Varnum and Logan

[2012] FamCA 1138

FAMILY COURT OF AUSTRALIA

VARNUM & LOGAN [2012] FamCA 1138

FAMILY LAW – COSTS – Applicant’s application for costs dismissed – where applicant was wholly unsuccessful in her claim - where the applicant did not respond to a written offer to settle - where the applicant failed to consent to the appointment of a case guardian for the respondent – where the applicant had the advantage of the  proceedings being heard undefended by her former partner

Family Law Act 1975 (Cth) s 117

Fitzgerald v Fish (2005) 33 FLR 123
Penfold v Penfold (1980) 144 CLR 311
Re JJT ex parte Victorian Legal Aid (1998) 195 CLR 184

APPLICANT: Ms Varnum

RESPONDENT: Mr Logan

FILE NUMBER: (P)NCC 592 of 2011

DATE DELIVERED: 6 December 2012

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: 4 December 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Tregilgas

SOLICITOR FOR THE APPLICANT: Conditis & Co

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT: Mr O’Callaghan

Orders

1. That the Applicant’s Application in a Case filed 2 October 2012 is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Varnum & Logan has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: (P)NCC 592 of 2011

Ms Varnum

Applicant

And

Mr Logan

Respondent

REASONS FOR JUDGMENT

1. This is an Application in a Case for costs by Ms Varnum filed 2 October 2012. It arises from a hearing and determination of undefended proceedings pursuant to Pt 8AB of the Family Law Act 1975 (Cth) (“the Act”) between the parties, where Ms Varnum was the respondent. Orders were made by me on 17 August 2012. Those orders provided for the sale of a property and a total payment out to the respondent of $52,000.

2. The application for costs is opposed by the de facto partner of the applicant, Mr Logan.

Background

1. This was a later life relationship.  The parties lived together for between five to six years, 2004 to 2010.  There were no children.  Both parties have adult children from previous marriages.  They separated on 29 November 2010. 

2. On 9 December 2010 a written offer was made to resolve the proceedings by Mr Logan.  There was no response or counter-offer. 

3. On 1 March 2011 Mr Logan filed an Initiating Application.  Inter alia, he sought exclusive occupation of the home. 

4. On 29 March 2011 Mr Logan suffered a stroke and was hospitalised for about three weeks.  The case assessment conference set down for 13 April 2011 was deferred because of Mr Logan’s health.

5. On 6 July 2011, Ms Varnum filed a Response. 

6. On 27 July 2011 the matter came before me for an interim hearing.  Mr Logan was represented, but unaccountably not present at Court. 

7. On 28 September 2011 the deferred case assessment conference was held.  The appointment of a Case Guardian for Mr Logan was raised in that conference.  An application had been prepared.  Ms Varnum opposed the application for the appointment of a Case Guardian.  It would have been possible for the order to have been made by the Registrar on that day. 

8. On 1 December 2011 solicitors for Mr Logan withdrew and filed a Notice of Ceasing to Act.  Mr Logan was not present on that occasion. 

9. The matter was set down for an undefended hearing on 23 February 2012.  On that day, Ms Varnum sought to rely on two further affidavits and a financial statement. These documents had not been served on Mr Logan.  The hearing was adjourned for service to be effected.

10. On 14 March 2012 the matter proceeded.  Subsequently a jurisdictional issue caused some delay[1]. 

    [1] Logan & Varnum [2012] FamCA 1030, paras 28-30

11. In July 2012 Ms Varnum brought the matter back before the Court in relation to proceedings in the State court.  The mortgagee of the husband’s business premises had exercised its rights of sale pursuant to a business loan agreement. 

12. I noted in my judgment that it was apparent at that time that Mr Logan was unable to attend to self-employment in his own business[2].  Ms Varnum adjusted the orders she sought to meet the new circumstances involving the mortgagee. 

    [2]  Logan & Varnum [2012] FamCA 1030, para 27

Applicable law

1. Section 117 of the Act provides for each party to proceedings to bear his or her own costs (s 117(2)). If there are justifying circumstances, the Court may make such orders as it considers just.

2. In the decision of the High Court in Penfold v Penfold (1980) 144 CLR 311 , it was established that the general rule must yield whenever a Judge finds in a particular case, that there are circumstances justifying the making of an order for costs.

