Arthurman and Arthurman (No. 2)

[2008] FamCA 928

FAMILY COURT OF AUSTRALIA

ARTHURMAN & ARTHURMAN (NO. 2) [2008] FamCA 928

FAMILY LAW – COSTS - Between parties
FAMILY LAW – COSTS - Offer of settlement
FAMILY LAW – COSTS - Circumstances justifying order

Family Law Act 1975 (Cth)

Browne and Green (2002) FLC 93-115

APPLICANT AND RESPONDENT TO THE CROSS APPLICATION: Mr Arthurman

RESPONDENT AND CROSS APPLICANT: Ms Arthurman

FILE NUMBER: SYF 2938 of 2003

DATE DELIVERED: 16 October 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Fowler

HEARING DATE: By written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr J. Millar

RESPONDENT: In person

Orders

1. The wife is to pay one half of the costs of the husband as agreed or assessed of the hearing before Justice Fowler commencing on the first day of such hearing.  Payment of this amount is postponed until such time as the wife receives the benefit of Order 4 made on 18 March 2008.

2. Pursuant to r 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2938  of 2003

MR ARTHURMAN

Applicant

And

MS ARTHURMAN

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court are applications by the husband and wife in these proceedings for an order for the costs of and incidental to the property proceedings finally heard by me on 17 to 20 December 2007, as and from 29 July 2005.

2. An order for costs is sought also by the husband in relation to the application in which the above order is sought.

Background Facts

1. There were defended proceedings before me for orders for settlement of property.  Final orders were made in the proceedings on 18 March 2008.

2. Those orders were:

   “THE COURT NOTED:

   (1)      The following definitions for the purpose of these Orders:

   (a)“The [C] Property” means the property at [C], Folio Identifier […].

   (b)“The [C property] mortgages” means the two mortgages to the Commonwealth Bank of Australia secured against the title of the [C] Property dealing Nos. […] and […]

   (c)“The [M] Property” means the two separate properties at […A] and […B] [W] Street, [M], respectively Folio Identifiers […] and […].

   (d)“[H Pty Ltd]” means the company [H] Pty Ltd ACN […].

   AND THE COURT ORDERED THAT:

   (1)Within 30 days from the date of these Orders the following shall occur simultaneously:

   [C] Property

   (a)the wife is ordered to do all acts and things and sign all documents necessary to transfer to the husband all right, title and interest in the [C] property unencumbered.

   (b)the husband and the wife are ordered to do all acts and things and sign all documents necessary to discharge the mortgages, and the husband is ordered to repay the balance of the [C property] Mortgages on or before discharge, whether by way of refinance or otherwise.

   (c)the wife is ordered to do all acts and things and sign all documents to assign to the husband any interest in any plant and/or equipment associated with or sitting upon the [C] property as at the date of this document.

   (d)the husband is ordered to do all acts and things and sign all documents necessary to indemnify and keep indemnified the wife from:

   (i)all liabilities and repayments associated with the [C property] mortgages;

   (ii)all rates and taxes and all other outgoings including utility expenses relating to the [C] property.

   [M] Property

   (e)the wife is ordered to do all acts and things and sign all documents necessary to transfer to the husband all her right, title and interest in the [M] property subject to any existing mortgage.

   (f)the wife is ordered to give vacant possession of the [M] property on the day immediately prior to the date appointed for completion of the sale of […A, W Street] of the [M] property and to ensure the [M] property is left in a good state of repair.

   [H] Pty Limited (“[H Pty Ltd]”)

   (g)the wife is ordered to do all acts and things and sign all documents necessary to transfer to the husband or his nominee all right title or interest she has in any share in [H Pty Ltd].

   (h)the wife is ordered to do all acts and things and sign all documents necessary to transfer to the husband or his nominee all right title or interest she has in any loan account or other similar benefit or facility in [H Pty Ltd].

   (i)the wife is ordered to do all acts and things and sign all documents to resign from any office she holds in [H Pty Ltd].

   [H] Pty Limited Trust (“the Trust”)

   (j)the husband and the wife are ordered to do all acts and things and sign all documents necessary to forthwith dissolve the Trust.

   (2)Within 45 days the husband is ordered to do all acts and things and sign all documents necessary to sell the [M] property.

