Suess & Suess (No 2)
[2024] FedCFamC1F 515
•1 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Suess & Suess (No 2) [2024] FedCFamC1F 515
File number(s): PAC 3016 of 2022 Judgment of: BERMAN J Date of judgment: 1 August 2024 Catchwords: FAMILY LAW – COSTS – Circumstances justifying an order – Where the Court found the financial agreement was binding pursuant to s 90G(1B) of the Family Law Act 1975 (Cth) – Where the wife’s Initiating Application was dismissed – Where the husband now seeks costs on an indemnity basis – Where the Court finds the wife was wholly unsuccessful – Where the Court finds that the wife’s case was arguable – Consideration of indemnity or scale costs – Costs awarded on a party/party basis. Legislation: Family Law Act 1975 (Cth) ss 78, 79, 117, 90K, 90G
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.13
Cases cited: Bant & Clayton (Costs) (2016) 56 Fam LR 31
Hoult & Hoult (2013) FLC 93-546
Jackamarra & Krakouer [1998] HCA 27
Kohan & Kohan (1993) FLC 92-340
Licul v Corney (1976) 180 CLR 213
Prantage & Prantage (2013) FLC 93-544
Re Wilcox; Ex parte Venture Industries Pty Ltd and Ors (No 2) (1996) 72 FCR 151
Robinson & Higginbotham (1991) FLC 92-209
Suess & Suess [2024] FedCFamC1F 175
Tudor & Tudor (1992) FLC 92-273
Division: Division 1 First Instance Number of paragraphs: 85 Date of hearing: 9 July 2024 Place: Adelaide via MS Teams Counsel for the Applicant: Mr Dura SC Solicitor for the Applicant: Walkden Law and Mediation Counsel for the Respondent: Ms Clarke Solicitor for the Respondent: LCI Legal ORDERS
PAC 3016 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SUESS
Applicant
AND: MR SUESS
Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
1 AUGUST 2024
THE COURT ORDERS THAT:
1.Ms Suess (“the wife”) pay to Mr Suess (“the husband”) his costs fixed in the sum of ONE HUNDRED AND TWO THOUSAND FIVE HUNDRED AND SEVENTY-SEVEN DOLLARS AND SIXTY NINE CENTS ($102,577.69).
2.The balance of the settlement sum payable to the wife in the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000) be retained by the husband in part satisfaction of order 1 herein.
3.The balance of TWO THOUSAND FIVE HUNDRED AND SEVENTY SEVEN DOLLARS AND SIXTY NINE CENTS ($2,577.69) be payable to the husband within twenty eight (28) days of this order.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Berman J
INTRODUCTION
By Amended Initiating Application filed 21 October 2022, Ms Suess (“the wife”) sought a declaration that the financial agreement entered into with Mr Suess (“the husband”) on 11 December 2019 (“the financial agreement”) be declared non-binding and/or that it be set aside.
By Amended Response to Initiating Application filed 28 October 2022, the husband sought that the Initiating Application be dismissed and the wife pay the husband’s costs on an indemnity basis.
The proceedings were bifurcated and the only aspect of the matter that was considered was the status of the financial agreement.
Judgment was delivered in Suess & Suess [2024] FedCFamC1F 175 (“the judgment”) on 20 March 2024 wherein the following orders were made:
1.The Court declares that pursuant to s 90G(1B) of the Family Law Act 1975 (Cth), the financial agreement entered into between the applicant and the respondent on 11 December 2019 is binding on the parties.
2. The Amended Initiating Application filed 21 October 2022 be dismissed.
No appeal was filed and the wife has not otherwise sought to challenge the final orders.
By Application in a Proceeding filed 12 April 2024 the husband seeks the following orders:
1.That within 90 days from the date of these Orders the Wife shall pay to the Husband or as he may direct in writing costs on an indemnity basis in the sum of $253,966.90.
2.In the alternative, within 90 days of the date of these Orders the Wife shall pay to the Husband, or as he may direct in writing costs calculated at scale in the sum of $115,337.67.