3. Section 117(2A) sets out mandatory considerations for what, if any, orders should be made.

4. The Full Court in Fitzgerald v Fish (2005) 33 FLR 123 made it clear that there is no obligation for more than one factor to be present for an order for costs to be made, nor is there any comparative weighting of the factors set out. One factor alone could be the foundation for a costs order.

5. Although it is not strictly necessary for reasons to be given in relation to costs, I will do so now. 

Section 117(2A)(a) financial circumstances of the parties

1. Ms Varnum is living in the former family home.  A second house on the property is occupied by members of her family, who pay her board.  Ms Varnum drives a taxi and earns about $800 per week.  She is in debt to her son and has been so since she borrowed from him just prior to separation.  There is apparently no immediate pressure for repayment.  Ms Varnum owes a debt to Centrelink, which I do not take into account.

2. Mr Logan is now receiving a disability pension and is unable to continue in his former self-employment for health reasons arising from his stroke.  He has accommodation in A Town and has not yet had access to his share of the funds from the sale of the home.  It has not been sold.

3. The financial circumstances of Ms Varnum are presently superior to those of Mr Logan.  The fact that he will ultimately have a greater share of the assets is not a matter I take into account in this application.

Section 117(2A) (b) whether the parties were in receipt of assistance by way of Legal Aid

1. Neither party had legal aid. 

Section 117(2A)(c) the conduct of the parties

1. Ms Varnum says she had no alternative, but to prosecute the proceedings and also was forced to issue subpoena to obtain information.  Ms Varnum was the respondent.  However, she did not respond to the settlement offer[3] made in December 2010, or make any offer to settle the matter herself.  There is no evidence before me of a refusal by Mr Logan to provide relevant information necessitating the subpoena.  There was a solicitor on the record at all times up to the date of Ms Varnum filing her response in July 2011.

   [3]   Exhibit 1

2. Mr Logan filed an affidavit and financial statement, together with an affidavit by his son. 

3. I may have been somewhat persuaded by the proposition that the proceedings becoming undefended had added to costs for Ms Varnum.  However, Mr Logan had had a stroke, a fact which was known to Ms Varnum.  Consenting to the appointment of a case guardian would have facilitated the proceedings continuing on a defended basis, both parties represented.  That opportunity was rejected by Ms Varnum in September 2011. 

4. That Mr Logan thereafter withdrew from participation in these proceedings is consistent with the need for a case guardian to have been appointed.  Such a person would have represented another opportunity to resolve the dispute by negotiation.  The extent of the disabilities of Mr Logan was set out in both his and his son’s affidavits. 

5. Further, the adjournment of the proceedings on 23 February 2012 would have been granted to Mr Logan, had he been present.  The cause of it was Ms Varnum seeking to rely on fresh material which had not been served. 

6. Further, there was a positive benefit to Ms Varnum in the undefended hearing.  Her evidence, and that of her witness, was unchallenged.

7. I consider that the stance of Ms Varnum was obstructive against her own interest, and does not justify costs.

S 117(2A) (e) whether any party has been wholly unsuccessful in proceedings

1. Ms Varnum’s application was for the bulk of the parties’ assets, the whole of the family home, unencumbered, plus its contents and a cash payment of $100,000.  It was, in my view, entirely unrealistic.  Ms Varnum was substantially unsuccessful in her claim. 

S 117(2A) (f) the husband’s offer to settle and the terms of that offer

1. Mr Logan made an offer to settle in December 2010.  The offer was a sum of $45,000, the amount of $40,000 said to repay a loan, plus $5000.  Whether or not this was a reference to a loan by Ms Varnum’s son to the parties of $40,000, Mr Logan was offering to pay $45,000 cash.  Had it been accepted, Ms Varnum would be less in debt to her son by that amount and would not have expended legal costs on this hearing.  She made no offer herself.  

2. In Re JJT ex parte Victorian Legal Aid (1998) 195 CLR 184, the High Court pronounced an order for costs is made to compensate a party against expense occurred in litigation, and is not punitive in nature.

3. The law is clear costs are not a penalty or damages.  

4. In my view, there is no basis to compensate Ms Varnum for expenses incurred in litigation.  She made no attempt to resolve the dispute in advance, and was unrealistic in her claim.  I dismiss her application for costs, and make orders accordingly.

I certify that the preceding thirty four (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 6 December 2012.

Associate: 

Date:  15 February 2013