JUDD & MOORE
[2014] FCCA 710
•17 April 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JUDD & MOORE | [2014] FCCA 710 |
| Catchwords: FAMILY LAW – Costs – consideration of whether indemnity costs order is appropriate. |
| Legislation: Family Law Act 1975, s.117 |
| Gallo v Dawson (1990) 93 ALR 479 Hamlin v The University of Queensland (No.3) [2013] FCCA 1129 Romano & June [2013] FamCAFC 198 Prantage & Prantage [2013] FamCAFC 105 |
| Applicant: | MS JUDD |
| Respondent: | MR MOORE |
| File Number: | DUC 337 of 2012 |
| Judgment of: | Judge Dunkley |
| Hearing date: | 17 March 2014 |
| Date of Last Submission: | 3 April 2014 |
| Delivered at: | Parramatta |
| Delivered on: | 17 April 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr Kenny |
| Solicitors for the Applicant: | Campbell Paton & Taylor |
| Counsel for the Respondent: | Ms Nash |
| Solicitors for the Respondent: | M J Duffy & Son |
ORDERS
Leave is granted to the applicant wife to apply for a costs order out of time.
Any rule or regulation preventing the making of such cost application is dispensed with.
The husband shall pay to the wife within 45 days of the date hereof, on account of her costs, the sum of $7,512.
IT IS NOTED that publication of this judgment under the pseudonym Judd & Moore is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
DUC 337 of 2012
| MS JUDD |
Applicant
And
| MR MOORE |
Respondent
REASONS FOR JUDGMENT
This is a cost application brought by the wife and opposed by the husband.
On 11 November 2013, judgment was delivered and final property settlement orders were made consequent upon the hearing of contested property settlement proceedings. Those proceedings were heard on 4 October 2013.
The Federal Circuit Court Rules 2001 (“the Rules”) require any cost application to be made within twenty-eight (28) days of judgment, or by such other time as allowed.
The wife filed a cost application on 10 December 2013, which is the 29th day after the delivery of judgment and the making of final orders.
The wife seeks leave to bring the cost application out of time. The husband opposes the granting of leave.
The rules and regulations of the court permit the dispensation of strict compliance with the rules.
The decision as to whether to grant leave is discretionary.
The reason for delay was seemingly caused by the wife’s solicitor.
The delay was one (1) day.
In the decisions of Romano & June [2013] FamCAFC 198, Justice May has applied the same test as Justice McHugh did in Gallo v Dawson (1990) 93 ALR 479 with respect to the exercise of discretion in enlargement of time to lodge a Notice of Appeal.
I do not see the exercise in discretion to enlargen the time to file a cost application is any different.
I am therefore bound to apply the same test, that is:
“the discretion [to enlarge time to file] can only be exercised in favour of the applicant upon proof that strict compliance with the rules will work an injustice on the applicant”.
The delay is of only one (1) day. It was the error of the applicant’s solicitor that caused the delay. The applicant wife has an arguable cost application if leave is granted.
For these reasons it would be unjust not to enlarge the time in which to file the cost application. I will grant such leave.
Having granted leave to bring the cost application out of time, the decision then becomes whether to grant the costs that are sought. The wife seeks orders quantified in the sum of $26,523. This sum is inclusive of $3,000, paid in legal fees to her former solicitors, and $23,523 paid in legal fees to her current solicitors.
I am told that the quantum of costs sought arises from cost agreements the wife had with each of her solicitors. The costs sought by her in the sum of $26,523 are calculated according to those agreements and not according to the scale of costs provided for in Schedule 1 of the Federal Circuit Court Rules (“the Schedule”).
No copies of the wife’s cost agreements with neither her current nor her former solicitors have been exhibited to the Court.
It is conceded that in reality, she is seeking an indemnity costs order for reimbursement of all the costs that she has incurred.
On 16 May 2013, the wife, through her first solicitors, made an offer of settlement in a letter dated 16 May 2013.[1] The offer was said to lapse on 20 May 2013.
[1] See annexure A to the Affidavit of [name omitted] sworn 9 December 2013.
By letter dated 16 May 2013, the husband’s solicitors sought clarification of the offer. That clarification was provided later on the same day.