3.That within 90 days of the date of these Orders the Wife shall pay the Husband’s costs of this application.
In addition, the husband sought that if the wife should fail to pay the costs as ordered by default, then a property situate at GG Street, Town HH NSW (“the Town HH property”) is to be sold with the net proceeds of sale to be disbursed and applied in payment of any outstanding cost order.
OUTSTANDING PROPERTY PROCEEDINGS
The wife argues that even though an order was made declaring the financial agreement binding between the parties, that did not dispose of the proceedings and should be considered as an interlocutory ruling. Simply put, the application for property settlement and declarations pursuant to ss 78 and 79 of the Family Law Act 1975 (Cth) (“the Act”) is still extant. As such, it is argued that given costs should follow the event, it is premature to determine costs in respect of an interlocutory application other than by costs being reserved to await the final determination of the proceedings.
The wife contends that there is a two-step process to be undertaken. The first consideration is whether the financial agreement is binding. If the financial agreement is however not binding, then the second step is to consider property settlement. It is a trite observation that in those circumstances the husband would not be seeking an order for costs given he would not have been able to resist the bifurcated orders sought by the wife setting the agreement aside.
Given that the financial agreement was held to be binding on the parties, the wife focusses on her contention as set out at [58] of the judgment that there were assets and/or contributions not accounted for in the financial agreement.
There is little doubt that to the extent that an asset has not been brought to account as part of the financial agreement then it is open to an aggrieved party to pursue proceedings in respect of the excluded asset.
Whilst the judgment highlighted assets and interests identified by the wife, no finding was made that any asset or financial interest existed but was not included in the financial agreement.
The rejection of the order sought by the wife to set the financial agreement aside also included an order dismissing the proceedings. No appeal nor Application in a Proceeding has been filed seeking to set aside, amend or vary the order dismissing the Amended Initiating Application filed 21 October 2022.
What is ignored in the wife’s argument is whether the resolution of the bifurcated proceedings, resulting in the declaration that the financial agreement is binding on the parties, is an interim or final order.
In Tudor & Tudor (1992) FLC 92-273, the Full Court at 79,025-6 referred to the decision of the High Court of Australia in Licul v Corney (1976) 180 CLR 213 as follows:
… That test as laid down by the High Court in Licul & Ors v. Corney (1976) 8 ALR 437 and reaffirmed by that Court in Carr & Anor v. Finance Company of Australia Limited (No. 1) (1981) 147 CLR 246, asks “whether the judgment or order appealed from, as made, finally determines the rights of the parties”: per Gibbs J in Licul & Ors v. Corney at 446. That test looks at the legal effect of the order, not its practical consequence: Carr & Ors v. Finance Company of Australia Limited (No. 1). This means that an order will be interlocutory if it leaves open the legal possibility of the application which it deals with being renewed, even though for all practical purposes, such as an application is unlikely to succeed.
The decision as to the status of the financial agreement has now been dealt with to finality.
Irrespective of what other proceedings may be available to or undertaken by the parties does not prohibit or prevent costs being considered in relation to the dismissal of the Amended Initiating Application and in particular, paragraphs 1 – 4 inclusive of the orders sought.
APPLICATION FOR COSTS
In considering what orders, if any, should be made in respect of the husband’s costs, s 117(2A) of the Act sets out that the Court shall have regard to the following:-
(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, admission 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.
Accordingly, whilst the primary consideration under s 117 of the Act is that each party should pay their own costs, the husband argues that there are circumstances which would justify the Court making an order pursuant to s 117(2A) of the Act.
If an order for costs is made in favour of the husband, it is argued that the quantum of costs should be assessed and paid on an indemnity basis.
The Application in a Proceeding filed 12 April 2024 is supported by the husband’s Affidavit filed 12 April 2024 which annexes the following documents:
(1)Communication between the parties’ solicitors seeking to rely upon pre-action procedures and compliance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) 2021 (“the Rules”).
(2)The wife’s notice of intention to start proceedings dated 8 December 2021 highlighting that an issue in dispute was the alleged non-disclosure of property and interests totalling $3,233,162.23 either omitted or not disclosed at the time of the parties entering into the financial agreement.
