Soglia and Soglia (No 2)

[2019] FamCA 792

FAMILY COURT OF AUSTRALIA

SOGLIA & SOGLIA (NO. 2) [2019] FamCA 792

FAMILY LAW – COSTS – order made for the wife to contribute a lump sum amount to the husband’s costs.

Family Law Act 1975 (Cth) s 117 Family Law Rules 2004
APPLICANT:	Mr Soglia

RESPONDENT: Ms Soglia

FILE NUMBER: SYC 8323 of 2015

DATE DELIVERED: 31 October 2019

PLACE DELIVERED: Brisbane

PLACE HEARD: In chambers on the papers

JUDGMENT OF: Baumann J

HEARING DATE: 18 June 2019

FINAL SUBMISSIONS RECEIVED: 25 September 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr D O’Connor

SOLICITOR FOR THE APPLICANT: Redmond Hale Simpson Solicitors & Barristers

COUNSEL FOR THE RESPONDENT: Ms R Druitt

SOLICITOR FOR THE RESPONDENT: McKells Solicitors

Orders

1. That the Order of Hogan J made 27 November 2018 is discharged.

2. That the wife, Ms Soglia, shall pay the husband, Mr Soglia, a contribution to his costs of these proceedings, fixed in the sum of $70,000 within ninety (90) days.

3. That all other pending applications between the wife and husband (if any) are 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 Soglia & Soglia 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: SYC 8323 of 2015

Mr Soglia

Applicant

And

Ms Soglia

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 12 July 2019 the Court delivered reasons for its order that the application of the wife, Ms Soglia, to set aside the Binding Financial Agreement dated 20 September 2007, be dismissed.

2. Arising from that decision, the husband, Mr Soglia, seeks an order for costs.

Principles

1. Although the usual rule in Family Law proceedings is for each party to bear their own legal costs (s 117(1)), if circumstances justify an order for costs (after consideration of the factors set out in s 117(2A)), a Court may make an order for costs as might be just.

Competing positions

1. The husband, by written submissions filed 29 August 2019, seeks an order for the wife to pay costs, on one of these alternate basis, namely:

   a)on an indemnity basis in a fixed amount in consideration of the entirety of the proceedings; or

   b)in a fixed amount on the ordinary basis up until 28 March 2018 and then on the indemnity basis for the remainder of the proceedings; or

   c)for the whole of the proceedings on the ordinary basis in a fixed amount.

2. Relying, as the husband does, on the evidence of his solicitor, David Sutherland, (filed 3 September 2019) the quantum of the Applicant’s costs and disbursements are said to amount (on an indemnity basis) to:

   a)Period December 2016 to before mediation on 27 March 2018 (paragraphs 44 to 46)

   This period includes the period prior to the hearing set to commence before Aldridge J on 29 January 2018.  On 24 January 2018, by consent, orders were made to vacate the hearing and for the parties to attend a private mediation, with the costs of the Mediator “in the first instance be borne by the Husband with apportionment to be a matter for the Trial Judge.”

   The matter proceeded to a mediation on 27 March 2018, but did not resolve.  The costs claimed until and including this event are:

-	Solicitors fees for trial preparation	$32,861.50
-	Solicitors disbursements	$2,325.85
-	Counsel’s fees	$19,635.00
-	Solicitors fees and disbursements for mediation	$3,833.85
-	Counsel’s fees for mediation	$16,500.00
-	Mediator’s fee	$5,500.00
$80,656.20

The evidence of Mr Sutherland is that, for these events, “scaled costs” amounted to:

-	Solicitors for hearing	$20,001.87
-	Solicitors for mediation	$2,650.81
-	Counsel for hearing	$13,461.25
-	Counsel for mediation	$11,650.54
Total disbursements	$2,682.60
$50,447.07

b)Period from completion of mediation on 27 March 2018 to 11 September 2018:

After the unsuccessful mediation, on 28 March 2018 an offer to settle was made in writing by the husband to the wife in these terms:

“1.      Our client [RESPONDENT] will pay to your client [APPLICANT] the sum of $200,000.00 within 28 days of acceptance of this offer.

