Boyer & Conrad
[2022] FedCFamC1F 303
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Boyer & Conrad [2022] FedCFamC1F 303
File number(s): SYC 2103 of 2021 Judgment of: WILSON J Date of judgment: 12 May 2022 Catchwords: FAMILY LAW – ARBITRATION – application for indemnity costs – application dismissed. Legislation: Family Law Act 1975 (Cth) s s90SF(3) 117(1), 117(2A) Cases cited: Agosti & Agosti [2021] FedCFamC1F 72
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Kennon v Kennon (1997) 22 Fam LR 1
Mallet v Mallet (1984) 156 CLR 605
Stanford v Stanford (2012) 247 CLR 108Division: Division 1 First Instance Number of paragraphs: 15 Date of last submission/s: 29 April 2022 Place: Melbourne Solicitor for the Applicant: Russell Kennedy Aitken Lawyers Solicitor for the Respondent: Crawford Ryan Lawyers Pty Ltd ORDERS
SYC 2103 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BOYER
Applicant
AND: MR CONRAD
Respondent
ORDER MADE BY:
WILSON J
DATE OF ORDER:
12 MAY 2022
THE COURT ORDERS THAT:
1.The applicant’s indemnity costs application filed on 31 March 2022 is dismissed.
2.Each party must bear his and her own costs of the proceeding and the arbitration.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Boyer & Conrad is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
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REASONS FOR JUDGMENT
WILSON J
Following the publication of the arbitral award in this proceeding the de facto wife[1] applied for the de facto husband [2] to pay her costs of this proceeding on an indemnity basis. She sought orders in a cascading range of amounts.
[1] In these reasons I call the applicant “the wife” although she was not married to the respondent.
[2] In these reasons I call the respondent “the husband” although he was not married to the applicant.
In his response, the husband sought orders that the wife pay the costs of the proceeding and, to that end, that the husband have leave to apply $111,000 from the amount to be paid under the award towards costs.
Both parties filed affidavits in support of their costs contentions. The solicitors for the parties prepared written submissions on costs.
These reasons explain why, in my view, the ordinary principle of costs reposed in s 117(1) of the Family Law Act must apply.
IN GREATER DETAIL
On 1 April 2022 I made orders registering the arbitrator’s award pursuant to s 13H of the Family Law Act. Submissions on costs were ordered, the last date for the filing of reply submissions being 29 April 2022. The parties duly complied.
The arbitration was conduct over two days in October and one day in December 2021 with the award being published on 3 March 2022. With the arbitrator’s customary efficiency and skill, the orders made included an order requiring the husband to pay the wife $250,000. The amount ordered for spousal maintenance was $400 per week (the award, erroneously, provided “in the sum of $400 per week per wife”) payable fortnightly in arrears from the date of the award for three years and three months.
The arbitrator made several observations about aspects of the case beyond simple contribution assessments. For example, the arbitrator observed that –
(a)controversy initially surrounded the manner in which the wife applied the proceeds of sale of a property in Japan although the arbitrator ultimately found that no significant portion of those funds was applied for the benefit of the parties;
(b)upon the parties separating the husband withdrew his sponsorship of the wife in her application for the grant of permanent residency in Australia;
(c)the wife was paid in the sum of $10,156.25 by way of victim support by the New South Wales Department of Justice;
(d)between late May and early June 2021 the husband paid the wife a total of $36,350 pursuant to interim orders of the Federal Circuit and Family Court of Australia;
(e)in October 2021 the wife was granted a subclass 801 visa;
(f)the net value of the parties’ property was a little over $4,105,000;
(g)to refuse orders altering in some manner the parties’ property interests would not be just and equitable despite the relationship being relatively short and despite the husband owning the property he owns now when the relationship commenced and despite the wife having made contributions limited to that of homemaker;
(h)on certain issues the wife’s credit was impugned with the consequence that the evidence of the husband was preferred to that of the wife where that evidence conflicted and where an absence of documentary evidence existed;
(i)the asserted controlling and abusive behaviour said by the wife to have been exhibited by the husband in support of a Kennon v Kennon[3] claim had not been made out;
(j)the Kennon v Kennon claim failed;
(k)the parties cohabited for a period of 44 months;
(l)during that period the parties maintained their property and income largely separately;
(m)applying the principle in Mallet v Mallet,[4] the wife’s contributions were appropriately recognised as being token for which the sum of $150,000 was a just and equitable assessment;
(n)the sum of $100,000 is just and equitable as an adjustment in favour of the wife under s 90SF(3) of the Family Law Act; and
(o)the spousal maintenance claim was determined in the manner already mentioned.
