Sam and Lamothe

[2019] FamCA 770

FAMILY COURT OF AUSTRALIA

SAM & LAMOTHE [2019] FamCA 770

FAMILY LAW – COSTS – Orders for the wife to pay costs to the husband for substantive proceedings.

Family Law Act 1975 (Cth) s 117(2A)

APPLICANT: Mr Sam

RESPONDENT: Ms Lamothe

FILE NUMBER: SYC 4095 of 2014

DATE DELIVERED: 24 October 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

IN CHAMBERS: 24 October 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms McIntosh

SOLICITOR FOR THE APPLICANT: Ktenas Solicitors & Barristers

COUNSEL FOR THE RESPONDENT: Ms Gibbons

SOLICITOR FOR THE RESPONDENT: Maveston Legal

Orders

IT IS ORDERED

1. That the wife pay the husband’s costs of the proceedings from 22 February 2017 assessed at $29,000, such sum to be deducted from any monies to be paid to the wife pursuant to Order 1 made on 30 July 2019.

2. That the wife’s application for costs in relation to the proceedings after 15  July  2016 until 23 August 2016 is dismissed.

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 Sam & Lamothe 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 SYDNEY

FILE NUMBER: SYC 4095  of 2014

Mr Sam

Applicant

And

Ms Lamothe

Respondent

REASONS FOR JUDGMENT

1. On 30 July 2019, reasons for judgment were delivered and orders made in proceedings for property settlement arising out of a de facto relationship between Ms Lamothe (“the wife”) and Mr Sam (“the  husband”).

2. The orders provided for the husband to pay to the wife the sum of $90,222 within three months of the date of the orders.

3. There has been no appeal against the orders.

4. On 28 August 2019, the husband filed an application seeking an order that the wife pay his costs as agreed or assessed or, in the alternate, in the sum of $34,835.40 if the court were minded to fix a sum.

5. The application is opposed by the wife.

6. The wife, in her response, seeks orders in the following terms:

   2.That Orders be made pursuant to the Order made before Justice Loughnan order no. 5 on 23 August 2016 that is, the question of the costs of and incidental to the proceedings held on 23 August 2016, that the Applicant pay the Respondent’s costs.

   3.That the Applicant pay the Respondent’s substantive costs of the proceedings held on 23 August 2016 – between the period 15 July 2016 to 23 August 2016.

7. On 23 August 2016, Loughnan J determined the issue of whether there should be a grant of leave to the wife to commence proceedings out of time.

8. Both parties have filed affidavits and written submissions.

9. The applications fall to be determined pursuant to the provisions of section 117(2A) of the Family Law Act 1975 (Cth) (“the Act”) which 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.

10. I propose to deal with the applications in the order in which the proceedings were heard.

WIFE’S APPLICATION FOR COSTS BETWEEN 15 JULY 2016 AND 23  AUGUST 2016

1. The facts of this case were unusual.

2. On 15 July 2016, Loughnan J determined that the parties had lived in a de facto relationship for two distinct periods – from 1991 to June 2002 and from 24  April  2009 until 6 April 2009.

3. Before Loughnan J, there was no dispute that the parties had lived in a de facto relationship between 1991 and June 2002. The dispute related to the nature of the second period of the relationship.

4. His Honour made orders declaring the existence of a de facto relationship, adjourned the matter to a date to be fixed to determine the issue of leave to proceed out of time and specifically order that there be no order as to costs.

5. Thus, in relation to the proceedings on 15 July 2016, costs have already been determined.

6. I propose to treat the wife’s application as being for costs incurred after 15  July  2016.

7. The next issue for determination arose out of the fact that the wife was out of time to file an application in relation to a de facto relationship that ended on 6  April 2011. She brought an application for leave which was heard by Loughnan J on 23 August 2016. His Honour granted leave.

8. The matters referred to in subsections (a) and (b) of s117 (2A) of the Act are common to both applications.

9. The parties’ respective financial positions were the subject of findings at the time of the trial.

10. The wife, who is 65 years old, was in receipt of a Centrelink benefit and had no significant assets. The wife had received superannuation of $41,752 and a redundancy payment of $26,561 in 2018 and she had spent the whole of those funds. None of those funds were applied to her outstanding legal fees.

11. The husband, who is 76 years old, was also in receipt of a Centrelink benefit and had about $17,000 in superannuation which was available to him. The husband owned a home with a net value at trial of $451,112. The home was the most significant asset in the proceedings. The husband had paid his legal fees.

12. Neither party was in receipt of Legal Aid.

13. I was not directed to any conduct on the part of the husband which would justify the making of an order for costs in relation to the proceedings before Loughnan  J.

14. I was not directed to any offer of settlement made by the wife before 23  August  2016.

15. The mere fact that the husband unsuccessfully opposed the wife’s application is not sufficient to displace the basic premise of s117(1) that each party pay his or her own costs.  

HUSBAND’S APPLICATION FOR COSTS OF THE SUBSTANTIVE PROCEEDINGS

1. Reference has been made earlier in these reasons to the matters in s117(2A)(a) and (b) of the Act.

2. I do not consider that the matters of which the husband complains in relation to the wife’s conduct merit consideration.

3. There is no allegation that failure to comply with an order necessitated the proceedings.

4. Neither party was wholly unsuccessful.

5. There were, however, a number of offers of settlement which are relevant.

6. On 19 May 2016, the solicitors for the husband wrote to the wife making an offer to pay to the wife the sum of $31,000 in three equal monthly instalments. That offer remained open until 23 May 2016 and was not accepted.

7. On 22 February 2017, after the Conciliation Conference, the husband made another offer to pay the wife $100,000 in settlement of the proceedings, each party otherwise to retain the assets in his or her possession. The offer contained no time limit for acceptance.

8. On 8 March 2017, the solicitors for the wife wrote to the solicitors for the husband making an offer to settle in the following terms:

   ·    That the husband pay the wife $250,000.

   ·    That the husband transfer to the wife his shares in the business which he then operated, subject to indemnities and him entering into a restraint from carrying on a like business within 15 kilometres.

   Seven days later, solicitors for the wife wrote again, stating that the wife’s offer was expressed to remain open for 14 days.

9. Whether the business had any value at that time cannot be ascertained. By the time of the hearing, the business had no value and was unlikely to continue to trade after 30 July 2019.

10. The husband did not accept the wife’s offer.

11. On 4 April 2017, the wife made a further offer to settle for $200,000 and the transfer to her of the business. That offer was expressed to be open for 14 days.

12. On 10 May 2017 the husband’s solicitors wrote again to the wife’s solicitors, rejecting the counter offer and making a further offer in the following terms:

    ·    Payment by the husband to the wife of $100,000.

    ·    Transfer by the husband to the wife of his shares in the business which he operated on the basis that she indemnify him in relation to liabilities arising after the transfer and that he refrains from carrying on a like business within 15 kilometres.

    ·    Otherwise, each party to retain the assets in his or her possession.

13. The letter stated that, if the wife did not wish to take the business, the husband intended to close it down.

14. The offer contained no time limit for acceptance.

15. On 8 October 2018, the husband made a further offer to pay the wife $110,000 and transfer the business to her on the terms she suggested. That offer contained no time limit for acceptance.

16. On 2 November 2018, the wife made a further offer to settle on the basis of payment to her of $379,500, the husband to retain the business.

17. That offer was not accepted by the husband.

18. Since 22 February 2017, there has been an offer on foot to pay the wife $100,000. That amount was increased to $110,000 by the offer made on 8 October 2018.

19. At any time since 22 February 2017, the wife could have accepted the husband’s offer and been in a better position than she was by virtue of taking the matter to trial.

20. I am not persuaded that the disparity in their respective financial circumstances is such that it should outweigh the consequences of the wife’s failure to accept reasonable offers.

21. Since 22 February 2017, the husband has incurred costs of $58,059 (as found in the husband’s case outline), calculated on a solicitor/client basis. According to the costs agreement between the husband and his solicitors that is tendered, the solicitors’ costs are charged at the rate of $350 per hour.

22. Having regard to the very modest amount of assets available to these parties, I am anxious to avoid the costs of assessment. The rate prescribed for solicitors’ costs at scale is $180 per hour or 51 per cent of the rate in the costs agreement.

23. I therefore propose to order that the wife pay the husband’s costs in the sum of $29,000.

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 24  October  2019.

Associate: 

Date:  24 October 2019