Cochrane & Cochrane - [2012] FMCAfam 984

FEDERAL MAGISTRATES COURT OF AUSTRALIA

COCHRANE & COCHRANE

[2012] FMCAfam 984

FAMILY LAW – Costs.

Family Law Act 1975, s.117
Federal Magistrates Act1999, s.86
Federal Magistrates Court Rules 2001, r. 21.02

Fitzgerald (as Child Representative for A (Legal Aid Commissioner of Tasmania)) v Fish & Anor (2005) 33 Fam LR 123
Penfold v Penfold (1980) 144 CLR 311
Latoudis v Casey(1990) 170 CLR 534
Brown v Brown [1998] FamCA 115
Collins & Collins (1985) FLC 91-603
Cachia v Hanes [1994] 179 CLR 403
Harris & Harris (1991) FLC 92-254
Robinson & Higginbotham (1991) 14 Fam LR 559
In the Marriage of Murray (1990) FLC 92-173
Browne v Green (2002) 29 Fam LR 428
In the Marriage of Harris (1987) 11 Fam LR 629
Norbis & Norbis (1986) 161 CLR 513
ReSherborne Estate (No. 2); Vanvalen v. Neaves (2005) 65 NSWLR 268

Applicant:

MR COCHRANE

Respondent:

MS COCHRANE

File Number:

DUC 431 of 2010

Judgment of:

Kemp FM

Hearing date:

Written submissions in Chambers

Date of Last Submission:

5 June 2012

Delivered at:

Sydney

Delivered on:

14 September 2012

REPRESENTATION

Counsel for the Applicant:

Mr Hodgson

Solicitors for the Applicant:

Booth Brown Samuels & Olney

Counsel for the Respondent:

Ms Obradovic

Solicitors for the Respondent:

Warwick McCarthy & Co Solicitors

ORDERS

That there be no order as to costs in relation to the substantive proceedings (including any application for leave to extend time).
That there be no order as to costs with respect to the parties’ costs applications.
The matter is removed from the active pending cases list.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