On 17 May 2013, the husband’s solicitors made a counter offer of settlement.
Neither party accepted the other party’s offer of settlement.
The final judgment resulted in the husband being ordered to pay the wife a greater sum than the sum in the offer of settlement made on her behalf on 16 May 2013.
It is conceded that the wife’s costs of $3,000 paid to her former solicitors were incurred entirely prior to the offer of settlement.
Section 117 of the Family Law Act 1975 (“the Act”) sets out the relevant provisions applicable to costs.
In the usual course of litigation, each party would normally pay their own costs.
The court has the discretion to order the payment of costs.
In exercising that discretion, the court is to consider a number of factors as set out in section 117(2A) of the Act.
The husband’s financial circumstances are superior to the wife’s. The husband has more superannuation than the wife, he receives two small honourariums and has property worth more than the wife’s property.
Neither party received a grant of legal aid to conduct the proceedings.
I make no criticism of either party’s conduct of the proceedings. The wife has sought and was granted an extension of time to file her trial affidavits. She answered a Notice to Produce on the morning of the Final Hearing in the terms of the notice served.
Both parties were compliant with court orders.
Neither party was wholly successful nor wholly unsuccessful. The husband was ordered to pay more than he sought to pay. The wife received less than she sought to receive.
The wife obtained a better outcome than the proposal in her offer for settlement made on 16 May 2013.
Both parties are of a similar age.
Both parties have a limited capacity to earn income and are nearing the end of their working lives. Both parties have some health issues.
In balancing the above, were it not for the offer of settlement made by the wife, each party would have been ordered to pay their own costs. However the making of the offer, its rejection and the fact that the wife ultimately achieved a better result tips the balance and causes the making of a costs order against the husband and in favour of the wife.
Turning then to consider whether the costs be indemnity costs or costs in accordance with Schedule 1 of the Rules, Rule 21.03 provides:-
“the Court may vary the maximum costs specified if, in the Court's opinion, there are special reasons and it is in the interests of justice to do so”.
The wife has not yet disclosed her cost agreements. I, therefore, cannot determine how greatly it departs from the scale.
This case is not out of the ordinary. There are no special reasons to depart from the Schedule. To order indemnity costs would be a very great departure from what is normal, and it has not been shown to be in the interest of justice to do so.
I am not critical of either party’s conduct of the litigation.
For these reasons, it would be unjust to order the payment of the entirety of the wife’s billed costs.
The wife’s application for indemnity costs therefore fails.
An order for indemnity payment would be unfair and unjust.
I have adopted the definition of “indemnity” as applied in Prantage & Prantage [2013] FamCAFC 105 when their Honours Justice Thackray and Justice Ryan defined “indemnity basis” as “an entitlement to costs, including under a cost agreement, for all costs incurred”.
Costs according to the Schedule are appropriate, but only with respect to the litigation post the rejection of the offer of settlement.
I have no evidence as to what disbursements the wife incurred post the offer of settlement.
I have no evidence as to her counsel’s fees incurred at hearing. In any event, I apply the reasoning in Hamlin v The University of Queensland (No.3) [2013] FCCA 1129 in this regard.
In accordance with Item 6 of the Schedule, $4,250 is allowed to prepare for a one day hearing. The final hearing took one day.
In accordance with Item 13 of the Schedule, the daily hearing fee for a full day, which the final hearing was, is $1,994. This amount is allowed.
Item 12 of the Schedule allows for a 50% loading for Item 13, being $997.00.
Item 9 of the Schedule allows for $271 to take judgment or explain orders.
The total costs order made in accordance with Schedule 1 is therefore calculated as follows:-
a)Item 6 – preparation: $4,250
b)Item 9 – take judgment and explain orders: $271
c)Item 12 – advocacy loading (50% of $1,994.00): $997
d)Item 13 – daily hearing fee: $1,994
Total: $7,512
The husband will, therefore, be ordered to pay the wife’s costs in the sum of $7,512.
A forty-five (45) day period to pay is not unusual and will allow the husband sufficient time to access funds.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of Judge Dunkley.
Associate:
Date: 17 April 2014
Key Legal Topics
Areas of Law
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Civil Procedure
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Family Law
Legal Concepts
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Costs
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Remedies
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