PETRALIA & WEILMANN

[2014] FamCA 584

FAMILY COURT OF AUSTRALIA

PETRALIA & WEILMANN [2014] FamCA 584

FAMILY LAW – Costs – modest award

APPLICANT: Ms Petralia

RESPONDENT: Mr Weilmann

FILE NUMBER: MLC 5468 of 2011

DATE DELIVERED: 29 July 2014

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bennett J

APPLICANT’S WRITTEN SUMISSIONS RECEIVED: 27 May 2014

RESPONDENT’S WRITTEN SUMISSIONS RECEIVED: 11 June 2014

Orders

IT IS ORDERED THAT:

1. The husband contribute to the wife’s costs claimed by paying the sum of $1,550 by not later than 1 September 2014.

IT IS DIRECTED THAT:

1. The applicant’s submissions as to costs dated 27 May 2014 be marked Exhibit “A” and remain on the Court file.

2. The respondent’s response to the applicant’s submissions as to costs dated 11 June 2014 be marked Exhibit “B” and remain on the Court file.

AND IT IS NOTED that otherwise these proceedings were concluded on 28 May 2014.

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

FAMILY COURT OF AUSTRALIA AT

FILE NUMBER: MLC 5468  of 2012

Ms Petralia

Applicant

And

Mr WEILMANN

Respondent

REASONS FOR JUDGMENT

Introduction  

1. On 28 May 2014 I dismissed all pending applications, save as to costs, which brought to an end proceedings between the husband and the wife commenced on 22 June 2011 in the Federal Magistrates Court (as it then was) at Dandenong, transferred to this Registry of this Court on 18 March 2013 and accepted into my docket in August 2013.

2. Final parenting orders were made, by consent, on 6 May 2014.  The parties subsequently entered into a Binding Financial Agreement to effect a final alteration of property interests arising out of their de facto marriage relationship which had ceased in January 2011.

3. On 6 May 2014, I ordered, inter alia:-

   22.      Any party wishing to make an application for costs in this proceeding do so by written submission filed and served not later than 14 days after final orders are made and any party against when an application is made file and serve any submission in response within 14 days of service.

4. The wife’s submission seeking costs is dated 27 May 2014. She seeks that the husband pay her costs fixed in the sum of $8,555.

5. The husband’s submission is by correspondence dated 11 June 2014. He opposes the wife’s application and seeks an order that each party bear his/her own costs.

The law

1. Section 117 of the Family Law Act1975 provides that each party to proceedings under the Act shall bear his or her own costs. The object of the rule is to ensure that spouses are not deterred from bringing or maintaining legitimate applications for fear of incurring an intolerable financial burden if they lose.[1]  However, the Court has a discretion to make an order for costs if it is of the opinion there are circumstances that justify that course and it would be just to do so. 

   [1]  In the Marriage of Kohn (1977) 30 FLR 175 at 177.

2. In considering whether to make an order in the exercise of my discretion, I must have regard to the matters set out in s 117(2A).

3. Section 117(2A) of the Family Law Act 1975 (“the Act”) provides:-

   (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.

4. The weight to be attached to any of the considerations in section 117(2A) is wholly discretionary. While no single factor out-ranks any other, there is nothing to prevent one or other of them from being the sole foundation for a costs order.[2]  As Kay J observed in Brown & Brown[3] :

   In many cases there will be an outstanding feature . . . that makes an order for costs appropriate, a feature which so dominates the scene that it can outweigh any of the other s 117(2A) considerations.

   [2]  LAC and TRF and LKL [2005] Fam CA 158 at [41].

   [3] (1998) FLC 92-822 at 85,347.

Discussion

1. The parties attended a private mediation with Mr Patrick O’Shannessy, of counsel, on 20 September 2013. They attended a further mediation with Registrar Riddiford on 12 February 2014.

2. The wife contends that between 20 November 2013 (when the parties attended a private mediation) and 28 May 2014 (when the proceedings were concluded) she incurred costs that she should not have incurred by reason of the husband failing or neglecting to obtain necessary legal advice and certifications to give effect to the resolution of financial matters arrived at during the private mediation and, otherwise, to bring the financial proceedings to an end.

