Sullivan and Sullivan

[2011] FamCA 801

FAMILY COURT OF AUSTRALIA

SULLIVAN & SULLIVAN [2011] FamCA 801

FAMILY LAW – Costs – Interlocutory hearing – Consideration of financial circumstances of parties – Husband wholly unsuccessful – Orders sought on a party / party basis – Assessment of what is a just outcome – Costs fixed in the sum of $12,000 – Parties to avoid costs of assessment – Interest in default payable

Family Law Act 1975 (Cth) s 117(1,) (2) and (2A)

APPLICANT: Mr Sullivan

RESPONDENT: Mr Sullivan

FILE NUMBER: MLC 11237 Of 2010

DATE DELIVERED: 20 October 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 22 August 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

SOLICITOR FOR THE APPLICANT: Westminster Lawyers

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT: Lander & Rogers

Orders

IT IS ORDERED:

1. THAT within sixty (60) days the husband pay or cause to be paid to the solicitors for the wife on behalf of the wife costs of and incidental to his Initiating Application filed 6 December 2010 and the hearing of 22 August 2011, fixed in the sum of $12,000.

2. THAT in default of payment within the sixty (60) day period interest thereafter accrue in default at the rate prescribed, from time to time, in the Family Law Rules 2004, such interest to be paid and calculated quarterly in arrears.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 11237 of 2010

Mr Sullivan

Applicant

And

Ms Sullivan

Respondent

REASONS FOR JUDGMENT

1. On 30 September 2011 I delivered Reasons for Judgment and pronounced Orders on the interlocutory issue that had been heard before me by oral and written submissions on 22 August of this year.

2. I have re-read my Reasons for Judgment and all of the background financial and other documents of facts of this case which were before me at that hearing.  As to my Orders the Agreement dated 16 April 2003 was found not to be a financial agreement and was held to be both unenforceable and not able to be rectified.

3. By Order 9 I directed the parties make, file and serve written submissions as to the payment and quantum of costs and it is that single issue which is before me in these Reasons for Judgment.

4. In the proceedings the wife, as respondent, had foreshadowed a costs application in paragraph 4 of her Response to the Initiating Application, which document she caused to be filed on 4 May 2011.  Subsequently the husband in a Response to the further Application in a Case filed by the wife had sought that she pay his costs of and incidental to her Application on an indemnity basis.

5. Both parties have instructed their solicitors to file further written submissions and they are helpful on this costs issue.

6. The wife’s written submissions were filed 7 October 2011 and she seeks, in the alternative:

   (a)that the husband pay towards her costs of and incidental to the proceedings a sum of $12,000 to be paid within fourteen days;  or

   (b)in the alternative that the husband pay her costs of and incidental to the proceedings to date, on a party / party basis, to be agreed and in default of agreement to be taxed, provided that such costs are to exclude the costs of the Case Assessment Conference and the preparation of the wife’s Financial Statement.

7. The written submissions on behalf of the husband were filed 12 October 2011 and he sought the following orders, no doubt having careful regard to the Reasons for Judgment and the Orders pronounced thereunder:

   (a)the husband pay the wife’s costs of and incidental to the interim proceedings heard by the Court on 22 August 2011, on a party / party basis, to be agreed and in default of agreement to be taxed provided further that the costs of the Case Assessment Conference and the preparation of the wife’s Financial Statement be excluded;

   (b)that the costs be paid out of the final property settlement between the parties;  or

   (c)in the alternative the husband pay the wife’s costs within sixty days from funds obtained from the further borrowings over the husband’s properties.

8. The wife’s submissions highlighted her financial situation and contrasted what she said to be the husband’s significantly stronger financial circumstances.  She asserted in her written submissions that he is in a financial superior financial position to her and that he is well able to afford an order for costs if made as sought.

9. The single issue before the Court related to the validity and operation of the Agreement and the wife’s submissions emphasised that the husband was wholly unsuccessful in his application and that a proper order for costs ought follow the outcome.

10. As to quantum the wife’s solicitors, aside from any costs of or associated with the Financial Conciliation Conference or the preparation of the Financial Statement, have said that a sum of $12,000 is the appropriate sum calculated on the basis of party / party costs.  The wife’s submissions emphasised the need to involve Counsel, preparation of lengthy affidavit material and written submissions from Counsel.  I am, of course, aware that Mr Dickson represented the wife in the proceedings and he is a senior junior of experience in our Court, as is Mr Wilson of Counsel who represented the husband.  I have general regard to the briefing of Counsel and the detailed manner in which the case was presented to the Court, submissions made and the somewhat involved legal issues developed in argument before the Court.

11. The written submissions of the husband, filed by his then solicitors though he is now unrepresented in the proceedings, do emphasis what is said to be his difficult financial circumstances.  It is submitted that his weekly personal expenditure far outweighs his total average weekly income.  It is said therefore that he is not in a position to make payment of any costs order without relying on funds otherwise borrowed or obtained.

