Stanic and Stanic (No.2)
[2008] FMCAfam 1028
•8 September 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| STANIC & STANIC (No.2) | [2008] FMCAfam 1028 |
| FAMILY LAW – Costs application – indemnity order sought – costs granted on Federal Magistrates Court scale. |
| Family Law Act 1975, s.117 |
| In the Marriage of L and CL Kohan (1993) FLC 92-340 Munday v Bowman (1997) FLC 92-784 |
| Applicant: | MS STANIC |
| Respondent: | MR STANIC |
| File Number: | MLC 1178 of 2007 |
| Judgment of: | Burchardt FM |
| Hearing date: | 8 September 2008 |
| Date of Last Submission: | 8 September 2008 |
| Delivered at: | Melbourne |
| Delivered on: | 8 September 2008 |
REPRESENTATION
| Counsel for the Applicant: | Ms E. Swart |
| Solicitors for the Applicant: | Cuthberts |
| Counsel for the Respondent: | Mr G. Ambrose |
| Solicitors for the Respondent: | Cahill & Rowe |
ORDERS
That the Husband pay the wife's costs, including any reserved costs, to be taxed in default of agreement according to the Federal Magistrates Court Rules 2001.
IT IS NOTED that publication of this judgment under the pseudonym Stanic & Stanic is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 1178 of 2007
| MS STANIC |
Applicant
And
| MR STANIC |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
This is the disposition of an argument as to costs in this proceeding.
On 1 September 2008 I delivered judgment. The net effect of that judgment was that the Applicant wife got to keep a house in [Z] and the Respondent husband kept a property in [N].
The costs argument largely arises from matters deposed to by Ms R in her affidavit sworn on 29 August 2008. From that material, it is clear that from November 2005 until early 2008 the husband was represented by Maria Blazeric. On 23 May 2006 Ms Blazeric made an open offer which in fact reflected very accurately the judgment at which I finally arrived. On 1 June 2006 the wife accepted that offer through her solicitors. Unfortunately, however, on 7 June 2006
Ms Blazeric wrote back demanding a further 10,000 euros and asserting that there had been a typographical error in her earlier correspondence referring to another currency. That assertion was self-evidently wholly and utterly wrong. There had been no prior mention that any kind of cash was payable.
Because matters then broke down, on 5 February 2007 the wife filed these proceedings. As I have said, in early 2008 the husband appointed new solicitors. There have been numerous interlocutory problems.
Ms Swart has asserted from the bar table - and I accept her word - that Ms Blazeric's conduct was extraordinary. There was no contest from the husband's now representatives as to this, not least because of course they were not present at the time. It seems likely, given earlier correspondence, that Ms Blazeric's conduct was at least erratic.
The husband repeated the offer originally put by Ms Blazeric after his new solicitors were appointed, but the wife rejected that as by then her costs were already substantial. Ms R estimates that costs on scale in this proceeding are of roughly the order of $9,300.00, and costs incurred will exceed $22,000.00. It should be noted, however, that neither side has any spare cash; both are on aged pensions.
So there are three issues. First, should there be a costs order? Second, if there is a costs order, should it be on a party-party basis or an indemnity basis? Third, who should pay? In other words, should Ms Blazeric pay or should the husband pay if the wife is successful?
The wife through counsel asserts that the husband has a great case against Ms Blazeric. I note, however, in passing that the wife has as I am informed in fact managed to pay the approximate $22,000.00 through what counsel told me was a mixture of her own careful management of funds and assistance from her family. Here the real risk is that orders for any substantial sum may cause the husband to be sold up out of his home.
This is obviously ultimately a balancing exercise. It is impossible not to be sympathetic to both parties. The wife took an entirely reasonable position and, albeit that I have not heard from Ms Blazeric, I am not able to avoid the finding that the husband was clearly influenced by an unreasonable solicitor. I note again that the new solicitor was able quite rapidly to get instructions to re‑put the offer originally put.
So the question as to whether there should be a costs order cannot be divorced from the second issue: namely, should any order be made on a party-party or an indemnity basis. Here the authorities favour the husband. The statutory scheme in s.117 of the Family Law Act 1975 (“the Act”) is opposed to making orders for costs. If one looks at the case In the Marriage of L and CL Kohan (1993) FLC 92-340 at page 79614-5, the Full Court of the Family Court pointed out there strongly that indemnity costs are not the norm. We are not concerned here with the sort of regime that obtains in Supreme Court cases where there are rules as to payments in. The Full Court pointed out that even where there was dishonest concealment of assets, it was still in that case only appropriate to have a party-party order. That view was further applied in Munday v Bowman (1997) FLC 92-784.
In this case the conduct of the husband, while clearly very misguided, was not dishonest. Thus in all the circumstances a party-party order would be appropriate which would amount to approximately $9,000.00 and possibly some reserved costs. In my view the husband should pay costs on that footing. This order balances his capacity to pay - because I note that he can easily raise a loan, and he also has family of his own who may assist him - against his improper conduct of the proceeding and in particular, his failure to stand by the initial offer made in 2006.
I direct that the husband pay the wife's costs as agreed or in default, taxed pursuant to the rules of this Court on the Federal Magistrates Court scale.
So far as the action against Ms Blazeric is concerned, this is also an interrelated consideration. I am by no means convinced that it will be as easy as counsel asserts, not because on the facts as revealed thus far there is not a case, but there is always the possibility of other outcomes such as Ms Blazeric going bankrupt. It is a matter for his present advisers.
I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Associate: Brooke Evans
Date: 8 September 2008
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