2.        That each party pay their own costs.

3.        That your clients [APPLICANTS] claim is dismissed.”

Notably, this offer was not withdrawn and appeared if anything to be still capable of acceptance as late as 6 June 2019, when the solicitors for the husband advised the new solicitors for the wife (who filed a Notice of Address for Service on 31 January 2019) of the offer for settlement made 28 March 2018.

Clearly the offer should have been accepted by the wife – it being on clearly more favourable terms than the ultimate determination by the Court dismissing the wife’s Application.

1. On 28 August 2018, the Court advised the parties the matter was listed for hearing for two days commencing 10 September 2018.  The evidence of the husband’s solicitor (paragraph 13) is that on the first day of hearing, the wife sought an adjournment and terminated her retainer of her solicitors then on the record.  The aborted hearing before Hogan J was adjourned, however her Honour on 27 November 2018 made the following orders:

   “1.      The Applicant [wife] pay the Respondent’s [husband] costs thrown away by the adjournment of the trial listed to commence on 10 September 2018, with such costs:

   a. to be in an amount as agreed between the parties, as assessed on a party and party basis in accordance with Schedule 3 to the Family Law Rules 2004 (Cth), or, failing agreement as to amount, to be in the amount assessed on a party and party basis in accordance with Schedule 3 to the Family Law Rules 2004 (Cth); and

   b.        to be paid within 30 days of either:

   i.         the making of a final order in the proceedings between the parties; or

   ii.        the final resolution, by other means, of the proceedings between the parties.”

2. The Full Court has said that although the discretion under s 117(2) “is to be exercised having regard to the primary rule that each party should bear his or her own costs”, it is a “broad” discretion, to be exercised having regard to the factors set out in subsection (2A), which factors are not to be read on a restrictive way, “the discretion remaining a broad one”.

3. Hogan J delivered written reasons for:

   a)refusing an application to adjourn the hearing on 10 September 2018;

   b)after refusing the adjournment initially, after which the Counsel (directly briefed) was given leave to withdraw, the oral application by the wife for an adjournment was granted; and

   c)her order made 27 November 2018 for costs “thrown away”.

4. The submissions of the husband (at paragraph 56) contend that rather than specifically assessing the costs under the order of Hogan J, it would be more efficient and beneficial if the orders of Hogan J be set aside, and the costs for the entirety of the proceedings be made in a “gross sum order”.  I agree with this approach.

5. The matter did proceed for hearing before me on 18 June 2019 and Reasons were delivered on 12 July 2019, for dismissing the wife’s application to set aside the Binding Financial Agreement.

6. The costs claimed by the husband for the entirety of the period from 27 March 2018 (which was the day before the offer of settlement was delivered) to the conclusion of the trial on 18 June 2019 are as follows:

-	Solicitors fees	$32,205.80
-	Disbursements	$5,351.36
-	Counsels fees (junior Counsel)	$38,857.50
$76,414.66

1. The evidence of Mr Sutherland is that, for these events, “scaled costs” amount to:

-	Solicitors costs	$24,544.30
-	Counsels fees	$30,503.72
-	Disbursements	$5,351.36
$60,399.38

1. The wife’s position, articulated in her new solicitor’s submissions filed 25  September 2019, are summarised at paragraph 2, namely:

   a)opposing any costs order at all; or

   b)the Court should not make an indemnity costs order.

2. The wife further asserted (see paragraph 6) that if a costs order is to be made, then it should be a “lump sum order… limited to 25% of the Husband’s costs with a discount applicable to senior Counsel’s fees repayable within 12 months.”  The wife contends, and I agree as does the husband it seems, that the parties do not wish to incur further costs in having costs assessed under the Family Law Rules 2004 by a Registrar.

Do circumstances exist to justify a costs order at all?

