Hunter and Morrison (Costs)

[2016] FamCA 1035

FAMILY COURT OF AUSTRALIA

HUNTER & MORRISON (COSTS) [2016] FamCA 1035

FAMILY LAW – COSTS - Between parties – where both parties were unrepresented at trial - Where the wife was wholly unsuccessful in the substantive proceedings – Where the husband has incurred significant legal fees up to the date of trial – Where the husband has made offers of settlement to the wife – Where a lump sum costs award saves the parties time, trouble and expense – Where costs are awarded in the sum of $20,000 – Where the wife has 12 months to pay

Family Law Act 1975 (Cth) ss 117(2), 117(2A)
Family Law Rules 2004 (Cth) r 19.18

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another(2005) 33 Fam LR 123
Idoport Pty Limited v National Australia Bank Limited and Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23
Lenova & Lenova [2011] FamCAFC 141
Reynolds & Sherman [2016] FamCAFC 240

APPLICANT: Mr Hunter

RESPONDENT: Ms Morrison

FILE NUMBER: TVC 13 of 2010

DATE DELIVERED: 1 December 2016

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Carew J

HEARING DATE: 1 December 2016

REPRESENTATION

FOR THE APPLICANT: Self-represented

FOR THE RESPONDENT: Self-represented

Orders

1. The respondent wife shall contribute towards the costs incurred by the applicant husband of and incidental to the proceedings fixed in the sum of $20,000.

2. The respondent wife has 12 months in which to pay that sum.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hunter & Morrison (Costs) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT

FILE NUMBER: TVC 13 of 2010

Mr Hunter

Applicant

And

Ms Morrison

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. Mr Hunter (“Mr Hunter”) is seeking an order that Ms Morrison (“Ms Morrison”) contribute the sum of $65,000 towards his legal costs incurred in the proceedings determined by me on 7 April 2016.

2. Mr Hunter filed an application for costs on 4 May 2016 and an amended application on 28 June 2016.

3. At the commencement of the trial in March 2016 the parties informed the Court that they consented to an order setting aside the final property Order made by consent in 2009 pursuant to s 79A(1A) of the Family Law Act 1975 (Cth) (as amended) (“the Act”). This issue had previously been the subject of an unsuccessful summary dismissal application by Mr Hunter. The trial before me was then concerned with whether any order pursuant to s 79 of the Act should be made in substitution for the one set aside.

4. Ms Morrison was the applicant in the substantive proceedings and she was wholly unsuccessful in her application for an order pursuant to s 79 of the Act. The setting aside of the 2009 Order ultimately served no useful purpose for her in the s 79 proceedings as I found that it was not just and equitable to make any order.

How costs applications are determined

1. The basic principle in considering costs applications is that each party is to bear their own costs but s 117(2) of the Act grants the Court discretion to award costs in circumstances that justify such a decision and the quantum of any costs award must be a just amount. 

2. When considering what, if any, costs order is made the Court must have regard to a number of factors as set out in s 117(2A) but no one factor has more weight than any other nor is it necessary for more than one factor to be present.[1]

   [1] see Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another(2005) 33 Fam LR 123 at 130

3. The factors to which the Court must have regard, where relevant, are as follows:

   (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.

4. When considering what specific order to make, Rule 19.18 of the Family Law Rules 2004 (Cth) (“the Rules”) empowers the Court to make an order:

   (a)of a specific amount;

   (b)as assessed on a particular basis (eg lawyer and client, party/party or indemnity);

   (c)to be calculated in accordance with the method stated in the order; or

   (d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.

5. In considering what specific order should be made the same Rule provides that the court may consider any of the following factors:

   (a)the importance, complexity or difficulty of the issues;

   (b)the reasonableness of each party's behaviour in the case;

   (c)the rates ordinarily payable to lawyers in comparable cases;

   (d)whether a lawyer's conduct has been improper or unreasonable;

   (e)the time properly spent on the case, or in complying with pre-action procedures; and

   (f)expenses properly paid or payable.

6. As found me at the trial neither party has any asset of significance and the Mr Hunter has borne almost the entire financial burden associated with caring for an educating the parties’ four children since separation in 2008. Each of the parties has ongoing debts to meet.

7. I note Mr Hunter’s evidence taken from Facebook entries by Ms Morrison that she and her partner have acquired another boat and that the business seems to be operating profitably. As I do not know how any purchase was made and in particular whether money was borrowed to effect any such purchase, I do not place any great weight on that evidence.

8. Ms Morrison operates a business with her partner and from this she receives an income of apparently modest proportions.

9. Mr Hunter operates a business which has not been profitable to date. His wife works and receives a gross income of $105,560 per annum.

10. Neither party is in receipt of legal aid.

11. Ms Morrison maintains her assertion that Mr Hunter’s conduct and delay in disclosing documents added to the cost and while that may be so to a degree, ultimately, Ms Morrison was unsuccessful in proving her assertions that Mr Hunter had undisclosed funds and had failed to make disclosure. She doggedly pursued those allegations at trial and raises it again in this proceeding. She did not prove her case.

12. Mr Hunter made a number of offers to settle the matter on the basis that they each walk away and bear their own costs. The earliest offer to which Mr Hunter refers in his evidence is one made on 10 April 2015 in which he proposed that Ms Morrison “withdraw all court action” and he would not pursue her for costs.

13. Mr Hunter did have lawyers acting for him for a considerable period as evidenced by the numerous tax invoices annexed to his affidavits. The total of those invoices is $84,396.66 although I note at times, some of those invoices also include a modest retainer, but as is apparent on their face, not all fees incurred related to the financial matters determined by me and the invoices span the period 28 April 2011 to 8 January 2015. Receipts for payment of those invoices are not before me although I note that in the body of some invoices it refers to payment of other invoices having been made and outstanding legal costs were not included as a current debt at trial. Mr Hunter confirms today that he has paid the legal costs. It is unlikely that lawyers would waive the entire debt owing to them so I am prepared to infer that Mr Hunter has incurred and paid a substantial sum by way of legal costs.

14. Although Ms Morrison urges against any order for costs, particularly because she contends she is impecunious, as the Full Court of this Court has stated on many occasions, limited financial capacity to meet a costs order is not of itself determinative.[2]

    [2]Lenova & Lenova [2011] FamCAFC 141

15. Accordingly, I am satisfied that there are circumstances which justify a costs order in this case.

16. As to what specific order I make I am conscious of the fact that these parties have been involved in litigation for years and an order requiring the parties to agree on a sum or have the costs assessed is likely to involve further delay and costs for each of them.

17. Accordingly, I propose to make an order for a lump sum as sought by Mr Hunter but not in the quantum sought by him as I am not satisfied that the sum sought by him is reasonable given the numerous matters for which the invoices relate that did not concern the ultimate matters heard at trial.

18. I propose to adopt the approach approved by the recent Full Court decision in Reynolds & Sherman [2016] FamCAFC 240 where a lump sum costs award was made against an unsuccessful appellant on the basis that to do so was in the interests of saving time, trouble and expense to the parties. I have also had particular regard to the principles considered in Idoport Pty Limited v National Australia Bank Limited and Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23 when making an order for a lump sum costs award.

19. While the sum I propose is not determined by a mathematical exercise, I have regard to the various invoices in evidence before me and to the appropriate basis for a calculation being on a party/party basis (noting that the invoices are of course prepared on a solicitor/own client basis) and to the rates usually paid by parties in comparable cases and also to Schedule 3 of the Rules in arriving at a lump sum figure of $20,000.

20. I propose to provide Ms Morrison twelve months to pay that sum.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 1 December 2016.

Associate: 

Date:  1 December 2016