(3)Correspondence from the husband’s solicitors to the wife’s solicitors disputing the wife’s claim and confirming that if pursued and unsuccessful costs would be sought on an indemnity basis.
(4)Confidential case outline document filed by the husband dated 6 April 2023.
(5)List of objections to trial affidavit of the wife filed 3 March 2023.
(6)Correspondence from husband’s solicitors to wife’s solicitors advising that indemnity costs will be sought if the wife’s application to set aside the financial agreement was unsuccessful.
(7)Letter from husband’s solicitors to wife’s solicitors dated 26 March 2024 containing an offer to settle the question of costs in the sum of $200,000.
(8)Itemised statement of costs prepared on an indemnity and scale basis together with counsel fees.
The itemised cost statements are for the period between 1 March 2021 and 19 November 2023. Judgment was delivered on 20 March 2024. The primary position of the husband is that if the Court makes an award of costs, then it should be assessed on an indemnity basis.
A preliminary issue is raised that as presently constituted, the application that costs be assessed on an indemnity basis may be deficient in that there has not been compliance with the Rules.
Rule 12.13 provides:
(3) An application for costs may be made:
(a) at any stage during a proceeding; or
(b)by filing an Application in a Proceeding within 28 days after the final order is made.
(4) A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement or costs agreements in relation to those costs and, if so, the terms of the costs agreement or costs agreements.
The rule appears mandatory, and it is conceded that whilst the Court could reasonably expect that the parties, but in particular the husband, entered into a costs agreement with their solicitors, the agreements were not provided either by way of informal discovery or as part of the application process.
There is good reason why the Rules require the terms and conditions of a costs agreement to be disclosed. If costs are to be sought on an indemnity basis, then the relevant charge rate must come within the parameters of the costs agreement.
It is not suggested that the itemised costs statement prepared on an indemnity basis is inconsistent with the terms of the cost agreement, nonetheless, there has not been compliance with the necessary requirement for the costs agreement to be produced.
As is apparent, whilst the provisions of the Rules must be given weight and proper attention, I am able to exercise my discretion to dispense with compliance.
The discussion of the Full Court in Prantage & Prantage (2013) FLC 93-544 (“Prantage”), is of assistance in determining whether, and in what circumstances, an order for indemnity costs should be made.
In Prantage (supra), the Full Court referred extensively to the decision of Kohan & Kohan (1993) FLC 92-340 (“Kohan”) and noted at [77] that whilst there was nothing in the Act which in any way “inhibits” a consideration of indemnity costs, the following is said in Kohan (supra) at 79,605:-
it is fundamental to the exercise of that discretion in the Family Court that the Judge should not only understand that such an order is a very great departure from the normal standard, but also that the Judge should know what the terms of the agreement are, to what extent it exceeds the parameters set by the scale, and what its likely impact will be on the financial position of each of the parties.
This impact was a relevant matter to which the trial Judge should have had regard, when considering the financial circumstances of each of the parties to the proceedings under sec 117(2A)(a), or perhaps even more as a relevant matter under (g). The degree to which a costs agreement departs from the established norm and the actual financial significance of such a departure may itself be a reason for not ordering costs on an indemnity basis.
In Re Wilcox; Ex parte Venture Industries Pty Ltd and Ors (No 2) (1996) 72 FCR 151, Cooper and Merkel JJ said:-
156.The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.
157.The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd. (1993) 46 FCR 225.
In Prantage (supra) the Full Court said at 87,209:-
97. In our view, once it is recognised that ensuring access to justice is one of the key objectives of the “usual rule”, the claimed increasing disparity between scale costs and those being charged by lawyers becomes as much an argument against the awarding of indemnity costs as it is in favour of costs being ordered on that basis.
98. With respect to the trial Judge, we are not convinced that there is a great deal of difference between current “commercial realities” and those prevailing at the time Kohan was decided. It should be noted that the costs agreement in Kohan provided for a rate of payment three times in excess of the scale. However, even if there have been changes in the market place for legal services, we are not persuaded this should have any impact on the application of the “usual rule”, which seeks to balance competing public policy considerations.
