Magnus & Sandri (No 5)

Case [2024] FedCFamC1F 762

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Magnus & Sandri (No 5) [2024] FedCFamC1F 762

File number(s): SYC 3830 of 2019
Judgment of: HARPER J
Date of judgment: 13 November 2024
Catchwords: FAMILY LAW – COSTS – Where husband seeks costs in a fixed sum – Where no party wholly unsuccessful – Where both parties claimed the conduct of the other caused delay and unnecessary costs to be incurred – Where husband had been tardy and non-compliant with disclosure during substantive proceedings – Both parties of substantial wealth – Where wife rejected two settlement offers made by the husband – Where wife claimed rejection of offers was not unreasonable as balance sheet was not sufficiently settled when offers were live – Where wife’s rejection of first offer was not unreasonable as offer made early in proceedings – Where wife’s rejection of second offer was unreasonable as she was in a position to assess the strength of her case and the offer provided a better outcome than achieved in final judgment – Where wife’s failure to accept the second offer was a failure in her duty to act consistently with the overarching purpose of s 95 of the Family Law Act 1975 (Cth) – Award of costs justified in husband’s favour from date of expiry of second offer – No basis for indemnity costs established – Wife to pay 40 per cent of husband’s costs as his conduct likely increased his own costs – Costs ordered in fixed sum of $270,000 in favour of the husband.
Legislation:

Family Law Act 1975 (Cth) Pt VIII, ss 95, 96, 117

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 67, 68

Cases cited:

Alston & Alston [2021] FedCFamC1A 96

Atkins & Hunt [2017] FamCAFC 131

Conrad & Conrad (2020) 61 Fam LR 301; [2020] FamCAFC 255

D & D (Costs) (No 2) (2010) FLC 93-435; [2010] FamCAFC 64

Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302

Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish (2005) 33 Fam LR 123; [2005] FamCA 158

Harris & Dewell and Anor (No. 2) (2018) FLC 93-863; [2018] FamCAFC 180

Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116

Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCa 1178

Magnus & Sandri (No 3) [2024] FedCFamC1F 449

Magnus & Sandri (No 4) [2024] FedCFamC1F 499

McFadzean v Construction, Forestry, Mining & Energy Union (No 2) [2007] VSCA 313

Moorcroft & Moorcroft (2020) 60 Fam LR 361; [2020] FamCAFC 83

Munday and Bowman (1997) FLC 92-784

Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248

Pennisi & Pennisi (1997) FLC 92-774; [1997] FamCA 39

Prantage & Prantage (Costs) [2014] FamCA 850

Raymond & Raymond (No 2) [2024] FedCFamC1A 92

Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184; [1998] HCA 44

Division: Division 1 First Instance
Number of paragraphs: 69
Date of hearing: 11 November…

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AGLC
Magnus & Sandri (No 5) [2024] FedCFamC1F 762
Case
[2024] FedCFamC1F 762
Decision Date

CaseChat Overview and Summary

The case of Magnus & Sandri (No 5) involved a dispute between Ms Magnus and Mr Sandri, who were married. The primary focus of the case was the allocation of costs incurred during their family law proceedings, particularly after March 2022. The Federal Circuit and Family Court of Australia adjudicated the matter. The court was tasked with determining whether the wife should bear the husband's costs, a proportion of those costs, or a fixed amount on a party and party basis, or whether she should indemnify the husband's costs on a solicitor and client basis or a sum fixed by the Court. Additionally, the court had to consider whether the husband's conduct, including tardiness and non-compliance with disclosure obligations, increased the overall costs and whether the wife's rejection of settlement offers was reasonable.

The court examined the respective conduct of both parties and concluded that while the husband had been tardy and non-compliant with disclosure during the proceedings, the wife's rejection of the husband's second settlement offer was unreasonable given her ability to assess the strength of her case. The court found that this rejection contravened the overarching purpose of section 95 of the Family Law Act 1975 (Cth). The court ruled that the husband's costs should be awarded from the date the second offer expired. It was determined that the husband's own conduct likely increased his costs, thus it was appropriate to order the wife to pay approximately 40 per cent of the husband's costs. The court decided against awarding indemnity costs, finding that such a basis had not been established.

In conclusion, the court ordered that the wife pay 40 per cent of the husband's costs incurred after March 2022, amounting to a fixed sum of $270,000. The court fixed this amount to avoid further litigation over costs and to ensure that all parties could finalise their financial obligations without additional delay. The wife was also ordered to pay interest on any unpaid sum in compliance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). All other outstanding applications were dismissed.

Orders

Orders of the court

SYC 3830 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS MAGNUS

Applicant

AND:

MR SANDRI

Respondent

ORDER MADE BY:

HARPER J

DATE OF ORDER:

13 NOVEMBER 2024

THE COURT ORDERS THAT:

1. Within 45 days of the date of these orders the Applicant Wife (“wife”) pay the Respondent Husband’s (“husband”) costs of the proceedings for the period after March 2022 fixed in the amount of $270,000.

2. The wife shall pay interest on any sum owing but unpaid in compliance with Order 1 calculated in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

3. All outstanding applications be otherwise dismissed.

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

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In answering the question of whether there is something “exceptional” in the circumstances which falls to the feet of the wife, account should be taken of the conduct of the husband and its impact upon the quantum of his costs. I accept the wife’s submissions that the husband conceded he had been tardy in providing information and disclosure during the proceedings, that he breached timetables, and the original trial dates in November 2023 were vacated largely because of the defaults by the husband and not the wife. I am not satisfied a basis for indemnity costs has been established.CONCLUSION It follows that the award of costs should not be in effect a full indemnification from November 2019 as the husband seeks in his first proposed order. My conclusions mean that the award of costs should relate only to the costs incurred by the husband after March 2022. According to the husband’s evidence he incurred $679,528.61 in costs after March 2022. The question is whether the wife should pay costs as claimed by the husband, or a proportion thereof, or in a fixed amount, on a party and party basis after March 2022 or some higher basis, such as indemnification after March 2022, on a solicitor and client basis or a sum fixed by the Court. I find that there should be a costs order in favour of the husband for some of his costs incurred after March 2022. On the evidence it is not possible to dissect the amount of $679,528.61 paid by the husband so as to attribute amounts to particular issues or to determine the extent to which the husband’s own actions resulted in additional costs. I am satisfied that while a substantial proportion of the husband’s costs after March 2022 would have been avoided if the wife had accepted the second offer, the actual quantum of the husband’s costs was likely increased by aspects of his own conduct in that period. The wife gave numerous instances of such conduct in her evidence and submissions which I accept are substantially accurate. Accordingly I am satisfied that it is appropriate to order the wife to pay approximately 40 per cent of the husband’s costs. It is in the interests of both parties for all costs arguments to be finalised by this judgment. In my view no further Court resources, and no further time and expense should be spent or incurred by the parties in undertaking an assessment of costs. Accordingly, I will fix the amount to be paid by the wife, in the sum of $270,000.

Ratio Decidendi

Legal Principle Established

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