DUC 431 of 2010

MR COCHRANE

Applicant

And

MS COCHRANE

Respondent

REASONS FOR JUDGMENT

Introduction

The applicant husband filed an Application in a Case on 3 February 2012, in which he sought an order for an extension of time to file an Application and written submissions as to costs and that the respondent pay the applicant’s costs of the costs proceedings.
On 7 May 2012, the Court made the following orders by consent:
(1)That leave be granted to the husband to extend the time to seek costs and file written submissions in support of an Application for costs.
(2)That the husband file and serve written submissions on or before 4pm on 21 May 2012.
(3)That the wife file and serve written submissions in reply on or before 4pm on 5 June 2012.
(4)That no further leave be granted to the husband in the event he fails to comply with Order 2 herein.
(5)That costs of the leave to extend time application be reserved to the costs determination itself.
The husband’s written submissions were received on 21 May 2012.
The wife’s written submissions were received on 5 June 2012.
The wife opposed the husband’s costs application and sought orders to the effect that the husband pay her costs of and incidental to the “costs proceedings” only.
The wife submits that the husband in his submissions did not identify any circumstance which would justify the Court in making an order for costs in his favour.
The wife submits that the husband in his written submissions, deals with the issues relevant to s.117(2A) of the Family Law Act1975 (“the Act”) only and that as that is the secondary issue, the Court must first decide whether to exercise its discretion and award costs. It must then consider what order (if any) is to be made. The wife says that it has been, therefore, difficult to respond to the husband’s submissions with any specificity, as to what circumstances might justify a costs order, except so far as the s.117(2A) factors, are addressed by the husband.
The wife says that the husband is not better off by reason of the judgment (referred to in paragraph 10 below), than he would have been had his offer of compromise dated 19 April 2011 been accepted by the wife, indeed, the wife submits that in monetary terms the husband is worse off.
The wife submits that while in Fitzgerald (as Child Representative for A (Legal Aid Commissioner of Tasmania) v Fish & Anor (2005) 33 Fam LR 123, the Full Court of the Family Court of Australia held that there is nothing to prevent any one factor being the sole determinate for an order of costs to be made, it is submitted that the one factor, being the offer of compromise upon which the husband relies, cannot prevail over the other factors which would weigh against the making of any costs order.
On 23 December 2011, judgment was delivered in the substantive proceedings and the following orders made:
(1)Provided the wife pays the husband the sum of $139,782.50 (“the stipulated sum”) within 3 months of the date hereof, then simultaneously with that payment, the husband will do all acts and things and sign all documents reasonably required to effect a transfer to the wife of all of his right, title and interest in the real property located at Property G in the State of New South Wales (“the Property G property”).
(2)If the wife fails to pay the stipulated sum within the time period referred to in order 1, or within any extended period as agreed to between the parties in writing, then the parties do all acts and things and sign all documents reasonably required to effect a sale of the Property G property by public auction and after payment of all costs associated with such a sale, including legal costs, the net proceeds of sale be divided in proportions as to 66.7% to the wife and 33.3% to the husband.
(3)Within twenty-eight (28) days, the wife shall do all acts and things and sign all documents reasonably required to effect a transfer to the husband of the whole of her right, title and interest in the real property located at Property T in the State of New South Wales, more fully described as Certificate of Title Folio Identifier (omitted) (“the Property T property”).
(4)Within twenty-eight (28) days, the husband shall do all acts and things and sign all documents reasonably required to cause the wife to be removed as guarantor of Mortgage Registered No. (omitted) to the (omitted) Bank and the husband shall be solely responsible for all rates, taxes and outgoings of or with respect to the Property T property and indemnify and keep indemnified the wife in relation to all liabilities whatsoever relating to the said property.
(5)The wife retain the following:
(a)Lexus motor vehicle;
(b)Household furniture;
(c)Jewellery and personal effects.
(d)Her superannuation with (omitted).
(6)Subject to order (7) below, in relation to the husband’s interest in the (omitted) Superannuation:
(a)That a base amount of $141,183.12 is allocated, as required by s.90MT(4) of the Family Law Act 1975 to the Wife out of the husband’s interest in the (omitted) Superannuation.
(b)That in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975:
(i)The wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulation 2001; and
(ii)The husband’s entitlement to payments out of his interest in the (omitted) Superannuation, and the entitlement of such other person to whom a splitable payment may be made, is correspondingly reduced by force of this order.
(c)That the Trustee of the (omitted) Superannuation (“the Trustee”) shall do all such acts and things and sign all documents as may be necessary to:
(i)calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created for the wife by clause 6(a), of this order; and
(ii)pay the entitlement whenever the Trustee makes a splitable payment out of the husband’s interest in the (omitted) Superannuation.
(d)That the orders have effect from the operative time and the operative time for this order is the fourth business day after provision of the Trustee’s approval in terms of order 7 below.
(e)That this order binds the Trustee of the (omitted) Superannuation.
(7)That order 6 takes effect, 4 business days after the Trustee of the (omitted) Superannuation, having been served with a copy of this order, approves the same. The applicant is to forthwith forward a copy of this order to the said Trustee and provide to my Chambers, within 7 days, evidence of the Trustee’s approval to the terms of this order, or otherwise.
(8)That, except as otherwise provided by the orders, the parties and each of them is declared to be the sole legal and beneficial owner of all property, whether real or personal (including but not limited to furniture, superannuation benefits, interest in deceased estates, monies in bank accounts existing as at the date hereof or accruing hereafter), in the possession of, under the control of or standing in the name of either party respectively as at the date of these orders being made.
(9)That, except as otherwise provided by these orders, the parties and each of them is declared to be solely responsible for any debt or liability standing solely in the name of either party respectively as at the date of these Orders being made and/or attaching or any item of property to be retained by either party as a result of these orders.
(10)In the event that either party fails, neglects or refuses to do any act or thing or sign any document which is reasonably required to give effect to these orders then, pursuant to s.106A of the Family Law Act 1975 as amended, the Registrar of this Court is appointed to sign such document or do such act or thing in the name of the defaulting party and on that party’s behalf.
(11)Liberty is granted to either party to apply on seven (7) days notice for orders for implementation of these orders.
(12)All outstanding applications (save as to costs, including any reserved costs), otherwise, be dismissed.
(13)The matter be removed from the list of cases awaiting finalisation.
(14)If any party seeks costs, an appropriate written application may be made within 28 days of today’s date, (supported by any documentary material) to be filed and served within that time period and a copy forwarded to my Chambers. The Court will then deal with that matter by way of written submissions, unless the parties wish to be heard orally. If no such application is made within the time period specified, there will be no order as to costs.
The basis of the above orders can be found in the following determination of the Court:
a)Considering then all of the above s.75(2) factors, the Court is of the view that there should be an adjustment of 12.5% made in favour of the wife in respect of each of the net property pool and superannuation pools. This, the Court regards, as a proper adjustment given the parties age, current child support responsibilities, health and current earning positions. This outcome reflects the cumulative outcome of the findings made pursuant to s.75(2). See Tomasetti & Tomasetti (2000) FLC 93-023.
b)Accordingly, with respect to the superannuation pool, the wife would be entitled to a split of $146,583.12 out of the total current superannuation of $234,533.00 (ignoring that the wife may have contributed some monies in superannuation over the past 40 weeks, given that the parties had reached agreement on the quantum of the superannuation interests and the Court accepts that agreement as valuing those interests), which, given that she will also retain her own superannuation (without a split due to its quantum) of $5,400.00, necessitates a split in her favour of $141,183.12 from the husband’s superannuation entitlement, which sum will represent the base amount allocated to the non-member spouse. The husband will retain $87,949.88.
c)Out of the parties’ net property pool (excluding superannuation), the wife would be entitled to 62.5%, equating to $321,242.50, with the husband entitled to the balance of $37.5%, being $192,745.50.
The following table, as set out in the Court’s judgment shows the effect of the property division between the parties.

