Lasky and Gantos - [2012] FMCAfam 587

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LASKY & GANTOS

[2012] FMCAfam 587

FAMILY LAW – Order as to costs – operation of s.117 – exercise of discretion under s.117(2) – integrity of previous agreement – failure to demonstrate sufficient discretionary factors.

Family Law Act 1975 (Cth), ss.117, 117(2), 117(2A)

Applicant:

MS LASKY

Respondent:

MR GANTOS

File Number:

BRC 9586 of 2008

Judgment of:

Burnett FM

Hearing date:

16 May 2012

Date of Last Submission:

16 May 2012

Delivered at:

Brisbane

Delivered on:

16 May 2012

REPRESENTATION

Counsel for the Applicant:

Ms Hogan

Solicitors for the Applicant:

Jones Mitchell Lawyers

Counsel for the Respondent:

Mr Hackett

Solicitors for the Respondent:

Evans & Company Family Lawyers

ORDERS

That there be no order as to costs.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRC 5986 of 2008

MS LASKY

Applicant

And

MR GANTOS

Respondent

REASONS FOR JUDGMENT

When this matter came on for trial, the scope of the matters in dispute were limited to those matters which are the subject of my reasons delivered on 2 September. The parties could not agree orders and, ultimately, the matter has come back today for the settling of orders and for the disposition of an application for costs. I have addressed the orders and am now required to address the matter of costs. The applicant seeks costs and the respondent contends there should be no order as to costs.
The principles governing the order of costs are provided for in s.117 of the Family Law Act 1975 (Cth), which commences from the premise that each of the parties shall bear his or her own costs. That premise, in my view, informs the appropriate approach to such an application as this and in particular informs the view that it was anticipated by the Parliament that parties may be successful yet not succeed in obtaining a favourable costs order given the common law practice and rule that costs usually follow the event.
So much is further to be inferred by reference to s.117(2), which provides that the Court, where it is of the opinion that there are circumstances in justifying it doing so, may, subject to s.117(2A) and applicable rules, make such order as to costs as the Court considers just. Section 117(2A) then identifies various heads which need to be considered.
The applicant seeks orders by reference to matters identified in s.117(2A). It maintains that a consideration of the relevant discretionary factors would warrant a departure from the usual order and the making of an order in terms of s.117(2). The first of the matters which is identified are the financial circumstances of each of the parties.
In particular, complaint is made by the applicant that the respondent has not detailed his financial situation. It is plain from the material that both parties are now in a state of relative financial distress. The applicant, no doubt, suffers distress by reason of her individual circumstances, as identified in her affidavit. The respondent also suffers distress because of business turndown, particularly in the property market, a fact notorious in South-East Queensland, more specifically on the Gold Coast by reason of the present economic and property recession.
The only parts of the economy that appear to be enjoying any economic strength are those associated with the mining sector. The Gold Coast is not certainly in that category. It seems to me, having regard to the competing complaints that there is nothing in particular that favours one party or the other in respect of that matter, in particular when one has regard to the altered domestic circumstances, which underlie the dispute which gave rise to this case.
So far as the conduct of the proceedings is concerned, this is an application that really had its body in a determination of an arrangement that was entered into some eight years before the dispute arose between the parties. As I have noted in my judgment, the arrangement between the parties was an unusual arrangement. However, it was one that was entered into by both parties with their eyes open and each having been appropriately advised.
It may have been, with hindsight, a silly arrangement, but in any event, it is the arrangement that they entered into. The conduct of the proceedings so far as it concerned that arrangement was, in my view, orthodox. There was nothing in the way in which the parties have sought to contest that dispute which would warrant a favourable consideration of the discretion under s.117(2).
That consideration, together with the following two considerations, they being whether the proceedings were necessitated by a failure of a party to comply with previous Court orders and whether a party has been wholly unsuccessful, I think warrant consideration. The agreement which was entered into came into dispute because of a change of circumstances.
The change, plainly, had not been anticipated. It is difficult to imagine that the respondent would have entered into an arrangement which was to provide an annuity for a fixed period for the applicant, if he had thought that there was a prospect that he would end up becoming the custodial parent. The arrangement that had been entered into between the parties clearly anticipated that the applicant would retain duty as the custodial parent and no doubt that was a factor which was cast in to the mix when they entered into this particular arrangement. It provided for an annuity based upon permanent employment by the applicant and the respondent’s business at least for a term which expired upon the youngest child achieving the age of 18.
It is, in my view, inevitable, when that matter occurred – and it had not been anticipated in the agreement – that there was going to be a dispute about what happened with the agreement and whether, as has been suggested, there would have been a capitalisation of matters such as future income; or whether that matter, which ought to have happened in the first place, would give rise to a dispute. Plainly, there was, in my view, a serious issue and a substantial issue to be debated between the parties.
The respondent, although unsuccessful in the result, in my view, put forward substantial arguments which, while supported only in the writings of authors respected in the field, provided a basis for his position to be maintained. As such, it could not be said that the respondent’s attitude to the proceedings was frivolous or vexatious. Furthermore, and perhaps significantly in the context of the agreement that was concluded between the parties, the matter was one that required determination because unlike most agreements, which upon breach give rise to rights of election and ultimate termination, this arrangement provides for an ongoing arrangement and accordingly needed to be resolved in order to permit the parties to move forward.
Plainly, if the agreement was to be unenforceable the remedies available to the respondent would be entirely different to those which he has ultimately found himself subject to. Likewise, the agreement having been found to be enforceable, the remedy which is now available to the applicant is different to that which might otherwise have followed.
It was a dispute which could not be resolved simply and required determination and adjudication by the Court. In my view, it could not be said that one party or the other necessarily failed or was unsuccessful so far as the overall dispute was concerned given that it did not require a simple adjudication on a matter which would have brought the rights of the parties to an immediate conclusion.
The fact remains that into the future, at least on my construction of the agreement, the parties will have to continue their interface. Furthermore, there were other matters sought, particularly in relation to enforcement, which I accept were not matters which ought be coupled with orders determining the quantum of sums presently outstanding.
The case, ultimately, was one in which there was to be an estimation of the sum due as at the date of judgment and an order in respect of that sum there could be no orders in respect of in futuro payments, which seems, in part, to have been contemplated by the parties. So far as offers of settlement are concerned, the failure to come to grips with the real issue in dispute is apparent, in my view, from the correspondence that was exchanged and the offers made.
Realistically, looking at the offers that were made, they fail to recognise that an interpretation of the agreement underlay the resolution of this dispute. Whilst offers were made to accept sums of money, the reality is that until the dispute itself in respect of the construction was resolved, the offers were meaningless. None of the offers really address that issue and accordingly the offers themselves were not, in my view, offers that could reasonably have been said to constitute appropriate offers in the context of the dispute.
In my view, when one considers each of the matters individually and collectively, there is nothing in this dispute which distinguishes it from any other involving a dispute between two litigants over the matrimonial estate. It follows, in my view, that I am not persuaded it is an appropriate occasion to exercise discretion under s.117(2) to order costs.

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

Date: 18 June 2012