Hogan and Hogan (No.2)
[2010] FMCAfam 1256
•26 November 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HOGAN & HOGAN (No.2) | [2010] FMCAfam 1256 |
| FAMILY LAW – Costs application – General principles – wide discretion. |
| Family Law Act 1975, ss.117(1), 117(2) 117 (2A) Federal Magistrates Court Rules 2001, Part 21 |
| Limousin v Limousin (Costs) (2008) 38 Fam LR 478 Penfold v Penfold (1980) 144 CLR 311 P v P (2008) 39 Fam LR 469 |
| Applicant: | MS HOGAN |
| Respondent: | MR HOGAN |
| File Number: | CAC 930 of 2009 |
| Judgment of: | Neville FM |
| Hearing date: | 29 September 2010 |
| Date of Last Submission: | 29 September 2010 |
| Delivered at: | Canberra |
| Delivered on: | 26 November 2010 |
REPRESENTATION
| Counsel for the Applicant: |
| Solicitors for the Applicant: | Peter Tierney Lawyer, Merimbula, NSW |
| Counsel for the Respondent: |
| Solicitors for the Respondent: | Kennedy & Cooke Lawyers, Merimbula, NSW |
ORDERS
Costs be awarded in favour of Ms Hogan in the sum of $14,500. This sum should be paid within 60 days of the date of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Hogan & Hogan (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAC 930 of 2009
| MS HOGAN |
Applicant
And
| MR HOGAN |
Respondent
REASONS FOR JUDGMENT
Introduction
On 9th September 2010 I made Orders in favour of Ms Hogan under section 79A of the Family Law Act1975 (“the Act”), which set aside Consent Orders made by the Local Court at Bega in March 2008.
The Orders made on 9th September also provided for written submissions in relation to costs.
In accordance with those Orders written submission were provided on behalf of both parties. As well, Ms Hogan provided a further affidavit which, among other things, annexed relevant correspondence between the parties’ solicitors. Among other things, that correspondence, on its face, confirmed that Ms Hogan, on at least on two occasions (initially in June 2009, and again in May 2010), made offers in an effort to settle the proceedings. No response, or no appropriate response, was made to either of the offers of settlement.
Section 117 of the Act deals with the question of costs. It is well known and clear on the face of the section that subject to s.117(2), each party to proceedings under the Act “shall bear his or her own costs.”
As noted, s.117(1) is qualified by s.117(2) and s.117(2A). Those sections provide as follows:
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(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.
In Penfold & Penfold,[1] the High Court held that an applicant for costs has to establish no more than that ‘justifying circumstances exist’. The Court also held that it was not necessary to show that “a clear case” had to be established before a costs Order was made.
[1] (1980) 144 CLR 311 at p.315 (Stephen, Mason, Aickin and Wilson JJ).
The question for determination in these proceedings now is whether, having regard to the High Court’s instruction, the matters referred to in s.117(2A), and the facts of this case, a costs order should be made in favour of Ms Hogan, and if so, what should be the scope of that order?
I will deal firstly with submissions on behalf of Mr Hogan, and then with submissions made on behalf of Ms Hogan.
Submissions on behalf of Respondent Husband
Briefly stated, in the light of the matters set out in s.117(2A), the substance of submissions on behalf of Mr Hogan was as follows.
It was emphasised that Mr Hogan was in receipt of funds from Centrelink and that this was his only source of income. Unfortunately the submissions do not appear to have addressed a matter that was raised at the hearing under s.79A where Mr Hogan had confirmed that he had not yet resolved a workers compensation issue. In such circumstances, the Court remains uninformed as to when that matter will be determined and what benefits might ultimately come to
Mr Hogan.
There is no issue that Mr Hogan has the care of two of the three children of the relationship, being aged 19 and 13 (Ms Hogan has the care of the third child of the relationship). The Husband also submitted that pursuant to Consent Orders entered into in this Court on
20th September 2010 following the resolution of the s.79A application, he has to raise a not insignificant sum of money in order to satisfy those terms to pay Ms Hogan her entitlement under s.79 of the Act.