(Emphasis per original)
I bring to account that the wife was on notice from early on in the proceedings that if she was unsuccessful in setting aside the financial agreement, then costs would be sought on an indemnity basis.
I also note that by reference to the “Points of Claim” which was included in the Amended Initiating Application filed 21 October 2023, it identifies the grounds relied upon to set aside the financial agreement as follows:
(1)That the financial agreement is not an agreement that complies with s 90G of the Act because the wife was not provided with independent legal advice.
(2)That pursuant to s 90K(1)(a) of the Act the financial agreement should be set aside on the basis that it was not just and equitable in all the circumstances and that the agreement had been obtained by fraud or misrepresentation namely, the husband failed to make full disclosure and/or misrepresented the pool of assets and liabilities.
(3)Pursuant to s 90K(1)(b) of the Act the agreement was void, voidable or unenforceable.
(4)Pursuant to s 90K(1)(e) of the Act the agreement should be set aside on the basis that the husband engaged in unconscionable conduct.
The husband submits that the relevant considerations pursuant to s 117(2A) of the Act are as follows:
(a)The conduct of the parties in relation to the proceedings;
(b)Whether any party to the proceedings has been wholly unsuccessful; and
(c)Whether either party to the proceedings has made an offer in writing to settle the proceedings and if so, the terms of such offer.
The wife argues that the husband bears the onus to establish circumstances which justify an order for costs and sets out the following reasons why a costs order should not be made in favour of the husband namely:
(a)The husband has not advised of the circumstances that justify the departure from the general rule;
(b)The husband unnecessarily prolonged and extenuated the proceedings with his failure to interact or respond to disclosure requirements; and
(c)The husband failed to disclose or at the very least there was a material failure of disclosure of the marital assets in the financial agreement and in these proceedings.
The financial circumstances of each of the parties
The husband filed a Cost Notice dated 12 October 2023 pursuant to r 12.06 of the Rules which sets out his costs as follows:
Total billed and unbilled costs to date $146,142 Estimated future fees including attendance of counsel $68,057
Accordingly, the estimated total costs as at 12 October 2023 are in the sum of $212,923 including GST.
The costs paid were sourced from the husband’s savings and loans from family members.
The itemised schedule of costs is in the sum of $253,966 being the amount claimed on an indemnity basis and $115,337.67 claimed on a scale basis.
Whilst neither party filed an up-to-date statement of financial circumstances, at [68] of the judgment, it sets out the assets and liabilities to be retained by each of the parties indicating that the pool of assets, subject of division pursuant to the financial agreement, has resulted in each of the parties retaining property to a significant value.
For her part, the wife holds an interest in the properties at Q Street and N Street. Each valued in the sum of $1,100,000 as at the date of the agreement.
In addition, the wife was to receive one half of the sale price of shares and a further settlement sum payable by the husband in the sum of $1,200,000 with a further sum of $100,000 to be paid to the wife upon the registration of an entity known as “[Z Pty Ltd]” with the local authority.
It is conceded by the husband that the terms and conditions necessary to trigger the payment of the sum of $100,000 have now been satisfied and whilst the further settlement sum is now due and owing, the husband has retained it in anticipation of a favourable costs order.
The concern of the wife arises in respect of the further orders sought by the husband that if there is default in the payment of any costs order, then the wife’s home in Town HH, NSW shall be sold and the net proceeds are to be disbursed in part to satisfy any outstanding costs order.
The wife views the application as punitive rather than a proper consideration of the factors as required under s 117(2A) of the Act.
I do not consider that the husband’s application for costs is an attempt to punish the wife. I accept that each of the parties have incurred substantial legal fees in an attempt to resolve their differences.
The husband states that he would suffer a significant financial loss if either no order was made as to costs or even if an order was made that his costs are to be assessed at scale. Whilst the stated position of the husband is not an unreasonable contention, no effort was made to present the husband’s current financial position.