3. The wife itemises her costs, apparently in accordance with the scale of costs provided in the Family Law Rules, at $8,555 being $4,400 counsel’s fees and $4,155 in solicitor’s fees.

4. The wife‘s submissions raise ss 117(2A)(a) and (c)

5. Relevantly to section 117(2A)(a), the wife contends that her income earning capacity is far inferior to the income earning capacity of the husband. The husband’s submissions do not join issue with the wife’s contention. The wife’s assertion is consistent with the information provided to me by the parties on the first day of hearing before me, 10 October 2013, when I was informed that the husband was in receipt of income of some $3,000 per week and whereas the wife was reliant on income tested pensions or benefits and maintenance from the husband. I am satisfied that the husband has a stronger financial position than the wife. Nonetheless, neither party has the means to incur legal costs unnecessarily.

6. The wife contends that the applicant husband protracted and delayed the finalisation of the proceedings by:-

   a)refusing to accede to the agreement reached on 20 November 2013 and 12 February 2014; and

   b)subsequently failing to obtain independent legal advice in a timely manner –

   I accept that these matters are relevant to section 117(2A)(c).

7. There is no assertion that the final settlement was inclusive of any outstanding costs issues.

8. The husband submits that on 22 November 2013 the matter was appropriately adjourned so that a binding financial agreement could be prepared.  I accept that was the case although my notes reflect that the agreement was to be drawn by the husband’s solicitors.

9. The husband contends that between 4 and 18 December 2013 the parties were either perusing the draft agreement which had been prepared by the wife’s practitioners or participating in further negotiations pending the conciliation conference with Registrar Riddiford. That appears to be plausible. However, no justification is provided for the fact that the husband’s solicitor, Mr Schetzer, informed the court that he would prepare the binding financial agreement for the hearing on 28 November and did not do so. No explanation was provided by Mr Schetzer who also purported to file a Notice of Ceasing to Act on 26 November 2013, impermissibly in my view given the provisions of Rule 8.04(1)(a) which provides that, save with leave of the court, a Notice to the court cannot be filed any earlier than 7 days after service of the Notice on the client.  

10. The conduct of the husband, or his former solicitor Mr Schetzer, prior to and on 28 November 2013 is, in my view, conduct which justifies an order that the husband pay the costs of the wife. However, I note that none of the itemised costs relate to the costs unnecessarily incurred on 28 November 2013.

11. The husband contends that the appearance on 6 May 2014 was necessary for the purpose of seeking final parenting orders in terms agreed to and signed. I do not accept that is so. Orders sought by consent and which are consistent with extensive interim orders made on 22 November 2013 could have awaited another day or been handed up by a practitioner who was not of counsel. I do accept that any drafting defect in the binding financial agreement must have been rectified as there are strict requirements as to the form of such agreements. I do not understand, however, why the husband did not seek to minimise the wife’s legal costs by saying that he would do all he could to have the matter adjourned without an appearance

12. Costs are discretionary save that the interrelationship between sections 117(1) and 117(2A) does require that I be satisfied that there are circumstances, enumerated in ss117(2A) or otherwise relevant, which justify departure from the general position that each party pay their own costs.

13. I had the benefit of convening the court for each of the mentions between 22 November 2013 and when final orders were made on 28 May 2014. I am satisfied that the husband did cause the wife to incur costs unnecessarily but only to a considerably lesser degree than the wife claims. 

14. I am satisfied that it is just, within the terms of section 117(2) of the Act for the husband to make a contribution to the costs of the wife thrown away. The husband makes no submission about the quantum of the wife’s costs or requiring a stay or time to pay.

15. It is just that I fix the costs rather than to refer the costs issue to an assessment process by a Registrar which would, more likely than not, increase the expense of this process for the parties and delay the case being finalised in its entirety.

16. I consider that the appropriate amount payable by the husband to the wife is $1,550 on account of all of the costs she now claims from 22 November 2013 to 28 May 2014 inclusive including any costs referrable to the submissions to which I have had regard.

Conclusion

1. I am satisfied that there are circumstances which justify an order that the husband make a contribution to the wife’s costs.

2. I am satisfied that it is just that the husband pay the wife’s costs fixed in the sum of $1,550 and do so within 30 days.

I certify that the preceding twenty six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 29 July 2014.

Associate: 

Date:  29 July 2014.