Property to be retained by wife	$
Her savings	25.00
Her jewellery and personal effects	5,000.00
Household contents and items	8,000.00
Motor vehicle (omitted) Lexus	28,000.00
The Property G property	420,000.00
Total	461,025.00
Less payment to the husband	139,782.50
Total	321,242.50
Liabilities to be met by the wife
Nil
TOTAL NET PROPERTY	$321,242.50
Property to be retained by husband
Property T property	540,000.00
His savings	3,260.00
The share portfolio	327,489.00
Total	870,749.00
Plus payment from the wife	139,782.50
Total	$1,010,531.50
Liabilities to be met by husband
Mortgage re the Property G property	347,843.00
Capital gains tax	27,606.00
Line of credit	9,900.00
Personal loan (omitted) Bank	69,604.00
Share portfolio loan	362,833.00
Total	$817,786.00
TOTAL NET PROPERTY	$192,745.50

The Court’s determination of the costs issue is based only on a study of the documents before it, being the written submissions of the parties’ legal representatives.

The Law

The Court’s general power to award costs is found in s.86 of the Federal Magistrates Act1999 and, in particular, pursuant to r.21.02 of the Federal Magistrates Court Rules2001.
In relation to costs, s.117 of the Act states:
(1) Subject to subsection (2), subsection 70NFB(1) and ss. 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of the opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) 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.
(3) Omitted.
(4) Omitted:
(5) Omitted.
Section 117 of the Act was considered by the High Court of Australia in Penfold v Penfold (1980) 144 CLR 311, where it was said:
“Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions, which imposes any additional or special onus on an applicant for an order for costs”.
In Latoudis v Casey(1990) 170 CLR 534, the High Court of Australia stated as follows:
“…in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.”
Section 117 of the Act, provides for a discretionary power in the Court. The Court must examine each of the factors, set out in the section, in turn, in relation to justifying a costs order. A costs order can be made on the basis of one or a combination of those factors: Brown v Brown [1998] FamCA 115.
The wife submits, and the Court accepts, that the discretion to award costs is a broad discretion: see for example Collins & Collins (1985) FLC 91-603.
The issue of costs were outlined in Cachia v Hanes [1994] 179 CLR 403 at paragraph 98 as follows:
“Indeed, the list of matters set out in sub-s (2A) to which the Family Court is directed to have regard in making orders under s 117(2) indicates clearly that the subject-matter of the orders to be made under s 117(2) is the costs which a person may be ordered to pay another as indemnity for that other's liability for professional fees and out of pocket expenses reasonably incurred in the litigation, that is, "costs" as that expression is ordinarily understood in the law.”
It is submitted by the wife, that the making of the offer is but one factor to consider. In Harris & Harris (1991) FLC 92-254, the Full Court of the Family Court of Australia noted that an offer of greater or equivalent value as to what was ultimately awarded does not necessarily lead to an order for costs.

