Federal Magistrates Court Of Australia Dugan and Dugan (No.2)
[2012] FMCAfam 38
•20 February 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DUGAN & DUGAN (No.2) | [2012] FMCAfam 38 |
| FAMILY LAW – Costs – application for costs – where respondent unsuccessful – where substantive proceedings necessary because respondent failed to comply with court order – whether indemnity costs warranted. |
| Family Law Act 1975, ss.117, 117B, 117C Federal Magistrates Court Rules 2001, r.21.15 |
| A and B v Director of Family Services (1997) 138 FLR 51 Colgate Palmolive Company & Anor v Cussons Pty Ltd (1993) 46 FCR 225 Drysdale v Drysdale (Costs) [2011] FamCAFC 161 Dugan & Dugan [2011] FMCAfam 799 Penfold v Penfold (1980) 144 CLR 311 |
| Applicant: | MS DUGAN |
| Respondent: | MR DUGAN |
| File Number: | SYC 3334 of 2010 |
| Judgment of: | Scarlett FM |
| Hearing date: | 16 January 2012 |
| Date of Last Submission: | 15 September 2011 |
| Delivered at: | Sydney |
| Delivered on: | 20 February 2012 |
REPRESENTATION
| Application heard in Chambers |
| Solicitors for the Applicant: | Streeterlaw |
| Solicitors for the Respondent: | Verekers Lawyers Wollongong |
ORDERS
The Respondent is to pay the Applicant’s costs of these proceedings including the application for costs, as agreed or taxed, on the usual party and party basis.
Certified under Rule 21.15 that it was reasonable to employ counsel to appear for the Applicant.
IT IS NOTED that publication of this judgment under the pseudonym Dugan & Dugan (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 3334 of 2010
| MS DUGAN |
Applicant
And
| MR DUGAN |
Respondent
REASONS FOR JUDGMENT
Application
This is an application for costs arising out of a decision handed down on 25th August 2011where orders were made in favour of the Applicant (Dugan & Dugan[1]). The Applicant sought an order for costs on an indemnity basis.
[1] [2011] FMCAfam 799
In paragraphs [75] to [84] of the decision I considered the question of costs and made a number of findings in relation to matters which must be considered by the Court under subsection 117(2A) of the Family Law Act 1975. Those findings were that:
a)The Respondent has the capacity to pay;
b)Neither party was in receipt of assistance by way of a grant of legal aid.;
c)There was no criticism that could be levelled against the parties as to their conduct of the proceedings;
d)The proceedings were necessitated by the failure of the Respondent to comply with an order made by the Family Court in proceedings between the parties on 19th October 1998; and
e)The Applicant had been successful in the proceedings but not as successful as she might have wished; and
f)The Respondent had sought an order dismissing the Application, but was unsuccessful in this regard.
I also stated:
83.The only matter upon which the Court does not have information is whether either party has made an offer in writing to the other party to the proceedings and, if so, the terms of any such offer.
84.As this is a matter that may be relevant, I will refrain from making any order for costs until such information is to hand. I will certainly require submissions as to why costs are sought on an indemnity basis, rather than on a party and party basis.[2]
[2] [2011] FMCAfam 799 at [83]-[84]
Submissions
The Applicant’s solicitors have forwarded to the Court a written submission under cover of their letter of 15th September 2011.
The Respondent did not forward any written submissions until 18th January, after having been informed that the decision would be handed down on 19th January.
The Applicant submits that costs should be awarded on an indemnity basis because the proceedings were enforcement proceedings and a continual breach of the Family Court orders by the Respondent. As a matter of equity, the Applicant should not be left “out of pocket” due to the Respondent’s non-compliance with Orders of the Court.
The Applicant seeks an order for costs on an indemnity basis up to the conclusion of the hearing on 12th November 2010 or, in the alternative, indemnity costs until 11th August 2011 and party and party costs thereafter.
The Applicant’s submission sets out a history of the proceedings.
The Respondent did not contact the Applicant about his being retrenched from his employment on 7th April 2009, which was the event that brought about his receipt of superannuation benefits.
The Applicant commenced proceedings for enforcement in this Court on 27th May 2010.
The Applicant’s solicitors advised the Respondent of the Application the next day and sought disclosure of all documents in relation to the Respondent’s superannuation benefits.
The Applicant’s solicitors made a further request for disclosure on 1st July 2010. When this was not forthcoming, they issued subpoenas to obtain the relevant information.
The Respondent eventually provided relevant information on 16th July 2010.
The Respondent’s solicitors offered to make a payment to the Applicant on 11th August 2010, in the sum of $148,172.76.
The Applicant’s solicitors replied the same day, agreeing to accept that amount as an interim payment but seeking the payment of interest.
The Respondent paid the bare amount of $148,172.76 on 30 August 2010 but paid no interest.
The Applicant relies on the following authorities:
a)A and B v Director of Family Services;[3]
b)Penfold v Penfold;[4] and
c)Drysdale v Drysdale (Costs).[5]
[3] (1997) 138 FLR 51
[4] (1980) 144 CLR 311
[5] [2011] FamCAFC 161
The Applicant submits that despite the fact that she was not wholly successful with respect to the amount due to her on the construction of the original orders of the Family Court, but for the fact that the Respondent’s deliberate breach and non-compliance with those orders the Applicant would not have incurred the costs that she did.
