Goyle and Goldstein
[2012] FMCAfam 26
•18 January 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| GOYLE & GOLDSTEIN | [2012] FMCAfam 26 |
| FAMILY LAW – Costs – application for costs – property proceedings – conduct of the parties to the proceedings – where respondent failed to attend court on three occasions – where respondent failed to file and serve material when directed by court – where respondent largely unsuccessful in the proceedings – where offer in writing made to settle the proceedings under Family Law Act 1975 (Cth), s.117C – party and party costs – indemnity costs. |
| Family Law Act 1975, ss.117, 117C |
| Browne v Greene [2002] FamCA LR 428 Colgate Palmolive Pty Ltd v Cussons Limited (1993) 46 FCR 225 Goyle & Goldstein [2011] FMCAfam 390 Kohan and Kohan (1993) FLC 92-340 Pennisi v Pennisi (1997) FLC 92-774 Robinson and Higginbotham (1991) 14 Fam LR 559; FLC 92-209 |
| Applicant: | MS GOYLE |
| Respondent: | MR GOLDSTEIN |
| File Number: | CAC 1761 of 2009 |
| Judgment of: | Scarlett FM |
| Hearing date: | 12 December 2011 |
| Date of Last Submission: | 12 December 2011 |
| Delivered at: | Sydney |
| Delivered on: | 18 January 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jackson |
| Solicitors for the Applicant: | Kennedy & Cooke Lawyers |
| Solicitor for the Respondent: | Mr Cohen |
| Solicitors for the Respondent: | David H. Cohen & Co |
ORDERS
The Respondent is to pay the Applicant’s costs of the Application for distribution of property decided on 4 May 2011 as agreed or assessed as follows:
(a)from the date of filing of the Application on 27 October 2009 until 17 November 2010 on a party and party basis; and
(b)from 18 November 2010 until the date of Judgment on 4 May 2011 on an indemnity basis.
The Respondent is to pay the Applicant’s costs of this Application as agreed or assessed on a party and party basis.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of Federal Magistrate Scarlett delivered this day will for all publication and reporting purposes be referred to as Goyle & Goldstein.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
CAC 1761 of 2009
| MS GOYLE |
Applicant
And
| MR GOLDSTEIN |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application for an order for costs on behalf of the successful Applicant in property proceedings.
The Respondent opposes the application.
Orders Sought
The Applicant filed an Application in a Case in the Canberra Registry of the Court on 31st May 2011, seeking the following orders:
1. That the Respondent Husband pay the costs of the Applicant Wife on a party/party basis from 27 October 2009 until 17 November 2010 and on an indemnity basis from 18 November 2010 to date.
2. That the Respondent Husband pay the Applicant Wife’s costs of this application in a case.
The Application was returnable on 22nd August 2011. On that date, his Honour Brewster FM transferred the application for costs to the Sydney Registry for hearing.
Background
The Applicant had brought an application for property orders arising out of her de facto relationship with the Respondent by filing her Application on 27th October 2009. The Application was heard in Canberra on 3rd December 2010.
On 3rd May 2011 I made final orders which largely favoured the Applicant (Goyle & Goldstein[1]).
[1] [2011] FMCAfam 390
The Applicant now seeks an order for costs in her favour.
Evidence and Submissions
The Applicant relies on the affidavit of Mr H sworn on 30th May 2011 setting out the facts relied upon in support of the application for costs.
The only evidence relied on by the Respondent is a copy of an Order made by the Equity Division of the Supreme Court of New South Wales in proceedings [omitted] between Workers Compensation Nominal Insurer as Plaintiff and [G] Pty Ltd as Defendant, showing that the Defendant company was wound up by Order of the Supreme Court on 7th June 2011 and a Liquidator was appointed.
The Respondent also tendered into evidence without objection a bundle of correspondence, including a copy of a letter dated 12th October 2011 from a solicitor formerly acting for the Respondent, Mr Carlos Turini, addressed to the Applicant’s solicitors, advising that:
Mr Goldstein instructs the following:
1. That his business, [G] Pty Ltd, has entered into liquidation;
2. That his business is in debt of over $300,000; and
3. That the bank has repossessed the [W] property.
Mr H’s affidavit states that:
a)The Applicant did not receive a grant of legal aid for her property case;[2]
b)Her solicitor’s costs are approximately $35,000 and no payment has been made to date;[3]
c)There was no appearance by the Respondent when the property application was before the Court on 7th December 2009, 6th October 2010 and 26th October 2010;[4]
d)The Respondent did not file any material in response to orders made by the Court on 6th August 2010;[5]
e)Correspondence took place between the Applicant’s solicitors and the Respondent’s then solicitor, Mr Peter Tierney, between 6th November and 9th November 2009 regarding settlement proposals;[6] and
f)On 17th November 2010 the Applicant’s solicitors forwarded an Offer to Settle to the Respondent.[7]
[2] Affidavit of Mr H 30.5.2011 at paragraph [6]
[3] Ibid at [7]
[4] Ibid at [8]
[5] Ibid
[6] Ibid Annexures “A”, “B” and “C”
[7] Ibid Annexure “D”
Counsel for the Applicant submitted that the offer to settle was a strong justification for an order for costs, relying on s.117(2A)(f) of the Family Law Act. He referred the Court to the decisions of the Full Court of the Family Court in Robinson and Higginbotham[8]; Pennisi v Pennisi[9] and Browne v Greene[10].
[8] (1991) 14 Fam LR 559; FLC 92-209
[9] (1997) FLC 92-774
[10] [2002] FamCA 791; (2002) 29 Fam LR 428
Mr Jackson further submitted that the original judgment was weighted in favour of the Applicant, indicating that the Respondent had been largely unsuccessful in the proceedings.
It was further submitted that the Respondent’s conduct with respect to the proceedings was a relevant factor, noting:
a)his failure to attend court on three occasions;
b)his failure to file and serve material when directed to do so by the Court; and
c)his appearance on the final hearing, where he produced no material other than a list of debts that he claimed that were owed but failed to make any proper disclosure of his financial circumstances.
For the Respondent, Mr Cohen told the Court that the Respondent had been declared bankrupt. He conceded, however, that the Applicant had been successful in her claims.
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 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 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.
Conclusions
This is clearly a case where the Applicant should receive a costs order in her favour, although the Respondent’s financial circumstances appear to be in a parlous state.
The Applicant was not in receipt of a grant of legal aid and was obliged to fund the proceedings herself.
The Respondent’s conduct in relation to the proceedings is a significant factor in persuading the Court that a costs order should be made against him. The records of the Court show that the Respondent did not attend Court on 7th December 2009, on 2nd August 2010, on 6th October or 26th October 2010.
He did not comply with the trial directions made by Baumann FM on 6th August 2010.
It was uncertain on the days leading up to the final hearing on 3rd December 2010 whether the Respondent would appear or not, and when he did appear he was unprepared and spent a considerable amount of time making submissions for which there was no basis in evidence.
The proceedings were, to my mind, unnecessarily prolonged by the conduct of the Respondent.
It is also significant that the Applicant had made a section 117C written offer of settlement to the Respondent on 17th November 2010, well prior to the final hearing. The terms of the offer, whilst not significantly less than the amount that was ordered by the Court, would have operated as a very useful basis for the parties, if properly represented and negotiating in good faith, to have resolved the matter without the need for trial.
The importance of a written offer of settlement, as referred to in s.117(2A)(f), should not be underestimated. As Nygh J said in Robinson and Higginbotham:[11]
…when one looks at paragraph (f) it is quite clear that the purpose of that provision is to ensure that offers to settle, if made seriously, are considered seriously, to ensure that the cost of litigation is avoided, the workload of this Court is lightened…[12]
[11] supra
[12] (1991) FLC 92-209 at 78,417
The decision in Robinson and Higginbotham was followed by the Full Court in Pennisi v Pennisi[13] at 84,554 and Browne v Greene[14] at [56].
[13] supra
[14] supra
It is also a significant factor that the Respondent was largely unsuccessful in the proceedings.
For all of these reasons, I am satisfied that the Applicant should have her costs on a party and party basis. I note that the Applicant seeks in her Application that costs after 18th November 2010 be assessed on an indemnity basis. It has been held that there should be some special or unusual feature in the case that would justify a departure from the usual practice that costs should be assessed on a party and party basis (Colgate Palmolive Pty Ltd v Cussons Limited[15]; see also Kohan and Kohan[16] ). However, an imprudent refusal of an offer of settlement may constitute such a special or unusual feature.
[15] (1993) 46 FCR 225
[16] (1993) FLC 92-340
In this case, there was a written offer of settlement made on 17th November 2010 which was apparently ignored. The property application proceeded to a final hearing and the Applicant was successful. There was no real case argued by the Respondent and the decision in favour of the Applicant was the almost inevitable result.
In the circumstances, I am satisfied that costs awarded against the Respondent from 18th November 2010 until the decision was handed down on 4th May 2011 should be assessed on an indemnity basis.
The Applicant should also be entitled for her costs of this Application, which should be assessed on the usual party and party basis.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Date: 12 January 2012
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