BRASS & BRASS - [2012] FMCAfam 64

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BRASS & BRASS

[2012] FMCAfam 64

FAMILY LAW – Costs.

Family Law Act 1975, ss.117(1), 117(2), 117(2A)

Applicant:

MS BRASS

Respondent:

MR BRASS

File Number:

BRC 6221 of 2010

Judgment of:

Jarrett FM

Hearing date:

By written submission

Date of Last Submission:

14 December 2011

Delivered at:

Brisbane

Delivered on:

27 January 2012

REPRESENTATION

Counsel for the Applicant:

Mr Burridge

Solicitors for the Applicant:

Corser Sheldon & Gordon

Solicitors for the Respondent:

Wheldon & Associates

ORDERS

The application for costs is dismissed.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRC 6221 of 2010

MS BRASS

Applicant

And

MR BRASS

Respondent

REASONS FOR JUDGMENT

On 17 November, 2011 I delivered orders for property adjustment between these parties. Ms Brass now applies for an order that Dr Brass pays her costs of and incidental to the proceedings “on an indemnity basis”. Ms Brass seeks that those costs should run from the date of her first offer to settle the proceedings and be fixed in accordance with a schedule attached to her submissions ($20,509.57 for professional costs, $17,380.00 for counsel’s fees and $4,702.00 for disbursements).
Dr Brass opposes Ms Brass’ application for costs and he asks for an order that each party should bear their own costs.
Section 117(1) of the Family Law Act 1975 provides that parties to proceedings under the Act ordinarily should bear their own costs. The court has a discretion to make another order as to costs if it thinks in the circumstances of the case it should do so: s.117 (2) of the Act. When determining to exercise the discretion reposed in it by s.117 (2) the Court needs to take into account, in so far as they are relevant, the factors set out in s.117 (2A) of the Act.
The financial circumstances of the parties are set out in my reasons for judgment delivered on 21 October, 2011. I will not set out the particulars that I have already set out in those reasons. Once the orders that I have made are carried into execution, the wife will retain $1,147,000.00 and Dr Brass will retain $937,877.00. The property of the parties (total asset pool, including superannuation assets, of $2,084,877.00) was divided 55% to Ms Brass and 45% to Dr Brass.
The orders for property adjustment provided for Ms Brass to receive her motor vehicle, her [omitted] business, her bank account, her jewellery, a sum received by way of interim partial property settlement, a split of the parties’ superannuation interests and the balance of her entitlement in cash to be liberated by a sale of the former matrimonial home.
Dr Brass received the balance of the assets but his entitlement was made up mainly of a 45% interest in the parties’ superannuation fund from his [business omitted] and his motor vehicle.
Dr Brass is employed as a [occupation omitted] and I found that he had an earning capacity in the order of $400,000.00 per annum. I found that Ms Brass had an earning capacity which was far less than Dr Brass’ earning capacity. At the time of trial she was receiving new start allowance. The disparity in the parties earning capacity and financial circumstances generally is a significant factor.
Ms Brass submits that Dr Brass’ conduct throughout the proceedings is a circumstance which would justify the Court making an order as to costs. It is asserted that throughout the entire proceedings he consistently maintained a position that he should receive a greater proportion of the assets than the wife. Certainly that was the position sought by Dr Brass in his response filed on 18 August, 2010 (he sought a 60/40 division in his favour) and it remained his position up to and including trial (where he sought a 55/45 division in his favour).
Ms Brass argues that given the substantial disparity in the income earning capacity of the parties and the length of the relationship, the position adopted by the husband in seeking greater than a 50% share of the asset pool was unrealistic and unreasonable. In particular Dr Brass maintained an argument that Ms Brass had a significant income earning capacity and that there should be no adjustment to take account of any disparity in the parties income earning capacities.
As Dr Brass points out in his written submissions, the two essential issues in the proceedings concerned the weight to be given to the initial contribution by Dr Brass to the parties’ property in approximately 1992 and the adjustment to be given to Ms Brass to take into account the disparity in the parties’ respective earning capacities.
