Britt and Britt

[2020] FamCA 290

FAMILY COURT OF AUSTRALIA

BRITT & BRITT [2020] FamCA 290

FAMILY LAW – COSTS – Where the wife seeks orders for the husband to pay her costs of and incidental to these proceedings on either an indemnity or party/party basis – Where the husband opposes the wife’s application – Where the wife, the day prior to commencement of trial, offered to accept a sum $36,000 less than what was subsequently ordered – Where the husband provided no response to the offer nor put forward any proposal himself – Where the husband’s submission that the wife’s offer was not a genuine offer fails entirely – Where the disparity in financial circumstances is not so great that an indemnity costs order would be appropriate – Ordered the husband pay the wife’s costs of and incidental to certain court events on a party/party basis.

Family Law Act 1975 (Cth), s 117(2)

Lad & Gittins (2015) 52 Fam LR 71
Colgate-Palmolive Co & CussonsPty Ltd (1993) 46 FCR 225

APPLICANT: Ms Britt

RESPONDENT: Mr Britt

FILE NUMBER: SYC 3351 of 2012

DATE DELIVERED: 28 April 2020

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: 17 April 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hodgson

SOLICITOR FOR THE APPLICANT: Sorensen and Brown Solicitors

COUNSEL FOR THE RESPONDENT: Mr Kelly

SOLICITOR FOR THE RESPONDENT: Derham Houston Lawyers

Orders

1. The husband shall pay the wife’s costs of and incidental to:

   (a)The trial concluded on 31 May 2019 calculated from 17 May 2019 on a party/party basis in the sum agreed or as assessed;

   (b)The interim hearing conducted 17 April 2020 on a party/party basis in the sum agreed or as assessed.

2. The Application in a Case filed 6 February 2020 is dismissed.

3. The Response to an Application in a Case filed 14 April 2020 is dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Britt & Britt has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: SYC 3351 of 2012

Ms Britt

Applicant

And

Mr Britt

Respondent

REASONS FOR JUDGMENT

Introduction

1. This an application by the wife for the husband to pay her costs on an indemnity or party/party basis.

2. There was also an order sought to extend time for making the application for costs.

3. In my view that second aspect of the application had effectively been dealt with by directions given. However, there was vehement opposition by counsel for the husband to the application proceeding and accordingly I note the following relevant matters:

   a)The wife had sought a costs order in the Amended Application relied on in trial.[1]

   [1] Amended Initiating Application filed 6/05/2019, proposed Order 4.

   b)Judgment was delivered on 19 December 2019.

   c)On 15 January 2020 solicitors for the wife advised my associate and the husband that the wife wished to proceed with an application for costs and asked for directions.

   d)On 16 January 2020 the wife was directed to file and serve the costs application which would then be listed.

   e)On 16 January 2020 the solicitor for the wife signed an application and swore an affidavit in support of the costs application but found that the matter was no longer open on the Court portal.[2] The solicitor then arranged for the Application in a Case and Affidavit to be sent to an agent in Newcastle for filing.

   [2] Affidavit of wife’s solicitor Anthony Brown filed 6/02/2020, para 11.

   f)The application was given a return date on 24 March 2020.

   g)On 17 March 2020 Counsel for the husband contacted the Court and solicitors for the wife advising that his instructing solicitor was ill and quarantined at home without access to the file. An application was made in that letter for the time for the husband’s Response to the Application in a Case to be administratively extended.

   h)On behalf of the wife an objection was raised to the adjournment of the costs application.

   i)The Court allowed an adjournment and the application was adjourned to 17 April 2020.

   j)On that day Counsel for the husband objected to the matter proceeding on the basis that the application had been made out of time and in any event should only be a directions hearing for the preparation of the costs application.

   k)The husband had filed a Response to an Application in a Case and an affidavit sworn by the husband.

   l)On 17 April 2020 when the matter was heard there was no objection raised by the wife to dealing with material very recently filed by the husband and the matter proceeded, over the opposition of counsel for the husband, by way of submissions.

   m)Counsel for the husband submitted that the wife’s application had been made out of time, should not proceed any further and was “fatally flawed”.

   n)This submission was without any substance. The husband had been on notice of costs being sought by the wife, subject to outcome, since he was served with her Amended Application for final hearing.

   o)There was no disadvantage to the husband in meeting the application in April 2020, time having been extended at his request.

The Evidence

1. The documents relied on in respect of the application were as follows:

   The Applicant wife – Ms Britt

   (a)Amended Initiating Application filed 6/05/2019;

   (b)Application in a Case filed 6/02/2020;

   (c)Affidavit of Ms Britt filed 6/05/2020;

   (d)Affidavit of the wife’s solicitor Anthony Brown filed 6/02/2020;

   The Respondent husband – Mr Britt

   (e)Response to an Application in a Case filed 14/04/2020;

   (f)Affidavit of Mr Britt filed 14/04/2020.

The Application

1. The wife relied on two factors within s 117(2) of the Family Law Act 1975 (Cth) (“the Act”) for departure from the principle that each party pay his or her own costs.

2. The two factors were:

   ·The offer made by the wife to settle the proceedings;[3] and

   ·Relative financial circumstances of the parties.

   [3] Affidavit of the wife’s solicitor Anthony Brown filed 6/02/2020, Annexure A

3. I was referred by Counsel for the wife to a decision of this Court in Lad & Gittins (2015) 52 Fam LR 71. In that matter each party, husband and wife, sought costs against each other in respect of concluded property proceedings.

4. The wife alleged that the husband had perpetrated fraud by giving false evidence in the trial. She also alleged that the husband had failed to provide proper disclosure to her during the course of the substantive proceedings.

5. The trial judge found that there was no evidence to support the assertion of fraud and that there was no or insufficient evidence to substantiate allegations of failure to make full disclosure. The application of the wife to pay or contribute to her costs was dismissed.

6. The husband ultimately pressed for an order for costs on an indemnity basis calculated from the date upon which he served the wife with an offer of settlement to conclusion of the proceedings six months later in November 2013. The offer was for the wife to discharge debt of $900,000 and for each to otherwise retain property in respective possession.

7. The trial judge determined that the wife should discharge the said debt but in addition should pay to the husband the sum of $300,000, thus the offer of the husband was substantially better than the result achieved by the wife.

8. It is this aspect of the decision which counsel for the wife submitted was relevant to the application in the matter before this Court. However, in my view the decision reflects the principles established in Colgate-Palmolive Co & CussonsPty Ltd (1993) 46 FCR 225 that an order for indemnity costs will only be made in exceptional circumstances.

9. The offer in Lad & Gittens was made six months prior to trial, acceptance of the offer would have saved costs of preparation and trial. The offer was very substantially less than the order ultimately made.

10. The financial circumstances of the wife were significantly superior to those of the husband. Assets after adjustive orders by the Court favoured the husband in a ratio of 83/17 per cent. The costs were ordered on an indemnity basis because of the substantial amount by which the result was better than the husband’s very reasonable offer. That was the main consideration but also the substantially superior financial circumstances of the wife.

11. In the matter before me the offer by the wife was made on the last working day before the trial. Preparation costs were complete. The offer was a reasonable one. The ultimate order of the Court was $36,013 more than the wife had offered to accept.

12. The husband did not respond to the offer which remained open throughout the trial and for the balance of the 30 day period.

13. The making of the offer in those circumstances clearly enlivens s 117(2A)(f) of the Act.

14. Counsel for the husband submitted that it was reasonable for his client to have simply rejected the offer because the orders made were for a figure  higher than it should have been by at least $140,000.

15. That submission must fail entirely for two reasons:

    a)There will be no appeal, leave to apply to appeal having been refused for reasons beyond the period of delay. Therefore the judgment stands;

    b)The husband did not respond to the offer with a lower offer and/or any articulation of how the matter could be resolved.

16. The financial circumstances of the husband are superior to those of the wife but the analysis in the judgment is changed by the payment yet to be made by the husband, and to be received by the wife, of $421,013. The property will probably be sold but not certainly. If it is not, further debt will be incurred.

17. The disparity is not so great that an indemnity costs order would be appropriate. However, the offer was made by the wife. It was dismissed by counsel for the husband during submissions as “not a genuine offer of compromise”.

18. In my view, that is exactly what it was. Seven days of trial could have been avoided. The husband chose not to respond. That was his choice to make, based on his view that it was unreasonable, but to simply ignore an offer in litigation is to take a risk of being proved wrong.

19. Accordingly, an order will be made for payment by the husband of the costs of the wife on a party/party basis from the date of the offer to conclusion of trial.

Costs of this Application

1. The wife in her Application in a Case pressed for an order that the costs of this application be paid by the husband.

2. The husband sought dismissal of this application on spurious grounds as outlined above. There was no attempt to compromise on this occasion as there had been none for the offer to settle the whole proceedings.

3. Costs on a party/party basis are ordered.

4. Orders are made accordingly.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 28 April 2020.

Associate: 

Date:  28 April 2020