   (3)Paragraph 1 of Order 1 made on 22 November 2007 is discharged.

   (4)Within seven days of completion of the sale of the last of […A] and […B], [W] Street comprising the [M] property the husband shall pay or cause to be paid to the wife the sum of $911,009.00

   (5)If required to do so by the husband the wife will, within 14 days of such request:

   (a)do all acts and things and sign all documents to assign to the husband any licence or right of use related to any Permissive Occupancy associated with the [C] property.

   (b)do all acts and things and sign all documents to assign to the husband any right title or interest in the Building Approval, Building Consent, Development Approval and/or Development Consent associated with the [C] property.

   (6)      Pending the transfer of title of the [C] property:

   (a)the husband shall have the right to occupy the
   [C] property with [the parties’ child] (when he is with him) and shall pay and be responsible for all rates, charges and taxes related to the use and occupation of the [C] property;

   (b)neither the husband nor the wife shall mortgage, charge, encumber or assign their interest in the [C] property;

   (c)the husband and the wife shall each hold the [C] property in trust for the husband as tenants in common in shares consistent with these Orders.

   (7)Pending the date of completion of the sale of the [M] property:

   (a)the wife shall have the right to occupy […A, W] Street of the [M] Property with [the parties’ child] (when he is with her) and shall pay and be responsible for all rates, charges and taxes related to the use and occupation of […A, W] Street of the [M] property.

   (b)the wife shall not mortgage, charge, encumber or assign her interest in the [M] property.

   (c)the husband and the wife shall each hold the [M] property in trust for [H Pty Ltd] as tenants in common in shares consistent with these Orders.

   (d)the wife shall do all things required of her by the husband to facilitate the sale of each lot of the [M] property.  In particular the wife shall:

   (i)co-operate in all reasonable ways with the husband, real estate agent, solicitors and prospective purchasers in relation to the sale of each lot of the [M] property.

   (ii)allow the husband, the real estate agent and any tradesmen engaged by the husband and/or real estate agent access to the [M] property at all reasonable times for the purpose of preparing each lot (including gardens) for sale.

   (iii)make available any keys.

   (iv)allow access to each lot of the [M] property for inspections at all reasonable times requested by the husband and/or real estate agent.

   (v)ensure that the [M] property is in a neat and clean condition at the time of inspection by prospective purchasers.

   (8)Within six months the husband sell the Porsche Registration […].

   (9)The husband shall be solely entitled to the exclusion of the wife to all other property, furniture, contents, plant, equipment, tools, building materials and resources situated at the [C] property.

   (10)The wife shall be solely entitled, to the exclusion of the husband, to all other property, furniture, contents and resources situated at the [M] property.

   (11)Subject to the provisions of paragraph 10 and Annexure “A” to the Orders made 22 November 2007, the husband and the wife shall each solely be entitled to the exclusion of the other to all other property, furniture, contents and resources not already referred to in these Orders in the possession of that party at this date.

   (12)Save and except as these Orders provide to the contrary, each of the parties shall, by this Order, mutually release the other from all debts owing from one to the other.

   (13)Within 30 days the wife pay to the husband $3,950 being 50% of Single Expert costs paid by him to [Mr E].

   (14)Each party shall be at liberty to apply on seven days notice in relation to the implementation of these Orders.

(15)In the event that either party refuses or neglects to comply with the provisions of these Orders then the Registrar of the Federal Magistrates Court or the Family Court of Australia may pursuant to s.106A(1) of The Family Law Act 1975 execute all deeds and documents in the name of the husband and/or the wife and do all acts and things necessary to give validity and operation to the said Orders.

(16)The matter may be re-listed within the next seven days or such further time as the court allows for argument on costs failing which there will be no order as to costs.

(17)The exhibits may be returned upon the usual undertakings.

(18)All material produced in response to subpoenas be returned to the party who produced it.

(19)The matter be removed from the pending cases list.”

1. In support of the application filed herein the husband filed a statement of his financial position as at 12 June 2008 and an affidavit in which he deposed to an offer made to settle the proceedings, which was filed and served on the wife’s then solicitors, Biddulph and Salenger, on 15 July 2005.

2. That offer provided as follows:

   “TERMS OF OFFER

   1)That the wife pay or cause to be paid to the husband within
   28 days the sum of $150,000.00.

