QUINN & WALT

[2019] FamCA 15

FAMILY COURT OF AUSTRALIA

QUINN & WALT [2019] FamCA 15

FAMILY LAW – COSTS – Application for costs sought by the Applicant against the Respondent where the Respondent has been wholly unsuccessful in her Application for property adjustment – where the Court is satisfied circumstances exist to justify an order for costs – order made for the Respondent to contribute to the costs of the Applicant.

Family Law Act 1975, ss.117

Walt & Quinn [2018] FamCA 855

APPLICANT: Mr Quinn

RESPONDENT: Ms Walt

FILE NUMBER: MLC 508 of 2018

DATE DELIVERED: 21 January 2019

PLACE DELIVERED: Brisbane

PLACE HEARD: Melbourne

JUDGMENT OF: Baumann J

HEARING DATE: By written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Jenkinson

SOLICITOR FOR THE APPLICANT: Lawyers By The Bay

SOLICITOR FOR THE RESPONDENT: Moreheads Lawyers

Orders

1. That within fourteen (14) days of the date of these Orders each party shall file and serve any further submissions as to the quantum of costs.

2. That in the event no further submissions are filed in accordance with Order 1 hereof, an order shall issue from chambers that the Respondent contribute the sum of $20,000 to the costs of the Applicant within ninety (90) days.

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 Quinn & Walt 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 BRISBANE

FILE NUMBER: MLC 508 of 2018

Mr Quinn

Applicant

And

Ms Walt

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 26 October 2018 the Court delivered Reasons for its order that dismissed an Application by Ms Walt against Mr Quinn, seeking a declaration that the parties were in a de facto relationship for nearly 18 years (see Walt & Quinn [2018] FamCA 855).

2. As a result of the dismissal, Mr Quinn (hereafter called the “Applicant”) seeks an order for costs against Ms Walt (hereafter called the “Respondent”) on:

   a)an indemnity basis totalling $36,635.59; or

   b)an indemnity basis for the period commencing 29 June 2018, when an offer of settlement was made; or

   c)alternately, on a party and party basis as agreed or taxed.

3. The Respondent opposes any order for costs and says the general rule in s.117(1) of the Family Law Act 1975 (“the Act”) should apply.

4. The principles to be applied in respect of costs is not controversial. Whilst the general rule is that each party shall pay their own costs of proceedings, if the Court is satisfied, after consideration of factors set out in s.117(2A) of the Act, that circumstances exist to justify an order for costs, then such order as is proper may be made. Authority identifies that the Court has a wide discretion in respect of costs but it is not unfettered.

5. If the Court concludes an order for costs is justified, then the Court may consider costs assessed on an indemnity basis being ordered – but generally only in exceptional circumstances.

6. I make the following findings under the matrix of considerations prescribed by s.117(2A) of the Act, namely:

   a)the Applicant owns a rural property, with the Respondent owning no assets of significance.  Both parties are employed, with the Respondent having a modest gross income of $800 per week.  From her income, at least, is the obligation under a personal insolvency agreement to pay her creditors $291.22 per fortnight.  The Respondent is not “insolvent” as she submits (paragraph 4(a) of her submissions), and is not bankrupt.  The Applicant asserts he has a more modest income of $26,000 per annum working for himself.  Although, overall, I find the Applicant is in a stronger financial position than the Respondent, I do not find the Respondent is impecunious.  Even if she were, that is of itself, not a bar to an order for costs;

   b)Neither party was in receipt of legal aid funding;

   c)I do not regard the parties’ conduct during the proceedings as a relevant consideration and the proceedings were not elongated or necessitated by any failures by either party to comply with orders of the Court;

   d)On 29 June 2018, the Applicant asserting that the Application for a de facto relationship declaration lacked merit, offered “without accepting the jurisdiction” and “on a pragmatic basis to avoid unnecessary future legal costs”:

   i)to pay the Respondent $20,000;

   ii)for each party to retain all other assets, liabilities and financial resources in their respective names; and

   iii)for each party retain their superannuation entitlements.

   A dispute arises now as to whether the 4WD motor vehicle, which the Applicant provided to the Respondent as a “sweetener” before the litigation commenced, was in the Applicant’s name at the time of the offer.  The correspondence annexed to the submissions of the Respondent suggest it was, as he has now demanded its return and has “de-registered” the car.  As a result, the offer must be seen in the context of the car not being retained by the Respondent at the time of the offer.

   Nonetheless, the offer was superior (even if reduced in value) than the outcome achieved by the Respondent.  She ought to have accepted the offer, and her failure to do so, has caused herself and the Applicant to incur the costs of trial – including preparation for that hearing.

   e)Clearly, as conceded, the Respondent was wholly unsuccessful.

Conclusion

1. Although the Respondent was wholly unsuccessful, decisions on de facto jurisdiction of this nature are essentially facts based.  The result in this case followed from the Court’s determination of the nature and characteristics of the relationship.

2. It would not be proper to characterise the proceedings as frivolous or vexatious.  The costs of the application were reduced because the hearing only took one day (as opposed to an estimate of the Registrar of three days).

3. Nonetheless, the Respondent ought to have accepted the offer made on 29 June 2018.  That fact alone strongly supports and justifies an order for costs.

4. I find an order for costs from the time of the offer on 29 June 2018 to be fair.  I am not satisfied that the circumstances of this case justify costs on an indemnity basis.  This was nothing remarkable about the jurisdiction argument.  At the least, by determining the jurisdictional issue as a discrete issue, further costs have been avoided.

5. I would prefer to fix costs rather than expose the parties to the further costs and delays associated with taxation.  I accept that the parties have not had a chance to make submissions as to the level of costs on a party and party basis from 29 June 2018 to, and including, submissions as to costs.

6. I will give the parties a period of 14 days to provide any further submissions as to the quantum of costs, with my estimate being inclusive of Counsel’s fees.  In that regard I note that the fee notice for Ms Jenkinson (total $2,035) was for work undertaken before the offer of settlement was communicated.  The Court’s estimate is the sum of $20,000 (inclusive of GST).

7. If no submissions are received within 14 days, an order shall issue from chambers that the Respondent contribute the sum of $20,000 to the costs of the Applicant payable within 90 days.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 21 January 2019.

Associate: 

Date:  21 January 2019