BAILEY and BELL

[2017] FCWA 135

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: BAILEY and BELL [2017] FCWA 135

CORAM: DUNCANSON J

HEARD: WRITTEN SUBMISSIONS

DELIVERED : 25 OCTOBER 2017

FILE NO/S: PTW 4454 of 2014

BETWEEN: MS BAILEY

Applicant

AND

MR BELL
Respondent

Catchwords:

COSTS - Conduct of the parties in relation to the proceedings - Offers - Where the husband is ordered to contribute to the costs of the wife

Legislation:

Family Law Act 1975 (Cth) s 117

Category: Reportable

Representation:

Counsel:

Applicant: Ms A Tait

Respondent: Self-Represented Litigant

Solicitors:

Applicant: Ball & Co.

Respondent: Self-Represented Litigant

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

Browne v Green (2002) FLC 93-115

Collins and Collins (1985) FLC 91-603

Fitzgerald v Fish (2005) 33 Fam LR 123

I and I (No 2) (1995) FLC 92-625

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1On 3 July 2017 I delivered reasons for judgment in proceedings between the husband, [Mr Bell] and the wife, [Ms Bailey]. On that day I made orders dividing the property of the parties between them. The wife seeks an order for costs in relation to those property proceedings.

BACKGROUND

2At trial the wife sought orders that if the husband sought to retain the former matrimonial home at [Country Town A] ["the Country Town A property"] he should pay her a cash sum such that she retain 67.5% of the parties' property overall. The husband sought an order that the property of the parties be divided equally. He sought to retain the Country Town A property and pay to the wife a sum reflecting that equal division.

3I found that the total value of the property of the parties was $455,428. In my reasons I found that the wife should receive 60% of the property and the husband 40% of the property.

4Taking into account assets and liabilities to be retained by each of the parties, I ordered that the husband pay to the wife the sum of $234,454. He would otherwise retain the Country Town A property.

ORDERS SOUGHT

5The orders sought by the wife are contained in her application filed 9 August 2017. She seeks an order that the husband pay her costs to 5 May 2017 fixed in the amount of $25,000.

6In his response filed 18 September 2017 the husband seeks an order that each party pays their own legal costs. The parties relied on their affidavit evidence filed and were informed that unless a party requested otherwise the proceedings would be determined in chambers.

7The wife says she has incurred total costs of $45,954 with her solicitors. Those costs relate to both property and parenting matters. She seeks a contribution to her costs incurred with respect to property matters in the sum of $25,000, although she says her total costs in that regard are at least $27,263 excluding hearing fees.

8The husband had representation early in the proceedings. He says he has incurred costs of $20,000 with his lawyers in relation to parenting and property matters.

THE LAW

9Subsection 117(1) of the Family Law Act 1975 (Cth) ("the Act") provides that, subject to s 117(2), each party to proceedings shall bear his or her own costs. Subsection 117(2) provides that if the court is of the opinion there are circumstances that justify it in doing so, the court may, subject to s 117(2A), make such orders as to costs as it considers just. Subsection 117(2A) provides as follows:

In considering what order (if any) should be made under subsection (2), the court shall 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 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.

10The Full Court of the Family Court of Australia in Collins and Collins (1985) FLC 91-603 described the discretion conferred by s 117 as being a "broad" one, and noted that the s 117(2A) factors are not to be read in a restrictive way. The Full Court said in I and I (No 2) (1995) FLC 92-625 at 82,277, the relevant matters in s 117(2A) "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". The Full Court in Fitzgerald v Fish (2005) 33 Fam LR 123 also made clear that any one of the factors referred to in s 117(2A) may be the sole foundation for an order for costs.

11It is necessary for me to take into account all of the relevant matters in s 117(2A) and balance them to determine whether the overall circumstances justify making an order as to costs.

Section 117(2A)(a)

12At the time of trial the wife was in employment. Her employment has since been terminated and she is unemployed. She is supported by her partner who provided her with financial assistance in meeting her legal costs.

13At trial the wife owned some Woolworths shares worth $2,440. She had modest superannuation benefits. The wife owned a motor vehicle worth $3,000. That vehicle has since been written off and she has insufficient funds to pay for a replacement vehicle.

14The husband intends to retain the Country Town A property and he has obtained pre‑approval for a loan to enable him to do so and pay out the wife. The husband owns a number of vehicles and [the family business]. He will be responsible for the payment of the home loan of $198,000. He has modest superannuation benefits. The husband is in employment as a [plumber] and at trial the income of his business varied between $500 and $2,500 per week. He draws $880 per week by way of personal income.

15The husband is in a position to meet a costs order, should one be made.