Similarly, whilst the wife remains liable for her own legal proceedings, I accept that she is possessed of significant property and has the capacity to meet a reasonable order.
The conduct of the parties
The litigation between the parties whilst conflicted, was conducted in a civil fashion. Each of the parties were focussed on the litigation and even though I questioned the competency of Ms B, each of the parties were represented during the currency of the proceedings by experienced solicitors and counsel. I do not consider that any significant issue arises as to the conduct of the proceedings.
Whilst the wife focusses upon an assertion that the husband did not make full and frank disclosure of property that should have been the subject of notation in the financial agreement, it is a relevant consideration that the wife’s application to rely upon a business valuation report filed 11 September 2023 was the subject of objection and ultimately resulted in a dismissal of the interlocutory proceedings.
Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
Each of the parties were consistent in their compliance with orders made. There was nothing about the conduct of the proceedings by either of the parties which detracted from the primary focus of the wife’s application namely, that on the basis of the wife having received inadequate legal advice, manifest non-disclosure of property by the husband and conduct by the husband in concert with the adult children of the parties, that the financial agreement should be declared either non-binding or set aside.
Offers made by each of the parties
The husband opposed the orders sought by the wife but in particular, paragraphs 1 to 4 inclusive of the Amended Initiating Application which were the subject of the bifurcated hearing.
The husband’s position remained constant throughout the litigation including the pre-litigation period. The husband opposed the orders sought that would either have the financial agreement declared not binding or set aside on the basis of unconscionable conduct.
In addition, whilst the husband did not resile from his position, he put the wife on notice that if she was unsuccessful in her application, then costs would be sought on an indemnity basis.
Accordingly, the offers made by the husband were not offers of compromise but rather reinforced the husband’s position as set out in his Amended Response namely, that the wife’s application should be dismissed.
Whether any party to the proceedings has been wholly unsuccessful
In Robinson & Higginbotham (1991) FLC 92-209 Nygh J considered the meaning of “wholly unsuccessful” and said at 78,417:
Her Honour then makes a reference to the question of which party was wholly successful, but of course, as counsel for the wife rightly submitted, paragraph (e) deals with a situation in which the proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed.
In Bant & Clayton (Costs) (2016) 56 Fam LR 31, the Full Court found the mother wholly unsuccessful in the proceedings and stated:
21.The father submits that by filing a Notice of Discontinuance the mother has been wholly unsuccessful. The mother says that her application was never heard or determined, and thus it was not wholly unsuccessful.
22.There is an element of truth in both submissions, but it is apparent to us that this paragraph does not apply to the facts of this case; it is designed for cases where an application is heard and determined and the applicant is wholly unsuccessful.
23.Thus, this paragraph does not provide a circumstance justifying an order for costs.
It is not controversial that the wife’s application was dismissed and a declaration was made under s 90G(1B) of the Act that the financial agreement was binding.
It is however reasonable to consider the issues raised by the wife and why they were ultimately rejected.
The extent to which the requirements of s 90G(1)(b) of the Act were considered by the wife not to have been met arises out of the advice given by the wife’s then solicitor, Ms B. As discussed at [114] of the judgment, Ms B’s evidence was not without controversy.
As set out at [111] of the judgment, in Hoult & Hoult (2013) FLC 93-546 Thackray J acknowledged that there was “forensic difficulty” in the case for the husband to establish that advice as to the advantages and disadvantages of the wife entering into the agreement had been established. However, that onus is satisfied by reliance upon the solicitors’ certificate, in this case signed by Ms B.
If the certificate is in existence, then the onus is on the wife to demonstrate that Ms B’s advice was so incompetent it has to be considered as no advice at all.
It is a trite observation that significant doubt attaches to Ms B’s competency. The fact that Ms B was reluctant to give evidence and was required to attend by subpoena, did not retain her solicitor’s file, kept little or no adequate records and acknowledged that she did not send a formal letter of advice as to the advantages and disadvantages of entering into the agreement, was a matter of considerable concern.
I accept that the wife used her best endeavours to cause the evidence of Ms B to be given and it is unlikely that without the litigation, Ms B would have remained uncooperative.