S.117(2A)(a) The financial circumstances of the party

The husband submits that he works on a full-time basis as a (occupation omitted) earning a gross salary of $3,800.00 per fortnight (equating to approximately $98,000.00 per annum (largely conceded by the wife) and subject to store profitability can earn an annual bonus of between $7,000.00 to $12,000.00.
The husband says that he pays to the wife an amount of child support in the sum of $1,100.00 per fortnight.
The wife is, therefore, in receipt of $1,100.00 per fortnight (child support) and $460.00 per week by way of her own income.
The husband says that the respective financial circumstances of the parties would not preclude the wife having the capacity to meet an order for costs in the event it was determined to make such an order.
The wife says that this submission made by the husband confuses the issue of earning capacity and “financial circumstances”. The wife says that there is no evidence to support the husband’s submission and, that that submission is by way of speculation only. In fact, the wife submits that the Court’s decision found that she had only $25.00 in savings and the balance of her property settlement totalling $321,242.50 was made up of assets which would need to be realised upon to free up any cash, out of which any costs order could potentially be met.
As found by the Court, the husband has a superior earning capacity to that of the wife.
The husband submits, notwithstanding his superior earning capacity, he is in an inferior position to the wife. He says that he has repayment obligations in respect of substantial liabilities in the sum of $817,786.00, (set out at paragraph 12 above).
The Court is satisfied that an assessment of this factor does not ground a costs order.

S.117(2A)(b) If any party in receipt of legal aid

The parties submit, and the Court accepts, that this factor is not applicable.

S.117(2A)(c) The conduct of the parties in relation to the proceedings

The parties submit, and the Court accepts, that this factor is not applicable.

S.117(2A)(d) Proceedings necessitated by the failure of a party to comply with previous orders

The parties submit, and the Court accepts, that this factor is not applicable.

S.117(2A)(e) Whether any party wholly unsuccessful in the proceedings

The parties submit, and the Court accepts, this factor is not applicable.

