest in Suburb C S Business and the value of the net asset pool”.

6. The wife’s counsel conceded that the retention of the interests of the parties in the Suburb C S Business was a significant issue and if there had been agreement as to all other matters there may have been merit in the wife’s application for costs, but it ignored the other complexities that remained in dispute.

7. I find that the wife has been wholly unsuccessful following the dismissal of her costs application.

8. The husband relies upon his solicitor’s letter of 9 March 2018 which forms annexure “A” to his solicitor’s affidavit filed 14 May 2018 as an offer to settle the proceedings by the wife withdrawing her application and that thereafter each party bear their own legal fees.

9. It is argued that the wife should have accepted the husband’s offer of settlement, but chose to proceed with her costs application.

10. The husband’s offer to settle is supported by r 10.01 of the Family Law Rules 2004 that provides:-

    10.01(1)A party may make an offer to another party to settle all or part of a case by serving on the other party an offer to settle at any time before the court makes an order disposing of the case.

11. The wife ignored the husband’s offer to settle and proceeded with her application.

12. The husband argues that it was reasonable in all the circumstances for the wife to have accepted his offer and this lends support to his costs application.

13. The wife did not make any offer to settle the husband’s application for costs. Her counsel contends that she was not able to properly consider a settlement of the husband’s application because it had been calculated in an indemnity basis and the quantum sought was not considered proportionate to the narrow focus of the application.

14. The concession by the husband’s counsel that the application should not have been framed by reference to indemnity costs lends some support to the wife’s position, save and except that there is no evidence of a counter offer or a request for the husband’s costs to be calculated on a party/party basis. If there had been, it would have been an important consideration. In the absence of a counter offer I find that the wife was wholly unsuccessful in her application for costs and that there are no mitigating circumstances which would mitigate against an order for costs being made.

QUANTUM

1. The husband’s application was supported by an affidavit of his solicitor filed 14 May 2018. The affidavit and the annexures were in support of the husband’s original application seeking costs on an indemnity basis in the sum of $13,508.19.

2. The husband’s concession to abandon indemnity costs reduces the potential sum sought by the husband to $6,754.

3. Annexure “D” to the affidavit provides the itemised invoices dated 1 December 2017, 19 February 2018, 23 March 2018 and 26 April 2018. The total of those invoices (excluding the sum of $5,000 for counsel fees in relation to the husband’s Appeal) together with anticipated costs to the hearing of the husband’s application total $13,508.19.

4. The wife’s counsel refers to the decision of the Full Court in Kohan & Kohan (1993) FLC 92-340 at page 79,614:-

   The intent of s 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the Court may make such order as the Court considers just. As we have pointed out, the Court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges. … Consequently, the Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind.

5. I have had regard to the itemised invoices and in particular take note of the hourly rate charged at $500.

6. The Supreme Court scale permits a charge of $377.50 per hour for work undertaken by a lawyer “involving skill”.

7. The Supreme Court rate is approximately three quarters of the hourly rate charged by the husband’s solicitor.

8. I also consider that the itemised invoices reflect charges incurred on the basis of solicitor/client and not a party/party basis.

9. Even were the invoices to be adjusted to reflect a permissible charge under the Supreme Court scale, there would still be attendances which would not fall conveniently within a costs calculation based on party/party costs.

10. I am obliged to have regard to the relevant cost scale but am not required to step into the shoes of a Taxation Registrar.

11. I consider that it is reasonable to allocate the sum of $2,500 by way of counsel fees, disbursements in the sum of $205 and the relevant filing fee in the sum of $115, totalling $2,820. I consider that it is a relevant consideration that whilst the wife could have put forward a counter-proposal, the failure by the husband’s solicitors to advise that the application was no longer to be considered on an indemnity basis, merits a discount. Accordingly, I propose to bring to account solicitor costs in the sum of $2,000 to be reflected in the following calculation:-

1.	David Burrell and Co	2,000
2.	Counsel fee disbursement	2,500
3.	Other disbursements	205
4.	Application filing fee	115
Total	$4,820
5.	GST on fees and disbursements only	470
Total	$5,290

1. Whilst not the subject of submissions, I consider 60 days for the payment of the costs to be reasonable.

SET OFF

1. The Case Outline document of the wife refers to a set off that she claims in the sum of $7,965.74 due by the husband to the wife in respect of his purported use of her credit card on 22 March 2016.

2. The issue was raised in an earlier Case Outline document filed on 14 September 2016 in anticipation of the substantive property proceedings.

3. Judgment has been delivered and there is no pending Appeal.

4. The application was pressed faintly by the wife’s counsel. Given the substantive proceedings are finalised, it is unclear as to what head of power would enable the Court to consider a possible set off. A jurisdictional issue may also arise and it was not argued that there was a common substratum or nexus between any costs order and claimed set off.

5. In the absence of any formal application I decline to consider any claim for set off.

6. I make orders as appear at the commencement of these reasons.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 13 July 2018.

Associate:

Date: 13 July 2018