Section 117(2A)(b)

16Neither party to the proceedings is in receipt of assistance by way of Legal Aid.

Section 117(2A)(c)

17This concerns the conduct of the parties as litigants in these proceedings.

18The wife refers to the husband's failure to file court documents in a timely manner necessitating an application by her to proceed on an undefended basis. In that respect he was ordered to pay her costs fixed at $300.

19The husband failed to file his trial documents on time and subject to the discretion of the trial judge, the wife was given leave to proceed on an undefended basis.

20The husband attended trial and sought to be heard. The husband was given an opportunity to consider the wife's trial documents. He was given an opportunity to compile his own. This prolonged the proceedings and increased the wife's costs.

21The husband failed in his duty of disclosure, something I took into account when considering relevant matters under s 75(2) of the Act.

22The husband's conduct, to the extent that he failed to comply with orders and prolonged the proceedings, is a circumstance justifying an order as to costs.

Section 117(2A)(d)

23The wife refers to the husband's failure to file documents as ordered, although I have taken this into account above when considering the husband's conduct.

Section 117(2A)(e)

24The wife sought an order that she receive 67.5% of the parties' property. The husband sought an order that the property be divided equally. I ordered that the wife receive 60% and the husband receive 40%. Taking into account the evidence and the outcome ordered by me, neither party was wholly unsuccessful.

Section 117(2A)(f)

25The wife says that on 26 May 2016 she offered to settle the property proceedings on the basis that she received 55% of the net assets of the parties, which at that time she calculated would require the husband to pay her the sum of $203,525.

26The husband did not respond to that offer.

27On 20 October 2016 after the conciliation conference, the wife's solicitors wrote to the husband informing him that she would be prepared to accept a payment of $190,000. The husband did not respond.

28On 6 December 2016 the wife's solicitors wrote to the husband referring to the offer dated 20 October 2016 and putting him on notice that trial affidavits would have to be prepared as the matter had been listed for a readiness hearing on 7 February 2017. The husband did not respond.

29On 12 January 2017 the wife's solicitors wrote to the husband's mortgage broker informing him that she would be prepared to accept a payment of $195,000. By that time she had prepared her trial documents. A minute of consent orders was sent to the husband's mortgage broker.

30In Browne v Green (2002) FLC 93-115 at [57], the Full Court emphasised the importance of offers. The Full Court said:

We think that whilst s 117(2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made. The insertion of s 117C into the legislation is a clear indication of the desire of Parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. 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 give it a proper consideration, is something to which very significant weight indeed ought normally be given. It is clearly a circumstance that would justify the making of an order for costs in favour of the husband.

31It is clear from the wife's offers at an early stage of the proceedings she was prepared to accept less than that to which she was ultimately found entitled. At an early stage in the proceedings she was prepared to accept $203,525, thereafter $190,000 and subsequently $195,000. All of the offers made by the wife provided for her to receive less than was ordered to be paid to her. The husband would have been better off had he accepted any of the wife's offers. This is a circumstance justifying an order for costs.

Section 117(2A)(g)

32The husband says that after separation he maintained the matrimonial home and paid all the costs in relation thereto. I took this into account when considering the parties' respective contributions.

33He refers to the parenting proceedings which have not yet been concluded. The wife does not seek a contribution to her costs in respect of those proceedings.

CONCLUSION AS TO COSTS

34There are circumstances which justify the making of an order for costs in favour of the wife, primarily the husband's failure to accept the wife's offers to settle, including the first offer made early in the proceedings.

35The wife estimates her total costs incurred to her solicitors for property matters amount to $27,263. In seeking payment of $25,000 from the husband, the wife seeks what would appear to be close to indemnity costs. It also appears from the invoices annexed to the wife's affidavit that there is some overlap between property and parenting matters in the earlier accounts. I note however that the wife has not pressed any charges for applications with which she did not proceed.

36Although the wife does not specifically seek an order for payment of indemnity costs, she seeks payment of an amount just short of these costs. I do not consider that the circumstances of this case are such that I should make the very great departure from the normal standard, nor are the circumstances exceptional that such an order for indemnity costs would be made. The basis of a costs order should be party/party costs.

37In my discretion I intend to fix the amount of those costs. In doing so the parties will not incur further costs of an assessment or the delay in resolving the matter overall.

38In the exercise of the broad discretion which I have, I intend to order that the husband make a contribution to the wife's costs of $12,500. I consider such an order to be just in the circumstances.

THE ORDERS

1The husband pay to the wife the sum of $12,500 within 42 days.

2The application and response be otherwise dismissed.

I certify that the preceding [38] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate