FITZGERALD & MURRAY

[2015] FCCA 1452

FEDERAL CIRCUIT COURT OF AUSTRALIA

FITZGERALD & MURRAY [2015] FCCA 1452

Catchwords:
FAMILY LAW – Costs – application for costs after final property hearing.

Legislation:

Family Law Act 1975, s.117

Federal Circuit Court Rules2001 (Cth)

Robinson and Higginbotham (1991) FLC 92-209
Lenova and Lenova [2011] FamCAFC 141

Applicant: MR FITZGERALD

Respondent: MS MURRAY

File Number: DNC 349 of 2013

Judgment of: Judge Harland

Hearing date: 16 February 2015

Date of Last Submission: 8 May 2015

Delivered at: Melbourne

Delivered on: 2 June 2015

REPRESENTATION

Counsel for the Applicant: Ms Holtham

Solicitors for the Applicant: Story & Associates

Counsel for the Respondent: Mr Valente

Solicitors for the Respondent: Jordan & Fowler Barrister & Solicitors

ORDERS

1. That within 28 days of the date of these orders, Ms Murray pay to Mr Fitzgerald $13,090.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DARWIN

DNC 349 of 2013

MR FITZGERALD

Applicant

And

MS MURRAY

Respondent

REASONS FOR JUDGMENT

1. On 17 October 2014 I delivered my reasons in the property proceedings between the de facto parties. For ease of reference I will refer to them as husband and wife in this judgment.

2. The respondent husband filed an application on 5 November 2014 seeking minor amendments to the orders in accordance with the slip rule and an order that the wife pay the husband’s costs in the sum of $14,114.

3. The applicant wife resists the application for costs. The wife filed an appeal. The parties sensibly agreed to defer the costs argument until after the determination of the appeal. I made orders providing a timetable for written submissions to avoid the parties incurring further costs in attending court. The wife discontinued her appeal. The parties then filed written submissions with respect to the costs argument.

4. In order for the Court to make a costs order in favour of the parties there must be justifying circumstances as set out in section 117(2A) of the Family Law Act 1975. I will address each of these matters in turn.

(a) The financial circumstances of each of the parties to the proceedings

1. Mr Fitzgerald concedes he is in a stronger financial position than Ms Murray. He earns approximately $120,000 a year. She is currently in receipt of Centrelink benefits. If it were not for the fact that by agreement Mr Fitzgerald withheld $14,114 from his payment to her, there would be a real issue of hardship to Ms Murray of imposing a costs order on her. As it is, it is clear from Ms Murray’s lawyers’ submissions that she will not receive any funds as she owes her lawyers well in excess of the sum Mr Fitzgerald seeks.

2. The sum above also includes costs of the costs application. It does not include costs for the earlier stages of the proceedings. That is appropriate given the timing of his offer. The costs application component includes allowance for a half day hearing of $1,024. The hearing was conducted by way of written submission. I find the sum of $1,706 sufficient to allow for that.

(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid

1. Neither party is in receipt of legal 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 answer questions, admissions of facts, production of documents and similar matters

1. The husband was arguing that the wife needed to seek leave to file the application out of time and did not concede this issue until the hearing. As the dispute as to the end of the relationship only covered a 4 month period this stance is unreasonable and he only abandoned it shortly before the hearing.

2. The husband complains that the wife lengthened the hearing unnecessarily by relying on schedules of expenses which she had to be cross-examined on in order to show her schedules to be wrong. As the hearing still completed well within 2 days, I do not accept that it materially lengthened the hearing although it would have added to the preparation.

(d) Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. Not applicable.

(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. Neither party has been wholly successful.

(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

1. The husband says he made various offers to settle to the wife before and during the proceedings. Relevantly he made a written offer on 24 February 2014 to pay the respondent $50,000. The wife rejected that offer and made a counter offer to the husband that he pay her $100,000. The husband made a further offer that he pay the wife $60,000 on 21 July 2014. The hearing commenced on 23 July 2014.

2. The Court ordered that the husband pay the wife the sum of $40,898.12. The husband sought to have his application for costs dealt with before he was due to make the payment to the wife on 1 December 2014. It was not possible to list that matter urgently given the pressure of other urgent cases which is usually particularly acute towards the end of the year in family law matters.

3. The most relevant offer is the one made on 24 February 2014. That offer was made at the time of the conciliation conference and before the matter was set down for hearing.

(g)  Such other matters as the court considers relevant.

1. It is important to note that in Family Law matters s.117(1) of the Family Law Act 1975 provides that the usual rule is that each party shall be responsible for his or her own costs.

2. To make a costs order at all is a departure from the ordinary rule. Schedule 1 of the Federal Circuit Court Rules2001 sets out a scale of costs to be applied in family law proceedings and in general Federal Law proceedings. It is an event based costs scale. Mr Fitzgerald seeks costs from the commencement of proceedings.

3. The factor which really favours a costs order being made is the offer Mr Fitzgerald made in May 2014. Ms Murray would have been in a better position financially if she had accepted his offer. Both parties would have saved the additional legal costs and stress of the hearing. It does justify a costs order being made in his favour. The comments of Nygh J in Robinson and Higginbotham (1991) FLC 92-209 at paras.78, 417 are particularly relevant here as pointed out by Mr Fitzgerald’s lawyer. Mr Fitzgerald’s lawyer also relevantly quoted the Full Court in Lenova and Lenova [2011] FamCAFC 141 wherein the Full Court referred to balancing a genuine and timely offer being made by the successful litigant against the other party’s limited capacity to pay a costs order. That limited capacity cannot be determined.

4. The respondent was legally represented throughout the proceedings. In all of the circumstances of the case, the Court will order costs in favour of Mr Fitzgerald in the sum of $13,090.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Judge Harland

Associate: 

Date:  2 June 2015