Next, Mr Hogan submitted that much if not all of the large amount of material prepared by Ms Hogan was all a matter for her and for which he should not be held [financially] accountable – in any respect. As well, he submitted that much of the material relied upon by Ms Hogan was not sufficient for the Court to base any formal finding against
Mr Hogan, at least in relation to duress, as alleged.
It was also submitted on behalf of Mr Hogan that because the Court placed some reliance on the ground advanced by Ms Hogan that the advice of her former solicitor was inadequate in the circumstances,
Mr Hogan should not be penalised for the quality of advice given to his former Wife.
Finally, Mr Hogan submitted either that the Court should order that each party pay their own costs, or alternatively, if the Court was minded to make a costs order in Ms Hogan’s favour, it should be very modest.
Submissions on behalf of Applicant Wife
Briefly stated, Ms Hogan submissions were as follows.
First, the Respondent Husband was wholly unsuccessful in the s.79A Application.
Secondly, as already noted, two offers of settlement were made in June 2009 and May 2010. No reply was received to either letter. Nor did the Respondent make any counter offer. I note too that the written offers of settlement were clearly marked to be ‘without prejudice save as to costs’, and put Mr Hogan on notice that he was ‘at risk’, if the matter proceeded to trial and Ms Hogan was successful, of an order for costs ‘on an indemnity basis.’ That said, it would appear that the warning for ‘indemnity costs’ was only made in the letter of June 2009.
Thirdly, in relation to a range of other matters set out at length in written submissions filed on behalf of Ms Hogan on 29th September, her solicitor details and documents the range of difficulties encountered in getting any satisfactory reply (and/or promptly so) in relation to a range of procedural issues including apparent delays in accepting service.
Fourthly, in addition to these matters, the solicitors for Ms Hogan note that a number of matters that were accepted in the course of the s.79A application were in Mr Hogan’s knowledge from a very early time in the course of the litigation.[2]
[2] See pars. 3.4 – 4.2 of the Wife’s Written Submissions, filed 29th September 2010.
Resolution & Determination
Ms Hogan claims costs (including Counsel’s fees) of $52,705.43. It would appear that this sum is the complete account for Ms Hogan on a solicitor-client basis.
The Court must have regard to the sections of the Act to which I have referred, and in particular, s.117(2A).
The general statements of principle by the High Court in Penfold, to which I have earlier referred, have been applied recently in two Full Court decisions – Limousin v Limousin (Costs) and P v P.[3]
[3] Respectively, (2008) 38 Fam LR 478 and (2009) 39 Fam LR 469.
In Limousin, at [59], the Full Court noted the very broad discretion in a court’s application of s.117(2), having regard to the matters set out in s.117(2A). Slightly more expansive comments, but to similar effect, are to be found in P v P, at [82] – [83].
In my view, on the evidence before the Court during the s.79A application, and in the light of the further evidence provided (in particular, the two offers of settlement made by Ms Hogan), a costs order should be made in her favour.
Having regard to the matters already addressed, it is sufficient to note that the discretionary act upon which the Court must embark in the current circumstances, I must have regard in particular to the limited resources available to Mr Hogan, on the one hand, and on the other,
Ms Hogan’s success with the application as well as the offers of settlement to which I have referred.
In my view, in accordance with the wide discretion in the Court under the Act, according to authority, and under the Federal Magistrates Rules 2001 (Part 21), it is best if a specific figure is awarded, rather than force the parties to continue to engage in either continued negotiation, or worse, a taxation of costs.
In all of the circumstances of the case, an award of costs in favour of Ms Hogan should be made in the sum of $14,500. Having regard to Mr Hogan’s financial circumstances, this sum should be paid within 60 days of the date of these orders.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Neville FM
Date: 26 November 2010
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