S.117(2A)(f)Any offers in writing

The husband submits his application for costs is essentially based upon his notice of offer of compromise dated 19 April 2011 (“the subject offer”). The subject offer was open until 4.00pm on 10 May 2011 and further provided that, if accepted, each party would bear his or her own costs of the proceedings.
The subject offer was provided with an explanatory letter from the husband’s solicitors to the wife’s solicitors, also dated 19 April 2011, which provided a detailed breakdown of the property and superannuation then available to the parties and made it reasonably clear that the net property pool and superannuation were each being divided as to 63.26% for the benefit of the wife.
The husband submits that the subject offer was largely based upon the values as ultimately ascribed to the property the wife received or retained referred to in the Balance Sheet determined by the Court.
The husband’s solicitor’s letter confirmed that the wife would receive the Property G property ($420,000.00), the Lexus Motor Vehicle ($28,000.00) household furniture ($8,000.00) jewellery and personal effects ($5,000.00) totalling $461,000.00 less her assumption of a line of credit to the (omitted) Bank of $69,000.00, totalling $392,000.00, representing 63.26% of the parties’ net matrimonial property, which totalled $619,600.00.
In accordance with the Court’s orders, the wife received $321,242.50, being 62.5% of a net property pool of $513,988.00 (at time of hearing).
The wife argues that ultimately, the net asset pool was found to be some $99,000.00 less than that asserted by the husband in his offer and that this equates to 7.4% of the pool as found.
It would appear that between the time of the making of the subject offer and the hearing, the net property pool had reduced from that which was asserted by the husband to be $619,600.00 (see paragraph 37 above) to that which was found by the Court to be $513,988.00 (see paragraph 38 above), being in fact, a reduction of $105,612.00 (and not $99,000.00 as referred to in paragraph 39 above), representing some 20.5% of the net property pool (excluding superannuation).
The wife submits that this reduction could only have occurred because either the husband’s figures were incorrect or the pool had changed by the time the matter was heard. There is no evidence to support the position that the husband’s asserted figures were incorrect. Indeed, the evidence was to the effect that certain share values within the property pool had been negatively affected by the global financial crisis and that Comsec had sold certain shares to re-pay the husband’s debts in relation to shares.
The husband’s solicitor’s letter also explained that the wife would retain her superannuation of $5,400.00 and receive a split from the husband’s superannuation of $139,232.00, bringing a total superannuation available to her of $144,632.00 (incorrectly referred to as $144,232.00 in that letter) representing 63.26% of the parties’ total superannuation entitlements, then being $228,400.00.
The Court’s orders provided for a superannuation split to the wife of $141,183.12, which together with the wife’s remaining superannuation of $5,400.00 totalled $146,583.12.
The husband says that as there was a period of some seven months between the subject offer and the hearing, the total superannuation available had increased in value from $228,400.00 to $234,533.00.
The husband submits, and the Court accepts, that a written offer of settlement is “highly relevant” to the question of costs. Such offers provide litigants with an incentive to settle and thereby avoid or reduce the costs of litigation. (Robinson & Higginbotham (1991) 14 Fam LR 559.)
A party cannot reject or ignore a reasonable offer seriously made except at his or her peril as to costs; see In the Marriage of Murray (1990) FLC 92-173, Nygh J. stated:
“If one considers the issue as a matter of policy, that is, on the basis of what the Parliament's objective and purpose was in enacting the legislation, it is clear that the Parliament wished to encourage settlements thereby reducing the cost of litigation to the parties and to the community. That must mean that a party cannot reject or ignore a reasonable offer seriously made except at his or her peril as to costs. At the same time a party cannot sit tight and postpone a decision as to acceptance until a matter is at the door of the court. By that time an offer which might have been acceptable to the offeror because of savings in time and preparation costs, may have become unattractive. In this case the offer was left open for a reasonable period, was clear and capable of acceptance which would have saved the parties considerable costs....”
The husband submits, and the Court accepts, that it is very important for the Court to give proper consideration to written offers of settlement which have been made. These offers 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 enable proper consideration to be given to it, is something to which “very significant weight” ought normally be given. (Browne v Green (2002) 29 Fam LR 428.)
The wife concedes that while an offer is relevant to the question of costs, she submitted that the terms of the offer itself, in particular when compared to the outcome of the proceedings, with respect to both parties, were likewise relevant to the question of costs: s117(2A)(f) of the Act.
The husband submits that the subject offer was realistic and reasonable and the wife ignored or rejected it at her peril as to costs. He says that his significant costs (including those in preparing for and participating in a 2 day hearing) would have been obviated if the wife had accepted the subject offer from the outset and that he had no alternative but to proceed to a contested hearing in order to receive a just and equitable result by way of property settlement.
The husband submits that the wife had adequate knowledge at the time the subject offer was made, particularly as to the quantum of the asset pool available for division between the parties, to give proper consideration to the terms of the subject offer: In the Marriage of Harris (1987) 11 Fam LR 629).
The wife submits that the subject offer was made in circumstances where there had not been full and frank disclosure by the husband, where ultimately both parties were worse off in monetary terms than the subject offer provided for, and where the net asset pool was significantly different to the pool asserted in the subject offer.
A summary prepared by the wife outlines the correspondence passing between the parties as follows:
a)Letter of husband’s solicitors dated 19 April 2011, enclosing Notice of Offer of Compromise (the “subject offer”);