The Applicant submits that the Respondent was wholly unsuccessful in that he sought to avoid the obligations to pay a sum to the Applicant imposed on him by the orders of the Family Court.
The Applicant also relies on paragraph [81] of the decision in the substantive matter:
It is a reasonable inference that if the Applicant had not commenced proceedings the Respondent would not have made the payment required by the Order. As it is, he did not pay any more than the bare sum required, and did not make that payment until more than a year later. Interest, under s. 117B, was clearly a matter that should have been considered.[6]
[6] [2011] FMCAfam 799
The Respondent states that he first received a request for payment on 28th May 2010, the day after the Applicant had commenced proceedings. It is submitted that the Applicant was at all times aware of the whereabouts and location of the Respondent but had made no effort to contact him.
The Respondent further submitted that the expert’s report provided to the parties did not support the Applicant’s claim for a payment of $300,000.00.
Again, the Respondent is critical of the Applicant for not putting forward settlement proposals. At paragraph 18 of the submission the Respondent states:
On 16 September 2010 a letter was forwarded to the solicitors for the Applicant a copy of which is attached and marked with the letter “J”. The letter sought discussions with a view to resolving the matter prior to the further mention date. Further, on 17 September 2010 the solicitor for the Respondent spoke to the solicitor for the Applicant and requested that a proposal for settlement be put. There was no subsequent proposal for settlement in any form received from the solicitors for the applicant.
It was further submitted at paragraph 20:
No proposal for settlement was received from the solicitors for the Applicant. At all times the Applicant sought payment of an excessive amount which was not supported in any way by calculations based on the Orders made or on the basis of the Expert’s Report.
The Respondent opposes the application for costs on an indemnity basis, and on a party and party basis, for these reasons:
· The Applicant made no attempt to contact the Respondent prior to filing an Application in the Court;
· The (Respondent) provided the information with respect to his superannuation benefit as soon as he could obtain it being by way of a letter dated 8 June 2010 after receiving initial contact from the solicitors for the Applicant on 28 May 2010;
· The Applicant proceeded to issue Subpoenae despite being provided with the necessary information by the Respondent;
· The Applicant made a proposal seeking an interim payment of $300,000.00 which was nearly double the amount ordered to be paid (in total) by the Court;
· The Applicant made no other proposal for settlement;
· The Applicant wrongly sought to include the Respondent’s retrenchment payment in his Superannuation Benefit when there was no basis for doing so;
· The Applicant failed to act upon the proposal and calculations provided by the Respondent to put any proposals for settlement despite invitations by the solicitor for the Respondent to do so;
· The Applicant was largely unsuccessful at hearing seeking an amount of approximately $95,000.00 in excess of what was subsequently ordered;
· At all times the Applicant was not prepared to enter into any meaningful negotiations to resolve the matter prior to hearing.[7]
[7] Respondent’s written submissions paragraph 24
The Relevant Law
Costs do not follow the event in family law (Family Law Act s.117(1)).
However, if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may make such an order for costs as it considers just (s.117(2)).
Subsection 117(2A) requires the Court to have regard to the matters set out in paragraphs (a) to (g) of that subsection.
Costs, when awarded, are usually awarded on a party and party basis. The circumstances in which the Court may in the proper exercise of its discretion may depart from the normal practice of making an order for costs on a party and party basis are set out in the decision of Sheppard J in Colgate Palmolive Company & Anor v Cussons Pty Ltd[8] at 233:
The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis…
The Circumstances of the case must be such as to warrant the Court in departing from the usual course…
…there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice.
[8] (1993) 46 FCR 225
An imprudent refusal of an offer of settlement may well be an example of a case where indemnity costs would be warranted, or a proceeding that was an abuse of the process of the Court.
Conclusions
There are several reasons why an order for costs on behalf of the Applicant against the Respondent is justified.
I am satisfied that the Respondent has the capacity to pay.
I have previously found that neither party is in receipt of assistance by way of a grant of legal aid.
The proceedings were brought about by the failure of the Respondent to comply with an order made by the Family Court on 19th October 1998. he failed to notify the Applicant that he had left his employment and he did not make any payment until after she had commenced proceedings.
It is, as I said, a reasonable inference that the Respondent would not have made that payment, or any payment, to the Applicant had she not commenced proceedings against him in this Court.
The Applicant did not receive the amount that she claimed in her Application. She sought an amount of $114,131.89 plus interest to 30th September 2010 in the sum of $628.40.
The Order made by the Court on 25th August 2011 was that the Respondent was to pay to the Applicant the sum of $19,762.90, which is a considerably smaller amount.
However, the disparity between the amount the Applicant claimed and the amount the Applicant was awarded is only a matter of degree. The Respondent was not prepared to pay her anything more than he had paid her and had sought that her Application be dismissed.
The Respondent was unsuccessful in the proceedings.
There is no evidence of any offer of settlement made under the provisions of s.117C of the Act. However, I am not persuaded by the Respondent’s submission that the Applicant failed to put an offer of settlement to the Respondent. It was always open to a respondent to make an offer of settlement to an applicant, but the Respondent in this case failed to do so.
There are no other relevant matters.
I propose to order that the Respondent is to pay the Applicant’s costs of these proceedings, including the costs application. This is a matter where it was reasonable to brief counsel and I will so certify under Rule 21.15.
I am not satisfied that the circumstances of the case are such that the Court is justified in departing from the usual practice that costs are payable on a party and party basis.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Date: 18 January 2012
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