   2)That the wife transfer to the husband her interest in [C property], the property, plant and equipment identified by him.

   3)That the husband and wife as directors of [H] Pty Ltd resolve that:

   (a)any plant and equipment and other property belonging to (or said by the wife as belonging to) [H] Pty Ltd and presently in the care, control and possession of the husband is to be transferred to the husband; and

   (b)that the husband and wife resolve that [H] Pty Ltd forgives any debts owed to it by the husband.

   4)That the husband:

   (a)releases [H] Pty Ltd from repayment of any debts currently outstanding to the husband;

   (b)resigns as a director of [H] Pty Ltd;

   (c)transfers his share in [H] Pty Ltd to the wife or her nominee; and

   (d)does all things necessary to transfer to the wife all of his right, title and interest in the [W] Street, [M] property;

   (e)does all things necessary to vacate his position as a trustee of the [H] Trust.

   5)That the wife indemnifies the husband in respect of any liabilities of [H] Pty Ltd and the [H] Trust and in respect of any guarantees given by the husband personally on behalf of [H] Pty Ltd.

   6)That the property, plant and equipment listed below that is presently in the custody, possession, care or control of the wife be returned to the husband and that the husband be declared the legal and beneficial owner of this property plant and equipment:

   (a)Case 4 in 1 crawler tractor (“bulldozer”) and it’s (sic) accessories and parts (including ripper)

   (b)Ex-army trailer

   (c)Various hand tools, mechanic’s tools and equipment

   (d)Chisel plough

   (e)Stick rake

   (f)Single tine ripper

   (g)Three phase welder and leads

   (h)“Woods” battery charger

   (i)Metal detector

   (j)40’ shipping container and contents belonging to the husband

   (k)Pot belly stove

   (l)Yamah 850 watt portable geneset

   (m)AEG drill

   (n)Three-point linkage crane

   (o)Fencing wire coil

   (p)Avon inflatable rubber dinghy, oars and outboard bracket.

   7)That otherwise each of the parties retain their respective assets currently in their name or in their possession.”

3. He further deposes to a second offer made on the 6 December 2007 to settle the matter, a copy of which is annexed to his affidavit and set out hereunder:

   “1.That by way of s.79 adjustment the Court makes an order in terms of paragraphs 13 to 23 below.

   2.That within 75 days from the date of these Orders the following shall occur simultaneously:

   [C] Property

   (a)the wife is ordered to do all acts and things and sign all documents necessary to transfer to the husband all right, title and interest in the [C] property unencumbered.

   (b)the husband and the wife are ordered to do all acts and things and sign all documents necessary to discharge the mortgages and the husband is ordered to repay the balance of the [C property] Mortgages on or before discharge whether by way of refinance or otherwise.

   (c)the wife do all acts and things and sign all documents to assign to the husband any interest in any plant &/or equipment associated with or sitting upon the [C] property as at the date of this document.

   (e) (sic)         the husband is ordered to do all acts and things and sign all documents necessary to indemnify and keep indemnified the wife from:

   (i)all liabilities and repayments associated with the [C property] mortgages;

   (ii)all rates and taxes and all other outgoings including utility expenses relating to the [C] property.

   [M] Property

   That in the event they still own the [M] property:

   (f)the husband and the wife are ordered to do all acts and things and sign all documents necessary to cause the [M] property to be transferred to the wife unencumbered.

   (g)the husband and the wife are ordered to do all acts and things and sign all documents necessary to discharge the [M property] Mortgage and the wife is ordered to repay the balance of the [M property] Mortgage on or before discharge whether by way of refinance or otherwise.

   (h)the wife is ordered to do all acts and things and sign all documents necessary to indemnify and keep indemnified the husband from:

   (i)all liabilities and repayments associated with the [M property] mortgage;

   (ii)all rates and taxes and all other outgoings including utility expenses relating to the [M] property.

   [H] Pty Limited (“[H Pty Ltd]”)

   (i)the wife is ordered to do all acts and things and sign all documents necessary to transfer to the husband or his nominee all right title or interest she has in any share in [H Pty Ltd].