b)Letter of wife’s solicitors dated 4 May 2011;
c)Letter of wife’s solicitors date 21 June 2011;
d)Letter of husband’s solicitors dated 19 July 2011;
e)Letter of wife’s solicitors dated 12 September 2011;
f)Letter of husband’s solicitors dated 13 October 2011;
g)Letter of husband’s solicitors dated 14 October 2011.
The Court notes, that it has examined the correspondence referred to above which are referred to as annexures to an affidavit of the wife’s solicitor, Mr Warwick McCarthy sworn 4 May 2012. This affidavit was referred to in the husband’s written submissions, but has not been filed with the Court. The Court has, therefore, only had regard to the contents of the letters, themselves.
The husband stated that the wife’s solicitors wrote to his solicitors on 4 May 2011, such letter not being received by that firm until 17 May 2011 (as shown by the date stamp on the letter). The wife’s submissions stated that her solicitors were unable to confirm the exact date that letter was faxed to the husband’s solicitors. This letter sought further information to enable the subject offer to be “fully considered.” The husband submits that this letter was received after the deadline for acceptance had expired. Further, the husband submits that the information sought by the wife had little bearing upon the proposal, particularly in relation to the proposed percentage division.
On its face, the subject offer was only open for acceptance until 4.00pm, Tuesday 10 May 2011 (“the closing date”).
The letter from the wife’s solicitor did not seek that the husband’s offer be kept open beyond the closing date. The subject offer was not expressly extended following the husband’s solicitor’s receipt on 17 May 2011 of the wife’s solicitor’s request.
The wife’s solicitors, in effect, chased up on the information sought by them in a further letter to the husband’s solicitors dated 21 June 2011.
The wife says that it was clear that she was seeking further and better particulars in relation to the value of the assets and liabilities ascribed by the husband, to properly consider the subject offer.
The wife further submits that there was no correspondence from the husband’s solicitors asserting that the further particulars sought by her were irrelevant, to enable her to properly consider the subject offer.
Indeed, the husband’s solicitor responded to the request for particulars by letter of 19 July 2011, providing the documents sought and addressing the questions posed by the wife’s solicitors. Weight is attached to that conduct.
The husband further submits that there were no attempts by the wife’s solicitors to request any further information as and from their letter dated 21 June 2011 and after the provision of the information and documents (which the Court notes provided tax returns for the 2008, 2009 and 2010 financial years) on 19 July 2011.
In fact, however, the wife sought in her solicitor’s letter of 12 September 2011, completion of the 2011 tax returns to “adequately consider settlement proposals in this matter”.
By way of further disclosure, the husband’s solicitors provided in their letters of 13 & 14 October 2011 details of margin loan calls and share sales as a result of those calls.
It would appear that settlement negotiations then went cold. The parties did not appear to conduct themselves on the basis that the subject offer was still open for acceptance. No further offers from the husband appear to have been made.
There was no evidence of any offers or counter offers made on behalf of the wife.
The wife submits that the husband’s correspondence referred to above evidenced the fact that the husband had not made a full and frank disclosure of all material facts at the time of the subject offer. The wife arguing that if such full and frank disclosure had been made, there would have been no need for the wife to seek further and better particulars and for the husband to provide to the wife the documents and particulars as sought some three months after the making of the subject offer.
The wife submits it is not relevant whether her request for further documents and information was received before or after the subject offer lapsed. The wife arguing that she could only properly consider the subject offer upon being provided with full and frank disclosure by the husband. While that may be the case, one would have expected the parties’ solicitors to have, at least, communicated on the basis that while that process was being attended to, the time for the lapsing of any offers would be, otherwise, extended. That did not happen and weight is attached to that conduct.
The husband submits that it is apparent from the above correspondence that he was ready, willing and able to negotiate a settlement from the outset.
Given the letter from the wife’s solicitor dated 4 May 2011, the Court is satisfied that, at the time the subject offer lapsed, the wife’s solicitors were still seeking information and disclosure to enable their client to consider the terms of the subject offer and the Court accepts that that information (as subsequently provided) was material to her consideration of the terms of the subject offer itself. In those circumstances, the subject offer cannot ground a costs order in the husband’s favour. The husband’s position would have been greatly strengthened if he had put a fresh offer of compromise after he had provided the information and documents referred to in the abovementioned correspondence. This is so, notwithstanding that the husband also argued that it was apparent from the correspondence that the wife was not attempting to engage in any meaningful negotiations as she made no offers or counter proposals herself.
Given the Court’s views as set out in paragraph 68 above, while it is not necessary to consider the adequacy of the subject offer made by the husband itself, in light of the parties’ submissions, the Court will consider that issue.
The wife submits that given the uncertainty around the quantification of the property pool, it would not be a true reflection for the Court to simply have regard to a dollar differential between the subject offer and the Court’s orders (some $68,407.00), but rather that the Court should look at the percentage differential between what was ordered 62.5% and what was offered of 63.2%, being 0.76%.
The wife submits, as set out in the following table, that when looking at the percentage split of the net pool as ordered, compared to the percentage split as contained in the subject offer, in monetary terms, the difference was in the order of some $5,688.00. The wife submits this is the amount the wife is worse off by and, conversely, the amount the husband is better off by, as shown in the table below:

Net Pool as determined by His Honour
Husband 37.5% *	Husband 36.74% **	Difference	Wife 62.5% *	Wife 63.26% **	Difference
Excluding Superannuation	$192,745.50	$188,839.19	$3,906.30	$321,242.50	$325,148.81	$3,906.31
Superannuation	$ 87,949.88	$86,167.42	$1,782.46	$146,583.12	$148,365.58	$1782.46
Total:	$280,695.38	$275,006.62	$5688.76	$467,825.62	$473,514.39	$5688.77

* In accordance with judgment

** In accordance with offer of compromise

The wife says that the difficulty with any numerical analysis is that the net pool of assets is significantly different as between the judgment and that asserted by the husband in the subject offer and had his offer been accepted by the wife, the husband would have received $311,368.00 in accordance with the subject offer (made up of $227,600.00 plus $83,768.00 of superannuation).
The wife says, further, that it is artificial for the husband in the costs application to look only at the amount which one of the parties would have received had the subject offer been accepted, as it would be unusual and indeed extraordinary, for a party to successfully rely on an offer of compromise where the end result sees him better off than he would have been if the offer had, in fact, been accepted.
The Court’s orders represented the outcome of an exercise of discretion in respect of the facts ultimately found at trial. Even on the facts as found, the exercise of that discretion involved a value judgment “in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right.” See Norbis & Norbis (1986) 161 CLR 513. In cases where there is a relatively small difference between an offer made and the ultimate outcome and whether assessed in monetary or percentage terms, that fact provides a compelling reason why the general rule as to costs should not be displaced by the mere fact of a party not having accepted an offer which ultimately proves to be more favourable. This was recognised by Palmer J. in ReSherborne Estate (No. 2); Vanvalen v. Neaves (2005) 65NSWLR 268. That was a case involving an application under the Family Provision Act where a party had rejected a Calderbank Offer of an additional provision of $120,000.00 and received at trial $80,000.00. His Honour said in refusing the costs application made:
“A claim under the Family Provision Act is not quantifiable by the parties’ legal advisers prior to judgment with anything like the prescience possible in a claim for a liquidated sum such as a contract debt, or even in a claim for unliquidated damages for personal injury or for future economic loss. There are statutory and judicial guidelines for the range of damages appropriate for various types of personal injury; expert accountants attempt to quantify damages for future economic loss by reference to historical financial information.
However, in a claim under the Family Provision Act, the Court has to quantify what provision “ought to be made” for the applicant out of the deceased’s estate “having regard to the circumstances at the time the order is made”: s 7. Inevitably, that question involves a large element of subjective assessment by the Judge. Inevitably, on any particular set of facts, there would be a variety of answers given by different judges. The decided cases offer broad parameters as to what provision “ought to be made” in certain kinds of circumstances but there is no formula and there is no yardstick on which the degrees of measurement are not etched by the judge’s own experience of life.
These observations are just as apposite in the present proceedings.
The Court accepts that the subject offer was in terms not materially so more advantageous to the wife, than that which was ordered, so as to ground a costs order in his favour.
Further, the husband argues that it is relevant to consider the subject offer in the context of the orders each party sought at the hearing. The Court accepts that position.
The husband further submits that at the time of the hearing the parties had reached agreement substantially as to the quantum of the net asset pool available for division between the parties. There were only three items in dispute, namely liabilities which had a total quantum of $6,028.00 (referred to in paragraph 42 of the Court’s reasons for its decision). As such the percentage division proposed by the husband could readily have been considered prior to the time of the hearing.
The husband submits that the terms of his proposed orders were not ambiguous or unclear, were expressed with precision and were objectively capable of being clearly understood.
However, the Court also notes that there was still disputed between the parties’ add-backs as to $10,000.00. The husband was successful in arguing that there should be no such add-back.
The position of the wife at the hearing was that she sought orders to the effect that she receive 70% of the net assets of the parties. She had originally sought to receive 75% of such assets. Accordingly, the husband says that even when the net asset pool had been effectively determined for the purposes of the hearing, the wife still sought that she receive an amount substantially in excess of the husband’s offer as set out in his proposed orders.
The husband says that in relation to the net assets of the parties excluding superannuation, the husband sought orders to the effect that the wife transfer to him all of her right, title and interest in the Property T property and that he be solely responsible for all liabilities attaching to that property and to indemnify the wife, accordingly. He further sought the sale of the property at Property G and a division of the net proceeds in proportions as to 71.5% to the wife and as to 28.5% to himself. Otherwise, the wife would retain the Lexus motor vehicle, household furniture, jewellery and personal effects.