12. The husband has not opposed the costs order made on a party / party basis and with appropriate delayed payment.  He has not consented to the wife’s solicitor’s estimate of costs in the sum of $12,000.

13. Pursuant to s 117 of the Family Law Act 1975 (Cth) it is provided in sub-section (1) thereof that each party to the proceedings bear his or her own costs, but always subject to the following sub-sections thereof.

14. Sub-section 117(2) provides that if the Court is of the opinion that there are circumstances that justify it in so doing then it may, subject to a consideration of the relevant matters, make such an order as to costs as it considers just.

15. The relevant matters are recorded in sub-section 117(2A) and in this matter I have had particular regard to the following matters:

    (a)the financial circumstances of each of the parties to the proceedings;

    (c)      the conduct of the parties to the proceeding;

    (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

    (g)such other matters that the Court considers relevant.

16. In my considerations of a just order and in the exercise of my discretion I have carefully had regard to the Financial Statement filed by the husband on 30 August 2011.  He is by occupation a salesman.  He deposed to his average weekly income being $13,803 though his expenditure was said to greatly exceed his income.  The majority of his income is derived from rental properties and profit distributions as identified in paragraphs 10 and 11 of his Financial Statement.

17. Though the husband acknowledged ownership of property to a value of $6.5m approximately his liabilities were said by him to total almost $4.8m.  I have had careful regard to the Schedule of Properties and Loans attached to his Financial Statement and have generally endeavoured to assess the rental income therefrom, any negative benefit and the overall financial circumstance of the husband subject to appropriate tax payments and other outgoings.

18. On the basis of that Financial Statement it is apparent and I so find that the husband can pay a proper and just costs order albeit that some time may well be needed for him to raise the required sum.

19. The wife’s Financial Statement highlighted a limited income inclusive of $425 received as child support from the husband.  Otherwise she has no assets and on the basis of that document presents as a person in somewhat difficult financial circumstances.  The appropriate qualification to that position identified by the wife, is her joint property ownership with the husband, as stated on page 12 of her Financial Statement though it is virtually impossible to identify the net financial interest therein and the wife records that as “not known” in her financial summary, contained at the commencement of her Financial Statement.

20. All matters considered I am satisfied that it is just to make an order for costs in favour of the wife. 

21. I am satisfied as to the financial discrepancy in the circumstances of each of the parties.  I find that, on the interlocutory issued determined in my Judgment, the husband was wholly unsuccessful. 

22. I have no criticism of either party and the conduct of the proceedings before me.  It was a well presented and well argued case of some reasonable legal complexity.

23. The wife seeks and the husband has offered to pay costs on a party / party basis.  I will order costs on that basis.  I find that to be a just outcome.

24. Given the documents filed, the Summary of Legal Argument, the conduct of the hearing before me by Counsel on 22 August 2011 and the earlier mentions of the matter I am somewhat surprised that the assessment of costs made by the wife’s solicitors is only in the sum of $12,000.  I do accept that sum excludes the costs of the Financial Conciliation Conference and preparation of certain documents which are properly excluded.

25. I intend, and I find it is a just outcome between the parties, if I fix the sum of costs.  The alternative to that procedure would be for the wife’s solicitors to prepare a detailed Bill of Costs in a form able to then be assessed by a Court Registrar.  Both parties would incur further substantial legal costs and expenses and it would be very time consuming.

26. The husband’s written submissions were filed seven days after those of the wife and thus he had the opportunity to object to the wife’s assessment of costs in the sum of $12,000.  This he did not do.  He is, quite properly, open to some form of consensus as he had volunteered to pay costs on a party / party basis as agreed or otherwise in default of agreement as taxed.

27. I consider it to be just and to be a cost savings to both parties if I fix the quantum of costs.  I do so in the sum of $12,000 which I emphasis is based upon my knowledge of and involvement in this case and a very careful consideration of all relevant documents filed, and earlier Court mentions.

28. I will allow the husband a period of sixty days from this day to pay that sum of $12,000 and interest in default thereafter is to be applicable and paid by him at the rate prescribed, from time to time, by the Family Law Rules.

29. I have considered the request of the husband to delay any payment of costs until the hearing and determination of the s 79 property applications before the Court.  The reality is that may take a considerable period of time and thus it would be unjust to the wife to deprive her of the benefit of a costs order.  Most likely she will be required to pay legal costs, or interest in default of payment, and therefore the proper outcome is to delay only the payment of costs for a period of sixty days.

30. I observe from my previous Orders that the matter is relisted before me on 8 December 2011 in respect of the various interim orders otherwise sought by the wife in her Application in a Case filed 1 June 2011.  I can only express the encouragement to the parties to discuss all of these interim issues and endeavour to resolve those matters outside of Court and to save further costs and expenses.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 19 October 2011.

Associate: 

Date:  19 October 2011