1. The wife, with an eye to the considerations set out in s 117(2A), submits, and the husband contends, that:

   a)the wife is in an inferior position financially, both in terms of income and in respect of property to that of the husband.  As much was conceded in the statement of assets contained in the Binding Financial Agreement and little had changed by the hearing 12 years later.  The disparity was, at least, one of the motives for the wife’s application.  The wife’s submissions (at paragraph 3(b)), suggest an equity in her home of over $350,000 – only reduced, she says, by acting as guarantor for her adult daughter to the extent of $330,000.  There is no evidence about these assertions, but in any event the wife is not impecunious.  The wife hopes to complete a pilot’s course in 2020 and otherwise, her income arises from dressmaking and Government benefits.  She also owns an overseas investment property.  She has, she claims, a number of unsecured debts, legal costs liabilities and credit card obligations.  Her financial position makes it clear that the generous offer made by the husband ought to have been accepted in March 2018;

   b)the criticisms of the delays and extra costs incurred by the husband as raised by him, the wife says, are due to her former solicitors conduct and advice.  However, as the history reveals, her decision to:

   i)not accept the reasonable offer;

   ii)seek to adjourn the trial on 10 September 2018; and

   iii)to press to a final hearing,

   all are her actions, for which there are consequences.

   c)the husband ought not to be permitted to retain Senior Counsel as there was no “major complexity” in this case.  For the reasons which follow, it is not necessary to engage in this issue as Senior Counsel’s fees related to earlier services up to and including the mediation;

   d)under the hearing “Prospects of Success”, the wife asserts, in effect, that her former solicitors were “very confident of a favourable outcome and none of her lawyers indicated she would not be successful”.  If that is the basis for not accepting the generous offer, then her remedies may lie elsewhere, however the husband (who was the Respondent) should not disproportionally share the financial consequences of the wife’s choices and decisions.

Conclusion

1. In my view, circumstances exist which justify an order to some extent being made, particularly:

   a)the wife’s failure to accept the husband’s reasonable offer of March 2018; and

   b)the cessation of her Counsel and solicitors causing the trial on September 2018 to be adjourned causing a costs order to be made; and

   c)the fact that the wife was wholly unsuccessful.

2. Considering all these factors, and the matters as set out, I find that:

   a)each party should bear their own costs and expenses up to and including the mediation on 27 March 2018.  The consensual vacating of the first hearing (in January 2018) and agreed attendance at mediation, reflects positively on the parties seeking to resolve the matter;

   b)the husband having paid the fees of the Mediator for $5,500, it is reasonable and just that the wife pay half of the fee – being $2,750;

   c)circumstances are such that the wife should pay a contribution to the costs of the husband (including any liability arising from the Order of Hogan J made 27 November 2018) for the period from 28 March 2018 to the conclusion of the trial on 18 June 2019; and

   d)I make no order, and none were sought, for the costs of the costs submissions or for taking judgment.

Quantum of costs

1. I am not persuaded that the circumstances of this case justify the assessment of costs on a full indemnity basis.  No exceptional circumstance has been demonstrated to do so, however, in the exercise of my discretion and considering the estimates of fees on an indemnity basis, I regard it as proper and just to assess the wife’s liability as follows:

50% of Mediator’s fee	$2,750
Fixed sum for costs and disbursements from 28 March 2018 to conclusion of the final hearing	$67,250
TOTAL	$70,000.00

1. In assessing costs in a fixed sum, as sought by both parties, the parties avoid costs and delays of assessment by a Registrar.

2. The wife says that “any significant lump [sum]… would result in a judgment the Husband could enforce by way of bankruptcy proceedings forcing the sale of the Wife’s home leaving her homeless…” (paragraph 4(b) of her submissions).

3. Although this cannot be ignored as a possibility, these consequences should have been understood by the wife when not only deciding to commence proceeding, but to pursue them.  The husband, although in a much stronger financial position, opposed the wife’s application at all times; made a very generous offer to settle and in the end, even if he recovers the sum of $70,000 (being the wife’s assessed contribution), he will also be out of pocket for over $80,000.

4. The wife seeks 12 months to pay.  Although the husband did not file any submissions in reply, I regard 12 months as too long.  The wife has, on her own submissions, an equity in the home which she has depleted by agreeing to guarantee a loan for her daughter.

5. I regard 90 days from the date of this order as an appropriate time for the wife to pay the sum assessed of $70,000.

6. The orders at the commencement of these Reasons are, in the circumstances of this case, just.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 31 October 2019.

Associate: 

Date:  31 October 2019