The husband submits that the sale of the Property G property was not immediately ordered and the wife was afforded an opportunity to acquire the husband’s interest by a payment to him of an amount of $139,782.50. Upon the basis that this property had a value of $420,000.00, this equates to the husband receiving in percentage terms, 33.3% of the net value of that property, which exceeded the percentage the husband had sought to receive upon sale, namely 28.5%. (If the wife failed to pay out the husband’s entitlement). The wife, otherwise, has received or retained those items which the husband proposed she receive or retain pursuant to the orders. Orders as sought by the husband in relation to the Property T property were also made. Therefore, the husband submits that he has for all intents and purposes achieved a better result than he had sought at the hearing in relation to the net assets, excluding superannuation (emphasis added)
The husband’s position as articulated in paragraph 82 above, however, cannot be separated from the position he adopted in relation to the superannuation pool. The Court notes that the husband sought on the hearing that the wife only receive a superannuation split of $100,000.00 out of his (omitted) Superannuation (as sought in his Exhibit “A”), being 43.6% of that superannuation entitlement. This was well below the amount specified in the subject offer which provided for $139,232.00 out of $223,000.00 (being 62.4% of his superannuation entitlement) and below that which was actually ordered of $141,183.12 out of $229,133.00 (being 61.62% of that superannuation entitlement). This is so, noting that the wife was, at all times, to retain her own superannuation of $5,400.00. This weighs against any costs order in the husband’s favour.

S.117(2A)(g) Such matters as the Court considers relevant

The Court accepts that there are no other matters relevant with respect to this factor.
The Court does not accept the husband’s submissions that there are sufficient circumstances to justify a departure from the principle that each party should, otherwise, bear their own costs.
The Court is, nevertheless, of the view that in light of the subject offer, and the position adopted by the husband as set out in paragraphs 80 to 82 above, the husband’s asserted claim for costs was not unreasonably argued and, in those circumstances, notwithstanding that the wife was successful in opposing costs, she should not, otherwise, obtain a costs order in her favour in respect of the costs application as the Court is of the view there are, similarly, no justifying circumstances to ground such an order.

I certify that the preceding eighty-six (86) paragraphs are a true copy of the reasons for judgment of Kemp FM

Date: 14 September 2012