   (j)the wife is ordered to do all acts and things and sign all documents necessary to transfer to the husband or his nominee all right title or interest she has in any loan account or other similar benefit of (sic) facility in [H Pty Ltd].

   (k)the wife is ordered to do all acts and things and sign all documents to resign from any office she holds in [H Pty Ltd].

   [H] Pty Limited Trust (“the Trust”)

   (l)the husband and the wife are ordered to do all acts and things and sign all documents necessary to forthwith dissolve the Trust.

   Miscellaneous

   (m)the wife return to the husband his collection of gold necklaces & bracelets approximating 600 grams in weight.

   3.That if required to do so by the husband the wife will, within 14 days of such request:

   (a)do all acts and things and sign all documents to assign to the husband any licence or right of use related to any Permissive Occupancy associated with the [C] property.

   (b)do all acts and things and sign all documents to assign to the husband any right title or interest in the Building Approval, Building Consent, Development Approval &/or Development Consent associated with the [C] property.

   4.That pending the transfer of title of the [C] property:

   (a)the husband shall have the right to occupy the home with [the parties’ child] (when he is with him) and shall pay and be responsible for all rates, charges and taxes related to the use and occupation of the [C] property;

   (b)neither the husband nor the wife shall mortgage, charge, encumber or assign their interest in the [C] property;

   (c)the husband and the wife shall each hold the home in trust for the husband as tenants in common in shares consistent with these Orders.

   5.That pending the transfer of title of the [M] property:

   (a)the wife shall have the right to occupy the home with [the parties’ child] (when he is with her) and shall pay and be responsible for all rates, charges and taxes related to the use and occupation of the [M] property;

   (b)neither the husband nor the wife shall mortgage, charge, encumber or assign their interest in the [M] property;

   (c)the husband and the wife shall each hold the home in trust for the wife as tenants in common in shares consistent with these Orders.

   6.(a)       That within 60 days of the date of these orders the wife is ordered to pay to the husband or as he directs a sum (“the capital sum”) by bank cheque calculated as follows:

   62.5% of the parties net assets and liabilities less the value of all items retained by the husband pursuant to these Orders.

   (b)That in the event that the wife has not paid to the husband the capital sum within 90 days of the date of these orders then interest shall accrue on the capital sum (or so much of it as remains unpaid) at the rate prescribed in the Rules &/or Regulations until paid, interest to be calculated from the date of these orders.

   7.That in the event that the wife has not paid to the husband the capital sum within 90 days of the date of these orders then the wife shall immediately do all things and sign all documents necessary to sell the [M] property and the proceeds of sale shall be applied in the following Order and priority:

   (a)costs of sale including legal expenses and agents commission;

   (b)repayment of any mortgage debt secured on the [M] property;

   (c)to the husband so much of the capital sum as is unpaid (including interest)

   (d)the balance to the wife.

   8.That the husband shall be solely entitled to the exclusion of the wife to all other property, furniture, contents and resources situated at the [C] property.

   9.That the wife shall be solely entitled to the exclusion of the wife (sic) to all other property, furniture, contents and resources situated at the [M] property.

   10.That subject to the provisions of paragraph 10 and Annexure “A” to the Orders made 22 November 2007, the husband and the wife shall each solely be entitled to the exclusion of the other to all other property, furniture, contents and resources not already referred to in these Orders in the possession of that party at this date.

   11.That save and except as these Orders provide to the contrary, each of the parties shall, by this Order, mutually release the other from all debts owing from one to the other.

   12.That each party, as against the other, be solely liable for all and any costs, debts, expenses or liabilities of any nature whatsoever attaching to any asset or financial resource to which that party is entitled pursuant to these orders and that the liable party indemnify and keep indemnified the other party in respect of all and any such costs, debts, expenses or liabilities.

   13.That each party shall be at liberty to apply on 7 days notice in relation to the implementation of these Orders.

   14.That in the event that either party refuses or neglects to comply with the provisions of these Orders then the Registrar of the Federal Magistrates Court or the Family Court of Australia may pursuant to s.106A(1) of the Family Law Act 1975 execute all deeds and documents in the name of the husband and/or the wife and do all acts and things to give validity and operation to the said Orders.”

1. In response to the application of the husband, the wife filed two applications.  On 14 July 2008 the wife filed an application seeking the following orders:

   “1.The Husband’s Application filed on 9 May 2008 be dismissed.