[3] (1997) 22 Fam LR 1.
[4] (1984) 156 CLR 605.
Rather than adjusting property interests by reference to a percentage, the learned arbitrator made some specific adjustments of dollar amounts in arriving at a determination that was, in all the circumstances, just and equitable, consonant with the learning in Stanford v Stanford.[5]
[5] (2012) 247 CLR 108.
THE WIFE’S MAIN GROUNDS
In support of her costs application the wife asserted that the husband’s conduct represented a proper basis for the making of an indemnity costs order. She relied on the information in her affidavit made 31 March 2022. She also asserted that the husband rejected a proposal put by her being an amount less than the sum awarded to her.
So far as the asserted conduct by the husband was concerned, the wife addressed issues such as her vacating the Suburb B property. She described certain conduct of the husband as the husband’s attempts to control her. Not only is that inadmissible for being a conclusion or the expression of an opinion but that assertion was also a submission, not a material fact. The applicable court rules require deponents to depose to material facts. I do not accept the deponent’s characterisation of the husband’s conduct as “evidence” and I do not accept its characterisation as being the husband’s attempts to control her. So far as she deposed to the husband’s purportedly defective disclosure, the arbitrator made observations about the husband’s disclosure adversely affecting the conduct of the arbitration. I do not accept the wife’s assertions that the husband should be visited with an indemnity costs order by reason of his conduct of the case or by reason of any deficiency in his disclosure.
So far as the offer of compromise was concerned, she asserted that on 10 November 2021 she made an offer to the husband that she would accept a payment to her of $280,000, to which, she said, she received no response. She said that the arbitrator’s award involved payment to her of an amount less than that sum meaning that, had the husband accepted her proposal, he would have been better off in the outcome.
The letter from the wife’s solicitors dated 10 November 2021 was said to be the sole repository of the wife’s settlement proposal. That proposal mentioned the respondent paying the applicant $280,000 within six weeks of “these orders” (that was the wording in paragraph 1). But the proposal said nothing of spousal maintenance. The figure of $280,000 was to be contrasted with the amount ordered by the arbitrator, namely $250,000. To that extent, the wife compared $280,000 with $250,000, a difference of $30,000. On that differential she said the offer was more favourable than the award. But the 10 November 2021 proposal failed to incorporate an amount for spousal maintenance. The arbitrator ordered $400 per week (he called it “$400 per wife”) for three years and three months. When translated to monetary terms, that was $400 per week for three years and three months (52 weeks per year by three years, i.e. 156 weeks) plus three months (i.e. 12 weeks) (totalling 168 weeks by $400) thereby deriving the sum of $67,200. When the total of $250,000 was aggregated with $67,000, the sum thereby produced was $317,000. That was substantially greater than was the sum recorded in the 10 November 2021 proposal. In other words, the wife achieved a greater amount in the award than was offered in her 10 November 2021 proposal.
Whether costs followed depended in part on a proper construction of the 10 November 2021 proposal. It was incomplete because it was silent on the issue of spousal maintenance. In other words, on a fair construction of the 10 November 2021 proposal it was not possible for the respondent to assess whether the settlement proposal was an all-in proposal. That was for the simple reason that it was silent on the subject of spousal maintenance. On the need for a proposal to be expressed on an “all-in” basis, I wrote on the issue in Agosti & Agosti.[6] Even if the respondent had been attracted by the 10 November 2021 proposal, any acceptance of it would not have had the effect of disposing of the entirety of this litigation as the spousal maintenance issue remained.
[6] [2021] FedCFamC1F 72.
I do not agree that the wife proposed a more favourable outcome in her 10 November 2021 proposal than was achieved in the award. That proposal did not offer to resolve the whole of the litigation. It failed to address the wife’s spousal maintenance claim.
DISPOSITION OF THE COSTS APPLICATION
Far from there being circumstances that enliven an indemnity costs application, I was unable to ascertain how the wife could legitimately make good a claim for any form of costs order. Nothing in the conduct of the proceeding enlivened an order for costs against the husband and the proposal that the wife asserted she bettered was incomplete in that it was not a proposal that dealt with the entirety of the litigation. In my view the ratio decidendi of Colgate-Palmolive Co v Cussons Pty Ltd[7] was not engaged and I am unable to ascribed anything in the nature of exceptional circumstances so as to attract the imposition of indemnity costs. Further, none of the elements of s 117(2A) were enlivened. In short, an order under s 117(2) was not warranted in consequence of which the standard order in s 117(1) applies, namely, that each party bears his and her own costs of the proceeding and the arbitration.
[7] (1993) 46 FCR 225.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 11 May 2022
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