Y and S

[2007] FCWA 2

JURISDICTION:

FAMILY COURT OF WESTERN AUSTRALIA

ACT:	FAMILY COURT ACT 1997
LOCATION:	PERTH
CITATION:	Y and S [2007] FCWA 2
CORAM:	THACKRAY J
HEARD:	WRITTEN SUBMISSIONS
DELIVERED:	12 JANUARY 2007
FILE NO/S:	PT 6604 of 2004
BETWEEN:	Y

Applicant

AND

S

Respondent

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Catchwords:

Costs - indemnity costs - oral offers - necessity for offers to be stated clearly

Legislation:

Family Court Act 1997, s 237(1), s 237(2), s 237(3)

Category: Not Reportable

Representation:

Counsel:

Applicant:	Ms L Tudori
Respondent:	Mr M Berry

Solicitors:

Applicant:	Linda Tudori & Associates
Respondent:	Shann Family Lawyers

Case(s) referred to in judgment(s):

Collins & Collins (1985) FLC 91-603
Fitzgerald v Fish (2005) 33 Fam LR 123
Harris & Harris (1987) FLC 91-822
I and I (No 2) (1995) FLC 92-625
Johnston & Johnston (2004) FLC 93-189
Kilich & Wood (2003) FLC 93-169
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1 I am required to determine an application for costs made by [Mr

Y].

Background

2 In September 2006 I delivered judgment in relation to the parties’ applications for property settlement. The orders sought by [Mr Y] would have resulted in [Ms S] being required to pay him $204,600. [Ms S] proposed that she not be required to pay him anything. The orders I made required her to pay $81,000, together with interest at the rate of 8% per annum from 1 November 2004 until the date of payment.

The law

3 Subsection 237(1) of the Family Court Act 1997 provides that, subject to certain other provisions of the Act, each party to proceedings is to bear their own costs. Subsection 237(2) provides that if the Court is of the opinion there are circumstances that justify doing so, the Court may subject to certain other provisions, including subsection (3), make such orders as to costs as it considers just.

4 Section 237(3) provides as follows:

“In considering what order (if any) should be made under

subsection (2), a court must have regard to –

(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, admissions 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 a court;
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(e)	whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)	whether a party to the proceedings has made an offer in writing to another 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”.

5 In considering the equivalent provision in the Family Law Act 1975, the Full Court of the Family Court of Australia in Collins & Collins (1985) FLC 91-603 described the discretion to award costs as being a “broad” one, and noted that the various enumerated factors are not to be read in a restrictive way. The Full Court in Fitzgerald v Fish (2005) 33 Fam LR 123 also made clear that any one of the factors referred to may be the sole foundation for an order for costs. Nevertheless, as an earlier Full Court said in I and I (No 2) (1995) FLC 92-625 at 82,277, the matters enumerated “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”.

Section 237(3)(a)

6 [Mr Y] points to the fact that [Ms S] has assets of significant value, whereas he has assets of much less value. There is no doubt that this is the case, however, it needs to be remembered that this was a very short relationship and that [Ms S] made by far the greater contribution to those assets. It should also be noted that [Mr Y] is a [specialist] with a high income earning capacity.

Section 237(3)(b)

7 Neither party was in receipt of legal aid.

Section 237(3)(c)

8 [Mr Y] relied on five matters under this subheading. Remarkably, the first of these concerns [Ms S]’s successful objection to [Mr Y]’s first solicitor continuing to act for him, on the basis that the solicitor had already advised her about the same matter. Not only was her objection upheld by the Court, but [Mr Y] was ordered to contribute to her costs of the interlocutory application she was required to make to prevent the solicitor from continuing to act.

9 The second and third matters relied upon by [Mr Y] under this subparagraph were not sufficiently developed to make it appropriate

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for me to even consider them. (Out of fairness to her, I should record that the solicitor now acting for [Mr Y] has been recently instructed and did not have the conduct of the matter at trial.)

10 The fourth matter relied upon under this subheading related to the application [Ms S] made to re-open after the trial had concluded. Once again, I observe that it would ordinarily be expected that the submission would be developed somewhat more fully than it was. I do recall, however, that whilst the application made by [Ms S] to re- open was adjourned, rather than dismissed, there was a great deal of merit in the submissions made on behalf of [Mr Y] in opposing the application. I note that [Ms S] made no reference at all to this part of [Mr Y]’s submissions.

11 The final issue relied upon under this subheading was [Ms S]’s alleged “unrealistic approach to making offers of settlement for a final resolution of the proceedings in circumstances where [she] should have known that the orders sought by her had no chance of success”. Apart from noting that I consider issues relating to negotiations are more appropriately addressed under s 237(3)(f), I observe that it could just as easily be said of [Mr Y] that he should have known the orders sought by him “had no chance of success”.