My determination that there ought to be a contribution based assessment of 60%-40% in Dr Brass’ favour recognised the initial contributions that he made to the parties’ property at the commencement of their relationship. Dr Brass’ argument at trial was that the adjustment should be somewhere between 5 and 10% in his favour. Ms Brass argued that it ought to be a lot less. As matters turned out, I assessed that there should be a 20% differential (60%/40%) between the parties’ contributions. In that sense, Dr Brass’ arguments were entirely successful.
On the issue of earning capacity, I have set out my findings above. Ultimately I adjusted the parties’ contribution based entitlement by 15% so that Ms Brass received 55% of the parties’ net property pool and Dr Brass 45%. My final assessment was much closer to the contentions of Ms Brass than they were to the contentions of Dr Brass.
The parties participated in mediation on 19 October, 2010. Subsequent to the mediation both parties delivered formal offers of settlement. On 4 November, 2010 Ms Brass delivered a formal offer of settlement proposing an overall property division of 55% to her and 45% to Dr Brass. On 12 November, 2010 Dr Brass delivered a formal offer of settlement to the effect that the net assets and financial resources be divided equally between the parties.
For the purposes of the trial, Ms Brass’ case outline sought an overall property division of 55%/45% in her favour. Dr Brass’ outline of case sought an overall division of 55%/45% in his favour. Whilst the percentage division contained in Ms Brass’ offer of settlement is identical with the percentage divisions determined by the Court, the percentage division arrived at by the Court was arrived at quite differently to the way in which Ms Brass’ percentage division was derived. As I have indicated above, I accepted Dr Brass’ arguments on the contribution based assessment and in fact found that Ms Brass was entitled to a greater adjustment than was argued for by her by reason of the disparity in the parties’ income earning capacity.
As Dr Brass’ written submissions on costs make clear, Ms Brass’ offer to settle the proceedings on 4 November, 2010 was predicated upon an asset pool which was some $150,000.00 less than that found at trial. She was contending that the value of the former matrimonial home ought to be found at $700,000.00 rather than the $850,000.00 found by me at trial. Indeed at trial Ms Brass contended that the former matrimonial home had a value of $750,000.00. The only reliable valuation evidence before me, however, was that the property was worth $850,000.00. Further, there was a significant difference between Ms Brass’ value of the parties’ family trust which she valued for the purposes of her offer at more than twice the value of the trust found at trial. According to the terms of her offer, Dr Brass was to retain the family trust and its assets.
Because of the difference in the asset values, I accept Dr Brass’ submissions that in the circumstances Ms Brass’ offer of 4 November, 2010 was in fact an offer which represented more than 60% of the net asset pool to her (given the value of the assets found by me at trial).
Neither party has been wholly unsuccessful in these proceedings. As I indicated above there were two significant issues which were litigated. My determinations tended to favour Dr Brass’ arguments with respect to contributions and Ms Brass’ arguments with respect to s.75 (2) matters. In that sense, both parties have enjoyed a measure of success in the proceedings.
According to her evidence Ms Brass has incurred costs to date in excess of $66,000.00 and according to his submissions Dr Brass has incurred costs in these proceedings of about $50,000.00.

Conclusion

In all of the circumstances, I am not satisfied that an order for costs is appropriate. As I have indicated above, both parties enjoyed a measure of success in the arguments that they presented at the proceedings. The disparity in the parties’ earning capacities has been taken into account in adjusting parties’ contribution based entitlements. Whilst it is not something to which I should pay no regard where the question of costs is concerned, in my view it is not a matter which, of itself or in combination with the other matters referred to by Ms Brass demands an order for costs.
For the reasons set out above the wife’s offer of 4 November, 2011 and Dr Brass’ offer of 12 November, 2001 are important, but not determinative, either by themselves or in combination with any of the other circumstances referred to herein as justifying the making of an order for costs.
In all of the circumstances Ms Brass’ application for costs is dismissed.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of Jarrett FM

Date:27 January 2012