   2.The Husband pay the Wife’s costs of an incidental to her Responses.”

   In an Application in a Case filed 23 May 2008 the wife also sought the following orders:

   “1.Leave be granted to the Wife to file an Application for costs out of time.

   2.The Husband pay the Wife’s costs of and incidental to the property proceedings heard on 17 December 2007 to 20 December 2007 as and from 10 September 2007.”

2. In support of her application the wife filed a statement of her financial position as at 23 May 2008 and an affidavit in which she deposed relevantly that she made an offer of compromise to settle matters with the husband on or about

   
   

   10 September 2007.  The terms of that offer were:

   “1.The parties shall immediately do all acts and things and sign all documents necessary to cause the property situate at and known as [C Property] in the State of New South Wales being the whole of the land contained in Folio Identifies (sic) […] (“the [C] property”) to be placed on the marked (sic) for sale and sold in accordance with the Terms of Sale annexed and marked “A”.

   2.Upon completion of the sale pursuant to Order 1, the parties shall do all acts and things and sign all such documents necessary to direct the proceeds of sale to be applied in the following manner and priority:

   a)In payment of agent’s commission and auction expenses (if any) due on the sale;

   b)In payment of legal costs and disbursements (if any) due on the sale;

   c)In payment of the amounts necessary to discharge mortgages to the Commonwealth Bank of Australia secured over the property;

   d)In payment of the loan to [Mr and Mrs T] in the sum of $25,000.00;

   e)In payment of the sums necessary to discharge all tax liabilities as assessed by the Australian Taxation Office arising from the sale;

   f)In payment of an amount equal to all or any increase in the mortgage to the Commonwealth of (sic) Australia secured over the property from September 2006 to the date of sale to the Wife;

   g)In payment of the sums necessary to discharge all secured debts; and

   h)The then balance to the Husband.

   3.The Husband shall indemnify and hold indemnified the Wife against any suits or claims by any person or entity for any other debt, fines, taxes or interest payable in relation to the [C] property including but not limited to any capital gains tax.

   4.The Husband shall simultaneously with effect being given to Order 1 be solely responsible for and indemnify and hold indemnified the Wife in respect of all liabilities associated with his [professional practice].

   5.Forthwith the Husband shall do all acts and things and sign all documents necessary to cause the Plan of Subdivision that is presently in the Husband’s possession in respect of the properties situate at and known as […A] and […B] [W] Street, [M], in the State of New South Wales being the whole of the land contained in the folio identifier […] (“the [M] properties”) to be registered.

   6.Upon effect being given to Orders 2 and 5, the parties shall do all acts and things and sign all documents necessary to cause the [M] properties to be placed on the market for sale and sold in accordance with the Terms of Sale annexed and marked “A”.

   7.Upon completion of the sale pursuant to Order 6 the parties shall do all acts and things and sign all such documents necessary to direct the proceeds of sale to be applied in the following manner and priority:

   a)In payment of agent’s commission and auction expenses (if any) due on the sale;

   b)In payment of legal costs and disbursements (if any) due on the sale;

   c)In payment of the sum necessary to discharge the debt to the Commonwealth Bank of Australia secured over the property;

   d)In payment of the sums necessary to discharge all tax liabilities as assessed by the Australian Taxation Office and Office of State Revenue arising from the sale;

   e)In payment of 50% of the remaining balance to the Wife; and

   f)In payment of an amount equal to all or any increase in the mortgage to the Commonwealth of (sic) Australia secured over the property from September 2006 to the date of sale to the Wife;

   g)In payment of an amount equal to 50% of the net assets of the parties excluding the [C] property and the [M] properties to the wife;

   h)In payment of the then balance to the Husband.

   8.The Husband shall indemnify the Wife against any suits, actions or claims by any person or entity for any other debt, fines, taxes or interest payable in relation to the [M] property including but not limited to any capital gains tax.

   9.Upon completion of sale pursuant to Order 7, the Wife shall do all acts and things and sign all documents necessary to give effect to the following:

   a)Resign as Secretary of the company [H] Pty Limited (ABN […]) of […] in the state of New South Wales (“the [H] company”);

   b)Transfer of the Wife’s shareholding in the [H] company to the Husband; and

   c)Resign as a Trustee of the [H] Pty Limited Trust (“the [H] Trust”).

   10.The Husband shall indemnify and keep the Wife indemnified in respect of all liabilities of the [H] company and the [H] Trust or the Wife as a consequence of her interest in or employment by or association with the [H] company and the [H] Trust including but not limited to all proceedings, suits or claims of whatsoever nature brought against the [H] company or the [H] Trust and/or the Wife including but not limited to her interest as a shareholder, former director and/or Trustee for the [H] company and the [H] Trust such liability to include income tax, PAYG tax, GST, CGT or any other taxation liability.

   11.Within fourteen (14) days of the date of these Orders, the Husband to make available for collection by the Wife the following items currently in his possession:

   a)Aluminium scaffolding;

   b)Stihl “cut quick” saw;

   c)Compressor and accessories;

   d)Migomag MIG Welder;

   e)Three wheel trolley;

   f)Rigmata 1.5 Tonne Handwinch;

   g)Hafco ½ - 2 “ Hydraulic Pipe Bender;

   h)Flextool plate compactor driven by Honda 5.5 petrol engine;

   i)Disston & Sons Antique Cross Cut Saw Cira 1860;

   j)Flextool plate compactor driven by Honda 5.5 hp petrol engine.

   12.Within 14 days the Husband will forthwith do all acts and things and sign all documents necessary to effect the transfer of the Trailer registration number […] unencumbered to the Wife and thereafter cause the fresh registration documents to be forwarded to the Wife.

   13.Subject to the terms of and compliance with these Orders, the parties each be declared to have sole right, title and interest in all other property, assets, superannuation and financial resources in her or his respective possession and/or control.”

Section 117 considerations

1. The Court has a broad discretion as to the orders that it makes for costs and that discretion is set out in section 117(2) of the Act.  In the consideration of the exercise of that discretion I am obliged to consider the matters set out in section 117 (2A) of the Act.  Those matters are set out in the following sub lettered sub sections of that section namely:

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

1. The financial circumstances of the parties are different.  The wife has submitted that the husband’s capacity to pay costs was, and is, greater than hers and that his income or earning capacity is greater also.

2. The husband I accept has a better earning capacity than the wife, and as a result of my judgment, more capital than she will have.

3. However, either of them is able to meet the requirement of an order for costs out of the proceeds of the litigation and any order I make would be payable upon the proceeds becoming available to them.

4. Each of the husband and wife has filed an up to date statement of their financial position.  I have had regard to them but note that given the manner in which I propose an order come into effect, it will be at a time when their financial position will be significantly different.

(b)    whether any party to the proceedings is in receipt of legal aid and, if so, the terms of the grant of that assistance to that party

1. There is no evidence that either party is in receipt of legal aid.

(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

1. There is nothing in the parties’ conduct of the litigation which in my opinion would be determinative of a cost consideration save for the date upon which proposals for compromise were made, and the date upon which agreement was reached on the value of the parties’ property at C, and the value of H Pty Limited which occurred during the trial, the husband conceding the valuation asserted by the wife for the C property.

2. The wife does point to a delay in the filing of the husband’s offer of compromise, but in the circumstances that delay would reduce the period of time to which a costs order would apply were I to make an order based on that offer to operate against her.

   (d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

3. There is no procedural inadequacy alleged by either party which would be determinative of whether an order should be made, and none is alleged in submissions made to me on this issue.

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

1. No party 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

2. The evidence of the husband is that he made an offer, as previously set out in these Reasons, on 6 December 2007.

3. The husband submits that having regard to the terms of the offer I ought to make an order that the wife pay his costs from that date.  The effect of the offer is to provide the husband with an amount equivalent to 62.5% of the net assets and the wife 37.5% of the assets, with the husband to retain the C property, something he had always sought.

4. The effect of my judgment is that the husband is to receive 62% of the net assets and the wife 38% of them, with the husband to retain the C property.

5. The effect of this portion of section 117 and the practice of the Court to require offers of compromise to be made and maintained in actions before it, is to require parties to consider seriously the consequences of proceeding with litigation, and requiring the other party to expend money on that process.  The rejection of an offer which ultimately reflects the judgment of the Court is a matter which must be taken seriously.

6. In Browne and Green (2002) FLC 93-115 at paragraph 57 the Full Court said that the failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made, to allow proper consideration of it, is something to which the Court should give very significant weight and that it is clearly a circumstance that would justify the making of an order for costs.

7. It is submitted by the husband that the wife was equipped with all the necessary information to enable her to properly evaluate the offer at the time the offer was made in December.

8. The wife has submitted that there remained at the date of the husband’s offer an unresolved issue as to the value of the C property which she says was not resolved until the 18 December 2007.  She further says that the value of H Pty Ltd was not determined until the same date.  She says that it was during the second day of the trial that the expert valuer’s report was available.  That report also made known some of the Capital Gains Tax consequences which would flow from various orders.  She also notes that the offer compels the wife to pay the husband a sum of money which the orders do not.

9. The wife also points to inadequacies which she says exist in relation to the wording of the offer, given the nature of the ownership of the properties at M.

10. She also makes a calculation which she says demonstrates that her earlier offer would have in fact divided the assets of the parties in the order of 78% to the husband and 22% to the wife.

11. The wife says that an offer which she made on the 23 November 2007 would have provided her with 40% of the net assets.

12. An earlier offer made on the 10 September 2007 would have been, she says, more favourable to the husband than the orders made but that offer was withdrawn prior to acceptance and in any event involved the sale of the one property that the husband always had wanted to keep, and was his at the commencement of the cohabitation.

13. Certainly even if I accepted the wife’s submission as to the effect of the earlier offer it would not, in my view, assist her much since it was withdrawn and the husband is seeking costs arising only since the making of his last offer.  If I accepted the wife’s assessment of the value of her later offer there would certainly be an offer on the table at the time of hearing which was close to the order finally made.

14. In reply, the husband submits that the issue of value of the property at C was a live issue for each of them and that the risk of a finding inimical to their claim was a risk equally shared.  I agree that that is so but say that the wife, in order to make an informed decision on his offer, needed to have a value for that property, since the husband proposed to retain it.

15. The determination of the value of H Pty Ltd the husband submits was awaited by both parties and likewise each of them faced a risk as to the determination of that issue.

16. In my view, it is not to be drawn from Browne and Green that an offer should not operate to put a party at risk as to costs only at a time when all issues are resolved, but a party must have adequate knowledge to enable them to make an informed decision.

17. It is pointed out by the husband that the offer that he made required the wife to pay certain monies because at that time it was her expressed wish to retain the M properties.  It is submitted the terms of the offers were consistent with what the wife at that time wanted, subject to the C property being otherwise dealt with.  It is, in any event, an offer which gave to the wife a certain value of the assets.  It is further submitted by the husband and is the fact that the parties at trial agreed to a valuation of the H Pty Ltd interests different to that proposed by the independent expert.  Her calculation, therefore, of her values and as to the effect of her offer do not take that into account.

18. The offer of the wife involved a sale of the C property and that was something the husband always sought to avoid.  At the outset of the proceedings the wife sought an order that the property be transferred to him and he received it in the Court’s orders.  In the circumstances, the husband was not benefited in the same way by her offer as he has been by the orders of the Court.

(g)    such other matters as the Court considers relevant

1. My primary decision in this case is the subject of an appeal.  I have nevertheless been asked to give my decision on costs notwithstanding that fact, rather than await the outcome of the appeal.

2. Taking all the relevant matters into account I have come to the conclusion that it is just and fair that the wife should bear some part of the costs of the husband.  The offer was made on 6 December 2007 and it was so close to the outcome of the trial as to be almost identical.  The offer of the wife which was current at the time of hearing did not have that proximity to the result in quantum and nor was it in the form which ultimately was ordered, in that it did not propose other than a sale of the property the husband wished to retain.

3. It was not however until the trial commenced that the wife was able to be fully informed on matters which would enable her to make an informed decision on the offer.  Accordingly, I believe that an appropriate contribution to the husband’s costs is that the wife should pay one half of the costs of the husband of the days of hearing before me.  Those costs will be as agreed or assessed.  I decline to make an order for the costs of this costs application.  I certify that this was an appropriate case for counsel to be briefed.

I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.

Associate: 

Date:  16 October 2008