Section 237(3)(d)

12 Not relevant.

Section 237(3)(e)

13 Neither party was wholly unsuccessful.

Section 237(3)(f)

14 [Mr Y] acknowledged in his submissions that neither party made a written offer of settlement that came “within close range of the judicial determination”. He did not specify what offers were made, but [Ms S] provided details in her submissions.

15 On 19 May 2006, a matter of days before trial, the parties exchanged their only written offers of settlement. [Mr Y] sought 30% of the net equity in [Ms S]’s two properties in [the suburb], which she estimated would have involved her paying him $205,000. [Ms S] made an offer of settlement that would have required her to pay $45,000. Whilst both offers were far removed from what I ultimately ordered, the offer made by [Ms S] was much closer to the mark.

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16	I note that no explanation was provided by either party for their failure to comply with the clear direction given by a Registrar on 12 September 2005, which required each of them to make a genuine offer to settle in writing within 28 days.

Section 237(3)(g)

17 [Mr Y] also submitted that the Court should take into account the terms of an oral offer of settlement made in the weeks leading up to the trial. He claimed in an affidavit filed in support of his application for costs that he instructed his solicitors that he would settle on the basis of a payment of “no less than $100,000”. He went on to say that his solicitor later told him that “my offer of $100,000 was not acceptable to the Respondent”.

18 It was not disputed that an oral offer of settlement can be taken into account: Kilich & Wood (2003) FLC 93-169 at 78,725. [Ms S] did, however, submit that the oral offer was made on a “without prejudice” basis. I do not need to consider that submission, as I am not prepared to take into account an offer as vague as the one relied upon by [Mr Y]. As the Full Court has said in Johnston & Johnston (2004) FLC 93-189 at [35], “[t]he terms of any offer of compromise must be stated clearly, precisely and with reasonable certainty”. See also Harris & Harris (1987) FLC 91-822 at 76,187.

19 It does not even appear from his submissions that [Mr Y]’s solicitor advised [Ms S]’s solicitor that he would settle for a payment of $100,000 – his instruction to his solicitor was that he would settle for “no less than $100,000”. Even if a firm offer of settlement had been made at a figure $100,000, there is no indication of what other terms would have accompanied such a proposal – for example, how long was [Ms S] to be allowed to make the payment, was there to be interest payable, was the payment to be secured, were there to be any default provisions for the sale of property in the event payment was not made?

20 Furthermore, even though [Mr Y]’s solicitors may have made this oral proposal of settlement on 10 May 2006, he then proceeded, a few days later, to make a written offer of settlement seeking a very much larger amount.

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Conclusion

21 I regard [Mr Y]’s application for costs as being so weak that it is surprising it was made at all, let alone that he asked the Court to order costs on an indemnity basis. The only element of his submission that had any merit related to the costs of the application to re-open. Were it not for the expense to which [Mr Y] was put to responding to that application, I would have acceded to the application made on behalf of [Ms S] that [Mr Y] should pay her costs of answering his application for costs.

22 [Ms S] sought to quantify her costs of replying to the costs application at $1,500. I consider this is far too much, given that the submissions were only slightly longer than two pages. The appropriate amount of costs in my view would have been around $400, which would very roughly be the amount of costs properly payable in responding to the application to re-open. In my view, the proper outcome is for those costs to cancel each other out, with the result that there will be no order as to costs.

Form 2 Application of 20 January 2006

23 I am also required to determine the application for costs made by [Ms S] relating to a Form 2 application filed on 20 January 2006 seeking “formal discovery in relation to a variety of documents”. Orders were made in terms of the application and costs were reserved to the trial Judge (or to the Magistrate who made the order in the event it was considered more appropriate that he deal with the application). I note from the record of proceedings before the Magistrate on 30 January 2006 that [Mr Y]’s solicitor was excused from attendance and no response was made to the application. I presume therefore that there was no basis for opposing the orders. In those circumstances, there seems a strong basis for an order that [Mr Y] should pay [Ms S]’s costs.

24 [Ms S] seeks costs in the sum of $1,000 relating to her Form 2 and the attendance at court. No information was provided to support the payment of such a large amount of costs for such a simple application. The written application was short. The matter was listed for hearing at 10.00 am and was stood down at 10.19 am. It was recalled at 3.48 pm and the matter was then resolved in two minutes. It was unclear for how long counsel was required to wait at court. In these circumstances, I am unable to assess the amount of costs

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properly payable. I consider the matter should be remitted for determination by the Magistrate who dealt with the matter if the parties are unable to agree the quantum of costs.

Orders

1. The Applicant’s application for costs is dismissed.

2. The Respondent’s application for costs of responding to the Applicant’s application for costs is dismissed.

3. The question of the Respondent’s costs of the Form 2 application filed on 23 January 2006 be listed for hearing before Magistrate Monaghan upon written request for such listing being made.

I certify that the preceding [24] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate