Cleary & Cleary (No. 2)

[2007] FamCA 1202

FAMILY COURT OF AUSTRALIA

CLEARY & CLEARY (NO. 2) [2007] FamCA 1202

FAMILY LAW – COSTS – Section 117C – offer – time for consideration of offer - Reasonableness of parties’ position having regard to proximity of commencement of hearing

Family Law Act 1975 (Cth)

APPLICANT: Ms Cleary

RESPONDENT: Mr Cleary

FILE NUMBER: MLF 51 of 2006

DATE DELIVERED: 28 September 2007

PLACE DELIVERED: Melbourne

PLACE HEARD: By way of written submissions

JUDGMENT OF: Cronin J

HEARING DATE: By way of written submissions

SUBMISSIONS RECEIVED FROM:

SOLICITOR FOR THE APPLICANT: Robb & Associates

COUNSEL FOR THE RESPONDENT: Mr O’Shannessy

SOLICITOR FOR THE RESPONDENT: Creaghe Lisle Solicitors

Orders

That upon reading the written submissions of the husband and the wife

IT IS ORDERED:

1. That within 60 days of the date of this order, the wife pay to the husband:

   (a)$709.50 being a contribution towards the expenses incurred for the superannuation expert’s fees; and

   (b)$4235 towards counsel’s fees.

2. That the wife make a contribution towards the solicitor-client costs of the husband associated with these proceedings for the period from 26 July 2007 to 13 September 2007 in addition to the costs referred to above.

3. In default of agreement as to those costs, the wife pay 50 per cent of the husband’s costs referred to in paragraph (2) hereof determined according to the Schedule to the Family Law Rules.

IT IS NOTED that publication of this judgment under the pseudonym Cleary & Cleary is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 51 of 2006

MS CLEARY  

Applicant

And

MR CLEARY  

Respondent

REASONS FOR COSTS JUDGMENT

1. On 31 August 2007 sitting at Albury, I made final orders in the contested property proceedings between the parties.  I shall not refer to the findings that I made nor to the orders.  However, under those orders, I made provision for either party to make an application for costs should they be so advised. 

2. On 14 September 2007, the husband who was the respondent in the proceedings filed submissions pursuant to my orders.

3. By facsimile transmission on 21 September 2007, the applicant wife either through her legal practitioners or on her own behalf filed a response to the husband’s application for costs. 

4. The husband has responded to the wife’s submissions.

5. Section 117 of the Family Law Act1975 (Cth) provides that each party shall bear their own costs unless the Court considers that there are circumstances which justify a departure from that rule. If that decision is made to depart from the rule, the court in making such a determination is obliged to take into account the matters set out in s 117(2A).

6. The essence behind the application by the husband for costs is that he had made a series of offers and that the orders that I made were not as favourable to the wife as the offers.  He makes the point that the offers were reasonable in the circumstances and that as the wife did not accept those offers, he incurred legal costs to conduct the proceedings.

7. It is just and reasonable to depart from the rule that each party pay their own costs in circumstances where the Court is satisfied that a party has made a reasonable attempt to resolve the matter and then being successful when the other party has adopted a position that a court ultimately finds to be unreasonable in those circumstances. 

8. In this case, negotiations had obviously been going on for some time but less than one month prior to the commencement of the Albury circuit, the husband made an offer fixing a time for a response.  In this case the time allocated by the husband for the response was only seven days and the submission on behalf of the husband was that that was “ample” time.  According to the husband’s submission, no response to the offer was received in any event notwithstanding the time restriction.  The wife’s submission in reply said that the offer of settlement was “the first sensible offer” that the husband had made during the course of the proceedings.  She made the observation that it came the day after the filing of all of the material.  That is of some significance because of the fact that the parties then would have known all of the material upon which the Court would be relying to make the determination.  However, the wife’s submission went on to say that the period of seven days to which I have referred during which the offer was open provided her counsel “with very little time to consult with the wife”.

9. There may be some basis for a complaint by the wife about the fact that that was not sufficient time for she and her legal advisors to consider the position but in any event, it was not until 24 August 2007 (not 27 August 2007 as referred to in the husband’s submission) that the wife seemed to open the negotiations again.  Her position however was to make an offer that was substantially higher than that which was ultimately my determination in the court proceedings.  It was also after the commencement of the circuit.

10. The solicitor for the husband virtually immediately rejected the wife’s offer.  Having regard to the orders that I made, the husband was clearly sensible in rejecting the wife’s offer. 

11. In her submission, the wife said that it was her wish for a settlement to have been negotiated but the husband’s “outright rejection” did not provide the wife with an opportunity to enter into any further negotiation.  That is hard to understand in circumstances where the offer she made on 24 August 2007 was so far outside of the range of what was ultimately the outcome, that it is not surprising that the husband entered no further into the negotiations.  The husband must have presumed that there was to be no sensible negotiation thereafter.

12. Accordingly, it was the husband who was adopting the sensible approach in respect of negotiations and it is therefore just and reasonable that the provision that each party pay their own costs be departed from.

13. In relation to the question of what matters are relevant for the purposes of making any order, I have canvassed at some length the circumstances of the parties in my reasons for judgment.  In my view there is little difference between the parties and I have set that out in some detail.

14. I am informed that neither party is in receipt of assistance by way of legal aid.

15. There is no suggestion in relation to the conduct of the proceedings that either party did not fulfil the requirements of the Family Law Rules. The husband’s submissions suggest that the wife adopted an unreasonable stance and having regard to what I have just said, I would agree. However, in respect of s 117(2A)(c), I do not think that that is conduct within the meaning of the provision.

16. Similarly, I do not understand there to be any suggestion that either party has been wholly unsuccessful in the proceedings.  Both parties spent considerable time endeavouring to resolve the parenting issues and no doubt each incurred costs accordingly.  The main difference between the parties’ respective submissions is that the husband correctly argues that he made an offer in writing to settle the proceedings and in my view, the terms of that offer were reasonable. 

17. It is appropriate therefore that the wife make a contribution towards the husband’s costs.

18. The submission on behalf of the husband divides the costs into three parts.  The first relates to counsel’s fees, the second relates to the costs of the solicitor and the third relates to the expenses associated with the provision of expert advice in relation to the superannuation.

19. In my view, there is no reason to suggest that either party should pay any more or less than one half each of the share of the superannuation expert’s costs.  Accordingly, half of those costs amount to $709.50 and the wife should make that contribution towards those costs.

20. Counsel set out in some detail in his submission the fees that the husband will be charged.  Counsel quite reasonably divided those fees into components relating to children’s matters and others in relation to property.  The husband therefore seeks only those costs associated with the property proceedings and the break up of those costs appears to me to be extremely reasonable in the circumstances and in accordance with the range set out in the Rules.  Accordingly, I am satisfied that the appropriate amount of costs towards counsel’s fees payable by the wife should be $4235.

21. The third area relates to the professional costs for the husband’s solicitor.  The submission on behalf of the husband said that the solicitor “estimates” his total costs calculated on scale for the period from 26 July 2007 to 13 September 2007.  No break up was given of that scale and a figure of $7300 was said to have been incurred by the husband during that period.  The wife makes the point that the offer made on 26 July 2007 was the day after all of the affidavit material had been filed.  I am therefore left with a situation where I do not know exactly what it was that the solicitor did during that period of some seven weeks after the bulk of the work had been done to incur costs of $7300 on the scale.  Notwithstanding the fact that the husband only seeks half of those costs, in the circumstances, I do not feel comfortable in saying that I can fix that particular sum.  The solution therefore is for that sum to be determined by agreement and failing agreement then taxed by a registrar in the usual way.

22. In her submission, the wife suggests that there were other matters going on at a time prior to the commencement of the proceeding associated with the children, the requirement for the husband to prove his case as to the value of the superannuation and the various problems associated with the implications of a splitting order.  However, all of those matters are matters that need to be considered seriously by parties prior to embarking upon a final hearing.  In this case, I indicated to the parties that the four step process was highly discretionary and that therefore they needed to make a serious attempt to try and work out what was reasonable but they were unable to do so and as I now know, that was as a result of the wife’s view about her entitlement.

23. The other matters that have been raised by the wife in her submission were really addressed by me in my reasons for judgment in respect of factors under s 75(2) of the Act and I propose not to canvass them again.

24. In the circumstances, it is appropriate that the wife make the contribution towards the husband’s reasonable costs in the terms that I have outlined above.

I certify that the preceding Twenty Four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate

Date:  28 September 2007