Simoi and Sargent

[2009] FMCAfam 461

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SIMOI & SARGENT [2009] FMCAfam 461

FAMILY LAW – Costs.

Family Law Act 1975, ss.81, 117

Kohan & Kohan (1993) FLC 92-340
Yunghanns & Yunghanns (2000) FLC 93-029

Applicant: MR SIMOI

Respondent: MS SARGENT

File Number: WOC 898 of 2007

Judgment of: Altobelli FM

Hearing date: By written submission

Date of Last Submission: 2 March 2009

Delivered at: Sydney

Delivered on: 26 March 2009

REPRESENTATION

Solicitor-Advocate for the Applicant: Mr Kerrison

Solicitors for the Applicant: Kerrisons the Law Firm

Solicitor-Advocate for the Respondent: Mr Chodat

Solicitors for the Respondent: Kells The Lawyers

ORDERS

1. The husband pay the costs of the wife in the sum of $25,619.18 by no later than three months from today's date.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

WOC 898 of 2007

MR SIMOI

Applicant

And

MS SARGENT

Respondent

REASONS FOR JUDGMENT

(Ex tempore)

1. This is an application for costs by the respondent wife in property proceedings. On 29 January 2009, I made orders and delivered quite detailed oral reasons. Accordingly I do not propose in these ex tempore reasons relating to costs to provide background material. Suffice it to say that the effect of the orders I made on 29 January is that the wife would retain the real estate and pay to the husband $121,864, the wife was required to discharge liabilities and each party would otherwise retain all other property in their possession or control. On the pool of assets as I found it in my Judgment, this represented a 65/35 split in the wife's favour largely attributable to her greater contribution at the commencement of, but also partly during the marriage.

2. An application for costs of course is governed by s.117 of the Family Law Act 1975, the provisions of which I incorporate into these reasons. Subsection (1) starts with the proposition that subject to ss.(2) each party to proceedings should bear their own costs. However, ss.(2) says that if the Court is of the opinion that there are circumstances to justify it in so doing so that the Court may, subject to other subsections, make an order as to costs as the Court considers just. And then of course ss.(2)(A) sets out the matters relevant to the costs order.

3. I am very grateful to the solicitors for both the wife and the husband for their comprehensive written submissions as to costs and I must say I am sorry I was not able to deliver these reasons until today. The last submission did not come in until 2 March. I will attempt to summarise these submissions, but I stress that the summary does no justice to them.

4. The wife seeks indemnity costs. She identifies in a number of points in the litigation that the husband could have settled the proceedings for a greater payment than that which was ultimately awarded to him. The wife says in effect, whether the offers are analysed in dollar terms or percentage times, the outcome is such that on any scenario the husband could have ended these proceedings by accepting an offer and receive in excess of what he has in fact received. The wife seeks indemnity cots for the about 18 month period from 10 August 2007 to January 2009 and the wife's application is primarily based, either implicitly or explicitly on the basis of offers that were made and the fact that she was wholly successful and asserts that the respondent husband was wholly unsuccessful.

5. The husband's submissions in effect unpack the various offers made and introduces the variables of valuations and how the valuations of the properties had declined during the period of litigation and that there were some uncertainties for example about the valuation of the wife's business. I accept as a matter of principle that valuations vary over time and that the impact of this was to muddy the water so to speak about offers to settle and I also accept that sometimes offers to settle and responses thereto are couched in conditional terms.

6. Nonetheless it is possible in this case to discern from all the offers identified by each of the solicitors in their submission whether it was reasonable in all the circumstances for the husband in particular to have maintained the position he did and indeed to express the offers that he made under all the circumstances. I think that when all the evidence is closely scrutinised, I think the clear indication is that the husband has acted unreasonably in maintaining the positions that he did and in declining to accept the offers that he did.

7. It seems to me quite clear for example that on 5 February 2008 an offer was made by the wife to pay the husband $150,000 which he knocked back. His counter offer was $179,000. It is clear to me that whether the husband's perception or expectation of the outcome in this case as expressed in percentage terms or dollar terms, he never really came anywhere near the final outcome and he would not only have saved himself enormous legal fees, but walked away with much more money if he had accepted the offer made even on 5 February and based on this evidence alone I think that in principle an order for costs is appropriate, but not an order for indemnity costs.

8. There are several Full Court decisions, including Kohan & Kohan (1993) FLC 92-340 and Yunghanns & Yunghanns (2000) FLC 93-029 which stress that the ordinary rule should apply, that is party/party costs unless there are exceptional circumstances and no such exceptional circumstances arise in this case. I think that party/party costs should apply from 5 February 2008.

9. I am not prepared to make an order that these costs be as agreed or as assessed because of the potential that this will then lock the husband and wife in conflict for many, many months to come and prevents me from seeking to achieve a clean break which s.81 of the Family Law Act requires me to strive for.

10. I do have a detailed cost memorandum from the solicitor for the wife. He says that indemnity costs would be $37,378 from 5 February 2008. But having regard to the difference between the charges that the wife agreed to with her solicitors and the amounts that would have been paid pursuant to the Family Law Act scale which of course would govern the party/party costs, I am only prepared to allow 55 per cent of the legal costs claimed, plus the disbursements, accordingly the cost payable will be as follows: it will be 55 per cent of $26,130 or in other words $14,371.50. There are unpaid disbursements of $1033.08 and there are paid disbursements of $10,214.60 and I make a total of $25,619.18.

11. The question of time to pay is a matter that I need to consider. It is a substantial costs order, but by the same token the husband has received, pursuant to the order, a fairly substantial payment from the wife. I think under the circumstances three months is an appropriate time to pay.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Associate:  Anthony Thompson

Date:  14 May 2009