I further found that Ms B had not provided a written advice or caution to the wife that promoted an independent valuation of the assets under consideration.
Whilst a near run thing, I found at [150] of the judgment that the advice given to the wife by Ms B did not fall below a basement threshold that would have permitted a determination that Ms B’s advice was so lacking in integrity that it should be considered as no advice at all.
Accordingly, I found that the provisions of s 90G of the Act had been satisfied.
I found no evidence to support a finding that the husband or any other person under his direction had misrepresented the value of the principal entity “[D Pty Ltd]” or that in some way the wife was coerced into accepting a valuation that was inadequate or at the very least, not demonstrative of the true value of the asset.
It is difficult to gain a sense of when the full picture of the assets available to the parties for inclusion in the financial agreement became known to the wife but at this stage it is likely that the wife accepted various valuations for the purposes of entering into the financial agreement arising from balance sheets prepared by the husband’s accountant, Mr C or Mr K, who were involved in various meetings and assisted the parties to settle their differences. Mr K agreed that the task to prepare a balance sheet reflecting the property of the parties had fallen to him.
I am left in no doubt that the method by which the parties constructed a balance sheet lacked rigor and was likely imprecise and potentially unreliable.
The notations to the financial agreement loomed large in that it provided opportunity for each of the parties to undertake their own investigation and determination of property considered by the parties to be relevant. Whilst there was not a determination as to the property in the possession or the control of the husband that was not disclosed and therefore brought to account for the purposes of the financial agreement, there is little doubt that there was merit in the wife exploring the extent of the property of the parties, even though she was not assisted by Ms B, Mr C and her son, Mr K.
Nonetheless I consider that it was open to the wife to properly consider the merits of the case, but she chose to progress the litigation to trial.
The wife was wholly unsuccessful in seeking an outcome in respect of paragraphs 1 to 4 inclusive of the Amended Application.
CONCLUSION
I do not find that the wife’s application was frivolous, or she intended to “chance her hand”.
In the decision of Jackamarra & Krakouer [1998] HCA 27, the High Court considered the meaning of “an arguable case” and found favour with the proposition that “once it appears that there is a real question whether a fact or law and that the rights of the parties depend on it, then it is not competent for the Court to dismiss the action”.
I consider that the wife was wholly unsuccessful notwithstanding that her case was arguable.
It is a relevant countervailing factor that there was likely to have been property either not disclosed or not brought to account that justified a reasonable enquiry by the wife.
It is now an unfortunate observation that the wife’s former solicitor, Ms B, was of little assistance to her highlighted by Ms B’s own admission that her professional conduct was deficient.
No attempt was made by either of the parties, or those that assisted in negotiating the terms and conditions of the financial agreement, as to any valuation rigor. It is a telling observation to compare the level of enquiry that would have been made in respect of a court determined order pursuant to s 79 and the less disciplined approach adopted by the parties in respect of their financial agreement.
It is appropriate for an order to be made in favour of the husband’s application for costs limited to the costs incurred as reasonably required in preparation for the trial. In that regard, I consider that costs should be payable on a party/party or scale basis as opposed to indemnity costs.
The wife’s case was arguable and whilst I accept that the husband has incurred costs on a solicitor/client basis representing a significant difference to costs assessed on scale, the justice and equity of the circumstances of the parties is such that I should reject the husband’s application for costs to be assessed on an indemnity basis.
I make reference to the itemised costs schedule annexed to the husband’s affidavit of 12 April 2024. I propose to assess the costs payable by the wife by reference to the following invoices:
20/12/2022 5843 $4,082.73 20/03/2023 6067 $9,760.52 27/04/2023 6234 $10,688.67 26/10/2023 7064 $19,353.11 Counsel fees $58,692.66 TOTAL $102,577.69
Given that the husband retains a further settlement sum payable to the wife in the sum of $100,000 I consider it a proper outcome that the husband’s costs are paid in part from that amount.
I make orders as appear at the commencement of these reasons.
I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 1 August 2024
0
7
2